As a Dq Treat franchisee, who bears the responsibility for any deviation or escalation in costs from the estimates provided in Item 7 or estimates given during the development process?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
ADQ cautions you to allow for inflation, discretionary expenditures, fluctuating interest rates and other costs of financing, and local market conditions, which can be highly variable and can result in substantial, rapid and unpredictable increases in costs. You must bear any deviation or escalation in costs from the estimates in this Item or estimates that ADQ gives during any phase of the development process.
Source: Item 7 — Estimated Initial Investment (FDD pages 24–29)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, the franchisee is responsible for any cost overruns. Specifically, the FDD states that the franchisee must bear any deviation or escalation in costs from the estimates provided in Item 7 or estimates given during any phase of the development process.
This means that while Dq Treat provides estimates for the initial investment required to set up a franchise, these are only estimates. The actual costs can vary significantly due to factors like inflation, fluctuating interest rates, local market conditions, and discretionary expenditures. These factors are often outside of Dq Treat's control, and the franchisee needs to be prepared to cover any additional expenses that arise.
Prospective Dq Treat franchisees should carefully review the estimated initial investment with a business advisor, as the FDD recommends. They should also factor in potential cost increases when planning their finances. It is important to have a financial cushion to absorb any unexpected expenses during the development and initial operation of the franchise. Understanding this responsibility is crucial for the financial stability of the franchise.