Frugal is Back!
“Smart entrepreneurs are doing more with less,” says Joseph R. Cardamone, president of the U.S. Federation of Small Businesses. “With diminished cash flow and tight credit, only those businesses that operate efficiently will survive this economic downturn, which may last several years.”
With over fifteen years of growth, Planet Beach Contempo Spas is breaking records and we believe in operating efficiently and running profitable businesses. We care about the profitability of our franchise owners and we want all of them to survive the economic downturn. We’re downright stingy about operating expenses and believe in spending hard-earned money on items that have a strong rate of return.
How much money does it take to start up a Contempo Spa franchise? Below is our Item 7 of our Franchise Disclosure Document. This table gives the ranges for typical start up costs:
Franchise Disclosure Document (FDD), Item 7
ESTIMATED INITIAL INVESTMENT
Single Unit (1):
| DESCRIPTION | ESTIMATED AMOUNT OR LOW-HIGH RANGE | METHOD OF PAYMENT | WHEN DUE | TO WHOM PAYMENT IS TO BE MADE |
| Initial Franchise Fee (2) | $39,950 | Lump sum | Upon signing of Franchise Agreement | PBFC |
| Planet Beach Spa Equipment & Timer System, with shipping, installation (3) | $81,700 to $104,229 | Lump Sum | As arranged | PBFC |
| Leasehold Improvements (4) | $5,000 to $65,000 | As arranged | As arranged | General Contractor |
| Owner Furnished Items (5) | $9,000 to $28,000 | As arranged | As arranged | Approved Vendors |
| Utility, phone & lease deposits (6) | $2,500 to $4,500 | As arranged | As arranged | Landlord and local providers |
| Insurance initial payment (7) | $600 to $1,200 | As arranged | As arranged | Insurance provider |
| Computer and Software (8) | $1,200 to $3,300 | Lump sum | Upon ordering | PBFC and/or Approved Vendor |
| Printing & Marketing (9) | $10,000 to $20,000 | As arranged | As arranged | Various |
| Wholesale Goods (10) | $6,000 to $7,500 | Lump sum | Upon ordering | PBFC |
| Washer and Dryer (11) | $0 to $1,200 | As arranged | As arranged | Local Provider |
| Permits, licenses (12) | $500 to $3,000 | As arranged | As arranged | Various |
| Working Capital and Miscellaneous (13) | $8,000 to $46,500 | As arranged | As arranged | N/A |
| Totals (14,15) | $164,450 to $324,979 |
Note 1. Estimates are based on a single unit Spa. Square footage is approximately 1400. These spas feature one (1) spray tanning unit, automated spa services and UV services as determined by PBFC.
Note 2. You must pay us an initial franchise fee of $39,950. In some states, the initial franchise fee will be placed in an escrow account (or deferred) until the Spa opens.
Note 3. All Spas are required to have a minimum of one (1) approved sunless spray, one (1) approved massage unit, one (1) approved facial unit, one (1) approved body treatment unit, one (1) approved weight loss treatment unit and one (1) approved UV therapy unit. The high estimate represents the current twelve (12) unit required Contempo Spa Service Mix. This amount may vary depending on shipping and installation costs. This amount does not include taxes. You must check with your state to determine if there are taxes due.
Note 4. The high estimate is based on a Spa with an estimated 1400 square foot space with significant landlord participation (in the form of actual landlord improvements performed or tenant improvement allowance) from a standard retail “vanilla shell.” This estimated range will vary depending on the location, necessary leasehold improvements and landlord participation. This estimate also includes an allocation for space plans, architectural and engineering drawings.
Note 5. Owner Furnished Items (OFIs) consist of millwork (including service stand and consultation station), lighting, flooring, interior branding components/signage, exterior signage, and furniture.
Note 6. High estimate is based on a security deposit equal to one (1) month’s minimum rent at $4000 per month. Some landlords may require a deposit of first and last month’s rent. Deposits on utilities will also vary. Deposits will vary based on the market rental rates for your market.
Note 7. You will need to obtain Commercial General Liability ($1 Million Minimum Coverage) insurance, Worker’s Compensation, Business Interruption insurance, Flood, Life Insurance (equal to amount borrowed) and Construction Coverage insurance.
Note 8. Low estimate includes hardware and required software. The high estimate includes the costs for one (1) CPU, one (1) cash drawer, one (1) receipt printer, one (1) signature pad and two (2) iPads or similar device. This estimate also includes allocation for installation of phone and Internet. .
Note 9. You are required to invest this amount in marketing during your Pre-sale and through the initial opening of your Spa. You may spend additional amounts with PBFC approval. This estimate also includes an allocation for initial office supplies.
Note 10. You will be required to purchase a specified amount of wholesale goods for the initial inventory of products to be offered for sale based on the size of your Spa. A selection of PBFC’s proprietary products and national brand products must be stocked.
Note 11. Zero dollars as a “Low” because not all Spas can accommodate a utility room due to size or layout restrictions. Therefore, the washer and dryer are optional.
Note 12. This figure includes inspection fees, occupational licenses and legal fees associated with Corporation set-up and lease review.
Note 13. PBFC requires that you must achieve a minimum of $12,500 membership draft before you can open for operation. This figure does not necessarily mean that you will “break even” or that you will reach any certain financial position. The high estimate includes an allocation for payroll during the one hundred and twenty (120) day presale period. The high estimate also includes expenses associated with attending Franchisee School as well as travel and accommodations for the required on-site training. ..
Note 14. PBFC relied on its experience to compile these estimates. You should review these figures carefully with a business advisor before making any decision to purchase the franchise.
Note 15. If you sign a Single Unit Franchise Agreement, your initial investment for your first Spa should be within the range disclosed in this Item 7 chart. The Initial Franchise Fee for each subsequent Spa is set forth in Item 5. You also should be aware that your initial investment for your second and subsequent Spas likely will be higher than the above estimates for your first Spa due to inflation and other economic factors that may vary over time.
Note 16. All payments are non-refundable. Neither PBFC nor its affiliates provide financing for any part of these investments.