To whom are payments for the construction management fee made when opening an Extreme Art Studio?
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 |
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, if a franchisee chooses to use the approved construction management supplier, payments for the construction management fee are made to approved suppliers. This fee, which ranges from $0 to $22,000, covers the management of the studio's build-out, permitting, and construction, including the oversight of general contractors and subcontractors. The payment is due as incurred.
This means that prospective Extreme Art Studio franchisees have the option to utilize a construction management supplier approved by the franchisor to handle the entire construction process of their studio. This service includes managing all aspects of the build-out, from obtaining permits to overseeing contractors.
The cost for this service can vary significantly, with a high end estimate of $22,000, and franchisees should factor this potential expense into their initial investment. It is important for franchisees to understand that this fee is paid to the approved suppliers as the expenses are incurred during the construction phase.