🍟 9/22/2022 – The Most Absurd Franchise ROI I’ve Ever Seen
FRANCHISES OF THE WEEK
- Founded in 2019, franchising since 2020
- Based in Nevada; 2+ locations open as of March 2022
- Creating the world’s biggest bounce house parks, both outdoors and indoors
Fees + Investment
- Royalty: 8%
- Brand Fund: none listed
- Franchise Fee: $25,000
- Initial Investment: $434,944 – $682,405
- The below tables reflect performance from the 2 affiliate outlets in 2021
The Wolf’s Take 🍟
I’m not going to beat around the bush: I’ve looked at thousands of franchise disclosure documents during my time in franchising and writing this newsletter, but I have NEVER seen any franchise with those numbers. Let’s break it down:
It’s only based on 2 affiliate locations, but regardless, both P&L’s are OFF THE CHARTS.
The California location did $785,000 in NET INCOME in just 22 weeks?! I’m not lying when I say that I stared at those numbers for 5 minutes to make sure I wasn’t misreading anything.
Meanwhile the Arizona location did $314,000 in net income in just 12 weeks? Considering the investment to build tops out at $682K, these are just insane stats.
WTF is a Funbox?!
Channeling my inner child here, but it’s basically a magical land that is 1 giant bounce house. They can be outdoors or indoors – with indoor locations being located in malls.
Check out this recent drone video they put on instagram to show their indoor location – the place looks SICK! Oh and not to mention, they have a casual 76,000+ instagram followers!
When you think about it, the numbers may make sense. The only COGS are buying the bounce houses, but assuming they can last a while before breaking (popping..?), then the margins should (and evidently are) be amazing.
One Last Thing
As for the 12 week – 22 week cycles, I’m not sure why their financials are reported that way. Perhaps they rent out spaces in malls or plots of land (for the outdoor locations) for 3-6 month time frames?
Regardless, they’re clearly driving a ton of customers to these bounce house parks, and it’s not hard to see why.
If I was still a kid, I’d be dying to go to a Funbox Who am I kidding, this would be fun for anyone!
Check them out below!
2) Big Frog
- Founded in 2007, franchising since 2008
- Based in Florida; 78+ locations open at the start of 2022
- A retail store providing custom garments and clothing
Fees + Investment
- Royalty: 6%
- Brand Fund: 1.5%
- Franchise Fee: $39,500
- Initial Investment: $192,434 – 267,934
- The below table is based on performance data in 2021, 2020, and 2019
- In 2021 they had 78 franchised stores, in 2020 they had 83 franchised stores, and in 2019 they had 86 franchised stores
The Wolf’s Take 🍟
This was an interesting franchise to find – they do custom t-shirts, professional uniforms, fleeces, sweatshirts, and more for individuals as well as businesses.
With an investment midpoint of $230K, the $436K in average revenue per location in 2021 is solid. While I don’t know the margins as they weren’t shared, it could be a decent EBITDA margin given it’s all custom designed clothing that likely commands a higher price.
A question I’d be curious to know the answer to is why did the units decline from 2019 – 2021? There of course could be issues from covid, or perhaps just poor performing locations got weeded out of the system (as franchises get bigger, this occasionally happens). Considering the average revenue did increase in the face of the unit decline, that’d be my guess as to what happened.
Check out Big Frog via the links below!
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