This post was updated on April 26, 2017 to reflect information from Wow 1 Day Painting’s 2017 FDD (Item 7).
Detailed Estimates of Wow 1 Day Painting Franchise Costs Based on Item 7 (Estimated Initial Investment) of Wow 1 Day Painting’s 2017 Franchise Disclosure Document
1. Initial Franchise Fee: $50,000
- This includes the Subterritory Initial Fee of $19,000 for the first Subterritory, plus $9,000 for each of the three additional Subterritories.
2. Initial Marketing Expense: $15,000
- The initial marketing expense will be used by you to market and promote the Franchised Business prior to and/or during the first 6 months of operation. This figure is based on a Franchised Business operating in four subterritories, with a minimum spending requirement of $3,750 per subterritory.
3. Computer Hardware and Software: $3,000
- You must obtain computer, telephone, and other related equipment that meet Wow 1 Day Painting’s specifications. These amounts represent the estimated cost to purchase this equipment.
4. Miscellaneous Opening Costs: $1,000 to $2,000
- This estimates your initial miscellaneous or unexpected start-up expenses, including items such as industrial locks for your vehicle(s), hands-free cell phone devices, attendance at networking events, etc.
5. Vehicles and Graphics: $4,000 to $6,000 (lease/purchase deposit)
- The above figures assume you lease one vehicle and represent the initial lease deposit for that vehicle. Costs may vary substantially, especially if you elect to purchase a vehicle rather than lease one.
- You must purchase or lease vehicles that meet Wow 1 Day Painting’s standards and specifications, and you are required to use only those vehicles in the operation of any part of the Franchised Business. You are permitted to use those vehicles only for the Franchised Business and for no other reason.
- You are required to abide strictly by Wow 1 Day Painting’s vehicle requirements and standards, including its requirements for the vehicles to be decorated with its approved graphics package. Your vehicles shall be outfitted, wrapped, and/or decaled to Wow 1 Day Painting’s specifications, the cost of which is included in the above estimated figures.
6. Real Estate/Rent: Amount Not Specified
- You may want to operate from a home-based office, in which case, there would be no cost to you for rent. However, if you choose to rent office space, then you must pay all rent and other fees payable under the lease. Wow 1 Day Painting cannot estimate the amount of rent, as it will vary depending on a number of factors, including size, condition, and location of the facility.
- If you do not have sufficient storage space at your designated office, then Wow 1 Day Painting recommends that you rent a 20′ by 10′ storage garage, which it estimates would cost $250 per month, although such prices may vary greatly.
7. Training Expenses: $4,050 to $6,000
- Training fees for you and one additional employee is included in your Initial Fee; however, you are responsible for your travel, accommodations, and meals while training at Wow 1 Day Painting’s training facility. Costs will vary depending on your proximity to British Columbia and the number of people attending training. These expenses are typically not refundable.
- Per person expected costs are based upon a 15-day estimated stay, with shared accommodations from $100-$200 per night; one meal per day (Wow 1 Day Painting provides breakfast and lunch during training); air transportation at $500 to $1,000 per person; and shared local transportation at $10-$25 per day.
8. Insurance: $3,500 to $4,500
- You must purchase insurance in accordance with Wow 1 Day Painting’s specifications:
- Comprehensive Liability – not less than $2,000,000 per occurrence
- Business Interruption – as required by Franchisor
- Vehicle Liability – not less than $1,000,000 or as required by Franchisor
- Workers’ Compensation – as required by state law
- Employer Liability Insurance – as required by Franchisor; not less than $1,000,000
- Other – as required by Franchisor
9. Cell Phone and Accessories: $150 to $500
- You must purchase a cell phone for use in connection with the Franchised Business, and you will be responsible for all costs associated with the use and maintenance of the cell phone. Upon termination or expiration of the Franchise Agreement, Wow 1 Day Painting may, at its option, purchase the cell phone number from you for fair market value, or require that you cancel the cell phone number, the costs or penalties of which will be paid by you.
10. Office Equipment and Supplies: $0 to $1,000
- The cost of office equipment and supplies will depend on whether you already have such items (such as a desk, stationery, etc.).
11. Customer Relationship Management (CRM) Fee: $0 to $1,080
12. Licenses and Permits: $1,500
- Government agencies typically charge fees for permits and operating licenses. Your actual costs may vary from the estimates based on the requirements of federal, state, and local government agencies.
13. Professional Fees: $2,000 to $5,000
- You will need to retain a lawyer, an accountant, and other consultants to assist you in establishing your Franchised Business. These fees may vary from location to location depending upon the prevailing rates of local lawyers, accountants, and consultants. These fees are typically non-refundable.
14. Memberships to Local Organizations: $300 to $1,500
- Wow 1 Day Painting recommends that you become a member of local business organizations such as the Better Business Bureau, Chamber of Commerce, and the Building Owners Management Association. Membership in these organizations is not mandatory.
15. Additional Funds (6 months): $24,000 to $50,000
- This estimates your initial operating expenses, including working capital and marketing fees, during the initial start-up months.
- You are required to expend a minimum of 12% of your Gross Revenue, or $15,000, whichever is greater, on local advertising during your first 12 months in operation, and a minimum of 7% of your Gross Revenue each quarter, on local advertising during your subsequent years in operation. A significant amount of working capital may be allocated to additional marketing during the start-up phase of the business.
- Additional Funds relate only to costs associated with the Franchised Business and do not cover any owners’ draw or personal, “living,” unrelated business or other expenses you may have, such as royalty payments, debt service on any loans, state sales and/or use taxes on goods and service, and a variety of other amounts not expressly described and included in the notes above.
16. Total: $108,500 to $147,080
- Wow 1 Day Painting relied on its experience in Canada to compile these estimates.