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Premier Rental-Purchase Franchise ProfileIndustrial Franchises > Equipment Rental |
Initial Investment Overview for Premier Rental-Purchase Franchise
To start a Premier Rental-Purchase franchise, the initial investment ranges from $367,475 to $630,070. This includes a franchise fee of $25,000. Prospective franchisees should also be prepared for ongoing costs, which consist of a 5% royalty fee and a 2.5% marketing fee. It's essential to have a cash reserve between $367,475 and $630,070 and a net worth between $300,000 and $2,000,000 to qualify for this franchise opportunity.
Financial Performance Insights
The Premier Rental-Purchase franchise shows promising financial metrics, with an average annual revenue per unit of approximately $746,412. The median revenue is slightly lower at $728,984, while the revenue range varies from $562,463 to $1,574,611. Franchisees can expect to break even within 12 months and achieve investment payback in about 16 months, making it a potentially lucrative investment for those who meet the financial criteria.
Understanding Operating Expenses
Operating expenses for a Premier Rental-Purchase franchise total around $626,939 annually. Key costs include rent at $92,067, advertising at $18,303, and general insurance at $18,401. Other expenses contribute significantly to the overall costs, so franchisees should budget accordingly and monitor these expenses closely to optimize profitability.
Franchise Growth and Stability
Since 2016, the Premier Rental-Purchase franchise has maintained a stable presence in the market, with franchised units numbering 56 in 2016, 54 in 2017, and 55 in 2018. The absence of corporate-owned units indicates a focus on franchising, which can provide opportunities for franchisees to thrive in a supportive network. This stability suggests a well-established brand that is poised for continued growth in the rental-purchase sector.
Premier Rental-Purchase 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:
Premier Rental-Purchase 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 | 56 | 54 | 55 |
| Net Change YoY | -2 | 1 | |
| Franchised Units | 56 | 54 | 55 |
| Net Change YoY | -2 | 1 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Investment Overview
The Premier Rental-Purchase franchise offers a low to moderate initial investment range of $367,475 to $630,070, with an initial franchise fee of $25,000. This investment is designed to provide franchisees with the tools and resources necessary to establish a successful rental-purchase business. The financial commitment also includes a cash requirement that aligns with the overall investment range, making it accessible for a variety of aspiring entrepreneurs.
Revenue Potential
Franchisees can expect strong revenue potential, with average annual revenues per unit around $746,412. The range of annual revenues varies significantly, with the lowest reported at $562,463 and the highest at $1,574,611. This variability highlights the potential for growth and profitability within the franchise, depending on location and operational efficiency.
Financial Performance
The financial performance of Premier Rental-Purchase franchises indicates a gross profit margin of approximately 48.3%. After accounting for operating expenses, which average 72.5% of revenue, franchisees can achieve an EBITDA of 27.5%. Understanding these metrics is crucial for potential franchisees to assess the viability of their investment and operational strategies.
Royalty and Marketing Fees
Franchisees are required to pay a royalty fee of 5% of gross sales, along with a marketing fee of 2.5%. These fees contribute to the overall support and branding efforts of the franchise, ensuring that franchisees benefit from collective marketing initiatives and brand recognition in the competitive rental-purchase market.
Breakeven and Payback Period
The Premier Rental-Purchase franchise boasts an attractive breakeven time of just 12 months, coupled with an investment payback period of 16 months. This quick turnaround can be appealing for investors looking for a relatively fast return on their investment, allowing them to reinvest profits into their business sooner.
Franchise Growth
The franchise has shown consistent growth, with a total of 55 franchised units reported in 2018, reflecting a stable presence in the market. Since its inception, the franchise has maintained a focus on expanding its footprint while supporting existing franchisees, which can be a significant factor for potential investors considering long-term growth opportunities.
Frequently Asked Questions
The initial investment for a Premier Rental-Purchase franchise ranges from $367,475 to $630,070, which includes the franchise fee and other startup costs.