Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Homes & Land/Estates & Homes (Real Estate Magazines) Franchise Costs (2016 FDD)

by Franchise Chatter on September 24, 2016

in Franchise Costs, Magazine Franchise

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Detailed Estimates of Homes & Land/Estates & Homes Franchise Costs Based on Item 7 (Estimated Initial Investment) of Homes & Land/Estates & Homes’ 2016 Franchise Disclosure Document

For New Franchise of Homes & Land or Estates & Homes

1.  Franchise Fee:  $27,000

  • At the franchisor’s discretion, up to 50% of the franchise fee may be deferred for 24 months.

2.  Travel Expenses and Meals While Training:  $600 to $2,500

  • If you are a new or transferee franchisee, you must travel to the franchisor’s corporate headquarters to receive the required Sales training, and if you decide to do your own magazine production, you will be required to travel to the franchisor’s offices to attend the mandatory production training before you produce your first magazine issue.
  • If you are an existing franchisee and you have not attended the Sales training class within the past year, you are required to attend training prior to acquiring an additional franchise.
  • You will be responsible for the cost of transportation, hotel, and most meal expenses during training.
  • The Sales training and production training will typically last up to one week each.
  • The cost of the instructors’ time and materials during the training are included in your franchise fee.

3.  Real Estate and Improvements:  Amount Not Specified

  • You do not have to purchase or lease real property. You may be able to operate your franchise from your home. If you want to obtain additional office space, the cost will vary depending on size, condition, and location of the premises.

4.  Furniture, Supplies, Racks, Memberships:  $4,000 to $24,500

  • This item includes an estimated amount for office furniture, distribution costs, membership to Chamber of Commerce, bulk mail stamp fee, additional supplies, telephone, answering machine and/or voice mail, facsimile machine, and photocopy machine (monthly lease).
  • This amount also includes recommended purchases such as office furniture, a cellular phone, hand-held camera (if photography is not subcontracted out), local organization memberships, and membership with the Board of Realtors.

5.  Computer Hardware and Software:  $5,000 to $6,000

  • This amount includes computer hardware and software necessary for magazine production. Additional workstations may be recommended depending on the size of your business.
  • You will not need to incur this expense if your magazine production is contracted to a vendor. You will not need to incur this expense if you are acquiring an additional territory or adding a magazine with a different local market designation within an existing territory.
  • If you are an existing franchisee acquiring an additional franchise, you may need to add or upgrade hardware and/or software to allow for the added workload or comply with current requirements.
  • If you are an existing franchisee renewing your franchise, you may need to update your hardware and software to comply with the current submission requirements.
  • This amount may vary depending on your specific needs and may be adjusted from time to time based on current requirements.

6.  Liability Insurance:  $500 to $1,000

  • You must obtain and maintain the comprehensive liability insurance and automobile liability coverage that the franchisor specifies in the Franchise Agreement and Franchise Operations Manual.
  • Currently, the franchisor requires that you have comprehensive general liability coverage for a minimum of $300,000 coverage for each occurrence, and $300,000 aggregate.
  • Your automobile liability coverage must provide minimums of $100,000 for bodily injury, each person; $300,000 bodily injury, each accident; $50,000 property damages, each accident, or $300,000 combined single limit.
  • You must name NewPoint Franchisor, LLC as an additional insured under your liability policies and provide the franchisor with evidence of such.

7.  Additional Funds for 3 Months:  $10,400 to $55,000

  • This estimates your start-up expenses for your first 3 months in business. This amount will be spent on ongoing office expenses, initial facility rental payments (if space is leased), equipment leases and maintenance, business licenses, initial promotion, production expenses, royalties, optional purchases of storage space for extra racks and magazines, and a contract for the distribution of magazines.
  • This amount also includes an estimate of your advance deposit equal to at least 50% of the anticipated costs for printing and basic services as provided in Schedule B to the Franchise Agreement relating to the publication of your first magazine. (The costs in Schedule B may change with 30 days’ written notice.)
  • Your working capital needs may vary depending on the location of your business, whether or not you have employees, cost of goods, business acumen, whether or not you are acquiring a new franchise or an existing franchise, and other economic factors.

8.  Total:  $47,500 to $116,000

  • These figures are estimates. Except as described above, none of these expenses are refundable. The franchisor does not guarantee that you will not need any additional funds.
  • The franchisor relied on the past experience of its franchisees and information gathered from related types of businesses to compile these figures.

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