In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:
Section I – Estimated initial investment (franchise costs) for a Costa Oil franchise, based on Item 7 of the company’s 2023 FDD
Section II – Initial franchise fee, royalty fee, and marketing fee for a Costa Oil franchise, based on Items 5 and 6 of the company’s 2023 FDD
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Section IV – News updates on the Costa Oil franchise opportunity
Section V – Presentation and analysis of Costa Oil’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:
- 2023 average, median, highest, and lowest gross revenue for the 14 outlets owned by Costa Oils, Inc. and 8 franchised Costa Oil outlets that were open from December 1, 2022 to December 1, 2023
- 2023 average, median, highest, and lowest gross revenue for the 7 outlets owned by Costa Oils, Inc. opened for more than 7 years; 5 outlets owned by Costa Oils, Inc. opened for more than 2 years but less than 4 years; 2 outlets owned by Costa Oils, Inc. opened for more than 1 year but less than 2 years; and 8 franchised Costa Oil outlets opened for more than 1 year but less than 2 years
- 2023 average, median, highest, and lowest gross revenue minus key expenses for the 14 outlets owned by Costa Oils, Inc. and 7 franchised Costa Oil outlets that were open from December 1, 2022 to December 1, 2023 and provided sufficient reporting
- 2023 average, median, highest, and lowest ticket for the 14 outlets owned by Costa Oils, Inc. and 8 franchised Costa Oil outlets that were open from December 1, 2022 to December 1, 2023
Section VI – Key ratios, comparables, computations, and analyses for the Costa Oil franchise opportunity (exclusive content for Platinum subscribers)
Section I – Costa Oil Franchise Costs
- Costa Oil franchise costs (kiosk with land and improvements leased), based on Item 7 of the company’s 2023 FDD:
- Franchise Fee: $54,900
- Grand Opening Onsite Support Fee: $5,000
- Real Estate Commission Fee: $0 to $8,000
- Kiosk Lease: $12,000 to $16,500
- Kiosk Engagement Fee: $5,000 to $7,000
- Ground Lease: $4,500 to $15,000
- Training Expenses for Travel, Food, and Lodging: $1,500 to $3,500
- Computer Hardware and Software: $1,000 to $2,500
- Office Supplies: $250 to $500
- Signage: $3,500 to $15,000
- Furniture and Equipment: $7,500 to $15,000
- Utilities: $500 to $2,000
- Tools: $1,000 to $2,000
- Inventory and Supplies: $12,000 to $16,000
- Grand Opening Advertising: $5,000 to $10,000
- Insurance: $1,000 to $3,500
- Licenses and Permits: $100 to $3,000
- Legal and Accounting: $1,500 to $4,000
- Site Plan Approval: $12,500 to $20,000
- Building Permit Approval: $20,000 to $35,000
- Additional Funds – 6 Months: $50,000 to $100,000
- Total Estimated Costa Oil Franchise Costs: $198,750 to $338,400
Section II – Costa Oil’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- Costa Oil’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:
- Initial Franchise Fee: $54,900
- Royalty Fee: 6.5% of Gross Revenue; $200 per week minimum royalty
- Brand Fund Contribution: up to 2% of Gross Revenue; currently 1% of Gross Revenue
- Website Design and Local Marketing Requirement: greater of $99 per month and 2.5% of Gross Revenue
- Market Cooperative Contribution: as determined by the cooperative; currently, none
Section III – Number of Franchised and Company-Owned Costa Oil Outlets
Franchised
2020
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- 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: 9
- Net Change: +9
Company-Owned
2020
- Outlets at the Start of the Year: 9
- Outlets at the End of the Year: 12
- Net Change: +3
2021
- Outlets at the Start of the Year: 12
- Outlets at the End of the Year: 13
- Net Change: +1
2022
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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.- Outlets at the Start of the Year: 13
- Outlets at the End of the Year: 15
- Net Change: +2
Section IV – News Updates on the Costa Oil Franchise
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Costa Oil Franchise (Item 19, 2023 FDD)
- The following tables contain historical financial performance representations for the 12-month period from December 1, 2022 to December 1, 2023 (referred in the tables as “2023” data) for 22 Costa Oil outlets, 14 of which were owned and operated by the franchisor’s predecessor’s affiliate, Costa Oils, Inc.
- This does not include the 4 locations owned by Costa Oils, Inc. or the 9 other franchised outlets that were not open for the entire 12-month reporting period, one of which closed down because of damage due to an accident (and plans to reopen in 2024) and the rest of which opened during 2023 and which had not been in business at least one year.
- The financial performance representations in the tables include: 2023 gross revenue, 2023 gross revenue minus key expenses (rent, labor, oil costs, royalties, brand fund contributions, and technology fees), and 2023 average ticket.
- Some of the data and tables are separated by subsets, including whether the locations are owned and operated by a franchisee or Costa Oils, Inc., the business owned by Costa Oil’s officer Costa Kapothanasis, or based on the duration of operations.
- The data in the following tables comes from the reported historical performance.
Part 1 – 2023 Gross Revenue
- Part 1 shows the gross revenue financial information for all 22 outlets that were open from December 1, 2022 to December 1, 2023, all of which reported to Costa Oil sales.
- The financial information is separated into two tables: (i) Part 1A shows information for the 14 outlets owned by Costa Oils, Inc.; Part 1B shows information for the 8 franchised outlets.
A. Costa Oils, Inc. Outlets
- Number of Outlets: 14
- Median Gross Revenue: $336,763
- Average Gross Revenue: $367,553
- Number and Percent of Sample That Achieved or Surpassed Average: 7 / 50%
- Highest Gross Revenue: $630,905
- Lowest Gross Revenue: $183,414
- Top 50% Median Gross Revenue: $486,394
- Top 50% Average Gross Revenue: $497,390
- Bottom 50% Median Gross Revenue: $250,769
- Bottom 50% Average Gross Revenue: $237,716
B. Franchised Outlets
- Number of Outlets: 8
- Median Gross Revenue: $220,684
- Average Gross Revenue: $220,168
- Number and Percent of Sample That Achieved or Surpassed Average: 4 / 50%
- Highest Gross Revenue: $414,866
- Lowest Gross Revenue: $95,598
- “Gross Revenue” means total of all revenue in a period, not including discounts, taxes, voids, or refunds for each location.
Part 2 – 2023 Gross Revenue by Duration of Operation
- Part 2 shows the gross revenue for the 22 outlets that were open and reported to Costa Oil the financial information but separated into subsets.
A. Costa Oils, Inc. Outlets Opened for More Than 4 Years
- Number of Outlets: 7
- Median Gross Revenue: $486,394
- Average Gross Revenue: $467,301
- Number and Percent of Sample That Achieved or Surpassed Average: 4 / 57.1%
- Highest Gross Revenue: $630,905
- Lowest Gross Revenue: $183,414
B. Costa Oils, Inc. Outlets Opened for More Than 2 Years But Less Than 4 Years
- Number of Outlets: 5
- Median Gross Revenue: $259,300
- Average Gross Revenue: $282,227
- Number and Percent of Sample That Achieved or Surpassed Average: 1 / 20%
- Highest Gross Revenue: $394,038
- Lowest Gross Revenue: $242,853
C. Costa Oils, Inc. Outlets Opened for More Than 1 Year But Less Than 2 Years
- Number of Outlets: 2
- Median Gross Revenue: $231,751
- Average Gross Revenue: $231,751
- Number and Percent of Sample That Achieved or Surpassed Average: 1 / 50%
- Highest Gross Revenue: $279,489
- Lowest Gross Revenue: $184,013
D. Franchised Outlets Opened for More Than 1 Year But Less Than 2 Years
- Number of Outlets: 8
- Median Gross Revenue: $220,684
- Average Gross Revenue: $220,168
- Number and Percent of Sample That Achieved or Surpassed Average: 4 / 50%
- Highest Gross Revenue: $414,866
- Lowest Gross Revenue: $95,598
Part 3 – 2023 Gross Revenue Minus Key Expenses
- Part 3 shows gross revenue minus key expenses financial information for 21 outlets that were open and reported to Costa Oil this information from December 1, 2022 to December 1, 2023. One additional franchisee outlet that did operate during the reporting period is excluded because of insufficient and inaccurate reporting.
- The key expenses deducted from gross revenue include: rent, labor, oil costs, royalties, brand fund contributions, and technology fees.
A. Costa Oils, Inc. Outlets
- Number of Outlets: 14
- Median Gross Revenue Minus Key Expenses: $86,028
- Average Gross Revenue Minus Key Expenses: $113,953
- Number and Percent of Sample That Achieved or Surpassed Average: 5 / 35.7%
- Highest Gross Revenue Minus Key Expenses: $307,572
- Lowest Gross Revenue Minus Key Expenses: $17,831
B. Franchised Outlets
- Number of Outlets: 7
- Median Gross Revenue Minus Key Expenses: $52,968
- Average Gross Revenue Minus Key Expenses: $46,559
- Number and Percent of Sample That Achieved or Surpassed Average: 4 / 57.1%
- Highest Gross Revenue Minus Key Expenses: $141,651
- Lowest Gross Revenue Minus Key Expenses: -$19,071
- “Gross Revenue” means total of all revenue in a period, not including discounts, taxes, voids, or refunds for each location. The Gross Revenue financial information in these tables is taken from Part 1.
- “Key Expenses” include Rent, Labor, Oil COGS, Royalties, Brand Fund contributions, and Technology Fees.
- “Rent” includes monthly rent or lease payments and applicable CAM/NNN charges.
- “Payroll” includes payroll payments to employees and payroll tax.
- “Oil COGS” includes the cost to purchase the oil products, filters, and additives used in providing the franchise products and services.
- “Gross Revenue Minus Key Expenses” refers to a number calculated from deducting the Key Expenses from Gross Revenue. It is not a gross profit, net profit, or similar financial calculation and does not include other common operational expenses and amounts such as utilities, insurance, debt payments, cable, internet, telephone, office supplies, accounting, legal, licenses, income tax, and so forth.
- “Gross Revenue Minus Key Expenses %” is a percentage that expresses the calculation of Gross Revenue Minus Key Expenses divided by Gross Revenue.
- “Royalties” refers to the 6.5% of Gross Revenue royalty payment required by the current franchise agreement.
- “Brand Fund” refers to the 1% brand fund contribution payment required by the current franchise agreement.
- “Tech Fees” refers to the $200 monthly technology fee payment required by the current franchise agreement.
- Not all outlets actually paid the current royalty amount of 6.5% of Gross Revenue with a $200 monthly minimum and not all outlets actually paid the current brand fund contributions amount of 1% of Gross Revenue. For these outlets, Costa Oil has imputed an amount equal to these royalty and brand fund contribution amounts. You will be expected to pay the royalties and brand fund contributions required in your franchise agreement.
Part 4 – 2023 Average Ticket
- Part 4 shows average ticket financial information for 22 outlets that were open and reported to Costa Oil average ticket information from December 1, 2022 to December 1, 2023.
A. Costa Oils, Inc. Outlets
- Number of Outlets: 14
- Median Ticket: $70.86
- Average Ticket: $70.29
- Number and Percent of Sample That Achieved or Surpassed Average: 7 / 50%
- Highest Ticket: $82.13
- Lowest Ticket: $59.96
B. Franchised Outlets
- Number of Outlets: 8
- Median Ticket: $70.92
- Average Ticket: $72.57
- Number and Percent of Sample That Achieved or Surpassed Average: 4 / 50%
- Highest Ticket: $91.18
- Lowest Ticket: $55.81
- “Average Ticket” means the amount spent per customer per visit.
- Some outlets have sold these amounts. Your individual results may differ. There is no assurance that you’ll sell as much.
Section VI – Costa Oil Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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