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How Much Does It Cost to Open Real Deals Franchise?

Do you want to open a home decor store business by buying Real Deals franchise? If YES, here is how much it cost to open Real Deals franchise successfully. If you are looking towards opening a Real Deals on Home Decor Franchise, it will be nice for you to have a preview of what the company represents before going ahead to enquire about the total cost of opening the franchise in your location.

Real Deals on Home Decor was founded in 2003 and they began franchising in 2006, about 14 years ago. The current CEO of the company is Nate Kelsey and they have their corporate head office at 4493 Mud Creek Rd. Buhl, ID 83316, USA.

As of the 2016 Franchise Disclosure Document, there are 60 franchised Real Deals on Home Decor locations in the USA. The company has franchise locations in 16 states. The largest region is the West with 33 franchise locations. Real Deals on Home Decor got its start in 2003 when Jeff and Marisa Humphrey turned the bottom floor of an old cotton mill in Jefferson, Georgia, into a showroom and began selling discount designer furniture and home decor.

Marisa’s sister Carie Kelsey and her husband Nate followed suit, opening their own Real Deals on Home Decor store in Idaho Falls, Idaho, later that year. Other relatives opened more stores over the next few years. Real Deals Home Decor is a home furnishings and accessories brand started by Stan and Robin Atkins in the small town of Jefferson, in North Georgia.

The store is a vast, comfortable space with a broad array of brand name furniture and home décor offered at reasonable prices and emphasizing great customer service. The Real Deals Home Decor store model emphasizes low overhead so that franchisees can keep retail prices at a competitive level. Here are areas where you are expected to spend money and the cost associated with it;

Financial Investment Required to Open Real Deals Home Decor Franchise

  1. Initial Investment: $101,500 – $161,500
  2. Ongoing Initial Franchise Fee: $25,000 – $25,000
  3. Working Capital: $20,000 to $30,000
  4. Ongoing Royalty Fee: 5%
  5. Ad Royalty Fee: 1%

1. Initial Investment Range: $101,500 – $161,500.

2. Franchise Fee: $25,000

3. Royalty Fee: 6 percent of Gross Sales

The Due Date for this fee is Paid by electronic funds transfer every Friday for the preceding Reporting Period. The amount of the Royalty Fee for any renewal term will be that provided in the Franchise Agreement executed for such renewal term.

Please note that “Gross Revenues” include all revenues generated from the provision of any and all services and/or the sale of any and all products and, whether by the franchisee or a third-party provider, that relate to or arise from the Franchised Business. It does not include taxes collected from customers.

  1. Local Advertising Spend, Local Marketing Fund, or Cooperative Advertising Contribution: At least 1 percent per calendar year and the Due Date: for this is Monthly.

Please note that each local advertising Cooperative may elect to increase the monthly contribution if approved by a two-thirds majority of the members, and the minimum contribution is subject to adjustment by an amount not to exceed the increase in the CPI.

Centers owned by Real Deals on Home Decor and its affiliates are also members of their respective local Cooperative and each company-owned Center has the same voting rights as the franchised locations within the Cooperative. If the company-owned Centers comprise the majority of a given Cooperative, the maximum and minimum fees for that Cooperative will be consistent with the range stated in this Item 6.

  1. Liquidated Damages Under Area Development Agreement: This fee varies but the Due Date is Payable within 30 days of the termination of the Development Agreement.
  2. Audit Costs: All costs and expenses associated with the audit, reasonable accounting and legal costs.
  3. Indemnity: This fee will vary under the circumstances and the Due Date is As incurred.

Please note that you must reimburse Real Deals on Home Decor if it is held liable for claims arising out of your franchise operations.

  1. Insurance: Reimbursement of costs the franchisor’s out-of-pocket costs.
  2. Equipment, Supply, or Supplier Testing or Inspecting: Fee not to exceed the actual costs of inspecting and testing. (Due Date:  Due on receipt of invoice.)

Please note that This fee covers the cost of testing or inspecting equipment, supplies, or suppliers you propose.

  1. POS Hardware and Software: Depends upon vendor and products purchased. (Due Date:  Depends upon vendor and products purchased.)
  2. Attorneys’ Fees and Costs: Will vary under circumstances. (Due Date:  As incurred.)

Payable to Real Deals on Home Decor if it is forced to retain independent counsel and seek damages or injunctive relief to enforce the Franchise Agreement (whether or not suit is filed) or if Real Deals is required to defend your unsuccessful claim against it.

  1. Veteran Incentives: This is open up for negotiation with the company
  2. Term of Agreement and Renewal: The length of the initial franchise term is 5 years. If requirements are met, franchisees can renew for one additional term of 10 years.
  3. Financial Assistance: Real Deals on Home Decor has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, and payroll et al.