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ARCpoint Labs Franchise Costs & Fees

Date of Incorporation: 1998
Franchising Since: 2005
Headquarters: Greenville, South Carolina

Business Description: The franchisor is ARCpoint Franchise Group, LLC. ARCpoint Labs offers comprehensive employment services built around a passion for reducing drug abuse as well as empowering individuals and companies to manage their health and wellness through affordable lab screening.

Franchise Offer: Franchisees will offer an affordable, full-service, on-site screening and offsite screen services for drug alcohol, DNA and background screens (ARCpoint Business). ARCpoint Businesses can also provide clinical testing (with some ARCpoint Businesses limited in scope by the franchisee’s state law), corporate wellness services, and regulatory compliance services (primarily directed toward businesses who, along with their employees, fall under the Department of Transportation’s (DOT) federal guidelines and who must adhere to strict regulations regarding the way they conduct business and manage employees).

Financial Assistance: Neither ARCpoint nor any agent or affiliate(s) offers direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or other obligations. The franchisor may refer franchisees to third parties for potential financing options, (with no guarantee of approval). Franchisees of the ARCpoint system are eligible for expedited and streamlined loan processing through the SBA’s franchise registry program.

Training and Assistance: Training includes five phases: 1) Orientation and Business Operations, 2) the ARCpoint Video Training Series, which covers drug, alcohol, and DNA testing methodology and qualifications, 3) ARCpoint University, which is currently 5 mandatory days of live training at the franchisor’s corporate headquarters, and up to 5 optional days of real-time observation and learning at its Affiliate, ARCpoint Labs of Greenville, or an approved franchise location, 4) One member from the franchisor’s operations/sales teams, will visit the franchised location, within approximately three months of the business’ opening, at a mutually-agreeable time, to focus on operational organization and sales approach, and 5) Advanced Regulatory Compliance (ARC) training, which is also interactive web-based. The Operational and Sales visit will cover approximately 40 hours of real-time learning, over the span of 4-5 days, at a mutually-agreeable time near the time franchisees open their ARCpoint Business. All additional employees must be fully-qualified to work in the business and must be trained by ARCpoint Certified Trainers, with the exception of administrative and clerical employees.

Territory: The franchisor will define by zip codes an exclusive territory (Protected Territory) in the Franchise Agreement. The territory for one ARCpoint Business typically consists of at least 10,000 total businesses, which includes a minimum of 4,000 targeted businesses (businesses having 5 or more employees), of which 1,000 are Standard Industry Classification (SIC), or North American Industry Classification System (NAICS) businesses. Once established and unless otherwise agreed to in writing, the boundaries of the Protected Territory will not be adjusted regardless of whether any of the relied-upon data used for defining the Protected Territory changes over time. The Protected Territory granted to franchisees in the Franchise Agreement is exclusive to them in that the franchisor will not establish either a company-owned or franchised outlet selling the same or similar goods or services under the same or similar trademarks.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Franchisees may renew for additional terms, subject to certain requirements.

Obligations and Restrictions: The ARCpoint Business must be under the franchisee’s direct, full-time, day-to-day supervision or a Designated Manager. “Designated Manager” means the individual designated by the franchisee as having primary responsibility for managing the day-to-day affairs of the ARCpoint Business if the franchise is a legal business entity, (such as a corporation, limited liability company or other legal business entity). Franchisees (or the Designated Manager) must attend and satisfactorily complete the initial training program before opening the ARCpoint Business. Franchisees or the Designated Manager must devote his or her full-time efforts (at least 35 hours per week) to the management of the day-to-day operation of the ARCpoint Business. Franchisees must offer the products that the franchisor specifies from time to time, in strict accordance with the franchisor’s standards and specifications.

Estimated Number of Units: 100

Investment Tables:
Initial Investment
Name of Fee Low High
Franchise Fee $49,500 $49,500
Real Estate/Rent and Security Deposit $1,500 $5,000
Site Selection Assistance $0 $2,000
Utility Deposits $0 $500
Leasehold Improvements $5,000 $45,000
Furniture, Fixtures, Improvement $2,000 $5,000
Initial Inventory $500 $2,500
Insurance $2,500 $5,000
Signage $2,000 $2,000
Initial Technology Fee $2,000 $2,000
Office Equipment and Supplies $2,500 $5,000
Initial Training $2,000 $2,000
Travel and Accommodation for Training $1,000 $3,500
Licenses and Permits $0 $350
Legal and Accounting $1,500 $2,500
Dues, Subscriptions and Memberships $200 $1,000
Breath Alcohols Instrument $1,600 $1,600
Sales and Marketing Support $10,000 $10,000
Additional Funds (first 9-12 months) $10,250 $63,500
ESTIMATED TOTAL $161,800 $237,950
Other Fees
Type of Fee Amount
Royalty Fee 7% of the previous month’s gross sales (but no less than $350 per month, whichever is greater).
Brand Fund Fee 2% of the previous month’s gross sales (but no less than $100 per month, whichever is greater).
Local Advertising/Marketing Expenditure $1,250 per month for the first 12 months;
$750 per month beginning in the 13th month.
Technology Services Fee $125
Operational Testing Software Fee $155 - $425
Additional Unforeseen Technology Fees Actual costs at the time they occur.
Audit Expenses Cost of Audit plus 18% (or highest allowed by law in the state where you are located) on the amount of the underpayment.
Late Fees, Expenses and Interest A late fee of $100 per month if not paid within 5 days after due date and 18% per year or the highest rate allowed by the state where the franchisee is located (if less than 18%) plus reasonable collection costs (including accounting and legal fees).
A late fee of $100 per month for not reporting gross sales and/or providing required financial reporting each month by the 15th.
Supplier or Product Approval All reasonable expenses associated with meeting vendor requirements, approximately $500 - $1,000
Relocation Assistance Actual expenses of providing relocation assistance not to exceed $1,500
Additional Hours of On-the-Job Training During Operational or Sales Visit $75 per hour in excess of 16 hours for Operational visit and 24 hours for Sales visit.
One on One DOT Mock Collections Training Fee $199 per employee.
Customer Service Actual expenses incurred in assisting your customers – not to exceed $3,000
Training for Additional Employees $75 per hour, with a minimum 8-hour charge totaling $600, plus actual travel expenses including flights, mileage, lodging, and food.
Cost of Enforcing Franchise Agreement The franchisor’ actual expenses including all reasonable attorney’s fees, which will vary depending on the nature of the case.
Transfer Fee $20,000
Indemnification All costs including reasonable attorneys’ fees.
ARC Training Updates Subscription $150 annually.

The above information has been taken from the FDD of ARCpoint Labs. Year of FDD: 2016

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