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Young Rembrandts Franchise Cost, Owners & Financials (2021)

Written by: Patrick Findaro
Last Updated by Brenda Bagnoli: August 22, 2022
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Young Rembrandts

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.

Contents

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
20202019
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 Income166,652
Net Income$59,132$209,328

Statement of Cash Flows

 Years ended December 31,2020 and 2019
20202019
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
20202019
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
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