FDD Talk 2018: Two Men and a Truck Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

• Section I – Background information on the Two Men and a Truck franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Two Men and a Truck franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Two Men and a Truck franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Two Men and a Truck outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of Two Men and a Truck’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• average and median annual gross sales for the years 2013 through 2017 for all franchise operating units operating as of December 31st of each of those years

• average annual gross sales, direct labor – mover wage expenses, moving truck expenses, other moving expenses – damages and supplies, advertising expenses, facility expenses, franchise fees, support staff expenses, other administrative expenses, and total annual expenses for experienced franchise operating units (i.e. those that were in operation as of December 31, 2017 and, at that time, had been in operation for at least five years)

• average and median annual gross sales, direct labor – mover wage expenses, moving truck expenses, other moving expenses – damages and supplies, advertising expenses, facility expenses, franchise fees, support staff expenses, other administrative expenses, and total annual expenses for each of the first four years of operation of new franchise operating units (i.e. those that completed their first 12 months of operation during the years 2013 through 2017 and that were in operation as of December 31, 2017)
  

Section I – Background Information

17 Things You Need to Know About the Two Men and a Truck Franchise

Celebrates 100th Consecutive Month of Growth

1.  In early May 2018, Two Men and a Truck reached 100 consecutive months of growth, with 84 of those months hitting record growth rates. Its year-over-year sales for the first quarter of 2018 resulted in more than 9 percent growth over the first quarter of 2017. Additionally, in April the company achieved the highest sales it’s ever seen in its 33-year history.

2.  Jon Nobis, co-CEO of Two Men and a Truck, said, “We’ve been able to accomplish this success because we set goals that our entire system strives to achieve. Our experience continues to make us stronger and smarter. We work hard to train our teams with top-notch operational practices and provide the best services possible so we can continue our growth and remain the leading moving franchise.”

3.  Two Men and a Truck celebrated another milestone in the first quarter of 2018 after it entered its 43rd state with the opening of its first franchise in Wyoming. The brand has plans to sign 15 more franchise agreements this year, aiming to expand in states with a brand presence, including Virginia, Maryland, New Jersey, and New York, and also in states currently without a territory, including Rhode Island, Vermont, West Virginia, and New Hampshire.

4.  Brig Sorber, co-CEO of Two Men and a Truck, said, “As one of the original ‘two men,’ it’s rewarding to see Two Men and a Truck continue to expand into new states. I don’t think we could have dreamt the company would be where it is today. It shows you that sweat equity and a proven business model set franchisees up for success no matter where they’re located.”

Launches “It’s More Than Moving” Campaign for 6th Annual Career Move Month

5.  At the beginning of March 2018, Two Men and a Truck announced its 6th Annual Career Move Month, which helps the brand’s employees advance their careers. The brand has a long history of helping its team members move forward, with 75 percent of the company’s management staff starting out in entry-level positions and one-third of the company’s franchisees beginning in frontline positions as movers or customer service representatives.

6.  To kick off the 6th Annual Career Move Month, Two Men and a Truck launched the “It’s More Than Moving” campaign to acknowledge that the brand’s movers aren’t just moving boxes. They’re part of a team and play a major role during a customer’s stressful moving process, while also building a career.

7.  Two Men and a Truck said that it has plans to collect 15,000 job applications with the ultimate goal of hiring 1,500 new employees ahead of its busiest moving season of the year during the spring and summer months. The brand has focused its hiring blitz on the “It’s More Than Moving” motto so that job seekers understand that Two Men and a Truck is not simply a job, but a lasting and meaningful career.

8.  Jon Nobis, co-CEO of Two Men and a Truck, said, “Two Men and a Truck has experienced 98 consecutive months of growth, with 82 of those months hitting record growth rates. Because of our ongoing success, we need to proactively look for team members who want to grow with us as we help homeowners and business owners across the U.S. move their lives and businesses forward.”

Builds on National Partnership with Cheeriodicals

9.  In early March 2018, as part of its partnership with Cheeriodicals, a national corporate team building and corporate gifting company, Two Men and a Truck assembled and delivered 300 big green boxes to patients at the Arnold Palmer Hospital for Children.

10.  Hundreds of franchisees, managers, and corporate office staff attending Two Men and a Truck’s annual national meeting worked with representatives from Cheeriodicals to assemble one-of-a-kind children’s gift boxes as a community-focused team-building activity during a “Cheeriodicals Day” event on March 5.

11.  Cheeriodicals are “big green boxes of cheer” made up of age-appropriate magazines and activity books, room decorations, puzzles, stickers, and games for the children to enjoy. Two Men and a Truck delivered the boxes the following day to the hospital.

12.  Although this was the first time that Two Men and a Truck assembled boxes, the brand has been working with Cheeriodicals for the past seven years. The founder of Cheeriodicals, Gary Parisher, had been looking for a way to get the boxes to a hospital in Columbus, Ohio when he drove by a Two Men and a Truck moving truck and noticed the brand’s motto: “Movers Who Care.”

13.  Parisher called the number, explained his situation, and Two Men and a Truck offered to make the delivery for free. Seven years later, Two Men and a Truck locations across the U.S. and Canada have made more than 200 deliveries of over 50,000 boxes to children’s hospitals.

Company History

14.  Two Men and a Truck was started in the early 1980s by Brig Sorber and Jon Sorber in Lansing, Michigan. The Sorber brothers initially used a ’66 Ford pickup truck to help people in the area move and earn some extra money while they were in high school. Their mother, Mary Ellen Sheets, drew their now-famous stick-men logo and advertised their services in the local paper.

15.  After the Sorber brothers left for college, Sheets continued to receive phone calls requesting for their services. Sheets continued to run the business on her own and in 1985, she purchased a 14-foot truck and hired a pair of movers. The truck cost her $350 and was the only capital Sheets has ever invested into the business.

16.  In 1988, Sheets began researching how to franchise her business and she awarded the first franchise the following year to her daughter, Melanie Bergeron. After the company grew to 39 franchises, Sheets asked Bergeron to become company president. The Sorber brothers eventually returned to the company after finishing school and Brig Sorber now serves as co-CEO while Jon Sorber is Executive Vice President. Today, there are over 300 Two Men and a Truck locations in the United States and Canada.

Entrepreneur’s Franchise 500

17.  Two Men and a Truck ranked No. 87 on Entrepreneur’s 2018 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Two Men and a Truck franchise costs, based on Item 7 of the company’s 2018 FDD.

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

• Please click here for detailed information on Two Men and a Truck’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  231
• Outlets at the End of the Year:  248
• Net Change:  +17

2016

• Outlets at the Start of the Year:  248
• Outlets at the End of the Year:  263
• Net Change:  +15

2017

• Outlets at the Start of the Year:  263
• Outlets at the End of the Year:  267
• Net Change:  +4

Company-Owned

2015

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  2
• Net Change:  +1

2016

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2017

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

• The financial performance information provided in this Item 19 is a historical financial performance representation about all of the franchisees existing in the franchise system for the relevant period based upon financial information those franchisees reported to Two Men and a Truck.

Part 1 – Average and Median Annual Gross Sales for All Franchise Operating Units Open as of December 31

• The chart below reflects the average and median annual gross sales for the years 2013 through 2017 for all franchise operating units operating as of December 31st of each of those years. The number of franchise operating units in the group for each of those years is noted in the chart.

• A franchise operating unit is one or more franchises under common ownership that work as a single business unit in the same general geographic region and share personnel and trucks. Two Men and a Truck believes franchise operating units are the best measurement of the total business and represent how franchises actually operate.