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Earthgrains Distribution Franchise ProfileMoving & Storage Franchises > Commercial Relocation |
What Are the Initial Investment Requirements for an Earthgrains Distribution Franchise?
To open an Earthgrains Distribution franchise, prospective franchisees should prepare for an initial investment ranging from $15,425 to $607,850. The initial franchise fee is set at $14,565, with a royalty fee of 2% for new units. Additionally, a cash requirement between $15,425 and $607,850 is necessary, alongside a net worth requirement of $100,000 to $300,000. These figures highlight the financial commitment needed to establish a franchise in this distribution network.
What Are the Revenue Potential and Financial Performance Metrics?
Earthgrains Distribution franchises have demonstrated promising financial performance, with average annual revenue per unit reported at $435,000. The median annual revenue stands at $1,006, while the lowest and highest annual revenues per unit range from $130,000 to $5,478,234, respectively. With a breakeven time of approximately 12 months and an investment payback period of around 72 months, franchisees can expect a reasonable timeline for returning their initial investment.
What Are the Operational Expenses for an Earthgrains Distribution Franchise?
Franchisees should be aware of the average running expenses, totaling approximately $134,090 annually. Key expenses include salaries and benefits at $58,888, freight, fuel, and maintenance at $28,793, and professional services at $6,375. Understanding these costs is critical for effective budgeting and financial planning, ensuring franchisees can maintain profitability while managing day-to-day operations.
How Many Units Are Currently Operating in the Earthgrains Distribution Franchise?
As of recent years, the Earthgrains Distribution franchise has shown stable growth in its unit count. In 2016, there were 471 total units, with 461 franchised and 10 corporate units. By 2018, the total units decreased to 429, with 426 franchised and 3 corporate units. This data reflects the franchise's adaptability and market presence, providing insights into its operational stability and potential for future growth.
Earthgrains Distribution Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Earthgrains Distribution Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2016 | 2017 | 2018 |
|---|---|---|---|
| Total Units | 471 | 465 | 429 |
| Net Change YoY | -6 | -36 | |
| Franchised Units | 461 | 463 | 426 |
| Net Change YoY | 2 | -37 | |
| Corporate Units | 10 | 2 | 3 |
| Net Change YoY | -8 | 1 |
Investment Overview
The Earthgrains Distribution franchise offers a range of investment options, with an initial investment ranging from $15,425 to $607,850. The franchise fee is set at $14,565, and franchisees are required to maintain a cash reserve between $15,425 and $607,850. With a net worth requirement of $100,000 to $300,000, potential franchisees should carefully evaluate their financial readiness before entering this business opportunity.
Revenue Potential
Franchisees can expect strong revenue potential, with average annual revenue per unit reported at $435,000. The median annual revenue stands at $1,006, indicating a significant disparity in performance across units. The lowest recorded annual revenue is $130,000, while the highest reaches an impressive $5,478,234, showcasing the diverse earning potential within the franchise.
Operational Performance
The average breakeven time for Earthgrains Distribution units is approximately 12 months, allowing franchisees to recoup their initial investment relatively quickly. However, the investment payback period extends to 72 months, highlighting the importance of effective operational management to optimize profitability and ensure long-term financial success.
Franchise Growth
As of 2018, the Earthgrains Distribution franchise has seen fluctuations in the number of franchised units, with a total of 426 units reported. In 2016, there were 461 franchised units, which slightly decreased to 463 in 2017 before dropping to 426 in 2018. This trend suggests a need for strategic planning to stabilize and grow the franchise network.
Corporate Presence
The corporate structure of Earthgrains Distribution includes company-owned units, which have decreased from 10 in 2016 to just 3 in 2018. This shift indicates a potential focus on franchising as a primary growth strategy, allowing the company to leverage local operators' expertise while reducing corporate overhead.
Financial Insights
Earthgrains Distribution demonstrates a solid financial foundation, with an average annual revenue of $288,266,000 across its units. The cost of goods sold (COGS) accounts for 47% of revenue, while operating expenses also represent 47%. This balance leads to an EBITDA of $18,509,000, reflecting the franchise's ability to maintain profitability in a competitive market.
Frequently Asked Questions
The initial investment for an Earthgrains Distribution franchise ranges from $15,425 to $607,850, which includes the franchise fee and other startup expenses.