What is the Face Foundrie's assumption regarding the security deposit for the leased premises?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
These figures presume that you will be leasing the Facial Bar premises.
The estimate in the table above includes your first month's rent payment, security deposits and utility deposits (for example, telephone, electricity, gas and water).
We have assumed that any security deposit to your landlord will equal one month's rent, although this may vary from landlord to landlord.
The low range of the estimate assumes that you obtain a free rent period from your landlord after your opening and/or you are not required to pay a security deposit to your landlord, and the high range assumes you paid a security deposit and first month's rent.
Both the low and high ranges assume that rent during buildout of the space has been waived or discounted.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–27)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the franchisor assumes that the security deposit for the leased premises will be equal to one month's rent. However, the document notes that this can vary from landlord to landlord. The estimated initial investment for rent and security deposits ranges from $9,100 to $32,000. The lower end of this range assumes that a franchisee obtains a free rent period or is not required to pay a security deposit, while the higher end assumes payment of a security deposit and the first month's rent.
This assumption has significant implications for prospective franchisees. If a landlord requires a security deposit greater than one month's rent, the franchisee's initial investment could be higher than the estimated range. Conversely, a franchisee who negotiates a free rent period or avoids a security deposit could see their initial costs reduced. Therefore, it is crucial for franchisees to carefully investigate local lease rates and security deposit requirements during their due diligence.
The FDD also indicates that both the low and high ranges assume that rent during the buildout of the space has been waived or discounted. This is a potentially beneficial arrangement for franchisees, as it can significantly reduce their initial costs. However, franchisees should confirm that this type of arrangement is available with their landlord, as it is not guaranteed. The actual rent, common area maintenance fees, and property taxes will depend on factors such as the size and condition of the premises, its location, and any construction allowances from the landlord.