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Franchise Costs: Detailed Estimates of Battery Giant Franchise Costs (2014 FDD)

by Franchise Chatter on October 21, 2014

in Battery Franchise, Franchise Costs, Retail Franchise

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Battery Giant Photo by Jim Ritterhouse

Detailed Estimates of Battery Giant Franchise Costs Based on Item 7 (Estimated Initial Investment) of Battery Giant’s 2014 Franchise Disclosure Document

1.  Initial Fee:  $29,900

  • In Illinois, all initial franchise fees owed to Battery Giant or its affiliate are deferred until such time as all initial obligations to you under the Franchise Agreement have been fulfilled by it and you have commenced doing business pursuant to the Franchise Agreement.

2.  Site Assessment Fee:  $3,500

3.  Travel and Living Expenses While Attending Initial Training and Factory Training:  $5,500 to $9,000

4.  Rent and Security Deposit (3 months):  $3,000 to $6,000

  • You must obtain and maintain a retail store and service space that meets Battery Giant’s requirements. You may elect to own your own premises. If you already lease or own premises, you should review your lease or purchase documents to evaluate the cost of real estate rental.
  • If not, lease situations will vary in rental amounts, lease terms, amount of space required, tenant improvements required, security deposit, and advance rental required. Location is a major factor in the amount of rent required.
  • These estimates may not cover advance rental deposits, insurance, and similar expenses.
  • If you rent real estate for the premises, you may be liable for the entire term of the lease whether or not you succeed in the business.

5.  Leasehold Improvements:  $5,000 to $35,000

  • The cost could be higher if you or your landlord requests changes from the standard design and materials.
  • Some landlords finance leasehold improvements by amortizing them over the lease term and charging a higher rental amount to cover the cost.
  • Even if you are taking over or continuing in an existing Battery Giant premises or another existing facility, Battery Giant may require that you remodel, redecorate, or make other changes to the premises to comply with Battery Giant’s specifications, at your cost.
  • You must maintain the premises at your expense, including furniture, fixtures, interior and exterior painting, and landscaping, in accordance with Battery Giant’s specifications.
  • It has been Battery Giant’s experience that landlords may include the cost of leasehold improvements as part of the lease, in consideration for your agreement to enter into a lease. This will be a product of your negotiations with your prospective landlord. Battery Giant cannot guarantee or promise that your landlord will make such a concession.

6.  Store Fixtures and Equipment Kit, Signage Kit, Tech Center Kit, Tech Center Supplies, Point-of-Sale Kit, Uniforms, and Initial Saleable Inventory Including Batteries and Accessories:  $129,700

  • If you are opening a new Battery Giant store, you are required to buy an Equipment Kit, Signage Kit, Tech Center Kit, Point-of-Sale Kit, and inventory from Battery Giant prior to store opening. A description of these kits is set forth in Item 8.

7.  Licenses:  $100 to $500

8.  Grand Opening and Marketing During Initial 6 Months:  $15,000

  • At your discretion, you may purchase Battery Giant’s Grand Opening and Literature Kit at a cost of $6,000 to $10,000. This cost is inclusive of the $15,000 you are required to spend in the first 6 months.
  • The Grand Opening Kit includes:  management and scheduling of grand opening; promotion and giveaway items; press releases; contact with Chamber of Commerce, local car clubs, sports teams, radio stations; initial newspaper and radio ads; field team to blitz market; grand opening flyers and brochures; rental of popcorn wagon; use of 30′ Battery Giant inflatable gorilla during grand opening period.
  • Battery Giant estimates that, in most areas, you can accomplish an adequate grand opening with the required purchase of the Kit, although, because of local conditions, you may decide that more is necessary.
  • The marketing expense of $15,000 is a minimum expenditure in the first 6 months and includes the Grand Opening Kit should you choose to purchase it from Battery Giant, as well as the National Marketing Fee of 1% of Gross Revenues per month or $100 per month (whichever is greater) and the minimum local marketing requirement of 4% of Gross Revenues per month or $1,000 per month (whichever is greater).

9.  Insurance:  $3,000 to $4,500

  • Battery Giant requires you to purchase and maintain, at your expense, throughout the term of the Franchise Agreement, commercial general liability insurance, including bodily injury, property damage, personal injury, advertising injury, non-owned automobile, loss of business income, and broad form contractual coverage for liability assumed under the Franchise Agreement.

10.  Additional Funds (3 months):  $5,000 to $15,000

  • Battery Giant relied on its affiliates’ experience in developing and operating a similar business in Michigan and Pennsylvania to compile these estimates. These estimates do not include owner compensation or return on investment. These figures are estimates and Battery Giant cannot guarantee that you will not have additional expenses starting the business.

11.  Miscellaneous Opening Costs:  $1,000 to $3,000

  • This estimate is a reserve to cover incidental unexpected costs. You may want to reserve more.

12.  Total:  $200,700 to $251,100

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