What is the low 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 |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–22)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the low estimate for lease and utility security deposits is $6,000. This figure is part of the total estimated initial investment, which ranges from $696,000 to $1,265,750. The security deposits are paid to unaffiliated third parties such as utility companies and the landlord, as arranged between the franchisee and those parties. Cream estimates that the high end for lease and utility security deposits is $20,000.
The FDD notes that the lease security deposit is assumed to be equal to one month's rent. Additionally, the estimate accounts for potential utility security deposits for services like gas, water, and electricity. These deposits are a standard practice in leasing commercial spaces and securing utility services, acting as a safeguard for the landlord and utility providers.
Prospective Cream franchisees should verify these deposit amounts with local landlords and utility companies, as these costs can fluctuate based on location, creditworthiness, and specific lease terms. Understanding these variations is crucial for accurate financial planning when opening a Cream franchise.