What is the development fee for three Cost Cutters Family Hair Salon businesses?
Cost_Cutters_Family_Hair_Salon Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Expenditure | Amount | Method Of Payment(8) | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|
| Travel and Living Expenses during Orientation Training | $2,050 - $4,500 | As Incurred | As Incurred | Airlines, Hotels & Restaurants |
| Rent and Security | $2,500 - $9,600 | Lump Sum | Before Start | Landlord or Regis |
| Deposit (7) | Note (7) | |||
| Grand Opening(8) Advertising | $5,000 | As Incurred | Within 60 days of opening of Cost Cutters Business | Independent Suppliers Note (8) |
| Signs | $6,000 - $12,000 | Lump Sum | Before Start | Supplier |
| Professional Fees(9) | $6,000 - $12,000 | Lump Sum | Within 5 days of receipt of an invoice | Suppliers Note (9) |
| Additional Funds – 3-6 Months(10) | $15,000 - $45,000 | As Incurred | As Incurred | Employees, Suppliers, Utilities and Cost Cutters Note (10) |
| TOTAL | $177,466 - $323,558 | |||
| DEVELOPMENT AGREEMENT | ||||
| Column 1 Type of Expenditure | Column 2 Amount | Column 3 Method of Payment | Column 4 When Due | |
| Development Fee for three Cost Cutters Businesses(1) | $69,500 | Lump Sum | At signing of Development Agreement |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 30–36)
What This Means (2024 FDD)
According to Cost Cutters Family Hair Salon's 2024 Franchise Disclosure Document, the development fee for three Cost Cutters Family Hair Salon businesses is $69,500. This fee is paid in a lump sum when the Development Agreement is signed and is payable to Cost Cutters Family Hair Salon.
This development fee grants the franchisee the rights to develop multiple Cost Cutters Family Hair Salon locations within a specific territory, as outlined in the Development Agreement. It is important to note that this fee is non-refundable, as stated in Item 7 of the FDD.
Prospective franchisees should carefully consider the financial implications of the development fee, as it represents a significant upfront investment. It is advisable to review the Development Agreement thoroughly and seek professional financial advice before committing to a multi-unit franchise agreement with Cost Cutters Family Hair Salon.