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

• Section I – Background information on the Budget Blinds franchise opportunity, including relevant news updates

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

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

• 2018 average sales for the Budget Blinds franchisees with a single territory (327 franchisees), with two territories (143 franchisees), and with three or more territories (45 franchisees), separately stated, that were in business throughout calendar year 2018 and who reported sales for the full year

• average cost of goods sold for franchisees responding to a survey that Budget Blinds conducted in February and March 2019

• average “closing rate” (that is, the number of sales calls that result in an actual sale) for franchisees responding to a survey that Budget Blinds conducted in February and March 2019

• number of employees (and positions of employees) for franchisees responding to a survey that Budget Blinds conducted in February and March 2019

• office location for franchisees responding to a survey that Budget Blinds conducted in February and March 2019

• number of years in business for franchisees responding to a survey that Budget Blinds conducted in February and March 2019

• percentage of repeat or referral customers for franchisees responding to a survey that Budget Blinds conducted in February and March 2019

• percentage of residential versus commercial sales for franchisees responding to a survey that Budget Blinds conducted in February and March 2019

Section I – Background Information

16 Things You Need to Know About the Budget Blinds Franchise

Franchisees Now Offering Hunter Douglas Products

1.  In mid-November 2019, Budget Blinds announced that it had finalized an agreement with Hunter Douglas, the world’s leading manufacturer of window coverings, to allow Budget Blinds franchisees throughout Canada to sell the popular Hunter Douglas line.

2.  Effective November 15, 2019, Budget Blinds franchisees in Canada are eligible to join the Hunter Douglas Aligned Dealer Program and add the Hunter Douglas brand to their signature in-home design consultation and installation service. These franchise owners now have access to Hunter Douglas’s hundreds of window-covering products including sheers, shades, blinds, and shutters plus PowerView® motorization and other advanced operating systems.

3.  The Canadian franchisee agreement is a continuation of the partnership between Home Franchise Concepts and Hunter Douglas that began last year (2018), which allowed U.S. franchisees to sell Hunter Douglas products for the first time.

4.  Tracy Christman, executive vice president of product development and management for Home Franchise Concepts (Budget Blinds’ parent company), said, “Today’s announcement brings together two of the largest and most prestigious names in customized window coverings in Canada and further expands Budget Blinds’ industry leadership in window covering design, quality, product variety and customer service.”

5.  The partnership between Home Franchise Concepts’ flagship brand and Hunter Douglas is part of an expanded commitment by Budget Blinds to lead the industry in customization, innovation, and community partnership across North America. According to the press release, additional consumer-focused Budget Blinds programs will be announced in the coming weeks.

Launches Custom Fabric Design Program

6.  In mid-November 2018, Budget Blinds launched the world’s first custom fabric design initiative that qualifies as the most advanced personalized design offering in the home products space. Available exclusively through Budget Blinds franchises around the world, Budget Blinds’ custom fabric design service allows customers to select from more than 9,000 unique fabric, pattern, and color combinations to create a truly customized whole-home design solution encompassing drapery panels, pillows, and more.

7.  Shirin Behzadi, CEO of Home Franchise Concepts, parent company of Budget Blinds, said, “The Budget Blinds custom fabric design offering represents the next level in personalized window covering and home design. Finally, homeowners can unlock their inner designer to create a wholly customized look and feel that captures their own unique style. We’ve combined a foolproof online design process with the services of our local design consultants to empower customers to create professional designer-worthy results they won’t just like – they’ll love! With our custom fabric design program, homeowners will be amazed at what they can do. The design possibilities are truly endless.”

8.  Working with their local Budget Blinds design expert, customers use a revolutionary online customizer to complete a three-step design process: 1) Select a fabric from among six high-quality base fabrics tested for strength, durability, and washing, and from among 1,500 patterns; 2) customize the color palette and pattern; and 3) decide on the pattern size.

9.  Homeowners can select an existing color from the Budget Blinds color wheel or create a color of their own. Prior to placing the final order, Budget Blinds style consultants will order a test swatch of the printed fabric to ensure customers are happy with the final result and are available to offer product and design guidance from initial consultation through delivery and installation.

10.  In addition to the new custom fabric design program, the brand debuted an expanded customer-friendly website and identity earlier in 2018 to make it easier for customers to access Budget Blinds’ constantly growing portfolio of window covering brands, no-obligation initial consultation, and the best warranties in the industry.

Company History

11.  Budget Blinds was founded in 1992 by five friends, Chad Hallock, his brother Brent Hallock, Todd Jackson, David Lewis, and Tony Forbes in Orange County, California. Chad Hallock had initially conceived of the idea for Budget Blinds and convinced his brother and their friends to each invest $5,000 to become partners in the company.

12.  Working out of a small apartment, the Hallocks, Jackson, Lewis, and Forbes began offering custom window covering services. The group spent all of their free time advertising their new business by handing out flyers and within four months, they had achieved $120,000 in sales.

13.  Building on that initial success, the friends and business partners began franchising the Budget Blinds concept in 1994. Since then, Budget Blinds has grown into the largest window covering franchise in the United States. There are also locations in Canada and Mexico.

14.  As Budget Blinds grew, the Hallocks, Jackson, Lewis, and Forbes formed Home Franchise Concepts (HFC) and began acquiring other home service brands: Tailored Living, Concrete Craft, and AdvantaClean. In 2015, Trilantic North America – a New York City-based private equity firm whose investment focuses are in the business services, consumer, energy, and financial services sectors – acquired a majority stake in HFC.

15.  Following the acquisition, the founders of Budget Blinds left the company – then-CEO Chad Hallock joined the board – and Budget Blinds is now the flagship brand of HFC.

Entrepreneur’s Franchise 500

16.  Budget Blinds ranked No. 35 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Budget Blinds 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 Budget Blinds’ 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:  932
• Outlets at the End of the Year:  966
• Net Change:  +34

2017

• Outlets at the Start of the Year:  966
• Outlets at the End of the Year:  1,016
• Net Change:  +50

2018

• Outlets at the Start of the Year:  1,016
• Outlets at the End of the Year:  1,061
• Net Change:  +45

Company-Owned

2016

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

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

• The following is information concerning the reported annual gross sales (i.e., total revenues) and other financial measures of those franchisees who purchased a franchise under any offering, who were open for business for all of calendar year 2018, and who reported their gross sales for all of 2018.

Part 1 – Annual Sales Levels

• The following table shows annual gross sales reported by franchisees with a single territory, with two territories, and with three or more territories, that were in business throughout calendar year 2018 and who reported sales for the full year. These franchisees represent 72% of the system.

• Figures for franchisees that had two or more territories are total sales for all territories – not average per territory – and if a franchisee’s additional territory opened during 2018, the total sales do not represent a full year of sales for the additional territory.

• All gross sales figures are presented without regard to the size of the territory. Although Budget Blinds currently grants territories that are at least 30,000 households, not all territories are that size. These variations in size arise both because Budget Blinds formerly sold territories of differing sizes and because territories can experience either growth or contraction after a franchise is sold.

• During 2018, there were 327 reporting franchisees who operated a single territory throughout the year, 143 franchisees who operated two territories each throughout the year, and 45 franchisees who operated three or more territories each throughout the year.

• These sales results are based upon sales reported to Budget Blinds by the franchisees. Budget Blinds has not audited or verified these sales results, and it generally depends upon the franchisees to report their sales accurately.

2018

Average Sales