What is the initial franchise fee for a Clozetivity franchise?
Clozetivity Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of E | Amount | Method of Payment | When Due | To Whom Payment is Made |
|---|---|---|---|---|
| Initial Franchise Fee | $39,000 | Lump sum | When Franchise | Us |
| (Note 1) | Agreement is signed | |||
| Construction and Leasehold Improvements (Note 2) | $2,500 – $5,500 | As arranged | As incurred | Contractors, suppliers, and/or Landlord |
| Equipment | $8,000 – $17,500 | As arranged | As incurred | Suppliers |
| (Note 3) | ||||
| Initial Inventory | $3,000 | As arranged | As incurred | Suppliers |
| (Note 4) | ||||
| Computer, Software | $1,500 – $2,500 | As arranged | As incurred | Suppliers |
| and Point of Sales | ||||
| System (Note 5) | ||||
| Service Vehicle | $4,500 – $45,000 | As arranged | As incurred | Automobile dealers |
| (Note 6) | ||||
| Start-Up Marketing – | $5,500 | As arranged | As incurred | Us, Suppliers |
| Three Months (Note 7) | ||||
| Insurance Deposits – | $1,000 – $4,500 | As arranged | As incurred | Insurers |
| Three Months (Note 8) | ||||
| Travel for Initial | $500 – $2,000 | As arranged | As incurred | Airlines, hotels, restaurants |
| Training (Note 9) | ||||
| Professional Fees | $500 – $1,500 | As arranged | As incurred | Attorneys, accountants, |
| (Note 10) | advisors | |||
| Licenses and Permits | $500 – $1,500 | As arranged | As incurred | Government |
| (Note 11) | ||||
| Additional Funds – Three Months (Note 12) | $15,000 – $30,000 | As arranged | As incurred | Us, employees, suppliers, landlord, utility suppliers |
| Total Estimate (Note 13) | $81,500 – $157,500 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 21–24)
What This Means (2024 FDD)
According to Clozetivity's 2024 Franchise Disclosure Document, the initial franchise fee varies depending on the operating territory. For a single territory, the initial franchise fee is $39,000. This single territory typically comprises an area with approximately 250,000 to 350,000 people. For a double territory, the initial franchise fee is $78,000.
For a single territory, the initial franchise fee of $39,000 is due as a lump sum when the Franchise Agreement is signed. For a double territory, the initial franchise fee of $78,000 is also due as a lump sum when the Franchise Agreement is signed. This fee grants the franchisee the right to operate a Clozetivity business within the defined territory.
It is important to note that the initial franchise fee is just one component of the total initial investment. Prospective franchisees should carefully review Item 7 of the FDD, which provides a detailed breakdown of all estimated initial expenses, including construction and leasehold improvements, equipment, initial inventory, computer systems, service vehicles, start-up marketing, insurance deposits, travel for initial training, professional fees, licenses and permits, and additional funds needed for the first three months of operation.
The FDD also emphasizes that these are estimates and the actual costs may vary based on factors such as the size of the business, local market conditions, and the franchisee's management capabilities. Consulting with business, accounting, and legal advisors is highly recommended before making any decisions.