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TeaGschwendner Franchise Cost & Fees

Date Incorporation: 1978

Franchising Since: 1980

U.S. Headquarters: Illinois

Country of Origin: Germany

Description: The franchisor operates a system of tea shops under the name “TeaGschwendner”, offering premium loose, packaged and ready to drink tea; fruit, spice and other infusion products and related accessories, products and services.

Franchise Offer: The franchise offered is for the right to operate a retail tea store business under the trademark “TeaGschwendner”.

Financial Assistance: The franchisor does not provide direct or indirect financing.

Training and Assistance: The franchisee and one of the manager-level employees must complete the initial training program on the material aspects of operating a TeaGschwendner Store. This training consists of 10 hours of classroom training and 142 hours of on-the-job training, located in Chicago, Illinois. Three days before the grand opening, the franchisor will send a representative to the new TeaGschwendner Store for a period of seven days to assist the new franchisee with its opening.

Territory: The franchisor will not receive an exclusive territory.

Term of Agreement and Renewal: The length of the franchise term is 10 years, with an option to acquire a successor franchise under the then current terms.

Obligations and Restrictions: The franchisee must act as the general manager of the TeaGschwendner Store with responsibility for direct, on-premises supervision of the store. They must keep inform the franchisor at all times of the identity of any supervisory employee(s) acting as assistant manager(s) of the store. The franchisee must devote full time and efforts to the management and supervision of the store.

Total Number of Units: 145 units.

Investment Tables:

Initial Investment:

Expenditures Low High
 Franchise fee   $15,000    $25,000
 Travel and living expenses during initial training   $2,000    $5,000
 3 months' rent    $9,000   $25,000
 Grand Opening Advertising   $5,000   $5,000
 Start-up inventory and supplies    $30,000   $45,000
 Construction, leasehold improvements and decorating costs   $40,000   $125,000
 Furniture, fixtures, equipment, installation and set-up   $50,000    $75,000
 Signage   $5,000    $10,000
 Insurance    $500   $2,000
 Licenses and permits   $1,000    $3,000
 Utilities for 3 months, including any security deposits    $500    $3,000
 Additional funds for 3 months    $7,000   $27,000
 Total Estimated Initial Investment  $165,000    $350,000

Ongoing fees:

 Name of Fee   Amount
 Royalty  Up to 3% of Gross Sales
 Advertising Fund  Up to 2% of Gross Sales
 Late payment interest  1.5% per month or the highest commercial contract interest rate the law allows, whichever is less
 Additional training  Will vary with the circumstances, but will not exceed the franchisor's expenses to conduct the training plus the travel and living expenses to attend
 Refresher Training  Will vary with the circumstances, but will not exceed the franchisor's expenses to conduct the training plus the travel and living expenses to attend
 Renewal fee  $2,500
 Transfer fee  $5,000
 Relocation fee  The franchisor's then current fee and expenses
 Replacement of Lost Operations Manual  $50
 Costs and attorneys' fees  Will vary with the circumstances
 Indemnification  Will vary with the circumstances
 Audit expenses  Cost of audit and interest
 Special marketing, management, and operational assistance performed at ynur request  The franchisor's then current fee and expenses, including their personnel's per diem charges and travel and living expenses
 Equipment repair services  Will vary with the circumstances
 Information Technology Service Fee  $500-$600 per month
 Insurance  Cost of premiums plus their costs and expenses
 Management Services Fee  Up to 20% of Gross Sales, plus costs and expenses

Date of FDD: 2009

The above information has been taken from the UFOC/FDD and online sources of TeaGschwendner

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