Bar-B-Clean Franchise: Average Sales ($352K) vs. Cost ($78K-$99K)

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

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

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

Section III – Number of franchised and company-owned Bar-B-Clean 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 Bar-B-Clean franchise opportunity

Section V – Presentation and analysis of Bar-B-Clean’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, median, highest, and lowest gross sales for the 3 full-time Bar-B-Clean franchised locations (excluding Texas franchised location), 4 full-time Bar-B-Clean franchised locations and 1 Bar-B-Clean affiliate location, 3 part-time Bar-B-Clean franchised locations (excluding South Florida and Nashville franchised locations), and 5 part-time Bar-B-Clean franchised locations in the Reporting Group

• 2022 annual gross sales for the 4 full-time and 5 part-time Bar-B-Clean franchised locations in the Reporting Group

• 2022 total gross revenue, cost of goods sold, gross profit, operating expenses, imputed franchise fees, and adjusted earnings for the Bar-B-Clean affiliate location in the Reporting Group

• 2022 average, median, highest, and lowest revenue per job and total jobs for the 3 full-time Bar-B-Clean franchised locations (excluding Texas franchised location), 4 full-time Bar-B-Clean franchised locations and 1 Bar-B-Clean affiliate location, 3 part-time Bar-B-Clean franchised locations (excluding South Florida and Nashville franchised locations), and 5 part-time Bar-B-Clean franchised locations in the Reporting Group

• 2022 total jobs and revenue per job for the Bar-B-Clean affiliate location in the Reporting Group

Section VI – Key ratios, comparables, computations, and analyses for the Bar-B-Clean franchise opportunity (exclusive content for Platinum subscribers)

Section I – Bar-B-Clean Franchise Costs

• Bar-B-Clean franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $49,500
• Real Estate and Improvements:  $0 to $2,000
• Franchise Equipment Package:  $5,000
• Computer Equipment:  $0 to $1,000
• Grand Opening Advertising:  $3,000 to $5,000
• Insurance:  $300 to $1,000
• Professional Fees:  $650 to $1,500
• Business Licenses and Permits:  $0 to $300
• Training:  $1,000 to $2,500
• Signage:  $750 to $2,000
• Vehicle:  $10,000 to $15,000
• Miscellaneous Opening Costs:  $0 to $1,320
• Additional Funds – 3 Months:  $8,000 to $13,000
• Total Estimated Bar-B-Clean Franchise Costs:  $78,200 to $99,120

Section II – Bar-B-Clean’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Bar-B-Clean’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
• Royalty:  the greater of 6% of monthly Gross Revenue or $500 per month
• Brand Fund Contribution:  up to 2% of your Gross Revenue
• Local Advertising Payment:  the difference between the amount you spent on local advertising each month and your required local advertising expenditure (an average of $1,000 per month each year)
• Local and Regional Advertising Cooperatives:  established by cooperative members, between 1% and 3% of Gross Revenue

Section III – Number of Franchised and Company-Owned Bar-B-Clean Outlets

Franchised

2020

• Outlets at the Start of the Year:  28
• Outlets at the End of the Year:  24
• Net Change:  -4

2021

• Outlets at the Start of the Year:  24
• Outlets at the End of the Year:  23
• Net Change:  -1

2022

• Outlets at the Start of the Year:  23
• Outlets at the End of the Year:  23
• 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:  1
• Net Change:  0

Section IV – News Updates on the Bar-B-Clean Franchise

• Bar-B-Clean Did Not Rank on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Bar-B-Clean Franchise (Item 19, 2023 FDD)

• As of December 31, 2022, Bar-B-Clean had one affiliate-owned Bar-B-Clean Business (“Affiliate Location”) and 23 franchised Bar-B-Clean Businesses (“Franchised Locations”) operated by 15 franchisees. Bar-B-Clean treats each signed Franchise Agreement as a separate Bar-B-Clean Business.

• Some franchisees report financial data for multiple Franchise Agreements together as noted below.

• The financial information provided in the following tables represents the historical performance of the data of the Affiliate Location and of Franchised Locations that meet the reporting criteria described below.

• Bar-B-Clean includes data from:

• (i) four full-time Franchised Locations where the Bar-B-Clean Business is the franchisee’s primary job and the franchisee operates on a full-time basis (“Full-Time Franchised Locations”);
• (ii) nine part-time Franchised Locations where the franchisee operates the Bar-B-Clean Franchised Location in addition to a full-time job and the franchisee operates on a part-time basis (“Part-Time Franchised Locations”); and
• (iii) one Affiliate Location that operated during the entire 2022 fiscal year on a full-time basis (“Reporting Group”) and reports on results attained during calendar year 2022 (“Reporting Period”).

• Each Franchised Location and the Affiliate Location in the Reporting Group reported Gross Revenue for all 12 months of the Reporting Period.

• Two franchisees in the Reporting Group reported the data of the following multiple Franchised Locations together: (i) two Part-Time Franchised Locations in Nashville are reported together (collectively, the “Nashville Franchised Location”); and (ii) three of the Part-Time Franchised Locations that are operated by a single franchisee in Florida were reported together (collectively, the “South Florida Franchised Location”).

• The Full-Time Franchised Location in Ventura, California (“Ventura Franchised Location”) owns two Franchised Locations but one has been excluded as described below.

• Bar-B-Clean has excluded the data of 10 Franchised Locations as follows:

• (i) five Franchised Locations whose Franchise Agreements were terminated after December 31, 2022 that did not report financial data prior to termination;
• (ii) one Franchised Location that did not operate the business during the Reporting Period (and paid the Minimum Royalty to reserve its territory for future use upon the franchisee’s retirement from their full-time position);
• (iii) one Franchised Location operated by the same franchisee operating the Ventura Franchised Location in the Reporting Group as the franchisee did not operate within the territory of this second Franchised Location during the Reporting Period; and
• (iv) three Franchised Locations owned by the South Florida Franchised Location in the state of California that were not operated in by the franchisee during the Reporting Period as the franchisee was operating within its Florida territories only.

• The financial information for the Affiliate Location was prepared from internal accounting records and reports. Data for the Franchised Locations is based on financial information reported to Bar-B-Clean by the franchisees. The information included in these financial performance representations has not been audited but Bar-B-Clean has no reason to doubt its accuracy.

• The Affiliate Location shares many of the same characteristics as Bar-B-Clean’s Franchised Locations, including degree of competition and services and goods offered, except the Affiliate Location pays less for products than franchisees and does not pay the Royalty. The Affiliate Location contributes to the Brand Fund on the same basis as franchisees.

• Some Franchised Locations in the Reporting Group differ from the franchised Bar-B-Clean Businesses offered under the disclosure document due to size of their territories, which range from approximately 100,000 to 175,000 households, except for the Central Texas Franchised Location (“Texas Franchised Location”), which operates in a territory with 269,099 households. The Texas Franchised Location operates within a territory that includes rural areas and services the territory with a staff that is comparable to a franchisee operating within a single territory in a densely populated area.

• The current standard territory includes 75,000 households with an opportunity to add up to 25,000 additional households (for a total of 100,000 households). Bar-B-Clean also permits franchisees to operate in multiple territories under a Multi-Unit Addendum.

• “Gross Revenue” for purposes of this Item 19 means the revenue Bar-B-Clean Businesses in the Reporting Group received from the sale of all goods, products, and services sold at, from, or through the Bar-B-Clean Businesses and all other income, revenue, and consideration of every kind and nature received by the Bar-B-Clean Businesses in the Reporting Group, whether for cash or credit, and regardless of collection in the case of credit, and all proceeds from any business interruption insurance, but not including: (a) any sales taxes or other taxes Bar-B-Clean Businesses in the Reporting Group collected from customers for, and thereafter paid directly to, the appropriate taxing authority; and (b) any bona fide refunds the Bar-B-Clean Businesses in the Reporting Group make to customers.

Part 1 – Average and Median Gross Revenue 2022

Full-Time Franchised Locations (excluding Texas Franchised Location)

• 2022 High Gross Revenue:  $391,727
• 2022 Average Gross Revenue:  $317,171
• 2022 Low Gross Revenue:  $257,005
• 2022 Median Gross Revenue:  $302,781
• Number and Percentage Meeting or Exceeding Average:  1 / 33%

All Full-Time Franchised Locations and Affiliate Location

• 2022 High Gross Revenue:  $457,954
• 2022 Average Gross Revenue:  $366,627
• 2022 Low Gross Revenue:  $257,005
• 2022 Median Gross Revenue:  $391,727
• Number and Percentage Meeting or Exceeding Average:  3 / 60%

Part-Time Locations (Excluding South Florida and Nashville Franchised Locations)

• 2022 High Gross Revenue:  $129,659
• 2022 Average Gross Revenue:  $92,244
• 2022 Low Gross Revenue:  $28,035
• 2022 Median Gross Revenue:  $119,037
• Number and Percentage Meeting or Exceeding Average:  2 / 67%

All Part-Time Franchised Locations

• 2022 High Gross Revenue:  $129,659
• 2022 Average Gross Revenue:  $62,572
• 2022 Low Gross Revenue:  $9,035
• 2022 Median Gross Revenue:  $28,035
• Number and Percentage Meeting or Exceeding Average:  2 / 40%

Part 2 – 2022 Gross Revenue for Full-Time Franchised Locations in the Reporting Group

• Ventura:  $302,781
• Temecula:  $257,005
• SW Florida:  $391,727
• Texas:  $457,954

Part 3 – 2022 Gross Revenue for Part-Time Franchised Locations in the Reporting Group

• Tampa:  $119,037
• San Diego:  $129,659
• S. Florida:  $27,095
• Nashville:  $9,035
• South Carolina:  $28,035

• Bar-B-Clean’s Affiliate Location is comparable to a Full-Time Franchised Location although the owner and operator also serves as Bar-B-Clean’s Director, President, and Chief Financial Officer.

• Part-Time Franchised Locations reported between 29 and 338 Jobs per year, while Full-Time Franchised Locations reported between 571 and 1,179 Jobs. The Affiliate Location reported 906 Jobs.

• The South Florida Franchised Location did not offer repair or parts replacement services and only provided cleaning services during the Reporting Period. The South Florida Franchised Location operates within three territories and reports the Gross Revenue from these territories together.

• The Nashville Franchised Location operates within two territories and reports the Gross Revenue from these territories together.

Part 4 – 2022 Adjusted Earnings and Adjusted Margin for the Affiliate Location

Total Gross Revenue:  $423,666 (100%)

Cost of Goods Sold:  $69,692 (16.45%)

Gross Profit:  $353,974 (83.55%)

Operating Expenses

• Liability Insurance:  $4,800 (1.13%)
• Marketing and Advertising:  $28,281 (6.68%)
• Meals and Entertainment:  $2,648 (0.63%)
• Office Expenses/Supplies:  $7,880 (1.86%)
• Technicians/Ops Payroll:  $121,840 (28.76%)
• Professional Fees:  $1,800 (0.42%)
• Telephone and Computer Services:  $1,181 (0.28%)
• Total Operating Expenses:  $168,430 (39.76%)

Franchise Fees (Imputed)

• Royalty (6%):  $25,420 (6%)
• Brand Fund (2%):  $8,473 (2%)
• Technology Fee:  $450 (0.11%)

Adjusted Earnings:  $151,201 (35.69%)

• “Cost of Goods Sold” includes the cost of Parts & New Grills. No other costs and expenses are included.

• “Gross Profit” means Gross Revenue less Costs of Goods Sold.

• “Operating Expenses” includes all operating expenses incurred by the Affiliate Location: liability insurance, marketing and advertising, meals and entertainment, office expenses/supplies, technicians/ops payroll, professional fees, and telephone and computer services.

• “Franchise-Related Adjustments” – Imputed Fees. Bar-B-Clean has imputed certain fees assessed by it and made adjustments based on the fees paid and expenditures required under its current Franchise Agreement for the Affiliate Location. Franchised Bar-B-Clean Businesses are required to pay a Royalty of the greater of 6% of Gross Revenue or a $500 monthly minimum and are subject to a Brand Fund Contribution of 2% of Gross Revenue. The Affiliate Location did not pay the Brand Fund Contribution during the Reporting Period as the Brand Fund was implemented in 2023.

• “Adjusted Earnings” refers to Gross Profit less Operating Expenses and Franchise-Related Adjustments. It does not include the deduction of taxes, interest, depreciation, or amortization.

• “Margin” is calculated by dividing Gross Revenue by Adjusted Earnings.

• Operational Differences. The Affiliate Location pays less for products than franchisees and does not pay the Royalty or technology fee. Because of this, Franchised Locations will have higher expenses than the Affiliate Location, and may experience lower income. There may be other costs and other expenses not identified, and the costs and expenses of the Affiliate Location may differ from Franchised Locations.

Part 5 – Average and Median Total Jobs and Revenue Per Ticket 2022

Full-Time Franchised Locations (excluding Texas Franchised Location)

• 2022 High Revenue Per Job:  $620
• 2022 Average Revenue Per Job:  $490
• 2022 Low Revenue Per Job:  $399
• 2022 Median Revenue Per Job:  $450
• Number and Percentage Meeting or Exceeding Average:  1 / 33%

• 2022 High Total Jobs:  758
• 2022 Average Total Jobs:  654
• 2022 Low Total Jobs:  571
• 2022 Median Total Jobs:  632
• Number and Percentage Meeting or Exceeding Average:  1 / 33%

All Full-Time Franchised Locations and Affiliate Location

• 2022 High Revenue Per Job:  $620
• 2022 Average Revenue Per Job:  $465
• 2022 Low Revenue Per Job:  $388
• 2022 Median Revenue Per Job:  $450
• Number and Percentage Meeting or Exceeding Average:  2 / 40%

• 2022 High Total Jobs:  1,179
• 2022 Average Total Jobs:  809
• 2022 Low Total Jobs:  571
• 2022 Median Total Jobs:  758
• Number and Percentage Meeting or Exceeding Average:  2 / 40%

Part-Time Locations (Excluding South Florida and Nashville Franchised Locations)

• 2022 High Revenue Per Job:  $431
• 2022 Average Revenue Per Job:  $375
• 2022 Low Revenue Per Job:  $312
• 2022 Median Revenue Per Job:  $384
• Number and Percentage Meeting or Exceeding Average:  2 / 67%

• 2022 High Total Jobs:  338
• 2022 Average Total Jobs:  235
• 2022 Low Total Jobs:  90
• 2022 Median Total Jobs:  276
• Number and Percentage Meeting or Exceeding Average:  2 / 67%

All Part-Time Franchised Locations

• 2022 High Revenue Per Job:  $431
• 2022 Average Revenue Per Job:  $341
• 2022 Low Revenue Per Job:  $268
• 2022 Median Revenue Per Job:  $312
• Number and Percentage Meeting or Exceeding Average:  2 / 40%

• 2022 High Total Jobs:  338
• 2022 Average Total Jobs:  167
• 2022 Low Total Jobs:  29
• 2022 Median Total Jobs:  101
• Number and Percentage Meeting or Exceeding Average:  2 / 40%

Part 6 – Total Jobs and Revenue Per Ticket for the Affiliate Location in the Reporting Group 2022

N. Orange Affiliate

• Total Jobs:  906
• Revenue Per Job:  $468

• “Job” refers to each unique customer transaction completed by the Franchised Location or Affiliate Location in the Reporting group.

• “Total Jobs” refers to the total number of Jobs completed during the 2022 Reporting Period.

• “Revenue per Job” is calculated by dividing the 2022 Gross Revenue for each business in the Reporting Group by the Total Jobs.

Section VI – Bar-B-Clean Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️