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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of BounceU Franchise Costs (2015 FDD)

by Franchise Chatter on June 20, 2014

in Child-Related Franchises, Franchise Costs

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Let's Play OC! BounceU Huntington Beach

This post was updated on September 1, 2015 to reflect information from BounceU’s 2015 FDD (Item 7).

Detailed Estimates of BounceU Franchise Costs Based on Item 7 (Estimated Initial Investment) of BounceU’s 2015 Franchise Disclosure Document

1.  Initial Franchise Fee:  $30,000

  • BounceU may refund fifty percent (50%) of the Initial Franchise Fee to you if:
  • (1) after making a good faith effort as determined by BounceU in its reasonable discretion, you (i) are unable to sign a lease agreement or real estate purchase agreement for Premises to operate your BounceU Facility; or (ii) are unable to secure lender financing for the development and operation of your BounceU Facility within one year of the effective date of the Franchise Agreement; and
  • (2) you provide BounceU with written notice of your request for a refund prior to the one year anniversary of the Franchise Agreement; and
  • (3) you execute a voluntary termination agreement and general release with BounceU.

2.  Training Expenses:  $1,000 to $2,500

  • BounceU does not charge a fee for the initial training of 2 individuals. You must, however, pay all expenses, including accommodations, travel, and wage expenses for these individuals during training.
  • If you decide to send more than 2 people to the training program, BounceU will charge you a fee of $400 per person, plus you must pay all associated expenses.

3.  Architecture, Engineers, Permits, and Licenses:  $8,000 to $20,000

  • This figure includes each of the following expenses that you will likely incur in the development of your BounceU Facility:
  • Preliminary Design Drawings. Preliminary design drawings of your BounceU Business must be produced by BounceU’s approved design architect. The architectural design fee is $2,000 to $2,500.
  • Construction Drawings. You must retain an architect licensed in your state to develop construction drawings of your BounceU Facility (you may opt to retain BounceU’s approved design architect to continue with the full set of construction drawings). These costs may or may not be incorporated with your general contractor’s expenses.
  • Permits and Licenses. You should obtain information from your local, county, and state authorities about the required licenses and related types of expenses in your local area. These costs may be incorporated with your general contractor’s expenses.

4.  Grand Opening Advertising:  $5,000

  • You must spend a minimum of $5,000 on your grand opening advertising.

5.  Rent and Rental Deposit:  $5,000 to $30,000

  • The estimated amount is for the first month’s rent and a rental deposit of one month’s rent. BounceU estimates that approximately 9,500 to 12,000 square feet are needed for a BounceU Facility.
  • You can locate your BounceU Facility in a variety of locations, including the suburbs, downtown, shopping malls, strip shopping centers, or light industrial or commercial complexes.

6.  Leasehold Improvements:  $175,000 to $450,000

  • These figures are based on a typical 10,000 square foot facility with at least 2 Stadiums and 2 Party Rooms. Larger locations, or facilities in areas with higher cost of living and construction may be higher.
  • The cost estimate for leasehold improvements does not include the purchase and installation of interior decor and outfitting discussed below.

7.  Start Up Package:  $60,000 to $70,000

  • The Start Up Package includes furniture, fixtures, equipment, glow lights, inventory, marketing materials, graphics package, VM System, supplies, and certain intangible services including onsite review, post-lease/pre-opening one-on-one consultation, opening training, and an administrative fee for providing the Start-Up Package.

8.  Exterior Signage:  $2,500 to $12,000

  • Exterior signage includes exterior signs identifying your BounceU Facility.

9.  Stadium Equipment and Games:  $40,000 to $70,000

  • Stadium Equipment and Games must be purchased or leased from BounceU’s approved vendors. The low range of the estimate is typically for a down payment to lease the Stadium Equipment and the high end of the range is an estimate for the cost to purchase the Stadium Equipment.
  • Each Stadium must include one or more toddler attractions.

10.  Initial Inventory:  $4,000 to $10,000

  • Inventory includes items such as party supplies and novelties for re-sale. BounceU requires a minimum amount of inventory to be purchased before you open your BounceU Facility.

11.  Insurance:  $750 to $1,600

  • This is an estimated down payment against your annual premiums to acquire the insurance required under the Franchise Agreement. The estimate is only for commercial general liability and business interruption insurance and does not include workers’ compensation insurance, the costs of which will vary depending upon your market and work history.

12.  Legal and Accounting:  $1,000 to $8,000

  • This is only an estimate and includes such things as a review of the Disclosure Document and setting up your books and records. This amount will depend on the fees charged by the professionals you choose.

13.  Additional Funds (5 months):  $20,000 to $60,000

  • Additional Funds is an estimate of the funds needed to cover the operational expenses incurred during the first 5 months of operation (please note that this estimate is exclusive of your lease costs).
  • In estimating this amount, BounceU relied upon prior experience in operating a business substantially similar to a BounceU Facility and its management’s general business experience.

14.  Total:  $352,250 to $769,100

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