Christmas Décor Inc
Date Incorporation: 1996
Franchising Since: 1996
Headquarters: Texas
Description: Christmas Décor Inc offers high quality lighting displays for customers’ homes and businesses during the Christmas season and for other special events.
Franchise Offer: The franchise on offer is for the operation of a special event and Christmas lighting and decorating service, within a specific geographic area under the Christmas Decor trademarks and business system.
Financial Assistance: Depending upon the territory, the franchisee’s credit rating and other factors, the franchisor may, in their sole discretion, make limited financing available for a portion of the initial franchise fee. In these cases, the amount financed will be the lesser of 50% of the territory fee or $7,500. The maximum financing term will be 18 months and the interest will be calculated at a 15% annual percentage rate. Payments must be made under a mandatory automatic draft agreement with the franchisee’s bank.
Training and Assistance: The franchisor will make the Quick Start training program available to the franchisee and up to 2 additional employees. The training consists of 5 days of classroom training and covers such things as product orientation $ Design theory, marketing & public relations, creating proposals and sales.
Territory: The franchisee will receive an exclusive territory for residential accounts. The franchisee will not receive an exclusive territory for commercial accounts. As for commercial accounts, the franchisee may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution
Term of Agreement and Renewal: The term of the franchise agreement is agreed before the franchisee signs the Option Agreement; there is a maximum of 1 year. After the initial term, the franchisee may extend the option on a month-to-month basis. The fee for renewal is $2,000.
Obligations and Restrictions: This is a full time business during the holiday decorating season, usually September through the following February each year. Although the franchisor does not require the franchisee to personally supervise the business on-premises, they recommend that the franchisee do so. If the franchisee does not, one of their employees whom the franchisor approves must devote full-time and on-premises attention to the management and operation of the Franchised Business during the holiday season. The franchisee may offer and sell only those products and services that the franchisor authorize but are not required to sell all products or services. The franchisor has the right to change the type of products or services they authorize.
Total Number of franchised Units: The total number of units for 2008: 294
- During the fiscal year ending March 31, 2008, in connection with renewals, the company has consolidated commonly owned territories operating under multiple franchise agreements into single franchise agreements with a common owner.
- During the fiscal year ending March 31, 2008, one existing franchise located in New Mexico was consolidated with another existing franchise in this same state under a single franchise agreement.
- During the fiscal year ending March 31, 2008, five existing franchises in Wisconsin were transferred to a new owner and consolidated under a single franchise agreement.
Investment Tables:
Initial Investment:
| Name of fee | Low | High |
|---|---|---|
| Initial Franchise fee | $9,000 | $9,000 |
| Initial Franchise fee – territory fee | $1,000 | $20,000 |
| Initial Rent & Deposit | $0 | $1,000 |
| Initial Marketing Investment | $2,000 | $6,000 |
| Leasehold Improvements | $0 | $1,000 |
| Business Licences and Permits | $0 | $500 |
| Insurance | $200 | $3,000 |
| Initial Printing Supply Package | Cost included in initial franchise fee | |
| Legal and Accounting Fees | $250 | $1,500 |
| Initial Inventory and Equipment | $4,000 | $10,000 |
| Computer System | $0 | $500 |
| Vehicles | $0 | $350 |
| Quick Start Training – travel and living expenses | $1,200 | $1,500 |
| Additional Funds for initial 6 month period | $1,000 | $6,000 |
| Totals | $18,650 | $60,350 |
Ongoing fees:
| Name of fee | Amount |
|---|---|
| Royalty Fee - all Territories | Greater of (a) 5% of actual annual Gross Sales or (b) 5% of annual Minimum Gross Sales |
| Marketing Development Fund (MDF) Contribution - all Territories | Greater of (a) 1 % of actual annual Gross Sales or (b) 1% of annual Minimum Gross Sales |
| Local or Regional Advertising Materials | Reasonable charge |
| Transfer Fee | Greater of $2,000 or 5% of the highest level of Gross Sales during the 3 years preceding the transfer request |
| Special Training, Conferences and Seminars | Special Training - then-current fee, plus reimbursement of costs. |
| Conferences and Seminars | reasonable fee plus out-of-pocket costs. |
| Renewal Fee | $2,000 |
| Software License Renewal Fee | Currently, $500 |
| Termination Fee | Lump sum payment of Minimum Royalty fees for the remaining term of the Agreement |
| Annual Royalty Late Payment/ Reporting Fee | $500 per occurrence plus $50 late fee for each month reporting and/or payment or remittance is delinquent |
| Interest on past due amounts | Lesser of 1.5% per month or the maximum legal rate from the due date of the invoice |
| Late Fee | $50 for each month payment or remittance is delinquent |
| Administrative billing charge | $25 per occurrence |
| Audit Administration Fee and Costs |
$3,000, plus our actual audit costs |
| Enforcement costs | Varies |
| Indemnification costs | Varies |
The above information has been taken from the UFOC/FDD of Christmas Décor, Inc
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