Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of The Goddard School Franchise Costs (2016 FDD)

by Franchise Chatter on November 10, 2015

in Child-Related Franchises, Childcare Franchise, Education Franchise, Franchise Costs

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Goddard School Exterior Photo by sqwynch

This post was updated on December 28, 2016 to reflect information from The Goddard School’s 2016 FDD (Item 7).

Detailed Estimates of The Goddard School Franchise Costs Based on Item 7 (Estimated Initial Investment) of The Goddard School’s 2016 Franchise Disclosure Document

  • The estimates below are for a typical 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 Opening Assistance Fee:  $35,000

  • The initial training and opening assistance fee is uniform except for the franchisor’s current policy of charging a reduced fee of $15,000 to existing franchisees in good standing who purchase an additional franchise and a fee of $10,000 to purchasers of existing franchises.

3.  Initial Advertising Contribution:  $35,000 to $38,500

  • You must pay the franchisor an initial advertising contribution of $35,000, 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.
  • The initial advertising contribution is non-refundable, uniform for all persons presently acquiring a franchise, and is paid to the franchisor to purchase advertising and promotional materials.

4.  Site Development Assistance Fee:  $30,000

  • The $30,000 fee for site development assistance 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 fee also covers the franchisor’s legal expenses associated with reviewing any legal documents you provide to it, as well as its costs in assisting you in obtaining appropriate state or local licenses.
  • The site development assistance fee is uniform except if you are an existing franchisee in good standing purchasing an additional franchise, the fee is $15,000.

5.  Background Check (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:  $151,000 to $176,500

  • The franchisor will provide you with specifications for the initial furniture, equipment, marketing materials, stationery, forms, curricular resources, signs, computer software, computer hardware, telephone system, interactive white board, 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 by signing its purchase orders for these items.

10.  Marketing Materials, Stationery, Forms, and Curricular Resources:  $13,900 to $18,200

11.  Signs:  $10,500

12.  Computer Hardware, Telephone, Interactive White Board, and Digital Signage Package:  $17,000

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 business listings, and online business listings advertising, including any Internet-based advertising and related items.

15.  Three Months’ Rent:  $49,800 to $69,900

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 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:  $610,200 to $729,300

  • The franchisor has relied on its own over 14 years of experience in this business to compile these estimates and on information the franchisor has obtained from its franchisees.

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{ 1 comment… read it below or add one }

Terry July 31, 2017 at 10:55 am

Go Goddard!


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