Does the 'additional funds' estimate for a Canine Dimensions franchise include payroll costs?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
Additional funds is an estimate of the funds needed to provide you with additional operating capital for other variable costs (e.g., electricity, telephone, Internet service, Internet setup, etc.), paper, cleaning, cellular telephones, and other supplies. You will need a car or van for transportation; however, we anticipate that you will use a motor vehicle that you already own. These expenses do not include payroll costs, as we expect that you will operate your Franchised Business personally. New businesses often generate a negative cash flow. We estimate that the amount given will be sufficient to cover ongoing expenses for the start-up phase of the business, which we calculate to be three months. This is only an estimate and there is no guarantee that additional working capital will not be necessary during this start-up phase or after. In calculating additional funds, we relied on the experience of our Affiliate as the owner and operator, since 2004, of a Canine Dimensions Business like the franchise being offered to you (and its predecessor in interest from 1994-2004).
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 13–14)
What This Means (2025 FDD)
According to Canine Dimensions's 2025 Franchise Disclosure Document, the 'additional funds' estimate does not include payroll costs. The FDD specifies that these funds are intended to cover other variable costs like electricity, telephone, internet service and setup, paper, cleaning, cellular telephones, and other supplies. The estimate ranges from $1,000 to $3,000 for the first three months of operation.
The reason payroll costs are excluded from the additional funds estimate is that Canine Dimensions expects franchisees to personally operate their franchised business, at least initially. This implies that the franchisee will not need to hire employees and pay their salaries during the startup phase. However, the FDD acknowledges that new businesses often experience negative cash flow, and there is no guarantee that the estimated additional funds will be sufficient to cover all ongoing expenses during the first three months or beyond.
Prospective Canine Dimensions franchisees should carefully consider their personal financial situation and ability to operate the business without immediate payroll expenses. If a franchisee anticipates needing to hire employees early on, they should factor in additional working capital to cover these costs. It is also advisable to consult with a business advisor to review the estimated initial investment and determine if it adequately reflects the franchisee's specific circumstances and financial needs.