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Figaro's Pizza Franchise Cost & Fees

Date of Incorporation: 1981
Franchising Since: 1986
Headquarters: Salem, Oregon

Business Description: Figaro’s Italian Pizza, Inc. is the franchisor. Figaro’s Pizza franchises offer a limited menu of pizza, calzones, submarine sandwiches, and/or other food and beverage products.

Franchise Offer: The Franchise Agreement for a Figaro's franchise relates to the establishment, development and operation of businesses for the retail sale of a limited menu of pizzas, lasagna, calzones, beverage products and other menu items prepared in accordance with specified recipes and procedures using the Trade Secret Food Products as defined in the Franchise Agreement and utilizing the Trade Secret Process as defined in the Franchise Agreement.

Financial Assistance: The franchisor does not provide direct or indirect financing nor does it assist in providing financing for the franchisee. The franchisor does not guarantee any notes or financial obligations the franchisee may incur in setting up and operating the franchise. Franchisees are eligible for expedited and streamlined SBA loan processing through the SBA’s Franchise Registry Program.

Training and Assistance: The franchisor, or the relevant master franchisee and staff, will train the franchisee and his or her designated manager before beginning operations of his or her first franchised store for a minimum of two six-day weeks. To facilitate the opening of the franchisee’s first franchised store, the franchisor will send one of its representatives to the franchised store, at its expense, for a minimum of 9 days, but no more than 14 days, during the first one to two months of operation. In addition, the franchisor or the relevant master franchisee may deem it appropriate or necessary to provide additional training and supervision to the franchisee at the location of the franchise store. If so, the franchisee will fully participate in and complete this additional training and supervision, including additional or revised training programs and processes that may be added to the Manual in the future. The franchisor, or the relevant master franchisee and staff, may provide and conduct refresher training programs or seminars at a location it designates. Each of the franchisee’s employees must complete a training program under the direction of the franchisee or the designated manager, and the franchisee’s managers must complete a yearly certification test as prescribed in the Confidential Operations Manual.

Territory: If the franchisee is purchasing a Standard Figaro's franchise, the franchisor will grant him or her a geographic area (Designated Area). The Designated Area is a one-mile radius from the authorized street address. The franchise will be only for the specific authorized location approved by the franchisor. If a portion of the territory has previously been assigned, the specific territory may be smaller than the one-mile radius. The franchisee will not receive an exclusive territory. The franchisee may face competition from other franchisees, from outlets that owned by the franchisor, or from other channels of distribution or competitive brands that controlled by the franchisor. However, if the franchisee purchases a Figaro's franchise, then while the Franchise Agreement is in effect and the franchisee is not in default, the franchisor will not establish nor license anyone other than the franchisee to establish any Figaro's facility in the Designated Area.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the date the Franchise Agreement is signed. The franchisor is willing to give a different length of term upon the franchisee’s reasonable request ranging from 5 years to 20 years. The franchisee can renew for additional successive terms of 10 years if all of the conditions in the Franchise Agreement have been met.

Obligations and Restrictions: Each Franchised Store that the franchisee owns is to be at all times under the direct on-premises supervision of the franchisee, or a trained and competent employee acting as a crew leader or manager. The franchisee will at all times faithfully, honestly and diligently perform his or her obligations and will not engage in any business or other activities that will conflict with these obligations. The franchisee will offer for sale and sell at the franchised store all of the menu items, trade secret food products and other categories of food products that the franchisor periodically approves for the specific type of franchise that the franchisee purchases.

Estimated Number of Units: 55

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $0 $25,000
Franchise Coordination Fee $0 $10,000
Grand Opening Advertising $12,500 $12,500
Lease Acquisition $2,000 $20,000
Leasehold Improvements $10,000 $215,000
Equipment & Fixtures $20,000 $150,000
Opening Inventory $5,000 $8,000
Training $500 $5,000
Signs $4,500 $11,000
Delivery Vehicles Varies
Additional Funds $15,000 $50,000
Miscellaneous $16,500 $40,000
ESTIMATED TOTAL $86,000 $546,000
Other Fees
Type of Fee Amount
Continuing Licensing Fees 5% of Gross Receipts; Minimum of $150 per week from initial opening of the store.
Advertising Fund 3% of Gross Receipts; A 1% increase in your Advertising Fund fee, will automatically be triggered by your failure to spend the minimum Local Advertising requirement or to report Local Advertising contributions.
Local Advertising 3% of Gross Receipts; can be increased to 4% of Gross Receipts with 30 days prior written notice, with a credit for any cooperative advertising paid.
Out of this amount, we may require that at least, 0.125% of Gross Receipts be sent to us as a contribution to H.E.L.P. the charity or other charitable causes.
Cooperative Advertising Amount not to exceed 4% of Gross Receipts.
Rebates All rebates received. The franchisor estimates between $0 and $75,000 per year.
Promotional Items Franchisor’s cost plus reasonable markup. The franchisor estimates between $1,000 and $12,000 per year.
Multi-Area Marketing and Discount Programs Marketing Kits, Commissions, discounts, or free products. The franchisor estimates between $800 to $5,000 per year.
Late Fee for Failure to Submit Report or Payment on Time $50 per incident.
Late Payments Highest applicable legal rate for open account business credit, not to exceed 1.5% per month.
Tax Payments If the franchisor is charged with any tax by the authorized taxing authority of any state or political subdivision, including taxes on sales made to or licenses granted to the franchisee, or sales made by the franchisee at the Franchise Premises, the franchisee will pay these taxes.
Audit Cost of audit plus interest on underpayment. The franchisor estimates up to $20,000
Insurance Policies Premium amounts. The franchisor estimates between $500 and $8,000 per year.
Transfer Fee Greater of $10,000 or 2% of gross proceeds from sale of the Franchised Store.
Additional Training and Assistance Franchisee’s cost. The franchisor estimates between $3,000 and $7,000
Additional Manager Training $900 per week per individual.
Continuing Education The franchisee will be required to pay his or her expenses as well as his or her employees' expenses in attending these programs.
Renewal Fee None.
Cost of Enforcement or Defense All costs including attorneys' fees.
Operation of the Franchised Store in Case of Absence, Incapacity or Death Reasonable compensation and expenses for the franchisor’s representative. The franchisor estimates up to $2,500 per month.
Operation of the Franchised Store in Case of Franchisee’s Default $400 per day plus expenses.
Indemnification All costs including attorneys' fees.
Supplier/Supply Approval Actual cost of test. The franchisor estimates between $6,000 and $9,000
Lost Confidential Operations Manual $500
Cure Fee $1,000
Mystery Shopper Fee Standard Charges by Mystery Shopper Service. The franchisor estimates up to $1,200

The above information has been taken from the FDD of Figaro's Pizza. Year of FDD: 2016

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