To whom are initial retail inventory payments made for a C3 Wellness Spa?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Expenditure | Amount | When Due | To Whom Payment is Made | |
|---|---|---|---|---|
| Initial Franchise Fee | $45,000 | Lump sum | When Franchise | Us |
| (Note 1) | Agreement is signed | |||
| Construction and Leasehold Improvements (Note 2) | $350,000 – $400,000 | As arranged | As incurred | Contractors, suppliers, and/or Landlord |
| Lease Deposits | $13,500 – $18,900 | As arranged | As incurred | Landlord |
| (Note 3) | ||||
| Furniture, Fixtures | $30,000 – $60,000 | As arranged | As incurred | Suppliers |
| and Equipment | ||||
| (Note 4) | ||||
| Initial Retail | $3,000 – $5,000 | As billed | As incurred | Suppliers |
| Inventory (Note 5) | ||||
| Initial Supply | $4,000 – $5,700 | As billed | As incurred | Suppliers |
| Inventory (Note 6) | ||||
| Signage | $10,000 – $20,000 | As arranged | As incurred | Suppliers |
| (Note 7) | ||||
| Grand Opening | $15,000 – $20,000 | As arranged | As incurred | Suppliers |
| Marketing Expenses | ||||
| (Note 8) | ||||
| Computer, Software | $16,261 – $22,766 | As arranged | As incurred | Suppliers |
| and Point of Sales | ||||
| System | ||||
| Utility Deposits | $1,056 – $1,478 | As arranged | As incurred | Suppliers |
| (Note 9) | ||||
| Insurance Deposits | $164 – $689 | As arranged | As incurred | Insurers |
| (Note 10) | ||||
| Travel for Initial | $2,010 – $5,952 | As arranged | As incurred | Airlines, hotels, |
| Training (Note 11) | restaurants |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 21–25)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, the initial retail inventory payments, which range from $3,000 to $5,000, are made to suppliers. This inventory is an initial supply of branded C3 Wellness retail products that franchisees must purchase before opening their spa location.
The initial retail inventory is intended for sale to customers and will require ongoing replenishment based on the sales volume of the C3 Wellness Spa location. This means franchisees need to budget not only for the initial purchase but also for maintaining adequate stock levels as they operate.
Prospective franchisees should carefully consider the potential sales volume of their location to estimate ongoing inventory costs. Understanding the supplier relationships and payment terms is also crucial for managing cash flow effectively. It is also important to note that the FDD states that franchisees must purchase the initial retail inventory from C3 Wellness Spa or its affiliates.