Updated October 7, 2020.
Detailed Estimates of Huntington Learning Center Franchise Costs Based on Item 7 (Estimated Initial Investment) of Huntington Learning Center’s 2020 Franchise Disclosure Document
1. Initial Franchise Fee: $28,000
- This is the amount a New Franchisee pays to the franchisor upon signing the Franchise Agreement.
2. Travel, Living Expenses for Initial Training: $0 to $4,690
- Training-related expenses are for travel, food, and lodging for one person attending the franchisor’s headquarters-based in-person 3-week Franchisee Initial Training (FIT).
3. Curricula and Testing Materials: $19,247 to $19,847
- The franchisor’s Tutoring and Test Prep curricula, eCurricula, and testing materials consist of paper-based material, typically books, and electronic material, all of which you must buy or license before you open.
- The lower estimate assumes you buy the standardized test during the 3rd quarter of the year (when it costs $650). The upper estimate assumes you buy the standardized test during the 1st, 2nd, or 4th quarter of the year (when it costs $1,300). Lower and upper estimates assume you buy the remaining items before opening.
4. Furniture, Computers: $33,407 to $38,053
- Furniture includes desks, office and student chairs, bookcases, file cabinets, study carrels, and tables, which you buy before you open the Franchised Business. Lower and upper estimates are $21,925 and $25,771 for 1,200 and 1,600 square feet, respectively, excluding tax, delivery, and installation.
- Computer equipment costs about $10,282. The franchisor uses this figure in the lower and upper estimates. You buy this equipment from the franchisor when you sign the Franchise Agreement.
- Lower and upper estimates include $1,200 and $2,000, respectively, for network wiring and internet connection you obtain from a third party. The higher estimate is for more complex environments, such as with more networked computers.
5. Start-Up Supplies: $4,000 to $8,000
- Start-up supplies consist of office and consumable supplies, forms, marketing materials, student workbooks, appointment books, file folders, paper, pens, etc. You buy most of these items from vendors.
- You buy the Administrative Start-up Package from the franchisor; it contains operational and staffing forms pre-assembled in individually labeled manila folders. It costs about $310.
- You also buy some other items, such as student workbooks, from the franchisor.
6. Advertising: $19,124
- The lower and upper estimates include $14,250, which is $57,000 prorated over three months.
- New Franchisees must buy the Marketing Start-up Package from the franchisor when they sign the Franchise Agreement. Lower and upper estimates include the amount for this package.
- In addition to spending the minimum advertising requirement, the franchisor recommends you undertake a program of community-based marketing, such as visiting, speaking with, and communicating with school personnel, doctors, psychologists, and merchants.
7. Training and Technology Initial Fee: $6,000
- A New Franchisee pays the franchisor this amount when signing the Franchise Agreement. Upon transfer, the buyer pays the franchisor this amount or a greater or lesser amount.
8. Training and Technology Fee: $380
- New Franchisees begin paying this fee the 3rd full month after the Agreement Date. The amount above is the fee a New Franchisee pays for one month.
- Transfer and Subsequent Franchisees pay the fee that applies to the number of months the business has been open, and begin paying as of the first full month after the Agreement Date.
9. Architect Design: $0 to $5,500
- An architect designs the Premises and exterior signs based on franchisor, landlord, and municipal requirements.
- Your costs may be substantially higher, for example, if you use an expediter or 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 $77,000
- Generally, you attempt to negotiate with your landlord concessions for improvements and free rent before signing a lease. 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 gives you the first three months rent‐free. The upper estimate is the product of 1,400 square feet and the estimated per square foot cost of improvement. The franchisor estimates this cost at $55 per square foot.
- Improvement costs depend on many factors. Factors include landlord contributions, Premises size, the Premises’ condition before improvements, extent of 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 concessions, your geographic area, 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 Sign: $500 to $7,500
- Estimates include fabrication, installation, and electrical installation. Estimates do not include taxes, permit fees, and other fees, such as design fees.
13. Interior Graphics: $2,175 to $5,875
- Interior graphics consists of interior signage package, window posters, lobby plaques, and front door decals. You must buy and install interior graphics according to the franchisor’s standards.
14. Professional Fees: $500 to $3,000
- Professionals include attorneys, accountants, and other consultants.
- Typically nonrefundable.
15. Loan Facility Fee: $0 to $4,200
- The franchisor or its affiliate offers a New Franchisee up to $100,000 to finance their first Franchised Business.
- The lower estimate assumes you do not obtain this financing. The upper estimate assumes you obtain this financing and pay the Lender the nonrefundable loan facility fee, which the Lender deducts from the loan amount.
16. Insurance: $1,625 to $6,500
- This estimates the cost for the franchisor’s minimum required property and liability insurance. The lower estimate assumes you pay the first three months of the annual premium. The upper estimate assumes you pay the entire annual premium.
17. Additional Funds – 3 Months: $18,000 to $40,000
- This estimates the following expenses for a New Franchisee’s first three months of operation: recruitment, cleaning, equipment leasing, repairs, maintenance, postage, credit card fees, loan discount fees, and additional funds of $15,000.
- It includes $380 for one month of Training and Technology Fee and $940 for one month of Call Center Service. (Since the franchisor does not charge you through the end of your second full month of operation for Training and Technology Services and Call Center Service, the franchisor includes only one month).
- These additional funds include no other expense.
18. Total: $133,458 to $276,669