Image Studios Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

1.  Initial Franchise Fee:  $54,750

• Image Studios will approve or decline your application within 45 days of its receipt of your completed application, or upon awarding approval after completion of Meet the Team Day, whichever comes later.

• Image Studios will not refund the Initial Franchise Fee(s) under any circumstances. Image Studios does not finance any fee.

2.  Site Development Administration Fee:  $6,500

3.  Business Formation:  $1,000 to $3,000

4.  Rent/Real Estate (first month’s rent and security deposit):  $20,000 to $45,000

• If you do not own adequate space, you must lease the space for your Business.

• Generally, this will include first month’s rent, plus a security deposit.

• The numbers provided cover the interior build out of a location. These costs are the same regardless of whether you buy a building or lease space.

• These estimates are based on the build out of one location. If you purchase multiple franchises at one time, you will incur additional expenses for each location purchased.

• Typical franchises are located in commercial centers, strip centers, buildings on commercial streets with heavy traffic, malls, and office buildings.

• The terms and conditions of all agreements relating to the purchase, lease, and alteration of the property will be negotiated solely by you; however, Image Studios requires you to include certain lease provisions, as set forth in the Design & Construction Manual and Lease Rider to the Franchise Agreement.

• Legal fees are included in Image Studios’ estimates for leasing the premises but not for the purchase of real estate. The purchase of real estate may have additional legal expenses.

5.  Initial Floor Plan Layout:  $350 to $1,000

6.  Utility Deposits:  $0 to $3,500

• Includes other deposits, utility costs, telephone, Internet and communications costs, and incorporation fees.

7.  Architectural Plans and Engineering:  $15,150 to $34,000

8.  Licensing and Permits:  $3,500 to $23,000

9.  Leasehold Improvements:  $582,000 to $1,200,000

• Franchise locations range from 9 studios to 50 studios (2,700 to 10,623 square feet).

• Your location will typically be leased, although some franchisees own their locations.

• Individual studios should be equipped with cabinets, mirrors, styling chair, etc.

• You will provide individual studios to salon professionals and sell a variety of different use and subscription packages to salon professionals on a month-to-month basis and offer and sell services and products that are part of the Image Pro Services program.

• Subscription payments are collected weekly on Fridays via EFT through Image Studios’ designated accounting software.

• The costs will vary widely and may be significantly higher than projected in this table depending on such factors as property location, population density, economic climate, prevailing interest rates and other financing costs, conditions of the property, and extent of alterations required for the property. You should investigate all of these costs in the area where you wish to establish a franchise.

10.  Furniture, Fixtures, and Equipment:  $110,000 to $225,000

11.  Initial Training Expenses:  $0 to $2,500

12.  Computer Equipment:  $1,500 to $3,000

• You will be required to purchase computer equipment and software for the operation of your franchise.

• While Image Studios does not require any specific vendors for computer, Internet, and communications equipment, it requires that you meet certain minimum standards established periodically in the Manuals.

• Image Studios also requires that you utilize its property management software and customer relationship management software to keep your salon professional and tenant database within, to run payments and rent via EFT, and to run required financials and reporting on a regular basis.

13.  Insurance (annual basis):  $1,200 to $3,500

14.  Additional Funds for 3 Months:  $35,000 to $50,000

• This estimates your initial startup expenses for an initial 3-month period, not including payroll costs, and does not include any revenue generated by the operation of your Business.

• To compile these estimates, Image Studios relied on its owners’ and management team’s combined experience in the salon suite business since 2009 and in the real estate industry since before 2000, as well as its internal data reporting and data from franchisees.

15.  Miscellaneous Opening Costs and Grand Opening:  $1,500 to $5,000

16.  Advertising and Marketing for First 3 Months:  $6,000 to $18,000

• The advertising and marketing expenditure includes local marketing of a minimum $2,000 per month (until you reach greater than 70% occupancy, at which point the minimum is reduced to $400 per month).

17.  Operating Supplies:  $1,000 to $2,500

• You must purchase an initial inventory of cleaning supplies and other operating supplies.

18.  Total Estimated Initial Investment:  $839,450 to $1,986,250

• Image Studios does not provide financing arrangements for you.