WaveMAX Laundry Franchise: Average Sales ($344K) vs. Cost ($251K-$1.42M)

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

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

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

Section III – Number of franchised and company-owned WaveMAX Laundry 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 WaveMAX Laundry franchise opportunity

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

• 2020, 2021, and 2022 actual and average gross revenue for the franchised outlets that operated for the entire applicable calendar year

• 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 gross revenue; net profit; less royalties, grand opening and local marketing, and POS system to adjust net profit as if a franchise unit; and adjusted net profit as if a franchise unit for the Jacksonville, FL company outlet

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

Section I – WaveMAX Laundry Franchise Costs

• WaveMAX Laundry (standard without mobile) franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $49,950
• Training-Related Expenses:  $1,500 to $2,000
• Grand Opening Marketing:  $20,000
• Computer Equipment and Software:  $1,000 to $1,500
• Laundry Machines and Equipment:  $69,000 to $799,000
• Tenant Improvements:  $50,000 to $450,000
• Location Lease:  $2,000 to $8,500
• Safes:  $550 to $1,200
• Containers:  $175 to $200
• Miscellaneous Supplies:  $75 to $200
• Camera and Security System:  $900 to $3,500
• Office Equipment:  $150 to $300
• Signage:  $9,000 to $15,000
• Vending Machines and ATM:  $0 to $2,500
• Televisions:  $175 to $450
• Furniture:  $400 to $600
• UV Sanitation:  $20,000 to $29,000
• Insurance:  $400 to $600
• Uniforms:  $80 to $150
• Legal Fees:  $1,000 to $2,000
• Business License(s):  $100 to $400
• Additional Funds for 3 Months:  $25,000 to $35,000
• Total Estimated WaveMAX Laundry Franchise Costs:  $251,455 to $1,422,050

Section II – WaveMAX Laundry’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Franchise Fee:  $49,950
• Royalty:  6% of Gross Revenue
• National Advertising and Marketing:  up to 1% of Gross Revenue (not currently implemented)
• Local Marketing:  $300 to $500 per month depending on the advertising package selected

Section III – Number of Franchised and Company-Owned WaveMAX Laundry Outlets

Franchised

2020

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  18
• Net Change:  +8

2021

• Outlets at the Start of the Year:  18
• Outlets at the End of the Year:  28
• Net Change:  +10

2022

• Outlets at the Start of the Year:  28
• Outlets at the End of the Year:  43
• Net Change:  +15

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 WaveMAX Laundry Franchise

• WaveMAX Hialeah Laundry Grand Opening

• Laundry’s Changing Landscape

• WaveMAX Laundry Inks 100th Development Agreement

• WaveMAX Laundry Did Not Rank on Entrepreneur’s 2023 Franchise 500 List

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

Part 1 – Franchisee Gross Revenue 2022

• Here, WaveMAX sets forth the Gross Revenue for the time period January to December 2022 as to the franchised outlets it had open on December 31, 2022 who operated the entire 2022 calendar year. As of December 31, 2022, WaveMAX had 42 franchised outlets, 28 of which met the criteria for inclusion in the Financial Performance Representation stated below:

• These revenue numbers do not include revenue for Wash-Dry-Fold and Vending. Franchisees typically see an increase of 20% to 30% through the Wash-Dry-Fold and Vending revenue streams.

Gross Revenue in 2022

• Outlet 1:  $599,249.92
• Outlet 2:  $581,910.69
• Outlet 3:  $550,520.42
• Outlet 4:  $546,324.56
• Outlet 5:  $531,207.27
• Outlet 6:  $515,931.40
• Outlet 7:  $460,105.08
• Outlet 8:  $445,457.82
• Outlet 9:  $423,952.94
• Outlet 10:  $403,789.85
• Outlet 11:  $371,315.50
• Outlet 12:  $366,778.75
• Outlet 13:  $324,260.20
• Outlet 14:  $309,165.65
• Outlet 15:  $300,624.35
• Outlet 16:  $293,040.29
• Outlet 17:  $292,245.84
• Outlet 18:  $250,134.17
• Outlet 19:  $244,356.45
• Outlet 20:  $240,944.63
• Outlet 21:  $240,711.00
• Outlet 22:  $222,551.15
• Outlet 23:  $217,883.90
• Outlet 24:  $212,604.80
• Outlet 25:  $212,005.02
• Outlet 26:  $181,677.60
• Outlet 27:  $172,547.10
• Outlet 28:  $137,917.35
• Average:  $344,615

Part 2 – Franchisee Gross Revenue 2021

• Here, WaveMAX sets forth the Gross Revenue for the time period January to December 2021 as to the franchised outlets it had open on December 31, 2021 who operated the entire 2021 calendar year. As of December 31, 2021, WaveMax had 28 franchised outlets, 20 of which met the criteria for inclusion in the Financial Performance Representation stated below:

Gross Revenue in 2021

• Outlet 1:  $518,121.57
• Outlet 2:  $490,994.65
• Outlet 3:  $466,369.62
• Outlet 4:  $406,807.67
• Outlet 5:  $377,443.37
• Outlet 6:  $366,903.98
• Outlet 7:  $312,004.25
• Outlet 8:  $306,904.75
• Outlet 9:  $301,799.52
• Outlet 10:  $271,123.19
• Outlet 11:  $254,555.75
• Outlet 12:  $243,986.00
• Outlet 13:  $241,841.95
• Outlet 14:  $233,097.50
• Outlet 15:  $207,342.87
• Outlet 16:  $203,367.96
• Outlet 17:  $194,997.06
• Outlet 18:  $193,212.57
• Outlet 19:  $171,619.90
• Outlet 20:  $162,657.25
• Average:  $296,257.57

Part 3 – Franchisee Gross Revenue 2020

• Here, WaveMAX sets forth the Gross Revenue for the time period January to December 2020 as to the franchised outlets it had open on December 31, 2020 who operated the entire 2020 calendar year. As of December 31, 2020, WaveMAX had 18 franchised outlets, 14 of which met the criteria for inclusion in the Financial Performance Representation stated below:

Gross Revenue in 2020

• Outlet 1:  $338,827.85
• Outlet 2:  $329,856.03
• Outlet 3:  $266,427.55
• Outlet 4:  $265,121.98
• Outlet 5:  $263,925.80
• Outlet 6:  $258,112.55
• Outlet 7:  $225,399.75
• Outlet 8:  $198,530.60
• Outlet 9:  $196,305.00
• Outlet 10:  $183,437.00
• Outlet 11:  $155,336.43
• Outlet 12:  $133,920.10
• Outlet 13:  $132,998.04
• Outlet 14:  $123,664.93
• Average:  $219,418.83

Part 4 – Franchisee Gross Revenue 2019

• Here, WaveMAX sets forth the Gross Revenue for the time period January to December 2019 as to the franchised outlets it had open on December 31, 2019 who operated the entire 2019 calendar year. As of December 31, 2019, WaveMAX had 10 franchised outlets, 4 of which met the criteria for inclusion in the Financial Performance Representation stated below:

Gross Revenue in 2019

• Outlet 1:  $186,405.96
• Outlet 2:  $208,107.67
• Outlet 3:  $228,813.25
• Outlet 4:  $241,334.14
• Average:  $216,165.26

• Gross Revenue means the aggregate sales price of all washing machine and dryer machine revenue earned by the Franchisee, in connection with or arising out of the operation of the Franchised Business, excluding only:

• (1) revenue derived by Franchisee through vending machines or ATM machines;

• (2) revenue derived from the Wash-Dry-Fold service offering;

• (3) the amount of any refund or credit given in respect of any services provided to a customer of the Franchised Business for which a refund of the whole or part of the purchase price is made or for which a credit is given in the ordinary course of business, and

• (4) any amounts collected by Franchisee for any governmental authority and paid out by Franchisee to that governmental authority on account of sales taxes or other taxes imposed upon the sale of goods or services by Franchisee in respect of the Franchised Business and which Franchisee is not entitled to subsequently recover.

• Outlet #1 was an existing laundromat location that was converted to a WaveMAX franchise location.

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

Part 5 – Jacksonville, FL Company Outlet

• The following table presents an historic financial performance representation of the gross revenue and net profit that AU Hydro, LLC realized in operating a laundromat business in Jacksonville, Florida for 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022.

• AU Hydro, LLC has been in business in this location since 2012 and operates substantially the same laundromat services as described in the Disclosure Document. However, AU Hydro, LLC does not operate a franchised unit. It is a separate company that is owned by the same persons who own a majority interest in the Franchisor.

2015

• Gross Revenue:  $346,904.10
• Net Profit:  $197,036.05
• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit:  $32,605.03
• Adjusted Net Profit as if a Franchise Unit:  $164,431.02

2016

• Gross Revenue:  $377,736.07
• Net Profit:  $218,783.89
• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit:  $34,472.72
• Adjusted Net Profit as if a Franchise Unit:  $184,311.17

2017

• Gross Revenue:  $409,047.57
• Net Profit:  $236,570.87
• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit:  $36,158.14
• Adjusted Net Profit as if a Franchise Unit:  $200,412.73

2018

• Gross Revenue:  $412,173.17
• Net Profit:  $226,112.31
• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit:  $36,422.75
• Adjusted Net Profit as if a Franchise Unit:  $189,689.56

2019

• Gross Revenue:  $428,959
• Net Profit:  $207,354
• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit:  $37,507.30
• Adjusted Net Profit as if a Franchise Unit:  $169,846.70

2020

• Gross Revenue:  $436,632.28
• Net Profit:  $219,119.26
• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit:  $31,197.94
• Adjusted Net Profit as if a Franchise Unit:  $187,921.32

2021

• Gross Revenue:  $489,385.97 (100.0%)
• Net Profit:  $254,511.47 (52.0%)
• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit:  $33,911.87 (6.9%)
• Adjusted Net Profit as if a Franchise Unit:  $220,599.60 (45.1%)

2022

• Gross Revenue:  $541,700.59 (100.0%)
• Net Profit:  $245,600.04 (45.3%)
• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust Net Profit as if a Franchise Unit:  $30,550.12 (5.6%)
• Adjusted Net Profit as if a Franchise Unit:  $215,049.92 (39.7%)

• “Gross Revenue” means the aggregate sales price of all washing machine, dryer machine, and Wash-Dry-Fold service revenue earned by the Franchisee, in connection with or arising out of the operation of the Franchised Business. It also includes the retail value of all products and sales generated from services donated, given away, or bartered by the Franchisee or any of its Affiliates, in connection with or arising out of the operation of the Franchised Business, excluding only:

• (1) revenue derived by Franchisee through vending machines or ATM machines;

• (2) the amount of any refund or credit given in respect of Wash-Dry-Fold services provided to a customer of the Franchised Business for which a refund of the whole or part of the purchase price is made or for which a credit is given in the ordinary course of business; and

• (3) any amounts collected by Franchisee for any governmental authority and paid out by Franchisee to that governmental authority on account of sales taxes or other taxes imposed upon the sale of goods or services by Franchisee in respect of the Franchised Business and which Franchisee is not entitled to subsequently recover.

• If you provide Mobile services, Gross Revenue includes gross revenue derived from Mobile services. Mobile Gross Revenue refers to just the portion of Gross Revenues from any Mobile pick-up and delivery laundry services you may offer including revenues from pickup and delivery charges.

• Net Profit means Gross Revenue less total expenses, except for the cost of equipment financing.

• In 2022, the Jacksonville location was over 10 years old and did have non-typical onetime expenses related to having air conditioning units repaired and one washing machine had to be rebuilt.

• Less Royalties, Grand Opening and Local Marketing, and POS System to Adjust as if Franchised Unit – WaveMax Laundry applied reductions to show additional costs that would be incurred if the outlet were a franchised outlet as follows:

• (1) a royalty reduction of 6% of Gross Revenue.

• (2) a $5,000 reduction for Grand Opening Marketing (you must spend $20,000 on Grand Opening Marketing, but WaveMAX Laundry normally applies approximately $15,000 of a manufacturer equipment purchasing rebate from Laundrylux to your Grand Opening Marketing, leaving your net spend at approximately $5,000). This is a 1st year of operation spend only and not an on-going annual expense. Prior to 2021, this spend would have been approximately $7,000.

• (3) Prior to 2021, a $4,800 reduction for Local Marketing (however, you can select a Local Marketing spend level at either $3,600, $4,800, or $6,000). In 2021, WaveMAX Laundry had local advertising spend included in the expense category.

• (4) Prior to 2021, WaveMAX Laundry deducted $600 for the monthly charges for your POS System (you would normally finance the upfront cost portion). In 2021, this line item was included in the store operation.

• (5) In 2022, the actual spend for Local Marketing and a POS System met the requirements for a new franchise location, so the only adjustment made to the Net Profit number was to reduce it by the 6% Royalty requirement.

• Adjusted Net Profit as if a Franchised Unit – These figures represent the Net Profit as if the company store outlet was a franchised outlet, by subtracting out additional costs, as explained above, that a franchisee would incur. WaveMAX Laundry does not subtract out the cost of equipment financing.

• In the time period set forth above, WaveMAX Laundry had 1 affiliate outlet.

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