FDD Talk: Pinot’s Palette 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 Pinot’s Palette franchise opportunity, including relevant news updates

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

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

• 2018 average, median, high, and low gross sales for the 82 franchisee-owned Pinot’s Palette Studios, grouped according to number of rooms, that met the franchisor’s minimum marketing and operations requirements for studio performance during the reported period ended December 31, 2018

• 2018 average, median, high, and low gross sales for the top 25%, top 50%, top 75%, and all 82 franchisee-owned Pinot’s Palette Studios that met the franchisor’s minimum marketing and operations requirements for studio performance during the reported period ended December 31, 2018

• 2018 average, median, high, and low gross sales for the 17 franchisee-owned Pinot’s Palette Studios whose owners own two or more locations, grouped according to number of rooms, that met the franchisor’s minimum marketing and operations requirements for studio performance during the reported period ended December 31, 2018

• 2018 average, median, high, and low gross sales for the 1 affiliated-owned Pinot’s Palette Studio (with two rooms) open the entire year ended December 31, 2018

• projected labor cost and cost of goods sold for a 2-hour and a 3-hour painting class, with 20, 35, and 50 painters

Section I – Background Information

15 Things You Need to Know About the Pinot’s Palette Franchise

Celebrates 10th Anniversary

1.  In May 2019, Pinot’s Palette celebrated its 10th anniversary. Founded in 2009 by Beth and Charles Willis and Craig Ceccanti, the franchise has grown to 141 studios across the United States and Canada and has turned the entrepreneurial dreams of more than 190 people into reality. The franchise is also one of the largest employers of professional artists, who serve as class instructors.

2.  Craig Ceccanti, co-founder and CEO of Pinot’s Palette, said, “When we started, I never could have imagined sharing a 10th anniversary with so many amazing customers, franchise owners, headquarters staff, and artists. The passion and dedication of our owners and employees nationwide have helped us become an industry leader. We could have never accomplished this kind of success without this amazing team of people. Thank you to everyone who has been part of this journey!”

3.  Charles Willis, co-founder and president of Pinot’s Palette, added, “One decade down, and we’re just getting started! Our reputation as a fun, successful business that gives franchisees the work-life balance they crave is resonating as new people from all backgrounds become part of the family. It’s an exciting time to be in the exploding experiential events industry!”

Texas Franchises Offer Discounts to Those Who Bring in Donations for Hope’s Door Shelters

4.  In early April 2019, Pinot’s Palette of Garland and Pinot’s Palette of Addison, Texas announced a partnership with Two Men and a Truck of Carrollton, Texas for their annual drive to collect toiletries for Hope’s Door New Beginning Center in Plano, Texas. Hope’s Door helps individuals and families escape and heal from domestic abuse, dating abuse, and family violence through their free trauma-informed services.

5.  Pinot’s Palette and Two Men and a Truck collected toiletries such as shampoo, conditioner, toothpaste, toothbrushes, moisturizers, lotions, soaps, body washes, hair brushes, and deodorant. Other items such as nail polish, makeup, hair accessories, and perfume that boost the overall spirit of women were also welcomed. Pinot’s Palette and Two Men and a Truck asked that all of the items be in new, unopened packages.

6.  In 2018, Hope’s Door answered 5,855 hotline calls, sheltered 573 adults and children, counseled 1,499 adults and 963 children, provided 589 clients with legal services, provided 167 families with transitional housing, and so much more. Hope’s Door said that it wanted to do even more in 2019 and the help from businesses and individuals in the community would help make this happen.

7.  Two Men and a Truck Carrollton placed donation boxes at the Garland and Addison Pinot’s Palette locations and accepted donations through Friday, May 17, 2019. Very well timed since Mother’s Day was May 12 last year, and hundreds of families in Dallas-Fort Worth have been impacted somehow by domestic violence or homelessness and need an organization like Hope’s Door New Beginnings.

8.  Both Pinot’s Palette locations offered 50% off coupons (which they have never done) to incentivize people to bring some type of toiletry in to support this fantastic cause.

Offers “Canvas Connection” Classes to Celebrate National Girlfriends Day

9.  At the beginning of August 2019, the Pinot’s Palette blog discussed how loneliness has become an epidemic across America. Only about half of Americans say they have meaningful face-to-face social interactions with friends. Women seem to be suffering solo the most.

10.  To help combat this issue, Pinot’s Palette announced that its studios would be hosting Girl Power painting sessions called “Canvas Connections” throughout the month of August to strengthen the bonds of female friendships. Pinot’s Palette girl bonding sessions kicked off August 1, on National Girlfriends Day – a day that encourages women to spend time with their female friends.

11.  Silvia from Pinot’s Palette – Memorial City said, “Canvas Connections is a campaign that encourages women to spend a little bit more time with their girlfriends, and head out to a studio. You can bring a friend or family member.”

Company History

12.  Pinot’s Palette was founded in 2009 by business partners Craig Ceccanti, Charles Willis, and Beth Willis in Houston, Texas. Ceccanti says he got the idea to open a paint and sip studio of his own after attending a class in Louisiana. Initially, Pinot’s Palette was called “Pinot and Picasso.”

13.  After opening two more locations in the Houston area, Ceccanti and the Willises decided to start franchising Pinot and Picasso and they changed the name to Pinot’s Palette. The first franchised Pinot’s Palette studio opened in 2010 in Katy, Texas.

14.  As Pinot’s Palette continued to grow across the United States, the company decided to launch a rebranding effort in 2016. Pinot’s Palette introduced a new logo and updated its studio décor. Today, there are Pinot’s Palette locations in over 31 states and a few in Canada.

Entrepreneur’s Franchise 500

15.  Pinot’s Palette ranked No. 323 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Pinot’s Palette 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 Pinot’s Palette’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:  87
• Outlets at the End of the Year:  128
• Net Change:  +41

2017

• Outlets at the Start of the Year:  128
• Outlets at the End of the Year:  138
• Net Change:  +10

2018

• Outlets at the Start of the Year:  138
• Outlets at the End of the Year:  135
• Net Change:  -3

Company-Owned

2016

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  4
• Net Change:  0

2017

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  3
• Net Change:  -1

2018

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  2
• Net Change:  -1

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

• Pinot’s Palette had 123 franchisee-owned Pinot’s Palette Studios and 1 affiliate-owned Pinot’s Palette Studio open the entire year ending December 31, 2018.

• The tables below include Gross Sales figures for the 1 affiliate-owned Pinot’s Palette Studio (Part 4) and for 82 franchisee-owned Pinot’s Palette Studios that met the franchisor’s minimum marketing and operations requirements for studio performance during the reported period, which minimum requirements are as follows:

• acquired at least 150 verified new Pinot Perks members,
• have acquired over 525 total Pinot Perks members, and
• earned a Net Promoter Score based upon customer surveys of greater than 80 (Parts 1 to 3).

• There were 41 franchisee-owned Pinot’s Palette Studios not included in the figures below because they did not meet one or more of Pinot’s Palette’s minimum marketing and operations requirements.

Part 1 – One Room and Two Room Franchised Studios (82 Studios)

One Room Franchised Studios