Franchise Costs: Detailed Estimates of Martinizing Dry Cleaning Franchise Costs (2018 FDD)

Updated October 8, 2018.

Detailed Estimates of Martinizing Dry Cleaning Franchise Costs Based on Item 7 (Estimated Initial Investment) of Martinizing Dry Cleaning’s 2018 Franchise Disclosure Document

Plant Franchise

1.  Franchise Fee:  $69,500

2.  Plant Purchase:  $301,417

• With a Plant Franchise, you must purchase an existing dry cleaning and laundry plant which will be converted into your Plant Franchise and will serve as your Franchised Location.

• The average provided above is based upon historical data reported by Martinizing franchisees regarding purchases of single dry cleaning and laundry plants in the calendar years of 2015-2017 and up to the issuance date of the 2018 disclosure document.

3.  Machinery and Equipment:  $0 to $15,000

• It is assumed that the dry cleaning and laundry plant you purchase will include the Standard Machinery and Equipment, but if it does not, you will need to purchase such machinery and equipment as may be necessary to operate the Franchised Business.

4.  Basic Operating Supplies:  $2,300

• This fee includes the cost for dry cleaning related supplies that you will need to operate a Plant Store Franchised Business including, by way of example only, hangers, collar supports, drop-off/pick-up bags, etc.

5.  Initial Package Fee:  $7,500 to $18,400

• You must purchase an Initial Package that includes the Initial Package Items.

6.  Site Selection Fee:  $500 to $2,000

• This fee includes payment for site selection services, including assistance with locating and/or securing your Franchised Location/Martinizing Store and negotiating the initial lease for your Franchised Location/Martinizing Store.

7.  Shipping and Taxes for Initial Package Items:  $0 to $1,225 for shipping and $100 to $300 for taxes

• The term Shipping and Taxes includes shipping, freight, insurance, taxes, tariffs, customs, duties, and other expenses incurred for the shipment of any Initial Package Items included in the Initial Package as well as all applicable taxes assessable on such items.

8.  Equipment Installation, Training, and Temporary Storage:  $0 to $1,200

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

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

• If the purchase of your dry cleaning and laundry plant for your Plant Franchise did not include retail store space, you will need to lease enough space for a Martinizing Store that is able to adequately offer and support all of the Martinizing Services, including providing ample storage space.

• You will also need to secure all necessary utilities and business related licenses to operate the Franchised Location.

• The typical Martinizing Store with on-site dry cleaning and laundry utilizes approximately 1,700 square feet to 3,500 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.

• 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 your purchase of the dry cleaning and laundry plant included the lease or ownership of a store location to serve as the Franchised Location and/or that these fees are part of your purchase, through your negotiations or otherwise.

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

11.  Leasehold Improvements:  $0 to $20,000

• This estimate of leasehold improvements relates to improvements to a Plant Franchise Martinizing Store premises in an existing retail shopping plaza or center containing adequate utility capacities.

12.  Rebranding:  $17,000 to $25,000

• These rebranding fees relate to the purchases you will need to make in order to properly identify the Franchised Location as a Martinizing Store, using trademarks, logos, and other representations of the Martinizing name and brand.

13.  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 Martinizing’s Operations Manual, including the requirement to have the Martinizing logo and otherwise be wrapped in accordance with Martinizing’s specifications.

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

• If you are obtaining an Initial Franchise, Martinizing 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 a Store Manager 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 above includes the travel, living expenses, and salary of two people designated by you to attend the Martinizing Training Program.

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

• Not many solvent distributors require this licensing fee, but depending on the type of solvent you want to use in your business, you may be subject to this fee.

16.  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 purchase documentation for the existing store you purchase to serve as your Plant Franchise, applicable lease documentation with respect to the Franchised Location/Martinizing Store, any and all employment related matters regarding the operation of your Franchised Business, and any other legal matters you would like reviewed and/or you have been advised to have reviewed in connection with operation of the Franchised Business.

• You should also have an accountant or other advisor prepare a business plan for your operations and review your working capital.

17.  Insurance:  $250 to $1,000

18.  Computer Hardware and Software:  $0 to $4,000

19.  Point-of-Sale System:  $0 to $10,000

20.  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.

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

• This item estimates your additional initial start-up expenses for a 3-month period.

• These expenses include payroll costs, but do not include any 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.

22.  Total:  $414,450 to $577,342