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F
A C T S A N D F I G U R E
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MARKETING
OR OTHER CO-OPERATIVE FUNDS
There are no marketing or co-operative fund, controlled
or administered by or for the franchisor, to which the
franchisee may be required to contribute.
PAYMENTS
Pre-payments The
Franchisor
does require a payment deposit, 50% of Franchise Fee.
This money will be held by the Franchisor. This money
will be applied to the Franchise Fee. A pre-payment
will be refunded when the Franchisee terminates the
Franchise Agreement within the cooling off period.
Establishment
cost The estimated
costs to start operating the Franchised Outlets depend
on the size of the restaurant to be operated by the
Franchisee. The Set Up costs listed below are based
on an average sized restaurant.
The
following are details of the range of costs to start operating
the Franchise Business based on current practice.
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Expenditures
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Estimated
Amount
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Paid
to
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- Equipment,
Fixtures,Other Fixed Assets,Construction, Re-modelling,
Leasehold Improvement & Decorating cost
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Tradesmen
or Shop Fitter Approved by Franchisor
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$175,000
to $250,000
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- Inventory
(Opening Stock)
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Approved
Suppliers
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$15,000
to $20,000
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- Security
Deposits & Bond, Utility Deposits, Insurance &
other pre-paid expenses
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$15,000
to $20,000 Plus 1-3 months Rental Deposit
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Paid
to Franchisor, Landlord, Utility Companies & other Suppliers
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- Additional
Funds including working capital required by the Franchisee
before operations begin
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$15,000
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Held
by Franchisee
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- Other
payments by Franchisee to begin operation
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(a)50,000
(b) $5,000 to $10,000 |
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Paid
to Franchisor $25,000 prior to execution of Franchise Agreement
& $25,000 at execution of Franchise Agreement. Paid
to Solicitors for professional costs.
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Total
Estimated Cost –
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(1)
Lower range $275,000
(2)
Higher range $365,000
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The
above payments will be payments for the goods, works,
equipment and services provided by the respective providers
thereof and will be paid when ordinarily due in the
normal course of business and such payments are not
refundable as between the franchisor and the franchisee
but may be a matter between the franchisee and the providers.
Other
Payments The
following are details of each recurring or isolated
payment payable by the franchisee to the franchisor
or an associate of the franchisor or to be collected
by the franchisor or an associate of the franchisor
for another person:
(a) Royalty
fee of 6% of the gross sales turnover of the business
for each accounting week payable by the 5th day following
the end of each and every accounting week. The royalty
payment is not refundable.
(b) A
performance bond is required.This amount is payable
to the franchisor and is refundable (without interest)
to the franchisee at the end of the franchise term subject
to the franchisor's rights to deduct from it expenses
of any kind incurred as a direct or indirect result
of a breach of the franchise agreement by the franchisee.
FINANCING
(a) The
franchisor, its agent or an associate of the franchisor
does not offer to the franchisee any financing arrangements
for the establishment or operation of the franchised
business.
(b) The
franchisor may use its good offices and experience to
assist the franchisee in obtaining bank finance if the
franchisee can provide adequate security and the amount
of finance sought is less than 50% of the capital required
for the establishment of the franchise business. This
assistance shall be provided at the election of the
franchisor and is not a commitment by the franchisor
to arrange finance for the franchisee.
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