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

1.  Initial Fee:  $60,000

2.  Lease Deposit and First Month’s Rent:  $0 to $5,000

• Brightway Insurance expects that you will lease the temporary professional office space (if any) and final retail office space for your Brightway Location. A typical retail office will occupy approximately 900 to 1,300 square feet of space. Lease payments will vary considerably depending upon the property size, type of transaction, and location.

• The low-end estimate above assumes that you will operate the Retail Agency from a home office for the initial period of operations, and the high-end estimate above assumes that you will commence operations in a retail space, and that the initial lease deposit for this space will be equal to two months of rent.

• Lease agreements may also include the following expenses: taxes, insurance, maintenance, fixed rent (with escalations), percentage rent, and other charges related to the operation of the Brightway Location.

3.  Leasehold Improvements:  $0 to $10,000

• Brightway Locations do not require extensive build-out; however, Brightway Insurance permits franchisees who wish to do so to spend additional sums on leasehold improvements (though these additional amounts are not incorporated into the estimates above).

• In new retail space, you may expect to install carpet, paint, cabling, and limited interior walls. There may also be plumbing or electrical costs.

• You should check with the relevant regulatory agencies to identify costs for required building permits, impact fees, taxes, bonds, licenses, and other fees, which can vary dramatically depending on the location.

• The low-end estimate above assumes that you will commence operations in a home office, and therefore not incur any build-out expenses during the pre-opening period.

• In some cases, the landlord of an office or retail space may cover some portion of the cost of leasehold improvements.

4.  Furniture, Furnishings, and Fixtures:  $0 to $7,000

• You must purchase certain furniture and fixtures in order to operate your Brightway Location. The Brightway Location will require one desk and chair for each person working at the Brightway Location.

• Other items include desks, guest chairs, and miscellaneous reception area and back‐office furniture, which currently must be purchased from Brightway Insurance’s required vendor.

• Certain furniture and fixtures are only required at a retail space, and will not be immediately necessary if you choose to temporarily operate your Brightway Location from a home office and/or professional office space during the initial period of operations.

• The low-end estimate assumes you are initially operating the Brightway Location from a home office which has adequate work space, and the high-end estimate assumes you will commence operations of your Retail Agency from a retail office space.

5.  Equipment:  $2,500 to $10,000

• You must obtain certain equipment according to Brightway Insurance’s Technology Specifications. You are required to maintain one computer (properly configured for use within the System and purchased from Brightway Insurance’s required vendor) for each producer working at the Brightway Location. You will also need a multi-function device that acts as a printer, scanner, and copier; headsets; IP Phones; and other miscellaneous equipment.

• The estimate above includes the cost of each of these items, in addition to monitors, laptop(s), operating software, Internet and other technology setup, and warranty plans for this equipment, as your estimated initial expense.

• The low-end estimate above assumes you are purchasing a single workstation and multi-function device, and the high-end estimate above assumes you are purchasing workstations and multi-function devices for multiple producers.

6.  Signage:  $0 to $12,500

• The type of signage to be installed at your premises is governed by local ordinances and lease provisions regarding height and size restrictions.The types and amount of signage will vary based on the type of location, landlord requirements, and city/municipality requirements.

• The low-end estimate above assumes that you will commence operations of your Brightway Location from a home office or professional office space and therefore no signage will be required.

• All signage must conform to the Brightway System specifications and must be submitted to Brightway Insurance for approval prior to purchase and installation.

• You may be required to use Brightway Insurance’s required vendor for signage.

• In some cases, the landlord of your retail office space may cover some or all of the cost of any exterior signage.

7.  Professional Fees:  $500 to $3,500

• These figures represent the estimated costs of engaging an attorney, CPA, or other business professionals to review the Disclosure Document and the accompanying agreements, to assist you in organizing a business entity and setting up your books, and to help you obtain required licenses and permits.

8.  Insurance Policies:  $2,300 to $5,000

• The estimated amount above includes the initial cost of the professional insurance policies that you will need to obtain and maintain according to Brightway Insurance’s standards and specifications.

9.  Licensing Fees:  $0 to $1,000

• You are responsible for obtaining certain licenses required by the state in which you are located. The estimate above also includes any initial education costs associated with obtaining your licenses.

• The low-end estimate assumes that you have insurance experience and already possess the licenses necessary to operate your Brightway Location.

10.  Opening Advertising Expense:  $0 to $4,500

• You are not required to expend any amount on grand opening advertising; however, Brightway Insurance recommends that you conduct an opening advertising program to promote the opening of your Brightway Location during the first 60 days following your soft opening.

• If you elect to do so, the amount of the opening advertising will be dependent on your unique circumstances, and Brightway Insurance will work with you to determine an appropriate program during the time period following the execution of your Franchise Agreement and prior to your opening.

11.  Additional Funds – 6 Months:  $23,000 to $55,000

• These figures are an estimate of your operating expenses for the initial six months of business. Both high-end and low-end estimates include rent, taxes, insurance, supplies, utilities, technology costs, licenses and permits, bank charges, and repair and maintenance expenses.

• They also include the costs of an opening advertising program, which will generally consist of primarily grassroots advertising but may involve printing and other costs necessary to generate referral sources.

• They do not include the portion of commissions withheld by Brightway Insurance.

• The low-end estimate assumes that you will begin operating from a home office, and move into a professional or retail office space before the end of the initial 90-day period. Accordingly, the low-end estimate also includes the cost of a lease deposit, leasehold improvements, furniture, fixtures and equipment, and signage that you will incur in connection with that relocation.

• The low-end estimate also assumes you will not employ any other individuals to work full-time writing New Business from your Brightway Location during the additional funds period, and that you will have strong initial sales.

• The high-end estimate assumes that you will commence operations from a retail office space and employ two other individuals to work full-time writing New Business from your Brightway Location. The high-end estimate also assumes you will have low initial sales.

12.  Total Estimated Initial Investment:  $88,300 to $173,500