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

• Section I – Background information on the Fastest Labs franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Fastest Labs franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Fastest Labs franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Fastest Labs outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Fastest Labs’ financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 average, median, highest, and lowest gross revenue for the top 1/3rd gross revenue, middle 1/3rd gross revenue, bottom 1/3rd gross revenue, and all 32 franchised Fastest Labs businesses that have been in operation for at least 12 months as of December 31, 2019

• 2019 average gross revenue, cost of goods sold and contract labor, gross profit, employee labor (non-owners) and expenses, net profit, imputed royalty fee, imputed technology fee, internet marketing, and adjusted net profit for the 1 affiliate-owned Fastest Labs business that has been in operation for at least 12 months as of December 31, 2019

Section I – Background Information

16 Things You Need to Know About the Fastest Labs Franchise

Remains Open During COVID-19 Crisis

1.  In late March 2020, Fastest Labs published a blog post regarding its status during the ongoing COVID-19 pandemic. As new regulations are being imposed by local and state government officials alike, Fastest Labs is highly encouraging all employers to keep their employees away from all medical testing facilities for a simple drug screen.

2.  With the increase in traffic at local walk-in medical facilities, work force medical clinics are experiencing increased volumes for patient services due to flu, fever, and other heightened health concerns. Fastest Labs urges all employers to keep employees away from these types of medical testing facilities for drug testing for two reasons:

• Help these facilities create room and time to treat the infirmed; and
• Help employees avoid exposure to medical waiting rooms and the potential spread of sickness in their organization.

3.  Fastest Labs stressed that it is not a medical testing facility, but is a drug testing franchise that specializes in offering clean, fast, and affordable services. Its niche is simple, and the company is committed to assisting employees and candidates immediately upon their arrival. They will not wait in a lobby full of ill people for 30 minutes to an hour like in most other medical testing facilities. Fastest Labs typically has individuals in and out in 5 to 10 minutes, so that they are back on the job immediately.

4.  In addition to assisting a company’s applicants immediately, Fastest Labs can send rapid test results, typically before an employee leaves the parking lot. In addition to rapid testing, Fastest Labs also offers the DOT Random Program required by all FMCSA truck drivers.

5.  Fastest Labs is diligently monitoring the situation regarding the COVID-19 outbreak. The health and safety of individuals and employees is of the utmost importance. The company said that locations will remain open regular business hours going forward unless otherwise specified.

6.  Fastest Labs does not test for COVID-19, nor does it medically treat customers with illnesses. Its services are completely non-medical.

7.  Fastest Labs prides itself in the cleanliness of its offices when servicing companies’ employees. Fastest Labs will continue to perform around the clock cleaning and sanitizing with all CDC-approved products.

Partners with Smart Screens to Build State-of-the-Art Drug Testing System

8.  In early November 2019, Ramsey Diagnostics Corporation, doing business as Smart Screens, announced that it had agreed to develop a custom software solution for one of the nation’s fastest-growing drug testing franchise groups, Fastest Labs.

9.  According to James Ramsey, president and founder of Smart Screens, “Fastest Labs is a dynamic company with special needs that exceed the scope of our current SmartReader 2.0 system. The good news is that anything a customer wants, we can make it happen.”

10.  The long-term development agreement was finalized earlier in 2019, and most Fastest Labs locations are just now starting to roll out their new state-of-the-art digital rapid drug test readers. Dave Claflin, CEO of Fastest Labs, said, “We are extremely excited to partner with Smart Screens. Our franchisees are eager to be part of the process that makes Fastest Labs the most advanced testing facilities in the industry.”

11.  The five-year project, which started on October 5th, makes Fastest Labs’ software the only custom solution ever developed by Smart Screens. “We do not currently, nor have we ever offered a custom solution like this to another company,” says Ramsey. “This was a good fit for both companies.”

12.  Smart Screens, a Virginia Corporation, designs and develops advanced rapid drug testing systems used by other corporations, court systems, probation and parole departments, treatment facilities, occupational medical centers, staffing agencies, and many other organizations around the U.S.

Company History

13.  Fastest Labs was founded in 2008 by Dave Claflin and his wife LeDona in San Antonio, Texas. Before Fastest Labs, the Claflins ran Enhouse America Inc. for eight years. In 2008, they opened a new testing division of the large Texas-based corporation and called it LabWork NOW Drug Testing of San Antonio.

14.  The brand soon grew to become one of the leading testing labs in the industry, outpacing the competition with superior quality services, affordable pricing, and unmatched customer care. LabWork NOW became known for its clean, state-of-the-art facilities and was soon used by individuals, businesses, and organizations throughout the state of Texas.

15.  As LabWork NOW kept growing, Claflin felt that it was time to expand and turn LabWork NOW into a national franchise. After being unable to trademark the name LabWork NOW, Dave applied for the trademark Fas-Tes® in 2009. In 2013, the company started using the name Fastest Labs, which was trademarked the following year. Today, there are Fastest Labs locations around the U.S.

Entrepreneur’s Franchise 500

16.  Fastest Labs did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Fastest Labs franchise costs, based on Item 7 of the company’s 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Fastest Labs’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  20
• Outlets at the End of the Year:  23
• Net Change:  +3

2018

• Outlets at the Start of the Year:  23
• Outlets at the End of the Year:  32
• Net Change:  +9

2019

• Outlets at the Start of the Year:  32
• Outlets at the End of the Year:  41
• Net Change:  +9

Company-Owned

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2018

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2019

• 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, 2020 FDD) and Analysis

• As of December 31, 2019, Fastest Labs had 41 franchised Fastest Labs locations (“Franchised Locations”) and 1 affiliate-owned Fastest Labs location (“Affiliate Location”).

• The information below is a historical financial performance representation for the 1 Affiliate Location and 32 Franchised Locations that have been in operation for at least 12 months as of December 31, 2019 (“Reporting Group”) during the 2019 fiscal year (“Reporting Period”).

• Nine Franchised Locations were not open for 12 months or longer as of December 31, 2019.

• The financial performance information for the Affiliate Location was taken from its unaudited profit and loss statement for 2019. The financial performance information for the Franchised Locations was taken from reports submitted to Fastest Labs. Fastest Labs has not audited this information, but has no reason to doubt its accuracy.

• The financial performance information for both the Affiliate Location and the Franchised Locations was prepared on a cash basis of accounting.

• Fastest Labs has presented the financial performance information of the Franchised Locations separate from that of the Affiliate Location below.

• Franchised Fastest Labs Businesses will share many of the same characteristics as the Affiliate Location, including degree of competition and services offered, except that the Affiliate Location does not pay the Royalty Fee or Technology Fee. Fastest Labs has not yet established the National Brand Fund.

Part 1 – Gross Revenue for the Franchised Locations in the Reporting Group During the Reporting Period

• The information provided in Part 1 below consists of the actual performance of the Franchised Locations in the Reporting Group. The numbers have been rounded to the nearest dollar for sake of presentation.

• Fastest Labs divided Franchised Locations in the Reporting Group into the following performance categories: Top 1/3rd Gross Revenue; Middle 1/3rd Gross Revenue; and Bottom 1/3rd Gross Revenue.

• Below Fastest Labs presents average and median Gross Revenue of the Franchised Locations in the Reporting Group.

• “Gross Revenue” means the aggregate amount of all sales of services and products, and the aggregate of all charges for services performed by the Fastest Labs Business net of discounts and bad debts.

All Franchised Locations in the Reporting Group