Express Employment Professionals Franchise: Average Sales ($6.49M) vs. Cost ($100K-$220K)

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

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

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

Section III – Number of franchised and company-owned Express Employment Professionals 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 Express Employment Professionals franchise opportunity

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

• months 1 to 24 average sales, gross margin, franchisee’s portion of gross margin and gross receipts, and hours for Express Employment Professionals franchise units that opened in fiscal year 2020, 2021, or 2022

• first 12 months, second 12 months, and first 24 months average, median, high, and low sales for Express Employment Professionals franchise units that opened in fiscal year 2020, 2021, or 2022

• fiscal year 2022 average annual sales, gross margin, franchisee share of gross margin and gross receipts, royalty paid as a percentage of annual gross margin and gross receipts, royalty paid as a percentage of annual sales for Express Employment Professionals franchise units open more than 24 months, 24-60 months, and more than 60 months, respectively

• 2022 average annual sales per owner, annual gross margin per owner, annual gross receipts per owner, owner’s portion of gross margin and gross receipts per owner, and bonus paid per owner for the 100 Express Employment Professionals multi-unit owners (operating 256 units) that responded to a survey

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

Section I – Express Employment Professionals Franchise Costs

• Express Employment Professionals (traditional model) franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $0 to $40,000
• Lease and Deposit:  $2,000 to $3,000
• Leasehold Improvements:  $5,000 to $25,000
• Utility Deposits:  $200 to $600
• Training Costs:  $4,000 to $7,000
• Office Supplies:  $500 to $1,000
• Office Equipment:  $2,000 to $4,000
• Computer System Hardware:  $15,300 to $17,000
• Furniture and Fixtures:  $5,000 to $12,000
• Signs:  $4,500 to $6,400
• Insurance:  $500 to $1,000
• Professional Service Fees:  $1,000 to $3,000
• Additional Funds (9 months):  $60,000 to $100,000
• Total Estimated Express Employment Professionals Franchise Costs:  $100,000 to $220,000

Section II – Express Employment Professionals’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Express Employment Professionals’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $40,000

Applies to Temporary Staffing Portion of the Express Employment Professionals Business

• Express Employment Professionals’ Portion of the Gross Margin:  40% of the Gross Margin
• Express Advertising/Marketing Fund:  0.6% of the Gross Margin

Applies to Direct Hire Portion of the Express Employment Professionals Business

• Express Employment Professionals’ Portion of the Gross Receipts:  8% of Gross Receipts of the Direct Hire portion of the Express Employment Professionals Business
• Express Advertising/Marketing Fund:  2% of Gross Receipts

Section III – Number of Franchised and Company-Owned Express Employment Professionals Outlets

Franchised

2020

• Outlets at the Start of the Year:  769
• Outlets at the End of the Year:  778
• Net Change:  +9

2021

• Outlets at the Start of the Year:  778
• Outlets at the End of the Year:  782
• Net Change:  +4

2022

• Outlets at the Start of the Year:  782
• Outlets at the End of the Year:  789
• Net Change:  +7

Company-Owned

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:  2
• Net Change:  +1

2022

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

Section IV – News Updates on the Express Employment Professionals Franchise

• Express Employment Professionals Sales Skyrocket in 2022; Highest Grossing Year on Record

• Express Employment Professionals Drives Continued Development Success in 2022

• How Express Employment Professionals Established Itself as One of the Most Sought After Franchise Opportunities in the Recession-Resistant Staffing Industry

• Express Employment Professionals Selects SOCi as Localized Marketing Platform of Record, Buys Franchisees Time at Crucial Moment for Labor Market

• Forbes Recognizes Express Employment Professionals as One of America’s Best Employers

• Express Employment Professionals Is the Number One Staffing Franchise in a $150bn Industry

• Express Employment Professionals Ranked No. 45 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Express Employment Professionals Franchise (Item 19, 2023 FDD)

• The following information is an historic financial performance representation about the system’s existing franchised units and subsets of those units. The information includes the historic Sales, Gross Receipts, and Gross Margin of existing franchised units and subsets of those units.

• The tables below exclude information on units owned directly or indirectly, in whole or in part, by Robert A. Funk and William H. Stoller (company-owned units).

Part 1 – Franchise Units Opened FY 2020, 2021, or 2022

Month 1

• Average Sales:  $8,488.98
• Average Gross Margin:  $1,866.00
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $1,119.60
• Average Hours:  359.35
• Units Operating for Period:  40

Month 2

• Average Sales:  $30,503.14
• Average Gross Margin:  $6,509.55
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $3,980.85
• Average Hours:  1,289.47
• Units Operating for Period:  40

Month 3

• Average Sales:  $46,025.53
• Average Gross Margin:  $9,866.28
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $6,667.71
• Average Hours:  1,979.61
• Units Operating for Period:  40

Month 4

• Average Sales:  $66,638.27
• Average Gross Margin:  $14,160.72
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $9,532.84
• Average Hours:  2,869.95
• Units Operating for Period:  40

Month 5

• Average Sales:  $79,461.92
• Average Gross Margin:  $16,951.67
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $10,921.00
• Average Hours:  3,427.27
• Units Operating for Period:  39

Month 6

• Average Sales:  $99,254.09
• Average Gross Margin:  $20,972.57
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $14,946.36
• Average Hours:  4,202.31
• Units Operating for Period:  38

Month 7

• Average Sales:  $118,107.84
• Average Gross Margin:  $25,197.13
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $16,179.13
• Average Hours:  4,952.81
• Units Operating for Period:  36

Month 8

• Average Sales:  $117,223.32
• Average Gross Margin:  $24,638.72
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $17,351.44
• Average Hours:  5,007.14
• Units Operating for Period:  36

Month 9

• Average Sales:  $134,479.46
• Average Gross Margin:  $28,399.14
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $19,872.18
• Average Hours:  5,802.10
• Units Operating for Period:  33

Month 10

• Average Sales:  $129,842.54
• Average Gross Margin:  $27,121.29
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $18,353.95
• Average Hours:  5,629.50
• Units Operating for Period:  32

Month 11

• Average Sales:  $152,258.32
• Average Gross Margin:  $31,558.15
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $21,099.86
• Average Hours:  6,573.92
• Units Operating for Period:  32

Month 12

• Average Sales:  $166,066.59
• Average Gross Margin:  $34,613.55
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $23,914.58
• Average Hours:  7,224.61
• Units Operating for Period:  29

Month 13

• Average Sales:  $188,765.18
• Average Gross Margin:  $38,940.83
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $25,685.84
• Average Hours:  8,178.70
• Units Operating for Period:  27

Month 14

• Average Sales:  $197,748.15
• Average Gross Margin:  $41,664.76
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $27,905.19
• Average Hours:  8,424.66
• Units Operating for Period:  25

Month 15

• Average Sales:  $188,431.75
• Average Gross Margin:  $39,721.79
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $27,053.88
• Average Hours:  8,142.20
• Units Operating for Period:  25

Month 16

• Average Sales:  $188,823.01
• Average Gross Margin:  $39,825.46
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $27,445.06
• Average Hours:  8,155.56
• Units Operating for Period:  25

Month 17

• Average Sales:  $198,308.19
• Average Gross Margin:  $41,731.05
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $26,324.82
• Average Hours:  8,644.95
• Units Operating for Period:  24

Month 18

• Average Sales:  $209,082.04
• Average Gross Margin:  $44,051.40
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $27,788.25
• Average Hours:  9,037.93
• Units Operating for Period:  24

Month 19

• Average Sales:  $224,088.76
• Average Gross Margin:  $47,051.95
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $31,092.14
• Average Hours:  9,620.25
• Units Operating for Period:  23

Month 20

• Average Sales:  $245,367.45
• Average Gross Margin:  $51,107.15
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $32,638.83
• Average Hours:  10,639.68
• Units Operating for Period:  23

Month 21

• Average Sales:  $246,444.23
• Average Gross Margin:  $51,602.71
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $32,880.02
• Average Hours:  10,465.03
• Units Operating for Period:  22

Month 22

• Average Sales:  $247,307.07
• Average Gross Margin:  $51,906.54
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $34,677.23
• Average Hours:  10,589.79
• Units Operating for Period:  19

Month 23

• Average Sales:  $246,236.17
• Average Gross Margin:  $52,026.47
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $35,189.60
• Average Hours:  10,377.27
• Units Operating for Period:  18

Month 24

• Average Sales:  $241,569.40
• Average Gross Margin:  $50,582.17
• Franchisee’s Portion of Gross Margin and Gross Receipts Average:  $32,481.87
• Average Hours:  10,208.88
• Units Operating for Period:  18

Units Open and Operating – First 12 Months

• Number of Units:  29
• Average Annual Sales:  $1,080,407.45
• Median Annual Sales:  $1,015.523.10
• High Annual Sales:  $2,619,702.60
• Low Annual Sales:  $187,546.51
• Number and Percentage of Units Equaling or Exceeding Average Annual Sales:  13 / 44.83%

Units Open and Operating – Second 12 Months

• Number of Units:  18
• Average Annual Sales:  $2,689,887.19
• Median Annual Sales:  $2,295,275.85
• High Annual Sales:  $5,633,847.33
• Low Annual Sales:  $982,660.88
• Number and Percentage of Units Equaling or Exceeding Average Annual Sales:  8 / 44.44%

Units Open and Operating – First 24 Months

• Number of Units:  18
• Average Annual Sales:  $3,694,128.89
• Median Annual Sales:  $3,228,619.10
• High Annual Sales:  $7,516,204.64
• Low Annual Sales:  $1,396,209.36
• Number and Percentage of Units Equaling or Exceeding Average Annual Sales:  8 / 44.44%

Part 2 – Franchise Units Open More Than 24 Months

FY 2022

• Number of Units in Survey:  545
• Average Annual Sales:  $6,497,275
• Average Annual Gross Margin:  $1,351,513
• Average Annual Franchisee Share of Gross Margin and Gross Receipts (AAGM):  $954,495
• Average Royalty Paid Percent of Annual Gross Margin and Gross Receipts:  37.0%
• Average Royalty Paid Percent of Annual Sales:  8.8%

Part 3 – Franchise Units Open 24 to 60 Months

FY 2022

• Number of Units in Survey:  127
• Average Annual Sales:  $4,201,538
• Average Annual Gross Margin:  $873,123
• Average Annual Franchisee Share of Gross Margin and Gross Receipts (AAGM):  $606,868
• Average Royalty Paid Percent of Annual Gross Margin and Gross Receipts:  37.4%
• Average Royalty Paid Percent of Annual Sales:  8.8%

Part 4 – Franchise Units Open More Than 60 Months

FY 2022

• Number of Units in Survey:  418
• Average Annual Sales:  $7,194,784
• Average Annual Gross Margin:  $1,496,862
• Average Annual Franchisee Share of Gross Margin and Gross Receipts (AAGM):  $1,060,113
• Average Royalty Paid Percent of Annual Gross Margin and Gross Receipts:  36.9%
• Average Royalty Paid Percent of Annual Sales:  8.8%

Part 5 – Multi-Unit Franchise Owners

• Number of Multi‐Owners in Survey:  100
• Number of Units in Survey:  256
• Average Number of Units Owned:  2.56
• Median Number of Unit Owned:  2.00
• Average Tenure of Units (Years):  10.83
• Median Tenure of Units (Years):  8.46

• 2022 Average Annual Sales per Owner:  $19,205,880.13
• 2022 Average Annual Gross Margin per Owner:  $3,864,801.76
• 2022 Average Annual Gross Receipts per Owner:  $376,963.83
• 2022 Average Owner’s Portion of Gross Margin and Gross Receipts per Owner:  $2,661,163.24
• 2022 Average Bonus Paid per Owner:  $93,688.86

• ”Sales” means the total of all client billings on the Temporary Staffing, temporary/contract staffing, and Direct Hire portions of the business as recorded in Express Employment Professionals’ records and billed by Express Employment Professionals; the term “Sales” does not include client refunds.

• “Gross Margin” means the aggregate amount of client billings on the Temporary Staffing, temporary/contract staffing portion of the business as recorded in Express Employment Professionals’ records and billed by Express Employment Professionals, plus or minus any adjustments, less:

• (a) wages earned by Associates based on the work hours reported;
• (b) all credits and taxes measured by sales or gross receipts (including sale, use, franchise, and similar taxes);
• (c) the employer’s share of Social Security and Medicare taxes, federal and state unemployment tax contributions, health benefits, insurance premiums, payments made in lieu of providing health benefits or insurance, workers’ compensation insurance premiums, disability insurance premiums where required by local law, taxes on union health and welfare payments;
• (d) premiums on fidelity bonding insurance, and professional liability insurance if applicable, billing adjustment items (e.g., VMS fees, early pay discounts, etc.);
• (e) any other direct payroll taxes and insurance premiums based on sales or payrolls that may be levied; and
• (f) any other county, municipal, or other local tax (whether described as a fee, license, registration, qualification, authorization, permit, tax, or other charge or assessment, and whether based on a flat fee, net profits, gross sales, gross receipts, payroll, number of employees, value of real or personal property, or other method) (all of which are collectively referred to as direct payroll costs).

• “Gross Receipts” means the total of all money and other remuneration received on your Direct Hire business conducted in accordance with the Franchise Agreement at the location specified; the term “Gross Receipts” does not include bona fide discounts for promotional programs recommended by Express Employment Professionals or refunds.

• “Units” means Territories. Some Express Employment Professionals Businesses have multiple offices within their Territory (“Branch Offices”) which are considered one unit in the tables above.

• “Hours” means those hours worked by the Associates assigned to clients as reported for payroll and client billing purposes.

• “Royalty” means Express Employment Professionals’ portion of the Gross Margin (40%, subject to adjustments for Bonus payments) and Gross Receipts (10%).

• Your portion of the Gross Margin will be 60% and is subject to further deductions and adjustments authorized by the Franchise Agreement and Manual. Your portion of the Gross Receipts will be 90%.

• In addition to deductions and adjustments made by Express Employment Professionals as described above, you will incur other expenses that will reduce your profits or net income, such as land, building and/or equipment rent, labor, debt service, depreciation and amortization, advertising, administrative expenses such as accounting or legal expenses, taxes, licenses, insurance, and others. These expenses vary from unit to unit.

• Some units have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much. If you rely upon Express Employment Professionals’ figures, you must accept the risk of not doing as well.

Section VI – Express Employment Professionals Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️