🍟 6/9/2022 – Low Investments, Higher Returns
FRANCHISES OF THE WEEK
1) LIME Painting
- Founded in 204, franchising since 2018
- Based in Colorado; 25+ locations at the start of 2022
- Offers Residential and commercial painting, coatings, and surface restoration
Fees + Investment
- Royalty: 7%
- Brand Fund: 0% now, could be adjusted up to 3% in the future
- Franchise Fee: $60,000
- Initial Investment: $124,700 – $162,375
- The below tables includes data from 2 affiliate locations and 5 franchise locations
The Wolf’s Take
LIME Painting looks to be what I’d expect in a quality home-service franchise:
- Scalable sub-contracting model
- Low investment relative to brick and mortar
- High ROI / EBITDA relative to the investment
- Tech-driven operating system to more easily manage the business
Home-services businesses have a lower ceiling than say, the endless possibilities of multi-unit expansion, but $150K per year can be a great starter business (or even your only business depending on your financial goals)!
If you’re in the market for a home-service business, check out LIME!
2) Strickland Brothers 10 Minute Oil Change
- Founded in 2016, franchising since 2019
- Based in North Carolina; 81 locations open at the start of 2022 (60 company owned, 21 franchisee owned
- Provides oil-change services
Fees + Investment
- Royalty: 6%
- Brand Fund: 2%
- Franchise Fee: $54,900
- Initial Investment: $217,900 – $354,900
- The first table below represents performance from 60 affiliate locations in 2021
- The 2nd table represents 1 franchisee’s performance in 2021 – this franchisee opened in October 2020, is located in Aurora, CO, and occupies 1,685 square feet and has 3 bays
The Wolf’s Take
The average affiliate location returned ~$182,000 to the bottom line, while the 1 franchisee disclosed returned ~$153,000.
That’s a solid return considering the investment range tops out at $355K. My big question for oil change businesses recently has been:
Should You Be Worried About Electric Vehicles?
EV’s of course don’t need oil changes, and Tesla’s success has sparked many (possibly all?) automakers to produce their own EV.
I recently spoke to a 29 unit Midas franchisee and asked him this question, and the general response was this:
The infrastructure needed to truly support hundreds of millions of EV’s in America is a massive undertaking. It’s not just about building charging stations, but also begs the question of the US power grid and how much charging it can actually support at one time.
Given that EV’s are currently just under 1% of the American auto-market, EV’s have a lonnggg way (a decade +) to go before oil changers need to start worrying.
With that said, checkout Strickland Brothers if you’re looking for a scalable auto franchise!
Disclaimer: This Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on this site constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.
All Content in this email is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the email constitutes professional and/or financial advice, nor does any information in the email constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content in this email before making any decisions based on such information or other Content.