The Investment
During the initial interview (Discover Day), we will discuss your investment, financing options, and other questions or matters of importance.
Your Estimated Initial Investment (Item 7 of Franchise Disclosure Document)
(Based on a Single-Truck Home Energy Rating Business)
Type of Expenditure |
Estimated Amount |
Method of Payment |
When Due |
To Whom Payment is to Made |
|
Initial Franchise Fee (1) |
$6,000 |
As arranged |
On Signing of the Franchise Agreement |
Fox Energy Specialists |
|
Real Property / Site Lease (2) |
See Note 2 |
As Arranged |
As Agreed |
Third Parties |
|
Leasehold Improvements (3) |
See Note 3 |
As arranged |
As agreed |
Contractor/ Architect |
|
Vehicle (4) |
$500 to $42,000 |
As arranged |
As agreed |
Vendors |
|
Fixtures and Equipment (5) |
$3,600 to $8,100 |
As arranged |
As agreed |
Vendors |
|
Soft Costs (6) |
$25 to $3,000 |
As arranged |
As agreed |
Vendors |
|
Insurance (7) |
$300 to $5,000 |
As arranged |
As agreed |
Insurance Company |
|
Opening Inventory (8) |
$1,100 to $7,000 |
As arranged |
As agreed |
Vendors |
|
Training Costs (9) |
$700 to $18,000 |
As arranged |
Before training |
Vendors |
|
Security Deposits (10) |
$25 to $2,500 |
As arranged |
As agreed |
Vendors |
|
Business Licenses (11) |
$100 to $1,000 |
As arranged |
As agreed |
Licensing Authority |
|
Additional Funds – 3 months (12) |
$1,650 to $13,780 |
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Totals (13): |
$14,000 to $106,380 |
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Explanatory Notes
- The initial franchise fee for a single Rating Business is $6,000. A single Rating Business is defined as operating one approved vehicle for purposes of delivering Rating Services. This amount is reflected in the estimated low column of the chart. We may in certain special instances grant rights to operate multiple Rating Businesses to a new strategic-partner, but you will sign a separate Franchise Agreement for each individual Rating Business. However, if you later purchase additional Rating Businesses, you will pay additional initial fees for each additional Rating Business. The initial franchise fee is the way we recoup part of the expenses we incur in putting the strategic-partner into our business.
- The total estimated initial investment does not include real estate. We do not currently require the purchase or lease of real estate designated for any Office from which you manage your Rating Business, but you may need to rent space for your Office if you are not able to do so from your home. The cost of leasing space for your Office will vary, depending on location and other factors, and cannot be accurately projected by us. We do not anticipate that you will purchase land or a building for your Office from which to manage the Rating Business.
- We do not currently require a specific size, design or layout for your Office. The Office may be an existing home residence, provided that you have sufficient space in the Office to store equipment, supplies and inventory necessary to perform Rating Services, as determined by us.
- If you do not currently own an approved vehicle, you will be required to buy or lease a vehicle that is approved and equipped to meet our requirements and standards. You may be offered the opportunity to lease an approved used vehicle from us on a temporary basis in connection with the offer of a franchise, but you will not be obligated to lease any vehicle from us. We have an oral arrangement with Transworld Leasing Corporation to arrange for you to lease an approved and equipped vehicle, but you have no obligation to lease or purchase your vehicle from Transworld Leasing Corporation. See Item 8. The low estimate assumes you lease a vehicle. The high estimate assumes you purchase a new vehicle.
- The fixtures and equipment costs are based on the costs charged by our vendors for the fixtures, equipment, and major tools required in all operations manual, policy statements, directives, bulletins and memoranda that contain prescribed or recommended standards, procedures, policies and advice relating to a Rating Business’s operation and management and to market the products Rating Businesses offers. The operations manuals disclose the principle elements of the System, and its contents are and will remain our exclusive property (collectively referred to as the “Operations Manual”).
- Soft costs include permits, fees, meeting costs, title reports, legal services and ancillary items.
- You must carry insurance as required in the Franchise Agreement. The amount in the table represents our best estimate of the premiums required for commercial general liability, business automobile liability, employee benefits liability, workers’ compensation, and umbrella liability insurance during a Rating Business’s first year of operation. However, your costs may vary from those described in the table.
- Opening inventory consists of field operational small tools, apparel and supplies.
- The low amount shown include estimated local travel, meal and incidental expenses for your Managing Principal to attend our required initial training program (in the Fort Worth, Texas area). The high amount includes additional costs for out of town travel, reasonable lodging and one Assistant to also attend our required initial training program. Such amounts will vary depending on the number of Assistants that attend the initial training program, the distance traveled, method of travel and choice of accommodations.
- Security and utility deposits include estimated deposits for a leased Office, Vehicle and equipment, telephone service and other utilities.
- The range given provides our best estimate of the costs you will incur for business permits and miscellaneous deposits, including utility deposits.
- The estimated low additional funds amount includes auto insurance, insurance, commercial recurring telephone and GPS services for the first 3 months of operation.
The estimated high additional funds amount also includes wages, occupancy costs, vehicle leasing, and insurance costs for the first 3 months of operations. - These figures are an estimate of your total opening and operating expenses for the initial three months of business. They are based on our predecessor and parent Nelrod’s experience in operating a Rating Business from its home office in Fort Worth, Texas and performing Rating Services primarily in Dallas, Fort Worth and Houston. The costs in your region of the country will vary. Your expenses may also vary depending on the size and location of your Designated Area, your experience, the prevailing wage, your level of sales, the competition and other factors.