8/4/2022 – Money Under The Mattress (Franchise)

FRANCHISES OF THE WEEK

1) Verlo

Fast Facts  

Background

  • Founded in 1989, franchising since 2011
  • Based in Wisconsin; 32+ locations open
  • A mattress store with a model that cuts out the middleman

Fees + Investment

  • Royalty: 5%
  • Brand Fund: 1% 
  • Franchise Fee: $50,000 
  • Initial Investment: $360,438 – $424,655

Financial Performance

  • The below table contains historical financial data of 10 single store franchise operators 

The Wolf’s Take 🍟

I wasn’t expecting to ever see a mattress franchise out there, but here we are!

And judging from the numbers…this looks like a great business! $223K in EBITDA from a ~$425K investment is extremely high across any brick & mortar franchise. 

Verlo’s model (according to their website) combines building personalized mattresses locally and selling them directly to the customer – cutting out any middleman markup.

My biggest question is how much would the on-going capex expenses be to run a store (can’t imagine keeping stock of dozens of mattresses is cheap).

But regardless, this is a unique franchise opportunity that shows great unit economics! 

Resources

2) Mici Handcrafted Italian

Fast Facts  

Background

  • Founded in 2004, franchising since 2020
  • Based in Colorado; 7+ locations open at the start of 2022
  • A fast casual and delivery Italian restaurant 

Fees + Investment

  • Royalty: 6%
  • Brand Fund: 2%
  • Franchise Fee: $45,000
  • Initial Investment: $244,205 – $586,605

Financial Performance

  • The below financial data is from 7 affiliate owned locations open for the full calendar year 2021

The Wolf’s Take 🍟

Mici is putting up some ridiculous numbers for a food franchise of this investment level. It’s an interesting concept that is attempting to combine quality Italian food (artisan pizza’s, pasta, etc.) in a QSR format.

Simply put, any restaurant that is showing the potential for $300K in EBITDA is worth looking into – Mici is doing that with an investment that’s below $600K.

Resources


FROM THE POD

Mike Kelley – Sylvan Learning

My conversation with Mike was jam packed with discussion about:

  1. Owning and selling a service franchise
  2. Growing to 10 locations of Sylvan Learning 

And also…why he decided NOT to move forward with Chick-Fil-A after an 18 month application process. Take a listen to the episode here!

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