In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:
Section I – Estimated initial investment (franchise costs) for an Uptown Cheapskate franchise, based on Item 7 of the company’s 2022 FDD
Section II – Initial franchise fee, royalty fee, and marketing fee for an Uptown Cheapskate franchise, based on Items 5 and 6 of the company’s 2022 FDD
Section III – Number of franchised and company-owned Uptown Cheapskate 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 Uptown Cheapskate franchise opportunity
Section V – Presentation and analysis of Uptown Cheapskate’s 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 sales, cost of goods sold, gross profit, franchise royalty, administration, facility, marketing, sales expense, labor, total expenses, and net income for the 84 franchisees whose Uptown Cheapskate stores operated in the United States during the period of November 1, 2020 through October 31, 2021
Section VI – Key ratios, comparables, computations, and analyses for the Uptown Cheapskate franchise opportunity (exclusive content for Platinum subscribers)
Section I – Uptown Cheapskate Franchise Costs
- Uptown Cheapskate franchise costs, based on Item 7 of the company’s 2022 FDD:
- Initial Franchise Fee: $25,000
- Travel and Living Expenses While Training: $2,000 to $5,000
- Real Estate Deposit, Improvements: $15,000 to $115,000
- Exterior Signs and Graphics: $8,400 to $16,800
- Interior Signs: $4,000 to $6,000
- Trade Fixtures, Hangers: $95,040 to $118,800
- Computers, Scanners, Cash Drawers, Printers, Credit Card Machines, Routers, Cables, iPads, TV, etc.: $15,239
- BaseCamp Software Suite (which includes IMAP, Baseline point-of-sale, and “Q” software): $10,000
- Security Camera System: $1,800 to $6,000
- Grand Opening Promotion: $20,000 to $25,000
- Opening Inventory: $48,000 to $65,000
- Incorporation Documents: $500 to $1,000
- Loan Fees: $3,500 to $8,500
- Licenses, Permits, Utility Deposits: $1,000 to $2,000
- Supplies, Miscellaneous Expenses: $6,000 to $9,600
- Pre-Opening Working Capital: $48,000 to $60,600
- Additional Working Capital for 3 Months: $42,000 to $54,000
- Total Estimated Uptown Cheapskate Franchise Costs: $345,479 to $543,539
Section II – Uptown Cheapskate’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- Uptown Cheapskate’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:
- Franchise Fee: $20,000 to $25,000
- Royalty: for 1 store: 5% of gross sales; for 2 or more stores: 4.5% of gross sales (applies to multiple Uptown Cheapskate and/or Kid to Kid stores that are generating sales)
- Marketing Fund: 0.5% of gross sales
- Advertising Expenditure: the greater of 5% of gross sales or $2,000 per month (in addition to grand opening, reopening, relocation, and transfer store expenditures, and Marketing Fund Fee)
- Cooperative Fees: 4% of gross sales with a monthly minimum of $2,000 and maximum of $5,000
Section III – Number of Franchised and Company-Owned Uptown Cheapskate Outlets
Franchised
2019
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- Outlets at the Start of the Year: 67
- Outlets at the End of the Year: 67
- Net Change: 0
2020
- Outlets at the Start of the Year: 67
- Outlets at the End of the Year: 79
- Net Change: +12
2021
- Outlets at the Start of the Year: 79
- Outlets at the End of the Year: 83
- Net Change: +4
Company-Owned
2019
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 5
- Net Change: +2
2020
- Outlets at the Start of the Year: 5
- Outlets at the End of the Year: 6
- Net Change: +1
2021
- Outlets at the Start of the Year: 6
- Outlets at the End of the Year: 13
- Net Change: +7
Section IV – News Updates on the Uptown Cheapskate Franchise
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Uptown Cheapskate Franchise (Item 19, 2022 FDD)
- The following charts were compiled from unaudited financial reports (using the accrual basis) submitted to Uptown Cheapskate from 84 franchisees whose stores operated in the United States during the period of November 1, 2020 through October 31, 2021.
- Of the 84 stores, 77 were in operation for 12 months and 7 were in operation for an average of 5.86 months (for which monthly numbers have been annualized).
- Stores have been separated into quartiles by gross sales.
- Uptown Cheapskate’s study measured its franchisees’ performance in a variety of different markets.
Part 1 – Average Profit and Loss Statements, by Quartile
First Quartile 2021 (Consisting of 21 Units Operating from November 1, 2020 through October 31, 2021)
Sales: $1,563,885 (100%)
Cost of Goods Sold: $570,169 (36%)
Gross Profit: $993,716 (64%)
Expenses
- Franchise Royalty: $68,781 (4.4%)
- Administration: $49,501 (3.2%)
- Facility: $150,810 (9.6%)
- Marketing: $60,338 (3.9%)
- Sales Expense: $7,618 (0.5%)
- Labor: $284,619 (18.2%)
- Total Expense: $621,667 (39.8%)
Net Income: $372,049 (23.8%)
Second Quartile 2021 (Consisting of 21 Units Operating from November 1, 2020 through October 31, 2021)
Sales: $1,189,083 (100%)
Cost of Goods Sold: $420,411 (35%)
Gross Profit: $768,672 (65%)
Expenses
- Franchise Royalty: $51,629 (4.3%)
- Administration: $39,162 (3.3%)
- Facility: $134,818 (11.3%)
- Marketing: $57,760 (4.9%)
- Sales Expense: $6,520 (0.5%)
- Labor: $231,458 (19.5%)
- Total Expense: $521,346 (43.8%)
Net Income: $247,326 (20.8%)
Third Quartile 2021 (Consisting of 21 Units Operating from November 1, 2020 through October 31, 2021)
Sales: $936,010 (100%)
Cost of Goods Sold: $325,056 (35%)
Gross Profit: $610,954 (65%)
Expenses
- Franchise Royalty: $43,011 (4.6%)
- Administration: $32,859 (3.5%)
- Facility: $119,199 (12.7%)
- Marketing: $46,486 (5.0%)
- Sales Expense: $4,450 (0.5%)
- Labor: $177,436 (19.0%)
- Total Expense: $423,441 (45.2%)
Net Income: $187,514 (20.0%)
Fourth Quartile 2021 (Consisting of 21 Units Operating from November 1, 2020 through October 31, 2021)
Sales: $646,242 (100%)
Cost of Goods Sold: $226,755 (35%)
Gross Profit: $419,487 (65%)
Expenses
- Franchise Royalty: $29,646 (4.6%)
- Administration: $27,247 (4.2%)
- Facility: $97,832 (15.1%)
- Marketing: $41,135 (6.4%)
- Sales Expense: $4,622 (0.7%)
- Labor: $128,439 (19.9%)
- Total Expense: $328,921 (50.9%)
Net Income: $90,566 (14.0%)
Average of Four Quartiles in 2021
Sales: $1,083,805 (100.0%)
Cost of Goods Sold: $385,598 (35.6%)
Gross Profit: $698,207 (64.4%)
Expenses
- Franchise Royalty: $48,267 (4.5%)
- Administration: $37,192 (3.4%)
- Facility: $125,665 (11.6%)
- Marketing: $51,430 (4.7%)
- Sales Expense: $5,802 (0.5%)
- Labor: $205,488 (19.0%)
- Total Expense: $473,844 (43.7%)
Net Income: $224,363 (20.7%)
- Sales: Sales less returns and discounts.
- Cost of Goods Sold: Includes shrinkage (loss of product due to theft, donations, etc.)
- Administration: Includes insurance, credit card processing fees, bad debt, bank charges, checking account fees, donations, equipment lease, equipment repairs, licenses, dues, office supplies, payroll processing fees, property tax, security, training expense, and travel expense.
- Franchise Royalty: Number doesn’t match sales because of multiple store discount, and charges for one month are paid in the following month.
- Rent: Rent, repairs, ancillary charges, utilities.
- Sales Expense: Bags, tags, and related supplies.
- Labor: Wages, taxes, benefits, not including any compensation received by owner.
- Net Income: Income before interest, taxes, depreciation, amortization, and owner’s compensation.
- Some stores have earned these amounts. Your results are likely to differ. There is no assurance that you will earn as much.
Section VI – Uptown Cheapskate Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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