What is the estimated minimum cost for insurance for a Devon Creek franchise?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Expenditure | Amount Low | Amount High | Method of Payment | When Due | To Whom Payment is Made | |
|---|---|---|---|---|---|---|
| Initial Franchise Fee1 | $39,000 | $39,000 | Lump Sum | At the Signing of the Franchise Agreement | Us | |
| Your Training Expenses2 | $3,500 | $10,000 | As Incurred | As Incurred | Third parties for travel and lodging | |
| Initial Equipment Package Fee3 | $5,000 | $30,000 | Lump sum | At the Signing of the Franchise Agreement, not applicable for additional franchises awarded to you | Suppliers/ vendors | |
| Premises lease deposit and first month’s rent and utilities4 | $0 | $15,000 | As incurred | Upon signing lease | Landlord | |
| Leasehold Improvements, Construction and/or Remodeling5 | $100 | $20,000 | As supplier/ Vendor Requires | As Incurred | Suppliers/ vendors | |
| Signage6 | $100 | $5,000 | As Incurred | As Incurred | Supplier | |
| Business Licenses | $500 | $1,000 | As Incurred | As Incurred | Governmental | |
| and Permits7 | agencies | |||||
| Initial Inventory to | $500 | $1,000 | Lump Sum | As Incurred | Suppliers | |
| Begin Operating8 | ||||||
| Furniture & Fixtures9 | 1,000 | 4,000 | As Incurred | As Incurred | Suppliers | |
| Service Vehicle & | $3,000 | $10,000 | As | As Incurred | Suppliers | |
| Wraps10 | Arranged | |||||
| Professional Fees11 | $1,500 | $2,000 | Lump Sum | As Incurred | Suppliers | |
| Initial Launch | $3,000 | $18,000 | Lump Sum | As Incurred | Suppliers | |
| Marketing12 |
| Insurance13 | $2,500 | $7,500 | Lump Sum | As Incurred | Suppliers |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT – START UP FRANCHISEE (FDD pages 16–21)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the estimated low-end cost for insurance is $2,500, while the high-end estimate is $7,500. This cost is a lump sum payment, typically due when incurred, and is paid to suppliers.
The FDD specifies that franchisees must obtain and maintain insurance coverage as specified by Devon Creek, covering the full annual premium in advance. These policies must include Devon Creek and its affiliates as additional insured parties and contain a waiver of subrogation rights against them.
Given the wide range in the estimated cost of insurance, prospective Devon Creek franchisees should obtain quotes from multiple insurance providers to understand the actual costs in their specific location. Franchisees should also clarify with Devon Creek the specific types and amounts of coverage required to ensure they obtain adequate insurance and comply with the franchise agreement.