Cabinet IQ Franchise: Average Sales ($2.38M) vs. Cost ($189K-$288K)

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

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

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

Section III – Number of franchised and company-owned Cabinet IQ 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 Cabinet IQ franchise opportunity

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

• 2022 gross revenues, cost of goods sold, gross profit, operating expenses, and EBITDA for the 2 affiliate-owned Cabinet IQ businesses located in Cedar Park, Texas and Austin, Texas

• 2017, 2018, 2019, 2020, 2021, and 2022 gross revenues for the affiliate-owned Cabinet IQ business located in Cedar Park, Texas, and the 2022 gross revenues for the affiliate-owned Cabinet IQ business located in Austin, Texas

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

Section I – Cabinet IQ Franchise Costs

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

• Initial Franchise Fee:  $47,600 to $59,500
• Lease, Utility, and Security Deposits:  $6,300 to $10,500
• Rent:  $10,000 to $18,000
• Improvements:  $85,000 to $140,000
• Exterior Signage:  $3,000 to $5,000
• Technology (Computers, Printer, Monitor):  $1,800
• Advertising (Digital Marketing Set-Up):  $2,000 to $3,000
• Professional Fees:  $500 to $1,500
• Office Supplies and Promotional Items:  $3,500 to $4,000
• Insurance:  $1,000 to $2,000
• Warehouse Tools and Supplies:  $6,000 to $8,000
• Business Licenses and Permits:  $500 to $1,000
• Training, Travel, and Living Expenses:  $2,000 to $4,000
• Grand Opening Advertising:  $10,000
• Additional Funds (3 months):  $10,250 to $20,500
• Total Estimated Cabinet IQ Franchise Costs:  $189,450 to $288,800

Section II – Cabinet IQ’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Franchise Fee:  $47,600 to $59,500
• Royalty Fee:  6% of Gross Revenues
• Advertising Fund Contribution:  2% of Gross Revenues
• Local Advertising:  the greater of $4,500 or 4% of your monthly average Gross Revenues in the prior 3-month period
• Marketing Cooperative Fees:  a fee as determined by the Marketing Cooperative

Section III – Number of Franchised and Company-Owned Cabinet IQ Outlets

Franchised

2020

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

2021

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

2022

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

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:  2
• Net Change:  +1

Section IV – News Updates on the Cabinet IQ Franchise

• From Engineer to Cabinet Visionary: The Cabinet IQ Franchise Success Story

• Cabinet IQ Did Not Rank on Entrepreneur’s 2023 Franchise 500 List

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

Part 1 – Affiliate Gross Revenues, Profit, Expense, and EBITDA for the Period from January 1, 2022 to December 31, 2022

• Part 1 provides Gross Revenues, Gross Profit, Expenses, and EBITDA for Cabinet IQ’s Affiliate’s two Businesses located in Cedar Park, Texas and Austin, Texas from January 1, 2022 to December 31, 2022.

Cabinet IQ of Cedar Park (Year 5 Store)

Gross Revenues:  $3,744,303 (100.0%)

Cost of Goods Sold

• Materials:  $1,558,917 (41.6%)
• Installation Labor:  $464,886 (12.4%)
• Total Cost of Goods Sold:  $2,023,803 (54.1%)

Gross Profit:  $1,720,500 (45.9%)

Operating Expenses

• Sales Payroll and Commissions:  $223,053 (6.0%)
• Operations and Admin Payroll:  $300,919 (8.0%)
• Advertising and Marketing:  $225,787 (6.0%)
• Royalty:  $224,658 (6.0%)
• National Ad Fund:  $0 (0.0%)
• Auto and Truck:  $22,614 (0.6%)
• Bank Services:  $1,698 (0.0%)
• Insurance:  $19,040 (0.5%)
• Office Supplies and Software:  $29,292 (0.8%)
• Legal and Professional Services:  $12,358 (0.3%)
• Merchant Account Fees:  $24,275 (0.6%)
• Rent:  $56,715 (1.5%)
• Utilities:  $26,959 (0.7%)
• Repairs and Maintenance:  $11,294 (0.3%)
• Showroom Materials:  $902 (0.0%)
• Tools, Supplies, and Consumables:  $14,988 (0.4%)
• Total Expenses:  $1,189,046 (31.8%)

EBITDA:  $531,454 (14.2%)

Cabinet IQ of Austin (Year 1 Store)

Gross Revenues:  $1,035,167 (100.0%)

Cost of Goods Sold

• Materials:  $389,400 (37.6%)
• Installation Labor:  $112,665 (10.9%)
• Total Cost of Goods Sold:  $502,065 (48.5%)

Gross Profit:  $533,102 (51.5%)

Operating Expenses

• Sales Payroll and Commissions:  $102,463 (9.9%)
• Operations and Admin Payroll:  $68,899 (6.7%)
• Advertising and Marketing:  $50,740 (4.9%)
• Royalty:  $62,110 (6.0%)
• National Ad Fund:  $0 (0.0%)
• Auto and Truck:  $0 (0.0%)
• Bank Services:  $0 (0.0%)
• Insurance:  $0 (0.0%)
• Office Supplies and Software:  $4,417 (0.4%)
• Legal and Professional Services:  $1,445 (0.1%)
• Merchant Account Fees:  $7,666 (0.7%)
• Rent:  $32,646 (3.2%)
• Utilities:  $2,241 (0.2%)
• Repairs and Maintenance:  $2,506 (0.2%)
• Showroom Materials:  $477 (0.0%)
• Tools, Supplies, and Consumables:  $3,687 (0.4%)
• Total Expenses:  $339,298 (32.8%)

EBITDA:  $193,804 (18.7%)

Average (Calculated by Franchise Chatter)

Gross Revenues:  $2,389,735 (100.0%)

Cost of Goods Sold

• Materials:  $974,158 (40.8%)
• Installation Labor:  $288,776 (12.1%)
• Total Cost of Goods Sold:  $1,262,934 (52.8%)

Gross Profit:  $1,126,801 (47.2%)

Operating Expenses

• Sales Payroll and Commissions:  $162,758 (6.8%)
• Operations and Admin Payroll:  $184,909 (7.7%)
• Advertising and Marketing:  $138,264 (5.8%)
• Royalty:  $143,384 (6.0%)
• National Ad Fund:  $0 (0.0%)
• Auto and Truck:  $11,307 (0.5%)
• Bank Services:  $849 (0.0%)
• Insurance:  $9,520 (0.4%)
• Office Supplies and Software:  $16,854 (0.7%)
• Legal and Professional Services:  $6,902 (0.3%)
• Merchant Account Fees:  $15,971 (0.7%)
• Rent:  $44,681 (1.9%)
• Utilities:  $14,600 (0.6%)
• Repairs and Maintenance:  $6,900 (0.3%)
• Showroom Materials:  $690 (0.0%)
• Tools, Supplies, and Consumables:  $9,338 (0.4%)
• Total Expenses:  $764,172 (32.0%)

EBITDA:  $362,629 (15.2%)

• “Gross Revenues” are the total amount received by or in connection with Cabinet IQ’s Affiliate’s Businesses from, connected with or related to the sale of any services, products, goods or merchandise and all business transacted related to these Businesses, excluding only the following (a) the amount of any refunds to clients for bona fide returns of goods sold or cancellations; and (b) the amount of any excise or sales tax levied upon retail sales and paid over to the appropriate governmental authority.

• “Materials” are the cost of materials used in the services including cabinets, countertops, and other materials.

• “Installation Labor” includes installation labor costs.

• “Gross Profit” is Gross Revenues less COGS (Installation Labor and Materials).

• “Sales Payroll and Commissions” includes sales base pay plus commissions.

• “Operations and Admin” includes a bookkeeper, showroom manager, operations staff, and warehouse employees. Note: These costs could be higher for your Business on a per location basis as operations and warehouse employees were shared between the two locations.

• “Advertising & Marketing” includes all costs incurred for advertising.

• “Royalty” is the sum of the Royalty Fee during the measurement period.

• “National Ad Fund” is the amount that was contributed by Cabinet IQ’s Affiliate to the Advertising Fund. The required Advertising Fund contribution for your Business is 2% and it applies after your Business’s first two years of operation.

• “Auto and Truck” includes all costs associated with one box truck used for pick up and delivery of materials and two installation trucks, insurance, gas, and maintenance.

• “Bank Services” includes all banking charges.

• “Insurance” includes auto insurance and business liability.

• “Office Supplies and Software” includes the cost of general office supplies, design software, QuickBooks, CRM software, DocuSign software, computers, monitors, office furniture, and appliances.

• “Legal and Professional Services” includes legal advice, accounting services, and other professional services.

• “Merchant Account Fees” includes ACH processing fees and credit card processing fees.

• “Rent” includes showroom and warehouse space rental.

• “Utilities” includes internet, electric, water, and bulk trash service.

• “Repairs and Maintenance” includes cleaning service, consumer trash service, showroom lighting, warehouse and showroom maintenance.

• “Showroom Materials” includes cabinet displays for showroom.

• “Tools Supplies and Consumables” is defined as warehouse and installer tools, installation consumables, and warehouse supplies.

• “Total Expenses” is the sum of all expenses.

• “EBITDA” is defined as Gross Revenue less Cost of Goods Sold and Expenses.

• The results listed in Part 1 reflect the 6% Royalty Fee due under the Franchise Agreement, but do not reflect an Advertising Fund Contribution and other fees and expenses that you may incur as a Cabinet IQ franchisee under the Franchise Agreement.

Part 2 – Affiliate Annual Gross Revenues

• The following tables provide Gross Revenues for Cabinet IQ’s Affiliate’s Businesses in Cedar Park, Texas and Austin, Texas for the referenced periods.

Cedar Park

• August 1, 2017 to December 31, 2017:  $423,700
• 2018:  $1,540,000
• 2019:  $1,840,000
• 2020:  $2,080,000
• 2021:  $3,692,794
• 2022:  $3,744,303

Austin

• 2022:  $1,035,167

• “Gross Revenues” are the total amount received by or in connection with Cabinet IQ’s Affiliate’s Businesses (segregated by location) from, connected with, or related to, the sale of any services, products, goods or merchandise and all business transacted related to the Businesses, excluding only the following (a) the amount of any refunds to clients for bona fide returns of goods sold or cancellations; and (b) the amount of any excise or sales tax levied upon retail sales and paid over to the appropriate governmental authority.

• The 2017 data reflects financial results of Cabinet IQ’s Affiliate’s predecessor, a sole proprietorship operated by Cabinet IQ’s Founder.

• Cabinet IQ’s Affiliate has two Businesses located in Cedar Park, Texas and Austin, Texas. Cabinet IQ’s Affiliate opened the Cedar Park, Texas Business in 2018 (which was preceded by Cabinet IQ’s Founder’s sole proprietorship opened in 2017 in Cedar Park, Texas) and the Austin, Texas Business opened in February of 2022.

• You will incur other additional costs and expenses in operating a Business, including but not limited to amounts due to Cabinet IQ under the Franchise Agreement.

• The financial information provided above has not been audited.

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

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