In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:
Section I – Estimated initial investment (franchise costs) for a ZIPS Cleaners franchise, based on Item 7 of the company’s 2023 FDD
Section II – Initial franchise fee, royalty fee, and marketing fee for a ZIPS Cleaners franchise, based on Items 5 and 6 of the company’s 2023 FDD
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Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does. A franchise specialist will be in touch to present what's available.Section III – Number of franchised and company-owned ZIPS Cleaners 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 ZIPS Cleaners franchise opportunity
Section V – Presentation and analysis of ZIPS Cleaners’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:
- 2022 average revenue, cost of production supplies, gross margin, labor, rent, repairs and maintenance, utilities, and income before general and administrative expenses for the 53 ZIPS Cleaners Plant Store Businesses operated by franchisees during the period January 1, 2022 to December 31, 2022
Section VI – Key ratios, comparables, computations, and analyses for the ZIPS Cleaners franchise opportunity (exclusive content for Platinum subscribers)
Section I – ZIPS Cleaners Franchise Costs
- ZIPS Cleaners (Plant Facility) franchise costs, based on Item 7 of the company’s 2023 FDD:
- Initial Franchise Fee: $15,000 to $30,000
- New Store Marketing: $10,000 to $25,000
- Real Property/Rent: $10,000 to $20,000
- Utility Deposits: $2,000 to $6,000
- Leasehold Improvements: $195,000 to $290,000
- Architectural and Engineering Fees: $10,000 to $35,000
- Furnishings, Fixtures, Marketing Materials, Supplies, and Other Branded Items: $13,000 to $17,000
- Insurance: $3,000 to $7,000
- Signage: $20,000 to $25,000
- Point of Sale System/Technical Equipment: $16,000 to $25,000
- Software: $7,500
- Office Equipment and Supplies: $1,200 to $4,000
- Dry Cleaning/Laundry Production Equipment and Installation: $325,000 to $425,000
- Initial Production Supplies: $10,000 to $15,000
- Training: $500 to $30,000
- Licenses, Permits, and Professional Fees: $1,500 to $13,500
- Additional Operating Funds – 6 Months: $100,000 to $200,000
- Total Estimated ZIPS Cleaners Franchise Costs: $739,700 to $1,175,000
Section II – ZIPS Cleaners’ Initial Franchise Fee, Royalty Fee, and Marketing Fee
- ZIPS Cleaners’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:
- Initial Franchise Fee: $15,000 to $30,000
- Royalty: 6% of Royalty Net Sales
- Total Marketing Obligation: 5% of Royalty Net Sales divided among the National Marketing Fund, any Regional Marketing Fund (or, any Regional Co-op), and Local Store Marketing
- National Marketing Fund Contribution: up to 4% of Royalty Net Sales; currently, 2.0% of Royalty Net Sales
- Regional Marketing Fund Contribution: amount ZIPS determines (not to exceed 3% of Royalty Net Sales); currently, 2.0% of Royalty Net Sales
- Regional Co-op Fee: amount determined by the Co-op
- Local Store Marketing: currently, 1% of Royalty Net Sales
Section III – Number of Franchised and Company-Owned ZIPS Cleaners Outlets
Franchised
2020
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible, saving you months of wasted research.🔴Free Webinar: 6 Under-the-Radar Franchise Concepts That Serious Buyers Should Know
Every month we feature 6 standout franchises that could be the opportunity you've been looking for, each evaluated on disclosed financials and matched to the type of buyer most likely to succeed with it. Can't attend live on October 27 at 6PM EST? Register now and we'll send you the full recording the next day. Reserve your spot here.- Outlets at the Start of the Year: 63
- Outlets at the End of the Year: 66
- Net Change: +3
2021
- Outlets at the Start of the Year: 66
- Outlets at the End of the Year: 64
- Net Change: -2
2022
- Outlets at the Start of the Year: 64
- Outlets at the End of the Year: 63
- Net Change: -1
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: 3
- Net Change: +1
2022
🎯Find Best-Fit Franchises Still Available in Your Target Area (Free Tool)
When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible, saving you months of wasted research.📈Dreaming of Multi‑Unit Success? Lock In Prime Territories Before They're Gone.
Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does. A franchise specialist will be in touch to present what's available.- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 3
- Net Change: 0
Section IV – News Updates on the ZIPS Cleaners Franchise
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the ZIPS Cleaners Franchise (Item 19, 2023 FDD)
System-wide ZIPS Cleaners Businesses – Statement of Average Total Revenue, Total Cost of Goods, Total Gross Profit, and Total Certain Costs (During Period January 1, 2022 to December 31, 2022)
- Presented below are the average total revenue, average total cost of goods, average total gross margin, and average cost of labor, rent, repairs and maintenance, and utilities data for 53 ZIPS Cleaners Plant Store Businesses operated by franchisees during the period January 1, 2022 through December 31, 2022.
- All 53 Franchised Businesses were open and operating during the 12-month period January 1, 2022 to December 31, 2022. These Franchised Businesses are located in the District of Columbia, Florida, Maryland, Ohio, Pennsylvania, Texas, and Virginia.
- Ten Franchised Businesses are not included in these calculations because they did not provide financial detail for the entire year.
- This data was compiled from unaudited financial statements submitted to ZIPS Cleaners by the Franchised Businesses.
- Some outlets have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.
- Average Revenue: $922,718 (100.0%)
- Average Production Supplies: $101,178 (11.0%)
- Average Gross Margin: $821,539 (89.0%)
- Average Labor: $391,697 (42.5%)
- Average Rent: $128,843 (14.0%)
- Average Repairs and Maintenance: $19,007 (2.1%)
- Average Utilities: $43,048 (4.7%)
- Average Income Before General and Administrative Expenses: $238,944 (25.7%)
- Revenue – This figure is an average of all income and revenue from the sale of all services and products to customers less refunds to customers, discounts, and store value gift cards and gift certificates. For 2022, the highest amount of revenue for a Franchised Business was $2,155,431 and the lowest amount of revenue for a Franchised Business was $56,475.
- Production Supplies – The average Production Supplies includes the total costs of all services and products sold at ZIPS Cleaners Businesses (such as alterations, supplies, leather costs, dry cleaning and laundry supplies, and waste disposal). These costs may vary from year to year, or within a year, due to fluctuations in the prices of supplies and/or materials, transportation costs, and/or shipping costs.
- Gross Margin – This figure represents the Revenue minus the Production Supplies.
- Labor – Labor includes salary, payroll taxes, wages, or benefits (including vacation pay) for management personnel and employees. Each ZIPS Cleaners Business compensates its managers differently and may use varied formulas. Franchisees may compensate managers differently or may compensate one or more individual owners in lieu of one or more managers.
- You will set and pay compensation (and any benefits) for owners and management personnel at your Franchised Business at a rate you determine. Your benefits package to employees may include some, all, or none of the expenses incurred by the ZIPS Dry Cleaners Businesses covered in this Item 19. The total amount of salaries for your employees and managers at a particular location will vary according to local wages, the number of employees, and the number of hours that the Franchised Business is open for business. You must make labor, wage, and benefit determinations based on your market, experience, and other factors.
- Rent – This includes rent, property taxes, and miscellaneous items. Rent consists of minimum rents, percentage rents, common area maintenance charges, and any sales or other taxes. Property taxes are real estate taxes and assessments levied against the property upon which the business is located.
- The amount or rate of taxation varies from jurisdiction to jurisdiction and you should consult with your tax advisors regarding the impact that these taxes will have on this analysis.
- Repairs and Maintenance – This includes equipment and facility repair and maintenance.
- Utilities – This includes trash/dumpster and charges for water, gas, and electric. The charges for water and trash/dumpster are included in either the Utilities category or the Rent category, depending upon whether such charges are payable under the terms of the lease for the particular ZIPS Cleaners Business.
- Income Before General and Administrative Expenses – This figure represents the Gross Margin minus Labor, Rent, Repairs and Maintenance, and Utilities, as defined above.
Section VI – ZIPS Cleaners Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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