Conserva Irrigation: $318K Average Sales vs. $84.8K-$110K Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for a Conserva Irrigation franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Conserva Irrigation franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Conserva Irrigation outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Conserva Irrigation franchise opportunity

Section V – Presentation and analysis of Conserva Irrigation’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 fiscal year average, median, highest, and lowest gross revenue for the 59 Conserva Irrigation franchisees (operating in a total of 160 franchise territories) that were operational during the entire reporting period, grouped by range of gross sales (greater than $1M, $500K to $1M, $250K to $500K, and less than $250K)

• 2023 fiscal year average, median, highest, and lowest gross revenue for the top third, middle third, and bottom third of the 50 multi-territory Conserva Irrigation franchisees that were operational during the entire reporting period

• 2023 fiscal year average, median, highest, and lowest gross revenue for the top half and bottom half of the 9 single-territory Conserva Irrigation franchisees that were operational during the entire reporting period

• 2022 calendar year average revenue, cost of goods sold (labor, material, and equipment rental), gross profit margin, certain marketing & operating expenses, and total revenue less cost of goods sold and certain required marketing & operating expenses for the 29 reporting Conserva Irrigation franchisees operating in 90 territories that had been open and operating on a full-time basis for at least two full years as of December 31, 2022

• 2018, 2019, 2020, 2021, 2022, and 2023 aggregate gross revenues (“system sales”) reported to Conserva Irrigation from all Conserva franchisees whose Conserva businesses were operational for any part, even as little as one month if the franchisee completed initial training in October of their initial year of operations

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

Section I – Conserva Irrigation Franchise Costs

• Conserva Irrigation franchise costs, based on Item 7 of the company’s 2024 FDD:

• Initial Franchise Fee:  $49,500
• Travel and Living Expenses While Training:  $2,000 to $3,000
• Tools and Equipment:  $2,000 to $5,000
• Computer Hardware and Software:  $800 to $2,000
• Inventory:  $5,000 to $7,500
• Trade Show Booth:  $2,500
• Storage Facility for Inventory and Equipment:  $0 to $500
• Vehicle:  $3,000 to $10,000
• Vehicle Signage and Outfitting:  $2,500 to $5,000
• Initial Marketing Expense:  $10,000 to $15,000
• Additional Funds for 3 Months:  $7,500 to $10,000
• Total Estimated Conserva Irrigation Franchise Costs:  $84,800 to $110,000

Section II – Conserva Irrigation’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Conserva Irrigation’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

• Initial Franchise Fee:  $49,500

• Monthly Branding Royalty:  for a period of 24 months beginning on the Operational Start Date of your Irrigation Business, you must pay Conserva Irrigation a Monthly Branding Royalty based on calendar year-to-date Gross Revenue equal to: $0 to $499,999 (8%); $500,000 to $999,999 (7%); $1,000,000 to $1,499,999 (6%); $1,500,000+ (5%). Beginning on the 24-month anniversary of the Operational Start Date, the Monthly Branding Royalty payable will be equal to the greater of: (a) the amount described above based on year-to-date Gross Revenue; or (b) $1,000.

• Individual Advertising Investment:  minimum $40,000 per calendar year for one territory; minimum $60,000 if you are granted two contiguous territories. A minimum of $20,000 for each additional contiguous territory.

• National Branding and Marketing Fee:  1.5% on the first $1,500,000 of Gross Revenues in any calendar year. No National Branding and Marketing Fee is due on Gross Revenues over $1,500,000 in any calendar year.

• Digital Marketing Fee:  Conserva Irrigation’s then-current fee; currently $300 per month

Section III – Number of Franchised and Company-Owned Conserva Irrigation Outlets

Franchised

2021

• Outlets at the Start of the Year:  106
• Outlets at the End of the Year:  143
• Net Change:  +37

2022

• Outlets at the Start of the Year:  143
• Outlets at the End of the Year:  168
• Net Change:  +25

2023

• Outlets at the Start of the Year:  168
• Outlets at the End of the Year:  195
• Net Change:  +27

Company-Owned

2021

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  0
• Net Change:  -5

2022

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

2023

• 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 Conserva Irrigation Franchise

• Conserva Irrigation: A Purpose-Driven Franchise

• Empower Brands Honors Top Franchisees of the Year at 2024 Annual Meeting

• Conserva Irrigation to Open a New Location in Clearwater, Florida

• Conserva Irrigation to Open a New Location in Birmingham, MI

• Conserva Irrigation Ranked No. 257 on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Conserva Irrigation Franchise (Item 19, 2024 FDD)

Part 1 – Gross Revenues Received by Franchisees During Fiscal Year Ending September 30, 2023

• The information provided in Part 1 below presents Gross Revenue derived by certain Conserva Irrigation franchisees during the period between October 1, 2022 and September 30, 2023 (“2023 Fiscal Year Reporting Period”).

• The information provided in the table below was compiled from 59 franchisees that were operational during the entire 2023 Fiscal Year Reporting Period. These franchisees operated 160 franchise territories during the 2023 Fiscal Year Reporting Period.

• 50 of these 59 franchisees operated in more than one territory under multiple franchise agreements during the entire 2023 Reporting Period as follows: 23 of the franchisees operated 2 territories, 15 franchisees operated 3 territories, 7 franchisees operated 4 territories, 3 franchisees operated 5 territories, 1 franchisee operated 8 territories, and 1 franchisee operated 9 territories.

• Conserva Irrigation franchisees report Gross Revenues to Conserva Irrigation for all of their territories on the same report. As a result, for the purposes of this Item 19, each of the 59 franchisees was considered to be one franchise even though some operate in more than one territory.

• The data excludes 33 franchise territories that commenced operations during the 2023 Fiscal Year Reporting Period, 2 franchise territories that transferred ownership during the Fiscal Year Reporting Period (partial year operations), and 6 franchise territories that ceased operations during the 2023 Fiscal Year Reporting Period.

A.  Combined Multi-Territory and Single-Territory Franchisees

Greater Than $1M

• Average Years in Business:  4.7
• Number:  13
• Minimum:  $1,014,154
• Maximum:  $3,805,289
• Median:  $1,200,489
• Average:  $1,548,421
• Number Above Average:  4
• Percent Above Average:  31%

$500K to $1M

• Average Years in Business:  3.7
• Number:  11
• Minimum:  $508,665
• Maximum:  $934,002
• Median:  $581,595
• Average:  $659,727
• Number Above Average:  5
• Percent Above Average:  45%

$250K to $500K

• Average Years in Business:  2.5
• Number:  21
• Minimum:  $251,611
• Maximum:  $473,898
• Median:  $342,744
• Average:  $352,471
• Number Above Average:  9
• Percent Above Average:  43%

Less Than $250K

• Average Years in Business:  2.9
• Number:  14
• Minimum:  $21,499
• Maximum:  $237,183
• Median:  $178,052
• Average:  $167,009
• Number Above Average:  9
• Percent Above Average:  64%

Total

• Number:  59
• Median:  $406,069
• Average:  $629,262
• Number Above Average:  18
• Percent Above Average:  31%

• Of the 13 franchisees with Gross Revenues greater than $1,000,000, all 13 (100%) operated more than one territory. Of the 11 franchisees with Gross Revenues between $500,000 and $1,000,000, 9 (82%) operated more than one territory. Of the 21 franchisees with Gross Revenues between $250,000 and $500,000, 19 (90%) operated more than one territory. Of the 14 franchisees with Gross Revenues less than $250,000, 9 (64%) operated more than one territory.

B.  Multi-Territory Franchisees Only

Top Third

• Number:  16
• Minimum:  $766,390
• Maximum:  $3,805,289
• Median:  $1,174,692
• Average:  $1,422,694
• Number Above Average:  4
• Percent Above Average:  25%

Middle Third

• Number:  17
• Minimum:  $337,935
• Maximum:  $684,593
• Median:  $431,975
• Average:  $451,968
• Number Above Average:  6
• Percent Above Average:  35%

Bottom Third

• Number:  17
• Minimum:  $21,499
• Maximum:  $329,786
• Median:  $237,183
• Average:  $224,115
• Number Above Average:  10
• Percent Above Average:  59%

C.  Single-Territory Franchisees Only

Top Half

• Number:  4
• Minimum:  $317,127
• Maximum:  $742,077
• Median:  $495,821
• Average:  $512,711
• Number Above Average:  2
• Percent Above Average:  50%

Bottom Half

• Number:  5
• Minimum:  $123,909
• Maximum:  $216,802
• Median:  $158,398
• Average:  $163,824
• Number Above Average:  2
• Percent Above Average:  40%

Part 2 – Average Total Revenue Less Average COGS and Average Certain Expenses of Reporting Franchisees Operating for at Least Two Years as of December 31, 2022

• This section presents information for those 29 Reporting Franchisees operating in 90 territories that had been open and operating on a full-time basis for at least two full years as of December 31, 2022. Twenty-four of the 29 Reporting Franchisees contained in the chart below operate multiple territories.

• The below chart reflects the average revenues, certain costs and expenses in the 2022 calendar year by these 29 Reporting Franchisees.

Revenue:  $777,701 (100.0%)

Cost of Goods Sold

• Labor:  $192,909 (24.8%)
• Material:  $139,318 (17.9%)
• Equipment Rental:  $7,898 (1.0%)

Gross Profit Margin:  $437,576 (56.3%)

Certain Marketing & Operating Expenses

• Royalties:  $59,439 (7.6%)
• Local Marketing Investments:  $47,433 (6.1%)
• National Brand Marketing Fund Investments:  $11,666 (1.5%)
• Office Manager Compensation:  $32,942 (4.2%)
• Small Tools, Equipment & Uniform Expense:  $8,588 (1.1%)
• Vehicle Expense:  $32,965 (4.2%)
• Bank Service Charges & Merchant Fees:  $20,618 (2.7%)
• Insurance:  $21,062 (2.7%)
• Licenses & Permits:  $1,477 (0.2%)
• IT & Telephone:  $19,795 (2.5%)

Total Revenue Less Cost of Goods Sold and Certain Required Marketing & Operating Expenses:  $181,593 (23.3%)

Part 3 – Conserva Irrigation Franchise System Sales for Years Ending September 30, 2018, 2019, 2020, 2021, 2022, and 2023

• The information provided in the table below is based on the aggregate Gross Revenues (“System Sales”) reported to Conserva Irrigation from all Conserva franchisees whose Conserva businesses were operational for any part, even as little as one month if the franchisee completed initial training in October of their initial year of operations, of each fiscal year ended September 30, 2018, September 30, 2019, September 30, 2020, September 30, 2021, September 30, 2022, and September 30, 2023.

2018

• System Gross Revenues:  $6,478,227
• System Gross Revenue % Change Year-Over-Year:  N/A
• Number of Franchised Territories as of Calendar Year End:  67
• Number of Franchisees as of Calendar Year End:  30

2019

• System Gross Revenues:  $10,476,795
• System Gross Revenue % Change Year-Over-Year:  61.7%
• Number of Franchised Territories as of Calendar Year End:  79
• Number of Franchisees as of Calendar Year End:  35

2020

• System Gross Revenues:  $13,755,666
• System Gross Revenue % Change Year-Over-Year:  31.3%
• Number of Franchised Territories as of Calendar Year End:  106
• Number of Franchisees as of Calendar Year End:  39

2021

• System Gross Revenues:  $20,191,491
• System Gross Revenue % Change Year-Over-Year:  46.8%
• Number of Franchised Territories as of Calendar Year End:  143
• Number of Franchisees as of Calendar Year End:  55

2022

• System Gross Revenues:  $31,262,486
• System Gross Revenue % Change Year-Over-Year:  54.8%
• Number of Franchised Territories as of Calendar Year End:  168
• Number of Franchisees as of Calendar Year End:  66

2023

• System Gross Revenues:  $40,114,860
• System Gross Revenue % Change Year-Over-Year:  28.3%
• Number of Franchised Territories as of Calendar Year End:  195
• Number of Franchisees as of Calendar Year End:  75

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

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