Storm Guard Roofing and Construction Franchise: Average Sales ($2.06M) vs. Cost ($185K-$221K)

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

Section I – Estimated initial investment (franchise costs) for a Storm Guard Roofing and Construction franchise, based on Item 7 of the company’s 2023 FDD

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

Section III – Number of franchised and company-owned Storm Guard Roofing and Construction 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 Storm Guard Roofing and Construction franchise opportunity

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

• 2022 average and median income, cost of goods sold, gross profit, total expenses, and EBITDA plus owner compensation for the 31 Storm Guard franchisees that were in operation throughout the entire Reporting Period (January 1, 2022 to December 31, 2022), plus 2 franchisees who opened in February of the Reporting Period, for a total of 33 franchisees whose information is included

• 2022 highest and lowest income and EBITDA plus owner compensation for the 31 Storm Guard franchisees that were in operation throughout the entire Reporting Period (January 1, 2022 to December 31, 2022), plus 2 franchisees who opened in February of the Reporting Period, for a total of 33 franchisees whose information is included

Section VI – Key ratios, comparables, computations, and analyses for the Storm Guard Roofing and Construction franchise opportunity (exclusive content for Platinum subscribers)

Section I – Storm Guard Roofing and Construction Franchise Costs

• Storm Guard Roofing and Construction franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $65,000
• Rent Deposits:  $1,500 to $3,000
• Utility Deposits:  $300 to $600
• Leasehold Improvements:  $0 to $4,000
• Insurance Deposits:  $3,000 to $5,000
• Travel and Living Expenses While Training:  $3,000 to $5,000
• Opening Package:  $21,000 to $32,000
• Vehicles:  $3,600 to $4,500
• Licenses, Certificates, and Permits:  $0 to $5,000
• Additional Signage, Equipment, and Supplies:  $500 to $1,500
• Furniture, Fixtures, and Equipment:  $10,000 to $15,000
• Professional Fees:  $2,500 to $5,000
• Dues and Subscriptions:   $0 to $1,000
• Additional Funds – 3 Months:  $75,000
• Total Estimated Storm Guard Roofing and Construction Franchise Costs:  $185,400 to $221,600

Section II – Storm Guard Roofing and Construction’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Storm Guard Roofing and Construction’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $65,000
• Royalty Fee:  6.25% of your Gross Sales, subject to the minimum revenue and royalty requirements
• Brand Development Fee:  0.75% of Gross Sales
• Local Advertising and Cooperatives:  you must spend at least $2,500 per month total on approved promotional activities during your first year of operations, $5,000 per month total during your second year of operations, and $7,500 per month during all subsequent years of operations

Section III – Number of Franchised and Company-Owned Storm Guard Roofing and Construction Outlets

Franchised

2020

• Outlets at the Start of the Year:  34
• Outlets at the End of the Year:  33
• Net Change:  -1

2021

• Outlets at the Start of the Year:  33
• Outlets at the End of the Year:  35
• Net Change:  +2

2022

• Outlets at the Start of the Year:  35
• Outlets at the End of the Year:  38
• Net Change:  +3

Company-Owned

2020

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

2021

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

2022

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

Section IV – News Updates on the Storm Guard Roofing and Construction Franchise

• National Roofing, Construction Company Announces Lubbock Location

• Storm Guard Named to Franchise Business Review’s 2022 Culture100 List

• Storm Guard Looks to Expand Locations and Services in 2022

• Storm Guard Looks to Attract Franchisees in Milwaukee

• Storm Guard Planting Trees One Roof at a Time

• Storm Guard Roofing and Construction Did Not Rank on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Storm Guard Roofing and Construction Franchise (Item 19, 2023 FDD)

Average Income, Cost of Goods Sold, Operating Expenses, and EBITDA Plus Owner Compensation for Franchisees Open Throughout the Entire Reporting Period (January 1, 2022 to December 31, 2022), Plus the 2 Franchisees Who Opened in February of the Reporting Period

• This Item 19 presents historical information regarding the actual operating results for the franchised Storm Guard businesses that were open and operating throughout the entire period from January 1, 2022 through December 31, 2022 (the “Reporting Period”), plus the two Storm Guard businesses that opened in February of 2022. Any franchisees that were terminated or ceased to operate for other reasons at any point during the Reporting Period are not included in this Item 19.

• This Item 19 does not include information for the company-owned Storm Guard business or the franchised Storm Guard businesses that were not open and operating throughout the entire Reporting Period (other than the two Storm Guard businesses that opened in February of 2022).

• During the Reporting Period, 1 franchisee closed and is therefore excluded from the table.

• As of December 31, 2022 (i.e., the end of the Reporting Period), there were 38 Storm Guard franchisees in operation, but only 33 franchised Storm Guard locations were open and in operation throughout the entire Reporting Period as 4 franchisees first began operating during the Reporting Period and 1 franchise was transferred to a new owner who signed a new franchise agreement and began operations during the Reporting Period.

• Of the 33 franchisees that were in operation for the entire Reporting Period, 32 provided the financial information requested by Storm Guard and required for inclusion in this Item 19; while 1 franchisee was not able to provide financial information by the applicable deadline (despite Storm Guard’s extension of the deadline and repeated requests for the required financial information). Therefore, Storm Guard was unable to include that franchisee’s financial information in this Item 19.

• Furthermore, 1 franchisee provided financial information to Storm Guard that is clearly inaccurate (and Storm Guard is investigating the cause of the inaccuracies), so that franchisee’s information is not included in Item 19.

• In addition, 1 individual owns two separate franchise locations under two separate franchise agreements with two separate legal entities serving as franchisee; however, that franchisee provided consolidated financial statements to Storm Guard and that franchisee’s financial information is included in Item 19.

• Also included within Item 19 are the operating results for two franchisees who first opened during February of the Reporting Period, even though the results for those two locations are based on approximately 11 months of operations.

• Item 19 is comprised of the operating results for 31 of the 33 Storm Guard franchisees that were in operation throughout the entire Reporting Period plus two franchisees who opened in February of the Reporting Period, for a total of 33 franchisees whose information is included.

• Information for the 1 franchisee that was terminated or otherwise ceased operating during the Reporting Period is not included in this Item 19. Furthermore, information for one company-owned Storm Guard business is not included in this Item 19.

• Storm Guard derived all of the figures shown in the tables below from information provided by, and in the possession of, its franchisees. This information is unaudited, but Storm Guard believes it is accurate and reliable.

Average

• Income:  $2,069,059 (100.0%)
• Cost of Goods Sold:  $1,056,262 (51.1%)
• Gross Profit:  $1,012,797 (48.9%)
• Total Expenses:  $863,216 (41.7%)
• EBITDA Plus Owner Compensation:  $281,347 (13.6%)

• Highest Income:  $5,617,239 (The total Income attained by the individual with two franchised businesses who provided consolidated financial information was $8,362,101.)
• Lowest Income:  $169,324
• 12 of the 33 (36%) Storm Guard businesses included in the average attained or surpassed the average Income.

• Highest EBITDA Plus Owner Compensation:  $933,893 (The EBITDA Plus Owner Compensation attained by the individual with two franchised businesses who provided consolidated financial information was $2,680,801.)
• Lowest EBITDA Plus Owner Compensation:  $(94,726)
• 12 of the 33 (36%) Storm Guard businesses included in the average attained or surpassed the average EBITDA Plus Owner Compensation.

Median

• Income:  $1,405,837
• Cost of Goods Sold:  $714,583
• Gross Profit:  $669,445
• Total Expenses:  $652,509
• EBITDA Plus Owner Compensation:  $142,082

• The “Average” column is comprised of the average operating numbers for all of the franchised Storm Guard businesses that were in operation throughout the entire Reporting Period, plus the 2 franchisees who opened during February of the Reporting Period, except for (a) 1 franchisee located in Boston, Massachusetts, who did not provide financial information to Storm Guard by the deadline (or extended deadlines) to be included in Item 19; and (b) 1 franchisee located in Pittsburgh, Pennsylvania who provided financial information to Storm Guard that was clearly inaccurate (and Storm Guard is investigating the cause of the inaccuracies).

• The term “Total Income,” as reflected in the first line item of this Item 19, includes all revenue and income received from operations from January 1, 2022 through December 31, 2022. This may include revenue received for jobs completed prior to January 1, 2022, but for which payment was received, in whole or in part, during the Reporting Period.

• The term “EBITDA,” as used in the table, means earnings before interest, taxes, depreciation, and amortization.

• The term “Cost of Goods Sold” means the total costs of materials and labor used to complete services provided by the applicable Storm Guard Businesses.

• The term “Gross Profit” means Total Income minus Cost of Goods Sold.

• The term “Total Expenses” means the expenses attributable to operating the applicable Storm Guard Businesses other than Cost of Goods Sold.

• From time to time, Storm Guard is able to secure rebates from material suppliers and manufacturers that are paid back to its franchisees. The figures shown in the table above may include rebates for some franchisees. Franchisees are encouraged to, but do not always, include rebates in their P&Ls. No rebates are guaranteed and Storm Guard is under no obligation to secure such rebates on behalf of its franchisees.

• For purposes of this Item 19, two types of compensation paid to owners were added back for the EBITDA Plus Owner Compensation line: (a) compensation paid to owners who categorized themselves as general managers; and (b) compensation paid to owners’ spouses in excess of $50,000. For both a and b, compensation includes the actual compensation paid to such owners plus directly related expenses such as payroll processing fees and taxes, as well as the cost of medical and other benefits that were paid on behalf of the franchise owners working as general managers.

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

Section VI – Storm Guard Roofing and Construction Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️

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