Franchise Costs: Detailed Estimates of Koala Insulation Franchise Costs (2020 FDD)

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

1.  Initial Franchise Fee:  $49,500

• The Initial Franchise Fee is for a standard territory with a population of 200,000 individuals. You may purchase additional population for a cost of $0.25 per person.

2.  Training Expenses:  $500 to $3,000

• The cost of the Initial Training Program for the Operating Principal and Manager is included in the Initial Franchise Fee. The chart estimates the costs for transportation, lodging, and meals for two trainees. These incidental costs are not included in the Initial Franchise Fee.

3.  Equipment and Vehicles:  $28,376 to $37,492

• The amounts reflected above and herein are for the required initial equipment and vehicles rated to operate a single Franchise in a single territory. These estimates are based on a 20% deposit of the final purchase invoice, with the remainder financed over a 60-month term, at an interest rate of 6% plus three months of payments. Your deposit, term, and interest may vary.

• You must obtain the required initial equipment prior to commencing operations. The required initial equipment consists of the Insulation Rigs (consisting of a spray foam rig and a blow-in rig) and Pickup Truck and the costs range between $28,376 to $37,492.

4.  GPS Tracking Systems:  $350 to $600

5.  Insurances:  $3,500 to $6,000

• Before you open for business, you must purchase and maintain at your sole cost and expense the insurance coverage that Koala Insulation specifies. You must comply with all state minimums when obtaining insurance for pesticide and herbicide application.

6.  Initial Advertising/Marketing:  $18,500

• Beginning at least one month prior to the scheduled opening of your Franchise and continuing for five months after the opening, Koala Insulation requires you to spend at least $2,500 per month on local advertising and promotional activities to promote your Franchise.

• After the initial opening advertising, you are required to spend the greater of 5% of Gross Sales or $2,000 per month on local advertising. Koala Insulation included $5,000 in pre-opening advertising plus three months at the minimum required amount.

7.  Professional Fees:  $2,500 to $6,000

• Estimated cost for professionals such as bookkeepers, accountants, and attorneys. You are required to use a third-party bookkeeping service for your first year of operations.

• You may incur professional fees depending on the scope of work performed, which may include legal and accounting fees to review franchise documents and costs of forming a separate legal entity.

• This list is not exhaustive. This amount will vary greatly depending on your specific needs and location.

8.  Rent (parking location/office):  $0 to $2,500

• Your Franchise may be operated out of your home. The higher amount listed is the estimated costs of renting space to park your Koala Rigs for a three-month period.

• Koala Insulation cannot estimate what you would pay if you seek to operate your business from somewhere other than your home. Koala Insulation does not provide any specifications for office locations outside your home.

• If you wish to rent commercial office space, such space must be located within your Territory. If you decide to rent office space, your initial investment will increase by the amount of any deposit you may be required to pay in connection with such rental, build-out costs, or prepaid rent which the landlord may require.

9.  Office Expense:  $500 to $1,250

• The figures on this chart reflect the estimated range to purchase various furniture and fixtures, and common office supplies based upon your needs and preference to maintain an efficient and organized home office. The cost of furniture and fixtures will vary depending on suppliers. You are not required to purchase such office equipment.

10.  Computer, Phone, and Technology Systems:  $700 to $3,000

• Koala Insulation requires you to purchase computer systems and software meeting its minimum specifications for use in your Franchise. This estimate includes the cost of the software packages, your office computer, a tablet computer, a telephone, a printer/scanner machine, and a smartphone.

• You must also have Internet and other telecommunications equipment and services in accordance with Koala Insulation’s standards to permit electronic transmission of sales information.

• Koala Insulation reserves the right to change your requirements for computer hardware and software at any time in the future.

11.  Business Licenses and Permits:  $500 to $1,500

• Business license costs vary widely depending on local laws and regulations. Additional permits may be required depending on your local laws and regulations. Consult the appropriate authorities to determine the amount applicable to a Franchise in your Territory.

12.  Additional Funds:  $15,000 to $30,000

• The estimate of additional funds for the initial phase of your business includes staff salaries and operating expenses for the first three months. If you have fewer employees initially, these monthly expenses may be reduced.

• The estimate does not include an owner’s salary or draw.

• Koala Insulation relied upon the experience of its company-owned locations to compile these estimates.

• Each installation requires a minimum of one two-person crew. You should investigate the costs of labor in your Territory before making any decision to operate a Franchise, as this will be a significant portion of your ongoing expenses.

13.  Total Estimated Initial Investment:  $119,926 to $159,342

• These figures are estimates and Koala Insulation cannot guarantee that you will not have additional expenses starting your franchised business. This estimate is based on Koala Insulation’s experience. This is only an estimate, however, and there is no assurance that additional working capital will not be necessary during this start-up phase or after.