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Franchise Costs: Detailed Estimates of Huntington Learning Center Franchise Costs (2017 FDD)

by Franchise Chatter on August 8, 2015

in Education Franchise, Franchise Costs

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

Huntington Learning Center Photo

This post was updated on June 18, 2017 to reflect information from Huntington Learning Center’s 2017 FDD (Item 7).

Detailed Estimates of Huntington Learning Center Franchise Costs Based on Item 7 (Estimated Initial Investment) of Huntington Learning Center’s 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $25,000

  • This is the amount you pay the franchisor when you sign the Franchise Agreement.

2.  Development Fee:  $0 to $5,000

  • If you sign a Development Agreement, you should expect to incur additional costs for each Franchised Business you develop, including the costs in this table.

3.  Travel and Living Expenses While Training:  $0 to $6,000

  • For transportation, food, and lodging for one person attending the franchisor’s Oradell, NJ-based in-person initial training program. You may also incur salary and other expenses.

4.  Curricula and Testing Materials:  $21,000

  • This figure consists of $19,000 for both Tutoring Service and Test Prep Service and $2,000 for testing material.
  • At your option, you may place each page of your curricula in plastic sheet protectors and place the sheet protectors in binders to prolong the useful life of your curricula. The cost to place more-frequently used curricula in sheet protectors and binders is $3,600; and the cost for less-frequently used curricula is $700.
  • Price depends on vendor pricing and inventory availability.
  • Typically nonrefundable.

5.  Furniture, Equipment, Computers:  $25,240 to $27,630

  • Includes furniture, equipment, phones, computers, third-party software. Includes nonrefundable payment of $10,799 to the franchisor for the software and hardware in Exhibit P; its pricing is subject to change.
  • Includes $500 to $2,000 for network wiring and internet connection; the higher estimate is for more complex environments, such as with more networked computers.
  • Payments to others typically are nonrefundable.

6.  Start-Up Supplies:  $4,000 to $8,000

  • Office and consumable supplies, forms, marketing materials, student workbooks, appointment books, file folders, paper, pens, etc., some of which you are required to buy from the franchisor.
  • Typically nonrefundable.

7.  Local Advertising:  $9,000 to $11,500

  • You spend it within three months after opening the Franchised Business. The lower amount assumes you only offer Tutoring Services. The upper amount assumes you offer both Tutoring Services and Test Prep Services.
  • Typically nonrefundable.

8.  Training and Technology Fee:  $380 to $1,520

  • Estimates are for a new franchise for 3 and 6 months, with the first payment due the 3rd full month after the Agreement Date.

9.  Architect Design:  $500 to $3,000

  • An architect designs the premises and exterior signs based on franchisor, landlord, and municipal  requirements.
  • You may need a state-licensed architect to seal the drawings.
  • Typically nonrefundable.

10.  Security and Utility Deposits; License Fees:  $500 to $3,000

  • Typically, you give your landlord and utility companies refundable deposits.
  • Landlords typically require 2-3 months’ rent, or more, as security.
  • The lower amount assumes you give the landlord no security.
  • If you obtain any licenses or permits, you may have to pay related fees; typically, they are not refundable.

11.  Real Estate and Improvements:  $0 to $49,000

  • Generally when you negotiate the lease, you attempt to negotiate concessions for improvements and free rent. If the landlord pays for improvements, you might eliminate or reduce your initial construction costs. However, in return, your rent might be higher.
  • The lower estimate assumes the landlord pays for all improvements and the first three months’ rent. The upper estimate assumes improvement costs of $35 per square foot for 1,400 square feet.
  • Improvement costs depend on many factors and your costs may be substantially higher. Factors include premises size, extent of improvements, the premises condition before improvements, demolition, flooring, walls, painting, doors, windows, ceiling, sprinklers, lights, electricity, heating and air conditioning, plumbing, the presence or absence of interior bathrooms, and many other items.
  • Rent depends on many factors, like the geographic area in which you locate your Franchised Business, size, condition, utilities, and common area maintenance charges.
  • Improvement costs and rent also depend on whether you locate in first or second floor retail space or professional space. Rent in first floor retail space is generally higher than in second floor retail space and professional space.

12.  Exterior Signs:  $1,000 to $6,000

  • You install signs according to franchisor, landlord, and municipal requirements.
  • You buy exterior signs from vendors of your choosing.
  • Typically nonrefundable.

13.  Center Graphics:  $4,500 to $7,500

  • You buy and install graphics on walls and windows according to the franchisor’s standards. You buy these graphics from a vendor the franchisor specifies.
  • You must hire a vendor to measure and install the graphics.

14.  Professional Fees:  $500 to $3,000

  • Professionals include attorneys, accountants, and other consultants.
  • Typically nonrefundable.

15.  Insurance:  $450 to $4,700

  • This is an estimate of your initial insurance premium for your required insurance. The low estimate assumes you pay the first three months of an annual premium of $1,800. The high estimate assumes you pay the entire year’s annual premium of $4,700. Your expense may be more.

16.  Financing Fees:  $0 to $3,800

  • The franchisor or its affiliate offers up to $100,000 to finance opening your Franchised Business.
  • The low estimate assumes you do not obtain this financing.
  • The franchisor’s financing fees are nonrefundable.

17.  Additional Funds – 3 Months:  $18,000 to $40,000

  • Estimates the following expenses for your first three months of operation:  recruitment; supplies; cleaning; additional funds of $15,000; miscellaneous expenses (like equipment leasing, repairs, maintenance, postage, credit card fees, loan discount fees, and payroll service).
  • It also includes $380 for one month of Training and Technology Fee, $861 for one month of Call Center service, and $412 for one month of Conference Services (since the franchisor does not charge you through the end of your second full month of operation for Training and Technology Services, Call Center Services, and Conference Services, the franchisor includes only one month).
  • These additional funds include no other expense.

18.  Total:  $110,070 to $225,650

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