Franchise Costs: Detailed Estimates of First Choice Business Brokers Franchise Costs (2016 FDD)

Detailed Estimates of First Choice Business Brokers Franchise Costs Based on Item 7 (Estimated Initial Investment) of First Choice Business Brokers’ 2016 Franchise Disclosure Document

1.  Initial Franchise Fee:  $34,000

2.  Training Fee:  $5,000

• The franchisor may offer financing for a portion of your Initial Franchise Fee and Training Fee if you meet its qualifications.

• The franchisor may finance up to 50% of your Initial Franchise Fee and Training Fee (a combined $19,500) at 0% annual interest rate over a 40-month repayment term. If the franchisor offered you such financing for $19,500, your monthly payment would be $487.50.

3.  Key Personnel Training:  $0 to $500

4.  Agent Training Fee:  $0 to $500

• The initial training fee is due at the time of signing of the franchise agreement.

• If you have Key Personnel, they are required to attend the initial training program. The fee for an Associate to attend training is $500.

• The estimate in Item 7 is based on you attending the initial training program alone for your Franchised Business, which is typically the case for franchisees.

5.  Travel to the Franchisor’s Headquarters for Training:  $0 to $2,500

• The initial training program is conducted through webinars and may also be held at the franchisor’s headquarters in Las Vegas, Nevada. You must pay the cost of any travel, transportation, lodging, and meals to attend any onsite initial training programs.

• The “zero” cost under this line item assumes that you are located in or around the franchisor’s headquarters in Las Vegas, or that the franchisor conducts the training online.

6.  Real Estate/Rent:  $0 to $15,000 for first three months

• You are not required to purchase real estate for the operation of your Franchised Business, and, if you have no agents (Associates), you may operate a home office as long as you have a professional meeting place to meet clients.

• The franchisor must approve your location.

7.  Real Estate Deposit and Improvements:  $0 to $15,000

• You should look for space that does not require your making any leasehold improvements, but it may not always be possible to find office space that does not require any improvements to the space at all.

• Installation of high speed Internet service is strongly recommended.

• You may be required to make a security deposit as a condition of leasing the location for your Franchised Business. Typically, a landlord will require a security deposit equal to one month’s rent and payment of one month’s rent before giving you possession of the leased premises.

8.  Signs:  $750 to $3,000

• The franchisor requires that, before you open, you spend between $750 and $3,000 on a sign for your Franchised Business that will display the Marks. Any sign that you place on your Franchised Business must first be approved by the franchisor before you use it.

9.  Office Furniture, Equipment, and Computers:  $1,000 to $7,000

10.  Pre-Opening and Initial Advertising:  $1,500 to $7,000

• The pre-opening initial advertising in this Item 7 consists mainly of marketing materials and ad placements. The cost for this will be about $1,500 to $3,000.

• The franchisor estimates that you will devote the remaining amount of money in this section to regular consumer advertising. You may spend even more if you wish to grow your Franchised Business faster.

11.  Insurance:  $1,500 to $2,000

• Although the franchisor is unaware of specific instances where the initial costs of insurance have been higher, it is possible that your initial insurance costs would exceed the numbers presented.

12.  Additional Funds – 3 Months:  $10,000 to $39,000

• This line item estimates the funds (working capital) you will need to cover your pre- and post-opening expenses, which can include initial employee wages, utility deposits, accounting fees, legal fees, licenses, permit costs, sales taxes, and dues, as well as additional operating capital for other variable costs (e.g. electricity, telephone, heat, Internet service, Internet setup, etc.), paper, cleaning, and other supplies.

• It also includes the minimum initial inventory of the brochures, business cards, products, equipment, and software that the franchisor requires you to purchase prior to opening, as the franchisor states in the Manual or otherwise in writing.

• Depending on the state in which you operate, you may need to first register as a franchise broker in your state before you can participate in the franchise sales process as part of your business. You may incur additional legal and filing costs as part of the registration process.

• The amounts listed in this Item are only an estimate, however, and there is no assurance that additional working capital will not be necessary during this start-up phase or after.

13.  Vehicle Cost:  $1,425 to $2,200

• The franchisor does not require you to purchase or lease a vehicle for your Franchised Business. Unlike real estate agents, business brokers do not ordinarily escort clients to potential sites for purchase, although you will at times make site visits to your clients.

• In arriving at the figures in this line item, the franchisor estimated a lease or loan payment cost of $300 per month and gas, maintenance, and insurance costs of $175 per month for the initial period of three months.

• Your costs may be higher or lower, depending on the age and type of car you purchase or lease, and fuel and insurance costs in your area.

14.  Estimated Initial Investment:  $54,175 to $132,700

• In compiling this chart, the franchisor relied on the experience of its affiliate, Las Vegas 101, as the owner and operator of a First Choice Office similar to the franchise being offered to you.

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