Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Express Employment Professionals Franchise Costs (2016 FDD)

by Franchise Chatter on June 20, 2015

in Franchise Costs, Staffing Franchise

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Express Employment Professionals Photo by technomadia

This post was updated on February 12, 2017 to reflect information from Express Employment Professionals’ 2016 FDD (Item 7).

Detailed Estimates of Express Employment Professionals Franchise Costs Based on Item 7 (Estimated Initial Investment) of Express Employment Professionals’ 2016 Franchise Disclosure Document

For a Single Traditional Model

1.  Initial Franchise Fee:  $35,000

  • If you enter into the Territory Development Agreement with the franchisor, your Initial Franchise Fee is $84,000.
  • The franchisor may offer discounts to qualified veterans or qualified franchisees who are opening additional Express Employment Professionals Businesses.

2.  Lease and Deposit:  $2,100 to $2,700

  • The office must be located in a place suitable for interviewing associates and candidates and for meeting the general public and customers.
  • Any deviation from the suggested interior layout and design provided to you by the franchisor for establishing your new business must be approved in advance in writing.
  • The franchisor expects that you will need approximately 1,000 to 1,500 square feet for the office for the Core Model and approximately 1,200 to 1,500 square feet for the Expanded Model.
  • The franchisor estimates that your lease costs will be between $22 per square foot and $25 per square foot per year.
  • The estimates included in the chart are for one month’s rent.
  • Prepaid rent and security deposits are generally required by landlords.

3.  Leasehold Improvements:  $4,000 to $5,000

  • Financing may be available through lessors or third parties.

4.  Utility Deposits:  $200 to $600

5.  Training Costs:  $3,300 to $6,500

  • “Training Costs” include the costs you will incur when you and/or your employees attend the initial training program and the salaries of your employees before the Express Employment Professionals Business opens.
  • The franchisor will provide the initial training program of up to 2 weeks in Oklahoma City, OK, and 1 week at a designated site for field training, to train you to operate the Express Employment Professionals Business.
  • The franchisor will pay the cost of transportation and lodging while you are in attendance at the classroom training in Oklahoma City, OK and your field training designation for a maximum of 2 people.
  • Meals, incidental expenses, and any changes made to transportation plans are your responsibility.

6.  Office Supplies:  $300 to $400

  • Includes paper, business cards, stationery, envelopes, etc. for your initial setup.

7.  Office Equipment:  $6,200 to $6,500

  • Equipment costs include costs of various office equipment you will need to operate the Express Employment Professionals Business.

8.  Computer System Hardware:  $12,000 to $14,500

  • In 2014, 60.86% of new franchisees financed the purchase of the computer system and software through the franchisor. The average monthly expense, principal and interest, was $329.14, combined core and expanded offices.

9.  Furniture and Fixtures:  $8,000 to $8,600

  • The estimate is for the furniture and fixtures you will need to operate the Express Employment Professionals Business, such as:  desks, chairs, file cabinets, etc.

10.  Signs:  $3,000 to $4,000

  • You must purchase and display a sign which complies with the franchisor’s specifications, if sign rights can be secured at your approved location.
  • Signage will include interior and exterior signs.

11.  Insurance:  $400 to $600

  • This is an estimate of your initial insurance premium for required insurance.

12.  Professional Service Fees:  $1,000 to $2,000

  • The franchisor believes that it is important for you to consult with your own accountant, attorney, risk management and/or business advisor before making any decision to enter into a Franchise Agreement with it.
  • You should also use an attorney or other business advisor to review any lease or other agreements that you enter in connection with your Express Employment Professionals Business or other independent business relationship.

13.  Additional Funds:  $44,500 to $53,600

  • You will need additional capital to support on-going expenses, such as payroll and utilities, insurance, lease, licenses, supplies, and miscellaneous expenses.
  • The franchisor estimates that the amount given will be sufficient to cover on-going expenses for the start-up phase of the business, which it estimates to be 9 months.

14.  Total:  $120,000 to $140,000

  • The estimates have been developed using the franchisor’s experience in the employee service business and information from its franchisees.
  • The figures in the chart are only estimates. Your actual costs may vary considerably.

For a Single Professional Staffing Model

  • The total estimated initial investment necessary to begin operation of a single expanded model Express Employment Professionals Business ranges from $170,000 to $196,000.

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