For a Deka Lash franchise, what does the 'Initial Investment for Your Initial Franchised Business' figure represent?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
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 'Initial Investment for Your Initial Franchised Business' represents the estimated investment required to open your first Deka Lash franchised business under the Franchise Agreement, which you enter into when you sign the Development Agreement. This investment ranges from $226,000 to $389,450.
The low-end estimate of $226,000 is calculated by taking the low-end estimate from Item 7, Table 1 ($285,900) and subtracting the initial franchise fee ($59,900), as the initial franchise fee is already included in the Area Development Fee. Similarly, the high-end estimate of $389,450 is derived from the high-end estimate in Item 7, Table 1 ($449,350) minus the $59,900 initial franchise fee.
It's important to note that this figure does not include costs associated with opening subsequent Deka Lash locations beyond the first studio required under the Area Development Agreement. These additional locations will incur further costs. Franchisees should also be aware that royalties, Brand Development Fees, interest expense, depreciation, or taxes are not included in this figure. Deka Lash recommends that prospective franchisees carefully review these figures with a business advisor before making any decision to purchase the franchise.