Spherion Staffing Franchise: Average Sales ($7.40M) vs. Cost ($143K-$242K)

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

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

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

Section III – Number of franchised and company-owned Spherion Staffing 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 Spherion Staffing franchise opportunity

Section V – Presentation and analysis of Spherion Staffing’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, median, highest, and lowest revenue, gross profit, and gross profit percentage for the Spherion Staffing franchisees that have been in operation for the entire fiscal year, grouped by number of years that they have been operating (1-5 years, 6-10 years, 10+ years, and all franchisees operating at least one year)

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

Section I – Spherion Staffing Franchise Costs

• Spherion Staffing (General Staffing) franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fees:  $40,000
• Computer System Hardware:  $0 to $7,300
• Real Property:  $3,500 to $7,000
• Furniture and Fixtures:  $15,500 to $35,000
• Leasehold Improvements:  $10,000 to $15,000
• Signs:  $2,000 to $8,000
• Equipment:  $4,650 to $10,500
• Opening Advertising:  $7,500 to $12,500
• Training Expenses:  $3,750 to $7,500
• Start-up Supplies:  $510 to $1,050
• Insurance:  $2,100 to $7,850
• Utility Expenses:  $160 to $1,100
• Professional Fees:  $1,050 to $5,200
• Business Licensees:  $160 to $1,100
• Hardware Installation:  $720 to $1,100
• Additional Funds for 11 Months:  $51,500 to $82,500
• Total Estimated Spherion Staffing Franchise Costs:  $143,100 to $242,700

Section II – Spherion Staffing’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Franchise Fees:  $40,000
• Spherion Marketing Fund for General Staffing Franchises:  0.25% of Sales
• Temporary Sales Fee for General Staffing Franchises:  Spherion Staffing pays its Spherion General Staffing franchisees 75% and retains 25% of the Temporary Gross Profits.
• Full-Time Placement Fee for General Staffing Franchises:  Spherion Staffing pays its Spherion General Staffing franchisees an 88% commission on (and it retains the 12% balance of) the Full-Time Placement Sales in each fiscal year.

Section III – Number of Franchised and Company-Owned Spherion Staffing Outlets

Franchised

• These numbers include Spherion Staffing’s traditional and Area-Based Franchised outlets. The Area-Based Franchise program is described in Item 1. This number also includes 2 Spherion Professionals franchised outlets that opened in 2021.

2019

• Outlets at the Start of the Year:  186
• Outlets at the End of the Year:  195
• Net Change:  +9

2020

• Outlets at the Start of the Year:  195
• Outlets at the End of the Year:  199
• Net Change:  +4

2021

• Outlets at the Start of the Year:  199
• Outlets at the End of the Year:  208
• 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:  1
• Net Change:  +1

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  0
• Net Change:  -1*

*On December 24, 2020, Spherion reacquired the Mississippi franchise outlet from its owner-franchisee and then transferred it on February 24, 2021 to an existing owner-franchisee.

Section IV – News Updates on the Spherion Staffing Franchise

• Spherion Earns Top 4 Ranking by Franchise Business Review in 2022

• Spherion Earns Recognition Among Top Franchises for Veterans in 2022 by Entrepreneur Magazine

• Tammy Feaster with Spherion Earns Prestigious Recognition as 2023 Franchisee of the Year

• Spherion Awards National Grand Prize in Second Annual Spherion Works Sweepstakes

• Spherion Staffing:
 Applying Insights to 
Stay Ahead of Competitors

• Spherion Staffing & Recruiting Ranked No. 63 on Entrepreneur’s 2023 Franchise 500 List

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

• Spherion believes it will be helpful for a prospective franchisee to know the average Gross Profit Percentage, the average per Franchise Agreement Sales, and the average per Franchise Agreement Gross Profit of its franchises for Fiscal Year 2021. The first set of below charts presents that data for franchisees grouped by the number of years that they have been operating, followed by a chart that combines the information for all of the represented franchisees.

• As of the issuance date of the Disclosure Document, Spherion Staffing has two Spherion Professionals franchisees operating under the Franchise Agreement, both of which are included in the applicable charts. Accordingly, the following figures are for the Spherion General Staffing franchises (many of which have the right to provide Professional Services through the Professional Services Addendum) and Professional franchises for Fiscal Year 2021.

1-5 Years in Operation

Revenue

• Average:  $2,845,291
• Median:  $2,722,465
• Highest:  $4,556,563
• Lowest:  $1,433,164

Gross Profit

• Average:  $605,377
• Median:  $637,470
• Highest:  $892,402
• Lowest:  $305,689

Gross Profit %

• Average:  21.3%
• Median:  20.1%
• Highest:  26.6%
• Lowest:  16.8%

6-10 Years in Operation

Revenue

• Average:  $5,856,573
• Median:  $2,779,390
• Highest:  $26,440,039
• Lowest:  $750,646

Gross Profit

• Average:  $1,314,667
• Median:  $594,414
• Highest:  $5,861,330
• Lowest:  $164,144

Gross Profit %

• Average:  22.3%
• Median:  22.0%
• Highest:  29.7%
• Lowest:  16.6%

10+ Years in Operation

Revenue

• Average:  $8,768,315
• Median:  $5,639,446
• Highest:  $47,341,014
• Lowest:  $582,324

Gross Profit

• Average:  $1,877,264
• Median:  $1,133,514
• Highest:  $9,097,689
• Lowest:  $176,718

Gross Profit %

• Average:  22.1%
• Median:  21.1%
• Highest:  35.1%
• Lowest:  12.7%

All Franchisees (at Least 1 Year)

Revenue

• Average:  $7,400,437
• Median:  $4,455,683
• Highest:  $47,341,014
• Lowest:  $582,324

Gross Profit

• Average:  $1,592,483
• Median:  $910,487
• Highest:  $9,097,689
• Lowest:  $164,144

Gross Profit %

• Average:  22.0%
• Median:  21.6%

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

• In order to be included in the above information, the Spherion franchise must have been in operation for the entire fiscal year.

• The information for Sales and Gross Profits is on a per franchisee basis. That is, if a franchisee has more than one Franchise Agreement with Spherion, then the numbers achieved under each Franchise Agreement are combined. If a franchisee has more than one office under the same Franchise Agreement, these offices are aggregated to determine the Sales and Gross Profit numbers for that Franchise Agreement.

• The above charts exclude three existing franchisees as of December 31, 2021 because they were not open and operating for the entire 2021 calendar year.

• In FY 2021, 3 of the 9 (or 33.3%) franchisees with tenure of 1-5 years under contract surpassed the average Gross Profit Percentage stated above. Five of the 9 franchisees (or 55.6%) surpassed the average annual Sales stated above, and 4 of the 9 franchisees (or 44.4%) surpassed the average annual Gross Profit stated above. The two Professional franchises are included in this chart.

• In FY 2021, 3 of the 8 (or 37.5%) franchisees with tenure of 6-10 years under contract surpassed the average Gross Profit Percentage stated above. One of the 8 franchisees (or 12.5%) surpassed the average annual Sales stated above, and 2 of the 8 franchisees (or 25.0%) surpassed the average annual Gross Profit stated above.

• In FY 2021, 10 of the 39 (or 25.6%) franchisees with tenure of 10+ years under contract surpassed the average Gross Profit Percentage stated above. Eleven of the 39 franchisees (or 28.2%) surpassed the average annual Sales stated above, and 17 of the 39 franchisees (or 43.6%) surpassed the average annual Gross Profit stated above.

• In FY 2021, 15 of the 56 (or 26.8%) franchisees of at least 1 year tenure under contract surpassed the average Gross Profit Percentage stated above. Fourteen of the 56 franchisees (25%) surpassed the average annual Sales stated above, and 24 of the 56 franchisees (42.9%) surpassed the average annual Gross Profit stated above.

• The information in this Item 19 includes franchisees operating mature offices, and a number of franchisees who bought existing offices, either from the franchisor or from a franchisee, as opposed to starting a new office. The information is for all of the Spherion branded franchised operations. However, the information does not include any of the “Area-Based Franchise Agreement” program franchises, which operate under a fundamentally different relationship and agreement.

• Your results will likely differ from the results presented above, depending on your efforts and those of your staff, your particular market size and makeup, and the competition. Other factors that could impact your numbers include, but are not limited to, local, regional, national, and international general economic conditions, your business mix (temporary staffing vs. permanent placement, clerical vs. light industrial, and the amount of professional staffing you have, if you receive the right to offer professional staffing services), etc.

• The financial performance representations above do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenues or gross sales figures to obtain your net income or profit.

• To help you analyze what your expenses might be on a monthly basis, Spherion Staffing has listed below what it believes to be your normal monthly expense items.

• Salaries and wages
• Commission/bonus accrual
• Employee benefits (including payroll taxes and health, life, and disability insurance)
• Franchise data processing allocation (MISTEF fee – Section 8 of the Franchise Agreement)
• Insurance
• SEM (Search Engine Marketing)
• SEO (Search Engine Optimization)
• Internet/online and social media advertising
• Email and text/SMS marketing
• Out-of-home/billboard advertising
• TV/cable/YouTube video advertising
• Radio advertising
• Grass roots marketing (flyers, posters, and other traditional and digital collateral)
• Meetings/seminars/courses/conventions
• Office supplies
• Equipment/software repair/maintenance
• Bank/credit card fees
• Rent (premises lease)
• Rent (equipment)
• Repairs and maintenance
• Depreciation and amortization expense
• Utilities
• Interest expense (includes interest on accounts receivable over 60 days charged by Spherion)
• Professional fees
• Telecommunications
• Automobile and parking
• Other travel
• Customer relations/development
• Bad debt expense
• Taxes and franchises
• Miscellaneous

• This expense listing may not be a complete listing for you, and Spherion Staffing does not make any representations to you as to what the actual expenses in each category will be.

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