What is the estimated range for leasehold improvements for an Extreme Art Studio franchise, and to whom are these payments made?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
INVESTMENT
| Type of Expenditure (1) | Amount | Method of Payment | When Due | To Whom Payment is to be Paid(1) | |
|---|---|---|---|---|---|
| Low | High | ||||
| Initial Franchise | $45,000 | $45,000 | Lump sum | Upon signing Franchise | Us |
| Fee(1) | Agreement | ||||
| Furniture, Fixtures, | $9,500 | $15,000 | As Incurred | As Incurred | Approved |
| and Equipment(2) | Suppliers |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 18–23)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the estimated cost for leasehold improvements ranges from $25,000 to $125,000. These payments are typically made to the landlord, contractors, or other suppliers involved in the build-out of the studio. Leasehold improvements encompass expenses related to the design and construction of the studio, including plumbing, electrical work, and remodeling. These costs can vary significantly based on the size, condition, and location of the leased premises, as well as the supply and demand for materials and labor in the local area. Local building and fire code requirements, along with the specific terms of the lease regarding construction and signage, can also impact these expenses.
The FDD notes that the estimate assumes the landlord will provide a contribution or tenant improvement allowance to help cover the costs of the build-out. Franchisees may be able to negotiate with their landlord for a significant contribution towards these expenses. In a build-to-suit lease, the landlord typically includes some or all of the improvements and fixtures in the lease payments. However, if the landlord does not provide what Extreme Art Studio requests in its standard work letter or does not provide an adequate allowance, the costs may increase.
Prospective franchisees should carefully consider these factors and conduct thorough research to understand the potential costs of leasehold improvements in their specific location. Negotiating favorable lease terms with the landlord and obtaining detailed quotes from contractors and suppliers are essential steps in managing these expenses. It is also advisable to consult with a business advisor to review these figures and develop a comprehensive financial plan for opening an Extreme Art Studio franchise.