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

• Section I – Background information on the Kitchen Solvers franchise opportunity, including relevant news updates

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

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

• 2020 average, median, high, and low gross sales for the 12 Kitchen Solvers franchisees that operated a single franchised business in the United States during the entire Measurement Period (January 1, 2020 through December 31, 2020) and the 6 Kitchen Solvers franchisees that operated more than 1 franchised business in the United States during the entire Measurement Period

• 2020 average, median, high, and low gross sales for the 6 Kitchen Solvers franchisees that operated a single franchised business in the United States during the entire Measurement Period with 2 or more full-time employees, and the 6 Kitchen Solvers franchisees that operated a single franchised business in the United States during the entire Measurement Period with 1 or less full-time employees

• 2020 average gross sales, materials expense, installation expense, gross profit, and number of jobs for the 12 reporting Kitchen Solvers franchisees that operated a single franchised business in the United States during the entire Measurement Period, and the 6 reporting Kitchen Solvers franchisees that operated more than 1 franchised business in the United States during the entire Measurement Period

Section I – Background Information

14 Things You Need to Know About the Kitchen Solvers Franchise

Named a Top Recession-Proof Franchise for 2021 by Franchise Business Review

1.  In mid-April 2021, Kitchen Solvers announced that it was named a top franchise by Franchise Business Review in its report on the Top Recession-Proof Franchises for 2021. Kitchen Solvers is a multi-dimensional kitchen cabinet remodeling franchise, offering total kitchen remodeling solutions for homeowners across the country.

2.  From kitchen design, cabinet refacing, and new cabinetry to custom countertops, tile backsplashes, and storage solutions, Kitchen Solvers provides solutions to meet the unique remodeling needs of all customers. As a one-stop-shop kitchen remodeling business, Kitchen Solvers franchise partners provide their clients with a Pleasant Remodeling Experience.

3.  Franchise Business Review (FBR) provides the only rankings of franchises based solely on actual franchisee satisfaction and performance. FBR publishes its rankings of top franchises in its annual Guide to Today’s Top Franchises, as well as in quarterly reports throughout the year that rank the top franchises in specific sectors.

4.  More than 31,000 franchisees representing nearly 300 franchise brands participated in Franchise Business Review’s franchisee satisfaction survey between July 2019 and February 2021. From the research, Kitchen Solvers was one of just 100 franchise brands to be identified as a Top Recession-Proof Franchise award winner and be featured on the list of the best recession-proof businesses to start.

5.  Kitchen Solvers franchisees were surveyed on 33 benchmark questions about their experience and satisfaction regarding critical areas of their franchise systems, including training and support, operations, franchisor/franchisee relations, and financial opportunity.

6.  According to Eric Stites, CEO of Franchise Business Review, “From our perspective, franchisee satisfaction is one of the most important factors to consider before investing in any franchise opportunity. Franchising has historically performed well in a recession, and for people seeking to be their own boss, the recession-proof businesses we identified this year not only have outstanding satisfaction among their owners, but we feel they hold a strong advantage to outperform their competitors in the years ahead.”

7.  Dave Kish, director of operations for Kitchen Solvers, said, “Being recognized as a Top Recession-Proof Franchise is an honor. At the Home Office, we are continually enhancing our system to make sure our franchise partners have high levels of profitability no matter the socioeconomic climate, and receiving this award during a pandemic truly speaks to our efforts from everyone within our system.”

Franchisee Named Rock Star Franchisee by Franchise Business Review

8.  In late July 2021, Kitchen Solvers announced that franchisees Brian and Suzie Crowley were identified by franchise research firm Franchise Business Review as being one of 2021’s Franchise Rock Stars. Brian and Suzie Crowley were selected from nearly 25,000 franchisees, representing 224 brands that participated in Franchise Business Review’s research in the past 18 months.

9.  The Franchise Rock Stars recognized were nominated by their franchise brand leadership in one of eight categories as franchisees who set admirable examples when it comes to leadership, business acumen, financial and professional success, and contributing to their community. Categories included: Giving Back, Women, Millennials, Veterans, Family-Owned, “Freshmen”, Top Performers, and Multi-Unit Owners.

10.  Eric Stites, CEO of Franchise Business Review, said, “There are so many success stories out there and thousands of inspiring franchise owners who are living their dreams of business ownership that it was incredibly difficult to narrow down the list. In the end, we chose individuals who are exceptional examples of achieving success through the franchise model and exemplify a strong work ethic and a real commitment to their business and community. The franchise owners on this year’s list have shown that with hard work, perseverance and the support of a strong franchise system, anyone can find success, no matter their background or previous experience. We are thrilled to recognize these individuals as Franchise Rock Stars.”

11.  Kitchen Solvers of La Crosse started in 1994 with owners Brian and Suzie (husband and wife duo) Crowley. They started with the La Crosse, Wisconsin and Winona, Minnesota territories. Brian and Suzie are active in the community and always receive rave reviews from the many homeowners they transform kitchens for.

12.  Suzie focuses on cabinet refacing sales, administrative work, business operations, and marketing. Brian installs and has also helped train many of the new franchise partners of Kitchen Solvers. Brian and Suzie’s son, Bryce Crowley, is their designer and new cabinet sales representative. He also helps with project management and installation. Bryce along with their lead installer, Dan Kollauf, recently bought into the business and are now part owners of Kitchen Solvers of La Crosse.

13.  Kitchen Solvers of La Crosse is also always willing to help support the franchise family. All of Kitchen Solvers’ new franchise partners come to training in La Crosse, Wisconsin. Brian, Bryce, and Dan allow the new franchise partners to experience on-the-job training during a day of installation. Many times, the feedback from new franchise partners is this is an invaluable experience they really enjoy. The team is always willing to jump on new ideas, try out new technologies, and give valuable feedback to the Home Office.

Company History

14.  Kitchen Solvers was founded in 1982 by Gerald and Betty Baldner in La Crosse, Wisconsin. The Baldners initially focused on offering kitchen cabinet refacing, because it was a lower cost remodel that breathed new life into older kitchens. Through word of mouth, demand for Kitchen Solvers’ services grew and the Baldners began expanding around Wisconsin. The Baldners started franchising Kitchen Solvers in 1984 and the first franchised location opened in Janesville, Wisconsin.

15.  Over the next decade, Kitchen Solvers expanded around the United States. In 1999, the company opened its first international location in Canada. The Baldners continued to own and operate Kitchen Solvers until 2010, when the company was sold to Tom Miskowski and Wade Nolte.

16.  Kitchen Solvers’ growth has been slow and steady over the past few decades and there are locations in a handful of U.S. states and one in Canada.

Entrepreneur’s Franchise 500

17.  Kitchen Solvers ranked No. 469 on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of Kitchen Solvers 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 Kitchen Solvers’ 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:  50
• Outlets at the End of the Year:  44
• Net Change:  -6

2019

• Outlets at the Start of the Year:  44
• Outlets at the End of the Year:  43
• Net Change:  -1

2020

• Outlets at the Start of the Year:  43
• Outlets at the End of the Year:  46
• 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

Part 1 – Overall Gross Sales Information

• The information in this Part 1 reflects a historical financial performance representation of Gross Sales earned by those 33 franchisees that operated 48 franchised businesses located in the United States during the entire period of January 1, 2020 through December 31, 2020 (the “Measurement Period”).

• As of December 31, 2020, there was a total of 33 franchisees operating 46 franchised businesses located in the United States.

• 6 franchisees operating 7 franchised businesses are excluded from the data presented in this Item 19 because they commenced operations in 2020 and were not fully operational for the entire Measurement Period.

• “Gross Sales” includes the total revenues and receipts from the sale of all products and services sold through each Kitchen Solvers Business. Gross Sales does not include sales tax.

A. Single-Unit Reporting Franchisees

• The following table presents Gross Sales information for the 12 franchisees that operated a single franchised business during the Measurement Period.

• Average Gross Sales:  $390,714.56
• Number and Percentage That Met or Exceeded Average:  3 (25%)
• Median Gross Sales:  $227,417.00
• High Gross Sales:  $53,208.00
• Low Gross Sales:  $2,169,117.00

B. Multi-Unit Reporting Franchisees

• The following table presents Gross Sales information for the 6 franchisees that operated more than 1 franchised business during the Measurement Period. Of these 6 franchisees, 4 franchisees operated 2 franchised businesses, and 2 franchisees operated 3 franchised businesses.

• These franchisees provided information for all franchised businesses that they own on 1 report.

• Average Gross Sales:  $875,699.90
• Number and Percentage That Met or Exceeded Average:  3 (50%)
• Median Gross Sales:  $880,977.75
• High Gross Sales:  $201,268.09
• Low Gross Sales:  $1,423,043.00

Part 2 – Gross Sales Information Based Upon Number of Full-Time Employees

• “Full-Time Employee” (or “FTE”) means 1 or more employees (excluding the franchisee) that in the aggregate work at least 40 hours per week.

A1. Single-Unit Reporting Franchisees with 2 or More Full-Time Employees

• The following table presents Gross Sales information for the 6 franchisees that operated a single franchised business during the Measurement Period with 2 or more full-time employees.

• Average Gross Sales:  $658,704.31
• Number and Percentage That Met or Exceeded Average:  1 (17%)
• Median Gross Sales:  $411,335.78
• High Gross Sales:  $240,434.00
• Low Gross Sales:  $2,169,117.00

• Because sales are seasonal, the number of FTEs that a franchisee may elect to employ can fluctuate throughout a given year. While all of the reporting single-unit franchisees in A1 above had at least 2 FTEs throughout the entire 2020 calendar year, the highest number of FTEs that any of those reporting single-unit franchisees had at some point during the 2020 calendar year was 10.

A2. Single-Unit Reporting Franchisees with 1 or No Full-Time Employees

• The following table presents Gross Sales information for the 6 franchisees that operated a single franchised business during the Measurement Period with 1 or less full-time employees.

• Average Gross Sales:  $122,724.81
• Number and Percentage That Met or Exceeded Average:  3 (50%)
• Median Gross Sales:  $118,258.50
• High Gross Sales:  $53,208.00
• Low Gross Sales:  $214,400.00

B. Multi-Unit Reporting Franchisees with 2 or More Full-Time Employees

• All of the multi-unit franchisees had 2 or more FTEs.

Part 3 – Gross Sales Information

• The information below reflects a historical financial performance representation based upon information taken from surveys that Kitchen Solvers sent to the 33 franchisees that operated 46 franchised businesses located in the United States during the entire Measurement Period.

• In response to its request, Kitchen Solvers received survey responses from 18 franchisees that operated 26 franchised businesses during the Measurement Period (collectively, the “Reporting Franchisees”). All information contained in this Item 19 came from surveys completed by the Reporting Franchisees.

• The financial performance representation contained in the tables below includes the total Gross Sales, materials expense, and installation expense experienced by the Reporting Franchisees that responded to the survey.

• The financial performance representation includes information for all services and jobs offered by the Reporting Franchisees who responded to the survey – i.e., including all products and services, and all installation services. The information contained in the tables below also reflects installation work and materials that the 18 Reporting Franchisees subcontracted through third parties.

A. Single-Unit Reporting Franchisees

• The following table presents information reported by the 12 Reporting Franchisees that operated a single franchised business during the Measurement Period.

• Average Gross Sales:  $390,714.56 (100%)
• Average Materials Expense:  $181,036.16 (46%)
• Average Installation Expense:  $49,976.70 (13%)
• Average Gross Profit:  $159,701.70 (41%)
• Average Number of Jobs:  23

B. Multi-Unit Reporting Franchisees

• The following table presents information reported by the 6 Reporting Franchisees that operated more than 1 franchised business during the Measurement Period. Of these 6 Reporting Franchisees, 4 Reporting Franchisees operated 2 franchised businesses, and 2 Reporting Franchisees operated 3 franchised businesses.

• These Reporting Franchisees provided information for all franchised businesses that they own on 1 report.

• Average Gross Sales:  $875,699.90 (100%)
• Average Materials Expense:  $352,709.28 (40%)
• Average Installation Expense:  $171,706.99 (20%)
• Average Gross Profit:  $351,283.63 (40%)
• Average Number of Jobs:  45

• “Gross Sales” includes the total reported revenues and receipts from the sale of all products and services sold through each Kitchen Solvers Business. Gross Sales does not include sales tax.

• “Materials Expenses” means the cost of all direct materials purchased by the Kitchen Solvers Franchise Business to complete all customer projects.

• “Installation Expenses” means the total amount of money spent on all subcontracted and employed labor needed to install and fulfill customer contract obligations by the Kitchen Solvers Franchised Business.

• “Gross Profit” is Gross Sales less Materials Expense and Installation Expense.

• Some outlets have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.

• Kitchen Solvers has not audited this information.

• The information presented in this Item 19 does not reflect all of the operating expenses or other costs or expenses that must be deducted from the average total sales price or gross revenue to obtain net income or profit. For example, continuing license fees and marketing expenses are not included.

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