Franchise Costs: Detailed Estimates of Expense Reduction Analysts Franchise Costs (2020 FDD)

Detailed Estimates of Expense Reduction Analysts Franchise Costs Based on Item 7 (Estimated Initial Investment) of Expense Reduction Analysts’ 2020 Franchise Disclosure Document

• Except as otherwise set forth in this Item, all fees noted in this Item 7 are payable to Expense Reduction Analysts and are non-refundable. This Item 7 shows estimated expenses through the third month of operation.

• Expense Reduction Analysts and its standard franchise offering assume that you will operate from a home office without hiring employees from the very beginning, and that you already own a vehicle that you will use in the operation of your Consulting Business. If you choose not to operate from a home office, you may incur additional fees relating to the operation of your Consulting Business, including but not limited to increased real property, furniture, equipment, insurance, permit and license-related expenses.

• None of these estimated expenses are refundable, except for insurance, which may be partially refundable from the broker or insurer. Expense Reduction Analysts does not offer direct or indirect financing for any of the expenses listed below.

1.  Initial Franchise Fee:  $59,900

• The Initial Franchise Fee is non-refundable.

• The Initial Franchise Fee is uniform for all franchisees except for those franchises sold under the VetFran initiative. Expense Reduction Analysts-USA proudly offers VetFran qualified veterans a discount of $5,000 off the Initial Franchise Fee.

2.  Training Expense:  $2,000 to $4,000

• Expense Reduction Analysts does not charge a fee to provide the Foundational Training Program to you or, if you are an entity, the principal you designate to be responsible for day-to-day operations of your Consulting Business that Expense Reduction Analysts approved (the “Designated Principal”).

• The cost you incur will vary depending upon factors such as distance traveled, mode of transportation, travel preferences (such as air travel or ground transportation), nature of accommodations, per diem expenses actually incurred, and the number of persons who attend training.

• This estimate does not include any wages or salary for you or your trainee(s) during training.

3.  Computer Hardware and Software:  $0 to $3,000

• This category includes required items such as a Computer System that is capable of running Expense Reduction Analysts’ Proprietary Software, which currently includes Expense Reduction Analysts’ management information system (“ERA Management Information System”), and has a high-speed internet connection, office furniture, telephone system, and a fax/copier/printer.

• If you already have these items, there may be no purchase required.

4.  Furniture and Equipment:  $0 to $3,000

5.  Supplies Inventory:  $0 to $1,000

6.  Insurance:  $1,000 to $3,500

• You will need business/professional liability insurance, and consultants’ errors and omissions insurance, as further described in the Franchise Agreement. Some coverage may be included in your homeowner’s policy.

• Insurance coverage will vary from state to state and will depend on your prior loss experience, if any, and/or the prior loss experience of your insurance carrier in the state or locale in which you operate your Consulting Business, and national or local market conditions.

7.  Professional Fees:  $0 to $5,000

• You may need the assistance of an attorney, accountant, or other consultants to assist in establishing your Consulting Business. These fees may vary from location to location depending upon the prevailing local rate of attorneys’, accountants’, and consultants’ fees. These fees are typically not refundable.

8.  Permits and Licenses:  $100 to $500

9.  Additional Funds for 3 Months:  $3,000 to $6,000

• This category includes estimated opening cash, initial marketing activities, monthly minimum royalty fees, the Technology Fee, various expenses incurred in connection with sales calls, visiting network events, and other miscellaneous expenses incurred before opening and during the first 3 months of operations.

• Expense Reduction Analysts relied on its experience and that of its franchisees in developing these figures. You should review them carefully in light of local conditions and the current economic outlook, and consulting a business advisor, if necessary.

• As with most businesses, your costs will depend on factors such as how much you follow Expense Reduction Analysts’ recommended systems; your technical, marketing, and general business activities and skills; local economic conditions; the local market for your business; competition; local cost factors; location; and the sales levels achieved by you.

• This is only an estimate, and Expense Reduction Analysts does not guarantee that the amounts specified will be adequate.

10.  Total:  $66,000 to $85,900

• The figures in this table are only estimates. Expense Reduction Analysts does not guarantee that you will not have greater start-up expenses other than these estimates or that you will not need more operating funds other than these estimates. Expense Reduction Analysts does not imply or guarantee that you will “break even” by any particular time.

• Your costs will vary depending on such factors as: how closely you follow the System; your management and marketing skills, experience, and general business ability; and local and general economic conditions, including disposable income.

• Expense Reduction Analysts does not offer direct or indirect financing to you for any items. The availability of financing through third-party lenders, if any, will depend on factors such as the lending policies of such financial institutions, the collateral you may have, your creditworthiness, and the general availability of financing.