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

• Section I – Background information on the Wireless Zone franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Wireless Zone 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 Wireless Zone franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned Wireless Zone 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 Wireless Zone’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average and median number of postpay activations, upgrades, and transactions (postpay activations and upgrades combined) per store per month for the top 10%, bottom 10%, and all 317 franchised Wireless Zone stores that were open during the entire calendar year 2018

• 2018 average, high, and low gross revenue, gross profit, gross profit margin, and net activations and upgrades, by quintile, for the 312 franchised Wireless Zone stores operating under the new gross profit model for the entire calendar year 2018

Section I – Background Information

20 Things You Need to Know About the Wireless Zone Franchise

Adds Wet Phone Recovery Capability to All Stores

1.  In mid-September 2018, Wireless Zone announced a partnership with Redux, a manufacturer of electronic drying devices, to add wet electronic restoration capability in all Wireless Zone franchise locations. The service became available in all Wireless Zone locations starting on September 15, 2018.

2.  Accidentally dropping a phone or other electronic device in water can damage sensitive electronics and make the item unusable. The Redux machine creates a vacuum chamber which, combined with humidity sensors, effectively removes 100% of moisture.

3.  Michael Broe, executive vice president of Wireless Zone, noted, “We continue to expand our offerings beyond phones, to make Wireless Zone a community resource for advice and guidance on home and personal wireless devices, and with services to protect these devices against damage. Redux solves a common problem among electronic users and can restore a wet unit to a fully functional device quickly and inexpensively.”

4.  Redux machines have an 84% success rate in drying wet electronics that have not been plugged in since submersion. For a small fee or a membership, a wet phone can usually be restored in less than an hour, allowing the user to retain phone services, photos, videos, and contacts without damage. Redux machines can also restore a host of other electronics damaged by accidental submersion, including electronic key fobs, hearing aids, Bluetooth devices, gaming controllers, tablets, and small laptops.

5.  James Shrake, director of business development for Redux, said the partnership with Wireless Zone was mutually beneficial. Shrake added, “With nearly 400 stores across the US, Wireless Zone provides an opportunity to thousands of customers to choose Redux as their first choice to save, rather than replace, a wet device.”

Partners with Kyocera to Raise More Than $18,250 for Autism Speaks

6.  In June 2019, Wireless Zone and the Communications Equipment Group of Kyocera, a leading manufacturer of rugged wireless phones, announced that together, they had raised over $18,250 for Autism Speaks, a global non-profit organization committed to enhancing lives today and accelerating a spectrum of solutions for tomorrow.

7.  Wireless Zone and Kyocera had teamed up to generate donations during April, World Autism Awareness Month. Throughout April, customers visiting Wireless Zone locations nationwide were asked if they would like to donate to Autism Speaks. Additionally, Kyocera generously pledged a donation for each Kyocera phone sold at a Wireless Zone location during April.

8.  Robert Clark, national consumer sales manager for Kyocera International, Inc.’s Communications Equipment Group, said, “We’re grateful to be a part of such an important program with Wireless Zone to benefit Autism Speaks. Thank you to all the wireless customers who helped raise these much-needed funds to continue valuable resources and programs for those affected by autism.”

9.  Autism Speaks is dedicated to promoting solutions, across the spectrum and throughout the life span, for the needs of people with autism and their families. World Autism Month activities are aimed at increasing understanding and acceptance of people with autism to create a more inclusive world. As autism spectrum disorder affects 1 in 59 children and their families, including the families of both Wireless Zone’s and Kyocera’s staff, this organization remains a core charity of the Wireless Zone Foundation for Giving.

10.  Brian Murtari, president of the Wireless Zone Foundation for Giving, added, “Whether it was rounding up a purchase to the nearest dollar, or companies in the communities stopping in to drop off a check, Wireless Zone’s customers came together to help this great organization. We’re thrilled to have raised over eighteen thousand dollars for Autism Speaks.”

11.  Mutari noted that this amount would be in addition to the $25,000 that the Wireless Zone Foundation for Giving had earmarked for the charity prior to this fundraising effort. A check presentation was scheduled at the Foundation’s annual golf tournament fundraiser, scheduled for mid-June.

Partners with SecurityMetrics for Managed Security and PCI Compliance

12.  In late April 2019, SecurityMetrics, a global leader in data security and compliance, and Wireless Zone, the nation’s largest wireless retail franchisor, signed a partnership that will bring data security and PCI compliance to each of Wireless Zone’s franchises across the country.

13.  Data breach costs per franchise location are significant and could impact all other owners in a franchise system by tarnishing its brand. Wireless Zone chose SecurityMetrics as a security vendor because it provides reliable protection, works to take day-to-day burdens off of small business owners, maintains current security updates, and provides reassurance to stores and customers.

14.  Brian Murtari, Wireless Zone’s chief information officer, said, “Small businesses often think they don’t have valuable data. Yet just one data breach can cause enough damage to force a small business to close, whether through fines, lawsuits or loss of customer confidence. SecurityMetrics offers our Wireless Zone owners the security and protection they need to protect their businesses at an affordable cost.”

15.  Troy Tribe, senior vice president of SecurityMetrics, added, “This partnership is an opportunity to support small business security while providing corporate visibility across a large network of franchises. We look forward to helping Wireless Zone’s 375 small businesses close security gaps and prevent data breaches as they grow and expand into more regions.”

Company History

16.  Wireless Zone was founded as The Car Phone Store in 1988 by Russ Weldon in Wethersfield, Connecticut. At the time, wireless products were seen as something of a novelty item, but Weldon sensed the potential of the industry and wanted to open a store that only sold these new wireless products. Weldon’s gamble paid off, and as the use of wireless technology became more common, The Car Phone Store took off.

17.  Over the next few years, Weldon continued to open The Car Phone Store locations, primarily in the Northeastern part of the United States. In 1999, the company decided to change its name to Wireless Zone to reflect the wide array of wireless products the brand offers.

18.  Not long after Verizon Wireless launched in 2000, Wireless Zone began offering Verizon products in its store. Being an early seller of Verizon Wireless products helped fuel Wireless Zone’s growth. Today, Wireless Zone is still one of the few exclusive Verizon Wireless National Premium Retailers.

19.  In 2012, Wireless Zone was acquired by Canadian company Glentel Inc. for $83.3 million. As part of the acquisition, Wireless Zone was allowed to keep its name and it continued to operate as a separate business. Glentel only owned Wireless Zone for a few years before selling the company to Round Room, LLC in 2016.

Entrepreneur’s Franchise 500

20.  Wireless Zone ranked No. 355 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Wireless Zone 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 Wireless Zone’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

Franchised

2016

• Outlets at the Start of the Year:  340
• Outlets at the End of the Year:  323
• Net Change:  -17

2017

• Outlets at the Start of the Year:  323
• Outlets at the End of the Year:  335
• Net Change:  +12

2018

• Outlets at the Start of the Year:  335
• Outlets at the End of the Year:  374
• Net Change:  +39

Company-Owned

2016

• Outlets at the Start of the Year:  35
• Outlets at the End of the Year:  0
• Net Change:  -35

2017

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

2018

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

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

• Wireless Zone franchisees sell and service wireless telephones, wireless data, satellite communications, personal communications devices, and other forms of wireless, wireline, and Internet-based communication devices, services, and accessories, and entertainment and security products and services.

• Below are tables containing financial performance representations based on the Provider’s postpay activations and upgrades data for all franchised Stores for the calendar year 2018, as provided to Wireless Zone by its Provider. The Provider reports postpay activations and upgrades data to Wireless Zone using a reporting system applicable to all of the Stores. Wireless Zone has not audited these figures.

Part 1 – Number of Postpay Activation and Upgrade Transactions

• The average number of postpay activation and upgrade transactions in the tables are net of deactivations.

• Wireless Zone has omitted the first month of data from all new franchise locations in 2018 that were open less than half the month during the first month to ensure more accurate averages.

• Wireless Zone offers substantially the same services to all of the Stores whose data is reported in the tables below as it does to new franchisees. New Stores will offer substantially the same products and services to consumers as were offered by these Stores.

• The first table reports data for all 317 Stores that were open as franchised Stores during the entire calendar year 2018.

• The second table reports data for the top 10% of the 317 franchised Stores that were open during the entire calendar year 2018, and the third table reports data for the bottom 10% of these 317 franchised Stores.

• The rankings of the top 10% and bottom 10% of these 317 franchised Stores were based on the total number of transactions (postpay activations and upgrades combined) per Store per month.

Franchised Stores Open 12 Full Months in 2018 (317 Stores)