Detailed Estimates of Profile by Sanford Franchise Costs Based on Item 7 (Estimated Initial Investment) of Profile by Sanford’s 2016 Franchise Disclosure Document
For a Stand-Alone Store
1. Initial Franchise Fee: $15,000 to $30,000
- The Initial Franchise Fee varies based on whether this is the third or subsequent franchise, whether you qualify for a veteran’s discount, and whether you are a qualified employee with Profile by Sanford.
2. Profile Start-Up Kit: $142,000 to $155,000
- The Profile Start-Up Kit includes marketing/BD collateral, office supplies, equipment, furnishings, and fixtures to start the franchised business.
- The equipment, such as scales and software, is used to monitor a customer’s weight. There is currently no exercise equipment.
- Profile by Sanford, its affiliate, or its designated vendors may be the only source for these items. The Profile Start-up Kit is currently purchased from Profile by Sanford’s affiliate, Profile Products, LLC.
3. Initial Product Inventory: $16,000 to $25,000
- You must purchase from Profile by Sanford or its affiliate or designee your initial product inventory that Profile by Sanford specifies.
- The product inventory, meals, and other food items are currently all purchased from Profile by Sanford’s affiliate, Profile Products, LLC, but some may be purchased from third-party vendors.
4. Exterior Signage: $7,500 to $10,000
- You must purchase from Profile by Sanford or its affiliate or designee one exterior sign that Profile by Sanford specifies.
- The exterior signage is currently purchased from Profile by Sanford’s affiliate, Profile Products, LLC, but some may be purchased from third-party vendors.
- Additional signage is at the owner’s discretion.
5. Real Estate Leasehold Improvements: $123,000 to $218,000
- The costs of construction and leasehold improvements depend upon the size and condition of the premises, the nature and extent of required leasehold improvements, the local cost of contract work, and your location.
- In some cases, your landlord may agree to pay for some of the leasehold improvements as part of your lease negotiations.
- Profile by Sanford must approve your location, but the selection and lease negotiation of the premises are your sole responsibility.
- Profile by Sanford requires a number of mandatory provisions in your lease agreement, and you and your lessor must sign an addendum to your lease in the form attached as Exhibit G, or other form that Profile by Sanford approves.
- The contract for the build-out will be between the general contractor and you, the franchisee.
- The flooring, lighting, HVAC, window treatments, and graphics are currently purchased from Profile by Sanford’s affiliate, Profile Products, LLC, but some may be purchased from third party vendors.
6. Site Development Services: $15,000
- Profile by Sanford has partnered with Access Commercial LLC to provide services, including site selection, lease negotiation, design, construction management, and other site development related services. Profile by Sanford refers to these services as Site Development Services.
- You must use Access Commercial LLC for all Site Development Services. Access Commercial LLC is a third-party vendor having no affiliation with Profile by Sanford.
7. Rent: $8,500 to $22,500
- The rent figures represent estimated three months’ rent.
- The rental expense may vary widely based on geographic location, size of the premises, local rental rates, and other factors.
- A typical premises occupies from 1,800 to 2,500 square feet of commercial space for a stand-alone store, and from 500 to 600 square feet for an in-facility store.
- For an in-facility store, rent may be in the form of a flat rate or a percentage of gross sales.
8. Lease and Utility Security Deposits: $1,000 to $8,500
- Landlords may require a last month’s rent and security deposit, and utility companies may require that you place a deposit prior to installing telephone, gas, and electricity and related utility services.
- A typical utility security deposit is one month’s expense. A typical lease deposit will be an amount equal to one month’s rent.
- These deposits may or may not be refundable according to the conditions of the agreements made with the utility companies and landlord.
9. Initial Promotional Campaign: $12,500 to $35,000
- You must conduct an initial promotional campaign that complies with Profile by Sanford’s standards.
- Generally, Profile by Sanford recommends that you spend $12,500 to $35,000 for a stand-alone store and $2,500 to $7,500 for an in-facility store, and complete the campaign within three months after your franchised business opens.
- The minimum amount required to be spent is $12,500 for a stand-alone store and $2,500 for an in-facility store.
10. Insurance: $2,000 to $3,000
- Estimated three months’ premiums for insurance that Profile by Sanford specifies, including liability, errors and omissions, and property damage, with Profile by Sanford as additional named insured, with limits that it sets, and with an insurer meeting its requirements.
- It is not possible to state all of the insurance policies required and amount of coverage for each type of policy. Third parties, such as landlords, Medicare, and medical insurance carriers will have their own requirements. Their requirements and Profile by Sanford’s will change over time.
11. Training Expenses: $2,000 to $12,000
- There is no separate training fee payable to Profile by Sanford for the initial franchisee training program for up to eight people, as it is included in the Initial Franchise Fee.
- You must make arrangements and pay the expenses for you and your staff to attend Profile by Sanford’s training program, including transportation, lodging, and meals.
- The amount expended will depend, in part, on the distance you must travel and the type of accommodations you choose.
- The high figure represents the estimated cost of airfare travel to and from the training locale, lodging expenses (assuming double occupancy for five nights), and dining expenses for five people attending four and a half days of training.
- The low figure assumes the five individuals will carpool from home to the training locale in the same vehicle, and includes fuel costs, lodging expenses (assuming double occupancy for four nights), and dining expenses.
12. Professional Fees: $1,000 to $4,500
- Profile by Sanford recommends that you hire your own attorney to help you evaluate this franchise offering, to identify the laws and regulations that may apply to your franchised business, to help you set up a business entity, to review and negotiate your lease, to assist you in adapting the membership agreement to laws and regulations in your state or locality, and for whatever other purpose you deem appropriate.
- You may also hire a lease consultant, an accountant, and other professionals.
13. Architectural and Engineering: $6,500 to $8,000
14. Licenses: $200 to $2,500
- This is an estimate of various licensing fees you may pay in your first three months of operation, which may include music licensing, software licenses, state health center or health membership club registration and bonding, and state and local business licenses.
15. Additional Funds (3-Month Period): $10,000 to $60,000
- This is the estimated amount of working capital you will need to cover other initial operating expenses for a period of three months. These figures are estimates, and Profile by Sanford cannot guarantee you will not have additional expenses starting the business, or that you will ever achieve profitability.
- If you are not profitable or have low net cash flow, you will need more additional funds.
- Expenses not included are rent and other estimates in other rows in the chart above, and owner draw, profit or salary, and interest or other cost of debt or equity financing.
- To compile this estimate of additional funds, Profile by Sanford relied on its affiliates’ experience in operating similar businesses. The factors and basis for such estimate will vary from location to location, including such factors as location, demographics of surrounding area, competition, and your skills and effort.
16. Total Estimated Initial Investment: $362,200 to $609,000
For an In-Facility Store
- The total estimated initial investment necessary to begin operation of a Profile by Sanford in-facility store ranges from $149,700 to $291,000.
Leave a Reply