N-Hance Wood Refinishing: $210K Average Sales vs. $70K-$192K Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for an N-Hance Wood Refinishing franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for an N-Hance Wood Refinishing franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned N-Hance Wood Refinishing 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 N-Hance Wood Refinishing franchise opportunity

Section V – Presentation and analysis of N-Hance Wood Refinishing’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 and median revenue per owner, average revenue per territory, average revenue per job, average solutions cost as a percentage of revenue, and average tech labor cost as a percentage of revenue for the top performer, top 5%, top 10%, 1st quartile, 2nd quartile, 3rd quartile, 4th quartile, bottom 10%, bottom 5%, and bottom performer of the 98 N-Hance franchise owners who operated their franchises for at least 13 months as of December 31, 2022 and submitted annual financial data to N-Hance for 2022 (“Active Franchise Owners”), who collectively own 270 N-Hance business franchises (the “Active Franchises”)

• 2022 average franchised areas per owner, average and median revenue per owner, average and median revenue per franchised area, average revenue per job, and average solutions cost as a percentage of revenue for the 98 Active Franchise Owners, grouped by number of franchised areas per owner (1, 2, and 3 or more)

Section VI – Key ratios, comparables, computations, and analyses for the N-Hance Wood Refinishing franchise opportunity (exclusive content for Platinum subscribers)

Section I – N-Hance Wood Refinishing Franchise Costs

• N-Hance Wood Refinishing franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial License Fee:  $22,500 to $45,000, per franchise
• Initial Package – Equipment, Product, Marketing, and Operations Package Fee:  $41,500
• Business Vehicle:  $0 to $60,000
• Three Months’ Rent:  $0 to $7,500
• Telephone and Business License:  $400 to $4,000
• Travel Expenses While Attending Training (if applicable):  $1,000 to $4,000
• Insurance:  $600 to $6,000
• Additional Funds for 3 Months:  $2,500 to $12,000
• Computer System:  $0 to $2,000
• Advertising for 3 Months:  $1,500 to $5,000
• Permits and Licenses:  $700 to $5,000
• Total Estimated N-Hance Wood Refinishing Franchise Costs:  $70,700 to $192,000

Section II – N-Hance Wood Refinishing’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• N-Hance Wood Refinishing’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial License Fee:  $22,500 to $45,000, per franchise

• Royalty – Traditional Franchise:  the greater of (1) 2% of your Gross Revenue or (2) the Minimum Monthly Royalty of $412.07 for months 1 to 6 and $824.79 thereafter

• Royalty – Small Market Franchise:  the greater of (1) 2% of your Gross Revenue or (2) the Minimum Monthly Royalty of $219.85 for months 1 to 6 and $439.71 thereafter

• Brand Marketing Fund Contribution – Traditional Franchise:  up to $400 per month; currently, $235.67 per month

• Brand Marketing Fund Contribution – Small Market Franchise:  up to $200 per month; currently, $117.84 per month

• Minimum Monthly Marketing Spend by You:  the greater of (1) 5% of your Gross Revenue or (2) a fixed dollar amount

Section III – Number of Franchised and Company-Owned N-Hance Wood Refinishing Outlets

Franchised

2020

• Outlets at the Start of the Year:  505
• Outlets at the End of the Year:  428
• Net Change:  -77

2021

• Outlets at the Start of the Year:  428
• Outlets at the End of the Year:  383
• Net Change:  -45

2022

• Outlets at the Start of the Year:  383
• Outlets at the End of the Year:  317
• Net Change:  -66

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 N-Hance Wood Refinishing Franchise

• N-Hance Announces New Ownership for Denver Metro Unit

• N-Hance Signs Deal for North Philadelphia

• N-Hance Wood Refinishing Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the N-Hance Wood Refinishing Franchise (Item 19, 2023 FDD)

• Every month, N-Hance requires all franchise owners to provide certain financial and other information relating to the operation of their N-Hance businesses during that month. N-Hance may also request that all franchisees who do not submit monthly reports submit an annual report.

• Most N-Hance franchise owners have purchased several franchises covering separate geographic areas. N-Hance believes that a franchisee is able to achieve overhead efficiencies by supporting multiple franchises from a single operating base that is conveniently located to the franchises.

• As of December 31, 2022, N-Hance had 127 U.S. franchise owners who operated 317 businesses.

• Of these franchise owners, 119 franchise owners (the “Mature Franchise Owners”), representing 93.7% of the total franchise owners, who operate 308 N-Hance businesses (the “Mature Franchises”) in discrete Franchise Areas, representing 96.7% of N-Hance franchises, operated those franchises for at least 13 months as of December 31, 2022.

• Of those Mature Franchise Owners, 98 franchise owners (the “Active Franchise Owners”), representing 77.2% of all franchise owners and 82.4% of Mature Franchise Owners, who collectively own 270 N-Hance business franchises (the “Active Franchises”), representing 84.6% of all franchises and 87.7% of Mature Franchises, submitted annual financial data to N-Hance for 2022 and actively operated their business.

• N-Hance derived the information presented below from the Active Franchise Owners about the Active Franchises. The information has been reported voluntarily by Active Franchise Owners and has not been audited, reviewed, or compiled by any independent accountant.

• An “Active Franchise Owner” is a franchisee in the U.S. that has operated an N-Hance business on a full-time basis for the full year of 2022 by (i) completing at least two jobs through its N-Hance business during each calendar month in 2022 and (ii) obtained at least one third-party starred Google review. Active Franchise Owners include both Traditional and Small Market Franchises.

• The chart below shows a revenue performance grid for Active Franchise Owners and Active Franchises for the one-year period ending on December 31, 2022, presented by various performance groupings from the top performing to the bottom performing groups of Active Franchise Owners, with performance measured and grouped by average revenue per owner.

• Information from the franchisees and about the franchised businesses that did not report revenue information for all of 2022, who did not qualify as Mature Franchise Owners, or which did not qualify as a Mature Franchise is not included in the performance grids.

• The table below also presents information obtained from the Active Franchise Owners about the cost of solutions N-Hance supplies to them for use in their Active Franchises, and the cost of labor for their technicians performing the jobs included in the revenues for the fiscal year ended December 31, 2022.

Top Performer

• Number of Owners:  1
• Number of Franchised Areas:  7
• Average Revenue/Owner:  $4,616,614
• Median Revenue/Owner:  $4,616,614
• Average Revenue/Territory:  $659,516
• Average Revenue/Job:  $8,303
• Solutions as a Percentage of Revenue:  3.3%
• Tech Labor as a Percentage of Revenue:  22.8%

Top 5%

• Number of Owners:  5
• Number of Franchised Areas:  31
• Average Revenue/Owner:  $2,542,894
• Median Revenue/Owner:  $2,243,054
• Average Revenue/Territory:  $410,144
• Average Revenue/Job:  $7,600
• Solutions as a Percentage of Revenue:  4.0%
• Tech Labor as a Percentage of Revenue:  24.2%

Top 10%

• Number of Owners:  10
• Number of Franchised Areas:  50
• Average Revenue/Owner:  $1,913,761
• Median Revenue/Owner:  $1,545,430
• Average Revenue/Territory:  $382,752
• Average Revenue/Job:  $7,184
• Solutions as a Percentage of Revenue:  3.7%
• Tech Labor as a Percentage of Revenue:  24.6%

1st Quartile

• Number of Owners:  24
• Number of Franchised Areas:  103
• Average Revenue/Owner:  $1,309,239
• Median Revenue/Owner:  $987,969
• Average Revenue/Territory:  $305,065
• Average Revenue/Job:  $7,031
• Solutions as a Percentage of Revenue:  3.7%
• Tech Labor as a Percentage of Revenue:  24.7%

2nd Quartile

• Number of Owners:  24
• Number of Franchised Areas:  77
• Average Revenue/Owner:  $548,071
• Median Revenue/Owner:  $529,622
• Average Revenue/Territory:  $170,827
• Average Revenue/Job:  $5,354
• Solutions as a Percentage of Revenue:  5.0%
• Tech Labor as a Percentage of Revenue:  26.7%

3rd Quartile

• Number of Owners:  25
• Number of Franchised Areas:  48
• Average Revenue/Owner:  $318,480
• Median Revenue/Owner:  $303,394
• Average Revenue/Territory:  $165,875
• Average Revenue/Job:  $4,945
• Solutions as a Percentage of Revenue:  4.9%
• Tech Labor as a Percentage of Revenue:  31.4%

4th Quartile

• Number of Owners:  25
• Number of Franchised Areas:  42
• Average Revenue/Owner:  $173,492
• Median Revenue/Owner:  $171,777
• Average Revenue/Territory:  $103,269
• Average Revenue/Job:  $4,585
• Solutions as a Percentage of Revenue:  7.1%
• Tech Labor as a Percentage of Revenue:  32.5%

Bottom 10%

• Number of Owners:  10
• Number of Franchised Areas:  19
• Average Revenue/Owner:  $126,087
• Median Revenue/Owner:  $127,523
• Average Revenue/Territory:  $66,361
• Average Revenue/Job:  $4,455
• Solutions as a Percentage of Revenue:  8.3%
• Tech Labor as a Percentage of Revenue:  34.5%

Bottom 5%

• Number of Owners:  5
• Number of Franchised Areas:  9
• Average Revenue/Owner:  $99,612
• Median Revenue/Owner:  $112,333
• Average Revenue/Territory:  $55,340
• Average Revenue/Job:  $3,891
• Solutions as a Percentage of Revenue:  11.0%
• Tech Labor as a Percentage of Revenue:  39.2%

Bottom Performer

• Number of Owners:  1
• Number of Franchised Areas:  1
• Average Revenue/Owner:  $78,420
• Median Revenue/Owner:  $78,420
• Average Revenue/Territory:  $78,420
• Average Revenue/Job:  $2,821
• Solutions as a Percentage of Revenue:  5.2%
• Tech Labor as a Percentage of Revenue:  29.3%

1 Franchised Area Per Owner

• Number of Owners:  24
• Number of Franchised Areas:  24
• Average Franchised Areas/Owner:  1.0
• Average Revenue/Owner:  $248,425
• Median Revenue/Owner:  $243,721
• Average Revenue/Franchised Area:  $248,425
• Median Revenue/Franchised Area:  $243,721
• Average Revenue/Job:  $4,824
• Solutions as a Percentage of Revenue:  4.9%

2 Franchised Areas Per Owner

• Number of Owners:  26
• Number of Franchised Areas:  52
• Average Franchised Areas/Owner:  2.0
• Average Revenue/Owner:  $392,532
• Median Revenue/Owner:  $325,736
• Average Revenue/Franchised Area:  $196,266
• Median Revenue/Franchised Area:  $162,868
• Average Revenue/Job:  $4,974
• Solutions as a Percentage of Revenue:  4.3%

3 or More Franchised Area Per Owner

• Number of Owners:  48
• Number of Franchised Areas:  194
• Average Franchised Areas/Owner:  4.0
• Average Revenue/Owner:  $848,056
• Median Revenue/Owner:  $692,775
• Average Revenue/Franchised Area:  $209,828
• Median Revenue/Franchised Area:  $154,659
• Average Revenue/Job:  $6,572
• Solutions as a Percentage of Revenue:  4.4%

Total

• Number of Owners:  98
• Number of Franchised Areas:  270
• Average Franchised Areas/Owner:  2.8
• Average Revenue/Owner:  $580,355
• Median Revenue/Owner:  $390,320
• Average Revenue/Franchised Area:  $210,647
• Median Revenue/Franchised Area:  $195,045
• Average Revenue/Job:  $5,998
• Solutions as a Percentage of Revenue:  4.4%

• A number of factors impact a franchise owner’s revenue, such as the operational capability of the franchise owner, the price that the franchise owner decides to charge for services, the competition in the market, and the franchise owner’s ability to sell ancillary products and higher-margin services. The price you charge and your ability to sell may differ from the Active Franchise Owners.

• “Number of Owners” reflects the number of individual franchise owners in each measured category out of the total 98 Active Franchise Owners.

• “Number of Franchised Areas” reflects the total number of Franchised Areas owned by the franchise owners in each given row. The number of “Franchise Areas” is based on the franchises owned at the end of each calendar year.

• “Average Revenue Per Owner” reflects the average revenue reported by the Active Franchise Owners for the calendar year ending December 31, 2022.

• “Median Revenue Per Owner” reflects the median revenue reported by the Active Franchise Owners for the calendar year ending December 31, 2022.

• “Average Revenue Per Job” reflects the price data that Active Franchise Owners voluntarily report to N-Hance for transactions during the calendar year ending December 31, 2022.

• “Tech Labor as a % of Revenue” refers to the reported cost of technician labor used in the performance of the jobs by the Reporting Owners, as a percentage of the revenues of the Reporting Owner. It is a portion of the costs of performance, but does not include any other costs for other materials, supplies, or other categories of expenses you would incur to operate your N-Hance Business.

• “Solutions as a % of Revenue” refers to the reported cost of N-Hance-supplied treatment products used in the performance of the jobs by the Reporting Owners, as a percentage of the revenues of the Reporting Owner. It is a portion of the costs of performance but does not include any other costs for labor, other materials, supplies, or other categories of expenses you would incur to operate your N-Hance Business.

• In these financial performance representations, N-Hance considers each Franchise Agreement to be one “franchise” or “unit” for purposes of counting the number of Active Franchises.

• In the N-Hance franchise network, there sometimes is one individual, group of individuals, or an entity who has management responsibility for a number of different franchises operating under different Franchise Agreements.

• For example, that individual, group, or entity may be the franchisee under each of the Franchise Agreements, or an owner (whether of a majority or minority of the ownership interests) of those franchisees, or have management responsibility (for example, as a managing member or partner) of those franchisees.

• The N-Hance brand is established in many of the markets in which the Active Franchises operate. If you operate your N-Hance business franchise in a new region or market where the N-Hance brand is not yet developed, your franchise may not benefit as much from an established trade identity in the market or from marketing activities that other N-Hance business franchise owners historically conducted.

• This financial performance representation does not reflect variable or fixed operating expenses, or other costs or expenses that must be deducted from the revenue figures to obtain your net income or profit.

• You should conduct an independent investigation of the costs and expenses you will incur in operating your N-Hance business. Franchisees or former franchisees, listed in the Disclosure Document, may be one source of this information.

• Some businesses have sold this amount. Your individual results may differ. There is no assurance that you will sell as much.

Section VI – N-Hance Wood Refinishing Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️