EverLine Coatings: $619K Average Sales vs. $148K-$293K Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for an Everline Coatings franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for an EverLine Coatings franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned EverLine Coatings 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 EverLine Coatings franchise opportunity

Section V – Presentation and analysis of EverLine Coatings’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 gross sales, cost of goods sold, gross profit, disclosed expenses, and gross sales less COGS and disclosed expenses for EverLine Coatings’ affiliate business over the 2022 calendar year

• approximate population and year launched for the 12 disclosed Canadian EverLine Coatings businesses owned and operated by franchise owners throughout the entire 2022 calendar year on a full-time basis

• 2022 average, median, highest, and lowest gross sales for the 12 disclosed Canadian EverLine Coatings businesses owned and operated by franchise owners throughout the entire 2022 calendar year on a full-time basis

• 2022 average, median, highest, and lowest client count for the 12 disclosed Canadian EverLine Coatings businesses owned and operated by franchise owners throughout the entire 2022 calendar year on a full-time basis

• 2022 average, median, highest, and lowest gross sales per client for the 12 disclosed Canadian EverLine Coatings businesses owned and operated by franchise owners throughout the entire 2022 calendar year on a full-time basis

• 2022 average, median, highest, and lowest close rate (won vs. lost proposals) for 11 of the disclosed Canadian EverLine Coatings businesses owned and operated by franchise owners throughout the entire 2022 calendar year on a full-time basis

• 2022 average, median, highest, and lowest gross profit margin for 10 of the disclosed Canadian EverLine Coatings businesses owned and operated by franchise owners throughout the entire 2022 calendar year on a full-time basis

• year-over-year revenue growth rates between the 2021 and 2022 calendar years for the 12 disclosed Canadian EverLine Coatings businesses owned and operated by franchise owners throughout the entire 2022 calendar year on a full-time basis

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

Section I – EverLine Coatings Franchise Costs

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

• Initial Franchise Fee:  $59,500
• Equipment Acquisition:  $17,578 to $110,085
• Initial Tools Purchased:  $9,000 to $12,000
• Office Equipment, Including Computer System Hardware:  $1,150 to $2,300
• Signage:  $500 to $700
• Telephone System:  $150 to $1,000
• Technology Setup Fee and First 3 Months Technology Fee:  $2,220 to $2,790
• Lease Deposits in Connection with Mobile Unit and Sales Vehicle – Pre-Opening:  $18,143 to $27,792
• Third-Party Storage/Operational Space – Lease Deposit:  $0 to $2,500
• Branding Collateral Package; Initial Marketing Materials:  $1,000 to $2,000
• Training and Travel Expense; Labor:  $1,500 to $2,000
• Training Fee:  $3,700
• Business Licenses and Permits:  $750 to $2,500
• Uniforms:  $385 to $500
• Insurance – Initial Premiums (covering post-launch operations):  $2,000 to $4,000
• Marketing Set-up Fee:  $1,100
• Initial Marketing Spend:  $5,000 to $9,500
• Professional Fees:  $300 to $5,000
• Additional Funds – 12 Months:  $25,000 to $45,000
• Total Estimated EverLine Coatings Franchise Costs:  $148,976 to $293,967

Section II – EverLine Coatings’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Franchise Fee:  $59,500

• Royalty Fee:  6% of Gross Sales, subject to the Minimum Royalty that is due on an annual basis ($6,000 to $22,500, depending on the number of years in operation). For work done in part or full by an approved subcontractor, and such subcontractor is necessary (as deemed by EverLine Coatings), the royalty rate for the part of the job done by an approved subcontractor shall be 2.5%.

• Fund Contribution:  2% of Gross Sales

• Local Advertising Requirement (or “LAR”):  a minimum of 1% of Gross Sales

Section III – Number of Franchised and Company-Owned EverLine Coatings Outlets

Franchised

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:  20
• Net Change:  +20

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 EverLine Coatings Franchise

• EverLine Coatings Reaches Milestones, Debuting on Franchise 500 and Opening 100th Location

• Pavement Maintenance Is a Promising Segment for Everline, G-Force Franchisees

• EverLine Coatings Builds on Leadership Team with New VP of Finance

• How Proposify Helped Everline Increase Their Close Rates Dramatically and Tailor Follow-ups for 59 Franchises

• EverLine Coatings Ranked No. 460 on Entrepreneur’s 2024 Franchise 500 List

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

• This Item 19 discloses the historical financial performance of certain EverLine Coatings and Services Businesses operating under the Proprietary Marks and utilizing the System within one or more Designated Territories within Canada as of December 31, 2022 (each, an “Existing CN Business”).

• As of December 31, 2022, there were a total of 18 Existing CN Businesses operating in Canada, namely: (i) the one Business owned and operated by an affiliate of EverLine Coatings and its Affiliate Franchisor (the “Affiliate Business”); and (ii) 17 franchised Businesses that are independently owned and operated by System franchisees that have entered into a franchise agreement with EverLine Coatings’ Affiliate Franchisor.

• As of December 31, 2022, EverLine Coatings had a total of 20 EverLine Coatings and Services Franchised Businesses operating in the United States (“Existing US Businesses”). EverLine Coatings has excluded the Existing US Businesses from this Item 19 because all of them opened during the 2022 Calendar Year and, therefore, had been open for less than a year as of December 31, 2022.

• There were 12 Existing CN Businesses that were (i) open and operating throughout the entire 2022 Calendar Year (ii) on a full-time basis (the “2022 Disclosed CN Businesses”).

• The Gross Sales data for the 2022 Calendar Year included in this Item 19 was converted from Canadian Dollars to U.S. Dollars with the average historical exchange rate during the 2022 Calendar Year, which was $1 CAD = $0.7688 USD.

Part 1 – Gross Sales Generated, as Well as COGS, Labor, and Certain Disclosed Expenses Incurred, by EverLine Coatings’ Affiliate Business Over the 2022 Calendar Year

Gross Sales:  $2,134,743 (100.0%)

Cost of Goods Sold (Reported Purchases + Direct Labor Costs Reported):  $1,046,546 (49.0%)

Gross Profit (Gross Sales Less Cost of Goods Sold):  $1,088,197 (51.0%)

Disclosed Expenses

• Estimated Royalties:  $128,085 (6.0%)
• Estimated Brand Fund:  $42,695 (2.0%)
• Advertising and Promotion:  $23,182 (1.1%)
• Licenses and Memberships:  $360 (0.0%)
• Insurance:  $21,933 (1.0%)
• Bank Charges:  $3,044 (0.1%)
• Office Supplies and Computer Software:  $21,044 (1.0%)
• Storage Rent:  $33,212 (1.6%)
• Safety (PPE):  $17,799 (0.8%)
• Professional Fees:  $6,942 (0.3%)
• Utilities:  $13,788 (0.6%)
• Vehicle:  $69,253 (3.2%)
• Total of Disclosed Expenses:  $381,337 (17.9%)

Gross Sales Less COGS and Disclosed Expenses:  $706,860 (33.1%)

Part 2 – Details Regarding the 2022 Disclosed CN Businesses Over the 2022 Calendar Year

Approximate Population as of December 31, 2022

• CN Business No. 1 (Affiliate-Owned) – Calgary (Launched Operations in 2012):  1,713,689
• CN Business No. 2 – Edmonton (Launched Operations in 2016):  1,929,966
• CN Business No. 3 – Sudbury (Launched Operations in 2018):  281,076
• CN Business No. 4 – Simcoe (Launched Operations in 2019):  1,188,856
• CN Business No. 5 – Saskatoon (Launched Operations in 2017):  363,301
• CN Business No. 6 – Winnipeg (Launched Operations in 2019):  1,255,941
• CN Business No. 7 – Ottawa (Launched Operations in 2020):  1,209,014
• CN Business No. 8 – Durham Region (Launched Operations in 2020):  955,297
• CN Business No. 9 – Kitchener (Launched Operations in 2020):  1,244,793
• CN Business No. 10 – Kelowna (Launched Operations in 2021):  256,995
• CN Business No. 11 – Ontario East (Launched Operations in 2021):  507,461
• CN Business No. 12 – New Brunswick/PEI (Launched Operations in 2021):  1,046,022

Part 3 – Gross Sales Generated Amongst the 2022 Disclosed CN Businesses Over the 2022 Calendar Year

• The financial amounts in this Part 3 have been converted from Canadian Dollars to U.S. Dollars with the average exchange rate during the 2022 Calendar Year as described above.

Data Reported Amongst All 12 of the Disclosed CN Businesses

• Highest Gross Sales:  $2,134,743 (reported by Affiliate Location)
• Average Gross Sales:  $746,021
• Median Gross Sales:  $593,968
• Lowest Gross Sales:  $239,620
• Number and Percent of Locations That Met or Exceeded Average:  6 (50%)

Part 4 – Number of Clients (“Client Count”) Amongst the 2022 Disclosed CN Businesses Over the 2022 Calendar Year

• For each 2022 Disclosed CN Business, the terms “Number of Clients” and “Client Count” both mean the number of Clients that the owner of that Business completed jobs for and received payment from between January 1, 2022, and December 31, 2022.

Data Reported Amongst All 12 of the Disclosed CN Businesses

• Highest Client Count Reported:  238
• Average Client Count Reported:  93
• Median Client Count Reported:  78
• Lowest Client Count Reported:  38
• Number and Percent of Locations That Met or Exceeded Average:  5 (42%)

Part 5 – Average Gross Sales Generated Per Client Amongst the 2022 Disclosed CN Businesses Over the 2022 Calendar Year

• For each Disclosed CN Business, the term “Average Gross Sales Per Client” was calculated as follows: (i) the Gross Sales generated by that Existing CN Business over the 2022 calendar year; and (ii) dividing that figure by the total number of Clients reported by the Existing CN Business in Part 5 below.

Data Reported Amongst All 12 of the Disclosed CN Businesses

• Highest Gross Sales Per Client Reported:  $38,472
• Average Gross Sales Per Client Reported:  $9,125
• Median Gross Sales Per Client Reported:  $6,395
• Lowest Gross Sales Per Client Reported:  $4,178
• Number and Percent of Locations That Met or Exceeded Average:  4 (33%)

Part 6 – Close Rate (Won vs. Lost Proposals) Amongst 11 of the 2022 Disclosed CN Businesses Over the 2022 Calendar Year

• The Close Rate percentages in Part 6 do not include any “open” proposals where the client has not answered or has not yet made a decision about hiring the business.

• EverLine Coatings did not have accurate close rate data from 1 of the 12 Disclosed CN Businesses, so it excluded that franchise from the data in Part 6.

Data Reported Amongst 11 of the Disclosed CN Businesses

• Highest Close Rate Reported:  75%
• Average Close Rate Reported:  59%
• Median Close Rate Reported:  60%
• Lowest Close Rate Reported:  43%
• Number and Percent of Locations That Met or Exceeded Average:  8 (72%)

Part 7 – Gross Profit Margin Amongst 10 of the 2022 Disclosed CN Businesses Over the 2022 Calendar Year

• “Gross Profit” is calculated by subtracting Cost of Goods Sold from Gross Sales. The “Gross Profit Margin” percentages are calculated by dividing Gross Profit by Gross Sales.

• Two of the 12 Disclosed CN Businesses did not provide EverLine Coatings with certain financial data needed to calculate their Gross Profit Margin for the 2022 Calendar Year, so EverLine Coatings excluded those 2 franchises from the data in Part 7.

Data Reported Amongst 10 of the Disclosed CN Businesses

• Highest Gross Profit Reported:  62%
• Average Gross Profit Reported:  50%
• Median Gross Profit Reported:  51%
• Lowest Gross Profit Reported:  38%
• Number and Percent of Locations That Met or Exceeded Average:  6 (60%)

Part 8 – Year-Over-Year Revenue Growth Rates Between the 2021 and 2022 Calendar Years Amongst the 2022 Disclosed CN Businesses

• The “Revenue Growth Rate” is calculated by subtracting each business’s Gross Sales for the 2021 Calendar Year from its Gross Sales for the 2022 Calendar Year and then dividing that difference by the Gross Sales for the 2021 Calendar Year.

• The data in Part 8 includes the 3 2022 Disclosed CN Businesses that opened for business during 2021, which did not operate for the entire 2021 Calendar Year and are therefore not included in the 2021 Disclosed CN Businesses.

Data Reported Amongst All 12 of the Disclosed CN Businesses

• Highest Revenue Growth Rate:  357%
• Average Revenue Growth Rate:  84.3%
• Median Revenue Growth Rate:  63%
• Lowest Revenue Growth Rate:  -29%
• Number and Percent of Locations That Met or Exceeded Average:  4 (33%)

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