Best in Class Education Center Franchise Costs Examined on Top Franchise Blog (2020 FDD)

Updated October 11, 2020.

Detailed Estimates of Best in Class Education Center Franchise Costs Based on Item 7 (Estimated Initial Investment) of Best in Class Education Center’s 2020 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: $35,000

This estimate assumes you are purchasing your 1st Center. The initial franchise fee is reduced to $30,000 for your 2nd franchise and $25,000 for your 3rd and subsequent franchises.

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.

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 Technology Systems, including 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 Marketing Fee: $10,000

The franchisor collects this fee and spends all of it on grand opening marketing activities to promote your Center. The estimate above assumes you choose not to spend any additional amount on grand opening marketing.

Following the expiration of your grand opening period (generally 30 days after opening), you must spend an amount that equals or exceeds the monthly Local Marketing Commitment on local marketing and advertising to promote your Center.

10. Business Licenses: $200 to $400

11. Professional Fees: $1,500 to $4,000

This includes legal fees you may incur to review your Franchise Agreement, negotiate your lease, and set up your company. It also may include accounting fees that you incur to set up your accounting system and to have your accountant review the terms of the franchise offering.

The franchisor requires that you hire a licensed real estate attorney to review and negotiate your lease. If you use the franchisor’s recommended real estate attorney, your fee for LOI and lease review and negotiation will be $2,000 per lease, but the franchisor will contribute $500 towards the fee incurred (so you must pay the attorney $1,500).

The low estimate assumes you hire the franchisor’s recommended real estate attorney to review and negotiate your LOI and lease, but that you do not engage the services of attorneys or accountants for any other purpose.

12. Insurance (1st Quarter Premium): $875 to $1,200

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), Local Marketing Commitment, monthly technology fees, rent, and other miscellaneous expenses and required working capital.

15. Total Estimated Initial Investment: $72,375 to $132,580

This estimate is for a single unit franchise only; if you sign an ADA, 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.