In this FDD Talk post, you’ll learn the following:
- Section I – Estimated initial investment (franchise costs) for a Wireless Zone franchise, based on Item 7 of the company’s 2022 FDD
- Section II – Initial franchise fee, royalty fee, and marketing fee for a Wireless Zone franchise, based on Items 5 and 6 of the company’s 2022 FDD
- Section III – Number of franchised and company-owned Wireless Zone 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 Wireless Zone franchise opportunity, including relevant news updates
- Section V – Presentation and analysis of Wireless Zone’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:
- 2021 average and median number of postpay activations, upgrades, and transactions (postpay activations and upgrades combined) per store per month for the top 10%, bottom 10%, and all 402 Wireless Zone stores that were open during the entire calendar year 2021
- 2021 average, high, and low gross revenue, gross profit, gross profit margin, and net activations and upgrades, by quintile, for the 397 franchised Wireless Zone stores operating under the new gross profit model for the entire calendar year 2021
- Section VI – Key ratios, comparables, computations, and analyses for the Wireless Zone franchise opportunity (exclusive content for Platinum subscribers)
Section I – Wireless Zone Franchise Costs
- Wireless Zone franchise costs, based on Item 7 of the company’s 2022 FDD:
- Initial Franchise Fee: $1,000 to $25,000
- New Franchisee Training, and Travel and Living Expenses While Training: $2,500 to $8,000 per person
- Real Estate/Rent: Not Included
- Real Estate Improvements: $10,000 to $50,000
- Business Equipment and Supplies: $10,000 to $16,000
- Computer Equipment, Signs, Fixtures, Kiosks, and Displays: $51,000 to $132,000
- Miscellaneous Opening Costs: $2,500 to $15,500
- Initial Product Inventory: $50,000 to $75,000
- Initial Marketing Program: $5,000
- Sales Tax, Use Tax, Other Similar Tax, Freight and Delivery Charges: $3,000 to $38,000
- Additional Funds for 3 Months: $25,000 to $50,000
- Total Estimated Wireless Zone Franchise Costs (excluding real estate costs): $160,000 to $414,500
Section II – Wireless Zone’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- Wireless Zone’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:
- Initial Franchise Fee: $1,000 to $25,000
- Royalties: not more than 22% of the Gross Profit you earn through sales at your Store
Section III – Number of Franchised and Company-Owned Wireless Zone Outlets
Franchised
2019
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- Outlets at the Start of the Year: 374
- Outlets at the End of the Year: 403
- Net Change: +29
2020
- Outlets at the Start of the Year: 403
- Outlets at the End of the Year: 412
- Net Change: +9
2021
- Outlets at the Start of the Year: 412
- Outlets at the End of the Year: 428
- Net Change: +16
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
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- 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 Wireless Zone Franchise
13 Things You Need to Know About the Wireless Zone Franchise
Franchisee Acquires Verizon Stores to Open First Wireless Zones in Georgia
1. In mid-April 2022, Wireless Zone announced that franchise owners Rick and Kelly Gdovic have acquired the Statesboro store location. Along with the 11 East Kennedy Street Verizon location, the Gdovics have also acquired seven other store locations across Georgia. This will create Wireless Zone’s first stores in the state.
2. Starting April 1, Rick and Kelly Gdovic took over ownership from former operating group, Wireless One Management. The two business leaders have experienced rapid growth in the franchise portfolio over the past 12 months. The Gdovics now own and operate 51 Wireless Zone stores across eight U.S. states.
3. Kelly Gdovic said, “The opportunity to enter the Statesboro community through Wireless Zone was something we simply could not say no to. Myself, Rick and our team are excited to serve our customers across the area, and we cannot wait to invest into this community who has properly welcomed and supported our entrance to their area.”
4. To keep up with demand, this Wireless Zone store location will have a higher inventory of items and will hire additional staff. As a Verizon authorized retailer, Wireless Zone offers customers optimal experiences in interactivity while shopping for wireless devices, accessories, and home solutions. It is designed as a destination for guests to get hands-on experience with the latest wireless devices.
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5. Keith Dziki, executive director of development for Wireless Zone, said, “Wireless Zone is excited to begin our business journey here in Statesboro. We look forward to a smooth ownership transition, while continuing to serve our customers across this community with premier wireless devices and accessories, along with industry-leading customer service.”
Donates 140,000 Backpacks Full of School Supplies Through Annual Event
6. In mid-July 2022, Wireless Zone announced its plan to donate 140,000 backpacks full of school supplies in the upcoming milestone tenth annual School Rocks Backpack Giveaway. In its 10 years of occurrence, the School Rocks Backpack Giveaway has provided more than 1.2 million backpacks full of school supplies to children across the U.S. as they prepare for their upcoming school years.
7. Between 1-4 p.m. on Sunday, July 31, more than 1,200 TCC and Wireless Zone stores nationwide invited local families to their locations to pick up a backpack filled with pencils, paper, a pencil box, folders, a ruler, and glue. One backpack per child present was given away on a first-come, first-served basis while supplies lasted.
8. In addition to the backpack donations, families could enter their students in a sweepstakes to win a $10,000 college scholarship through the giveaway’s Big Impact. Children in grades K-12 were eligible for entry and could be registered at their local TCC and Wireless Zone stores during the School Rocks Backpack Giveaway event. Five scholarships in total will be awarded to randomly selected winners.
9. According to the National Retail Federation, American families with school-aged children spent an average of $849.90 on school supplies in 2021 – totaling $37.1 billion spent in America last year on school supplies alone. Round Room, parent company of Wireless Zone, is working to ease the strain of rising school supply costs with this annual program through its TCC and Wireless Zone stores nationwide.
Company History
10. Wireless Zone was founded as The Car Phone Store in 1988 by Russ Weldon in Wethersfield, Connecticut. At the time, the idea of wireless technology was so novel that many people were skeptical that it would last. Weldon, however, saw the potential and wanted to open a store that sold these new products as well as accessories for the products. As we all know, wireless products took off, which meant that Weldon’s gamble paid off. Following the success of the first store, Weldon opened additional Car Phone Stores around Connecticut.
11. As the brand continued to grow and expand its offerings, the company changed its name to Wireless Zone in 1999. A year later, Verizon Wireless was founded and Wireless Zone was one of the first retailers to sell Verizon’s products. This partnership fueled Wireless Zone’s growth.
12. In 2012, Wireless Zone was acquired by Canadian company Glentel Inc. for $83.3 million. Just a few years later, the company was sold again to Round Room, LLC. Today, Wireless Zone is still one of Verizon’s Authorized Retailers and there are locations all across the United States.
Entrepreneur’s Franchise 500
13. Wireless Zone ranked No. 172 on Entrepreneur’s 2022 Franchise 500 list.
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Wireless Zone Franchise (Item 19, 2022 FDD)
- Wireless Zone franchisees sell and service wireless telephones, wireless data, satellite communications, personal communications devices, and other forms of wireless, wireline, and Internet-based communication devices, services, and accessories, and entertainment and security products and services.
- Below are tables containing financial performance representations based on the Provider’s postpay activations and upgrades data for all franchised Stores for the calendar year 2021, as provided to Wireless Zone by its Provider. The Provider reports postpay activations and upgrades data to Wireless Zone using a reporting system applicable to all of the Stores. Wireless Zone has not audited these figures.
Part 1 – Number of Postpay Activation and Upgrade Transactions
- The average number of postpay activation and upgrade transactions in the tables are net of deactivations.
- Wireless Zone has omitted the first month of data from all new franchise locations in 2021 that were open less than half the month during the first month.
- Wireless Zone offers substantially the same services to all of the Stores whose data is reported in the tables below as it does to new franchisees. New Stores will offer substantially the same products and services to consumers as were offered by these Stores.
- The first table reports data for all 402 Stores that were open as franchised Stores during the entire calendar year 2021.
- The second table reports data for the top 10% of the 402 Stores that were open during the entire calendar year 2021, and the third table reports data for the bottom 10% of these 402 Stores.
- The rankings of the top 10% and bottom 10% of these 402 Stores were based on the total number of transactions (postpay activations and upgrades combined) per Store per month.
Stores Open 12 Full Months in 2021 (402 Stores)
- Average Number of Postpay Activations Per Store Per Month: 45
- Median Number of Postpay Activations Per Store Per Month: 39
- Average Number of Upgrades Per Store Per Month: 112
- Median Number of Upgrades Per Store Per Month: 100
- Average Number of Transactions Per Store Per Month (Postpay Activations and Upgrades Combined): 157
- Median Number of Transactions Per Store Per Month (Postpay Activations and Upgrades Combined): 139
Top 10% of Stores Open 12 Full Months in 2021 (40 Stores)
- Average Number of Postpay Activations Per Store Per Month: 98
- Median Number of Postpay Activations Per Store Per Month: 95
- Average Number of Upgrades Per Store Per Month: 232
- Median Number of Upgrades Per Store Per Month: 219
- Average Number of Transactions Per Store Per Month (Postpay Activations and Upgrades Combined): 330
- Median Number of Transactions Per Store Per Month (Postpay Activations and Upgrades Combined): 301
Bottom 10% of Stores Open 12 Full Months in 2021 (40 Stores)
- Average Number of Postpay Activations Per Store Per Month: 18
- Median Number of Postpay Activations Per Store Per Month: 18
- Average Number of Upgrades Per Store Per Month: 42
- Median Number of Upgrades Per Store Per Month: 42
- Average Number of Transactions Per Store Per Month (Postpay Activations and Upgrades Combined): 61
- Median Number of Transactions Per Store Per Month (Postpay Activations and Upgrades Combined): 60
Part 2 – Gross Revenue and Gross Profit Information
- Wireless Zone excluded the results of 5 franchisees from the chart because their gross profit was inaccurately allocated, resulting in an inaccurate reporting of gross revenues.
- Wireless Zone omitted the first month of data from all franchise locations in 2021 that were open less than half the month during the first month to ensure more accurate averages.
- Based on its calculations, Wireless Zone compiled the chart below, showing the average and median gross revenue, gross margin percentage, gross profit, and activations and upgrades each month for the top 20% of those franchises on the gross profit model, the second 20%, the middle 20%, the fourth quintile, and the bottom 20%.
- As used in the charts below, and in Wireless Zone’s Franchise Agreement, the following terms are defined:
- “Allowable Cost” means (i) cost attributable to Wireless Zone-approved devices, products, accessories, goods, and services sold at the Store, as set forth in the WZ LLC Price Sheet; (ii) Fees; (iii) Chargebacks: and (iv) Non-Return Chargebacks.
- The cost attributable to any device, product, accessory, good, or service will be determined based on the WZ LLC Price Sheet in effect at the time of sale. Allowable Costs do not include administrative costs, sales costs, overhead, business costs, corporate costs, labor, depreciation, inventory, rent, taxes, or any other kind of operational, business, administrative, or regulatory cost or expense.
- “Gross Profit” means, for any calendar month, the Gross Revenue of the Store less Allowable Cost.
- “Gross Revenue” means all revenue received from or in connection with the Store, including but not limited to the following: (i) sale of devices, products, accessories, goods, and services; (ii) commissions; (iii) 50% of residuals; (iv) device trade-ins; (v) customer fees; and (vi) other payments from the Provider or any supplier or vendor to WZ LLC that may be distributed to a store owner.
- Gross Revenue does not include: (i) incentives or other short-term sales program compensation funded by WZ LLC; (ii) market development funds; and (iii) co-op advertising funds.
Quintile 1 (79 Franchised Stores)
- Average Gross Revenue: $3,407,278
- Highest Gross Revenue: $6,666,389
- Lowest Gross Revenue: $2,134,261
- Average Gross Profit: $901,712
- Highest Gross Profit: $1,613,102
- Lowest Gross Profit: $668,393
- Weighted Average Gross Margin Percentage: 26%
- Average Net Activations and Upgrades: 3,348
Quintile 2 (79 Franchised Stores)
- Average Gross Revenue: $2,145,044
- Highest Gross Revenue: $3,016,026
- Lowest Gross Revenue: $1,532,144
- Average Gross Profit: $563,321
- Highest Gross Profit: $667,733
- Lowest Gross Profit: $493,817
- Weighted Average Gross Margin Percentage: 26%
- Average Net Activations and Upgrades: 2,148
Quintile 3 (79 Franchised Stores)
- Average Gross Revenue: $1,776,417
- Highest Gross Revenue: $2,771,289
- Lowest Gross Revenue: $1,277,056
- Average Gross Profit: $444,676
- Highest Gross Profit: $492,559
- Lowest Gross Profit: $398,935
- Weighted Average Gross Margin Percentage: 25%
- Average Net Activations and Upgrades: 1,745
Quintile 4 (80 Franchised Stores)
- Average Gross Revenue: $1,308,385
- Highest Gross Revenue: $1,762,640
- Lowest Gross Revenue: $994,250
- Average Gross Profit: $345,614
- Highest Gross Profit: $398,778
- Lowest Gross Profit: $302,778
- Weighted Average Gross Margin Percentage: 26%
- Average Net Activations and Upgrades: 1,308
Quintile 5 (80 Franchised Stores)
- Average Gross Revenue: $915,506
- Highest Gross Revenue: $1,249,598
- Lowest Gross Revenue: $483,025
- Average Gross Profit: $235,969
- Highest Gross Profit: $302,564
- Lowest Gross Profit: $120,435
- Weighted Average Gross Margin Percentage: 26%
- Average Net Activations and Upgrades: 907
Median (397 Franchised Stores)
- Median Gross Revenue: $1,719,890
- Median Gross Profit: $446,237
- Weighted Median Gross Margin Percentage: 26%
- Median Net Activations and Upgrades: 1,676
All (397 Franchised Stores)
- Average Gross Revenue: $1,906,503
- Highest Gross Revenue: $6,666,389
- Lowest Gross Revenue: $483,025
- Average Gross Profit: $497,213
- Highest Gross Profit: $1,613,102
- Lowest Gross Profit: $120,435
- Weighted Average Gross Margin Percentage: 26%
- Average Net Activations and Upgrades: $1,887
- These financial performance representation figures do not reflect the costs of sales, operating expenses, freight expenses, inventory loss expense, royalties, or other costs or expenses that must be deducted from the gross revenue or gross profit figures to obtain your net income or profit.
- The data reported in the table above are averages and could vary greatly by geographic region, the length of time the Store has been in business, sales volume, sales mix, your particular Provider, the length of time that Provider has been operating in the area, the terms of contract with the Provider, the service plan selected by the Store customer, and customer usage.
- Some Stores have earned these amounts. Your individual results may differ. There is no assurance that you’ll earn as much.
Section VI – Wireless Zone Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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