What is the range of the estimated initial investment for leasehold improvements for an Annex Brands franchise, as detailed in Item 7?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure (1) | Amount (2) | Method of Payment | When Due | To Whom Payment Is To Be Made | |
|---|---|---|---|---|---|
| Initial franchise fee (3) | $35,000 | Lump sum | On signing franchise agreement | Us | |
| Fixtures | $40,000 - $50,000 | Lump sum | Before opening | Us | |
| Mailboxes | $14,000 - $16,000 | Lump sum | Before opening | Us | |
| Package lockers (4) | $3,500 | Lump Sum | Before opening | Us | |
| Flooring | $6,000 - $9,000 | Lump sum | Before opening | Us | |
| Interior signage (5) | $1,000 - $2,500 | Lump sum | Before opening | Us or suppliers you choose | |
| Exterior signage (5) | $6,000 - $8,000 | Lump sum | Before opening | Us or suppliers you choose | |
| Construction services (6) | $70,000 - $90,000 | As agreed | Before opening | Us or substitute licensed contractor | |
| Construction consultation fee, if applicable (7) | (7) | Before construction begins | Before opening | Us | |
| Equipment (8) | $4,000 - $6,500 | As agreed | Before opening | Us or suppliers you choose |
| Type of Expenditure (1) | Amount (2) | Method of Payment | When Due | To Whom Payment Is To Be Made | |
|---|---|---|---|---|---|
| Computer hardware, and software programs and licenses (9) | $4,500 - $13,000 | Lump sum | Before or at initial training | Software: us and suppliers Hardware: us or suppliers you choose | |
| Initial inventory (10) | $5,000 - $7,000 | Lump sum | Before opening | Us or suppliers you choose | |
| Insurance (11) | $2,500 - $7,000 | As agreed | As incurred | Insurance company | |
| Online financial training portal license and administrative fee | $330 | Lump sum | On signing franchise agreement | Us | |
| Travel, lodging and | $1,000 - $4,000 | Lump sum | As incurred | Suppliers you | |
| meals for initial training | choose | ||||
| New Center/New Owner Marketing Program deposit (13) | $5,500 | Lump sum | Before or at initial training | Us | |
| Supplies (14) | $1,000 - $2,500 | As agreed | As incurred | Us or suppliers you choose | |
| Business licenses, | $300 - $1,000 | As agreed | As incurred | Government | |
| business permits, etc. | agencies | ||||
| Deposits and pre-paid | $13,500- $20,000 | As agreed | As incurred | Us and suppliers | |
| expenses (15) | you choose | ||||
| Architect fee (16) | $4,000-$6,000 | Lump sum | Before plan preparation | Us | |
| Miscellaneous | $2,000 - $3,000 | As agreed | As incurred | Suppliers, | |
| expenditures | employees & others | ||||
| Additional funds (17) (1st | $30,000 - $60,000 | As incurred | As incurred | Suppliers, | |
| 12 months) | employees & others | ||||
| TOTAL (18) | $249,130 - $349,830 |
TABLE NO. 2 CONVERSION OF EXISTING BUSINESS TO STANDARD OR FLEX RETAIL CENTER
| Type of Expenditure (1) | Amount (2) | Method of Payment | When Due | To Whom Payment Is To Be Made |
|---|---|---|---|---|
| Initial franchise fee (3) | $17,500 | Lump sum | On signing franchise agreement | Us |
| Fixtures | $0 - $40,000 | Lump sum | Before opening | Us |
| Mailboxes | $0 - $16,000 | Lump sum | Before opening | Us |
| Package lockers (4) | $0 - $3,500 | Lump sum | Before opening | Us |
| Flooring | $0 - $9,000 | Lump sum | Before opening | Us |
| Interior signage (5) | $1,000 - $2,500 | Lump sum | Before opening | Us or suppliers you choose |
| Exterior Signage (5) | $6,000 - $8,000 | Lump sum | Before opening | Us or suppliers you choose |
| Construction services (6) | $0 - $60,000 | As agreed | Before opening | Us or substitute licensed contractor |
| Construction consultation fee, if applicable (7) | (7) | Before construction begins | Before opening | Us |
| Equipment (8) | $0 - $6,500 | As agreed | Before opening | Us or suppliers you choose |
| Computer hardware, and software programs and licenses (9) | $250 - $13,000 | Lump sum | Before or at initial training | Software: us and suppliers Hardware: us or suppliers you choose |
| Initial inventory (10) | $0 - $7,000 | Lump sum | Before opening | Us or suppliers you choose |
| Insurance (11) | $2,500 - $7,000 | As agreed | As incurred | Insurance company |
| Online financial training portal license and administrative fee | $330 | Lump sum | On signing franchise agreement | Us |
| Conversion training fee | $0 - $4,000 | Lump sum | On signing | Us |
| (12) | franchise agreement | |||
| Travel, lodging and meals | $1,000 - $4,000 | Lump sum | As incurred | Suppliers you |
| for initial training | choose | |||
| New Center/New Owner Marketing Program deposit (13) | $5,500 | Lump sum | Before or at initial training | Us |
| Supplies (14) | $0 - $2,500 | As agreed | As incurred | Us or suppliers your choose |
| Business licenses, | $0 - $1,000 | As agreed | As incurred | Government |
| business permits, etc. |
What This Means (2025 FDD)
Based on the 2025 FDD, the estimated initial investment for construction services, which would cover leasehold improvements, varies depending on the type of Annex Brands retail center. For a new standard retail center, the estimated cost for construction services ranges from $70,000 to $90,000. For a conversion standard or flex retail center, the estimated cost for construction services ranges from $0 to $60,000. For a new flex retail center, the estimated cost for construction services ranges from $20,000 to $50,000.
These figures represent a significant portion of the overall initial investment and highlight the importance of carefully evaluating potential locations and the extent of necessary improvements. The cost differences between a new standard retail center and a conversion center underscore the potential savings in renovating an existing space versus building from scratch.
Prospective franchisees should conduct thorough due diligence, including obtaining multiple construction bids and consulting with experienced contractors, to refine these estimates and avoid unexpected costs. Additionally, the FDD indicates that these costs are 'as agreed' and paid 'before opening' to either Annex Brands or a substitute licensed contractor, suggesting some flexibility in managing these expenses.