FDD Talk 2021: Big Frog Custom T-Shirts & More 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 Big Frog Custom T-Shirts & More franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Big Frog Custom T-Shirts & More franchise, based on Item 7 of the company’s 2021 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Big Frog Custom T-Shirts & More franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned Big Frog Custom T-Shirts & More outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Big Frog Custom T-Shirts & More’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2018, 2019, and 2020 average, highest, and lowest gross revenue, customer count, and average sale for the franchised Big Frog Custom T-Shirts & More stores open and operating for at least 12 months as of December 31 of the applicable year

• 2018, 2019, and 2020 average revenue, payroll, cost of goods sold, rent, utilities, and marketing expenses for the franchised Big Frog Custom T-Shirts & More stores in operation on December 31 of the applicable year, who had operated for at least 12 months, and submitted to Big Frog one or more monthly profit and loss statements

Section I – Background Information

15 Things You Need to Know About the Big Frog Custom T-Shirts & More Franchise

Expands into Canada with First Storefront

1.  In late May 2021, Big Frog Custom T-Shirts & More announced that it was expanding into Canada with its first store in Edmonton and more locations to come across the country. Jessica Eggert, director of communications for Big Frog Canada, said the company has initially been focusing on Alberta, primarily Edmonton and Calgary, for the retailer’s launch across the country. It has been advertising to raise awareness of the brand and the opportunities for franchise locations. “We’re focusing in Alberta right now but we’ve had interested people from Ontario that we’ve had conversations with and BC as well. The plan is to be right across Canada,” she said. The exception is Quebec due to its franchising legislation.

2.  Tina Bacon-DeFrece, president and CEO Big Frog Franchise Group, said the retailer has 80 locations in 26 states in the US. The company started franchising in 2008. Bacon-DeFrece started her first store in 2006 in Clearwater, Florida. “It was a neighbourhood T-shirt shop that my husband and my partner (Ron) developed just to be part of the community and service schools and non-profits and small businesses,” said Bacon-DeFrece.

3.  Bacon-DeFrece added, “We are essentially a specialty retail boutique where we’ll do a custom shirt. We bought one of the first prototype garment printers that uses garment dye that actually dyes the image in the shirt.” The printer allowed customers to buy just one shirt at a time and the concept caught on. The local news featured the retailer because no one was doing it at the time. “So essentially a customer can come in and they’re able to work with a professional designer, get a custom shirt done for $20, $25. It’s no longer you have to pay someone $300 to do artwork, set up, do all the colour charges. They get a completely custom product that they designed themselves with our help for $20, $25,” said Bacon-DeFrece.

4.  Brian and Shannon Marowitch are opening the first Canadian store in early July in the Windermere community in southwest Edmonton. It will be located near the West Edmonton Mall, just off the busy Anthony Henday road and close to Calgary Trail and the airport. The store will be in a brand new strip mall, kitty corner from the Windermere Crossing shopping center.

5.  “Very much a high visibility, high traffic, accessible location,” said Shannon, adding that the couple’s goal is to eventually open a second store in their territory. She continued, “But it’s just one store at a time. We’re focusing on getting the brand out there, getting the excitement going. Summer’s coming and with the vaccination rollout and the protocols being lifted, we’re very excited and we’re ready to go.”

6.  Shannon added, “This just seemed like a perfect fit (for us). It seemed like a great concept. I think it’s going to be extremely well received in Edmonton. It’s very accessible for the one-off T-shirts in addition to business to business sales. It’s a concept that is not seen in Edmonton or anywhere as far as I know in Canada. Since the pandemic, we need something like a Big Frog. We need fun and we need excitement. And we need that froggie spirit. It’s something that we are thrilled to be a part of. ”

7.  Brian said, “And it’s a great work/life balance. You can put as much time in as you want and get the results that you want and if you want to work really hard you can get even better results. It just seemed like a very nice balance for us and the concept of course is fantastic. And it seems like a fun job too – like you want to enjoy yourself too. And what we’re looking forward to is meeting all the new customers and just helping them have fun building their own shirts.”

Launches ‘Give 1, Get 1 T-Shirt Recycling Program’ in Partnership with Allmade

8.  In November 2020, Big Frog Custom T-Shirts & More launched its “Give 1, Get 1 T-Shirt Recycling Program” in partnership with Allmade to raise awareness on the importance of recycling. From November 2 to 14, people could drop an old t-shirt into a recycling bin at any participating Big Frog stores.

9.  In exchange for recycling an old t-shirt, participants received a free organic and sustainably made Allmade shirt and could choose from any of the pre-made “eco-themed” designs. The design was printed on the shirt using Big Frog’s Direct-to-Garment Printing technology, one of the cleanest and greenest ways to custom decorate any apparel.

10.  The two-week long recycling program included:

• A Virtual Facebook Event launch hosted by Big Frog Custom T-Shirts & More founders Tina & Ron DeFrece and Allmade CEO Ryan Moor.

• “I Pledge to Recycle” online page wherein individuals could sign up virtually and commit to recycle, reuse, and reduce waste.

11.  Tina Bacon-DeFrece, president and CEO of Big Frog Custom T-Shirts & More, said, “As a brand, sustainability is deeply rooted in our DNA, which is why we specialize in Direct-to-Garment Printing because it uses clean and green water-based ink. We also recognize the economic and environmental impact of recycling apparel, which is why we partnered with Allmade because they are a brand truly committed to reducing their environmental impact by manufacturing their apparel sustainably and using approximately six recycled water bottles in every shirt.”

12.  Data from the Environmental Protection Agency highlights a greater need to promote the importance of reducing waste through recycling. “About 80 per cent of what Americans throw away is recyclable, yet our recycling rate is only 28 per cent. By educating ourselves with how our clothing is made as well as committing to consuming products that consist of recycled materials, we can help to make a difference through a t-shirt,” said Allmade CEO Ryan Moor.

Company History

13.  Big Frog Custom T-Shirts & More was founded as Dream Niche, LLC and Bay Area Custom T-Shirts, LLC in 2006 by Leeward J. Bean, Ronald E. DeFrece, and Christina (Tina) Bacon-DeFrece in Clearwater, Florida. Bean and Ron DeFrece had been working together since 1997 at the company that DeFrece had previously started, Ocean Optics.

14.  At the time, custom t-shirts were becoming popular and Bean and the DeFreces sensed an opportunity to get into the industry before it became crowded. They shifted their focus to offering custom t-shirts and after two years, they began franchising the Big Frog Custom T-Shirts & More concept. Today, there are Big Frog franchises around the United States.

Entrepreneur’s Franchise 500

15.  Big Frog Custom T-Shirts & More ranked No. 422 on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Big Frog Custom T-Shirts & More franchise costs, based on Item 7 of the company’s 2021 FDD.

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

• Please click here for detailed information on Big Frog Custom T-Shirts & More’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  81
• Outlets at the End of the Year:  92
• Net Change:  +11

2019

• Outlets at the Start of the Year:  92
• Outlets at the End of the Year:  88
• Net Change:  -4

2020

• Outlets at the Start of the Year:  88
• Outlets at the End of the Year:  82
• Net Change:  -6

Company-Owned

2018

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

2019

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

2020

• 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, 2021 FDD) and Analysis

• This Item 19 presents information about the Key Performance Indicators and a historic financial performance with respect to Big Frog Stores open and operating for at least a full 12 months as of December  31, 2020. On December 31, 2020, there were 79 franchised Big Frog Stores in operation for the full 12 months*. Big Frog has excluded the Key Performance Indicators of 3 franchised outlets, as they opened for business during calendar year 2020 and have not operated for a full 12 months.

• In 2019, the number of stores operating the entirety of 2019 was 86, and for 2018 the total number of stores in operation for the full year was 81.

• *Due to COVID-19 most stores were partially or fully closed for at least 6 weeks during 2020. All stores closed to the general public during federally mandated quarantine, but some stores continued to service customers with only the owner operating the store and designers working from home.

Part 1 – Big Frog Key Performance Indicators – 2020 Compared to 2019 & 2018

• The data used in preparing these Key Performance Indicators was compiled from information submitted to Big Frog through the Big Frog Point-of-Sale system (“POS System”). While Big Frog believes that the data is accurate, it has not independently verified or audited the information.

2020