Furla USA

Below are some of the most frequently asked questions
of prospective franchisees. It is important to read this list
carefully before filling out a franchisee questionnaire. The
list of abbreviated questions and statements below apply to
only our network in North, Central and South America and
to the Caribbean, and are also subject to our complete terms
and conditions, as contained in our most recent Uniform
Franchise Offering Circular (UFOC).

FURLA is an internationally recognized brand with over 200
shops and corners around the world. If you desire information
to open a FURLA shop outside of our specific geographic
areas outlined above, please visit Furla.com.

For practical purposes, Furla Licensing (USA), Inc., the firm
with exclusive Furla franchising and licensing rights in the
Western Hemisphere, will be referred to as "Furla".

The following issues are extracts from our Franchise
Agreement (FA) and are edited for presentation purposes
on this web site. All of these issues are subject to the
full terms of our FA.

1. What do I need to open a Furla franchise?

» An affinity and familiarity with, the Furla brand and product, so that you are able to demonstrate a shared enthusiasm for the Furla product to your customers.
» An entrepreneurial spirit.
» An interest and ability to own and operate your own business within an established model.
» The time and capabilites to open, and ultimately nurture and grow, a new retail location.
» The ability to demonstrate a liquid net worth in excess of $750,000 in the form of a certified net worth statement.

2. How much is the initial Furla franchising fee?

» The initial franchise fee is $25,000 for a franchisee's first Furla mono-brand shop. The initial franchise fee is $15,000 for a franchisee's first Furla "corner" or "shop-in-shop location".

3. What are the royalty fees?

» Year 1 pays 0 % royalty on net sales.
» Year 2 pays 1.0 % royalty on net sales.
» Year 3 pays 1.5 % royalty on net sales.
» Year 4 and forward pays 2 % royalty on sales.

4. What support can I get for my fees?

» Furla is an internationally recognized brand of upscale, made in Italy, leather goods and accessories (handbags, shoes, belts, small leather goods, jewelry, watches, sunglasses and scarves).
» We provide a worldwide network of Furla shops.
» We provide comprehensive data and information about your location selection regarding demographic and psycho-graphic profiles and buying trends of the consumer in the trade area where you propose to open a shop.
» We provide guidance governing the suggested standards and quantities of certain products, services or equipment you procure from us. We will sell the Furla products to you.
» We sell any printed paper products bearing the proprietary marks and other non-proprietary items bearing the proprietary marks.
» We will provide you with a layout for the interior of a typical Furla shop and a set of typical preliminary store manual and construction plans and specifications for furniture, fixtures, lighting, equipment and/or decor.
» We may from time to time conduct an annual conference, convention or training sessions.
» We shall provide on-site training and assistance concerning the selling, merchandising, displaying and/or marketing of the Furla products immediately prior to and following the commencement of operations of the shop. You may request additional onsite training and/or assistance at any time, so long as such requests are communicated in accordance with those guidelines specified in our manual or otherwise.
» We will make available through internet/intranet web site a copy of our confidential Franchise Operating Manual and all of its component manuals, written bulletins, facsimiles or other written notices to help more effectively operate and administer a shop.
» We have, for North American shops, a comprehensive national advertising program.
» We have, for all shops an integrated POS (Point-of-Sale) software program for sales, customer service, marketing, ordering, inventory control and management reporting.

5. What are the invoice terms on orders?

» First year invoice terms are 90 days ex-Italy.
» Second year and forward are 60 days ex-Italy.

6. What about marketing fees?

» USA/Canada Franchisees pay 1% National Advertising & Marketing fee beginning in the second year of the shop's operation. This fee helps contribute to national advertising campaigns in upscale publications such as Vogue, Harper's Bazaar, Women's Wear Daily, Fashion of the Times, In Style, and many other upscale national and regional publications.

7. What are the duty arrangements?

» Franchisee buys Furla products duty paid FOB port of entry in USA and Canada.
» Central and South America franchisees buy Furla products ex-Italy (they pay all costs from Furla warehouse or suppliers distribution center to their shop).

8. Is there an Initial Purchase Mark Up Margin?

» Currently, the USA and Canada franchisee Initial Purchase Mark Up margin is set at 2.8 (64.3%).
» Currently, the Central and South America franchisee IPMU is margin set at 3.03 (67.0%).

9. What if I cannot sell all of my merchandise?

» We work very hard with all shops to help select the right styles and quantities to adequately serve their trade areas. However, there may occasionally be residual inventory at the end of a season. In that event, Furla offers the following programs:
» New shops may return, at their full cost price paid to Furla, 50% of the Furla handbags and small leather goods (SLG) units remaining from the prior seasons fashion collection inventory for their first two selling seasons (first year’s operation) or Furla will issue a 30% merchandise credit for the entire amount of residual fashion collection of handbags and SLG, at Furla's sole option.
» Second year of shops' operation and forward, Furla will buy back 50% of franchisees' prior season’s residual fashion collection handbags and SLG at a 30% reduction from the franchisees original buying price from Furla.

10. Are there any special incentives for new franchisees?

» In addition to the first year's special 90-day invoice payment terms, the first year's royalty fees are waived and then significantly reduced for years two and three. We will waive the first year's advertising fees and a guaranteed opening inventory merchandise buy-back program. We also offer new shops the following "merchandise credit rebate" program:
» All new full-line Furla shops will receive a $50,000 merchandise credit (a form of Furla construction allowance) towards second year purchases.
» All new Furla corners or shop-in-shops will receive a $20,000 merchandise credit (a form of Furla construction allowance) towards second year purchases.

11. What about exclusive territories?

» Each Furla franchisee and licensee will have an exclusive territory, predicated upon the natural trade area surrounding their retail location. Furla will not open any corporate store nor sell any Furla franchise or license within your exclusive territory during the time of your agreement.

12. What is the average size of a shop?

» 800-1200 square feet.

13. How do I choose a location for my Furla store?

» Because we consider you the resident expert in your particular trade area, we expect you to choose your own location. However, we maintain the right to approve or disapprove any location based on careful comparison of demographic studies provided by you and performed by Furla.

14. How long will a franchise last?

» 7-10 years predicated on the underlying retail shop lease. There is also an automatic renewal term of equal length provided lease can be renewed and subject to conditions of the Franchise Agreement (FA). The shop location may be moved at the end of the first term, also subject to the terms of the FA.

15. What is the total investment required?

» There is a $25,000 initial franchise fee. We estimate that the cost of the opening inventory of Furla products, that you must purchase from us before your franchised shop opens, will range from $75,000 to $125,000, depending on the season. The estimated total initial investment required is from $284,000 to $480,000 (including the opening inventory but excluding real estate purchases).

16. Can I sell my franchise?

» Yes, the FA is transferrable, subject to the conditions in the FA.

17. Can I move my shop?

» Yes. Predicated on the economic realities of a trade area a shop may be moved, subject to the terms of the FA.

18. What guarantees does Furla require?

» We require a stand-by letter of credit in the initial amount of $45,000 as a form of security for all new shops, subject to our delivery terms and conditions and a personal guaranty of the franchisee.

19. Where do we go from here?

» If you feel you fit all of the requirements and parameters for owning a Furla franchise, please complete our questionnaire. After we receive and review your questionnaire we will get back with you to discuss the potential of opening a Furla franchise. The above statements briefly detail some of our current terms and conditions and are subject to be changed, modified or amended from time to time by Furla as business and economic conditions change.

This advertisement is not an offering. An offering can only he made by a prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. There may be laws in your state with which we have to comply before we sell you a franchise. You should consult with your state government if you are not familiar with whether or not your state has such laws. We will be in compliance with these laws before we sell you a franchise. No offer is being made through this website. Should you provide us with information through this site or in any other way, it does not impose on us any obligation to make an offer of a franchise to you. Nothing in this site constitutes or is intended by us as an offer to you.

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