This post was updated on May 4, 2016 to reflect information from Lemon Heaven’s 2016 FDD (Item 7).

Detailed Estimates of Lemon Heaven and Cin City Donuts Franchise Costs Based on Item 7 (Estimated Initial Investment) of Lemon Heaven’s 2016 Franchise Disclosure Document

• Depending on the number and types of Franchise Businesses you operate, additional equipment packages may be required.

• The high range estimate for a Cin City Donuts Business includes the capability to also operate a Lemon Heaven Business with a trailer equipment package.

• These estimates are for cart, kiosk, and trailer locations only. Lemon Heaven may also offer you a franchise for a Site Specific Business that requires custom build-out.

• These costs and ranges do not include amounts for Site Specific Businesses that require custom build-out, because Lemon Heaven has no experience with such locations.

• All fees are non-refundable unless otherwise stated.

Lemon Heaven Business

1.  Franchise Fee:  $0 to $25,000

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

• Lemon Heaven does not charge a fee for initial training. However, you will be responsible for travel, meals, lodging, wages, salaries, and employment benefit expenses of you and your personnel while attending training.

• The estimate includes these expenses for 2 people to attend training and the low range estimate reflects training at a location near you.

3.  Event Fees (Rent):  As specified in lease

• You will not purchase the business premises for a cart, kiosk, or trailer. However, your cost for the right to operate a cart, kiosk, or trailer, which may include a base fixed rent, typically ranges from 0% to 45% of your sales as determined by the lease or concession agreement, so estimates for the purchase and lease of real property are not included in the table.

• Currently, Lemon Heaven has no experience with Site Specific Businesses that require custom build-out, therefore, it is unable to provide estimates for such locations.

• Variables affecting the cost include venue, property location, building size, improvements, desirability of location, access to major streets, real estate taxes, common area maintenance charges, and the like.

4.  Equipment Packages and Small Wares:  $11,500 to $70,000

• This equipment package range excludes optional equipment, shipping costs, and taxes on equipment, if applicable, that may increase costs by approximately 5% to 15%.

• These costs are for cart, kiosk, and trailer equipment packages and do not include locations that require a custom build-out because Lemon Heaven has no experience with such locations.

5.  Computer System and Office Supplies:  $0 to $4,000

• These amounts include the cost of purchasing a new Computer System (as defined in Item 11) and general office supplies.

• The low-end of the range assumes that you already have all required components of the Computer System, and sufficient office supplies. The high-end of the range assumes that you need to purchase the Computer System and office supplies before you commence operations.

6.  Starting Supplies:  $1,000

• Starting supplies include dollies, hoses, extension cords, and other miscellaneous equipment.

7.  Insurance:  $750 to $2,000

• You must obtain and maintain certain types and amounts of insurance. This estimate includes insurance costs for 12 months for the comprehensive general liability insurance Lemon Heaven requires under the Franchise Agreement.

8.  Professional Fees:  $0 to $4,500

• Before you sign the Franchise Agreement, you should obtain professional advice from an advisor, like a lawyer or an accountant.

• Lemon Heaven may also require you to retain a consultant that it designates to advise you on financing the start-up costs of your Franchise Business, which it estimates will cost a minimum of $1,500 if it imposes such a requirement.

• The estimate on the high end also contemplates fees for professional advice including organizing a business entity if advised by your advisor(s).

9.  Opening Inventory:  $5,000

10.  Uniforms:  $500

11.  Vehicle and Utility Trailers:  $0 to $45,000

• You must take into consideration that before you commence operations you will need a vehicle in the form of a cargo van, cube van, or a pick-up truck and/or vehicle with an enclosed utility trailer.

• The low range figure assumes that you already have this type of vehicle. The high range figure assumes that you do not have this type of vehicle and that you will need to purchase this type of vehicle (including an enclosed utility trailer if the vehicle does not have an enclosed cargo area) before you commence operations.

12.  Additional Funds – 3 Months:  $10,000 to $15,000

• The additional funds represent working capital that will be used in the operation of the business.

• The amount of additional funds required will depend on the financial condition and cash flow of your Franchise and venue location. You may need these additional funds to operate your Franchise during its 3-month initial period.

• The estimated amount covers items such as employees’ salaries, legal services, and miscellaneous expenses. The amount does not cover any salary or other compensation for you.

13.  Estimated Initial Investment:  $29,750 to $174,000 (not including event fees/rent)

• To compile these estimates, Lemon Heaven has relied on its owners’ experience in the business of offering franchises in Canada since December 2000 and its affiliates’ experience in operating businesses such as the Franchise Businesses in Canada since May 2004.

• Although Lemon Heaven’s affiliates have also operated businesses such as the Franchise Businesses in the United States since February 2015, such operations are limited in comparison to comparable Canadian operations.

• Your estimated initial investment may vary significantly from the estimates provided above due to differences between the United States and Canada in market and economic conditions, laws, tax structure, and other circumstances.

• The franchisor does not finance any portion of your initial investment.

Cin City Donuts Business

1.  Franchise Fee:  $0 to $25,000

2.  Training Expenses:  $1,500 to $3,000

3.  Event Fees (Rent):  As specified in lease

4.  Equipment Packages and Small Wares:  $65,000 to $100,000

5.  Computer System and Office Supplies:  $0 to $4,000

6.  Starting Supplies:  $1,000

7.  Insurance:  $1,500 to $3,000

8.  Professional Fees:  $0 to $4,500

9.  Opening Inventory:  $5,000 to $10,000

10.  Uniforms:  $500 to $750

11.  Vehicle and Utility Trailers:  $0 to $45,000

12.  Additional Funds – 3 Months:  $10,000 to $20,000

13.  Estimated Initial Investment:  $84,500 to $216,250 (not including event fees/rent)