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Three Dog Bakery Franchise Cost & Fees

Date Incorporation: 2003

Franchising Since:  2007

Headquarters: Missouri

Description: Three Dog Bakery operates stores selling personalized cakes, muffins, pastries, and novelty baked items that are baked in the store, dog food, dog cookies, dog biscuits, dog training treats, and cat treats manufactured by the franchisor or its affiliates, as well as ancillary items such as dog bowls, leashes, and collars.

Franchise Offer: The franchisee will be granted the right to operate a single Three Dog Bakery store at a location approved by Three Dog, offering the products and services approved by Three Dog at retail.

Financial Assistance: The franchisor does not offer direct or indirect financing

Training and Assistance: The franchisee must attend a 6 day training program with Three Dog Bakery. The training program is conducted in various sites in and around Kansas City, Missouri, including the Three Dog Bakery offices, at the central production facility at which Three Dog Bakery produces products for sale in the franchised stores, and at the one "company-owned" Three Dog Bakery store.

Territory: The franchisee will be granted an exclusive territory.

Term of Agreement and Renewal: The length of the franchise term is 7 years, with an option for renew for additional terms equal to the then-current franchise term.

Obligations and Restrictions: The Three Dog Bakery store must at all times be under the direct, day-to-day, full-time supervision of the franchisee or an operating manager who has been approved by Three Dog and who has satisfactorily completed Three Dog's training program.

Total Number of Units: 35 outlets at the end of 2008

Total Number of franchises Units: 16 franchised outlets at the end of 2008

Investment Tables:

Initial Investment:

 Expenditures  Low   High 
 Development Fee  $5,000 per store (minimum two stores plus Initial Fee for first two stores) or $65,000   $5,000 per store (minimum two stores plus Initial Fee for first two stores) or $65,000
 Initial Fee   $32,500   $32,500
 Real Estate / Rent Deposit $  4,000    $10,000
 Leasehold Improvements   $50,000   $80,000
 Utility and Miscellaneous Security Deposits   $2,000   $4,000
 Furniture, Fixtures, and Equipment   $100,000  $125,000
 Opening Inventory   $25,000   $40,000
 Insurance  $3,000    $5,000
 Signage (interior and one exterior)  $13,000    $15,000
 Travel and Living Expenses While in Training   $3,000    $5,000
 Additional Funds—Three Months   $25,000    $50,000
 Marketing for Store opening   $7,000   $9,000
 Miscellaneous   $4,000    $7,000
 Total estimated initial investment   $268,500   $382,500

Ongoing fees:

 Name of Fee  Amount 
 Royalty   5.5% of Royalty Sales of the Bakery
 Advertising Fee   Up to 2.5% of total Net Sales
 Late Payment Fee   10% of the payment due
 Interest on Late Payments   Greater of 1.5% per month or 300 basis points (3%)
 Insufficient Funds Fee   10% of the amount of the insufficient funds check, draft/ wire transfer
 Transfer Fee   Not more than one-half of the current initial franchise fee (currently $8,150/$16,250)
 Product purchases   Varies
 Maintenance and Renovation  Actual cost of ongoing maintenance and renovation
 Legal Fees/ Indemnification  Actual costs of suit, attorneys and accountants fees incurred by Three Dog.
 Audit Costs  If audit reveals underpayment of 2% or more, you must reimburse Three Dog for its audit costs.
 Initial Training   Currently no fee charged. Reimburse out of pocket expenses

 Supplemental and Refresher Training

 Currently no fee charged. Reimburse out of pocket expenses

 Management Services:

 Up to 8%

Date of FDD:

The above information has been taken from the UFOC/FDD of Three Dog Bakery
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