Updated July 4, 2021.
Detailed Estimates of The Goddard School Franchise Costs Based on Item 7 (Estimated Initial Investment) of The Goddard School’s 2021 Franchise Disclosure Document
- The estimates below are for a typical new School with a building size ranging from 8,400 square feet to 10,000 square feet. In certain special situations, the franchisor may approve a larger building, in which case your costs will be higher.
1. Initial License Fee: $135,000
- You must pay the franchisor a deposit of $30,000 when you sign the Preliminary Agreement. The remaining $105,000 is payable when you receive the Opening Invoice.
2. Training and Assistance Fee: $35,000
- The fee covers your training, opening support provided by the School Support Services department, and additional training as the franchisor deems necessary to support a successful opening and enrollment ramp-up.
- The fee is uniform except for the franchisor’s current policy of (i) charging a reduced fee of $15,000 to existing franchisees in good standing who purchase an additional franchise, or in certain circumstances waiving the fee for existing franchisees in return for a substantial reduction of the franchisor’s obligations, and (ii) charging a reduced fee of $10,000 (subject to an annual increase of 10%) to purchasers of the assets of existing franchises.
3. Initial Marketing Fee: $50,000 to $55,000
- When you sign the Franchise Agreement, you must pay the franchisor an initial marketing fee of $50,000 for a School in the current typical building size range reflected in the table, except in some instances, based on the local cost of advertising and other market conditions, the franchisor may deem it necessary to spend more than $50,000 to adequately promote the School and the franchisor may increase your required initial marketing fee by an additional amount, but not more than 10%, or $5,000, for a total initial marketing fee of up to $55,000.
- In certain special situations, the franchisor may approve a School building larger than the current typical building size range from 8,400 square feet to 10,000 square feet reflected in the table, in which case your initial marketing fee payable when you sign the Franchise Agreement will be higher, up to a maximum of $65,000, subject to an increase of not more than 10%, or $6,500 based on the local cost of advertising and other market conditions, for a total initial marketing fee of up to $71,500.
4. Site Development Assistance Fee: $35,000
- The $35,000 fee for site development assistance for the School covers the franchisor’s expenses in reviewing the site and building plans for your School, traveling to and from a proposed location, providing demographic and other relevant information, and compensates the franchisor for assisting you in preparing your financial applications.
- The site development assistance fee is uniform under the Franchise Agreement, except if you are an existing franchisee in good standing purchasing an additional franchise, the fee is $15,000.
- The fee also covers the franchisor’s legal costs associated with reviewing for compliance with its requirements any legal documents you provide to it, as well as its costs in assisting you in obtaining appropriate state or local licenses.
5. Background Check (estimate is for up to four individuals): $3,000 to $5,500
- You must pay the franchisor’s costs to obtain a background check (including credit and criminal) on each individual franchise applicant.
6. Convention Deposit: $1,000
7. Land Acquisition Cost (Optional): Varies
- The franchisor estimates that the land acquisition costs may range from $450,000 to $1,200,000 and the construction costs, including site work, construction bid, and construction soft costs may range from $1,800,000 to $3,400,000 (could be higher in specific markets or in urban areas).
- If you finance the cost of the construction project, you will also incur costs in connection with draws under the construction loan and lender-related fees that will be listed on your loan documents and the franchisor estimates this may range from $250,000 to $550,000, depending on the project costs.
- The franchisor will provide prototypes of building plans. The services of a qualified, licensed architect and engineer, who the franchisor has approved or designated for use, will be required to adapt the franchisor’s prototype building plans and specifications for the remodeling or finish-out of your School.
- If the franchisor does not require you to use design/build professionals it designates, it may, in its sole business judgment, require that you retain a construction manager it designates or approves for construction management services.
- The franchisor may from time to time develop or approve variations with respect to its prototype locations and plans although it has no obligation to do so.
- If the current prototype building plans have never been used in the state in which your School will be located, or your School will be located in a retrofit building, you may have to pay additional fees to the architect and engineer to bring the prototype into compliance with state-specific requirements.
- You should test the soil for possible environmental contamination before making a commitment to purchase the property.
- The estimated costs of the architect and engineer are included in the estimated construction soft costs. The franchisor estimates the cost of any construction manager to be $50,000 and the cost of any soil test to be $5,000.
- Consequently, if you decide to purchase or build a facility, your increased costs may range between approximately $2,555,000 to $5,205,000 (higher in an urban area), but these cost estimates are highly dependent on the geographic area in which you chose to build. If you decide to purchase land in an urban area and build the facility for your School, rather than rent the property, your land acquisition costs would be higher.
8. Building Construction and Site Work (Optional): Varies
9. Furniture, Fixtures, and Equipment: $201,000 to $241,000
- The franchisor will provide you with specifications for the initial furniture, equipment, marketing materials, stationery, forms, curricular resources, signs, a computer system, telephone system, interactive flat panel, digital signage, and security system required for the opening of the School.
- You may be required to purchase certain of these items directly from the franchisor’s approved suppliers; other items you may be able to purchase from other sources or through Purchase Orders the franchisor issues which it will submit to approved suppliers on your behalf.
10. Marketing Materials, Stationery, Forms, and Curricular Resources: $18,500 to $24,500
11. Signs: $10,500
12. Computer System, IT Security, Telephone System, Interactive Flat Panel, and Digital Signage Package: $21,000 to $30,000
13. Security System: $11,000
14. Miscellaneous Opening Costs: $73,000 to $113,000
- The Miscellaneous Opening Costs are the franchisor’s best estimates of costs for various items including lease deposit and deposits for insurance, gas, electric, pre-opening print and online business listings advertising, including any Internet-based advertising and related items.
15. Three Months’ Rent: $55,000 to $85,000
16. Accreditation: $1,000
- The franchisor may require that you apply for and earn School accreditation through a national accreditor the franchisor approves, or achieve at least second level quality recognition from your state’s Quality Rating and Improvement System within 18 months after your School opens for business, or by a later date the franchisor determines, and then maintain your accreditation or quality recognition.
- The franchisor estimates the current cost of obtaining accreditation or quality recognition is $1,000. You will need to reapply which could be annually. This amount is payable to third parties.
17. Additional Funds – 3 Months: $48,300 to $90,600
- The initial start-up expenses include payroll costs but do not include any draw or salary for you. The franchisor does not include any estimate for your Royalty Fee payments or TGS Marketing Fund marketing fees which all depend on the amount of Gross Receipts you receive. These figures include utilities, telephone, legal/accounting expenses, local advertising, and materials and supplies.
- To cover these Additional Funds expenses for a three-month period and beyond, and to cover rent and other costs, the franchisor requires that you have initial working capital of between $200,000 and $250,000 for a School.
18. Total Estimated Initial Investment: $698,300 to $873,800
- If you decide to purchase or build your facility, your increased costs may range from between approximately $2,555,000 to $5,205,000 or more depending on the geographical area, including higher costs in urban areas.
- The franchisor has relied on its own over 19 years of experience in this business to compile these estimates and on information the franchisor has obtained from its franchisees.