Tutoring Club Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)
- These estimated initial expenses are Tutoring Club’s best estimate of the costs you may incur in establishing and operating your Tutoring Center.
- Other than financing all or a portion of your initial fee and Start-Up Package under the circumstances identified in Item 10, Tutoring Club does not offer financing directly or indirectly for any part of the initial investment.
- 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 estimate does not include any finance charge, interest or debt service obligation, or your living expenses.
- The factors underlying Tutoring Club’s estimates may vary depending on a number of variables, and the actual investment you make in developing and opening your Franchised Business may be greater or less than the estimates given depending upon the location of your franchise, and current relevant market conditions.
- None of the amounts you pay to Tutoring Club or its affiliates are refundable. Whether the money you pay to third parties is refundable will depend on your arrangements with them.
1. Initial Franchise Fee: $34,500
2. Real Estate/Rent: $4,500 to $18,000
- The floor area recommended for a Tutoring Center is 1,000 to 1,800 square feet.
- The high estimate represents a lease rate of $40 per square foot for 1,800 square feet of space. The low estimate represents a rate of $18 per square foot for 1,000 square feet of space. Additionally, there may be lease acquisition costs in the nature of deposits.
- The figures listed in this Item may vary substantially from location to location.
- Tutoring Club anticipates that most of its franchisees will lease space for their Tutoring Centers. As a result, these amounts do not reflect costs for the purchase of real estate for your Tutoring Center, which also would result in a significantly greater initial investment.
3. Utility Deposits: $0 to $400
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4. Leasehold Improvements: $0 to $25,000
- Initial leasehold improvements are required before operation.
- These costs can vary substantially based on the size of the business; requirements of a particular landlord; whether or not the improvements are capitalized as part of the lease; local market conditions, including the availability and prices of labor and materials; the site’s condition, location, and size; the demand for the site among prospective lessees; the site’s previous use; and any construction or other allowances the landlord grants.
- These costs do not include capitalized costs of rent or other occupancy costs, over either the life of the lease or the life of your investment.
- These estimates assume that the landlord will provide a “vanilla shell” space that, at a minimum, includes finished floors, demised exterior walls, HVAC, roof, and utilities stubbed to the premises sufficient for a Tutoring Center.
5. Start-Up Package: $15,000
- You must order the Start-Up Package and pay the fee at least 60 days before your Franchised Business is scheduled to open. Tutoring Club will not order your items until you have paid for the Start-Up Package.
6. Insurance: $500 to $1,500
- A 25% down payment of the approximate annual premium is reflected in the lower amount. The total approximate annual premium is represented by the high estimate.
- The exact dollar amount of your insurance payment will be determined by the geographic location of the Tutoring Center and the number of employees that you are covering.
7. Start-Up Package Shipping: $500 to $2,000
8. Your Expenses for Attending Training: $1,500 to $4,000
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- You are responsible for arranging transportation and paying the expenses for meals and lodging for any persons attending the training program. The amount expended will depend on the distance you must travel and the type of accommodations you choose.
- The estimate contemplates attendance by you and up to one employee traveling to Tutoring Club’s Fountain Valley Tutoring Club or other designated location for approximately 2 weeks.
9. Grand Opening Advertising: $7,500
10. Permits/Professional Fees: $500 to $2,000
11. Signage: $3,000 to $6,000
12. Additional Funds for First 3 Months: $10,830 to $16,330
- Additional funds is an estimate of the funds needed to cover pre- and post-opening expenses including sales taxes, recruitment, on-site training expenses, 3 months’ license fees for Tutoring Club Proprietary Software, 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 item also includes the estimated cost of your local advertising expenses for the first 3 months that you operate the Tutoring Center. This estimate also includes the estimated cost of salaries for your employees, but does not include an estimated salary for you.
- Such amounts are the minimum recommended levels of working capital to cover operating expenses during the first 3 months of operation, including employees’ salaries for 3 months. This amount also includes your required local marketing expenditures for 3 months ($2,000 per month for $6,000 total).
- However, Tutoring Club cannot guarantee that such an amount will be sufficient. Additional working capital may be required if your revenues are low or your costs are high.
- In compiling this chart, Tutoring Club relied on its experience, and the experience of the individuals identified in Item 2, as the owners of Tutoring Centers similar to the Tutoring Center that Tutoring Club is offering to you.
13. Total Estimated Initial Investment: $78,830 to $127,730
- You should conduct your own independent investigation of the costs of opening a tutoring business in the geographic area in which you intend to open your Tutoring Center.
- The amounts shown are estimates only and may vary for many reasons including the size of your Tutoring Center, the capabilities of your management team, how closely you follow Tutoring Club’s methods and procedures; your management skill, experience, and business acumen; local economic conditions; the local market demand for your services; the prevailing wage rate; competition; and the sales level reached during the initial period.