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

Section I – Estimated initial investment (franchise costs) for a Stratus Building Solutions master franchise, based on Item 7 of the company’s 2022 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Stratus Building Solutions master franchise, based on Items 5 and 6 of the company’s 2022 FDD

Section III – Number of franchised and company-owned Stratus Building Solutions master franchise 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 – News updates on the Stratus Building Solutions master franchise opportunity

Section V – Presentation and analysis of Stratus Building Solutions’ financial performance representations (average revenues and/or profits) for master franchises, based on Item 19 of the company’s 2022 FDD, including information on the:

• 2019, 2020, and 2021 average, median, highest, and lowest gross revenue for the Stratus Building Solutions master franchisees in franchised regions, affiliate-owned regions, and total regions that were open for at least 24 months as of December 31 of the applicable year

• 2021 average, median, highest, and lowest gross revenue, by years in operation (2-3 years, 3-4 years, 4-5 years, and 5+ years), for the 46 Stratus Building Solutions master franchisees that were open for at least 24 months as of December 31, 2021

• 2021 average, median, highest, and lowest gross revenue, by tier ($0 to $100,000 monthly; $100,000 to $300,000 monthly; and $300,000+ monthly), for the 46 Stratus Building Solutions master franchisees that were open for at least 24 months as of December 31, 2021

Section VI – Key ratios, comparables, computations, and analyses for the Stratus Building Solutions master franchise opportunity (exclusive content for Platinum subscribers)

Section I – Stratus Building Solutions Master Franchise Costs

• Stratus Building Solutions master franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $75,000 to $219,000
• Real Estate, Fixtures, Leasehold Improvements, and Utility Deposits:  $1,500 to $15,000
• Initial Supplies and Inventory:  $500 to $1,000
• Equipment:  $2,800 to $5,450
• Licenses, Permits, Security Deposits, etc.:  $750 to $5,000
• Insurance:  $1,000 to $3,500
• Training:  $3,000 to $6,000
• Additional Funds (6 months):  $25,000 to $100,000
• Total Estimated Stratus Building Solutions Master Franchise Costs:  $109,550 to $354,950

Section II – Stratus Building Solutions’ Initial Franchise Fee, Royalty Fee, and Marketing Fee for Master Franchises

• Stratus Building Solutions’ initial franchise fee, royalty fee, and marketing fee for master franchises, based on Items 5 and 6 of the company’s 2022 FDD:

• Royalty on Contract Services and Sales:  4% of gross revenues less than $300,000; 3.5% of gross revenues between $300,000 and $500,000; and 3% of gross revenues over $500,000

• Royalty on Unit Franchise Fees:  20% of revenue from Unit Franchise Fees in the prior month if your Master Franchise business generated less than $300,000 in gross revenues in the prior month; 15% of revenue from Unit Franchise Fees in the prior month if your Master Franchise business generated between $300,000 and $500,000 in gross revenues in the prior month; and 10% of revenue from Unit Franchise Fees in the prior month if your Master Franchise business generated over $500,000 in gross revenues in the prior month

• Advertising and Public Relations Fund:  $150 or 1% per month of gross revenues, whichever is greater

Section III – Number of Franchised and Company-Owned Stratus Building Solutions Master Franchise Outlets

Franchised

2019

• Outlets at the Start of the Year:  45
• Outlets at the End of the Year:  39
• Net Change:  -6

2020

• Outlets at the Start of the Year:  39
• Outlets at the End of the Year:  44
• Net Change:  +5

2021

• Outlets at the Start of the Year:  44
• Outlets at the End of the Year:  45
• Net Change:  +1

Company-Owned

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  8
• Net Change:  +8

2020

• Outlets at the Start of the Year:  8
• Outlets at the End of the Year:  8
• Net Change:  0

2021

• Outlets at the Start of the Year:  8
• Outlets at the End of the Year:  11
• Net Change:  +3

Section IV – News Updates on the Stratus Building Solutions Master Franchise

• Stratus Building Solutions Targets New Territories for Growth as Need for Commercial Cleaning Increases

• Stratus Building Solutions Welcomes New President at a Time of Growth

• Stratus Building Solutions Names New VP of Franchise Development

• Stratus Building Solutions Opens First Franchise Location in Vancouver

• Stratus Building Solutions Ranks No. 32 on Entrepreneur’s 2022 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Stratus Building Solutions Master Franchise (Item 19, 2022 FDD)

• Part 1 presents the average and median annual Gross Revenues figures for 29 master franchise regions for calendar year 2019, for 45 master franchise regions for calendar year 2020, and for 46 master franchise regions for calendar year 2021.

• Part 2 presents the average and median 2021 Gross Revenues for 46 master franchise regions for the calendar year 2021, presented based on years of operation.

• Part 3 presents the average and median 2021 Gross Revenues for 46 master franchise regions for the calendar year 2021, presented based on the financial performance of the master franchise region.

• “Gross Revenues” represents the actual amount of dollars received by the master franchisee from customer revenue (including revenue from special services provided by unit franchisees), plus the franchise fees paid by unit franchisees during the calendar year.

• The annual Gross Revenues numbers are based on reports pulled from the CRM system utilized by Stratus Building Solutions’ master franchisees and are based on data they enter. These numbers have not been independently audited or verified.

Part 1 – Average Annual Gross Revenues for 2019, 2020, and 2021

• Stratus Building Solutions presents below the average and median annual Gross Revenues for certain existing master franchisees and regions for calendar years 2019, 2020, and 2021.

• The table includes data for (a) 7 master franchise regions that Stratus Building Solutions’ affiliate SBS Services Group reacquired from a group of affiliated master franchisees in 2019, (b) 1 region that was terminated in 2019 and that SBS Services Group subsequently operated as a company-operated region beginning in 2020, and (c) 1 region that SBS Services Group reacquired from a former master franchisee in July 2021. One of these regions was subdivided into two regions in 2021. These 10 regions are noted as “Affiliate-Owned.”

• SBS Services Group reacquired two regions from master franchisees in January 2022; however, these regions are still reported as “franchised” regions in the charts below.

• The 2019 section below presents the average and median annual Gross Revenues for the 2019 calendar year, as reported by the 29 master franchisees that were open for at least 24 months as of December 31, 2019. The 2019 section does not include data for the 14 regions that were operating as of December 31, 2019, but had not been operating for at least 24 months as of December 31, 2019.

• The 2020 section below presents the average and median annual Gross Revenues for the 2020 calendar year, as reported by the 45 master franchisees that were open for at least 24 months as of December 31, 2020. The 2020 section does not include data for the 5 regions that were operating as of December 31, 2020, but had not been operating for at least 24 months as of December 31, 2020.

• The 2021 section below presents the average and median annual Gross Revenues for the 2021 calendar year, as reported by the 46 master franchisees that were open for at least 24 months as of December 31, 2021. The 2021 section does not include data for the 10 regions that were operating as of December 31, 2021, but had not been operating for at least 24 months as of December 31, 2021.

2019

Franchised Regions

• Number of Regions in Subset:  21
• Average Annual Gross Revenue:  $2,559,999
• Number and Percentage of Regions at or Above the Average:  10 (48%)
• Median Annual Gross Revenue:  $2,446,831
• Number and Percentage of Regions at or Above the Median:  11 (52%)
• Highest Gross Revenue:  $8,884,632
• Lowest Gross Revenue:  $247,547

Affiliate-Owned Regions

• Number of Regions in Subset:  8
• Average Annual Gross Revenue:  $3,593,698
• Number and Percentage of Regions at or Above the Average:  4 (50%)
• Median Annual Gross Revenue:  $3,673,597
• Number and Percentage of Regions at or Above the Median:  4 (50%)
• Highest Gross Revenue:  $7,730,473
• Lowest Gross Revenue:  $585,992

Total Regions

• Number of Regions in Subset:  29
• Average Annual Gross Revenue:  $2,845,157
• Number and Percentage of Regions at or Above the Average:  12 (41%)
• Median Annual Gross Revenue:  $2,640,603
• Number and Percentage of Regions at or Above the Median:  15 (52%)
• Highest Gross Revenue:  $8,884,632
• Lowest Gross Revenue:  $247,547

2020

Franchised Regions

• Number of Regions in Subset:  36
• Average Annual Gross Revenue:  $2,062,764
• Number and Percentage of Regions at or Above the Average:  12 (33%)
• Median Annual Gross Revenue:  $1,477,099
• Number and Percentage of Regions at or Above the Median:  18 (50%)
• Highest Gross Revenue:  $9,774,156
• Lowest Gross Revenue:  $93,884

Affiliate-Owned Regions

• Number of Regions in Subset:  9
• Average Annual Gross Revenue:  $3,196,272
• Number and Percentage of Regions at or Above the Average:  4 (44%)
• Median Annual Gross Revenue:  $2,423,118
• Number and Percentage of Regions at or Above the Median:  5 (56%)
• Highest Gross Revenue:  $6,902,129
• Lowest Gross Revenue:  $389,110

Total Regions

• Number of Regions in Subset:  45
• Average Annual Gross Revenue:  $2,289,465
• Number and Percentage of Regions at or Above the Average:  17 (38%)
• Median Annual Gross Revenue:  $1,604,588
• Number and Percentage of Regions at or Above the Median:  23 (51%)
• Highest Gross Revenue:  $9,774,156
• Lowest Gross Revenue:  $93,884

2021

Franchised Regions

• Number of Regions in Subset:  36
• Average Annual Gross Revenue:  $2,479,961
• Number and Percentage of Regions at or Above the Average:  15 (42%)
• Median Annual Gross Revenue:  $1,885,298
• Number and Percentage of Regions at or Above the Median:  18 (50%)
• Highest Gross Revenue:  $11,327,548
• Lowest Gross Revenue:  $143,546

Affiliate-Owned Regions

• Number of Regions in Subset:  10
• Average Annual Gross Revenue:  $3,266,338
• Number and Percentage of Regions at or Above the Average:  4 (40%)
• Median Annual Gross Revenue:  $2,407,851
• Number and Percentage of Regions at or Above the Median:  5 (50%)
• Highest Gross Revenue:  $7,299,515
• Lowest Gross Revenue:  $387,426

Total Regions

• Number of Regions in Subset:  46
• Average Annual Gross Revenue:  $2,650,913
• Number and Percentage of Regions at or Above the Average:  19 (41%)
• Median Annual Gross Revenue:  $1,885,298
• Number and Percentage of Regions at or Above the Median:  23 (50%)
• Highest Gross Revenue:  $11,327,548
• Lowest Gross Revenue:  $143,546

Part 2 – 2021 Average and Median Gross Revenues by Years in Operation

• The table below provides the 2021 average and median annual Gross Revenues for the 46 master franchisees in 2021, presented based on their years in operation as of December 31, 2021.

• The data in the table is presented in four groups: (a) the 5 master franchisee regions operating for more than 2 years but less than 3 years; (b) the 6 master franchisee regions operating for more than 3 years but less than 4 years; (c) the 9 master franchisee regions operating for more than 4 years but less than 5 years; and (d) the remaining 26 master franchisee regions operating for more than 5 years.

2-3 Years in Operation

• Number of Regions in Subset:  5
• Average Annual Gross Revenue:  $524,301
• Number and Percentage of Regions at or Above the Average:  2 (40%)
• Median Annual Gross Revenue:  $319,465
• Number and Percentage of Regions at or Above the Median:  3 (60%)
• Highest Annual Gross Revenue:  $1,153,530
• Lowest Annual Gross Revenue:  $143,546

3-4 Years in Operation

• Number of Regions in Subset:  6
• Average Annual Gross Revenue:  $1,060,931
• Number and Percentage of Regions at or Above the Average:  2 (33%)
• Median Annual Gross Revenue:  $866,347
• Number and Percentage of Regions at or Above the Median:  3 (50%)
• Highest Annual Gross Revenue:  $2,084,763
• Lowest Annual Gross Revenue:  $333,182

4-5 Years in Operation

• Number of Regions in Subset:  9
• Average Annual Gross Revenue:  $2,585,122
• Number and Percentage of Regions at or Above the Average:  4 (44%)
• Median Annual Gross Revenue:  $2,362,813
• Number and Percentage of Regions at or Above the Median:  5 (56%)
• Highest Annual Gross Revenue:  $8,884,632
• Lowest Annual Gross Revenue:  $247,547

5+ Years in Operation

• Number of Regions in Subset:  26
• Average Annual Gross Revenue:  $3,449,569
• Number and Percentage of Regions at or Above the Average:  10 (38%)
• Median Annual Gross Revenue:  $3,154,076
• Number and Percentage of Regions at or Above the Median:  13 (50%)
• Highest Annual Gross Revenue:  $11,327,548
• Lowest Annual Gross Revenue:  $524,127

Part 3 – 2021 Average and Median Gross Revenues by Tier

• The table below provides the 2021 average and median annual Gross Revenues for the 46 master franchisees listed in 2021, presented in tiers based on financial performance.

• Tier 1 or “Start-Up Franchisees” are those that generated average monthly Gross Revenues of $0 to $100,000 per month; Tier 2 or “Emerging Franchisees” are those that generated average monthly Gross Revenues of $100,000 to $300,000 per month; and Tier 3 or “Established Franchisees” are those that generated average monthly Gross Revenues more than $300,000 per month.

• The data in the table is presented in three groups: (a) 14 Tier 1 master franchisees; (b) 21 Tier 2 master franchisees; and (c) 11 Tier 3 master franchisees.

Tier 1: $0 to $100,000 Monthly

• Number of Regions in Subset:  14
• Average Annual Gross Revenue:  $603,760
• Number and Percentage of Regions at or Above the Average:  8 (57%)
• Median Annual Gross Revenue:  $670,409
• Number and Percentage of Regions at or Above the Median:  7 (50%)
• Highest Annual Gross Revenue:  $1,153,530
• Lowest Annual Gross Revenue:  $143,546

Tier 2: $100,000 to $300,000 Monthly

• Number of Regions in Subset:  21
• Average Annual Gross Revenue:  $2,302,572
• Number and Percentage of Regions at or Above the Average:  10 (48%)
• Median Annual Gross Revenue:  $2,084,763
• Number and Percentage of Regions at or Above the Median:  11 (52%)
• Highest Annual Gross Revenue:  $3,207,909
• Lowest Annual Gross Revenue:  $1,366,525

Tier 3: $300,000+ Monthly

• Number of Regions in Subset:  11
• Average Annual Gross Revenue:  $5,921,395
• Number and Percentage of Regions at or Above the Average:  5 (45%)
• Median Annual Gross Revenue:  $5,463,116
• Number and Percentage of Regions at or Above the Median:  6 (55%)
• Highest Annual Gross Revenue:  $11,327,548
• Lowest Annual Gross Revenue:  $3,692,473

• Some master franchises have earned this amount. Your individual results may differ. There is no assurance that you will earn as much.

• The 2019 financial performance information presented above reflects historical revenue data that predates the 2020 economic disruptions caused by the COVID-19 pandemic. The 2020 and 2021 financial performance information does reflect the effects of the pandemic beginning in March 2020.

Section VI – Stratus Building Solutions Master Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️