What is the estimated range for operating expenses/additional funds for a Devon Creek franchise for 3 months?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
| Signage6 | $500 | $5,000 | As Agreed | As Incurred | Outside Suppliers |
|---|---|---|---|---|---|
| Business Licenses | $100 | $1,000 | As Agreed | As Incurred | Governmental |
| and Permits7 | agencies | ||||
| Initial Inventory to | $500 | $1,000 | Lump Sum | As Incurred | Outside |
| Begin Operating8 | Suppliers | ||||
| Furniture & Fixtures9 | $100 | 7,500 | Lump Sum | As Incurred | Outside Suppliers |
| Service Vehicle & | $1,000 | $15,000 | Lump Sum | As Incurred | Outside |
| Wraps10 | Suppliers | ||||
| Professional Fees11 | $500 | $1,000 | Lump Sum | As Incurred | Suppliers |
| Initial Launch | $3,000 | $18,000 | Lump Sum | As Incurred | Suppliers |
| Marketing12 | |||||
| Insurance13 | $100 | $10,000 | Lump Sum | As Incurred | Third Parties |
| Training/Computer | $300 | $5,000 | As Agreed | As Incurred | Outside |
| Equipment14 | Suppliers | ||||
| Office Equipment & | $100 | $500 | As Incurred | As Incurred | Third Parties |
| Supplies15 | |||||
| Operating Expenses / Additional Funds – 3 months16 | $5,000 | $15,000 | As Incurred | As Incurred | Cash reserves in franchisee’s banking account to pay ongoing payroll, suppliers, and vendors. |
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 operating expenses and additional funds needed for the first three months of operation range from $5,000 to $15,000. These funds are intended to cover initial payroll, taxes, bank charges, miscellaneous supplies and equipment, initial staff recruiting expenses, and additional marketing costs. These estimates do not include any compensation to the franchisee or debt service.
Devon Creek specifies that these figures are estimates, and actual expenses may vary. The FDD notes that additional, unforeseen expenses could arise during the startup phase. Factors influencing these costs include the franchisee's adherence to Devon Creek's methods, management skills, local economic conditions, market demand, competition, and achieved sales levels.
The FDD advises prospective Devon Creek franchisees to carefully review these estimates with a business advisor before investing. The document emphasizes that Devon Creek cannot guarantee when or whether a franchisee will achieve positive cash flow or profits. The funds are expected to be held as cash reserves in the franchisee’s banking account to pay ongoing payroll, suppliers, and vendors.