FDD Talk: How Much Does a Shack Shine Franchise Make (Average Revenues and/or Profits)?

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

• Section I – Background information on the Shack Shine franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Shack Shine 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 Shack Shine franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned Shack Shine 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 Shack Shine’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 average, median, highest, and lowest gross revenue; average and median job size; average and median gross profit margin; and average, median, highest, and lowest gross revenue per subterritory for the 16 franchised Shack Shine businesses in the United States that were open and operating through at least the last 12 months of the year ending December 31, 2020, grouped by number of months in operation (over 24 months, 12-24 months, and all)

• 2020 average, median, highest, and lowest gross revenue; average and median job size; average and median gross profit margin; and average, median, highest, and lowest gross revenue per subterritory for the 21 franchised Shack Shine businesses in Canada that were open and operating through at least the last 12 months of the year ending December 31, 2020, grouped by number of months in operation (over 24 months, 12-24 months, and all)

Section I – Background Information

15 Things You Need to Know About the Shack Shine Franchise

O2E Brands Lands Coveted Spot on Newsweek’s List of ‘Most Loved Workplaces’

1.  In late October 2021, O2E Brands, a home services company that includes Shack Shine, 1-800-Got-Junk?, and Wow 1 Day Painting, was named number 17 on Newsweek’s Most Loved Workplaces list. It joins a list of 100 businesses from around the world such as Spotify, Twitter, and Dell, lauded for their high levels of employee happiness and satisfaction. The company is the highest-ranking Canadian company on the list.

2.  CEO Brian Scudamore said, “Being included in Newsweek is huge, but it’s even more meaningful this year. There’s been an upheaval of what ‘going to work’ even means. As a ‘Most Loved Workplace’, we’re among companies who display a remarkable commitment to respecting and appreciating their people. And that’s what this is really about: the people who bring their whole selves to work to make O2E Brands exceptional. While everyone is talking about the great resignation, we’re thinking about it as the great progression.”

3.  As businesses grapple with the compounded effects of returning employees to the office from remote work and the so-called “great resignation” brought on by the pandemic, this win sets O2E Brands apart as a top employer in North America. Now, they’re poised to double down on that reputation with an innovative reintegration strategy.

4.  Kerrie Shakespeare, chief purpose officer of O2E Brands, added, “We talked to dozens of businesses to find out their approach about back-to-the-office. We considered every single person on every team, and used data in a new way to build a framework around reintegration called the 4Cs: Connect, Collaborate, Communicate, and Celebrate. Our goal was to establish the office as a cultural gathering space to inspire our people to do their best work.”

Offers a Wide Array of House Detailing Services

5.  Shack Shine offers various exterior house detailing services. Virtually any surface of a home can be detailed by Shack Shine, including siding, windows, trim, flashing, gutters, decks, patios, and driveways. Shack Shine uses two methods to wash a home: soft wash or hand wash, and pressure washing. According to Shack Shine, both methods are highly effective. For vinyl, wood, and delicate surfaces, hand wash or soft wash is preferred and for more robust surfaces, power washing does the trick. Shack Shine’s technicians will recommend the appropriate method.

6.  For home owners looking to restore their siding, deck, or driveway to their original condition, Shack Shine offers power and pressure washing services. Both the power and pressure washing services are done without the use of harsh chemicals. Instead, Shack Shine uses the latest pressure washing technology to achieve top results.

7.  Shack Shine’s friendly, uniformed technicians will make every effort to minimize hassle and maximize convenience: they will carefully move and replace any patio furniture or other belongings as needed to ensure thorough washing. Best of all, clients don’t even need to be home for Shack Shine to complete the service.

8.  Shack Shine’s professional window washing service will leave all windows, skylights, storm windows, french doors, and glass panels shiny every time. The brand uses the latest in water purification technology, ensuring windows get a spot-free and streak-free shine. Shack Shine’s state of the art carbon fiber extension poles allow technicians to reach even the toughest windows, while standing safely on the ground.

9.  Keeping gutters clean is an important, but tedious task. Shack Shine provides gutter and eavestrough cleaning services. Shack Shine’s professional gutter cleaning service makes it easy to ensure that this important task is done safely and properly.

10.  Shack Shine’s uniformed technicians are trained to clean all types of roofs, safely and effectively. Technicians know how to brighten up a dull looking roof and add instant curb appeal to a home, as well as lengthen the life of roofing materials.

11.  Another unique service that Shack Shine offers is moss removal. Technicians are trained to clear away moss, safely and effectively. Shack Shine knows how to get rid of moss from all types of surfaces, including roofs, siding, concrete, and more.

12.  A special service that Shack Shine provides is Christmas lights installation. Shack Shine supplies the latest lights product and technology to ensure that a client’s display wows the neighborhood. Shack Shine will even take the lights down and make sure they’re properly stored so they’re ready for next year. Technicians have the equipment and knowledge to install lights with the precision and expertise of Santa’s little helpers.

Company History

13.  Shack Shine traces its history to the early 2010s when the idea for the company was developed by Dave Notte. He had built a successful multi-million dollar commercial painting business and was looking for his next business venture. After developing the idea for a house-detailing service (windows, gutters, and power washing), Notte approached Brian Scudamore – founder and CEO of O2E Brands, the parent company of 1-800-Got-Junk? and Wow 1 Day Painting – with the idea for Shack Shine.

14.  Notte wanted to know if Shack Shine would be a good fit for O2E Brands, and while Scudamore thought the concept was perfect, he initially rejected Notte’s pitch. Scudamore felt that it wasn’t the right time for O2E Brands to take on Shack Shine. However, Notte was persistent, and Scudamore decided that he wanted to revamp the Shack Shine concept before investing. Notte agreed to this and was satisfied with the changes that Scudamore wanted to make and a deal was struck in 2015. Since then, Shack Shine has been steadily growing around the United States and Canada.

Entrepreneur’s Franchise 500

15.  Shack Shine ranked No. 395 on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of Shack Shine franchise costs, based on Item 7 of the company’s 2021 FDD.

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

• Detailed information on Shack Shine’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:  7
• Outlets at the End of the Year:  13
• Net Change:  +6

2019

• Outlets at the Start of the Year:  13
• Outlets at the End of the Year:  22
• Net Change:  +9

2020

• Outlets at the Start of the Year:  22
• Outlets at the End of the Year:  19
• Net Change:  -3

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

• In this Item 19, Shack Shine provides information regarding certain historical financial performance for all 16 franchised businesses in the United States and 21 franchised businesses in Canada that were open and operating through at least the last 12 months of the year ending December 31, 2020 (“2020 Reporting Year”).

• The charts below reflect average, median, highest, and lowest Gross Revenue figures for the 2020 Reporting Year. Average and median Job Size and Gross Profit Margin are also included.

• For purposes of these charts, franchisees are grouped into franchised businesses open longer than 24 months and those open between 12 and 24 months.

• Because Shack Shine franchisees own different numbers of subterritories, Shack Shine also provides in the charts below the franchisee average, median, highest, and lowest Gross Revenue on a per-subterritory basis.

• Of the U.S. franchisees reported in the charts below: the average number of subterritories owned is 3, with the fewest number owned being 2, and the largest number owned being 12; the median number of subterritories owned is 2.

• Of the Canadian franchisees reported in the charts below: the average number of subterritories owned is 3, with the fewest number owned being 1, and the largest number owned being 4; the median number of subterritories owned is 2.

• Unless otherwise specified, “Gross Revenue” means the actual gross revenues billed to consumers for products and services, less taxes collected and credits or refunds given in accordance with the franchisor’s refund policy.

• “Job Size” means the Gross Revenue attributable to the Services and Products ordered from a single dwelling that can be completed in one job.

• “Gross Profit Margin” means the percentage of Gross Revenue remaining after subtracting the following from Gross Revenue: labor costs, Royalties, and Sales Center, Marketing & Technology Fees. Material costs (including Christmas lights) are not included in the definition of “Gross Profit Margin.”

• This information excludes information from the 6 US franchises and 1 Canadian franchise that closed in 2020, or from the 3 U.S. franchises and 1 Canadian franchise that opened in 2020, because they were not in operation for the entire 2020 Reporting Year.

• The information in this Item 19 is based upon financial information franchisees reported to Shack Shine, but Shack Shine has not independently audited the information or independently reviewed its franchisees’ accounting methodologies to verify their conformance with generally accepted accounting principles.

• You should note that Gross Revenue will be dependent, among other things, upon the size of the territory in which the Franchised Business operates and number of vehicles operating in that territory.

• The average is calculated by adding all figures up and dividing by the number of figures counted. The median is calculated by placing all figures being counted in order of ascending or descending value and finding the middle figure in the list. If there is an even number of figures, the median is calculated by adding the middle two figures and dividing by two.

• The U.S. franchisees chart is reported in USD, and the Canadian franchisees chart is reported in CAD.

Part 1 – U.S. Franchisees (Calendar Year 2020)

• These charts do not include franchises that closed during the 2020 Reporting Year, and franchises that were not in operation for the entire 2020 Reporting Year.

Franchisees Operating Over 24 Months (U.S. Dollars)