Proforma Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)

• The following represents the total estimated investment required of a Proforma franchise owner. Proforma does not finance any part of your initial investment.

For Start-Up

1.  Initial Franchise Fee:  $34,500

• The initial franchise fee for a Start-Up franchise owner is $34,500.

• If you have “Relevant Industry Experience” or are a “Conversion Franchise” as defined in Item 5, and otherwise meet Proforma’s qualifications, it will not charge you an initial franchise fee.

2.  Customized Fast-Track Marketing Kit (applicable only to Start-Up Franchises):  $4,500

3.  Computer Hardware:  $0 to $4,000

• Proforma’s Proprietary Order Processing Software is a web-based application and typically operates on an IBM-compatible computer with at least a 2.0 gigahertz (GHz) processor, 2 GB of system memory, a minimum screen resolution of 1920 x 1080, and Internet access.

• The software specifications are Microsoft Windows 7 operating system or higher; an antivirus software with active support and daily definition updates; and WinFax Pro version 10.0 for Windows.

• Proforma’s MAC specifications are a 2.7 GHz Intel Core i5 or greater processor with 8GB of RAM or greater. MAC users will need to install virtual computer software that allows installation of Microsoft Windows onto the native MAC OS, MAC OS X Snow Leopard, VMware Fusion 3.1 or Parallel Desktop 5, Microsoft Windows 7, and Adobe Reader installed on Windows 7.

• As long as the hardware is compatible with the requisite software, you will not need to invest in additional computer hardware. Otherwise, you may obtain the hardware from any source.

4.  Internet Service Provider and Anti-Virus Software:  $30 to $200

• You must subscribe to an Internet Service Provider (“ISP”) and maintain this service during the Agreement. Proforma recommends that your Internet connection speed be at least 10M bps or higher.

• ISPs charge $15 or more per month.

5.  Equipment, Fixtures, Fixed Assets, and Stationery:  $700 to $3,000

• To facilitate ongoing communications between Proforma and you, customers, and vendors, you must obtain an email address from Proforma for use in the Franchised Business. The estimate includes the price of installation of a voice message box and service of an ISP.

• The charge for an email account, additional email accounts, and a voice message box are included in the monthly Communication & Technology Support Fee of $100. Additional voice message boxes are $10 each. The voice message box is accessed through an “800” line hook-up. You will receive a bill for any charges associated with rental.

• However, Proforma may reduce the amounts you otherwise would be billed for usage costs if it provides significant training or support to you through the voice mail system. The Manual contains these programs and other support services for which charges may be waived.

• You must, at all times, maintain one published telephone line exclusively dedicated to the Franchised Business.

• Proforma recommends you initially purchase at least 500 business cards, 500 letterhead, 500 envelopes, and 25 sheets each of mailing and shipping labels to commence operating your Franchised Business.

6.  First Month Pre-Opening Lease, Rent, and Security Deposit:  $0 to $2,000

• Proforma franchise owners normally commence operating their Franchised Businesses from a home-based office space. Some may choose initially to operate this business from a leased office space. They will typically commence operating the business themselves as the sole employee, and hire additional staff as the volume of business or your knowledge of the Franchise System warrants it.

7.  Utility Deposits, Insurance, Licenses, Business Entity Registration:  $300 to $3,000

• At your own expense and before beginning your Franchised Business, you must procure and maintain in full force and effect throughout the term of the Agreement, comprehensive general liability insurance policy covering the operation of the Franchised Business and the types of insurance enumerated when your circumstances as described in the Manual warrant it: “all risk” of physical loss, and as the business warrants, content coverage, general casualty loss and business insurance, employer’s liability, Workers’ Compensation insurance, and additional policies as may be required under your local laws or ordinances.

• You must operate your Proforma franchise only through an established registered business entity (corporation, partnership, or LLC). You may incur legal, accounting, and/or filing fees to set up your business entity.

8.  Travel, Room, and Board for Initial Training:  $1,000 to $2,000

9.  Supplemental Training Fee:  $0 to $495

• You must pay for all costs of travel, meals, additional training materials, and lodging incurred during initial training.

• Proforma cannot estimate your travel or living costs during training, given the many variables involved. The above estimates do not include living expenses for you or your family or any employees that you may bring to training.

10.  Additional Funds Incurred During the Initial Phase, Which Usually Lasts 3-6 Months:  $3,000 to $6,000

• During the initial phase of your Franchised Business, you may require access to additional funds to pay expenses until your business generates sufficient cash flow to pay them.

• The initial phase usually lasts 3-6 months and requires a minimum of $3,000 to $6,000 in additional funds. Because no one can promise you when or whether you will generate any amount of revenue, Proforma urges you to have access to additional funding in case you need it.

• You should have sufficient cash reserves to cover living expenses for at least 6 to 12 months.

11.  Total:  $44,030 to $59,695