FRANCHISE HEADLINES

Steve Aoki OrangeTheory

The Scoop

Steve Aoki, the DJ whose songs are burned into my memory from spring break in Cabo however many years ago, has been named OrangeTheory’s new “CMO” aka Chief Music Officer.

His first order of business is to produce a soundtrack for a new series of exercise routines called “All Out with Aoki”. 

The Wolf’s Take

The beauty of the franchise model is that it’s an incredible tool for scale. Simply put, franchises can get really big, and when that happens, they can partner with big names and public figures.

This partnership seems like a great fit for the boutique fitness giant, where music clearly plays a major role in the customer experience i.e. during high intensity workouts. 

Celebrity Partnerships

Aoki joins a long list of franchise brand <> celebrity partnerships. Here’s a list of some of my favorites:

• Patrick Mahomes –> opening 30 Whataburger’s
• Megan Thee Stallion –> Popeyes marketing partner
• Lebron James –> major equity stake (~$45M) in Blaze Pizza
• Mark Wahlberg –> owned 33% of F45 at the time of their IPO

When franchises achieve national scale, they can attract the biggest names in the world!

More Headlines

Gong Cha Signs 3 US Deals 
With over 1,670 locations worldwide, the brand is accelerating is US expansion

McDonald’s Pauses Russian Operations 
Closing 850+ Russian stores represents 9% of global revenue

Biggest OrangeTheory Franchisee Launching Sauna Franchise 
Jamie Weeks has the backing of a PE Firm for his brand Sweathouz

FLAGSHIP FRANCHISE

KFC

• Founded: 1930
• Units Open: 25,680
• Investment Range: $1.45M – $2.8M
• Average Revenue per Location: $1,193,701

Did You Know?

In Japan, eating KFC on Christmas day is a tradition. In a country where less than 1% of the population identifies as Christian, the trend started back in the 1970’s when KFC launched it’s highly effective “Kentucky for Christmas” marketing campaign in Japan!

Is there a brand you’re curious to know the financials of? Reply to this email and let me know!

FRANCHISE OF THE DAY

Crushr

Fast Facts

Background

• Founded in 2016, franchising since 2018
• Based in Kentucky; 51 locations open as of 2022
• Provides dumpster crushing services to increase capacity for businesses

Fees + Investment

• Royalty: 8% of gross sales
• Brand Fund: 1% of gross sales
• Franchise Fee: $49,500
• Initial investment: $111,675 – $318,825

Financial Performance

• The below information contains performance data from the company owned outlet for the full year 2019 and 2020

The Wolf’s Take

I covered a similar franchise called Smash My Trash in the Week 12 edition. Given the popularity of that business (it has sold hundreds of territories in the last year), I wanted to highlight a competitor with more territory availability.

What is Crushr?

Just like Smash My Trash, Crushr uses mobile compaction trucks that quite literally crush & compress the contents of dumpsters for businesses.

Crushr is able to increase dumpster capacity by up to 80%, which means businesses have to do less dumpster hauls, has less downtime in-between hauls, and ultimately saves money (the price of a dumpster haul is higher than what dumpster crushers charge).

Outside of financial benefits to the companies that hire dumpster compaction services, it’s an eco-friendly business that reduces roundtrips to landfills, and the amount of diesel fuel consumed in the process.

For franchise owners, it’s ultimately a business that is built around B2B sales, so depending on your background and skillset, that could be a good or bad thing. 

It’s a low overhead and high margin business:

• No brick & mortar building to maintain
• Can hire an employee drive the truck to perform crushes

As the owner, you can drive the truck if you want to, but if you’d prefer a semi-passive ownership than you can hire that portion out. 

Profit potential comes down to how many compactions you can you do in a day – with the selling point to businesses being that they save money in the end by paying for compactions. 

Competitive Landscape

The founder of Crushr, Scott Dennison, has extensive franchise experience that began over 30 years ago when he was a Papa John’s franchisee.

This is typically a positive for a franchise system, because they know what it’s like to work with a franchisor, and also know what is required to exceed as a franchisee. 

My main question, which applies to Smash My Trash as well, is “how big is the junk compressing industry”?

Clearly the mobile compaction truck is an innovative piece of technology that has enabled lucrative service businesses to be built around it.

But with Smash My Trash selling hundreds of territories, Crushr starting to take off, and a few other small competitors popping up, will the market become over-saturated soon, or does it have plenty of room to run? It’s likely still too early to know.

While the business offers high margin and high income potential, before buying a territory I would be digging deep into that question. And of course on the flip-side, if your local market doesn’t have competition yet, it could be a great opportunity to take early market share!

Resources

• Crushr Franchise Website