Window Hero: $694K Average Sales vs. $99.5K-$205K Franchise Cost

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

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

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

Section III – Number of franchised and company-owned Window Hero 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 Window Hero franchise opportunity

Section V – Presentation and analysis of Window Hero’s 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, franchisor fees, and adjusted profit for Window Hero’s affiliate-owned location, which has been in operation since 2003

• 2022 annual gross sales and year-over-year change for the 2 affiliate-owned Window Hero locations and 11 franchised Window Hero locations that were open for at least 12 months as of December 31, 2022

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

Section I – Window Hero Franchise Costs

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

• Initial Franchise Fee:  $54,900 to $67,400
• Franchisor Directed Advertising Fee Deposit:  $6,000
• Window Supplies Package:  $5,000 to $7,500
• Travel Expenses to Training:  $250 to $3,000
• Security Deposits:  $0 to $500
• Rent:  $0 to $500
• Office Furniture:  $0 to $1,000
• Vehicle:  $0 to $40,000
• Vehicle Enhancements and Vehicle Wrap:  $3,000 to $25,000
• Tools and Equipment:  $5,000 to $7,500
• Business Management and Technology System:  $1,000 to $3,000
• Business Licenses:  $300 to $750
• Technology Fee (3 months):  $1,797
• Industry Certifications:  $0 to $100
• Professional Fees:  $500 to $2,000
• Insurance Deposit and Initial Premiums:  $1,800 to $2,500
• Grand Opening Marketing:  $5,000 to $7,000
• Additional Funds (3 months):  $15,000 to $30,000
• Total Estimated Window Hero Franchise Costs:  $99,547 to $205,547

Section II – Window Hero’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Window Hero’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 for a territory of up to 75,000 households ($0.50 for each additional household, up to an additional 25,000 households)

• Royalty Fee:  the greater of: (i) 7% of Gross Revenue; or (ii) the Minimum Royalty Fee each month. The Minimum Royalty Fee is based upon: (i) the number of months the Franchised Business has been open and operating; and (ii) the number of Designated Territories that the Franchised Business operates in.

• Brand Fund Contribution:  currently, 1% of Gross Revenue. Window Hero reserves the right to increase your Brand Fund Contribution to 3% of Gross Revenue.

• Local Advertising Requirement:  currently, a minimum of 3% of Gross Revenue per month. Window Hero may increase the Local Advertising Requirement up to a maximum of 4% of Gross Revenue per month upon 90 days’ prior written notice to you.

• Regional Advertising and Promotional Cooperative:  if established, determined by the cooperative

• Technology Fee:  the then-current Technology Fee, which is currently $599 per month

• Call Center Fee:  4% of Gross Revenue

Section III – Number of Franchised and Company-Owned Window Hero Outlets

Franchised

2020

• Outlets at the Start of the Year:  9
• Outlets at the End of the Year:  10
• Net Change:  +1

2021

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  16
• Net Change:  +5

2022

• Outlets at the Start of the Year:  16
• Outlets at the End of the Year:  23
• Net Change:  +7

Company-Owned

2020

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  0
• Net Change:  -1

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 Window Hero Franchise

• Window Hero Franchise: Ben Brown’s Journey to Fulfillment

• The Core of the Window Hero Franchise Opportunity Is Servant Leadership

• Window Hero Plans to Clean Up Pennsylvania with a Second Location in Northeast Reading

• Window Hero Opens Second Texas Branch with a New Location in Belton

• Window Hero West Knoxville Franchisee Wins Rookie of the Year

• Window Hero Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

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

• This Item sets forth certain Gross Sales information for the Franchised Locations and Affiliate-Owned Locations from January 1, 2022 to December 31, 2022 (the “2022 Measurement Period”).

• The data was obtained through Window Hero’s cloud-based software and reported financial statements. The information in this analysis has not been audited, is based on historical financial data, and is not a forecast or projection of future financial performance.

Part 1 – Gross Sales, Gross Profit, and Adjusted Net Income Generated by the Affiliate-Owned Location Over the 2022 Measurement Period

• Part 1 of this Item discloses the Gross Sales, Gross Profit, and Adjusted Net Income from Window Hero’s Affiliate-Owned Location for the 2022 Measurement Period. This Affiliate-Owned Location has been in (i) operation since 2003, and (ii) operates in a market where the brand maintains significant awareness among consumers and a significant market presence for over 15 years.

• Part 1 excludes data for the Franchised Locations because Window Hero did not receive operating costs and expense data from its Franchised Locations for the 2022 Measurement Period in the required form and format.

Affiliate-Owned Location

Gross Sales:  $2,040,034 (100%)

Cost of Goods Sold

• Equipment, Tools, and Rentals:  $15,513 (1%)
• Direct Labor Wages and Taxes:  $573,694 (28%)
• Direct Labor Workers Comp/General Liability:  $84,206 (4%)
• Supplies:  $89,977 (4%)
• Vehicle Expense:  $71,593 (4%)
• Total Cost of Goods Sold:  $832,983 (41%)

Gross Profit:  $1,207,051 (59%)

Disclosed Expenses

• Marketing:  $326,770 (16%)
• Sales and Management Wages and Taxes:  $192,888 (9%)
• Rent and Facility Maintenance:  $54,371 (3%)
• Computer and Technology:  $4,414 (<1%)
• Dues and Subscriptions:  $2,319 (<1%)
• Merchant Fees:  $53,868 (3%)
• Office Supplies:  $3,415 (<1%)

Franchisor Fees

• Royalty Fee:  $142,802 (7%)
• Call Center Fee:  $81,601 (4%)
• Brand Fund Fee:  $20,400 (1%)
• Technology Fee ($425/mo.):  $7,188 (<1%)

Total Disclosed Expenses and Franchisor Fees:  $890,037 (44%)

Adjusted Profit:  $317,013 (16%)

• The Affiliate-Owned Location operates within a Designated Territory that is larger than the size of the Designated Territory you will receive under Window Hero’s current form of Franchise Agreement. The Affiliate-Owned Location operates in a territory that is approximately 3.89 times the size of a Designated Territory.

• Gross Sales means the total revenue derived by each location less sales tax, discounts, allowances, and returns.

• Cost of Goods and Services Sold means the direct non-managerial and non-administrative cost of goods sold and labor incurred by a location in directly performing and/or installing Approved Services and Products resulting in Gross Sales. Cost of Goods and Services Sold does not include managerial expenses, administrative expenses, Disclosed Expenses, general expenses, or operating expenses.

• Gross Profit means Gross Sales less Cost of Goods and Services Sold. Gross Profit is not net profit or income and, except as to Cost of Goods and Services Sold, does not include the deduction of all other expenses incurred by a Franchised Business including, but not limited to, Disclosed Expenses, operating expenses, interest, taxes, depreciation, and amortization.

• Disclosed Expenses refers to a limited selection of expenses as disclosed in the tables to this Item 19, comprised of the following select expense categories: Marketing, Rent and Facility Maintenance, Computer and Technology, Dues and Subscriptions, Merchant Fees, Office Supplies, Franchisor related charges for Royalty Fee, Call Center Fee, Brand Fund Fee, and Technology Fee.

• Under Window Hero’s current form of Franchise Agreement, franchisees are obligated to expend a minimum of $3,000/month on local advertising, although Window Hero recommends that franchisees expend more than the minimum. As set forth in Part 1 above, the Affiliate-Owned Location spent substantially more on marketing than you are obligated to spend under Window Hero’s current form of Franchise Agreement.

• Adjusted Profit means Gross Profit less Disclosed Expenses. Adjusted Profit is not equal to net profit or income and, except as to Cost of Goods and Services Sold and Disclosed Expenses, does not include the deduction of all other expenses incurred by a Franchised Business including, but not limited to, other operating expenses, management wages, interest, taxes, depreciation, and amortization.

Part 2 – Annual Gross Sales Generated by the Franchised Locations and Affiliate-Owned Location During the 2022 Measurement Period

• Part 2 of this Item discloses the monthly and annual Gross Sales information as well as the percentage growth year over year for the Franchised Locations and Affiliate-Owned Location during the 2022 Measurement Period.

• Affiliate-Owned Outlet 1:  $2,040,035 (2% year-over-year change)
• Affiliate-Owned Outlet 2:  $322,048 (-8% year-over-year change)
• Franchise Outlet 1:  $1,530,276 (13% year-over-year change)
• Franchise Outlet 2:  $1,023,405 (23% year-over-year change)
• Franchise Outlet 3:  $1,316,139 (10% year-over-year change)
• Franchise Outlet 4:  $679,949 (25% year-over-year change)
• Franchise Outlet 5:  $818,360 (4% year-over-year change)
• Franchise Outlet 6:  $680,493 (43% year-over-year change)
• Franchise Outlet 7:  $396,900 (23% year-over-year change)
• Franchise Outlet 8:  $398,687 (N/A)
• Franchise Outlet 9:  $360,851 (N/A)
• Franchise Outlet 10:  $224,713 (N/A)
• Franchise Outlet 11:  $205,440 (N/A)
• Average for Affiliate-Owned Outlets:  $1,181,042
• Average for Franchise Outlets:  $694,110

• Franchised Location 3 and Franchised Location 6 each operate 2 franchises, but report their Gross Sales to Window Hero together.

• Window Hero recently restructured the size of the Designated Territory that it grants under its current form of Franchise Agreement. Franchisees were previously granted territories that were larger than the Designated Territory that you will receive.

• The Franchised Locations operate in territories of the following sizes:

• i. Franchised Location 1 – Approximately 4.32 Designated Territory Equivalents;
• ii. Franchised Location 2 – Approximately 9.21 Designated Territory Equivalents;
• iii. Franchised Location 3 – Approximately 6.96 Designated Territory Equivalents;
• iv. Franchised Location 4 – Approximately 3.40 Designated Territory Equivalents;
• v. Franchised Location 5 – Approximately 1.63 Designated Territory Equivalents;
• vi. Franchised Location 6 – Approximately 9.04 Designated Territory Equivalents;
• vii. Franchised Location 7 – Approximately 4.33 Designated Territory Equivalents; and
• viii. Franchised Location 8 – Approximately 2.83 Designated Territory Equivalents.

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