Shack Shine Franchise: Average Sales ($424K) vs. Cost ($136K to $269K)

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

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

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

Section III – Number of franchised and company-owned Shack Shine 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 Shack Shine franchise opportunity

Section V – Presentation and analysis of Shack Shine’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 revenue; average gross revenue of the top 25% and bottom 25%; average and median job size; average and median gross profit margin; and average, median, highest, and lowest gross revenue per subterritory for the 26 franchised Shack Shine businesses in the United States that were open and operating through at least the last 12 months of the year ending December 31, 2022, grouped by number of months in operation (over 24 months, 12-24 months, and all)

• 2022 average, median, highest, and lowest gross revenue; average gross revenue of the top 25% and bottom 25%; average and median job size; average and median gross profit margin; and average, median, highest, and lowest gross revenue per subterritory for the 21 franchised Shack Shine businesses in Canada that were open and operating through at least the last 12 months of the year ending December 31, 2022, grouped by number of months in operation (over 24 months, 12-24 months, and all)

• 2022 total gross revenue for franchised Shack Shine businesses operating in the United States and Canada for at least 1 day in the 2022 calendar year

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

Section I – Shack Shine Franchise Costs

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

• Initial Franchise Fee:  $20,000 to $60,000
• Start-Up Marketing Expense:  $15,000 to $20,000
• Computer Hardware and Software:  $1,500 to $2,500
• Seasonal Lights Inventory:  $25,000 to $40,000
• Vehicles and Graphics Lease/Purchase Deposit:  $3,200 to $12,800
• Real Estate/Rent:  $0 to $4,500
• Training Expenses:  $2,350 to $6,200
• Insurance:  $2,000 to $13,000
• Additional Insurance Premiums – Certain States:  $0 to $9,500
• Equipment and Supplies:  $15,000 to $30,000
• Licenses and Permits:  $150 to $500
• Professional Fees:  $1,800 to $2,400
• Employee Expenses:  $5,000 to $10,000
• Additional Funds – 6 to 12 Months:  $45,000 to $58,500
• Total Estimated Shack Shine Franchise Costs:  $136,000 to $269,900

Section II – Shack Shine’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Fee:  $20,000 to $60,000
• Royalty:  8% of Gross Revenue
• Minimum Royalty:  depending upon your year of operation, the Minimum Royalty will range from $5,000 to $8,000 multiplied by the number of subterritories in your Territory, per calendar year. The amount payable is the amount the Minimum Royalty for that year exceeds the total of all Royalties actually received by Shack Shine for that year from that Territory. In the first year of operation, if Scheduled Opening Date is after September 1st, then Minimum Royalty will be assessed beginning in the following calendar year.
• Sales, Marketing & Technology Fee:  8% of Gross Revenue
• Digital Marketing Programs Fee:  at least 5% of Gross Revenue per quarter, but not more than the minimum required local marketing and promotions expenditure, which ranges from 8% to 13% depending on the year of operation
• Branding Cooperative:  up to 5% of Gross Revenue in aggregate

Section III – Number of Franchised and Company-Owned Shack Shine Outlets

Franchised

2020

• Outlets at the Start of the Year:  22
• Outlets at the End of the Year:  19
• Net Change:  -3

2021

• Outlets at the Start of the Year:  19
• Outlets at the End of the Year:  30
• Net Change:  +11

2022

• Outlets at the Start of the Year:  30
• Outlets at the End of the Year:  35
• Net Change:  +5

Company-Owned

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

Section IV – News Updates on the Shack Shine Franchise

• Trusting His Timing; A Marketing Executive Takes an Entrepreneurial Leap

• A New Life as a Franchise Owner in the USA

• New for 2022: We’re Making Franchise Ownership Easy!

• Shack Shine Ranked No. 478 on Entrepreneur’s 2023 Franchise 500 List

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

• In this Item 19, Shack Shine provides information regarding certain historical financial performance for all 26 franchised businesses in the United States and 21 franchised businesses in Canada that were open and operating through at least the last 12 months of the year ending December 31, 2022.

• Shack Shine does not include information from 10 U.S. franchises that opened during the 2022 calendar year, as well as 5 U.S. franchises and 3 Canadian franchises that closed during the 2022 calendar year, because they were not in operation for the entire year.

• The charts below reflect average, median, highest, and lowest Gross Revenue figures for 2022. Average and median Job Size and Gross Profit Margin are also included.

• For purposes of these charts, franchisees are grouped into franchised businesses open longer than 24 months and those open between 12 and 24 months.

• Because Shack Shine franchisees own different numbers of subterritories, Shack Shine also provides in the charts below the franchisee average, median, highest, and lowest Gross Revenue on a per-subterritory basis.

• Of the U.S. franchisees reported in the charts below: the average number of subterritories owned is 3, with the fewest number owned being 2, and the largest number owned being 12; the median number of subterritories owned is 2.

• Of the Canadian franchisees reported in the charts below: the average number of subterritories owned is 3, with the fewest number owned being 1, and the largest number owned being 4; the median number of subterritories owned is 2.

• Unless otherwise specified, “Gross Revenue” means the actual gross revenues billed to consumers for products and services, less taxes collected and credits or refunds given in accordance with Shack Shine’s refund policy.

• “Job Size” means the Gross Revenue attributable to the Services and Products ordered from a single dwelling that can be completed in one job.

• “Gross Profit Margin” means the percentage of Gross Revenue remaining after subtracting the following from Gross Revenue: labor costs, Royalties, and Sales, Marketing & Technology Fees. Material costs (including Christmas lights) are not included in the definition of “Gross Profit Margin.”

• Shack Shine includes franchised businesses in Canada in this Item 19 because these Canadian franchisees operate businesses that are substantially similar to those in the U.S., with substantially similar performance results and no material differences between the data of the two groups other than the currency.

• The information in this Item 19 is based upon financial information franchisees reported to Shack Shine, but Shack Shine has not independently audited the information or independently reviewed its franchisees’ accounting methodologies to verify their conformance with generally accepted accounting principles.

• The average is calculated by adding all figures up and dividing by the number of figures counted. The median is calculated by placing all figures being counted in order of ascending or descending value and finding the middle figure in the list. If there is an even number of figures, the median is calculated by adding the middle two figures and dividing by two.

• The U.S. Franchisees chart is reported in USD, and the Canadian Franchisees chart is reported in CAD.

Part 1 – U.S. Franchisees (Calendar Year 2022)

Franchisees Operating Over 24 Months (U.S. Dollars)

• Number of Franchisees in Range:  18 of 26
• Total Gross Revenue:  $9,008,231

• Average Gross Revenue:  $500,457
• Number and Percentage of Franchisees at or Above Average Gross Revenue:  8/44%
• Median Gross Revenue:  $429,703
• Highest Gross Revenue:  $1,469,002
• Lowest Gross Revenue:  $40,673
• Average Gross Revenue of Top 25%:  $995,736
• Average Gross Revenue of Bottom 25%:  $106,487

• Average Job Size:  $730
• Number and Percentage of Franchisees at or Above Average Job Size:  9/50%
• Median Job Size:  $739

• Average Gross Profit Margin:  40%
• Number and Percentage of Franchisees at or Above Average Gross Profit Margin:  10/56%
• Median Gross Profit Margin:  46%

• Average Gross Revenue Per Subterritory:  $192,617
• Number and Percentage of Franchisees at or Above Average Gross Revenue Per Subterritory:  6/33%
• Median Gross Revenue Per Subterritory:  $132,626
• Highest Gross Revenue Per Subterritory:  $560,206
• Lowest Gross Revenue Per Subterritory:  $20,336

Franchisees Operating 12-24 Months (U.S. Dollars)

• Number of Franchisees in Range:  8 of 26
• Total Gross Revenue:  $2,021,439

• Average Gross Revenue:  $252,680
• Number and Percentage of Franchisees at or Above Average Gross Revenue:  3/38%
• Median Gross Revenue:  $234,738
• Highest Gross Revenue:  $575,528
• Lowest Gross Revenue:  $35,024
• Average Gross Revenue of Top 25%:  $497,076
• Average Gross Revenue of Bottom 25%:  $57,002

• Average Job Size:  $898
• Number and Percentage of Franchisees at or Above Average Job Size:  4/50%
• Median Job Size:  $872

• Average Gross Profit Margin:  48%
• Number and Percentage of Franchisees at or Above Average Gross Profit Margin:  1/13%
• Median Gross Profit Margin:  46%

• Average Gross Revenue Per Subterritory:  $117,757
• Number and Percentage of Franchisees at or Above Average Gross Revenue Per Subterritory:  3/38%
• Median Gross Revenue Per Subterritory:  $96,823
• Highest Gross Revenue Per Subterritory:  $287,764
• Lowest Gross Revenue Per Subterritory:  $17,512

All Franchisees (U.S. Dollars)

• Number of Franchisees in Range:  26
• Total Gross Revenue:  $11,029,670

• Average Gross Revenue:  $424,218
• Number and Percentage of Franchisees at or Above Average Gross Revenue:  10/38%
• Median Gross Revenue:  $322,329
• Highest Gross Revenue:  $1,469,002
• Lowest Gross Revenue:  $35,024
• Average Gross Revenue of Top 25%:  $910,774
• Average Gross Revenue of Bottom 25%:  $78,285

• Average Job Size:  $782
• Number and Percentage of Franchisees at or Above Average Job Size:  12/46%
• Median Job Size:  $779

• Average Gross Profit Margin:  42%
• Number and Percentage of Franchisees at or Above Average Gross Profit Margin:  12/46%
• Median Gross Profit Margin:  46%

• Average Gross Revenue Per Subterritory:  $169,583
• Number and Percentage of Franchisees at or Above Average Gross Revenue Per Subterritory:  11/42%
• Median Gross Revenue Per Subterritory:  $121,243
• Highest Gross Revenue Per Subterritory:  $560,206
• Lowest Gross Revenue Per Subterritory:  $17,512

Part 2 – Canadian Franchisees (Calendar Year 2022)

• Exchange rates from Canadian to U.S. Dollars ranged from 0.7217 to 0.80316 during calendar year 2022, with the period average exchange rate being 0.7692.

Franchisees Operating Over 24 Months (Canadian Dollars)

• Number of Franchisees in Range:  16 of 21
• Total Gross Revenue:  $11,887,935

• Average Gross Revenue:  $742,996
• Number and Percentage of Franchisees at or Above Average Gross Revenue:  6/38%
• Median Gross Revenue:  $641,785
• Highest Gross Revenue:  $1,840,762
• Lowest Gross Revenue:  $351,804
• Average Gross Revenue of Top 25%:  $1,275,851
• Average Gross Revenue of Bottom 25%:  $386,596

• Average Job Size:  $780
• Number and Percentage of Franchisees at or Above Average Job Size:  6/38%
• Median Job Size:  $697

• Average Gross Profit Margin:  47%
• Number and Percentage of Franchisees at or Above Average Gross Profit Margin:  11/69%
• Median Gross Profit Margin:  49%

• Average Gross Revenue Per Subterritory:  $332,257
• Number and Percentage of Franchisees at or Above Average Gross Revenue Per Subterritory:  7/44%
• Median Gross Revenue Per Subterritory:  $288,783
• Highest Gross Revenue Per Subterritory:  $727,855
• Lowest Gross Revenue Per Subterritory:  $72,876

Franchisees Operating 12-24 Months (Canadian Dollars)

• Number of Franchisees in Range:  5 of 21
• Total Gross Revenue:  $1,518,889

• Average Gross Revenue:  $303,778
• Number and Percentage of Franchisees at or Above Average Gross Revenue:  2/40%
• Median Gross Revenue:  $243,089
• Highest Gross Revenue:  $527,207
• Lowest Gross Revenue:  $179,396
• Average Gross Revenue of Top 25%:  $527,207
• Average Gross Revenue of Bottom 25%:  $179,396

• Average Job Size:  $797
• Number and Percentage of Franchisees at or Above Average Job Size:  3/60%
• Median Job Size:  $822

• Average Gross Profit Margin:  37%
• Number and Percentage of Franchisees at or Above Average Gross Profit Margin:  3/60%
• Median Gross Profit Margin:  45%

• Average Gross Revenue Per Subterritory:  $139,074
• Number and Percentage of Franchisees at or Above Average Gross Revenue Per Subterritory:  2/40%
• Median Gross Revenue Per Subterritory:  $131,802
• Highest Gross Revenue Per Subterritory:  $243,089
• Lowest Gross Revenue Per Subterritory:  $35,879

All Franchisees (Canadian Dollars)

• Number of Franchisees in Range:  21
• Total Gross Revenue:  $13,406,824

• Average Gross Revenue:  $638,420
• Number and Percentage of Franchisees at or Above Average Gross Revenue:  8/38%
• Median Gross Revenue:  $534,606
• Highest Gross Revenue:  $1,840,762
• Lowest Gross Revenue:  $179,396
• Average Gross Revenue of Top 25%:  $1,188,407
• Average Gross Revenue of Bottom 25%:  $284,645

• Average Job Size:  $784
• Number and Percentage of Franchisees at or Above Average Job Size:  9/43%
• Median Job Size:  $720

• Average Gross Profit Margin:  45%
• Number and Percentage of Franchisees at or Above Average Gross Profit Margin:  15/71%
• Median Gross Profit Margin:  48%

• Average Gross Revenue Per Subterritory:  $286,261
• Number and Percentage of Franchisees at or Above Average Gross Revenue Per Subterritory:  8/38%
• Median Gross Revenue Per Subterritory:  $243,089
• Highest Gross Revenue Per Subterritory:  $727,855
• Lowest Gross Revenue Per Subterritory:  $35,879

Part 3 – Total 2022 Gross Revenue of Shack Shine Franchisees (Reported in US Dollars)

• The information provided below was compiled from all the Shack Shine Franchised Businesses operating in the United States and Canada for at least 1 day in the 2022 calendar year.

• United States:  $11,832,175
• Canada:  $10,882,116

• This chart includes all franchises operating for at least 1 day during 2022, including 18 locations that did not operate for the full 2022 calendar year.

• The Gross Revenue figure in Canadian Dollars ($14,147,316) was converted using the calendar year 2022 average exchange rate of 0.7692 for Canadian to U.S. Dollars, which rate ranged from 0.7217 to 0.8031 during calendar year 2022, and was 0.7383 on December 31, 2022.

• Some franchises have earned this amount. Your individual results may differ. There is no assurance you will earn as much.

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