Updated September 24, 2018.
Detailed Estimates of The Goddard School Franchise Costs Based on Item 7 (Estimated Initial Investment) of The Goddard School’s 2018 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 a deposit of $20,000 when you sign the Preliminary Agreement. The remaining $115,000 is payable in two installments, $50,000 when you sign the Franchise Agreement and $65,000 when you receive the Opening Invoice.
2. Initial Training and Assistance Fee: $35,000
- The initial training and assistance 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 and (ii) charging a reduced fee of $10,000 to purchasers of the assets of existing franchises.
3. Initial Advertising Contribution: $35,000 to $38,500
- You must pay the franchisor an initial advertising contribution of $35,000 for the School, except in some instances, the franchisor may deem it necessary to spend more than $35,000 to adequately promote the School and it may increase your required initial advertising contribution by not more than 10%, or $3,500, over the initial advertising contribution amount.
- In certain special situations, the franchisor may approve a School building larger than the current typical building size range of from 8,400 square feet to 10,000 square feet, in which case your initial advertising contribution costs will be higher, up to a maximum of $50,000.
4. Site Development Assistance Fee: $30,000
- The $30,000 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 (optional) may range from $400,000 to $1,000,000 (higher in an urban area), site work costs will be approximately $250,000, building construction may range from $1,200,000 to $1,400,000, and professional fees and other related development expenses may range from $150,000 to $250,000.
- You must hire an engineer to test the soil for possible environmental contamination before you may make a commitment to purchase any property. The franchisor estimates the cost of the soil test will be approximately $5,000.
- Consequently, if you decide to purchase or build a facility, your increased costs may range between approximately $2,005,000 and $2,905,000 (higher in an urban area).
8. Building Construction and Site Work (Optional): Varies
9. Furniture, Fixtures, and Equipment: $157,000 to $197,000
- 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 can, but you are not required to, purchase these items through the franchisor for a School by signing its purchase orders for these items.
10. Marketing Materials, Stationery, Forms, and Curricular Resources: $13,700 to $20,000
11. Signs: $10,500
12. Computer Hardware and Firmware, Network Infrastructure, Telephone, Telecommunications Infrastructure, Interactive Flat Panel, and Digital Signage Package: $21,000
13. Security System: $11,000
14. Miscellaneous Opening Costs: $60,600 to $81,600
- 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: $49,800 to $74,900
16. Advertising Contribution – 3 Months: $9,000
- The estimated advertising contribution for the initial three months is in addition to the initial Advertising Contribution for your opening promotion and is based on the $3,000 per month minimum advertising contribution, as described in Item 6; your actual contributions may be higher but the franchisor does not project your Gross Receipts.
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. 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 at least $200,000 for a School.
18. Total Estimated Initial Investment: $619,900 to $760,600
- The franchisor has relied on its own over 15 years of experience in this business to compile these estimates and on information the franchisor has obtained from its franchisees.