FDD Talk 2016: The Painting with a Twist Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2016 post, you’ll learn the following:

• Section I – Background information on the Painting with a Twist franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Painting with a Twist franchise, based on Item 7 of the company’s 2016 FDD

• Section III – Presentation and analysis of Painting with a Twist’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:

• 2015 average, median, high, and low gross revenue for the top third, middle third, bottom third, and all 117 Painting with a Twist franchisees that (i) were open during the entire Measurement Period; (ii) met their required minimum local advertising spend; (iii) provided the franchisor with the required profit and loss information containing the data to be included in Item 19; (iv) were not in default of, or non-compliant with, their Franchise Agreement as of December 31, 2015; and (v) did not transfer ownership of the Studio during the Measurement Period

• 2015 average artist pay, operating supplies, annual advertising, charitable contribution, and rent for the 117 Painting with a Twist franchisees in the sample

• percentage of customers using the preferred loyalty program, average annual return trips for customers visiting a studio more than once, and average days between visits for the 228 Painting with a Twist studios operating as of April 14, 2016

• average percentage of public events, average percentage of private events, and average gross sales earned prior to opening for the 199 Painting with a Twist franchisees who opened after January 1, 2010 and reported gross sales earned prior to opening

Section I – Background Information

The story of how Painting with a Twist got its start is one worth re-telling because it really helps you understand what this business is all about. When Hurricane Katrina struck in 2005, Renee Malone and Cathy Deano had a desire to do something significant in helping New Orleans neighborhoods get back on their feet, but everyone was so emotionally wrecked and stressed out it was hard to know what to do. That’s when it hit them – they needed to help people relax and remember what having a good time is like.

For those who haven’t discovered it yet, painting is one of the most relaxing, de-stressing things you can do, as long as you’re not all hung-up on your own perceived lack of artistic ability. That’s what gets in the way for most people – they think they aren’t and can’t be artists. The solution? Get some wine into their systems to loosen up those inhibitions.

Turns out it works like a charm and the pair realized they were onto something big. They started out as Corks-N-Canvas back in 2007 and in 2009 changed the name to Painting with a Twist and started franchising the concept in earnest. The chain now has more than 276 locations throughout the nation.

Here’s how Painting with a Twist keeps good feelings flowing for its customers:

Extending Painting with a Purpose

The chain has always had a focus on using its painting classes to raise money for local causes, which it does through monthly events earmarked for that purpose. Now it has taken its “painting with a purpose” concept to the next level by establishing its own non-profit organization: Painting with a Purpose Corporate.

As funds flow into the foundation from select Painting with a Purpose classes, grants will be made to artists who make a real difference in people’s lives and communities.

No More Starving Artists

Everyone knows that it’s tough to make a living as an artist, and Painting with Twist is happy to help out. It has a catalog of well over 3,000 “starter images” it uses in its classes, each of which was produced by a real artist. And these real artists also get hired to be the chain’s class instructors. It’s a win-win for artists!

Serving a Diverse Market

Not everyone is interested in drinking wine while painting, so the chain has come up with all kinds of different classes that serve a wide range of customer needs.

There are classes where you drink coffee instead of wine, classes focused on specifically painting your own pet, classes appropriate for corporate retreats to build teamwork skills, classes for families and children, classes for date nights, parties, and much more.

A Big Milestone

Sarasota resident Sharon Schwalm, a regular customer at Painting with a Twist, had no idea until she was informed that she was the chain’s five millionth customer. She was awarded a year’s worth of free classes at her local studio. Five million customers in just seven years is pretty amazing for this kind of business.

Section II – Estimated Costs

• Please click here for detailed estimates of Painting with a Twist franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis