Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Martinizing Dry Cleaning Franchise Costs (2016 FDD)

by Franchise Chatter on January 10, 2016

in Dry Cleaning Franchise, Franchise Costs

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Martinizing Dry Cleaning Photo by tofightfortheright

This post was updated on November 9, 2016 to reflect information from Martinizing Dry Cleaning’s 2016 FDD (Item 7).

Detailed Estimates of Martinizing Dry Cleaning Franchise Costs Based on Item 7 (Estimated Initial Investment) of Martinizing Dry Cleaning’s 2016 Franchise Disclosure Document

1.  Franchise Fee:  $69,500 to $99,500

2.  Initial Package:  $318,600

  • You must purchase an Initial Package that includes the machinery, equipment, material, and other related items, credits, and allowances needed for the initial operation of the Franchised Business and you must enter into a Purchase and Sale Agreement for the initial package purchase.
  • The equipment package will enable you to dry clean and finish most goods and garments and the investment for this equipment is approximately $318,600.

3.  Shipping and Taxes for Initial Package Items:  $2,500 to $13,100 for shipping and $5,500 to $30,000 for taxes

  • The term Shipping and Taxes includes shipping, freight, insurance, taxes, customs, duties, and other expenses incurred for the shipment of any goods or products, including by way of example only, your Initial Locker Order, the Lockers, and all machinery and equipment or other items for your Franchised Business, as well as all applicable taxes, assessable on such items.

4.  Equipment Installation, Training, and Temporary Storage:  $29,000 to $47,000

  • Typical equipment installation costs relate to setting the equipment in place and connection of water, steam, and air lines. The services of a licensed electrician may be needed to connect wiring of equipment.

5.  Grand Opening Deposit:  $15,000

  • If the Franchise Agreement is terminated by Martinizing for any reason before the grand opening of your Franchised Business, the Grand Opening Marketing Deposit will be refunded to you, less any outstanding amounts owed Martinizing or any third party, including the franchisor’s charges for any promotional items or materials prepared for or delivered to you and any expenditures made from the Grand Opening Marketing Deposit before cancellation of the Franchise Agreement.

6.  Security and Utility Deposits for Leased Franchised Location/Martinizing Store and Business Licenses:  $0 to $5,000

  • The range listed above assumes that the security deposit, on the high end, would be the equivalent to one month’s rent at $30 per square foot (or $60,000/12).
  • The low end assumes you already have a leased or owned location to serve as the Franchised Location, or that these fees are part of your lease, through your negotiations or otherwise.

7.  Rent for First Month for Leased Franchised Location/Martinizing Store:  $3,333 to $5,000

  • The typical Martinizing Store with on-site dry cleaning utilizes approximately 2,000 square feet, and rent is estimated to be between $20 and $30 per square foot, or $40,000 and $60,000 per year, depending on the size, condition, and location of the leased premises and the demand for the premises among prospective lessees.
  • This range of total rent is the franchisor’s best estimate based on its predecessor’s information from the most recent Martinizing franchisees.
  • In addition to rent, you may be charged a share of taxes, insurance, and common area maintenance expenses.

8.  Leasehold Improvements:  $60,000 to $75,000

  • This estimate of leasehold improvements relates to improvements to the Martinizing Store premises in an existing retail shopping plaza or center containing adequate utility capacities.
  • The range provided is based on the franchisor’s predecessor’s information from the most recent Martinizing franchisees.

9.  Vehicle Lease or Purchase Payments for First Month:  $0 to $2,000

  • You must purchase or lease a delivery vehicle in conformance with the requirements and guidelines set forth in the franchisor’s Operations Manual, including the requirement to have the Martinizing logo and otherwise be wrapped in accordance with its specifications.
  • If you already have a delivery vehicle with hanging racks, and otherwise meeting the franchisor’s specifications, with its approval, you may use it.
  • The low end of the range assumes you would not need to secure a vehicle and the high range quoted is for a new van and a racking system.
  • If you have a vehicle, and only need to purchase a racking system, the franchisor’s best estimate is that a racking system would cost between $500 and $1,000.

10.  Travel, Lodging, Expense, and Salary, if any, of Persons Attending Martinizing Training Program:  $500 to $3,000

  • If you are obtaining an Initial Franchise, the franchisor will provide the Martinizing Training Program to two persons as part of the Initial Package, and the Martinizing Training Program is mandatory for the Managing Person and the Store Manager, if one is employed by the franchisee.
  • However, you are responsible for the travel, lodging, expenses, and salaries (if any) payable to or for the persons attending the Martinizing Training Program. The range listed includes the travel, living expenses, and salary of two people designated by you to attend the Martinizing Training Program.

11.  Dry Cleaning Solvent License Fee:  $0 to $3,000

  • Not many solvent distributors require this licensing fee, but this is the fee Martinizing franchisees in the United States reported having paid for this type of license in the past and depending on the type of solvent you want to use in your business, you may be subject to this fee.

12.  Legal, Accounting, and Loan Fees:  $2,000 to $8,000

  • In addition to reviewing the disclosure document and your Franchise Agreement, you will need a legal advisor to review any applicable lease documentation with respect to the Franchised Location/Martinizing Store.
  • Also, you should have an accountant or other advisor prepare a business plan for your operations and review your working capital.

13.  Insurance:  $250 to $1,000

  • The range provided is based on the franchisor’s predecessor’s information from the most recent Martinizing franchisees in the United States and anticipates your initial monthly premium payment needed to commence operations.

14.  Computerized Accounting System:  $0 to $400

  • This item estimates the cost of your computerized accounting system to maintain your business records. It is the franchisor’s best estimate that this will cost you up to $400 and the low range assumes you already have a computerized accounting system in place.

15.  General Business Supplies:  $0 to $10,000

  • This item estimates the cost for the general business supplies and materials you will need to operate the Franchised Business, including, by way of example only, general cleaning supplies, restroom supplies, maintenance supplies and equipment, basic tools, furniture, fixtures, and light equipment, office supplies and forms, sewing and textile repair supplies, packaging, and chemicals and cleaning supplies.

16.  Additional Funds – 3 Months:  $10,000 to $70,000

  • This item estimates your additional start-up expenses for a 3-month period. These expenses include payroll costs, but do not include a draw or salary for you or a manager, if you elect to operate as an absentee owner.
  • These expenses also include an estimate of any Royalty and the Fund Fee payable to Martinizing for the 3-month period.

17.  Total:  $516,183 to $705,600

  • The range provided is based partially on its predecessor’s information from the most recent Martinizing franchisees in the United States and its experience through affiliate franchise systems regarding additional expenses needed for your initial investment during the first three months of operation.

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