Detailed Estimates of Proforma Franchise Costs Based on Item 7 (Estimated Initial Investment) of Proforma’s 2017 Franchise Disclosure Document
- The following represents the total estimated investment required of a Proforma franchise owner. Proforma does not finance any part of your initial investment.
1. Initial Franchise Fee: $7,250 to $14,500
- The initial franchise fee for a Start-Up franchise owner is $14,500.
- Proforma is a member of the International Franchise Association and participates in their VetFran Program, which provides special financial incentives to qualified veterans.
- In November 2012, Proforma began offering 100 franchise grants to qualifying honorably discharged U.S. Veterans. The $14,500 initial franchise fee will be waived in its entirety for the first 100 qualifying honorably discharged U.S. Veterans approved for a Proforma Start-Up franchise under the Veteran Franchise Grant Program.
- Qualified veterans under the Veteran Franchise Grant Program will be required to invest $4,500 for a customized Fast-Track Marketing Kit personally designed from Proforma’s proprietary marketing and business development tools and resources
- Upon expiration or termination of the Veteran Franchise Grant Program, qualifying U.S Veterans will pay 50% of the initial franchise fee, or $7,250, as a Start-Up franchise owner.
- To be eligible for the Veteran Franchise Grant Program or the 50% fee discount, you must be able to verify honorable discharge from any branch of the United States Military via an official copy of your DD Form 214 (Certificate of Release or Discharge from Active Duty).
- If you qualify for this discount, you must maintain during the term of the Franchise Agreement a 51% majority interest in the beneficial and voting interest in the business entity which owns the Franchised Business.
- Proforma may modify or discontinue either program for U.S. Veterans at any time.
- Fifty percent of a Start-Up franchise owner’s franchise fee may be refundable if, during the 12-month period after the Effective Date of the Franchise Agreement, Proforma has collected a sales amount of $150,000 or greater from their customers.
- This refund will not apply to the customized Fast-Track Marketing Kit fee. This refund will not apply to Start-Up franchise owners receiving the U.S. Veteran’s initial franchise fee waiver or discount described above.
- If you have “Relevant Industry Experience” or are a “Conversion Franchise” or “GGN Franchise” as defined in Item 5, and otherwise meet Proforma’s qualifications, it will not charge you an initial franchise fee.
2. Customized Fast-Track Marketing Kit (applicable only to Start-Up Franchises and qualifying U.S. Veterans under the Veteran Franchise Grant Program): $4,500
- Qualified veterans under the Veteran Franchise Grant Program will be required to invest $4,500 for a customized Veteran’s Fast Track Marketing Kit personally designed from Proforma’s proprietary marketing and business development tools and resources.
3. Computer Hardware: $0 to $4,000
- Proforma’s Proprietary Order Processing Software is a web-based application and typically operates on an IBM-compatible computer with at least an 800 megahertz (MHz) processor, 2 GB of system memory, a minimum screen resolution of 1280 x 1024, and Internet access.
- The software specifications are Microsoft Windows XP with Service Pack 3, Vista with Service Pack 1, or Windows 7 operating system; MacAfee or Norton AntiVirus for Windows; and WinFax Pro version 10.0 for Windows.
- So long as the hardware is compatible with the software, you may obtain the hardware from any source.
4. Internet Service Provider and Anti-Virus Software: $30 to $200
- You must subscribe to an Internet Service Provider (“ISP”) and maintain this service during the Agreement. The connection speed is recommended at 56k bps or higher. A high speed connection is preferred.
5. Equipment, Fixtures, Fixed Assets, and Stationery: $700 to $3,000
- To facilitate ongoing communications between Proforma and you, customers, and vendors, you must obtain an electronic mail address from Proforma for use in the Franchised Business. The estimate includes the price of installation of a voice message box and service of an ISP. ISPs charge $15 or more per month.
- The charge for an email account, additional email accounts, and a voice message box are included in the monthly Communication & Technology Support Fee of $100. Additional voice message boxes are $10 each. The voice message box is accessed through an “800” line hook up. You will receive a bill for any charges associated with rental.
- However, Proforma may reduce the amounts you otherwise would be billed for usage costs if it provides significant training or support to you through the voice mail system. The Manual contains these programs and other support services for which charges may be waived.
- You must, at all times, maintain one published telephone line exclusively dedicated to the Franchised Business.
- Proforma recommends you initially purchase at least 500 business cards, 500 letterhead, 500 envelopes, and 25 sheets each of mailing and shipping labels to commence operating your Franchised Business.
6. First Month Pre-Opening Lease, Rent, and Security Deposit: $0 to $2,000
- Proforma franchise owners normally commence operating their Franchised Businesses from a home-based office space. Some may choose initially to operate this business from a leased office space. They will typically commence operating the business themselves as the sole employee, and hire additional staff as the volume of business or your knowledge of the Franchise System warrants it.
- Proforma’s estimate is for one months’ rent, and it assumes security deposits already have been paid.
7. Utility Deposits, Insurance, Licenses: $0 to $3,000
- You must procure and maintain in full force and effect throughout the term of the Agreement, comprehensive general liability insurance policy covering “all risk” of physical loss, and as the business warrants, content coverage, general casualty loss and business insurance, employer’s liability, workers’ compensation insurance, and additional policies as may be required under your local laws or ordinances.
- If you have not already formed a business entity to own your franchise, you must do so within 30 days of the Effective Date of your Agreement. You may incur legal, accounting, and/or filing fees to set up your business entity.
8. Travel, Room, and Board for Initial Training: $1,000 to $2,000
- You must pay for all costs of travel, meals, additional training materials, and lodging incurred during initial training.
- Proforma cannot estimate your travel or living costs during training, given the many variables involved. The above estimates do not include living expenses for you or your family or any employees that you may bring to training, or debt service relating to launching the Franchised Business.
- You should have sufficient cash reserves to cover living expenses for at least 6 to 12 months.
9. Supplemental Training Fee: $0 to $495
10. Additional Funds Incurred During the Initial Phase, Which Usually Lasts 3-6 Months: $3,000 to $6,000
- During the initial phase of your Franchised Business, you may require access to additional funds to pay expenses until your business generates sufficient cash flow to pay them.
- The initial phase usually lasts 3-6 months and requires a minimum of $3,000 to $6,000 in additional funds. Because no one can promise you when or whether you will generate any amount of revenue, Proforma urges you to have access to additional funding in case you need it.
10. Total: $11,980 to $39,695
- This total is an estimate of your pre-opening initial investment and the expenses you will incur during the first three months of Franchised Business operations. This total is based on Proforma’s estimate of nationwide average costs, prevailing market conditions, and its over 25 years of experience in the business supporting Proforma franchises.
- These figures are estimates only and Proforma cannot guarantee that you will not have additional expenses in starting or operating your Franchised Business.