ARCpoint Labs Franchise: Average Sales ($651K) vs. Cost ($198K-$379K)

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

Section I – Estimated initial investment (franchise costs) for an ARCpoint Labs franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for an ARCpoint Labs franchise, based on Items 5 and 6 of the company’s 2023 FDD

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Section III – Number of franchised and company-owned ARCpoint Labs outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the ARCpoint Labs franchise opportunity

Section V – Presentation and analysis of ARCpoint Labs’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

2022 average, median, highest, and lowest gross sales for the top 20%, middle 60%, and bottom 20% of the 62 franchised ARCpoint Labs businesses that: (a) reported this data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business 24 months or more as of December 31, 2022

2022 average, median, highest, and lowest gross sales for the top 20%, middle 60%, and bottom 20% of the 15 franchised ARCpoint Labs businesses that: (a) reported this data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business for between 12 and 24 months as of December 31, 2022

2022 average, median, highest, and lowest clinical sales for the top 20%, middle 60%, and bottom 20% of the 59 franchised ARCpoint Labs businesses that: (a) reported COVID-test related clinical sales data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business 12 months or more as of December 31, 2022

2022 average gross sales, cost of goods sold, gross profit, general and administrative expenses, and net operating income for the 77 franchised ARCpoint Labs Businesses that: (a) reported this data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business for between 12 and 24 months, or 24 months or more as of December 31, 2022

2022 average gross sales by tests and services provided by the 77 franchised ARCpoint Labs Businesses that: (a) reported this data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business 12 months or more as of December 31, 2022

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

Section I – ARCpoint Labs Franchise Costs

ARCpoint Labs franchise costs, based on Item 7 of the company’s 2023 FDD:

Initial Franchise Fee: $54,500
Initial Training Fee: $18,500
New Owner Support Fee: $13,500
Initial Technology Fee: $3,500
Clinical Program Fee: $2,500
Sales Training Fee: $3,000
Training Expenses: $0 to $5,425
Insurance: $4,500 to $24,495
Professional Fees: $4,500 to $9,000
Computer Hardware and Software: $2,550 to $9,800
Site Selection Assistance: $0 to $2,500
Leasehold Improvements: $20,000 to $80,000
Testing Equipment: $3,600 to $30,000
Signage: $2,000 to $7,000
Furniture, Fixtures, and Equipment: $500 to $8,000
Office Equipment and Supplies: $500 to $8,000
Initial Inventory: $10,750 to $22,500
Business Licenses and Permits: $100 to $2,000
Dues, Subscriptions, and Memberships: $300 to $3,500
Additional Funds – 6 Months: $54,000 to $72,000
Total Estimated ARCpoint Labs Franchise Costs: $198,800 to $379,720

Section II – ARCpoint Labs’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

ARCpoint Labs’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

Initial Franchise Fee: $54,500
Royalty: the greater of 7% (“Royalty”) of preceding monthly Gross Sales or $350 per month (“Minimum Royalty”)
Brand Fund Contribution: the greater of 2% of your monthly Gross Sales (“Brand Fund Contribution”) or $100 per month (“Minimum Brand Fund Contribution”)
Local Advertising Requirement Compliance Fee: the difference between the amount you spent on local advertising each year and your required local advertising expenditure ($6,000 in first 3 months after commencing Lab Operations; $9,000 in next 9 months, for a total of $15,000 for the first 12 months; the greater of 3% of your Gross Sales per 12-month period, or $9,000 per 12 months thereafter)

Section III – Number of Franchised and Company-Owned ARCpoint Labs Outlets

Franchised

2020

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Outlets at the Start of the Year: 93
Outlets at the End of the Year: 99
Net Change: +6

2021

Outlets at the Start of the Year: 99
Outlets at the End of the Year: 108
Net Change: +9

2022

Outlets at the Start of the Year: 108
Outlets at the End of the Year: 126
Net Change: +18

Company-Owned

2020

Outlets at the Start of the Year: 2
Outlets at the End of the Year: 2
Net Change: 0

2021

Outlets at the Start of the Year: 2
Outlets at the End of the Year: 5
Net Change: +3

2022

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Outlets at the Start of the Year: 5
Outlets at the End of the Year: 5
Net Change: 0

Section IV – News Updates on the ARCpoint Labs Franchise

ARCpoint Labs Expands to Worcester

ARCpoint Labs Did Not Rank on Entrepreneur’s 2023 Franchise 500 List

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

As of December 31, 2022, ARCpoint Labs had 126 franchised and 5 affiliate-owned ARCpoint Labs Businesses. The data below only applies to the franchisee-owned ARCpoint Labs Businesses.

Part 1A – 2022 Gross Sales Analysis for the Period from January 1, 2022 to December 31, 2022

The Gross Sales data represented below is based upon the business records and financial statements prepared by the 62 ARCpoint Labs Businesses that: (a) reported this data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business 24 months or more as of December 31, 2022.

Of the 62 ARCpoint Labs Businesses represented in the following table, Gross Sales ranged from $56,976 to $4,511,492.

Top 20%

Number of Franchisee Locations Whose Gross Sales Were Within Each Range: 12
Low Gross Sales: $1,188,749
High Gross Sales: $4,511,492
Average Gross Sales: $1,924,707
Median Gross Sales: $1,643,356
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 4 (33%)

Middle 60%

Number of Franchisee Locations Whose Gross Sales Were Within Each Range: 38
Low Gross Sales: $215,935
High Gross Sales: $1,158,553
Average Gross Sales: $572,180
Median Gross Sales: $497,464
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 17 (45%)

Bottom 20%

Number of Franchisee Locations Whose Gross Sales Were Within Each Range: 12
Low Gross Sales: $56,976
High Gross Sales: $206,270
Average Gross Sales: $135,046
Median Gross Sales: $135,981
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 6 (50%)

The Top 20% of these ARCpoint Labs Businesses averaged $1,924,707 in Gross Sales, the Middle 60% averaged $572,180, and the Bottom 20% averaged $135,046.

Part 1B – 2022 Gross Sales Analysis for the Period from January 1, 2022 to December 31, 2022

The Gross Sales data represented below is based upon the business records and financial statements prepared by the 15 ARCpoint Labs Businesses that: (a) reported this data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business for between 12 and 24 months as of December 31, 2022.

Of the 15 ARCpoint Labs Businesses represented in the following table, Gross Sales ranged from $46,720 to $728,859.

Top 20%

Number of Franchisee Locations Whose Gross Sales Were Within Each Range: 3
Low Gross Sales: $463,165
High Gross Sales: $728,859
Average Gross Sales: $580,748
Median Gross Sales: $550,220
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 1 (33%)

Middle 60%

Number of Franchisee Locations Whose Gross Sales Were Within Each Range: 9
Low Gross Sales: $127,027
High Gross Sales: $241,437
Average Gross Sales: $187,565
Median Gross Sales: $190,173
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 5 (56%)

Bottom 20%

Number of Franchisee Locations Whose Gross Sales Were Within Each Range: 3
Low Gross Sales: $46,720
High Gross Sales: $111,152
Average Gross Sales: $88,027
Median Gross Sales: $106,210
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 2 (67%)

The Top 20% of ARCpoint Labs Businesses averaged $580,748 in Gross Sales, the Middle 60% averaged $187,565, and the Bottom 20% averaged $88,027.

Part 2 – 2022 Clinical Program Sales Analysis for the Period from January 1, 2022 to December 31, 2022

The Clinical Program sales data represented below is based upon the business records and financial statements prepared by the 59 ARCpoint Labs Businesses that: (a) reported COVID-test related clinical sales data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business 12 months or more as of December 31, 2022.

Of the 59 ARCpoint Labs Businesses represented in the following table, Clinical Program sales ranged from ($996) to $3,900,755.

Top 20% Clinical Sales

Number of Franchisee Locations Whose Clinical Sales Were Within Each Range: 12
Low Clinical Sales: $601,576
High Clinical Sales: $3,900,755
Average Clinical Sales: $1,261,708
Median Clinical Sales: $1,076,232
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 5 (42%)

Middle 60% Clinical Sales

Number of Franchisee Locations Whose Clinical Sales Were Within Each Range: 35
Low Clinical Sales: $32,431
High Clinical Sales: $567,596
Average Clinical Sales: $218,663
Median Clinical Sales: $155,144
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 14 (40%)

Bottom 20% Clinical Sales

Number of Franchisee Locations Whose Clinical Sales Were Within Each Range: 12
Low Clinical Sales: -$996
High Clinical Sales: $19,368
Average Clinical Sales: $6,945
Median Clinical Sales: $5,989
Number and Percentage of Franchisee Locations That Attained or Surpassed the Average: 6 (50%)

The Top 20% of these ARCpoint Labs Businesses averaged $1,261,708 in Clinical Program sales, the Middle 60% averaged $218,663, and the Bottom 20% averaged $6,945.

Clinical Program sales include Gross Sales from a variety of clinical products and services in addition to COVID-related clinical services. However, during the period reflected herein from January 1, 2022 to December 31, 2022, COVID-related testing constitutes more than 85% of Clinical Program sales.

Results above exclude Clinical Program sales from labs operated by the franchisor’s affiliates ACL and ODS and their respective subsidiaries.

Part 3 – 2022 Net Operating Income Analysis for the Period from January 1, 2022 to December 31, 2022

The Net Operating Income data represented below is based upon the business records and financial statements prepared by the 77 ARCpoint Labs Businesses that: (a) reported this data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business for between 12 and 24 months, or 24 months or more (as indicated below) as of December 31, 2022.

Set forth in this table is a comparison table of Gross Sales and certain expenses for ARCpoint Labs Businesses that have been open for between 12 and 24 months and those that have been open greater than or equal to 24 months as of the year ending December 31, 2022.

Open 12-24 Months (Average)

Gross Sales: $246,294 (100.0%)
Cost of Goods Sold: $36,031 (14.6%)
Gross Profit: $210,263 (85.4%)
General and Administrative Expenses: $235,153 (95.5%)
Net Operating Income: -$24,890 (-10.1%)

Open ≥ 24 Months (Average)

Gross Sales: $749,353 (100.0%)
Cost of Goods Sold: $139,834 (18.7%)
Gross Profit: $609,519 (81.3%)
General and Administrative Expenses: $438,630 (58.5%)
Net Operating Income: $170,889 (22.8%)

Part 4 – 2022 Average Gross Sales by Tests and Services Provided by the Reporting Group

The data represented below is based upon the business records and financial statements prepared by the 77 ARCpoint Labs Businesses that: (a) reported this data for each of the 12 months in the period from January 1, 2022 to December 31, 2022; and (b) were in business 12 months or more as of December 31, 2022.

The following table shows the average Gross Sales per Territory per product/service type sold that were reported in 2022 by these ARCpoint Labs Businesses.

Results below do not include data from labs operated by the franchisor’s affiliates ACL and ODS and their respective subsidiaries.

Top 20% performers have a higher mix of clinical testing and non-traditional testing modalities such as oral fluid, hair, and nail testing that tend to have higher gross margin than the traditional urine testing.

Collection for TPA Accounts makes up just 13% of the Gross Sales for the top 20% performers and middle 60% performers, while it makes up 27% for the bottom 20% performers.

Top 20% by Gross Sales

Background Checks: $7,525
Clinical Testing: $943,100
Finger Printing: $2,421
On-Site/After Hours: $33,534
Physicals: $4,905
TPA Collection and Other: $163,975
Fee for Service Miscellaneous: $1,160,299
Total Fee for Service Income: $1,108,735

Breath Alcohol Test: $3,859
DNA Paternity/Immigration: $8,467
Urine – Combined: $55,469
Revenue Tests – Other and Hair/Nail/Saliva: $228,948
Revenue Tests Miscellaneous: $71,315
Total Revenue Tests: $368,058

Other Miscellaneous: $208,896
Total Gross Sales: $1,685,689

Middle 60% by Gross Sales

Background Checks: $4,991 (1.1%)
Clinical Testing: $218,680 (47.7%)
Finger Printing: $2,373 (0.5%)
On-Site/After Hours: $11,420 (2.5%)
Physicals: $1,146 (0.3%)
TPA Collection and Other: $103,905 (22.7%)
Fee for Service Miscellaneous: $347,686 (75.9%)
Total Fee for Service Income: $342,032 (74.6%)

Breath Alcohol Test: $1,735 (0.4%)
DNA Paternity/Immigration: $10,584 (2.3%)
Urine – Combined: $27,712 (6.0%)
Revenue Tests – Other and Hair/Nail/Saliva: $45,099 (9.8%)
Revenue Tests Miscellaneous: $5,373 (1.2%)
Total Revenue Tests: $90,503 (19.7%)

Other Miscellaneous: $25,722 (5.6%)
Total Gross Sales: $458,257 (100.0%)

Bottom 20% by Gross Sales

Background Checks: $523
Clinical Testing: $31,537
Finger Printing: $114
On-Site/After Hours: $1,980
Physicals: $916
TPA Collection and Other: $25,982
Fee for Service Miscellaneous: $61,939
Total Fee for Service Income: $102,473

Breath Alcohol Test: $1,909
DNA Paternity/Immigration: $5,106
Urine – Combined: $11,101
Revenue Tests – Other and Hair/Nail/Saliva: $43,060
Revenue Tests Miscellaneous: $1,089
Total Revenue Tests: $62,265

Other Miscellaneous: $5,581
Total Gross Sales: $170,319

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

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ARCpoint Labs Franchise: Average Sales ($651K) vs. Cost ($198K-$379K)

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Section I – ARCpoint Labs Franchise Costs

Section II – ARCpoint Labs’ Initial Franchise Fee, Royalty Fee, and Marketing Fee