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

• Section I – Background information on the Tide Dry Cleaners franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Tide Dry Cleaners franchise, based on Item 7 of the company’s 2017 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Tide Dry Cleaners franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Tide Dry Cleaners’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average gross sales, discounts, net sales, cost of sales, labor cost and taxes, marketing, utilities, repair and maintenance, credit card fees, miscellaneous expenses, total controllable expense, net controllable income, royalty, and net controllable income less royalty for the 18 Tide Dry Cleaners Outlets that were open and operating for over 1 year as of June 30, 2017, and operated as Plant Stores that did not support 1 or more Drop Stores or Non-Traditional Stores (collectively, the “Plant Store Covered Outlets”); and the 7 Tide Dry Cleaners Outlets that were open and operating for over 1 year as of June 30, 2017, and operated as Drop Stores (the “Drop Store Covered Outlets”) (separately stated)

• 2016 average, median, high, and low monthly net sales, net sales per customer visit, price per garment, garments per trip, monthly customer visits, and monthly discount rate for the 18 Tide Dry Cleaners Plant Store Covered Outlets, the 11 Servicing Plant Stores, and the 7 Tide Dry Cleaners Drop Store Covered Outlets (separately stated)

Section I – Background Information

11 Things You Need to Know About the Tide Dry Cleaners Franchise

Opens 50th Location

1.  In early April 2017, Tide Dry Cleaners celebrated a milestone for the franchise with the opening of its 50th location (in Columbus, Ohio). Since the brand started franchising in 2009, it has grown rapidly and is currently the 4th largest dry cleaner in the the United States by number of locations. It is also one of the fastest-growing dry cleaning franchises, which is remarkable since the dry cleaning industry is a historically low-growth sector.

2.  Thomas Flaherty, president and CEO of Agile Pursuits Franchising, Inc. (Tide Dry Cleaners’ parent company), said, “We are thrilled to see Tide Dry Cleaners’ substantial growth in Columbus, and throughout the U.S. The expansion in this market is truly unprecedented. With 50 locations across the country, Tide Dry Cleaners continues to proudly serve its guests as one of the industry’s most-trusted dry cleaning services.”

Poised for Rapid National Growth

3.  After Tide Dry Cleaners opened its 50th location in early 2017, the brand talked about how it is now one of the fastest-growing dry cleaning franchises in the U.S. Thomas Flaherty, president and CEO of Agile Pursuits Franchising, Inc., the franchisor of Tide Dry Cleaners, discussed how the franchise started. He said that the brand launched its pilot store in 2008 in Kansas City because it needed to test the concept outside of Tide’s home in Cincinnati, where a large number of Procter & Gamble and Tide brand enthusiasts already exist.

4.  Flaherty said that Kansas City was a “quintessential suburban market” that Agile Pursuits was looking for in the U.S. He added, “(Kansas City is) one of the best performing, if not the best performing, markets that we have in the U.S.”

5.  Going forward, Agile Pursuits isn’t pushing for a certain number of stores to be added in a given year, but is targeting the right locations by focusing on visibility and ease of access.

6.  Flaherty also explained how a dry cleaning service was a natural extension for what Tide already offers. He said, “This was a good way to extend (the Tide) brand very naturally by putting a face on it. Our franchisees are great representatives of the Tide brand at the local level. They’re wearing a Tide logo, and they have a smiling face, and they’re interacting with guests like never before. So really getting outside of that consumer packaged-goods environment into that service-based industry was a good segue for us and a way to really extend that brand. We say we’ve been in your home for years, and now we have a home of our own so to speak.”

7.  The stores also keep the Tide brand relevant and serve as a space to showcase other Procter & Gamble products. The dry-cleaning locations offer free samples and coupons for P&G products and also feature a rewards program that not only allows repeat customers to earn free dry cleaning, but also free products.

8.  In addition to solidifying the Tide and Procter & Gamble brands, Tide Dry Cleaners stores address several shortcomings of the dry-cleaning industry. For example, many dry cleaners aren’t air conditioned and are not open seven days a week. Most dry cleaners also use perchloroethylene as a solvent, which has been linked to negative health effects. Tide Dry Cleaners locations use GreenEarth technology, have well-maintained and air conditioned locations, and have 24/7 kiosks or lockers where customers can pick up or drop off clothes.

Company History

9.  Tide Dry Cleaners was founded in 2008 by Agile Pursuits Franchising, Inc., a wholly-owned subsidiary of the Procter & Gamble company, which owns the Tide brand. Tide has been a household brand for over 70 years and wanted to create a professional dry cleaning service. Tide Dry Cleaners offers high quality and convenient dry cleaning services, such as its drive-thru valet and 24-hour services.

10.  Agile Pursuits Franchising, Inc. started franchising Tide Dry Cleaners in 2009. Since then, the franchise has successfully grown across the United States and today, there are over 60 locations in the country.

Entrepreneur’s Franchise 500

11.  Tide Dry Cleaners has appeared on Entrepreneur’s annual Franchise 500 list twice since the brand started franchising in 2009. It ranked No. 251 in 2018 and No. 441 in 2017.

Section II – Estimated Costs

• Please click here for detailed estimates of Tide Dry Cleaners franchise costs, based on Item 7 of the company’s 2017 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Tide Dry Cleaners’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

Part 1 – Financial Performance Representation for All Plant Store Covered Outlets Open At Least 1 Year

• As of June 30, 2017, there were 56 Tide Dry Cleaners (TDC) Outlets operating in the United States.

• The franchisor excluded from this first financial performance representation the: (i) 15 TDC Outlets that had not operated for a full year as of June 30, 2017; (ii) the 12 TDC Outlets that operated as Drop Stores or Non-Traditional Stores; and (iii) the 11 TDC Outlets that operated as Plant Stores, which serviced 1 or more other Drop Stores or Non-Traditional Stores (the “Servicing Plant Stores”).

• The franchisor excluded the Servicing Plant Stores because they incur additional costs of sales, and labor and utility expenses in servicing their associated Drop Stores and Non-Traditional Stores, and these additional expenses (and the difficulty in allocating the expenses between the Servicing Plant Stores and the Drop Stores and/or Non-Traditional Stores) alter the Servicing Plant Stores’ stand-alone results.

• The first financial performance representation reflects the average sales, certain expenses, and net controllable income for the period from July 1, 2016 through June 30, 2017 (the “Covered Period”) for the 18 TDC Outlets that were open and operating for over 1 year as of June 30, 2017, and operated as Plant Stores that did not support 1 or more Drop Stores or Non-Traditional Stores (collectively, the “Plant Store Covered Outlets”).

• Agile (the franchisor’s affiliate) owns and operates 2 of the Plant Store Covered Outlets and franchisees own and operate the other 16.

• The Plant Store Covered Outlets use the prototypical business format, facilities, and operating procedures for a Plant Store that form the basis of the Tide Dry Cleaners franchise opportunity that the franchisor offers in the company’s 2017 FDD.

• All Plant Store Covered Outlets operate in suburban locations within greater metropolitan areas of U.S. cities, and most from free-standing premises.

• The Plant Store Covered Outlets operated for an average of 3 years, 8 months.

Fiscal Year 2016/2017