Franchise Costs: Detailed Estimates of Best in Class Education Center Franchise Costs (2018 FDD)

Updated December 17, 2018.

Detailed Estimates of Best in Class Education Center Franchise Costs Based on Item 7 (Estimated Initial Investment) of Best in Class Education Center’s 2018 Franchise Disclosure Document

• The franchisor does not offer direct or indirect financing for any of these items.

• None of the fees payable to the franchisor are refundable, except that 50% of the initial franchise fee may be refunded under the circumstances described in Item 5.

• The franchisor is unaware of any fees payable to third-party suppliers that are refundable although some landlords refund security deposits at the end of the lease if the tenant does not default.

1.  Initial Franchise Fee:  $32,000 to $35,000

• The low estimate assumes you are a United States Veteran and/or qualified educator, in which case you will receive a $3,000 discount off the franchisor’s standard $35,000 initial franchise fee.

2.  Reimbursement of Expenses for Grand Opening Assistance:  $1,340 to $3,730

3.  Food, Lodging, and Travel (assumes 1 to 2 people training in Washington):  $1,460 to $2,900

4.  Lease and Utility Security Deposit:  $4,500 to $7,000

• These figures presume that you will be leasing your premises. The expense of leasing will vary depending upon the size of the premises, its location, landlord contributions, and the requirements of individual landlords.

• For purposes of this estimate, the franchisor has assumed the rent will range from $2,000 to $3,000 per month, although your actual rent may vary significantly above or below this range depending on your area and the local market conditions.

• Landlords typically require security deposits equal to 1 or 2 months’ rent and may, in addition, require payment in advance of the first and/or last (or more) month’s rent. The total estimated initial investment shown here includes a security deposit equal to 2 months’ rent.

• Some franchisees may prefer to own their facility. The costs of purchasing a facility vary so widely that the franchisor cannot reasonably estimate the cost.

• This estimate also includes your estimated cost for utility security deposits.

5.  Leasehold Improvements:  $2,500 to $35,000

• The cost of leasehold improvements vary widely based upon a number of factors, including the size and condition of the premises, whether or not there are any existing leasehold improvements, and whether the landlord will contribute to the cost of the improvements.

• The low estimate assumes little to no required tenant improvements and the space is ready for move-in (or the landlord pays for tenant improvements). The high estimate assumes you will bear the cost of required tenant improvements.

6.  Signage:  $500 to $4,500

• The low estimate assumes your Center will be in an office building that does not allow exterior signage, while the high estimate assumes your Center will be in retail space with exterior signage.

7.  Decorating, Furniture, and Furnishings:  $3,000 to $4,000

• This estimate includes your cost to purchase classroom tables, chairs, light fixtures, and furniture for the reception area.

8.  Office Equipment:  $3,300 to $9,250

• This estimate includes the cost of your computer system (including hardware, software, and printer), telephone system, 5 web-based security cameras, as well as hardware and installation. It also includes the $2,000 initial license fee paid to LBIS for your BC Portal software system.

• The low estimate assumes you purchase a small printer or lease a large printer, while the high estimate assumes you purchase a large printer.

9.  Grand Opening Advertising:  $5,000

• During the period beginning 30 days before opening through 60 days after opening, you must spend a minimum of $5,000 on local advertising and other marketing activities to promote your Business. The estimate above assumes you choose to spend only the minimum required amount.

• After this initial period, you must spend an amount equal to the greater of 4% of your monthly Gross Revenues or $500 per month on local advertising.

• Any amounts that you pay the franchisor or its affiliates for the purchase of marketing materials will be credited towards your minimum advertising obligation.

10.  Business Licenses:  $200 to $400 

11.  Professional Fees:  $1,200 to $2,500

12.  Insurance (1st Quarter Premium):  $300 to $600

13.  Business Coaching Fees:  $1,000 to $3,600

• These costs are incurred to a third-party business coaching organization focused on helping franchisees with grand opening marketing coaching as well as guidance during the initial stages of opening a business. The costs vary according to the program(s) enrolled as well as the duration of those courses.

14.  Additional Funds (3-Month Period After Opening):  $7,500 to $12,000

• This estimates your expenses during the first 3 months of operation, including payroll costs (excluding any wage or salary paid to you), monthly technology fee, rent, and other miscellaneous expenses and required working capital.

15.  Total Estimated Initial Investment:  $63,800 to $125,480

• This estimate is for a single unit franchise only; if you sign an Area Development Agreement, the estimated initial investment will increase by the aggregate initial franchise fees for each Center to be developed (excluding the first Center).

• These figures are estimates based on the past experience of the franchisor’s principals in opening and operating BrainChild Education Centers, and the franchisees in opening and operating Best in Class Education Centers. You may have additional expenses starting your Center.

• Your costs will depend on a variety of factors, including: how closely you follow the franchisor’s methods and procedures; your management skills, experience, and knowledge; the local real estate market; the prevailing wage rate; competition; and the sales level achieved during the initial period.

• The franchisor strongly recommends that you have independent estimates on your anticipated cost to construct, develop, open, and operate your Center.