In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Martinizing Dry Cleaning franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Martinizing Dry Cleaning 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 Martinizing Dry Cleaning franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned Martinizing Dry Cleaning 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 Martinizing Dry Cleaning’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average, median, high, and low monthly gross sales, monthly labor costs, monthly rent, monthly debt service, and monthly discretionary cash flow for the 21 Martinizing franchisees who responded to a survey the franchisor provided to all of the Martinizing franchisees in the United States regarding their gross sales, net revenue, and various other details related to their operations for the period of January 1, 2018 to December 31, 2018 (the “Measured Period”)
- 2018 average, median, high, and low route gross sales for the 16 Martinizing franchisees who responded to the survey and performed route services
- 2018 average, median, high, and low plant store ticket for the 16 Martinizing franchisees who responded to the survey
- 2018 average, median, high, and low route services ticket for the 13 Martinizing franchisees who responded to the survey
Section I – Background Information
13 Things You Need to Know About the Martinizing Dry Cleaning Franchise
Franchises Participate in GreenEarth Cleaning’s Earth Day Clothes Drive
1. To celebrate its 20th anniversary, GreenEarth Cleaning, the world’s largest solution provider of environmentally non-toxic dry cleaning technology, held an Earth Day Clothes Drive during the month of April this year.
2. From Connecticut to Colorado to California, 140 affiliated retail locations opted in to the GreenEarth Cleaning 20th Anniversary Earth Day Clothes Drive, including a few Martinizing Dry Cleaning franchises in Royal Oak, Michigan; Santa Fe, New Mexico; and Wichita, Kansas. All of the participants racked up a combined donation amount of 20,000 pounds and counting – an average of 150 pounds per store.
3. At the GreenEarth home office in Kansas City, Missouri, the team partnered with Big Brothers Big Sisters of Kansas City as well as local taproom Bier Station for a one-day clothes drive event of its own on April 20 to make up GreenEarth’s contribution.
4. Tim Maxwell, president of GreenEarth Cleaning, said, “Celebrating all that our planet provides us has been a fixture of GreenEarth Cleaning since the formation of our company 20 years ago. With the growing issues surrounding the disposal of waste associated with fast fashion, we felt that collecting clothing for charities fit our Network’s focus on sustainable garment care.”
Opens Two New Stores in Spokane, Washington
5. In late October 2018, Martinizing Dry Cleaning opened its first locations in Spokane, Washington. The two new stores are owned and operated by Kay Quinn, an accomplished service industry professional and Spokane resident. The new Martinizing locations can be found in convenient spots, one on the South Hill at 3007 E. 57th Ave. Suite 2 and another in Wandermere at 12519 N. Division Suite 2.
6. The Wandermere store’s grand opening celebration was held on Friday, October 26 from 4-5:30 p.m. and the South Hill store hosted its grand opening shortly after on Tuesday, November 6 from 4-5:30 p.m. During both grand opening events, complimentary food and refreshments were served, including holiday treats and fresh-brewed Starbucks coffee.
7. All guests also received a goodie bag filled with a variety of useful garment care products and Martinizing discount coupons. Plus, guests were able to tour the fully-renovated facilities and discover Martinizing for their future dry cleaning needs.
8. In a press release covering the two new stores, Maritinizing Dry Cleaning as a whole said the company was celebrating more than six decades as the most experienced name in dry cleaning, laundry, and garment care. The brand’s new stores, like the ones in Spokane, feature innovative lifestyle-oriented services like home and office pick-up and delivery, app-powered lockers, and on-demand service. Martinizing also boasts green cleaning technologies that are safe for people, clothes, and the environment.
9. In addition to the traditional dry cleaning and laundry services, Martinizing also offers alterations, leather cleaning, wedding dress cleaning, and preservation services. Locations can also clean household items such as rugs, comforters, drapes, linens, and duvet covers.
10. Martinizing Dry Cleaning, originally called One Hour Martinizing, was founded in 1949 by Henry Martin in Ohio. Martin, who was a chemist from Buffalo, developed a safer method for cleaning clothes using perchloroethylene (also called PERC, or tetrachloroethylene). He presented his method to dry cleaners in New York and called it Martinizing, hence the company’s name.
11. Martin’s process revolutionized the laundry industry and dry cleaners were now able to offer a quicker turnaround time on garments. Martin Equipment Company was founded in order to produce the special equipment to clean the garments. Later, Martin Equipment Company became part of American Laundry Machinery in Ohio. Franchising began immediately and Martinizing Dry Cleaning grew quickly in the 1950s and 1960s.
12. Eventually, Martinizing Dry Cleaning expanded beyond the United States and there are now locations around the world. In 2014, Martinizing Dry Cleaning was acquired by the Huntington Company of Berkley, Michigan.
Entrepreneur’s Franchise 500
13. Martinizing Dry Cleaning ranked No. 354 on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Martinizing Dry Cleaning 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 Martinizing Dry Cleaning’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: 170
- Outlets at the End of the Year: 161
- Net Change: -9
- Outlets at the Start of the Year: 161
- Outlets at the End of the Year: 171
- Net Change: +10
- Outlets at the Start of the Year: 171
- Outlets at the End of the Year: 193
- Net Change: 22
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 1
- Net Change: +1
- 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
- The details applicable to each set of financial performance representations are set forth below, however, the following information applies to all representations.
- As of December 31, 2018, there were 101 Martinizing franchisees operating 193 Martinizing franchises in the United States (not including the one Martinizing franchise owned by the franchisor’s affiliate, Huntington).
- These numbers include two categories of franchisees and franchises: 1) royalty Martinizing franchisees (each a “Royalty Franchisee” and collectively, “Royalty Franchisees”) operating under franchise agreements obligating them to pay either a percentage of gross sales (each a “Royalty Franchise” and collectively, “Royalty Franchises”); and 2) fixed fee Martinizing franchisees (each a “Fixed Franchisee” and collectively, “Fixed Fee Franchisees”) operating under franchise agreements obligating them to pay a predetermined annual fee (each a “Fixed Fee Franchise” and collectively, the “Fixed Fee Franchises”) to the franchisor.
- In the United States, as of December 31, 2018, there were 64 Royalty Franchisees operating 103 Royalty Franchises and 37 Fixed Fee Franchisees operating 90 Fixed Fee Franchises.
Part 1 – Historical Information Regarding Retail Services and Route Services
- The charts below include findings of a survey the franchisor provided to all of the Martinizing franchisees in the United States regarding their gross sales, net revenue, and various other details related to their operations for the period of January 1, 2018 to December 31, 2018 (the “Measured Period”). The survey was sent on March 25, 2019 and was closed on May 30, 2019.
- There were 21 respondents to the survey (each a “Respondent” and collectively, the “Respondents”); however, the number of Respondents for each question varied, as further detailed in each chart below.
- The 21 Respondents own a total of 36 franchises, including 27 Plant Stores and 9 Drop Stores. Of the Respondents, 17 were Royalty Franchisees and 4 were Fixed Fee Franchisees. The Respondents were from the following states: Texas (4), Arizona, Pennsylvania (2), California (2), Colorado (2), Indiana, Florida (3), Ohio (2), Michigan (2), North Carolina, and New Mexico.
- Unless otherwise noted, the information depicted in the charts below is provided on a per-franchisee basis, not a per-location basis. The franchisor cannot verify the information provided by the Respondents.
- Please note that the figures below are solely derived from the Respondents’ performance of Retail Services and, in some cases, Route Services. Specifically, 16 of the 21 Respondents perform Route Services.
- The following definitions apply to the charts below and were provided with the survey:
- “Plant Stores” are considered locations where clothing is cleaned and where customers can drop off and pick up clothing.
- “Drop Stores” are stores where clothing can be dropped off and picked up, but where no clothing is cleaned.
- “Gross Sales” means total revenues derived from the sale of goods or services less sales tax, discounts, allowances, and returns/refunds or credits.
- “Gross Profit” means Gross Sales minus cost of goods sold.
- “Net Profit” means Gross Profit less all ordinary and recurring operating expenses, interest, income taxes, depreciation, and amortization.
- “EBITDA” means Net Profit plus interest, taxes, depreciation, and amortization.
- “Discretionary Cash Flow” means EBITDA plus interest paid on debt payments, plus dividends paid to owner(s), plus owner(s) salaries, plus personal expenses paid for by the business.
A. Plant Stores, Drop Stores, Gross Sales, Annual Labor Cost, and Annual Rent Cost
Number of Plant Stores