Detailed Estimates of Shack Shine Franchise Costs Based on Item 7 (Estimated Initial Investment) of Shack Shine’s 2019 Franchise Disclosure Document
1. Initial Franchise Fee: $20,000 to $32,000
- This figure includes $20,000 for the first subterritory, plus $12,000 for one additional subterritory. While the majority of franchises will be two territories, Shack Shine may sell one territory or more than two subterritory franchises in certain appropriate markets or circumstances. The subterritory Initial Fee is $12,000 per each additional subterritory.
2. Initial Marketing Expense: $10,000
- The Initial Marketing Expense will be used by Shack Shine in its discretion to market and promote the Franchised Business prior to and during the first 6 months of operation.
3. Computer Hardware and Software: $1,200 to $2,000
- You must obtain computer, telephone, and other related equipment that meets Shack Shine’s specifications. These amounts represent the estimated cost to purchase this equipment.
- You must purchase a cell phone for use in connection with the Franchised Business, and you will be responsible for all costs associated with the use and maintenance of the cell phone.
- Upon termination or expiration of the Franchise Agreement, Shack Shine may, at its option, purchase the cell phone number from you for fair market value, or require that you cancel the cell phone number, the costs or penalties of which will be paid by you.
4. Vehicles and Graphics Lease/Purchase Deposit: $0 to $5,000
- The above figures assume you lease one vehicle and represent the initial lease deposit for that vehicle. Some franchisees with good credit and who meet certain other vendor requirements may be able to lease a vehicle with no payments for the first six months of the lease term, as represented by the low end estimate of $0 shown above.
- Costs may vary substantially, especially if you elect to purchase a vehicle rather than lease one.
- You must purchase or lease vehicles which meet Shack Shine’s standards and specifications as stated in the Operations Manual, and you are required to use only those vehicles in the operation of any part of the Franchised Business.
- You are permitted to use those vehicles only for the Franchised Business and for no other reason.
- You are required to abide strictly to Shack Shine’s vehicle requirements and standards, including its requirements for the vehicles to be decorated with its approved graphics package. Your vehicles shall be outfitted, wrapped, or decaled to Shack Shine’s specifications, the cost of which is included in the above estimated figures.
5. Real Estate/Rent: $0 to $750
- Shack Shine does not require you to lease office or storage space. You may operate your Franchised Business from a home-based office, in which case, there would be no cost to you for rent.
- If you choose to rent office space, Shack Shine cannot estimate the amount of rent as it will vary depending on a number of factors, including size, condition, and location of the facility.
- If you do not have sufficient storage space at your designated office then Shack Shine recommends that you rent a 20’ by 10’ storage garage, which Shack Shine estimates would cost $250 per month, although such prices may vary greatly.
6. Training Expenses: $3,000 to $4,650
- Training fees for you and one additional employee are included in your Initial Fee; however, you are responsible for your travel, accommodations, and meals while training at Shack Shine’s training facility.
- Costs will vary depending on your proximity to British Columbia and the number of people attending training. These expenses are typically not refundable.
- Per person expected costs are based upon a 10-day estimated stay, with shared accommodations from $100-200 per night; one meal per day at $20 per person (Shack Shine provides breakfast and lunch during training); air transportation at $500-1,000 per person; and shared local transportation at $10-25 per day.
7. Insurance: $250 to $500
- You must obtain and maintain at all times during the term of your franchise the types of insurance policies or coverages and the minimum policy limits or maximum deductibles of any policy as specified in the Operations Manual (“Coverages”), which are apt to change from time-to-time.
- You must also maintain at all times all insurance policies as required by the law in which your Franchised Business is operated.
8. Equipment and Supplies: $3,000 to $17,000
- The cost of office equipment and supplies will depend on whether you already have such items (such as a desk, stationery, etc.). This item also includes all equipment that will be in the vehicles, such as pressure washers, water poles, safety equipment, etc.
9. Licenses and Permits: $150 to $200
- Government agencies typically charge fees for permits and operating licenses. Your actual costs may vary from the estimates based on the requirements of federal, state, and local government agencies.
10. Professional Fees: $1,900 to $2,400
- You will likely need to retain a lawyer, an accountant, and other consultants to assist you in establishing your Franchised Business. These fees may vary from location to location depending upon the prevailing rates of local lawyers, accountants, and consultants. These fees are typically non-refundable.
11. Additional Funds – 6 Months: $10,000 to $25,000
- This estimates your initial operating expenses, including working capital, during the initial start-up months. Additional Funds relate only to costs associated with the Franchised Business and do not cover any owners’ draw or personal, “living,” unrelated business or other expenses you may have, such as royalty payments, debt service on any loans, state sales and use taxes on goods and service, and a variety of other amounts not expressly described and included in the notes above.
12. Total: $49,500 to $99,500
- Shack Shine relied on the experience of its U.S. franchisees to compile these estimates.