Annex Brands Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

PostalAnnex, PostalAnnex+, Pak Mail, AIM Mail, Parcel Plus, Handle with Care Packaging Store, or Sunshine Pack & Ship Standard and Flex Retail Centers

• These figures are estimates and are based on the development of an 800 to 1,500 square-foot leased facility for a standard or flex retail center.

1.  Initial Franchise Fee:  $29,950

2.  Fixtures:  $35,000 to $45,000

3.  Mailboxes:  $13,000 to $15,000

4.  Package Lockers:  $3,500

• A 24-hour access security gate and digital keypad entry are required to have package lockers. Based on the location and previous use of the facility, and other factors, a 24-hour access security gate, digital keypad entry, and package lockers may not be required for a new express retail center or if you are converting a qualified existing business to a standard or flex retail center.

5.  Flooring:  $5,500 to $8,500

6.  Interior Signage:  $1,000 to $2,500

7.  Exterior Signage:  $6,000 to $7,500

• Signage includes interior and exterior signs that bear Annex Brands’ trademarks, and other signage that may include standard products and services offered at the center, center location information, etc.

8.  Construction Services:  $38,000 to $46,000

• The cost for construction services will vary widely depending on the size, condition, and location of your standard or flex retail center, your lease, and other factors, but typically will be between $28 and $38 per square foot for a standard or flex retail center.

• For a new standard or flex retail center, the constructions services include the purchase and installation of a 24-hour access security gate and digital keypad entry ranging in cost from $8,000 to $10,000.

• Annex Brands’ estimate assumes standard development based on a leased facility delivered to you in “vanilla shell” condition. If the leased facility is delivered to you in any condition other than “vanilla shell” (i.e., “grey shell” or other condition), your build-out costs will be higher.

9.  Construction Consultation Fee, if applicable:  $0 to $2,500

• Annex Brands will designate a contractor for your use who is familiar with its requirements. If you use Annex Brands’ designated contractor, you do not pay this fee.

• If you want to use, and Annex Brands approves, a substitute contractor, you must pay Annex Brands a construction consultation fee of $2,500 before construction begins.

• In addition, if your contractor does not supply a 24-hour access security gate and digital keypad entry, you may have to purchase it on your own.

• Any substitute contractor must have a state license and be insured as required by law.

10.  Equipment:  $3,500 to $6,000

• The equipment cost estimate assumes that you will finance (and not purchase) 2 walk-up self-serve photocopiers and 1 multi-function color photocopier. The full purchase cost for the 3 photocopiers would be about $25,000.

• Each walk-up self-serve photocopier may be financed through a leasing company at a cost of about $55 each per month over 3 years, maintenance included.

• A multi-function color photocopier may be financed through a leasing company at a cost of about $250 to $300 per month over 5 years, plus about $0.01 per copy. The cost to digitally connect a multi-function color photocopier is about $100 per month on a 5-year lease.

11.  Computer Hardware, and Software Programs and Licenses:  $4,500 to $13,000

• You must have your computer and establish Internet access before or at initial training. Annex Brands recommends a broadband Internet connection (Cable or hi-speed DSL line) for Internet access, which is faster than a standard modem.

• The monthly cost for a Cable or hi-speed DSL line ranges from $59 to $89 per month. The cost of a standard modem line ranges from $10 to $40 per month.

• The computer software cost includes the license fee for the use of Annex Brands’ proprietary PostalMate POS network software.

12.  Initial Inventory:  $5,000 to $7,000

• Annex Brands recommends that you begin the operation of the standard or flex retail center with a specified initial inventory. The initial inventory may vary according to the anticipated volume of business, and the size and location of the standard or flex retail center.

13.  Insurance:  $2,500 to $6,000

• You must maintain comprehensive general liability insurance with a limit of not less than $2,000,000 per occurrence and $4,000,000 aggregate.

• You must maintain motor vehicle liability coverage that includes bodily injury and property damage on all owned, non-owned, leased, hired, rented, or borrowed motor vehicles having a combined single limit of at least $2,000,000 resulting from each occurrence.

• You must maintain Notary professional liability insurance of at least $500,000 or the maximum permitted by the state if less than $500,000.

• You must maintain property insurance for your standard or flex retail center. The coverage also must include property of others in your care, custody, or control, with a minimum limit of $400,000.

• Coverage for business interruption also must be provided on an “actual loss sustained” basis for a period of not less than 24 months or the maximum permitted by the state if less than 24 months. You also must maintain coverage for employee dishonesty ($25,000 limit).

• You must maintain any workers’ compensation, employer’s liability, or comparable insurance as required by law in your jurisdiction, or additional types and coverage amounts as Annex Brands may periodically designate.

• In addition to carrying other insurance described in the Franchise Agreement, you must participate in any Annex Brands group-wide or other designated insurance program that is available to franchisees regarding small parcel, freight, or transit damage and related risks. Premiums generally are from $0.50 to $1.65 per $100 of property valuation.

14.  Travel, Lodging, and Meals for Initial Training:  $250 to $3,000

15.  New Center/New Owner Marketing Program Deposit:  $5,500

16.  Supplies:  $1,000 to $2,500

• You will need office supplies such as telephones, answering machines, shipping labels, brand labels, telephone connections, in-center marketing collateral, business cards, letterhead, Notary equipment, etc.

17.  Business Licenses, Business Permits, etc.:  $300 to $1,000

18.  Deposits and Pre-paid Expenses:  $10,500 to $15,000

• Deposits may vary from location to location. Some utility deposits may be refundable after a designated period.

• The landlord may require you to pay a security deposit and the 1st month’s rent in advance. The security deposit will depend on the size of the facility, location, and other factors (for example, 1,000 square feet at $2 per square foot is a deposit of $2,000).

• The deposits payable to Annex Brands in this range include: a $7,500 to $8,500 deposit for a new standard or flex retail center to apply to the cost of shipping fixtures and equipment to your standard or flex retail center; and a $3,000 deposit to apply to the cost of building permits for a new standard or flex retail center (included in low and high ranges).

19.  Architect Fee:  $4,000 to $6,000

• An architect Annex Brands designates will prepare architectural plans meeting local structural, electrical, plumbing, and other construction-related requirements. If “as built” plans are not provided by the landlord, or the site is delivered to you in an “as is” condition, there may be additional architect inspection fees, which are included within this range.

• In addition, local government agencies may charge fees for reviewing and approving those plans.

20.  Miscellaneous Expenditures:  $2,000 to $3,000

21.  Additional Funds (1st 12 months):  $25,000 to $50,000

• You may need additional funds to operate your standard or flex retail center during its 12-month initial period to cover operating expenses that are in excess of typical start-up revenue.

22.  Total:  $196,000 to $275,950

• Annex Brands has relied on its 34 years of experience operating or franchising businesses of the type being franchised to compile most of these estimates.