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FLEX Franchise ProfileBusiness Services Franchises > Consulting |
What Are the Initial Investment Requirements for a FLEX Franchise?
To open a FLEX franchise, you can expect an initial investment ranging from $81,600 to $131,900. This includes a franchise fee of $24,500. It's important to note that you will also need to demonstrate a net worth between $100,000 and $500,000. Having sufficient cash reserves is crucial, as the cash required falls within the same range as the total initial investment. This financial readiness is essential to ensure you can cover startup costs and sustain operations as you establish your franchise.
What Are the Ongoing Fees Associated with a FLEX Franchise?
As a FLEX franchisee, you will be responsible for ongoing fees that include an 8% royalty fee on your revenue and an additional 8% marketing fee. These fees are vital for maintaining brand strength and supporting marketing efforts that benefit all franchisees. Understanding these financial commitments is essential as you plan your budget and forecast your profitability, ensuring you can sustain your business in the long run.
What Are the Financial Performance Expectations for a FLEX Franchise?
FLEX franchises have shown promising financial performance, with average annual revenue per unit reported at $300,000. The median annual revenue is slightly lower at $175,691, with a range that spans from $15,000 to $600,000. Franchisees can expect to break even within 12 months, which is a positive indicator of potential profitability. Additionally, the EBITDA margin stands at 20%, reflecting a healthy return on investment for franchise owners who effectively manage their operations.
What Is the Current Growth Trend for FLEX Franchise Units?
The FLEX franchise has experienced a gradual decline in the number of franchised units over the past few years, dropping from 107 units in 2019 to 98 units in 2021. Despite this decrease, the number of corporate-owned units has remained stable at 10. This trend may indicate a need for strategic growth initiatives to attract new franchisees and improve unit performance. Understanding these dynamics can help potential franchisees gauge the stability and future growth prospects of the FLEX brand in the market.
FLEX 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:
FLEX Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2019 | 2020 | 2021 |
|---|---|---|---|
| Total Units | 117 | 113 | 108 |
| Net Change YoY | -4 | -5 | |
| Franchised Units | 107 | 103 | 98 |
| Net Change YoY | -4 | -5 | |
| Corporate Units | 10 | 10 | 10 |
| Net Change YoY | 0 | 0 |
Initial Investment
The FLEX franchise chain requires an initial investment ranging from $81,600 to $131,900. This investment includes a franchise fee of $24,500, which grants you the rights to operate under the FLEX brand. Aspiring franchisees should be prepared for additional costs that may arise during the setup process, ensuring they have sufficient capital for a smooth launch.
Ongoing Fees
Franchisees are subject to an 8% royalty fee based on gross sales, along with an additional 8% marketing fee. These fees are essential for maintaining brand presence and supporting marketing initiatives that drive customer traffic. Understanding these ongoing financial commitments is crucial for effective budgeting and profitability analysis.
Revenue Potential
FLEX franchise units have shown promising revenue figures, with an average annual revenue of $300,000. The revenue can vary significantly, with the lowest reported at $15,000 and the highest reaching up to $600,000. This wide range highlights the importance of location, management, and market conditions in determining a unit's financial success.
Profitability Metrics
Franchisees can expect a gross profit margin of approximately 60%, translating to a gross profit of $180,000 on average. After accounting for operating expenses, which also average around $120,000, the EBITDA stands at $60,000, representing 20% of total revenue. These metrics provide a clear picture of potential profitability for prospective investors.
Breakeven Timeline
The FLEX franchise chain has a breakeven timeline of 12 months, indicating that franchisees can expect to recover their initial investment within the first year of operation. This relatively quick return on investment is appealing to many aspiring entrepreneurs, as it allows for faster reinvestment into the business.
Franchise Growth
Since 2019, the FLEX franchise has seen a gradual decline in the number of franchised units, from 107 in 2019 to 98 in 2021. Despite this decrease, the stability of corporate units at 10 indicates a consistent commitment to the brand. Understanding these trends can help potential franchisees assess market saturation and growth opportunities within the FLEX franchise system.
Frequently Asked Questions
The initial investment for a FLEX franchise ranges from $81,600 to $131,900, which includes the franchise fee of $24,500.