Ballroom Dance > How much to open a Fred Astaire franchise?

Discussion in 'Ballroom Dance' started by mop6686, Jun 7, 2016.

  1. mop6686

    mop6686 Member

    Does anyone know how much (on average) it costs to open a Fred Astaire franchise? What is the general process and what are the benefits versus opening an independent studio? Thanks!
     
  2. jump'n'jive

    jump'n'jive Well-Known Member

    I can't think of a single reason to open a franchise. I have owned an independent studio for years. With dvida and istd you have syllabus covered. Competition galore to choose from. No franchise fees to pay. And if you have a a personality better then a board you make friends quickly with local and distant studio owners and then it's easy to team up to out on events. Did I mention no franchise fees or upfront costs?

    As far as building a studio out you can do it for 15-20k on the small side. Our next build is $100k
     
    MaggieMoves likes this.
  3. MaggieMoves

    MaggieMoves Well-Known Member

    Honestly it depends entirely on the locale. Some places you have to be prepared to take a significant loss before you break even. Real estate is a massive cost in the NYC metro area as 20-35 USD per square foot per year are kind of average in terms of space rental. So say if you have a 2000 square foot studio (small), your average rent would be a minimum of 40,000 USD a year, up to 70,000 USD a year. Say if it takes you 3 years to break even... you might look at a loss of up to 70,000 USD a year (unlikely, but possible) just from rental costs. Buying is another story entirely... it is more expensive, but you have equity gain over that same period in time.

    Loopnet is a great website to look at to see local real estate costs of renting vs. selling in your particular area, at least in the United States.

    The larger in size you go, the obvious increases in costs. This is just real estate too, not even factoring in employee acquisition and training... although you can lift from a local talent pool if you live in an area that fosters it. With a franchise studio many have minimum pay requirements for all instructors, which may add significantly to start up costs until you get things going. Independents typically can work out a model to pay their employees until things get going.

    Franchises I was last told pay around 9 percent of their gross sales on lessons in franchise fees for a mature studio. Newer studios pay a reduced rate for a few years.

    You can set up a meeting with any of their representatives for more information though. Most of what I've heard about employee pay and franchise fees have been through the vine, or from outdated information from my own research.
     
  4. jump'n'jive

    jump'n'jive Well-Known Member

    Larger doesn't always mean more money in real estate. Type of building and location determine it. Example. I'm in a prime retail strip mall and pay a pretty good penny for it. Our next build is in a flex/warehouse building just down the street. We get double the square foot and less then half the cost. So we will get a giant studio cheaper then our current 2400 sqft space. Location is just as good if not better. So building type and how it's zoned will play a major factor in price per sqft. Also if it's NNN or Gross. One thing to remember everything is negotiable.
     
  5. mop6686

    mop6686 Member

    What's "the small side"?
     
  6. tangotime

    tangotime Well-Known Member

    Putting aside obvious costs like building conversion, furnishings and ads, there is a small matter of franchise cost.

    They may range from 25K upwards, and, in some cases, "they" decide the location , in the area you choose .If this is the path you choose, then you are controlled by Head office and ,possibly a master franchisee .The main upside is, name recognition .

    Having been involved in both AM and FA brands, I also have had independent studios, which as most said, gives one the choice of how and where you choose your locale ( costs are comparable and , depend upon the physical structure ) .

    Be prepared to work ,7 days a week !!
     
  7. Joe

    Joe Well-Known Member

    8, if you're a Beatle!
     
  8. tangotime

    tangotime Well-Known Member

    Which one ?.. Paul or Ringo ?....:D
     
  9. Cal

    Cal Well-Known Member

    Have you asked for the franchise disclosure documents? That would give you some information to consider too.
     
    Loki and stash like this.
  10. mop6686

    mop6686 Member

    Nope, just feeling it out right now. Honestly, I can't really see any reason to open a franchise over a independent studio. I'm with a franchise right now, because the training is great (and paid), but I'll probably go independent when I have enough savings.
     
  11. Loki

    Loki Well-Known Member

    Most indie owners that I know are FA or AM alumni. Not sure about the gypsies.
     
  12. twnkltoz

    twnkltoz Well-Known Member

    You could find an existing studio where the owner is sick of being a studio owner and offer to buy them out.
     
    Mr 4 styles, MaggieMoves and Loki like this.
  13. JANATHOME

    JANATHOME Well-Known Member

    Having done some accounting and financial council for FADS owners, there are a few reasons as to the why....

    The regional office will provide financing to someone who otherwise would not have the credit rating to secure a working capital loan (especially out of country owners) . For a new business owner the franchise would place the potential owner in a successful studio and give them "Business 101" experience for about 6 months prior to managing their own studio. Again, out of country people may know how to give the best dance instruction but are clueless on how to run a business, make a profit.

    While I do agree for a business minded person this is not a good solution as the interest rates are steep, franchise fees huge.... But it does have value... In the end you can sell back the studio to the franchise, which in turn Corp will sell the same unit over and over again....

    It is a model that works for corporate because the sell the same product multiple times, and for the owner with no business background the process will and can educate them to go independent and actually make a living out of owning a studio....
     
  14. MaggieMoves

    MaggieMoves Well-Known Member

    All points well put. The increase in liquidity because of a corporate backing itself might be worth it.
     
    Dancing Irishman likes this.
  15. Dancing Irishman

    Dancing Irishman Well-Known Member

    I'd say the business training would be helpful not just for an immigrant (who may still be learning how business works specifically in the US) but for anyone who lacks training on running a business (practical or formal).

    ETA: also, you get to benefit from ads that corporate may run for the franchise more generally. Plus some amount of SEO for your studio website. And generally having a website that doesn't look like a relic from the Bush presidency.
     
    Last edited: Jun 8, 2016
    RiseNFall and Larinda McRaven like this.
  16. danceronice

    danceronice Well-Known Member

    Having worked with franchises in the restaurant business, if you don't have prior experience in an industry, a well-established franchise is very much worth it. With restaurants, most where people decide "hey, owning a restaurant would be great, I like food!" and open an independent one, fail hard because there's a lot to know. With a franchise situation, you often have training, resources, and a knowledge base you'd otherwise need to work bottom-up in an industry to acquire.
     
    RiseNFall likes this.
  17. jump'n'jive

    jump'n'jive Well-Known Member

    Could you send one of this magical fairy's my way? I would love to sell mine lol
     
  18. RiseNFall

    RiseNFall Well-Known Member

    I think it's a problem selling a studio when the owner is a big part of the business and I get the feeling that you are! The current owners of the studio where I dance bought it...oh...almost three years ago, but they were both working there before that and one of them had already taken over as the studio manager.
     
  19. twnkltoz

    twnkltoz Well-Known Member

    Talk to the OP! ;)
     
  20. 3wishes

    3wishes Well-Known Member

    And further, for those considering the "business owner" model, because free consult information is available from the Small Business Administration - SCORE unit. These are real world business mentors, be it franchises (notwithstanding dance studios but businesses in general) or otherwise. Sorry, not to hi jack the thread, but the SCORE unit really has incredible people that can provide an outsider, non-bias, viewpoint as well, no charge (at least it was when I was a part of it).
     

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