What is the estimated low and high range for the total initial investment for a Deka Lash franchise?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 7: ESTIMATED INITIAL INVESTMENT]
| Fee | Estimated | Estimated | Method of | When Due | To Whom Payment |
|---|---|---|---|---|---|
| Amount Low | Amount High | Payment | is to be Made | ||
| Initial Franchise Fee (Note 1) | $59,900 | $59,900 | Wire / ACH | Upon entering into franchise agreement | Us |
| Operations Onboarding & First Studio | $5,450 | $5,450 | Wire / ACH | Upon entering into | Us |
| Opening Support Fee (Note 2) | franchise agreement | ||||
| Initial Staff Training & Certification | $3,750 | $3,750 | Wire / ACH | Upon entering into | Us |
| (Note 3) | franchise agreement | ||||
| New Franchisee Training Travel, | $300 | $3,000 | As Arranged | Before Opening | Third-party vendors |
| Meals & Lodging (Note 4) | |||||
| Design / Architectural Plans (Note 5) | $1,000 | $5,000 | As Arranged | Before Opening | Third-party vendors |
| Leasehold Improvements & Project | $75,000 | $150,000 | As Arranged | Before Opening | Third-party vendors |
| Management (Note 6) | |||||
| Rent & Security Deposits (Note 7) | $12,000 | $25,000 | As Arranged | Monthly | Landlord & Third- party suppliers |
| Signage (Note 8) | $5,000 | $10,000 | As Arranged | Before Opening | Third-party vendors |
| Furniture, Fixtures and Equipment | $60,000 | $86,000 | As Arranged | Before Opening | Third-party vendors |
| (Note 9) | |||||
| Flooring (Note 10) | $5,000 | $8,000 | As Arranged | Before Opening | Third-party vendors |
| Computers and Hardware (Note 11) | $2,000 | $5,000 | As Arranged | Before Opening | Third-party vendors |
| Start-up Supplies / Inventory (Note 12) | $13,500 | $13,500 | As Arranged | Before Opening | Us & Third-party vendors |
| Grand Opening / Marketing (Note 13) | $9,000 | $12,000 | As Arranged | Before Opening | Us & Third-party vendors |
| Insurance & Permits (Note 14) | $3,250 | $7,500 | As Arranged | As incurred | Third-party vendors |
| Professional Fees (Note 15) | $1,250 | $3,750 | As Arranged | As incurred | Third-party vendors |
| Utilities (Note 16) | $500 | $1,500 | As Arranged | As incurred | Third-party utilities |
| Payroll (Note 17) | $23,000 | $35,000 | As Arranged | Bi-Weekly or Semi- Monthly | Employees |
| Additional Funds (Note 18) | $6,000 | $15,000 | As Arranged | As incurred | Us & Third-party Vendors |
| TOTAL (Note 19) | $285,900 | $449,350 |
[Item 7: ESTIMATED INITIAL INVESTMENT]
| Fee (Note 1) | Estimated | Estimated | Method of | When Due | To Whom |
|---|---|---|---|---|---|
| Amount Low | Amount High | Payment | Payment is to be Made | ||
| Area Development Fee (Note 2) | $97,900 | $334,900 | Wire / ACH | Upon entering into Area Development Agreement | Us |
| Initial Investment for | $226,000 | $389,450 | See Chart above. | ||
| Your Initial Franchised | |||||
| Business (Note 3) | |||||
| TOTAL (Note 4) | $323,900 | $724,350 |
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 17 Payroll. Our estimate includes compensation expenses for 4 full-time lash artists paid over 12 weeks.
Payroll expenses can vary significantly depending on local wage and benefits requirements.
We base our estimate on your acting as your own studio manager.
If you hire a studio manager, you will incur additional expenses.
- Note 19 Total. Does not include Royalties, Brand Development Fees, depreciation, interest expenses or taxes.
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 total initial investment for a single franchise ranges from $285,900 to $449,350. This includes expenses such as the initial franchise fee of $59,900, operations onboarding and first studio opening support fee of $5,450, initial staff training and certification fee of $3,750, and costs for items like leasehold improvements ($75,000 to $150,000), furniture, fixtures, and equipment ($60,000 to $86,000), and start-up supplies/inventory ($13,500). It also factors in expenses for the first three months of operation, such as rent, utilities, payroll, and additional funds for software licenses and working capital.
For an Area Development Agreement, which grants the right to open and operate multiple Deka Lash franchises, the total initial investment ranges from $323,900 to $724,350. This includes the Area Development Fee, which varies from $97,900 for two territories to $334,900 for ten territories, as well as the initial investment for the first franchised business, ranging from $226,000 to $389,450.
It's important to note that these figures do not include ongoing royalties, Brand Development Fees, depreciation, interest expenses, or taxes. The estimates also assume that the franchisee will act as their own studio manager; hiring a manager would incur additional expenses. Deka Lash recommends that prospective franchisees carefully review these figures with a business advisor before making any decision to purchase a franchise, as the actual costs may vary and additional expenses may arise.