Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of American Express Travel Franchise Costs (2014 FDD)

by Franchise Chatter on August 1, 2014

in Franchise Costs, Travel Franchise

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Don't Invest in a Franchise Until You Check Out This List

Changi Airport Photo by Brian

Detailed Estimates of American Express Travel Franchise Costs Based on Item 7 (Estimated Initial Investment) of American Express Travel’s 2014 Franchise Disclosure Document

1.  Initial Fee:  $3,500

  • The Initial Fee for each branch office you wish to operate in addition to the main office is $2,500. You must pay the fee in lump sum when American Express Travel lists the branch offices in the Representative Agreement. All other expenses listed in the chart also apply to branch offices.
  • American Express Travel does not finance any fee.

2.  Annual Fee:  $13,100 to $45,500

  • Your Annual Fee includes the Branding and Marketing Package fee and includes two offices. You must pay $2,000 for each additional location.
  • The amount of the Annual Fee will depend on the Branding and Marketing Package you select. The fees for these packages are currently $13,100 (Associate), $25,000 (Affiliate), and $45,500 (Centurion).

3.  Real Estate and Improvements:  $0 to $5,000

  • You should not need to rent additional space as a result of becoming a Representative, as American Express Representatives are existing travel agencies and the Representative Agreement does not impose additional space requirements.
  • In the event the Representative obtains new office space for a branch office, the Representative determines the appropriate size of such office. The cost of office space varies in different markets but the average annual cost is $25 per square foot at an average of 1,500 square feet.
  • American Express Travel provides one free sign for each Representative office.

4.  Additional Funds During Initial Phase (3 months):  $0

  • Because American Express Travel Representatives are existing travel agencies when they enter into the Representative Agreements, you should not be required to incur additional expenses (other than the expenses specified above) during the first three months of operation as a result of becoming a Representative.
  • In addition, because American Express Travel Representatives are existing travel agencies, you will already have the hardware and software to access a Global Distribution System (“GDS”).
  • These figures are, however, estimates and American Express Travel cannot guarantee that you will not incur additional expenses. Your costs may depend upon factors such as your management skill, experience and business acumen, local and national economic conditions, travel industry conditions, the local market for your services, the prevailing wage rates, competition, and your sales volume during the initial phase.
  • When you convert from an existing travel agency to a Representative, you are not required to purchase new signage because American Express Travel provides, at its own expense, an American Express Travel Service Representative Sign for each Representative Office.
  • Exception: In the event that a Representative leaves the Representative Program, then rejoins the program at a later date, it will be charged for the cost of signage which will cost approximately $1,500 (including manufacturing, shipping, and installation). The cost may vary in different markets.
  • Representatives are not required to purchase stationery or business cards upon converting to the American Express Travel system; Representatives retain the name under which they previously operated and are granted the right to display the American Express mark in addition to their own name.
  • When new Representatives deplete their existing stock of business cards and stationery, they may elect to add the American Express name to their new supply of such items in accordance with the Representative Agreement.

5.  Total:  $16,600 to $54,000

  • American Express Travel has relied upon its years of experience in the travel business to compile these estimates. You should review these figures and your business plan carefully with a business advisor before making any decision to invest in the Representative Program with American Express Travel.

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