Young Rembrandts Franchise Cost, Owners & Financials (2024)
Based on the Young Rembrandts Franchise Disclosure Document (FDD), we have answered the top 5 most common questions for prospective franchisees.
As a Young Rembrandts franchisee, you are an independent business owner offering to sell and provide drawing classes, including instruction in artistic techniques, primarily to elementary and preschool children in in-person settings in private schools, public elementary schools, pre-schools, day care centers, Montessori schools, park districts, libraries and community centers and via live Zoom cloud meetings.
How much is a Young Rembrandts franchise?
The Young Rembrandts franchise cost ranges from $44,905 to $52,055. According to the Young Rembrandts 2021 Franchise Disclosure Document (FDD).
The initial initial franchise fee for Young Rembrandts is $39,500.
Review the estimated initial expenses to start a Young Rembrandts franchise below:
| Type of Expenditure | Amount |
|---|---|
| Initial Franchise Fee | $39,500 |
| Office Equipment and Computer System | $1,725 to $2,845 |
| Travel and Living Expenses While Training | $700 to $1,500 |
| Miscellaneous Opening Cost | $300 to $1,500 |
| Initial Inventory of Art and Teaching Supplies | $900 to $1,160 |
| Initial Inventory of Marketing and Promotional Materials | $550 |
| Liability Insurance | $530 to $1,800 |
| Additional Funds First 3 Months of Operation | $700 to $3,200 |
| Totals | $44,905 to $52,055 |
Young Rembrandts franchise cost
- Royalty- 10% on first $75,000 in Gross Revenues and 8% on Gross Revenues in excess of $75,000 each year from September 1 through August 31. For the Gold Franchise, you must pay a minimum monthly royalty of $250 for 1st and 2nd year, $400 for 3rd and 4th year, and $500 during years 5 through 10 and all renewal terms. For the Silver Franchise, you must pay a minimum monthly royalty of $250 for 1st and 2nd year, $300 for 3rd and 4th year and $350 during years 5 through 10 and all renewal terms.
- National Marketing Fee- Up to 2% of Gross Revenues, currently 1% with a minimumof $35 per month.
- Technology Fee- Currently $250 per year
- Transfer Fee plus Broker Fees- $10,000 plus fee charged by broker, if applicable
How much does the franchise make?
Young Rembrandts franchise does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets.
To better understand the financial performance, you may reach out directly to franchisees of Young Rembrandts. A list of our franchisees as of December 31, 2020 is attached as Exhibit E in the 2021 FDD for Young Rembrandts.
Who are the owners of Young Rembrandts franchise?
Young Rembrandts Franchise, Inc. is an Illinois corporation incorporated on December 2, 1997, with principal office at 23 North Union Street, Elgin, Illinois 60123.
In 1988, Ms. Bette Fetter, their President and Founder, began a business known as Young Rembrandts, which was incorporated as Young Rembrandts, Inc. in Illinois on September 2, 1994. Ms. Fetter designed their business concept, format, and method of operations.
From March 9, 1988 to September 2009, Bette Fetter and later Young Rembrandts, Inc. offered and performed in Illinois and Wisconsin the identical services to be offered to the public.
It does not conduct any business activities other than licensing.
President/ Founder/Director: Bette Fetter
Ms. Fetter has served as our President since October 2006 and as our Secretary and a Director since our inception in December 1997. She has also served as President and Director of Young Rembrandts, Inc. from March 9, 1988 to present. From September 2008 to 2018, she was a Member of Art Renaissance LLC of Elgin, Illinois. From April 2012 to present, she has been a Director of Brilliant Arts, Inc., a not for profit corporation, based in Elgin, Illinois. December 2017 to the present, she has been President of Fetterville, Inc. in Elgin, Illinois which owns and operates a Young Rembrandts business in Illinois
Director of Franchise Development: Kim Swanson
Ms. Swanson has been employed by us since January 2002, most recently as our Director of Franchise Development and previously as Director of Franchise Operations, Franchise Development and Director of Training and Support. Ms. Swanson was employed by Young Rembrandts, Inc. from August 1998 to December 2001, initially as an Area Coordinator/Teacher and then as Area Manager/Office Manager. She has been a Certified Franchise Executive since February 2007.
Director of Operations and Director of Marketing: Elizabeth Wahl
Ms. Wahl has been our Director of Marketing since September 2011 and our Director of Operations since December 2019. From August 2010 to September 2011, she served as our Franchise Marketing Coordinator, and from June 2008 to August 2010, she served as a Marketing Assistant for them.
Technology Manager: Camille Wilson
Ms. Wilson has been our Technology Manager since November 2019. From July 2018 to June 2019, she was Registrar for Community High School District 155, Crystal Lake, Illinois. From October 2006 to February 2018, she was Office and Payroll Manager for Tessler Construction Company, Inc. in Bull Valley, Illinois.
Franchise Business Coach: Kathleen M. Briscoe-Thompson
Ms. Briscoe-Thompson has been our Franchise Business Coach since October 2015. She also has been Admin/Payroll for Cross of Christ Lutheran Church Music Academy in Broomfield, Colorado since May 2019 and Substitute Teacher for Colorful Kids, LLC DBA Young Rembrandts in Westminster, Colorado since February 2017. From November 2010 to January 2017, she owned and operated the Young
Rembrandts – NW Denver & Boulder franchise in Colorado until she transferred the franchise to another franchisee.
Franchise Business Coach: Christy McDonald Roberson
Ms. Roberson has been our Franchise Business Coach since September 2020. From November 2008 to August 2020, she was the Managing Director of the Young Rembrandts – South Birmingham franchise in Birmingham, Alabama.
How much do the owners of Young Rembrandts franchise make?
In 2020, Young Rembrandts Franchise collected $291,000 in franchise fees and $560,000 in Royalty Income. The Franchisor only made $59,000, a significant drop from 2019 of $209,000.
Statement of Income
| Years ended December 31, 2020 and 2019 | ||
|---|---|---|
| 2020 | 2019 | |
| Income: | ||
| Franchise fee income | $291,364 | $376,253 |
| Royalty income | $560,488 | $1,025,270 |
| Other program income | $71,182 | $131,271 |
| Interest income | $4,741 | $6,674 |
| NMF revenue | $27,343 | $122,899 |
| Total Income | $955,118 | $1,662,367 |
| Operating Expenses: | ||
| Commissions and referral fees | $26,600 | $1,000 |
| Payroll expenses | ||
| Wage and salaries | $472,158 | $656,194 |
| Payroll taxes | $39,597 | $49,518 |
| Employee benefits | $45,190 | $28,895 |
| Payroll processing | $562 | $1,101 |
| Training and conference – staff | $11,203 | $65,140 |
| Consulting fees | $81,227 | $81,784 |
| Insurance | $6,767 | $6,112 |
| Occupancy | $72,703 | $79,016 |
| Marketing | ||
| Public relations and marketing | $46,738 | $79,043 |
| Website | $14,783 | $67,647 |
| Gifts and promotional | $1,145 | $6,609 |
| Franchisee | ||
| Supplies and recognition | $2,135 | $2,786 |
| Training | $820 | $2,474 |
| Compliance technology | $33,340 | $35,061 |
| Legal and registration fees | $27,601 | $39,226 |
| Licensing fees | $24,000 | $24,000 |
| Computer expense | $54,824 | $44,438 |
| Interest expense | $20,312 | $27,152 |
| Communications | $7,386 | $12,218 |
| Loss on currency exchange | $13,988 | $28,622 |
| Contributions | $7,500 | $15,460 |
| Auto expense | $13,747 | $14,508 |
| Accounting fees | $14,876 | $19,785 |
| Travel | $1,948 | $8,775 |
| Meetings | $288 | $11,972 |
| Office expense | – | $12,706 |
| Copier expense | $2,470 | $4,633 |
| Education materials/fees | $378 | $3,961 |
| Dues and publications | $3,650 | $4,824 |
| Bank services charges | $5,738 | $7,107 |
| Depreciation expense | $2,971 | $4,271 |
| Reproduction | $3,166 | $4,381 |
| Postage and delivery | $1,755 | $1,546 |
| Amortization expense | $1,072 | $1,072 |
| Total Operating Expense | $1,062,638 | $1,453,039 |
| Income from Operations | $(107,520) | $209,328 |
| Other Income | ||
| Payroll Protection Program Grant Revenue | $138,375 | – |
| SBA loan payment | $28,277 | – |
| Total Other Income | 166,652 | – |
| Net Income | $59,132 | $209,328 |
Statement of Cash Flows
| Years ended December 31,2020 and 2019 | ||
|---|---|---|
| 2020 | 2019 | |
| Cash flows from Operation Activities: | ||
| Net Income | $59,132 | $209,328 |
| Non Cash items included in net income: | ||
| Depreciation and amortization | $4,043 | $5,345 |
| SBA loan payments | $(28,277) | – |
| Foreign tax paid | $(3,186) | $(7,204) |
| Changes in: | ||
| Accrued royalty income | $70,122 | $(6,568) |
| Accounts receivable | $14,267 | $(20,262) |
| Franchise fees receivable | – | $10,000 |
| Due from related company | $(5,705) | $16,449 |
| Prepaid expenses and deposits | – | $1,500 |
| Taxes payable | $(39,035) | $41,140 |
| Accounts payable | $31,208 | $(7,880) |
| Accrued commissions | – | $(2,600) |
| Deferred franchise fees | $(164,364) | $(190,753) |
| Due to marketing fund | $(35,980) | $7,846 |
| Net cash used by operating activitieses | $(97,775) | $56,341 |
| Cash Flows from Investing Activities: | ||
| Net cash (used) by investing activities | – | – |
| Cash Flows from financing activities | $ | $ |
| Payments on capital lease | $(1,151) | $(2,055) |
| Payments on line of credit | $(15,681) | $(50,000) |
| Proceeds from line of credit | $94,400 | $40,000 |
| Payments on installment note payable | $(12,859) | $(7,643) |
| Net Cash (used) by financing activities | $64,709 | $(29,698) |
| Net increase (decrease) in Cash and Cash Equivalents | $(33,066) | $26,613 |
| Cash and Cash equivalents: | ||
| Beginning of year | $106,574 | $79,931 |
| End of year | $73,508 | $106,574 |
| Supplementary information: | ||
| Interest received | $4,741 | $6,674 |
| Interest paid | $20,312 | $27,152 |
| Noncash Activity: | ||
| SBA loan payments | $28,277 | – |
Balance Sheets
| December 31, 2020 and 2019 | ||
|---|---|---|
| 2020 | 2019 | |
| Current Assets | ||
| Cash | $73,508 | $106,374 |
| Accrued royalty income | $46,390 | $116,512 |
| Accounts receivable | $12,523 | $26,790 |
| Due from related company | $176,355 | $170,650 |
| Prepaid expenses | $1,400 | $1,400 |
| Total Current Assets | $310,176 | $421,926 |
| Property and equipment net | $5,583 | $8,554 |
| Other Assets | $ | $ |
| Repurchase of franchise territory | $5,000 | $5,000 |
| Software development net of accumulated amortization of $36,347 and $55,476, respectively | $1,250 | $2,322 |
| Due from marketing fund | $18,950 | – |
| Total other assets | $25,200 | $7,322 |
| Total Assets | $340,959 | $437,802 |
Liabilities and Equity
| Current Liabilities | ||
| Accounts payable and accrued expenses | $132,766 | $101,558 |
| Current portion of deferred franchise fees | $222,985 | $261,114 |
| Line of credit debt | $58,240 | $73,922 |
| Marketing Fund | – | $17,030 |
| Taxes payable | $78,084 | $117,100 |
| Current portion of capital lease | – | $1,151 |
| Current portion of long-term debt | $22,585 | $20,259 |
| Total current liabilities | $514,660 | $592,134 |
| Long term liabilities | ||
| Deferred income tax | $1,735 | $1,754 |
| Deferred Franchise fees | $636,272 | $762,507 |
| Long term debt net of current portion | $141,610 | $90,671 |
| $779,617 | $854,932 | |
| Stockholder Equity | ||
| Common stock $1,00 per value authorizes and issued 1,000 shares | $1,000 | $1,000 |
| Retained earnings | $(954,318) | $(1,010,264) |
| Total stakeholders equity | $(953,318) | $(1,009,264) |
| Total liabilities and stakeholders Equity | $340,959 | $437,802 |
