Detailed Estimates of Kitchen Solvers Franchise Costs Based on Item 7 (Estimated Initial Investment) of Kitchen Solvers’ 2020 Franchise Disclosure Document
1. Initial Franchise Fee: $60,000
2. Pre-Opening Training: $1,000 to $2,500
3. Supplies Package: $4,500
- You must purchase a Supplies Package from Kitchen Solvers for use in your Business.
4. Pre-Opening Advertising: $5,000
- Within 120 days after the date of your Franchise Agreement, you must spend a minimum of $5,000 on pre-opening advertising. Typically, this expense will cover your first home and display and certain marketing materials.
- All pre-opening advertising must be approved by Kitchen Solvers and, at its request, you must provide it with copies of all invoices and receipts evidencing your pre-opening advertising efforts.
5. Local Marketing: $3,750
- Except if Kitchen Solvers provides written notice stating otherwise, commencing on the first full calendar year after you sign the Franchise Agreement, and continuing for each successive calendar year that you operate your Kitchen Solvers Business, you must spend a minimum of $15,000 each year on approved local marketing and advertising.
- You must spend at least $7,500 on local advertising on or before June 30 of each calendar year with the remaining balance spent on or before December 31 of each calendar year.
- The amount identified above reflects 3 months of local marketing expenses.
- Kitchen Solvers must approve all local marketing and advertising. Upon Kitchen Solvers’ request, you must provide to it copies of all invoices and receipts evidencing your local marketing activities.
6. Rent/Leasehold Improvements: $0 to $3,000
- Your initial investment may not include any amount for office space, and Kitchen Solvers recommends that you initially operate your Business from your home.
- If you lease an office, showroom, or shop space outside of your home, this expense will vary based upon local real estate market conditions and the size of the space you lease. The estimate provided assumes a high end of $1,000 per month for a warehouse or shop.
- If you choose to have a showroom for your Business, it must meet Kitchen Solvers’ specifications and standards for showrooms and you may incur additional expenses for furniture, fixtures, equipment, and signage.
- Typically, a showroom is a minimum of 200-300 square feet of office space with 400-600 square feet of shop space and would be located in a light industrial park that will allow you to receive merchandise.
7. Office Equipment: $0 to $1,000
8. Vehicle: $0 to $2,100
- You must use either a motor vehicle or enclosed trailer with your Business. You may use your existing vehicle if it meets Kitchen Solvers’ standards and specifications. The low end of the range assumes you will use your existing vehicle with signage as noted below.
- If you do not currently own a vehicle that is capable of pulling a trailer or your existing vehicle does not meet Kitchen Solvers’ standards and specifications, you must purchase or lease a vehicle capable of serving in that capacity.
- The estimate for a lease on a vehicle that will serve as an installation vehicle is $700 and includes sales tax and license and title fees.
- If you choose to purchase a trailer, the cost of the trailer will range from $2,000 to $4,000.
9. Insurance Premiums: $315 to $900
- Insurance premium estimates are for general liability, business operation, motor vehicle, and such other insurance coverage that Kitchen Solvers designates.
10. Computer System: $700 to $1,500
11. Utility Deposits and Business Licenses: $100 to $750
- This amount includes utility deposits and business licenses. Deposits are generally refundable, but license fees are not.
12. Attorneys’ Fees: $500 to $1,000
- This amount is an estimate for attorneys’ fees in connection with your purchase of the franchise.
13. Bookkeeping Fees: $74 to $150
- This amount is an estimate of the third-party software fees that you will need to spend in connection with establishing and maintaining proper records and financial statements during the first three months.
- The low estimate reflects the amount you would spend if you used Kitchen Solvers’ recommended vendor, and the high estimate reflects the amount that you may spend if you use an alternative software or vendor.
14. Accounting Fees: $300 to $1,050
- This estimates the amount that you may pay an accountant during the first three months.
- The low amount estimates the amount you may spend if you use Kitchen Solvers’ recommended accounting firm for minimal services. The high amount estimates the amount you may spend if you use your own accounting firm or if you engage an accounting firm for more than minimal services.
15. Back Office Expenses: $0 to $450
- This estimates the amount that you may spend during the first three months on back office services such as payroll services and general human resource services.
- The low end estimates the amount that you may spend on these services if you do not have any employees during the first three months. The high end estimates the amount that you may spend during the first three months if you either use Kitchen Solvers’ recommended PEO (professional employment organization) or if you purchase separate payroll and human resource services for your Business.
16. Installation Tools: $0 to $3,725
- You may need to purchase tools for installation. Kitchen Solvers will supply you a suggested complete tool list upon request for your use in determining which tools you may need to purchase.
17. Technology Fees: $345
- This estimates that you will not purchase additional email accounts from Kitchen Solvers and you either already have a subscription to Microsoft 365 or you will purchase such subscription through a third-party vendor.
18. Additional Funds (3-month period): $15,000 to $25,000
- The estimate of Additional Funds for the initial phase of your Kitchen Solvers Business is based on recurring expenses and operating expenses for the first 3 months of operation.
- This estimate is based on costs experienced by Kitchen Solvers’ current franchisees, as well as its management team’s and its predecessors’ more than 30 combined years of industry experience and knowledge of average costs and market conditions prevailing as of the date of the Disclosure Document.
19. Total: $91,584 to $116,720