FDD Talk 2020: Ziebart 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 Ziebart franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Ziebart 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 Ziebart franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Ziebart 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 Ziebart’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 actual and average total income (rustproofing, maintenance, clean/coatings, diamond gloss, Z-gloss, accessories/other, spray on liner, electronics, window tint, Z-shield, vinyl graphics, glass, reminder cards, environmental, discounts and allowances), total cost of sales, gross profit, total operating expenses, and operating income before manager compensation for 4 of Ziebart’s existing company-owned stores

Section I – Background Information

17 Things You Need to Know About the Ziebart Franchise

Expands Leadership Team to Accelerate Brand Momentum

1.  In mid-June 2020, Ziebart promoted three veteran employees to senior-level positions in finance, marketing, and operations, in an effort to get ready for a strong second half of the year. The brand announced the promotions of Brian Jackman to vice president and treasurer, Larisa Walega to vice president of marketing, and Jason Theisen to director of franchise operations.

2.  Among the many positions Jackman has held at the company over the past decade, he most recently served as Ziebart’s director of corporate finance, where he played an instrumental role in streamlining the accounting department. In his new role as vice president and treasurer of Ziebart International Corporation, Jackman’s responsibilities include all aspects of corporate financial functions, including financial and tax reporting, cash management, being a liaison to independent auditors, banks and investment institutions, distribution functions, and control of corporate assets.

3.  With 11 years at the company, Walega has spent the past seven years as director of marketing. Now, as vice president of marketing, her key responsibilities include building and executing a holistic brand awareness strategy through digital marketing, sales promotion, public relations, store layout, and marketing of new products and services. Walega manages the internal marketing team at Ziebart, as well as vendor partner relationships.

4.  During his 16-year career at Ziebart, Theisen worked his way up from technician at a local store to management and eventually corporate sales. As the director of franchise operations, Theisen is responsible for U.S. regional sales, product sales, and technical support and customer service.

5.  Thomas E. Wolfe, president and CEO of Ziebart International Corporation, said, “All three of these loyal team members have devoted years of hard work and proven their ongoing value to the Ziebart brand, as well as to our franchisees and dealers around the world. Before the pandemic and throughout, Brian, Larisa and Jason remained committed to Ziebart’s core values of Honesty, Passion, Innovation, Teamwork and Legacy. We look forward to the important role they will play in the future of our great brand.”

Sees Uptick in Concern Over Car Hygiene

6.  At the end of May 2020, Ziebart announced that it had received confirmation from appropriate federal agencies that its Disinfecting Interior Detailing Service kills coronavirus, including COVID-19, plus 99% of other germs and bacteria. The news came just as states began to loosen restrictions and car usage began to rise. As a result, the company reported increased inquiries about vehicle disinfecting – particularly regarding killing coronavirus.

7.  According to Edmund Russell, director of product development and technical support for Ziebart, “Now that many municipalities are beginning to gradually re-open previously non-essential businesses, consumers are driving more places and realizing their cars can be a connector of germs between public places and their homes. We are receiving more requests and inquiries on how to disinfect their vehicles and kill coronavirus.”

8.  Russell says the company is now suggesting, at minimum, bi-annual Disinfecting Interior Detailing services for all vehicles. In addition, between professional services, Ziebart recommends the following DIY car sanitization tips:

9.  Dos:

• After leaving the grocery store, place used masks in a paper bag before putting it on car seat.
• Similarly, remove gloves and place them in a bag before entering the vehicle. Throw the bag with the gloves away when you get home.
• Placing your mask and gloves in a bag before entering your vehicle prevents any germs from the store, which are now on the gloves/mask, from being transferred to the car.
• Carry anti-bacterial wipes to disinfect high-touch areas inside and outside your vehicle, such as the steering wheel, door handles (interior and exterior), door latches, lock buttons, radio and climate control buttons, and seat belts.
• To reduce damage, use an alcohol swab to clean touchscreen radios/GPS systems in the car.

10.  Don’ts:

• Don’t place used gloves and masks on the seats in the car after leaving the grocery store.
• Don’t throw used plastic gloves on the ground outside of the grocery store.
• Never spray any liquid chemicals on electronic devices in the car – this can severely damage them and lead to a high cost to repair.
• Don’t use bleach or hydrogen peroxide to clean – this can damage surfaces.

Offers Free Car Cleanings to COVID-19 First Responders

11.  In March 2020, not long after the COVID-19 pandemic became a serious threat in the United States, several Ziebart franchisees gave back to their local communities by offering free disinfectant wipe downs of highly-touched areas for all first responder vehicles.

12.  First responders could go to their local participating Ziebart store for a detailed anti-bacterial wipe down on high-traffic/touched areas such as door handles, steering wheels, etc. With this zero-contact service, first responders waited outside their vehicle while the Ziebart technicians wiped down the high-touch areas.

13.  Thomas E. Wolfe, president and CEO of Ziebart, said, “In a time of crisis, giving back and banding together as a community raises spirits and provides hope. In the end of all this, you can look back and say you tried to do your part by doing the right thing.”

Company History

14.  Ziebart was founded in 1959 by Kurt Ziebart (and two other investors) in Detroit, Michigan. While working in a Packard body shop, Ziebart saw firsthand the effects of rust on cars and began looking for a way to protect cars against it. Eventually, Ziebart created a process called rustproofing, which was the first successful method of protecting an automobile from corrosion. The method became so widely used that “Ziebart-ing” or “Ziebart-ed” is now a generic term for rustproofing. Ziebart’s rustproofing was an instant success and franchising began in 1962.

15.  The following year, Kurt Ziebart decided to sell the company to an investor group led by Roger Waindle. Waindle also acquired the right to the name Ziebart, which he registered with the company’s trademark, a helmet and shield design. Additionally, Waidle made sure to patent the rustproofing process.

16.  Over the next few decades, Ziebart continued to expand around the U.S. and Canada. Ziebart also added other services to its lineup and also acquired smaller competitors. Today, there are Ziebart locations in over 33 countries.

Entrepreneur’s Franchise 500

17.  Ziebart ranked No. 149 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Ziebart 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 Ziebart’s 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:  76
• Outlets at the End of the Year:  76
• Net Change:  0

2018

• Outlets at the Start of the Year:  76
• Outlets at the End of the Year:  80
• Net Change:  +4

2019

• Outlets at the Start of the Year:  80
• Outlets at the End of the Year:  82
• Net Change:  +2

Company-Owned

2017

• Outlets at the Start of the Year:  12
• Outlets at the End of the Year:  13
• Net Change:  +1

2018

• Outlets at the Start of the Year:  13
• Outlets at the End of the Year:  13
• Net Change:  0

2019

• Outlets at the Start of the Year:  13
• Outlets at the End of the Year:  11
• Net Change:  -2

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• This is a historic financial performance representation from January 1, 2019 thru December 31, 2019, based on 4 of Zeibart’s existing Company-Owned Stores.

• There were 93 Zeibart Outlets that existed during this time period, 11 of which were Company-Owned Stores.

• The financial performance of any particular Store may be affected by a number of factors that may vary due to the individual characteristics of the Store. These factors include, but are not limited to: sales by channel of trade, product and service offering, competition from other businesses, geographic and socioeconomic conditions in your locality, your experience, the quality and effectiveness of your managerial skills, adherence to the operation system, advertising programs, personnel and cost controls, business cycles, and the performance of the local, national, and world economy.

Part 1 – IL45 Company-Owned Store in Chicago Market (for 12 Months Ending 12/31/2019)

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