FDD Talk: Annex Brands (PostalAnnex+, Pak Mail, AIM Mail, Etc.) Franchise Costs, Fees, Average Revenues and/or Profits (2022 Review)

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

• Section I – Estimated initial investment (franchise costs) for an Annex Brands franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for an Annex Brands franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned Annex Brands outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

• Section IV – Background information on the Annex Brands franchise opportunity, including relevant news updates

• Section V – Presentation and analysis of Annex Brands’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• fiscal year 2021 average, median, highest, and lowest gross sales for the upper 50%, lower 50%, and all 269 franchised PostalAnnex/PostalAnnex+ centers that had been in operation for 12 months or more as of September 30, 2021 and that had represented the principal operating activity at their business locations

• fiscal year 2021 average, median, highest, and lowest gross sales for the upper 50%, lower 50%, and all 520 franchised Annex Brands centers (PostalAnnex/PostalAnnex+, Pak Mail, AIM Mail, Parcel Plus, Handle With Care Packaging Store, and Sunshine Pack & Ship) that had been in operation for 12 months or more as of September 30, 2021 and that had represented the principal operating activity at their business locations

• fiscal year 2021 gross sales for the 1 company-owned Annex Brands center (Pak Mail) that had been in operation for 12 months or more as of September 30, 2021

• Section VI – Key ratios, comparables, computations, and analyses for the Annex Brands franchise opportunity (exclusive content for Platinum subscribers)

Section I – Annex Brands Franchise Costs

• Annex Brands franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $29,950
• Fixtures:  $35,000 to $45,000
• Mailboxes:  $13,000 to $15,000
• Package Lockers:  $3,500
• Flooring:  $5,500 to $8,500
• Interior Signage:  $1,000 to $2,500
• Exterior Signage:  $6,000 to $7,500
• Construction Services:  $38,000 to $46,000
• Construction Consultation Fee, if applicable:  $2,500
• Equipment:  $3,500 to $6,000
• Computer Hardware, and Software Programs and Licenses:  $4,500 to $13,000
• Initial Inventory:  $5,000 to $7,000
• Insurance:  $2,500 to $6,000
• Travel, Lodging, and Meals for Initial Training:  $250 to $3,000
• New Center/New Owner Marketing Program Deposit:  $5,500
• Supplies:  $1,000 to $2,500
• Business Licenses, Business Permits, etc.:  $300 to $1,000
• Deposits and Pre-Paid Expenses:  $10,500 to $15,000
• Architect Fee:  $4,000 to $6,000
• Miscellaneous Expenditures:  $2,000 to $3,000
• Additional Funds (1st 12 months):  $25,000 to $50,000
• Total Estimated Annex Brands Franchise Costs:  $196,000 to $275,950

Section II – Annex Brands’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Annex Brands’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $29,950
• Royalty Fee:  5% of Gross Receipts
• Marketing Fee:  2% of Gross Receipts
• Advertising Association Fee:  monthly, the greater of $150 or 1% of Gross Receipts

Section III – Number of Franchised and Company-Owned Annex Brands Outlets

Franchised

2019

• Outlets at the Start of the Year:  276
• Outlets at the End of the Year:  279
• Net Change:  +3

2020

• Outlets at the Start of the Year:  279
• Outlets at the End of the Year:  292
• Net Change:  +13

2021

• Outlets at the Start of the Year:  292
• Outlets at the End of the Year:  301
• Net Change:  +9

Company-Owned

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

2021

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

Section IV – Background Information on the Annex Brands Franchise

10 Things You Need to Know About the Annex Brands Franchise

Pak Mail Franchisee Helps Businesses Build Brand Awareness

1.  In mid-May 2022, Tim Kincade, owner of Pak Mail in Jonesboro, Arkansas, highlighted how the company helps businesses build brand awareness. Kincaded said, “We help people turn their idea into a tangible product in a short amount of time. People are always so surprised. They just don’t realize all we do and it’s hard to get that word out.”

2.  Pak Mail has increased the brand awareness of a laundry list of professionals, from realtors to CPAs, politicians to party planners, and tutors to personal trainers. The professionals at Pak Mail go beyond the material and transform that whisper of an idea into a valuable product that works for your niche. Kincade added, “If you have an ‘It’ we can print it. Whatever your ‘It’ is, we can print it, package it and ship it.”

3.  Kincade stressed that Pak Mail doesn’t just make copies or print business cards, the brand can make whatever a client wants to print. Additionally, unlike big box printing stores, each employee at Pak Mail is specialized in print production. Kincade said, “We help customers with all their printing needs all while offering our experience in helping bring their ideas to life.”

4.  According to Kincade, clients often arrive with a paper product or design they expect can be copied and placed on business cards, banners, or fliers. He said, “They come in with unreal expectations, no digital files and they don’t realize what printing really is and what it takes. Our graphic designers are super talented. We have built a reputation of being a place with a quick turnaround. We can only work so fast, and that is pretty fast.”

5.  In an organization with more than 800 stores across the country that do the same type of business, Pak Mail of Jonesboro continues to keep its firm place among the top performers, year after year. Kincade believes that printing belongs in the business model, so much so that he consults with other stores that decide to grow their own printing service capabilities.

6.  On a final note, Kincade said, “One of the hardest things to get the word out is all that we produce. We are a complete printing center, A-Z. We not only print it or make it, but we will also package and process it and get it ready for the shipping company of your choice.”

Company History

7.  Annex Brands started out in 1985 as PostalAnnex+, which was founded by Jack Lentz near San Diego, California. At the time, there weren’t any businesses offering a complete line of small office and home-based office services in one location. The first PostalAnnex+ was a success and Lentz opened two more locations by the end of the year. Franchising started in 1986 and PostalAnnex+ grew quickly around the U.S.

8.  In 2006, PostalAnnex+ began making acquisitions to continue its growth. Its first acquisition was Florida-based Sunshine Pack & Ship retail and commercial shipping centers. The next year, PostalAnnex+ bought the Handle With Care Packaging Store brand. At that time, PostalAnnex+ decided to change its name to Annex Brands to encompass all of its properties.

9.  Over the next few years, Annex Brands also acquired Navis Pack & Ship, AIM Mail Center, Parcel Plus, and Pak Mail Centers of America, Inc. Then, in 2012, Annex Brands decided to launch Annex Copy Center as a full-service copy and print center. Today, the franchises under Annex Brands have locations all around the world.

Entrepreneur’s Franchise 500

10.  PostalAnnex+ ranked No. 140 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Annex Brands Franchise (Item 19, 2022 FDD)

• “Gross Sales” include all revenue for products and services sold to customers, including products and services with higher margins such as shipping services (including ground, next day, freight, and custom packaging), faxes, copies and metered postage, and products and services with lower margins such as postage stamps, but exclude:

• (i) sales, use, or service taxes collected and paid to appropriate taxing authorities;
• (ii) customer refunds and adjustments;
• (iii) the cost of electronic funds transfers for resale;
• (iv) the cost of money orders for resale;
• (v) utility funds collected;
• (vi) the cost of lottery tickets for resale and phone cards for resale;
• (vii) the cost of 3rd party truck rental sales;
• (viii) the cost of eBay sales; and
• (ix) the cost of ancillary fees paid to the appropriate government agencies to process fingerprinting, LiveScan, and passports.

• Annex Brands franchisees pay royalty fees and marketing fees based on Gross Receipts (defined in Item 6), which are calculated by excluding the cost of metered postage and postage stamps from Gross Sales.

• Both Gross Sales and Gross Receipts include fees and commissions generated from electronic funds transfers, money order sales, utility collections, lottery ticket sales, phone card sales, 3rd party truck rental sales, fingerprinting, LiveScan, passport services, and eBay sales.

• Annex Brands reserves the right periodically, in its sole discretion, to add additional exclusions to the list above as new programs, products, or services are established, or as changes to existing programs, products, or services are established, as specified in the Manuals, in writing or otherwise.

• The mix of postal, printing and copying, packaging and shipping, and business support services offered to the public by each individual center varies at the discretion of each franchisee.

• The Gross Sales attainable by a franchisee are largely dependent on the type and quality of service offered to the public, and individual sales and marketing efforts.

• An “average” is calculated by adding the numerical values of all data points in a set, and dividing by the number of data points in the set.

• A “median” is the numerical value of the data point in the middle of all data points in a set. If a set contains an even number of data points, the median is calculated by identifying the 2 data points in the middle of the set, adding their numerical values, and dividing by 2.

Part 1 – Annual Gross Sales for the Fiscal Year Ended September 30, 2021 of PostalAnnex/PostalAnnex+ Centers in Operation 12 Months or More as of September 30, 2021

• As of September 30, 2021, there were 301 PostalAnnex/PostalAnnex+ centers in operation, for a total of 301 PostalAnnex/PostalAnnex+ franchised centers.

• The averages, ranges, and medians below are based on the actual Gross Sales, for the fiscal year ended September 30, 2021, of the 281 PostalAnnex/PostalAnnex+ franchised centers that had been in operation for 12 months or more as of September 30, 2021 (14 franchised centers were excluded for this reason), and that had represented the principal operating activity at their business locations (6 express centers were excluded for this reason).

All Franchised

• Number of Centers:  281
• Average Annual Gross Sales:  $406,000
• Range of Annual Gross Sales:  $33,000 to $1,551,000
• Median Annual Gross Sales:  $377,000
• 122 or 43% of all 281 franchised centers met or exceeded the average annual Gross Sales figure of $406,000.

Upper 50% Franchised

• Number of Centers:  141
• Average Annual Gross Sales:  $559,100
• Range of Annual Gross Sales:  $377,000 to $1,551,000
• Median Annual Gross Sales:  $517,000
• 59 or 42% of the 141 franchised centers in the upper 50% of annual Gross Sales met or exceeded the average annual Gross Sales figure of $559,100.

Lower 50% Franchised

• Number of Centers:  140
• Average Annual Gross Sales:  $253,000
• Range of Annual Gross Sales:  $33,000 to $374,000
• Median Annual Gross Sales:  $264,000
• 74 or 53% of the 140 franchised centers in the lower 50% of annual Gross Sales met or exceeded the average annual Gross Sales figure of $253,000.

• In Annex Brands’ fiscal year ended September 30, 2021, 5 PostalAnnex/PostalAnnex+ centers ceased operations, 0 after being terminated and 5 for other reasons.

Part 2 – Annual Gross Sales for the Fiscal Year Ended September 30, 2021 of PostalAnnex/PostalAnnex+, Pak Mail, AIM Mail, Parcel Plus, Handle With Care Packaging Store, and Sunshine Pack & Ship Centers in Operation 12 Months or More as of September 30, 2021

• As of September 30, 2021, 301 PostalAnnex/PostalAnnex+ centers, 181 Pak Mail centers, 44 AIM Mail centers, 21 Parcel Plus centers, 9 Handle With Care Packaging Store centers, and 3 Sunshine Pack & Ship centers were in operation, for a total of 559 franchised centers and 1 company-owned Pak Mail center.

• The averages, ranges, and medians below are based on the actual Gross Sales, for the fiscal year ended September 30, 2021, of the 526 franchised centers that had been in operation for 12 months or more as of September 30, 2021 (15 franchised centers were excluded for this reason), and that had represented the principal operating activity at their business locations (18 express centers were excluded for this reason).

• The 1 company-owned Pak Mail center’s Gross Sales are not included in the averages, ranges, or medians for the franchised centers, but are shown separately in the chart below.

All Franchised

• Number of Centers:  526
• Average Annual Gross Sales:  $390,000
• Range of Annual Gross Sales:  $33,000 to $1,551,000
• Median Annual Gross Sales:  $357,000
• 221 or 42% of all 526 franchised centers met or exceeded the average annual Gross Sales figure of $390,000.

Upper 50% Franchised

• Number of Centers:  263
• Average Annual Gross Sales:  $540,500
• Range of Annual Gross Sales:  $358,000 to $1,551,000
• Median Annual Gross Sales:  $487,000
• 99 or 38% of the 263 franchised centers in the upper 50% of annual Gross Sales met or exceeded the average annual Gross Sales figure of $540,500.

Lower 50% Franchised

• Number of Centers:  263
• Average Annual Gross Sales:  $240,000
• Range of Annual Gross Sales:  $33,000 to $356,000
• Median Annual Gross Sales:  $248,000
• 137 or 52% of the 263 franchised centers in the lower 50% of annual Gross Sales met or exceeded the average annual Gross Sales figure of $240,000.

Company-Owned

• Number of Centers:  1
• Annual Gross Sales:  $725,000

•  In Annex Brands’ fiscal year ended September 30, 2021, 13 centers ceased operations, 0 after being terminated and 13 for other reasons.

• The Gross Sales figures reported above do not reflect cost of sales, payroll and related expenses, rent, office expenses, amortization, depreciation, income taxes, or similar expenses or debt service obligations.

• Annex Brands prepared the information above from sales reports submitted by the centers. Those reports are not audited, and Annex Brands has not undertaken to independently verify the accuracy of the information. However, Annex Brands knows of no instance in which, and has no reason to believe that, any centers overstated their Gross Sales or Gross Receipts in any reports.

• There are no material differences between the operations of, or the products or services offered by, the centers whose results are reported above, and the franchises Annex Brands currently offers.

• Some centers have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much.

Section VI – Annex Brands Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️

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