Squeeze Massage Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)
1. Initial Franchise Fee: $60,000
- The Initial Franchise Fee is not refundable under any circumstances.
2. Grand Opening Plan: $9,000 to $14,000
- You must advertise and promote the Squeeze Shop during the 4-month period that begins 1 month prior to opening and continues for 3 months following the opening of the Squeeze Shop (“Grand Opening Plan”).
- Your Grand Opening Plan expenditures must equal or exceed $9,000 although the franchisor recommends that you spend more than the minimum amount.
- You agree to comply with the franchisor’s guidelines for the Grand Opening Plan, based upon an agreed upon marketing plan, which you must follow as part of the marketing, advertising, and promotion of the Squeeze Shop (“Marketing Plan”).
- You must spend at least the amount that the franchisor specifies for your Grand Opening Plan; however, you may spend more than the required amount. This expenditure is in addition to your Brand Fund contribution and the amount you must spend on Local Store Marketing.
3. Travel and Living Expenses While Training: $2,000 to $4,500
- You must pay all travel and living expenses incurred by you and your employees while attending all training courses and programs. The amount of these expenses will depend on the distance you must travel, mode of transportation, type of accommodations, number of your employees attending training and their wages.
4. Leasehold Improvements: $238,686 to $362,339
- The Leasehold Improvements estimate includes estimated expenditures for interior construction, HVAC, electrical, plumbing, walls, millwork, and floor coverings.
- This estimate includes an allowance of $35 per square foot paid by the Property Owner (“Tenant Allowance”), which is the average amount that Squeeze Massage estimates will be paid by Property Owners of Squeeze Shops to assist in the build-out of Squeeze Shops throughout the United States. Your Property Owner may offer you a Tenant Allowance that is less than or greater than Squeeze Massage’s estimate of the Tenant Allowance. There is no guarantee that your Landlord will contribute any Tenant Allowance to your site and building improvements.
- The cost of these improvements varies significantly depending upon the size and existing condition of the Premises as well as the geographic area in which your Squeeze Shop is located.
- Costs will likely be significantly higher in California as well as certain metropolitan areas including New York City (including boroughs), Washington D.C. (including surrounding areas in Virginia and Maryland), and Chicago, as well as Hawaii and Alaska.
5. Architect/Engineer/Permits and Licenses: $18,000 to $53,000
- This figure includes an estimate of the expenses that you will likely incur in the development of your Squeeze Shop, including preliminary design drawings, construction drawings, and building and construction related permits and licenses. Some of these expenses may be built into the costs billed to you by your general contractor.
6. Legal/Professional Fees: $2,000 to $5,000
- These figures represent the estimated costs of engaging attorneys or other business professionals to review the disclosure document and the accompanying agreements, to assist you in forming an entity, to assist you in obtaining a loan, and to help you obtain required business licenses and permits.
7. Project Management Fee: $15,000 to $17,500
- You are required to retain the franchisor’s designated project management company to assist you in designing and constructing your Squeeze Shop. This is the current fee (“Project Management Fee”) charged by that provider of project management services. The Project Management Fee may be different for subsequent Squeeze Shops.
8. Prepaid Rent, Security, and Other Deposits: $3,000 to $15,000
- The franchisor expects that you will lease the location for the Squeeze Shop, which will range in size from 2,800-3,000 square feet and be located in a retail shopping center, strip center, or lifestyle center.
- The lease that you sign for your Squeeze Shop must be for a term of no less than 10 years from within a geographic area that the franchisor identifies in the Franchise Agreement (“Site Selection Area”).
- The lease payments that you will make to third-party Property Owners will vary considerably depending upon the property size, type of transaction, and location. Lease agreements may include the following expenses: taxes, insurance, maintenance, fixed rent (with escalations), percentage rent, principal and interest on tenant improvement loans, and other charges related to the operation of the Squeeze Shop.
- Landlords may require you to pay the first and last months’ rent and a security deposit equal to at least one to three months’ rent. Utility companies also may require a deposit for all new commercial accounts. The amount of the utility deposit will vary depending upon your utility company and its standard credit practices.
9. Initial Liability Insurance and Workers’ Compensation Deposit: $1,000 to $3,500
- This is an estimated down payment against your annual premiums to acquire the insurance required under the Franchise Agreement. The estimate is only for commercial general liability, property, professional liability, business interruption, and workers’ comp insurance.
- The franchisor may periodically specify and change the types and amounts of coverage required, including an additional liability insurance umbrella policy.
10. Exterior Signage and Interior Graphics: $8,200 to $10,750
- The signage and graphics will be governed by the System Standards and any restrictions in your lease (if applicable) and local ordinances.
11. Technology Purchases: $15,000 to $16,250
- This amount estimates your cost for the purchase and installation of required hardware, software, and related equipment (“Shop Systems”). The low estimate assumes you own three computers that may be used in the operation of the Shop and that you will purchase zero computers, and the high range assumes you will purchase 3 computers.
12. Technology Start-up Fee: $1,500
13. Technology Fee: $5,850
- This reflects an estimate of the Technology Fee that you will pay the franchisor during your first 3 months of operation of your Squeeze Shop and a one-time technology setup fee.
14. Opening Inventory and Supplies Not Otherwise Noted: $16,000 to $17,000
- Includes supplies associated with providing the Squeeze Services at your Squeeze Shop.
15. Furniture, Fixtures, and Equipment: $64,000 to $71,000
16. Additional Funds (Initial 3-6 Month Period): $40,000 to $65,000
- This is an estimate of the funds needed to cover business (not personal or living) expenses during the initial period (which the franchisor considers to be the first 3 to 6 months) of operation of the Squeeze Shop. To the extent that operational revenues do not cover these expenses, you will need additional funds to support the operational costs of your business, including other expenses as rent, leases, payroll, utilities, insurance, taxes, loan payments, advertising, supplies, inventory, Grand Opening Plan expenses, and other expenses.
17. Total: $499,736 to $722,189
- The franchisor has relied upon its experience, the experience of its affiliate Squeeze Holdings, the operator of the original Squeeze Shop, and the experience of the franchisor’s project management vendor, in compiling these estimates. The franchisor does not offer financing to you for any part of the initial investment.