Auto Appraisal Network
Date of Incorporation: August 28, 2006
Franchising Since: January, 2007
Address: California
Description: Auto Appraisal Network (AAN) is into the business of professional evaluation and appraisal of all types of automobiles, watercraft and/or motorcycles for the purpose of financing, insurance and other requirements as needed by owners.
Franchise Offer: Auto Appraisal Network is a franchising company which sells and grants franchises for the operation of providing professional auto appraisals to individuals, and/or companies. A franchisee will offer professional evaluation and certified reports of all types of automobiles, watercraft and motorbikes for the purpose of insurance, financing, and other requirements as requested by clients of AAN.
Financial Assistance: Auto Appraisal Network does not offer direct or indirect financing, nor do they guarantee any notes, leases, or other obligations, but they may decide to offer indirect financing in the future.
Training and Assistance: AAN provides Initial Training, which lasts for approximately 5 days, at the corporate headquarters in Irvine, California. AAN anticipates offering Initial Training on a bi-monthly basis. The franchisee or the initially appointed manager must attend the Initial Training within 3 months of signing the Franchise Agreement. There is no separate charge for Initial Training; however the franchisee is responsible for all expenses of attending the Initial Training including travel, lodging, meals, miscellaneous expenses and employee compensation of those attending.
Territory: The franchisee will receive an exclusive territory in a Demographic Market Area (DMA), with a minimum population of 80,000 people. The franchisee will operate from one official location and must receive permission from the franchisor if the franchisee intends to relocate the office. The franchisor will not operate units or grant franchises for a similar or competitive business within the DMA.
Term of Agreement and Renewal: Length of the term of the franchise is10 years and renewal or extension of the term is for an additional 5 years. Default under the Franchise Agreement, bankruptcy, abandonment, and other grounds will result in termination of franchise agreement by the franchisor.
Obligations and Restrictions: Franchisee must be involved in the general oversight and management of the operations of the Business. However the franchisee can employ a full-time general manager with qualifications reasonably acceptable and who successfully completes the initial training program. The franchisee may provide only those services and products authorized and approved by Auto Appraisal Network. All appraisals must be conducted and completed according to the guidelines and in the manner designated by AAN.
Total Number of Units: 9 franchised outlets at the end of the financial year 2007.
Investment Table:
Estimated Initial Investment:
| Name of Fee |
Low |
High |
|---|---|---|
| Franchise Fee |
$15,000 |
$35,000 |
| Area Development Fee |
$0 |
$10,000 |
| Travel/Living Expenses for Training |
$500 |
$3,000 |
| Rent |
$0 |
$2,000 |
| Security Deposit |
$0 |
$2,000 |
| Utility Deposits |
$0 |
$500 |
| Equipment/Fixtures |
$0 |
$2,000 |
| Business Licensing, Legal, Accounting |
$500 |
$2,500 |
| Phones and Internet Service |
$100 |
$300 |
| Extranet Service |
$0 |
$75 |
| Insurance Deposit |
$100 |
$400 |
| Initial Adversting |
$200 |
$1,000 |
| Marketing/Networking |
$300 |
$500 |
| Additional Funds |
$3,000 |
$10 |
|
Total |
$19,700 |
$60,275 |
Ongoing Costs:
| Name of Fee |
Amount |
|---|---|
| Service Fee |
$85 per certified report for the report quantities equal to or less than the Minimum Quarterly requirement, $75 per certified report for report quantities exceeding the Minimum Quarterly requirement, $65 per certified report exceeding the Minimum Quarterly requirement by 50% or more |
| Training of Additional Persons |
Then-current charges, currently $2,500 per additional person after first 2. |
| Additional Training Programs |
Then-current charges, currently $500 per person, per day. |
| Renewal | $2,500 |
| Transfer |
$5,000 Transfer Fee |
| Transfer Referral Fee |
6% of sales price franchisee will pay broker if one is involved in the sale See above for training of new franchisee |
| Insurance |
Amount of premiums for the insurance required |
| Indemnification |
Amounts incur for any claims from the operation of the Business or misuse of the Marks. |
| Extranet and Software Support Fee |
Currently $0 per month, per user for the Extranet Fees based on current cost to maintain sites, technology and support. Not to exceed $50 per month. |
| Wireless carrier and cell phone services |
Approximately $100-200 per month |
| Local Advertising |
A minimum of $250 per month averaged over 3 months |
| Local Telephone and On-line Directories |
Varies |
The above information has been taken from the UFOC/FDD of Auto Appraisal Network.
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