What does the estimated initial investment in Table 2 for Deka Lash assume?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
| | | TOTAL (Note 4) | $323,900 | $724,350 | | | |
Table 2 Notes
Note 1 – Fee. The estimates set forth in Table 2 assume that you will be entering into an Area Development Agreement for the right to open and operate two (low amount) to ten (high amount) Franchised Businesses within a Development Area and the cost of opening the first Franchised Business.
Note 2 – Area Development Fee. The Area Development Fee ranges from $97,900 for two Area Development territories to $334,900 for ten territories, as explained in Item 5 above.
Note 3 – Initial Investment for Your Initial Franchised Business. This figure represents the total estimated initial investment required to open your initial Franchised Business under the Franchise Agreement you must enter into with us at the same time as the execution of your Development Agreement. The low-end comprises of the low-end estimate from the Item 7, Table 1, less the $59,900 initial franchise fee, as it is included in the Area Development Fee ($285,900 - $59,900 = $226,000). The high-end comprises of the high-end estimate from the Item 7, Table 1, less the $59,900 initial franchise fee, as it is included in the Area Development Fee ($449,350 - $59,900 = $389,450).
Note 4 – Total. Other than the Development Fee and the cost to open the first studio required under the Area Development Agreement, this figure does not include the costs associated with opening a second and subsequent locations which will incur additional costs.
Note 5 – Generally. Does not include royalties, Brand Development Fees, interest expense, depreciation, or taxes. These figures are estimates of your initial expenses covering the first three months of your operation. We cannot guarantee that you will not have additional expenses starting the business. You should review these figures caref
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–27)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the estimated initial investment in Table 2 assumes that a franchisee will enter into an Area Development Agreement. This agreement grants the right to open and operate between two and ten franchised businesses within a specific Development Area. The costs associated with opening the first franchised business are also included in the estimate.
The Area Development Fee itself ranges from $97,900 for two territories up to $334,900 for ten territories. The initial investment for the first franchised business ranges from $226,000 to $389,450. These figures are derived from the Item 7, Table 1 estimates, but with the $59,900 initial franchise fee deducted, as this fee is already incorporated into the Area Development Fee.
It's important to note that the total estimated initial investment, ranging from $323,900 to $724,350, covers the Development Fee and the expenses of opening only the first studio under the Area Development Agreement. Costs for opening subsequent locations are not included in this figure and will incur additional expenses. The estimate also excludes items such as royalties, Brand Development Fees, interest expense, depreciation, and taxes. These figures are estimates of your initial expenses covering the first three months of your operation.