Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Sitters Etc. Franchise Costs (2014 FDD)

by Franchise Chatter on December 26, 2014

in Franchise Costs, Senior Home Care Franchises

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Sitters Etc LogoDetailed Estimates of Sitters Etc. Franchise Costs Based on Item 7 (Estimated Initial Investment) of Sitters Etc.’s 2014 Franchise Disclosure Document

  • A Sitters Etc. Personal Services business provides to individuals (“Clients”) non-medical in-home personal care. These services provide quality of life and ease of living to Clients, and enable them to live independently in their homes.
  • Your Clients are generally persons who are 60 years old or older, or younger persons who suffer from functional disabilities.
  • A Franchised Business also offers assisted living/residential care placement services.

1.  Initial Franchise Fee:  $40,500

  • The Initial Franchise Fee for a single Franchised Business is $40,500. The Initial Franchise Fee for each additional Franchised Business purchased by the same person or entity is $29,000.
  • A Fast Start Agreement requires the developer to commit to 4 Franchise Agreements for a total Development Fee of $106,500.

2.  Travel and Other Expenses While Training:  $1,000 to $3,000

  • Sitters Etc. will provide its initial training program to 2 people from your Franchised Business at no tuition charge.
  • You must pay for your trainees’ expenses while attending training. These include travel, lodging, meals, insurance, and compensation.
  • The low end of the estimate assumes that you are within driving distance of Sitters Etc.’s training facility.
  • The amount you spend will depend on how far the trainees must travel, the number of people attending training, the method of travel, and the accommodations chosen.

3.  Rent – 3 Months:  $1,200 to $3,000

  • Your state’s licensing requirements or local zoning laws may dictate that you maintain a small office. You will need approximately 400 to 800 square feet of office space either through a lease or participation in a conference space membership program.
  • Lease costs will vary based upon square footage, cost per square foot, and required maintenance costs and charges.
  • Sitters Etc. assumes the landlord will require the first month’s rent and a security deposit equal to one month’s rent.
  • You may need to pay for minor improvements/remodeling of the location. Sitters Etc. has not included an estimate for any leasehold improvements.

4.  Furniture and Fixtures:  $0 to $2,500

  • You may need to purchase typical office equipment, like a desk, chair, filing cabinets, and fax machine.

5.  Signage:  $0 to $200

  • You may need to purchase some signage for your Business. Sitters Etc.’s specifications for your signage will be included in the confidential Operations Manual.

6.  Office Equipment:  $1,000 to $7,000

7.  Insurance – Full Year Premium:  $3,000 to $6,500

  • Requirements are described in greater detail in Item 8. Factors that may affect your cost of insurance include location of the Franchised Business, value of the leasehold improvements, amount of inventory, and other factors.
  • Sitters Etc.’s estimate represents an annual premium. You may pay your premiums monthly, quarterly, or semi-annually.

8.  Miscellaneous Opening Costs:  $200 to $1,000

  • Sitters Etc.’s estimate includes other deposits, utility costs, telephone, Internet, and communications costs.

9.  Grand Opening Inventory:  $0 to $500

  • This estimate is for any additional office supplies you may need.

10.  Grand Opening Advertising:  $1,500

  • You must spend, at a minimum, this amount on advertising and promotion for your Franchised Business before opening and during the first three months of operation. Any advertising you wish to use must first be approved by Sitters Etc.

11.  Computer Equipment, Software, and Printer:  $1,000 to $5,000

  • You must purchase the computer equipment Sitters Etc. specifies in Item 11. Its specifications for your computer equipment will also be included in the Operations Manual.

12.  Permits/Licenses:  $250 to $18,000

  • This is the estimated cost of the permits and licenses that you must have in order to operate your Franchised Business, and the costs may vary greatly depending on your state’s requirements. Each state establishes its own licensing requirements, and those requirements may change.
  • You are solely responsible for investigating and determining the licensing requirements and costs in your state and taking all necessary actions to ensure that your Franchised Business remains in compliance with those requirements at all times.
  • Sitters Etc. strongly recommends that you consult with an attorney to determine exactly what permits and licenses you will need and how much those permits and licenses will cost.

13.  Professional Fees:  $2,500 to $5,000

  • Sitters Etc. strongly recommends that you retain an attorney to advise you on the franchise offering and your state’s licensing requirements. You may also wish to retain an accountant to help you evaluate the franchise offering.
  • If you choose to form an entity to own the franchise, you may incur additional fees that Sitters Etc. cannot estimate.

14.  Additional Funds – 3 Months:  $2,500 to $4,500

  • These amounts are the minimum recommended levels to cover operating expenses, including employees’ salaries, for the start-up phase of the business, which Sitters Etc. calculates will be 3 months from the time you commence operating the Franchised Business. However, Sitters Etc. cannot guarantee that this amount will be sufficient.
  • Additional working capital may be needed if Gross Sales are delayed or less than anticipated, or fixed costs are high. Additional working capital may also be needed for state imposed requirements and may vary greatly from state to state.

15.  Total:  $54,650 to $98,200

  • This total is an estimate of your initial investment and the expenses you will incur during the first 3 months of operations. In compiling this chart, Sitters Etc. relied on the experience of its officers.
  • The amounts shown are estimates only and may vary for many reasons including whether you operate from home, or if your state’s licensing requirements or local zoning laws dictate that you operate from a leased space, the capabilities of your management team, and your business experience and acumen.
  • These are only estimates and your costs may vary based on actual rental prices in your area, and other site-specific requirements or regulations.
  • The amounts do not cover a salary for you, or debt service payments.

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