Detailed Estimates of Wine & Design Franchise Costs Based on Item 7 (Estimated Initial Investment) of Wine & Design’s 2018 Franchise Disclosure Document
- These estimates assume a studio having a 2-mile radius protection, with a limit of one studio for every 50,000 people in a metropolitan statistical area as defined by the U.S. Government (“MSA”). The estimates are based on an initial period consisting of pre-opening and the first 3 months of operation.
- All fees and payments are non-refundable unless otherwise noted or allowed by third-party vendor.
1. Initial Franchise Fee: $25,000
- This is the initial franchise fee for a territory with a radius of 2 miles from the location of the studio.
- The franchisor also offers Area Development Agreements whereby you will receive the exclusive right to develop certain designated areas with multiple studios. You will pay the franchisor an area development fee that will equal the number of franchises included in the designated territory times the initial franchise fee for each of the franchises.
- You will pay the franchisor a deposit of $12,500 for each franchise to be opened pursuant to the Area Development Agreement at the time you sign the Area Development Agreement.
- If you are entitled to a discount off your initial franchise fee and if the franchise is up for an additional franchise, you may be entitled to a 50% reduction off of the then-current initial franchise fee.
2. Leasehold Deposit, Plus First Month’s Rent: $1,800 to $9,000
- Assumes that franchisee’s space is being leased and is based on 3 months of rent payments. If a franchisee elects to own their location, additional costs will be incurred.
3. Leasehold Improvements: $2,000 to $25,000
- Assumes new space that has never been built out. These projections assume the space is being leased. If a franchisee elects to own their location, additional costs will be incurred.
4. Signage: $3,000 to $15,000
5. Furniture and Fixtures: $3,000 to $10,000
6. Equipment and Supplies: $3,500 to $6,000
7. Deposits and Licenses: $2,000 to $15,000
- Market conditions will dictate whether the landlord can obtain the last month’s rent and a security deposit upfront. You will need to check with your local Alcohol Beverage Board to determine if a license is required to offer BYOB and serve drinks. Any license will require a license fee which will vary by state jurisdiction.
8. Training Living Expenses: $500 to $5,000
9. Insurance: $1,000 to $3,000
- The figures in the chart represent estimated quarterly insurance premiums for the insurance that the franchisor requires and costs may vary from state to state. Depending on your insurance company’s practices, you may have to pay the entire annual premium in a lump sum; generally you pay your premiums quarterly or semi-annually.
10. Accounting and Legal Services: $2,500 to $3,000
11. Additional Technology and Website Fees: $1,000 to $2,000
12. Studio Manager/Assistant Salary: $10,000 to $30,000
13. Artist Training: $1,000
14. Grand Opening Fees: $3,000 to $5,000
15. Start-up Working Capital: $2,500 to $5,000
16. Additional Funds – 3 Months: $5,000 to $6,500
- The estimate of costs assumes a franchisee is leasing the location for their studio. The cost for purchasing the real estate is not included in these cost estimates.
- You will need additional funds during the start-up phase of your business to pay your monthly lease rentals during the first three months, employees, independently contracted artists, purchase supplies, and pay other expenses. The franchisor estimates the start-up phase to be 3 months from the date you open your business.
- These amounts do not include any estimates for debt service.
- You must also pay the royalty and other related fees described in Item 6 of the Disclosure Document.
- These figures are estimates and the franchisor cannot assure you that you will not have additional expenses. The percentage of required purchases during your start-up phase should be approximately 95 percent, as it is estimated to be during your operation.
- Your actual costs will depend on factors like your management skills, experience, and business acumen. You should base your estimated start-up expenses on the anticipated costs in your market and consider whether you will need additional cash reserves.
- The franchisor relied upon the experience of its franchisee-owned locations in producing these estimates. You should review these figures carefully with your business advisor.
17. Total: $66,800 to $165,500