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

Section I – Estimated initial investment (franchise costs) for a Conserva Irrigation franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Conserva Irrigation franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Conserva Irrigation 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 Conserva Irrigation franchise opportunity

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

• 2022 fiscal year average, median, highest, and lowest gross revenue for the 51 Conserva Irrigation franchisees (operating in a total of 134 franchise territories) that were operational during the entire reporting period, grouped by range of gross sales (greater than $900K, $600K to $900K, $300K to $600K, and less than $300K)

• 2022 fiscal year average, median, highest, and lowest gross revenue for the top third, middle third, and bottom third of the 40 multi-territory Conserva Irrigation franchisees that were operational during the entire reporting period

• 2022 fiscal year average, median, highest, and lowest gross revenue for the top half and bottom half of the 11 single-territory Conserva Irrigation franchisees that were operational during the entire reporting period

• average and median growth in gross revenue for 33 of the 51 franchisees that operated the full 12 months ending September 30, 2022, and the full 12 months ending September 30, 2021

• 2021 calendar year average revenue, cost of goods sold (labor, material, and equipment rental), gross profit margin, certain marketing & operating expenses, and total revenue less cost of goods sold and certain required marketing & operating expenses for the 20 reporting Conserva Irrigation franchisees operating in 64 territories that had been open and operating on a full-time basis for at least two full years as of December 31, 2021

• 2018, 2019, 2020, 2021, and 2022 aggregate gross revenues (“system sales”) reported to Conserva Irrigation from all Conserva franchisees whose Conserva businesses were operational for any part, even as little as one month if the franchisee completed initial training in October of their initial year of operations

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

Section I – Conserva Irrigation Franchise Costs

• Conserva Irrigation franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $49,500
• Travel and Living Expenses While Training:  $2,000 to $3,000
• Tools and Equipment:  $2,000 to $5,000
• Computer Hardware and Software:  $800 to $2,000
• Inventory:  $5,000 to $7,500
• Trade Show Booth:  $2,500
• Storage Facility for Inventory and Equipment:  $0 to $500
• Vehicle:  $3,000 to $10,000
• Vehicle Signage and Outfitting:  $2,500 to $5,000
• Initial Marketing Expense:  $10,000 to $15,000
• Additional Funds for 3 Months:  $7,500 to $10,000
• Total Estimated Conserva Irrigation Franchise Costs:  $84,800 to $110,000

Section II – Conserva Irrigation’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Franchise Fee:  $49,500
• Monthly Branding Royalty:  for a period of 24 months beginning on the Operational Start Date of your Irrigation Business, you must pay Conserva Irrigation a Monthly Branding Royalty based on calendar year-to-date Gross Revenue equal to: $0 to $499,999 (8%); $500,000 to $999,999 (7%); $1,000,000 to $1,499,999 (6%); $1,500,000+ (5%). Beginning on the 24-month anniversary of the Operational Start Date, the Monthly Branding Royalty payable will be equal to the greater of: (a) the amount described above based on year-to-date Gross Revenue; or (b) $1,000.
• Individual Advertising Investment:  minimum $40,000 per calendar year for one territory; minimum $60,000 if you are granted two contiguous territories. A minimum of $20,000 for each additional contiguous territory.
• National Branding and Marketing Fee:  1.5% on the first $3,000,000 of Gross Revenues in any calendar year. No National Branding and Marketing Fee is due on Gross Revenues over $3,000,000 in any calendar year.
• Digital Marketing Fee:  Conserva Irrigation’s then-current fee; currently $300 per month

Section III – Number of Franchised and Company-Owned Conserva Irrigation Outlets

Franchised

2020

• Outlets at the Start of the Year:  79
• Outlets at the End of the Year:  106
• Net Change:  +27

2021

• Outlets at the Start of the Year:  106
• Outlets at the End of the Year:  143
• Net Change:  +37

2022

• Outlets at the Start of the Year:  143
• Outlets at the End of the Year:  168
• Net Change:  +25

Company-Owned

2020

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  5
• Net Change:  +1

2021

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

2022

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

Section IV – News Updates on the Conserva Irrigation Franchise

• Conserva Irrigation Shows How Modern Problems Require Modern Solutions

• Conserva Irrigation Franchisor Is a 2022 Inc. 5000 Honoree

• Conserva Irrigation to Open a New Location in Eugene, OR

• Conserva Irrigation Partners with Franchise FastLane

• Conserva Irrigation Ranked No. 251 on Entrepreneur’s 2023 Franchise 500 List

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

Part 1 – Gross Revenues Received by Franchisees During Fiscal Year Ending September 30, 2022

• The information provided in Part 1 below presents Gross Revenue derived by certain Conserva Irrigation franchisees during the period between October 1, 2021 and September 30, 2022 (“2022 Fiscal Year Reporting Period”).

• The information provided in the table below was compiled from 51 franchisees that were operational during the entire 2022 Fiscal Year Reporting Period. These franchisees operated 134 franchise territories during the 2022 Fiscal Year Reporting Period.

• 40 of these 51 franchisees operated in more than one territory under multiple franchise agreements during the entire 2022 Reporting Period as follows: 20 of the franchisees operated 2 territories, 9 franchisees operated 3 territories, 6 franchisees operated 4 territories, 3 franchisees operated 5 territories, 1 franchisee operated 8 territories, and 1 franchisee operated 9 territories.

• Conserva Irrigation franchisees report Gross Revenues to Conserva Irrigation for all of their territories on the same report. As a result, for the purposes of this Item 19, each of the 51 franchisees was considered to be one franchise even though some operate in more than one territory.

• The data excludes 44 franchise territories that commenced operations during the 2022 Fiscal Year Reporting Period and 6 franchise territories that ceased operations during the 2022 Fiscal Year Reporting Period.

A.  Combined Multi-Territory and Single-Territory Franchisees

Greater Than 900K

• Average Years in Business:  4.1
• Number:  10
• Minimum:  $932,527
• Maximum:  $3,459,942
• Median:  $1,275,444
• Average:  $1,446,375
• Number Above:  2
• Percent Above:  20%

600K to 900K

• Average Years in Business:  2.9
• Number:  8
• Minimum:  $605,511
• Maximum:  $868,919
• Median:  $703,560
• Average:  $720,013
• Number Above:  4
• Percent Above:  50%

300K to 600K

• Average Years in Business:  2.7
• Number:  13
• Minimum:  $306,161
• Maximum:  $549,874
• Median:  $361,320
• Average:  $385,748
• Number Above:  6
• Percent Above:  46%

Less Than 300K

• Average Years in Business:  2.2
• Number:  20
• Minimum:  $110,520
• Maximum:  $296,637
• Median:  $216,342
• Average:  $210,888
• Number Above:  12
• Percent Above:  60%

Total

• Number:  51
• Average:  $577,575
• Number Above:  18
• Percent Above:  35%

• Of the 10 franchisees with Gross Revenues greater than $900,000, all 10 (100%) operated more than one territory. Of the 8 franchisees with Gross Revenues between $600,000 and $900,000, all 8 (100%) operated more than one territory. Of the 13 franchisees with Gross Revenues between $300,000 and $600,000, 8 (62%) operated more than one territory. Of the 20 franchisees with Gross Revenues less than $300,000, 14 (70%) operated more than one territory.

B.  Multi-Territory Franchisees Only

Top Third

• Number:  13
• Minimum:  $815,669
• Maximum:  $3,459,942
• Median:  $1,032,296
• Average:  $1,305,963
• Number Above:  5
• Percent Above:  38%

Middle Third

• Number:  13
• Minimum:  $306,161
• Maximum:  $754,242
• Median:  $402,483
• Average:  $479,624
• Number Above:  5
• Percent Above:  38%

Bottom Third

• Number:  14
• Minimum:  $110,520
• Maximum:  $296,637
• Median:  $217,442
• Average:  $219,207
• Number Above:  7
• Percent Above:  50%

C.  Single-Territory Franchisees Only

Top Half

• Number:  6
• Minimum:  $282,128
• Maximum:  $549,874
• Median:  $338,477
• Average:  $384,678
• Number Above:  2
• Percent Above:  33%

Bottom Half

• Number:  5
• Minimum:  $123,915
• Maximum:  $225,226
• Median:  $157,944
• Average:  $173,347
• Number Above:  2
• Percent Above:  40%

D. Franchisee Percentage Growth in Gross Revenues for the 12-Month Period Ending September 30, 2022 Compared to the 12-Month Period Ending September, 30 2021

• The table below presents the growth in Gross Revenue for 33 of the 51 franchisees that operated the full 12 months ending September 30, 2022, and the full 12 months ending September 30, 2021.

• The percentage growth for each franchisee is calculated by taking the difference in Gross Revenues reported for the 12 months ending September 30, 2022 and the 12 months ending September 30, 2021, and dividing the difference by the 12 months ending September 30, 2021.

• Average:  35.4%
• Number and Percent Above Average:  13 (39%)
• Median:  27.8%

Part 2 – Average Total Revenue Less Average COGS and Average Certain Expenses of Reporting Franchisees Operating for at Least Two Years as of December 31, 2021

• The information provided below was compiled from franchisees that were operational for all of 2021 and reported to Conserva Irrigation at least one of the following: (a) an annual Profit and Loss statement (“P&L”); (b) detailed customer reports from the customer relationship management (“CRM”) software; or (c) the number of full-time equivalent technicians in 2021 (“Reporting Franchisees”).

• A “technician” is a person employed by the Irrigation Business or the owner of the Irrigation Business who is responsible for the repair, maintenance, service, design, and construction of irrigation systems.

• Conserva Irrigation franchisees report Gross Sales to it for all of their territories on the same report. As a result, for the purposes of this Item 19, each of the franchisees was considered to be one franchise even though some operate in more than one territory.

• The information contained in this Part 2 reflects the most current information available to Conserva Irrigation as of the issuance date of the disclosure document because Conserva Irrigation typically is unable to collect this information from its franchisees until April of each year.

• The information below excludes 30 franchisees operating in 79 territories that either began operations after January 1, 2021, operated the business as a part-time business or as an ancillary business with another business, or did not report a detailed annual P&L, CRM reports, or technician data for a complete 2021 year operations.

• The Reporting Franchisees also exclude information for 3 operators that operated 6 territories that terminated operations in 2021.

• This section presents information for those 20 Reporting Franchisees operating in 64 territories that had been open and operating on a full-time basis for at least two full years as of December 31, 2021. Fifteen of the 20 Reporting Franchisees contained in the chart below operate multiple territories.

• The below chart reflects the average revenues, certain costs and expenses in the 2021 calendar year by these 20 Reporting Franchisees.

Revenue:  $759,687 (100.0%)

Cost of Goods Sold

• Labor:  $203,951 (26.8%)
• Material:  $133,689 (17.6%)
• Equipment Rental:  $6,544 (0.9%)

Gross Profit Margin:  $415,503 (54.7%)

Certain Marketing & Operating Expenses

• Royalties:  $58,178 (7.7%)
• Local Marketing Investments:  $42,842 (5.6%)
• National Brand Marketing Fund Investments:  $11,395 (1.5%)
• Office Manager Compensation:  $30,024 (4.0%)
• Small Tools, Equipment & Uniform Expense:  $6,491 (0.9%)
• Vehicle Expense:  $54,979 (7.2%)
• Bank Service Charges & Merchant Fees:  $17,367 (2.3%)
• Insurance:  $22,956 (3.0%)
• Licenses & Permits:  $2,737 (0.4%)
• IT & Telephone:  $17,722 (2.3%)

Total Revenue Less Cost of Goods Sold and Certain Required Marketing & Operating Expenses:  $150,810 (19.9%)

Part 3 – Conserva Irrigation Franchise System Sales for Years Ending September 30, 2018, 2019, 2020, 2021, and 2022

• The information provided in the table below is based on the aggregate Gross Revenues (“System Sales”) reported to Conserva Irrigation from all Conserva franchisees whose Conserva businesses were operational for any part, even as little as one month if the franchisee completed initial training in October of their initial year of operations, of each fiscal year ended September 30, 2018, September 30, 2019, September 30, 2020, September 30, 2021, and September 30, 2022.

2018

• System Gross Revenues:  $6,478,227
• System Gross Revenue % Change Year-Over-Year:  N/A
• Number of Franchised Territories as of Calendar Year End:  67
• Number of Franchisees as of Calendar Year End:  30

2019

• System Gross Revenues:  $10,476,795
• System Gross Revenue % Change Year-Over-Year:  61.7%
• Number of Franchised Territories as of Calendar Year End:  79
• Number of Franchisees as of Calendar Year End:  35

2020

• System Gross Revenues:  $13,755,666
• System Gross Revenue % Change Year-Over-Year:  31.3%
• Number of Franchised Territories as of Calendar Year End:  106
• Number of Franchisees as of Calendar Year End:  39

2021

• System Gross Revenues:  $20,191,491
• System Gross Revenue % Change Year-Over-Year:  46.8%
• Number of Franchised Territories as of Calendar Year End:  143
• Number of Franchisees as of Calendar Year End:  55

2022

• System Gross Revenues:  $31,262,486
• System Gross Revenue % Change Year-Over-Year:  54.8%
• Number of Franchised Territories as of Calendar Year End:  168
• Number of Franchisees as of Calendar Year End:  66

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

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