Franchise Costs: Detailed Estimates of Right at Home Franchise Costs (2017 FDD)

Detailed Estimates of Right at Home Franchise Costs Based on Item 7 (Estimated Initial Investment) of Right at Home’s 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $48,500 to $49,500

• The standard initial franchise fee for one Franchised Business is $48,500 for all franchisees who attend Right at Home’s Discovery Day prior to April 21, 2017 and sign Franchise Agreements by April 28, 2017 or, if you reside in or will operate your Franchised Business in a state where Right at Home is required to renew the registration of the franchise, sign a Franchise Agreement within 20 days after Right at Home’s renewal is approved and it sends you the Franchise Disclosure Document and a Franchise Agreement (the “Initial Franchise Fee”).

• The Initial Franchise Fee will be $49,500 for all Franchise Agreements signed after April 28, 2017 or more than 20 days after Right at Home’s renewal is approved and it has sent you the Franchise Disclosure Document and a Franchise Agreement.

• The Initial Franchise Fee is deemed fully earned and nonrefundable upon payment.

2.  Real Estate/Rent:  $2,000 to $4,950

• You must provide a location other than a personal residence from which to operate the Franchised Business, and the open office must exist solely and exclusively for the operation of the Franchised Business.

• Normally, space is obtained on a leasehold basis.

• The floor area recommended for the Franchised Business is approximately 600 to 800 square feet.

• The estimate for rental property represents a high-end annual lease rate of $23 per square foot for 800 square feet of space. The low-end estimate represents an annual lease rate of $18 per square foot for 600 square feet of space.

• Additionally, there may be lease acquisition costs in the nature of deposits.

• It is extremely difficult to estimate lease acquisition costs because of the wide variation in these costs among various locations. Right at Home will not assist in financing this expenditure.

3.  Rent Deposits:  $0 to $3,300

• A rent deposit may be required by your landlord.

4.  Leasehold Improvements:  $0 to $3,000

• Minimal leasehold improvements are generally required before operation. These costs again vary based on the size of the business and requirements of a particular landlord, depending upon whether or not the improvements are capitalized as part of the lease.

5.  Insurance:  $2,000 to $4,000

• This estimate is for estimated first year premiums of all insurance except office contents and workers’ compensation insurance, which vary by location.

• Right at Home does not currently require you to have Cyber Liability coverage but it may do so in the future.

6.  Furniture and Fixtures:  $2,000 to $6,000

• The range represents the approximate costs associated with acquiring the furniture, including desks, chairs, shelves, and phone system.

7.  Computer Hardware and Software:  $2,400 to $6,500

• The range represents the approximate costs associated with acquiring the franchisor-required computer hardware, designated software (“Designated Software”), and high-speed internet service.

8.  Other Office Equipment and Supplies:  $800 to $2,000

• The range represents the approximate costs associated with acquiring basic office supplies and fax/copy machine.

9.  Training:  $2,550 to $7,600

• You are responsible for arranging transportation and paying the expenses for meals and lodging for any persons attending Right at Home’s training program and its Home Improvement Annual Conference (“HIAC”) as described below.

• The amount expended will depend on the distance you must travel and the type of accommodations you choose.

• If Right at Home requires you to attend its HIAC, you will pay the attendance fee, which will not exceed $500 per person to attend.

• The low estimate contemplates attendance by one person traveling to Right at Home’s headquarters in Omaha, Nebraska or other designated location for approximately 12 days for its training program. The low estimate does not include your attendance at the HIAC.

• The high estimate contemplates attendance by two people traveling to Right at Home’s headquarters or other designated location to attend Right at Home’s training program for approximately 12 days. The high estimate also includes the annual conference fee and travel expenses for one person to attend the HIAC.

10.  Initial Opening Marketing:  $500 to $2,000

• The range represents the approximate costs associated with promoting the opening of your location.

11.  Permits and Licenses:  $200 to $2,000

• State and local government licensing and registration fees vary considerably from state to state and you must check into and verify the amount of the fees.

12.  Professional Fees:  $300 to $3,050

• This range represents the approximate costs associated with attorney and CPA fees.

13.  Signage:  $0 to $4,000

• This range includes the cost of all requisite signage used in the Franchised Business.

14.  Additional Funds for 3 Months:  $17,000 to $40,000

• Such amounts are the minimum recommended levels to cover operating expenses, including employees’ salaries for 3 months. However, Right at Home cannot guarantee that such an amount will be sufficient.

• The amounts do not include money for franchise owner’s compensation.

• Additional working capital may be required if sales are low or fixed costs are high.

15.  Total:  $78,250 to $137,900

• In compiling this list of expenditures, Right at Home relied on its experience involving Franchised Businesses and data from a sampling of recently opened Franchised Businesses.

• The amounts shown are estimates only and may vary for many reasons including the size of a Franchised Business, the capabilities of your management team, where you locate your Franchised Business, and your business experience and acumen.