To whom are additional funds (3 months) paid for a Cr3 American Exteriors franchise?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure* | Low** | High | Method of payment | When Due | To Whom Payment is to be Made |
|---|---|---|---|---|---|
| Local Brand Optimization (Note 12) | $1,000 | $2,500 | As Incurred | As incurred | Third Parties |
| Initial Training (Note 13) | $500 | $3,900 | As Incurred | As incurred | Third Parties |
| Telecommunications | $0 | $400 | As Incurred | As Incurred | Third Parties |
| Services (Note 14) | |||||
| Additional Funds – 3 months (Note 15) | $26,000 | $68,000 | As incurred | Before and after opening | Employees, Third Parties |
| Total | $77,000 to | o $222,300 |
Note 15: Additional Funds-3 months. The estimate of additional funds is based on your general operating expenses and rent for the first three months of operation. The estimate of additional funds does not include job-material costs, royalties, interest expenses, or owner's salary or draw. The low-end assumes no jobs will be completed in the first 3-months in operation, and therefore no subcontractor or direct labor expenses. The high-end includes an estimate of subcontractor expenses and labor expenses to complete five (5) jobs within the first 3-months in operation with an average customer cost of $15,000 per job and an average payroll or independent contractors' expenses of $5,400 per job.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 21–24)
What This Means (2025 FDD)
According to Cr3 American Exteriors' 2025 Franchise Disclosure Document, the additional funds covering the first three months of operation are paid to employees and third parties. These funds, estimated between $26,000 and $68,000, cover general operating expenses and rent during this initial period. However, these additional funds do not cover job-material costs, royalties, interest expenses, or the owner's salary or draw.
The low-end estimate of $26,000 assumes that no jobs will be completed during the first three months, thus excluding any subcontractor or direct labor expenses. The high-end estimate of $68,000 factors in expenses for completing approximately five jobs, with an average customer cost of $15,000 per job and average payroll or independent contractor expenses of $5,400 per job.
Prospective Cr3 American Exteriors franchisees should carefully consider these figures and plan their initial capital accordingly. It's important to note that these are estimates, and actual costs may vary based on factors such as local economic conditions, market competition, and the franchisee's business skills. Understanding the breakdown of these additional funds and to whom they are paid is crucial for managing cash flow during the early stages of the franchise.