In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Storm Guard franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Storm Guard franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Storm Guard franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned Storm Guard outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Storm Guard’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average total income, cost of goods sold, gross profit, total expenses, EBITDA, and EBITDA plus owner compensation for the top 10%, bottom 10%, and all 28 franchised Storm Guard businesses that were open and in operation throughout the entire Reporting Period (November 1, 2017 to October 31, 2018) and provided the financial information requested by Storm Guard and required for inclusion in this Item 19
- 2018 highest, lowest, and median total income, EBITDA, and EBITDA plus owner compensation for the 28 franchised Storm Guard businesses that were open and in operation throughout the entire Reporting Period (November 1, 2017 to October 31, 2018) and provided the financial information requested by Storm Guard and required for inclusion in this Item 19
Section I – Background Information
8 Things You Need to Know About the Storm Guard Roofing and Construction Franchise
Key Business Features
1. According to Storm Guard Roofing and Construction, the brand’s systems and tools are built to help its franchisees grow big businesses. The model can be scaled to the wants and needs of the franchisee. Storm Guard offers robust customer acquisition and retention programs, from telemarketing to direct mail and door-to-door canvassing.
2. Some of Storm Guard’s key business features include:
- Call Center – Storm Guard has a call center to set appointments for franchisees’ sales reps.
- Proprietary Back-Office System – Storm Guard offers a computer software system that will allow the owner to have a bird’s eye view of the entire operation. The software will handle everything from scheduling sales leads to final accounting. Additionally, there are training videos available on the software.
- Weather Detection – Storm Guard utilizes the latest in weather technology software to determine damaged areas and past storms. Armed with this information, franchisees have a significant advantage over local competition.
- Targeted Marketing and Sales Efforts – With Storm Guard’s ability to track historical data on storm activity within the franchisee’s territory, the franchisee can target specific areas. With the ability to know storm data, zip codes affected, and number of homes in zip code, franchisees can market using both traditional and direct sales marketing strategies to leverage revenue opportunity.
- Recruiting Assistance – Storm Guard has a national recruiting firm that specializes in restoration services to assist owners in both their initial staffing and on-going staffing needs.
Predicting Home Improvement and Design Trends for 2019
3. Storm Guard Roofing and Construction’s website has a blog that provides home tips and ideas every month. In early 2019, Storm Guard published its predictions for 2019 home improvement trends, which include the following:
- DIYs are getting younger, not older. According to Storm Guard, in recent years, there was a spike in home improvements for seniors, many of them executed by non-profit organizations or charities who work with older Americans to put in improvements like wheelchair ramps, grab bars, and other advances to make aging in place easier. Now, a recent report by the Home Improvement Research Institute finds that this generation’s do-it-yourself handy-people are more likely to be millennials. This generation, born between 1981 and 1996, did have a major delay in life changes like marriages and home ownership due to a crushing amount of debt. However, they’re now reaching the age where home improvement is not only a possibility, but can also be augmented by a near-permanent access to digital devices like computers, smartphones, and tablets. That creates a generation enabled by technology to make nearly any DIY project a realistic possibility.
- Smart technology in the home is becoming ubiquitous. Besides the voice-enabled digital assistants (Siri, Alexa, and Google among them), homeowners can now start upgrading traditional appliances to smart appliances. These smart appliances are enabled by smart home technology, as well as the aforementioned digital assistants and also, video upgrades. From ovens that can show you step-by-step how to cook a recipe to smart locks and doorbells to network-enabled diagnostics for your television, these changes are likely to be a big trend in home improvement in 2019.
- People want “cleaner” kitchens. Storm Guard says that with the rise of open kitchen concepts, homeowners are looking to declutter this space. The open kitchen trend encourages lots of hidden storage and integrated appliances to make the kitchen feel more streamlined. From sliding doors that hide cooking and sink areas to large islands that encourage meal prep as well as entertaining, Storm Guard expects kitchens to change quite a lot this year.
- Changes in color are incoming. According to Storm Guard, the palettes of home designers and manufacturers change about every six months, but this year promises a few bolder changes. Many decorators and designers are moving away from minimalist and simple colors to more personalized and curated colors that also blend seamlessly with other living spaces in the home, from kitchens to bedrooms to living space. Smart technology will also create changes here, as smart lighting from companies like Philips gives homeowners more options for mood lighting, entertainment, and more.
4. Storm Guard Roofing and Construction was founded in 2003 in Fort Worth, Texas and offers roofing and construction services as well as restoration services for homes that have suffered damage. The owners of Storm Guard Roofing and Construction began franchising the concept in 2011.
5. The company consulted with Francorp Inc., the world’s leading franchise development firm, to fully develop its franchise program. However, growth was slow and only a few locations were opened by friends and family of Storm Guard’s owners. Then in 2013, Storm Guard Roofing and Construction partnered with Rhino7, a franchise development company, and the franchise’s growth picked up.
6. With Rhino7 handling operations from the beginning of the partnership and providing an intermediate plan for growth, Storm Guard was supported by business industry experts. Rhino7 even became one of Storm Guard’s franchisees, giving Rhino7 the ability to learn from the inside as they continued to develop and support both the operations and sales sides of the Storm Guard concept.
7. With additional financial backing from the founders of Storm Guard and the help of Rhino7, Storm Guard Roofing and Construction has opened more locations across the United States.
Entrepreneur’s Franchise 500
8. Storm Guard Roofing and Construction did not rank on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Storm Guard franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Storm Guard’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 30
- Outlets at the End of the Year: 40
- Net Change: +10
- Outlets at the Start of the Year: 40
- Outlets at the End of the Year: 36
- Net Change: -4
- Outlets at the Start of the Year: 36
- Outlets at the End of the Year: 33
- Net Change: -3
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 3
- Net Change: 0
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 1
- Net Change: -2
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 1
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
Average Income, Cost of Goods Sold, Gross Profit, Total Expenses, EBITDA, and EBITDA Plus Owner Compensation for All Franchisees Open Throughout the Reporting Period (November 1, 2017 to October 31, 2018)
- This Item 19 presents historical information regarding the actual operating results for the franchised Storm Guard businesses that were open and operating throughout the entire period from November 1, 2017 through October 31, 2018 (the “Reporting Period”). Any franchisees that were terminated or ceased to operate for other reasons at any point during the Reporting Period are not included in this Item 19.
- This Item 19 does not include information for the company-owned Storm Guard business or the franchised Storm Guard businesses that were not open and operating throughout the entire Reporting Period.
- During the Reporting Period, 4 franchisees closed and are therefore excluded from the table.
- As of October 31, 2018 (i.e. the end of the Reporting Period), there were 32 Storm Guard franchisees in operation, but only 29 franchised Storm Guard locations were open and in operation throughout the entire Reporting Period as three franchisees first began operating in June 2018.
- All 29 franchisees that were in operation for the entire Reporting Period provided the financial information requested by Storm Guard and required for inclusion in this Item 19, but one franchisee subsequently informed Storm Guard that the information she provided contained significant errors and is unreliable; therefore, Storm Guard has excluded that franchisee’s financial information from this Item 19.
- As a result, this Item 19 is comprised of the operating results for 28 of the 29 Storm Guard franchisees that were in operation throughout the entire Reporting Period.
- Storm Guard derived all of the figures shown in the tables below from information provided by, and in the possession of, its franchisees. This information is unaudited, but Storm Guard believes it is accurate and reliable.