Franchise Costs: Detailed Estimates of Ziebart Franchise Costs (2020 FDD)

Detailed Estimates of Ziebart Franchise Costs Based on Item 7 (Estimated Initial Investment) of Ziebart’s 2020 Franchise Disclosure Document

• These estimated initial expenses are Ziebart’s best estimate of the costs you may incur in establishing and operating your Ziebart franchise.

• Ziebart may offer financing for a portion of the Start-up Package that you buy from it. The availability and terms of financing from third parties depend on many factors, including the availability of financing generally, your creditworthiness and collateral, and the lending policies of financial institutions from which you request a loan.

• The factors underlying Ziebart’s estimates may vary depending on a number of variables, and the actual investment you make in developing and opening your Ziebart franchise may be greater or less than the estimates given depending upon the location of your franchise, and current relevant market conditions

• Ziebart does not know whether any of the money you pay to third parties will be refundable.

• In compiling this chart, Ziebart relied on its experience as a franchisor, and the experience of its affiliates as the owners and operators of Ziebart businesses similar to the franchise being offered to you.

1.  Initial Franchise Fee:  $36,000

2.  Opening Inventory/Supplies:  $23,000 to $36,000

3.  Equipment Package:  $100,000 to $163,000

4.  Exterior/Interior Decor Package:  $8,000 to $14,000

• The above shows Ziebart’s estimates of these fees during the first three months that you operate your Ziebart franchise.

5.  Leasehold Improvements:  $45,000 to $55,000

• To meet Ziebart’s System specifications for the build out of your Ziebart franchise, leasehold improvements may be required.

• Ziebart is unable to estimate your cost to purchase or construct a building because this cost is dependent upon geographical area, labor costs, size of building, cost of materials, and other variables unique to each situation.

• Often, these improvements can be included in the monthly lease payment; however, in some cases, you may be required to spend between $45,000 and $55,000 at your location for leasehold improvements. Ziebart does not recommend selecting any location that would require more than $55,000 in improvements

• These amounts do not reflect costs for the purchase of unimproved land and construction of a freestanding Ziebart franchise, which also would result in a significantly greater initial investment.

• These numbers assume a low rent cost of $6,700 per month and a high rent cost of $9,200 per month.

• This estimate does include any tenant improvement allowance and any free rent that you may receive from the landlord for your Ziebart franchise.

• The premises must contain overhead doors for large vehicle access as well as a shop, office, sales showroom, and restroom.

• These costs could be substantially higher in certain markets, depending on the cost of hiring any necessary contractors and costs of materials, as well as shopping center construction fees, county or city building application and inspection fees, county, city or state codes, and the cost to access existing plumbing.

• You should carefully investigate all of these costs in the area where you wish to establish your Ziebart franchise.

6.  Computer Equipment:  $2,200 to $2,500

7.  Utilities, Rent, and Deposits (first 3 months):  $18,600 to $27,600

8.  Insurance:  $3,000 to $9,000

9.  Grand Opening Advertising:  $5,000 to $7,000

10.  Travel Expenses for Initial Training:  $2,000 to $4,000

11.  Miscellaneous Funds:  $5,000 to $15,000

• These funds are to cover initial start-up expenses including utility deposits, licenses, and legal/accounting fees before your Ziebart franchise is opened, as well as the following items:

• a.  Clothes washer and dryer;
• b.  Uniform deposits/detailing cloths;
• c.  Power tools, hand tools, miscellaneous hardware, equipment, and supplies;
• d.  Spray booth; and
• e.  Refrigerant/Dryer.

12.  Additional Funds (Initial Period):  $50,000 to $100,000

• This is an estimate of the funds needed to cover your pre- and post-opening expenses including sales tax, recruitment, on-site training expenses, payroll, payroll processing, janitorial services, as well as additional operating capital for other variable costs (e.g., electricity, telephone, Internet service, Internet setup, etc.), paper, office supplies, cleaning, cellular telephones, and other supplies.

• Additional Funds are also an estimate of the monies you will need on hand during the initial phase of business operations. This estimate also includes the estimated cost of salaries for your employees, but does not include an estimated salary for you.

13.  Estimated Total Investment:  $297,800 to $469,100

• These figures are estimates and Ziebart cannot guarantee that you will not have additional expenses starting your Ziebart franchise. Your costs will depend on factors such as: how closely you follow Ziebart’s methods and procedures; your management skill, experience, and business acumen; local economic conditions; the local market demand for your produce; the prevailing wage rate; competition; and the sales level reached during the initial period.