For what period does the 'additional funds' estimate cover for a Desi District Eatery Only franchise?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Office Expenses (see | $500 - $1,000 | Check, debit, and/or credit | As incurred | Vendors |
| Note 10) | ||||
| Inventory (see Note 11) | $20,000 - $40,000 | Check, debit, and/or credit | Upon ordering | Our Affiliate, Vendors |
| Licenses and Permits (see Note 12) | $1,000 - $2,000 | Check | Upon application | Government |
| Dues and Subscriptions (see Note 13) | $200 - $500 | Check, debit, and/or credit | As incurred | Vendors, trade organizations |
| Professional Fees | $1,500 - $4,000 | Check, debit, and/or credit | As incurred or when billed | Professional service firms |
| (lawyer, accountant, | ||||
| etc.) (see Note 14) | ||||
| Travel, lodging and | $3,000 - $6,000 | Cash, debit or credit | As incurred | Airlines, hotels, and restaurants |
| meals for initial training | ||||
| (see Note 15) | ||||
| Additional funds (for first 3 months) (see Note 16) | $75,000 - $100,000 | Varies | Varies | Employees, suppliers, utilities |
| Total | $669,200 - $1,020,500 | This is the total estimated initial investment to open and commence operating your initial location for the first three months (as described more fully in Chart A of th |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 20–26)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the estimated additional funds cover the first three months of operation for a new franchise. This is an important consideration for prospective franchisees as it represents the capital needed to sustain the business during its initial phase, before it ideally becomes self-sufficient. The estimate for these additional funds ranges from $75,000 to $100,000.
These funds are intended to cover expenses such as payroll, additional inventory, rent, and other operating expenses that exceed the income generated by the business during this startup period. It's important to note that this estimate does not include any salary or compensation for the franchisee themselves. Desi District based this estimate on their affiliate's experience developing a Desi District business and their general knowledge of the industry.
Prospective franchisees should carefully review this estimate and consider their own financial situation and market conditions to determine if they have sufficient capital to cover these initial operating expenses. It is also important to note that the estimate can vary depending on factors such as location, operating efficiency, and local market conditions. Therefore, franchisees should conduct their own due diligence and potentially consult with financial advisors to ensure they are adequately prepared for the initial operating period.