What pre-opening expenses are estimated in Item 7 for a Bevaris Alliance franchise?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Expenditure | Amount Est. Low Range | Amount Est. High Range | Method of Payment | When Due | To Whom Payment Is To Be Made |
|---|---|---|---|---|---|
| Franchise Fee for a single franchise (Note 1) | $25,000 | $25,000 | Lump sum | On signing franchise agreement | Us |
| Rebate (3 months) | $1,500 | $12,000 | Installment | Monthly | Client |
| POS/Back Office | $500 | $5,000 | Lump sum | As incurred | Approved |
| System | vendors | ||||
| Initial Inventory (see Note 2) & Office Supplies | $8,000 | $150,000 | Lump sum | As incurred | Approved vendors |
| Licenses & Permits | $1,000 | $5,000 | Lump sum | Issuance | Others |
| Professional Fees | $1,000 | $50,000 | Lump sum | Invoice | Your advisors |
| Insurance (quarterly) | $250 | $50,000 | Lump sum | Invoice | Your insurance company |
| Training Expenses | $5,000 | $20,000 | Lump sum | Prior to training | Third parties |
| (see Note 3) | |||||
| Additional Funds/ | $30,000 | $100,000 | As incurred | As incurred | Third parties |
| Working Capital | |||||
| (see Note 4) | |||||
| Kitchen Equipment | $5,000 | $75,000 | As incurred | As incurred | Third parties |
| Start-up expenses | $5,000 | $10,000 | As incurred | As incurred | Third parties |
| (see Note 5) | |||||
| Total (see Note 6) | $82,250 | $502,000 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 10–11)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, Item 7 details the estimated initial investment for opening a franchise. These pre-opening expenses include several categories, each with a low and high estimated range. The franchise fee is a lump sum of $25,000, paid upon signing the franchise agreement to Bevaris Alliance. Initial inventory and office supplies range from $8,000 to $150,000, paid to approved vendors as incurred. Licenses and permits are estimated between $1,000 and $5,000, paid to various entities upon issuance. Professional fees range from $1,000 to $50,000, paid to advisors as invoiced. Training expenses range from $5,000 to $20,000, paid to third parties prior to training. Kitchen equipment costs between $5,000 and $75,000 paid to third parties as incurred. Start-up expenses range from $5,000 to $10,000, paid to third parties as incurred.
Other notable pre-opening expenses include a rebate ranging from $1,500 to $12,000, paid monthly to the client. POS/Back Office system costs between $500 and $5,000, paid as a lump sum to approved vendors as incurred. Insurance is estimated between $250 and $50,000 paid quarterly to the insurance company. Additional funds/working capital range from $30,000 to $100,000, paid to third parties as incurred.
The total estimated initial investment ranges from $82,250 to $502,000. These figures are estimates, and Bevaris Alliance cannot guarantee that franchisees will not incur additional expenses. The actual costs can vary significantly based on factors such as adherence to Bevaris Alliance's methods, the franchisee's management skills, local economic conditions, market demand, prevailing wage rates, competition, and initial sales levels. Franchisees are advised to carefully review these estimates with a business advisor, considering inflation, discretionary expenditures, fluctuating interest rates, financing costs, and local market conditions.