What is the high estimate for lease and utility security deposits for a Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Expenditure | Amount | Method of Payment 1 | When Due | To Whom Payment is Made | |
|---|---|---|---|---|---|
| Low | |||||
| Initial Franchise Fee | $40,000 | $40,000 | Lump sum | Upon signing Franchise Agreement | Us |
| Real Estate (3 Months’ | $18,000 | $60,000 | As arranged | As arranged | Landlord |
| Rent) 2 | |||||
| Lease and Utility Security Deposits 3 | $6,000 | $20,000 | As arranged | As arranged | Unaffiliated third parties (e.g., utility companies, landlord) |
| Architect, Permits, Engineers, and Licenses 4 | $40,000 | $60,000 | As arranged | As arranged | Unaffiliated third parties (e.g., architect, engineer, designer) |
| Leasehold | $375,000 | $700,000 | As arranged | As arranged | Unaffiliated third |
| Improvements 5 | parties | ||||
| Furniture, Fixtures, and | $70,000 | $134,000 | As arranged | As arranged | Approved third- |
| Equipment 6 | party suppliers | ||||
| Décor Package 7 | $2,000 | $10,000 | As arranged | As arranged | Approved third- party suppliers |
| Computer System and | $2,000 | $4,000 | As arranged | As arranged | Approved third- |
| Technology 8 | party suppliers | ||||
| Tools and Supplies 9 | $12,000 | $16,000 | As arranged | As arranged | Approved third- party suppliers |
| Signage 10 | $10,000 | $30,000 | As arranged | As arranged | Approved third- party suppliers |
| Business Licenses and | $500 | $1,000 | As required | As required | Government |
| Permits 11 | agencies | ||||
| Type of Expenditure | Amount Low | Method of Payment 1 | When Due | To Whom Payment is Made | |
| Professional Fees 12 | $10,000 | $17,000 | As arranged | As arranged | Unaffiliated third parties (e.g., accountant, attorney) |
| Initial Inventory 13 | $20,000 | $26,000 | As arranged | As arranged | Us and approved third-party suppliers |
| Ongoing Inventory (3 months) 13 | $52,000 | $87,000 | As arranged | As arranged | Us and approved third-party suppliers |
| Insurance (3 months) 14 | $500 | $750 | As arranged | As incurred | Unaffiliated third parties (e.g., insurance companies) |
| Initial Training Program Expenses 15 | $3,000 | $5,000 | As arranged | As incurred | Unaffiliated third parties (e.g., airlines, hotels, restaurants) |
| Grand Opening | $20,000 | $25,000 | As arranged | As arranged | Unaffiliated third |
| Advertising 16 | parties | ||||
| Additional Funds – First 3 Months of Operation 17 | $15,000 | $30,000 | As incurred | As incurred | Unaffiliated and approved third- party suppliers (e.g., employees) |
| TOTAL ESTIMATED | $696,000 | $1,265,750 | |||
| INITIAL | |||||
| INVESTMENT 18 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–22)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the estimated initial investment for lease and utility security deposits ranges from $6,000 to $20,000. This estimate accounts for security deposits required by the landlord, typically equal to one month's rent, as well as security deposits for utilities such as gas, water, and electricity. These payments are made to unaffiliated third parties like utility companies and the landlord, with the timing of payments arranged between the franchisee and these entities.
The security deposit for the lease is influenced by the monthly rent amount, which in turn depends on factors such as the location and size of the Cream shop. The FDD notes that the shop size should be approximately 900 to 1,400 square feet. Utility security deposits can vary based on local utility company policies and the anticipated usage levels at the location.
Prospective Cream franchisees should budget for the higher end of this range to ensure they have sufficient capital to cover these initial deposit requirements. It is also advisable to confirm specific deposit amounts with the landlord and utility providers during the lease negotiation and setup process to avoid any unexpected costs.