Updated September 28, 2019.
Detailed Estimates of The Goddard School Franchise Costs Based on Item 7 (Estimated Initial Investment) of The Goddard School’s 2019 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 $20,000 when you sign the Preliminary Agreement. The remaining $115,000 is payable 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: $50,000 to $55,000
- When you sign the Franchise Agreement, you must pay the franchisor an initial advertising contribution 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 advertising contribution by an additional amount, but not more than 10%, or $5,000, for a total initial advertising contribution of up to $55,000.
- In certain special situations, the franchisor may approve a School building larger than the current typical building size range reflected in the table, in which case your initial advertising contribution 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 advertising contribution of up to $71,500.
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 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.
- You will need to hire an architect and engineer, and if the franchisor, in its sole business judgment, requires, a construction manager the franchisor designates or approves for construction management services. 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: $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: $18,700 to $24,500
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: $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: $49,800 to $74,900
16. Advertising Contribution – 3 Months: $10,500
- 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 initial $3,500 per month minimum advertising contribution for the School (before any inflation adjustment).
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 between $200,000 and $250,000 for a School.
18. Total Estimated Initial Investment: $653,800 to $814,500
- The franchisor has relied on its own over 17 years of experience in this business to compile these estimates and on information the franchisor has obtained from its franchisees.