Gotcha Covered: $598K Average Sales vs. $100K-$122K Franchise Cost

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

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

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

Section III – Number of franchised and company-owned Gotcha Covered 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 Gotcha Covered franchise opportunity

Section V – Presentation and analysis of Gotcha Covered’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 profit margin, monthly sales, annual sales, close ratio, and sale amount for the 84 Gotcha Covered reporting franchisees that operated during the entire 2022 calendar year

• 2022 average profit margin, monthly sales, annual sales, close ratio, and sale amount for the 19 Gotcha Covered reporting franchisees that operated during the entire 2022 calendar year, who had 12-24 months of reported operations

• 2022 average profit margin, monthly sales, annual sales, close ratio, and sale amount for the 13 Gotcha Covered reporting franchisees that operated during the entire 2022 calendar year, who had 25-36 months of reported operations (“Established Franchisees”)

• 2022 average profit margin, monthly sales, annual sales, close ratio, and sale amount for the 52 Gotcha Covered reporting franchisees that operated during the entire 2022 calendar year, who had 37+ months of reported operations (“Mature Franchisees”)

• 2016, 2017, 2018, 2019, 2020, 2021, and 2022 systemwide revenues for all Gotcha Covered reporting franchisees, without excluding any who terminated operations or who were in the early stages of their operations

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

Section I – Gotcha Covered Franchise Costs

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

• Initial Franchise Fee:  $69,900
• Franchise Starter Package:  $17,500
• Annual Conference Registration Deposit:  $1,000
• Training:  $250 to $2,000
• Equipment:  $0 to $600
• Insurance:  $1,000 to $4,000
• Miscellaneous Opening Costs:  $100 to $1,200
• Additional Funds for First 3 Months:  $10,300 to $25,855
• Total Estimated Gotcha Covered Franchise Costs:  $100,050 to $122,055

Section II – Gotcha Covered’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Franchise Fee:  $69,900

• Royalty:  1st month of first Franchise Year: $350; 2nd month of first Franchise Year: $400; 3rd month of first Franchise Year: $450; 4th month of first Franchise Year: $700; 5th month of first Franchise Year: $750; 6th month of first Franchise Year: $800; 7th month of first Franchise Year: $1,050; 8th month of first Franchise Year: $1,100; 9th month of first Franchise Year: $1,150; 10th month of first Franchise Year: $1,300; 11th month of first Franchise Year: $1,350; 12th through 36th month of Franchise Term: $1,400; 37th month of Franchise Term through remainder of initial term: $2,000, plus $.05 for each household above 30,000 households

• Marketing Fund Fee:  1st month of first Franchise Year: $0; 2nd through 4th month of first Franchise Year: $125; 5th through 7th month of first Franchise Year: $250; 8th through 10th month of first Franchise Year: $375; 11th through 13th month of Franchise Term: $550; 14th through 17th month of Franchise Term: $625; 18th through 20th month of Franchise Term: $750; 21st through 23rd month of Franchise Term: $875; 24th month of Franchise Term and thereafter: $1,000

• Local and Regional Marketing Cooperative:  established by cooperative members

Section III – Number of Franchised and Company-Owned Gotcha Covered Outlets

Franchised

2020

• Outlets at the Start of the Year:  107
• Outlets at the End of the Year:  116
• Net Change:  +9

2021

• Outlets at the Start of the Year:  116
• Outlets at the End of the Year:  128
• Net Change:  +12

2022

• Outlets at the Start of the Year:  128
• Outlets at the End of the Year:  144
• Net Change:  +16

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 Gotcha Covered Franchise

• Gotcha Covered Opens 5th Location in California

• Gotcha Covered Continues Expansion in Florida with 17th Location

• Gotcha Covered Named a 2023 Top Franchise by Franchise Business Review

• Gotcha Covered Named a Top 100 Most Innovative Franchise by Franchise Business Review

• Gotcha Covered Named a Top Low-Cost Franchise and Top Recession-Proof Business for 2023 by Franchise Business Review

• Gotcha Covered Ranked No. 292 on Entrepreneur’s 2024 Franchise 500 List

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

• As of December 31, 2022, there were 133 franchised Gotcha Covered Businesses operating in the United States, 11 franchised Gotcha Covered Businesses operating in Canada, and no company-owned Gotcha Covered Businesses.

• The information in the tables below is a historical financial performance representation for the 107 franchised Gotcha Covered Businesses that operate in the United States and had been in operation for at least one year as of December 31, 2022 (“Reporting Group”) for the 2022 calendar year (“Reporting Period”).

• Gotcha Covered excluded Canadian Gotcha Covered Businesses, which are not offered under the Franchise Disclosure Document.

• Gotcha Covered also excluded Gotcha Covered Businesses that closed during the Reporting Period or that had not operated for a full 12 months by December 31, 2022 due to the unreliability and irregularity of performance until such a ramp-up period for operations has been completed.

• As a result, and due to the variation in use of Gotcha Covered’s sales software, certain data came from Reporting Groups comprising different sizes, with most data coming from a Reporting Group of 84 (fully compliant users of the sales software, to generate average annual and monthly sales data), whereas others drew from a Reporting Group of 96 (for comprehensive system-wide sales) and 95 (for closing ratio).

• Gotcha Covered has not audited these amounts, but has no reason to doubt the accuracy of the information.

• These financial performance representations disclose only average sales and key performance indicators and, except for the specific ways that expenses are disclosed, they do not take into account the cost of services performed or franchisee expenses.

• The data used in these tables was obtained from sales reports delivered to Gotcha Covered by franchisees, and from Gotcha Covered’s administrative access to the required sales software used by franchisees. Because some information is only available from Gotcha Covered’s reporting software, and use of such software is not uniform, some locations’ performance may not be reflected in each instance, and the “reporting locations” mentioned reflect such variations based on the variation in use and in manner of use of the sales software by each franchise owner.

• In these tables the following definitions apply:

• “Average Annual Sales” is reported as the total Gross Sales of a Franchise Business during a calendar year.

• “Average Monthly Sales” is reported as the Average Annual Sales divided by 12 (months).

• “Average Close Ratio” is calculated by dividing the total number of closed Sales in the reporting period by the total number of customers given a quote during the same reporting period.

• “Average Sale Amount” is calculated by dividing the total Sales contracts in the reporting period by the total number of closed Sales during the same reporting period.

• “Average Profit Margin” is calculated by dividing each Franchised Business’s gross cost of Sales by the same Franchised Business’s total Sales as reported by the Franchisee, and taking a system-wide average of each Franchised Business’s percentage to determine the overall average for any given Reporting Group.

Part 1 – Average Overall Performance Data for Franchisees in the 2022 Reporting Period (for Franchisees that operated during the entire 2022 calendar year)

• Number of Reporting Franchisees:  84
• Average Profit Margin (as reported by franchisee):  56.14%
• Average Monthly Sales:  $49,856.01
• Average Annual Sales:  $598,272.16
• Average Close Ratio:  52.68%
• Average Sale Amount:  $3,838.75

Part 2 – Average Performance Data for First Full Year of Operations During 2022 (for Franchisees that operated during the entire 2022 calendar year, who had 12-24 months of reported operations)

• Number of Reporting Franchisees:  19
• Average Profit Margin (as reported by franchisee):  53.15%
• Average Monthly Sales:  $26,039.30
• Average Annual Sales:  $312,471.56
• Average Close Ratio:  51.92%
• Average Sale Amount:  $3,711.13

Part 3 – Average Performance Data for Established Franchisees During 2022 (for Franchisees that operated during the entire 2022 calendar year, who had 25-36 months of reported operations)

• Number of Reporting Franchisees:  13
• Average Profit Margin (as reported by franchisee):  53.63%
• Average Monthly Sales:  $31,534.86
• Average Annual Sales:  $378,418.13
• Average Close Ratio:  58.14%
• Average Sale Amount:  $3,917.53

Part 4 – Average Performance Data for Mature Franchisees During 2022 (for Franchisees that operated during the entire 2022 calendar year, who had 37+ months of reported operations)

• Number of Reporting Franchisees:  52
• Average Profit Margin (as reported by Franchisee):  61.84%
• Average Monthly Sales:  $63,138.56
• Average Annual Sales:  $757,662.76
• Average Close Ratio:  51.90%
• Average Sale Amount:  $3,861.39

• The reporting franchisees include all outlets reporting at least one year of historical revenue and performance data at the time of preparation of the disclosure document. All franchisees were requested to provide information.

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

Part 5 – System-Wide Revenues

• The following chart reflects system-wide revenues for the years outlined and includes all reporting franchisees, without excluding any who terminated operations or who were in the early stages of their operations.

• For this chart, System-Wide Revenues means the sum of each Franchise Territory’s Gross Revenues during the calendar year listed.

• 2016:  $18,299,446
• 2017:  $21,370,869
• 2018:  $20,287,870
• 2019:  $27,564,146
• 2020:  $33,764,329
• 2021:  $50,108,422
• 2022:  $58,002,433

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

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