INVESTMENT

Notes

(1) Initial Franchise Fee. The initial Franchise Fee is $39,500. This fee is not refundable.

(2) Grand Opening Advertising. We estimate you will expend this amount in the period from approximately one month before opening through the first 60 days of operation to advertise and promote opening of your business by newspaper, direct mail and/or other media. The grand opening advertising will be according to a grand opening program you prepare and submit to us for our approval. If you elect to spend more, your actual expense could exceed the high estimate.

(3) Leasehold Improvements. These estimates are for a shop facility about 2,600 to 4,000 square feet with costs of improvements estimated at about $28 per square foot. Some factors that impact costs of leasehold improvements are size and condition of premises, required improvements, location, local cost of contract work, choice of contractor, timing, design and work choices and conditions in the area that may affect availability and cost of service providers. Costs may be less if the landlord provides a construction allowance. These estimates assume no landlord contribution. These are only estimates. 

(4) Signage. This estimate is for exterior, front signage consisting of one or more of a pole, awning, channel letter and/or monument sign(s), vinyl sign on the doorway and stainless steel laser cut logo sign in the reception area. 

(5) Rent. You obtain premises for your Rivali Paint Protection® business. This estimate assumes you rent or lease. The low estimate assumes a lease rate of about $1.35 per square foot per month for premises of about 2600 square feet. The estimate is for three months’ rent and a lease security deposit equal to one months’ rent. ($1.35 x 2600 x 4 = $14,040). The high estimate assumes a lease rate of about $4 per square foot per month for premises of about 4,000 square feet. ($4 x 4,000 x 4 = $64,000). While possible, you are unlikely to achieve the low rental rate for the smaller size premises, so the low estimate is not likely. If your lease is for premises larger than 4,000 square feet or at higher rent than $4 per square foot, your actual cost could exceed the high estimate. These estimates assume no free rent period in the first three months.

(6) Utilities and Utility Security Deposits. You may have to pay deposits before installation or start of service of telephone, gas, electric, water, internet and other utilities. The low-end assumes some utility providers require lower or no security deposit. We estimate deposits at $300 - $800. We estimate your utility expenses for three months at about $600 for telephone, $300 for gas, $900 for electric, $900 for water and $450 for internet. 

(7) Equipment. This includes polishers, pressure washers, vacuums, blowers, steam cleaner, lifts/jacks and plotter. Other items may include compressor, air hoses, floor jack, generator, battery charger, work bench, bench vice, bench grinder, drill press, toolbox and other hand tools, stools, storage cabinet, parts bin, film wall rack, pushcart, fender covers, power tools, tool set, tint and film tools, glass, peel boards; heat guns, steamer, electronics scope, programming tool, detaining tools, buffers, pads, brushes, knives, blades, tapes, cutters, shop trash pails, mop, buckets, squeegees, janitorial supplies, first aid kit and other supplies.

(8) Office Equipment; Furniture and Supplies. These estimates are for desks, office chairs, filing cabinets, computer, printer, desk items and office supplies, guest chairs, other lobby furniture and wall decor. The estimates represent costs to purchase these.

(9) Point of Sale System. Currently we require you to use the Spot On cloud-based POS system for payment processing. At the issuance date of this Disclosure Document, we were developing scheduling software we call Senza Rivali for estimating, deposits, scheduling, appointment reminders and customer management. These estimates are for three months of service at $250 to $500 per month depending which services you subscribe for. 

(10) Initial Inventory. This is initial inventory of polishes, soaps, sprays, film, paint protection film, coatings and other supplies used in the business. You will obtain most of the inventory from us. 

(11) Insurance. You must obtain comprehensive general liability insurance including broad form contractual liability, personal and advertising injury; products/completed operation and garage keepers’ liability with coverage of at least $1,000,000 per occurrence and $2,000,000 aggregate and fire damage liability of at least $(424) 999-5990 per fire and medical expense coverage of at least $5,000 per person. You must obtain insurance for replacement cost for loss of fixtures, equipment, supplies, products and other property used in the business, workers' compensation and employer's liability insurance of $1,000,000. We require you to obtain $500,000 of employment practices liability insurance. Each policy must insure us and you. You must obtain business interruption insurance, automobile liability insurance, including owned, hired and non-owned vehicle coverage, of at least $1,000,000; any insurance required by your lease, and umbrella coverage of at least $1,000,000. The lower estimate represents a less expensive package of the above insurance or the first quarterly payment of an annual premium. The higher figure represents an approximate annual premium and assumes you pay this in full in a lump sum. It is possible to purchase additional insurance or more costly insurance and thus to exceed the high estimate. 

(12) Training. You arrange transportation and pay for meals and lodging for you and your employee who attend our training. You pay your employee during training. The amount of your expense will depend on travel, type of travel, lodging you choose, and rate of compensation. You come to our headquarters or other location we designate for about 10 days. The low estimate assumes you and your employee are located near enough to us, so you have no travel expenses and assumes you do not pay yourself and you pay one employee for time in training, approximately minimum wage. If you and an employee travel to us or other location, you should expect at least $500 per day for food and lodging in addition to compensation of your employee at about minimum wage, plus about $100 of fuel cost if you drive, more if you fly. The high estimate assumes expenses of about $500 per person per day for food and lodging, in addition to compensation of your employee at about minimum wage for about 10 days, plus $350 per person for round-trip air fare for you and your employee. 

(13) Licenses/Permits. These estimates are for costs of local licenses and permits. The high estimates assume you have more expense because you might have a facility changing use from a non-automobile building to an automobile use and may need a permit to change the use. Other permits like waste disposal permits and other types of permits and licenses add to the high estimate. 

(14) Professional Advisors. You should consult professional advisors like a lawyer and accountant. 

(15) Working Capital. We considered approximately 4-7 months will be needed to generate revenue and the possibility of unexpected expenses. The Franchise Agreement states you are required to maintain a cash reserve in the bank of the greater of $25,000 or one month’s expenses. We estimate this to be about $25,000 to $50,000. We do not assure these amounts will be enough. You may need more working capital if sales are low or costs are high. We relied on our officer’s experience of more than 10 years (including 8 years at Concours Auto Spa), and consulted with Concours Auto Spa in developing these estimates. You should review these estimates carefully with a business advisor before making any decision to purchase the franchise. 

(16) Totals. The amounts in each row, and the totals are not exact. They are estimates to give you an idea of the expenses and a source for comparison to your own analysis. You should review these estimates with a business advisor before making any decision. You should not plan to draw income from operations during the start-up and development stage of your franchise, which could exceed three-months. You should plan to have reserves to cover other expenses, losses or unanticipated events during the start-up and development stage or beyond. Generally, none of the expenses in this table is refundable, except security deposits may be refundable and some of the premium may be refunded when an insurance policy is cancelled before its term ends. We do not provide direct or indirect financing. 

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