What variable costs are included in the 'additional funds' estimate for a Canine Dimensions franchise?
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).
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- This Estimated Initial Investment Item 7 includes our estimates of your initial startup expenses and funds for additional inventory and additional funds for the operation of your Franchised Business.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 13–14)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, the 'additional funds' estimate in Item 7 covers several variable costs a new franchisee may incur during the initial three months of operation. These costs include expenses such as electricity, telephone, Internet service and setup, paper, cleaning supplies, cellular telephones, and other general supplies. The FDD notes that while a vehicle is necessary for transportation, the estimate assumes franchisees will use a vehicle they already own, so vehicle costs are not included in the additional funds estimate.
The estimated range for these additional funds is $1,000 to $3,000 for the first three months. This capital is intended to cover ongoing expenses during the start-up phase when the business may not yet be generating a positive cash flow. The document emphasizes that this is only an estimate, and there is no guarantee that this amount will be sufficient to cover all expenses during the initial period or beyond. It is important to note that payroll costs are not included in this estimate, as Canine Dimensions expects the franchisee to personally operate the business, at least initially.
Canine Dimensions based these estimates on the experience of its affiliate, which has operated a similar Canine Dimensions business since 2004. The FDD advises prospective franchisees to carefully review these figures with a business advisor to assess the adequacy of the estimated additional funds for their specific circumstances. This is a common practice in franchising, as initial investment estimates can vary widely based on location, market conditions, and individual business management practices. Franchisees should prepare for the possibility of needing more than the estimated amount to sustain the business until it becomes profitable.