Cabinet IQ: $2.25M Average Sales for 2 Affiliate Outlets vs. $218K-$305K Franchise Cost

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

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

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

Section III – Number of franchised and company-owned Cabinet IQ 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 Cabinet IQ franchise opportunity

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

• 2023 gross revenues, cost of goods sold, gross profit, disclosed expenses, and adjusted profit for the 2 affiliate-owned Cabinet IQ businesses located in Cedar Park, Texas and Austin, Texas

• 2023 average, high, and low ticket received by the 2 affiliate-owned Cabinet IQ businesses located in Cedar Park, Texas and Austin, Texas

• 2017, 2018, 2019, 2020, 2021, 2022, and 2023 gross revenues for the affiliate-owned Cabinet IQ business located in Cedar Park, Texas, and the 2022 and 2023 gross revenues for the affiliate-owned Cabinet IQ business located in Austin, Texas

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

Section I – Cabinet IQ Franchise Costs

• Cabinet IQ franchise costs (base territory only), based on Item 7 of the company’s 2024 FDD:

• Initial Franchise Fee:  $53,550 to $59,500
• Custom Marketing and Services Activation Fee:  $2,000
• Showroom Design and Order Preparation Fee:  $3,000
• Software Implementation Assistance Fee:  $2,500
• Rent:  $10,000 to $18,000
• Lease, Utility, and Security Deposits:  $6,300 to $10,500
• Exterior Signage:  $5,000 to $8,000
• Improvements:  $105,000 to $150,000
• Training, Travel, and Living Expenses:  $500 to $3,000
• Insurance:  $1,500 to $3,500
• Grand Opening Advertising/Marketing (Lead Generation):  $14,000
• Professional Fees:  $1,000 to $5,000
• Office Supplies and Promotional Items:  $500 to $1,250
• Technology, Computer, and Software:  $3,500
• Business Licenses and Permits:  $0 to $1,000
• Additional Funds (3 months):  $10,250 to $20,500
• Total Estimated Cabinet IQ Franchise Costs:  $218,600 to $305,250

Section II – Cabinet IQ’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

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

• Initial Franchise Fee:  $47,600 to $59,500
• Royalty Fee:  6% of Gross Sales, subject to Minimum Royalties following the 13th month from the effective date of the Franchise Agreement
• Brand Fund Contribution:  maximum of 2% of Gross Sales; currently, 1% of Gross Sales
• Local Advertising:  the greater of: (i) $4,500 for each Showroom, plus an additional $1,000 per Additional Territory; or (ii) 4% of Gross Sales per month (beginning 2 months prior to opening)

Section III – Number of Franchised and Company-Owned Cabinet IQ Outlets

Franchised

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

2023

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

Company-Owned

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  2
• Net Change:  +1

2022

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2023

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section IV – News Updates on the Cabinet IQ Franchise

• Franchise FastLane to Aid Growth of Cabinet IQ

• Cabinet IQ: Franchise Profitability

• Cabinet IQ: Redefining Kitchen Remodeling

• Cabinet IQ Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

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

• The following tables and accompanying footnotes are a historical financial performance representation.

Part 1 – Affiliate Gross Revenues, Gross Profit, Disclosed Expenses, and Adjusted Profit for the Period from January 1, 2023 to December 31, 2023

• Part 1 provides Gross Revenues, Gross Profit, Disclosed Expenses, and Adjusted Profit for Cabinet IQ’s Affiliate’s two Businesses located in Cedar Park, Texas and Austin, Texas from January 1, 2023 to December 31, 2023.

Cabinet IQ of Cedar Park (Year 6 Store)

Gross Revenues:  $3,129,177 (100.00%)

Cost of Goods Sold

• Materials:  $1,342,417 (42.90%)
• Installation Labor:  $359,855 (11.50%)
• Total Cost of Goods Sold:  $1,702,272 (54.40%)

Gross Profit:  $1,426,905 (45.60%)

Disclosed Expenses

• Sales Payroll and Commissions:  $234,105 (7.50%)
• Operations:  $121,275 (3.90%)
• Advertising and Marketing:  $170,150 (5.40%)
• Royalty:  $187,751 (6.00%)
• Brand Fund:  $31,292 (1.00%)
• Bank Services:  $703 (0.00%)
• Insurance:  $12,977 (0.40%)
• Office Supplies and Software:  $29,080 (0.90%)
• Legal and Professional Services:  $10,564 (0.30%)
• Merchant Account Fees:  $15,020 (0.50%)
• Rent:  $73,584 (2.40%)
• Utilities:  $21,711 (0.70%)
• Repairs and Maintenance:  $8,125 (0.30%)
• Showroom Materials:  $1,842 (0.10%)
• Tools, Supplies, and Consumables:  $10,809 (0.30%)
• Total Disclosed Expenses:  $928,988 (29.50%)

Adjusted Profit:  $497,917 (15.90%)

Cabinet IQ of Austin (Year 2 Store)

Gross Revenues:  $1,385,926 (100.00%)

Cost of Goods Sold

• Materials:  $515,564 (37.20%)
• Installation Labor:  $155,224 (11.20%)
• Total Cost of Goods Sold:  $670,788 (48.40%)

Gross Profit:  $715,138 (51.60%)

Disclosed Expenses

• Sales Payroll and Commissions:  $78,064 (5.60%)
• Operations:  $38,375 (2.80%)
• Advertising and Marketing:  $83,168 (6.00%)
• Royalty:  $83,156 (6.00%)
• Brand Fund:  $13,859 (1.00%)
• Bank Services:  $0 (0.00%)
• Insurance:  $5,749 (0.40%)
• Office Supplies and Software:  $11,039 (0.80%)
• Legal and Professional Services:  $1,445 (0.10%)
• Merchant Account Fees:  $6,652 (0.50%)
• Rent:  $32,081 (2.30%)
• Utilities:  $5,437 (0.40%)
• Repairs and Maintenance:  $2,506 (0.20%)
• Showroom Materials:  $1,528 (0.10%)
• Tools, Supplies, and Consumables:  $4,814 (0.30%)
• Total Disclosed Expenses:  $367,873 (26.50%)

Adjusted Profit:  $347,264 (25.10%)

Average (Calculated by Franchise Chatter)

Gross Revenues:  $2,257,552 (100.00%)

Cost of Goods Sold

• Materials:  $928,990 (41.15%)
• Installation Labor:  $257,540 (11.41%)
• Total Cost of Goods Sold:  $1,186,530 (52.56%)

Gross Profit:  $1,071,022 (47.44%)

Disclosed Expenses

• Sales Payroll and Commissions:  $156,084 (6.91%)
• Operations:  $79,825 (3.54%)
• Advertising and Marketing:  $126,659 (5.61%)
• Royalty:  $135,454 (6.00%)
• Brand Fund:  $22,576 (1.00%)
• Bank Services:  $352 (0.02%)
• Insurance:  $9,363 (0.41%)
• Office Supplies and Software:  $20,060 (0.89%)
• Legal and Professional Services:  $6,004 (0.27%)
• Merchant Account Fees:  $10,836 (0.48%)
• Rent:  $52,832 (2.34%)
• Utilities:  $13,574 (0.60%)
• Repairs and Maintenance:  $5,316 (0.24%)
• Showroom Materials:  $1,685 (0.07%)
• Tools, Supplies, and Consumables:  $7,812 (0.35%)
• Total Disclosed Expenses:  $648,432 (28.72%)

Adjusted Profit:  $422,590 (18.72%)

• “Gross Revenues” are the total amount received by or in connection with Cabinet IQ’s Affiliate’s Businesses from, connected with or related to the sale of any services, products, goods or merchandise, and all business transacted related to these Businesses, excluding only the following (a) the amount of any refunds to clients for bona fide returns of goods sold or cancellations; and (b) the amount of any excise or sales tax levied upon retail sales and paid over to the appropriate governmental authority.

• “Materials” are the cost of materials used in the services including cabinets, countertops, and other materials.

• “Installation Labor” includes installation labor costs.

• “Gross Profit” is Gross Revenues less COGS (Installation Labor and Materials).

• “Sales Payroll and Commissions” includes sales base pay plus commissions.

• “Operations” includes an installation manager and installation coordinator. Note: These costs could be higher for your Business on a per location basis as Operations were shared between the two locations.

• “Advertising & Marketing” includes all costs incurred for advertising.

• “Royalty” is the sum of the Royalty Fee during the measurement period.

• “Brand Fund” is the amount that was contributed by Cabinet IQ’s Affiliate to the Brand Fund. The current required Brand Fund contribution for your Business is 1%, although it can be increased to up to 2% of Gross Revenues.

• “Bank Services” includes all banking charges.

• “Insurance” includes auto insurance and business liability.

• “Office Supplies and Software” includes the cost of general office supplies, Design 20/20 software, QuickBooks, CRM software, DocuSign software, computers, monitors, office furniture, and appliances.

• “Legal and Professional Services” includes legal advice, accounting services, and other professional services.

• “Merchant Account Fees” includes ACH processing fees and credit card processing fees.

• “Rent” includes showroom space rental.

• “Utilities” includes internet, electric, water, and bulk trash service.

• “Repairs and Maintenance” includes cleaning service, consumer trash service, showroom lighting, warehouse and showroom maintenance.

• “Showroom Materials” includes cabinet displays for showroom.

• “Tools, Supplies, and Consumables” is defined as warehouse and installer tools, installation consumables, and warehouse supplies.

• “Total Disclosed Expenses” is the sum of the Disclosed Expenses in the table.

• “Adjusted Profit” is defined as Gross Profit less the Total Disclosed Expenses. Adjusted Profit is not equal to net profit or income and, except as to Cost of Goods Sold and the Total 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.

• You will incur other additional costs and expenses in operating a Business including but not limited to amounts due to Cabinet IQ under the Franchise Agreement.

Part 2 – Ticket Amounts

• The following table reflects the high ticket, average ticket, and low ticket received by Cabinet IQ’s Affiliate’s Businesses in Cedar Park, Texas and Austin, Texas for the period from January 1, 2023 to December 31, 2023.

• For purposes of this table, each “Ticket” is the Gross Revenues received for an individual project involving the installation of cabinets or countertops.

• High Ticket:  $129,833
• Average Ticket:  $25,412
• Low Ticket:  $2,790

Part 3 – Affiliate Annual Gross Revenues

• The following table provides Gross Revenues for Cabinet IQ’s Affiliate’s Businesses in Cedar Park, Texas and Austin, Texas for the referenced periods.

Cedar Park

• August 1, 2017 to December 31, 2017:  $423,700
• 2018:  $1,540,000
• 2019:  $1,840,000
• 2020:  $2,080,000
• 2021:  $3,692,794
• 2022:  $3,744,303
• 2023:  $3,129,177

Austin

• 2022:  $1,035,167
• 2023:  $1,385,926

• “Gross Revenues” are the total amount received by or in connection with Cabinet IQ’s Affiliate’s Businesses (segregated by location) from, connected with, or related to, the sale of any services, products, goods or merchandise, and all business transacted related to the Businesses, excluding only the following: (a) the amount of any refunds to clients for bona fide returns of goods sold or cancellations; and (b) the amount of any excise or sales tax levied upon retail sales and paid over to the appropriate governmental authority.

• The 2017 data reflects financial results of Cabinet IQ’s Affiliate’s predecessor, a sole proprietorship operated by Cabinet IQ’s Founder.

• Cabinet IQ’s Affiliate has two Businesses located in Cedar Park, Texas and Austin, Texas. Cabinet IQ’s Affiliate opened the Cedar Park, Texas Business in 2018 (which was preceded by Cabinet IQ’s Founder’s sole proprietorship opened in 2017 in Cedar Park, Texas) and the Austin, Texas Business opened in February of 2022.

• You should develop your own business plan for your Business, including capital budgets, financial statements, projections, and other appropriate factors. You are encouraged to consult with your own accounting, business, and legal advisors in doing so. The business plan should make necessary allowances for economic downturns, periods of inflation and unemployment, and other negative economic influences.

• The financial information provided above has not been audited.

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

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