Franchise Costs: Detailed Estimates of Nextaff Franchise Costs (2019 FDD)

Detailed Estimates of Nextaff Franchise Costs Based on Item 7 (Estimated Initial Investment) of Nextaff’s 2019 Franchise Disclosure Document

1.  Initial Franchise Fee:  $40,000

• For a new office, the initial franchise fee is $40,000. If you are a veteran of the United States Armed Forces, the initial franchise is $32,000. If you are an employee of a Nextaff Office immediately before signing a Franchise Agreement, for a minimum of 24 months, the initial franchise fee is $20,000.

2.  Lease of Office and Related Deposit:  $1,500 to $2,500

• You must lease, buy, or construct a building for an Office. If you buy or build an Office, the costs will vary depending on the size, condition and location of the premises, the price difference between various vendors and contractors, the price of the land, construction and labor costs, the price of materials, and shipping distance from vendors.

• All construction materials and fixtures must be in compliance with plans and specifications of Nextaff. In addition, local zoning ordinances and regulations may require alterations to the typical plans and specifications, which will affect the cost of construction.

• These costs are normally paid to third parties before the opening of the Office, or in installments over a period of time, depending on the type of financing arrangement you are able to obtain.

• Nextaff has based this estimate on leasing the location and estimates that you will need to lease premises of approximately 1,000 square feet to 1,500 square feet for an Office.

• Nextaff does allow you to operate for up to 3 months in a commercial flex-space type office (“Flex Office”). These arrangements can typically go month to month for $250 to $750 per month. Some franchisees choose to begin operations in a Flex Office to allow them to begin operating their business more quickly after they purchase their franchise.

3.  Leasehold Improvements/Construction/Remodeling:  $1,000 to $5,000

• The range of estimated initial investment represents the estimated cost of leasehold improvements for a leased location in line.

• These costs may be reduced if you are able to have the owner/landlord of the premises incur the costs for all or a percentage of the leasehold improvements or you operate in a Flex Office.

• Changes in the economy, local prices of labor and materials, negotiation with and selection of appropriate consultants and contractors with appropriate contracts, your timely preparation of appropriate plans and specifications, the quality of supervision and management, and inflation will all contribute to your costs for leasehold improvements, construction, and remodeling.

• Additional factors that may significantly affect these costs include, without limitation, (1) the condition of the existing structure; (2) the configuration of the premises; and (3) the geographic location of the Office.

• All leasehold improvements, construction, and remodeling must be in compliance with plans and specifications of Nextaff. In addition, local zoning ordinances and regulations may require alterations to the typical plans and specifications, which could affect costs.

4.  Signage:  $1,000 to $4,500

• The cost of purchasing signs may vary as a result of price differences between vendors and shipping distances from vendors. The cost will also depend on if you have a retail or office location.

• You must purchase your internal sign from Nextaff.  You may purchase exterior approved signs from the Nextaff’s preferred vendors.

• Payment for these items will typically be made before the opening of the Office or in installments over a period of time depending on the type of financing arrangement you are able to obtain. If you operate initially from a flex-space, these costs may not be incurred until you move into your long-term location.

5.  Furnishings, Fixtures, and Equipment:  $2,500 to $5,000

• The furnishings and fixtures should be in compliance with the specifications and suggestions of Nextaff.

• Payment for these items will typically be made before the opening of the Office. If you operate initially from a flex-space, these costs may not be incurred until you move into your long-term location.

6.  Computer System:  $2,260 to $3,706

• Computer System will include computers, copier, facsimile machine, and printer.

• Payment for these items will typically be made before the opening of the Office or in installments over a period of time depending on the type of financing arrangement you are able to obtain.

7.  Business and Sales Coaching:  $0 to $6,869

• Nextaff uses a third-party vendor for 12 months of Business Coaching. Nextaff pays for 6 months of this expense and you pay for 6 months of this expense. You must pay your portion of this expense upon execution of the Franchise Agreement.

• Nextaff also uses a third-party vendor for 12 months of Sales Coaching. You must pay your portion of this expense upon execution of the Franchise Agreement. Nextaff in its sole discretion may waive these requirements.

8.  Utility Deposits and Fees:  $0 to $250

9.  Business Licenses:  $150 to $400

10.  Insurance:  $1,000 to $1,500

• You must maintain certain minimum levels of property and liability insurance as specified in the Franchise Agreement. Insurance costs are based on the annual insurance premium.

11.  Initial Marketing, Advertising, and Promotion:  $3,500

• Nextaff has a specific marketing plan for opening an office that Nextaff will coordinate and implement. This amount includes your initial press releases and your first 12 weeks of appointment setting and direct mailer materials.

12.  Miscellaneous Expenses, Including Travel and Living Expenses During Training:  $975 to $2,850

• Miscellaneous costs and expenses, including travel, employee training costs, and other normal and customary operational expenses, are typically paid to third parties as incurred. These expenses are estimates and the franchisor cannot guarantee that you will not have additional expenses starting the Office.

• Your costs may vary depending on, among other things, your management skill, your sales experience and abilities, and local economic conditions.

13.  Additional Funds (Initial 6 Months of Operations):  $44,915 to $72,725

• This includes estimated additional funds for the first 6 months of operation for operating expenses such as rent, staff salaries, utilities, recruiting expenses, marketing expenses.

• Nextaff has based its estimates of initial investments on the operations of the staffing offices formerly operated by Mr. Daniel and Mr. Windmiller and information provided from recently opened offices. This is only an estimate and you might need additional working capital during the first 6 months of operation and for a longer period than that. Nextaff cannot guarantee when or if your office will break even.

• Your costs will depend on how much you follow Nextaff’s methods and procedures, your management and sales skills, and your office’s sales activities during the initial period.

• Nextaff does not guarantee financing directly or indirectly for any part of the initial investment. The availability in terms of financing depends on many factors, including the availability of financing generally, your creditworthiness and collateral, and lending policies of financial institutions from which you request a loan.

14.  Total:  $98,800 to $148,800