|
Westaff Franchise ProfileBusiness Services Franchises > Staffing |
What Are the Initial Investment Requirements for a Westaff Franchise?
To open a Westaff franchise, you will need to prepare for an initial investment ranging from $151,840 to $258,280. This includes a franchise fee of $39,950. Additionally, you must ensure you have a net worth between $80,000 and $120,000 to meet the financial criteria set by the franchisor. It's essential to factor in ongoing costs such as a 10% royalty fee and a 10% marketing fee, which will affect your overall budget and financial planning.
What Are the Revenue Expectations for a Westaff Franchise?
Westaff franchises have shown promising revenue potential, with an average annual revenue per unit of approximately $8,675,856. The median annual revenue stands at $13,479,043, highlighting the significant earning capability within this franchise model. However, it's important to note that revenues can vary widely, with the lowest reported annual revenue at $1,264,628 and the highest reaching an impressive $71,128,332. Understanding these figures can help you set realistic financial goals for your franchise.
What Is the Breakeven Timeline for a Westaff Franchise?
Franchisees can expect to reach breakeven within 12 months of operation. This swift timeline is particularly appealing for new investors looking to recoup their initial investment quickly. The investment payback period is also set at 12 months, indicating that the financial structure of Westaff allows for a relatively rapid return on investment, provided that operational efficiencies are maintained.
What Are the Ongoing Operational Costs for a Westaff Franchise?
Operating a Westaff franchise involves various expenses that must be accounted for in your financial planning. On average, total running expenses amount to approximately $113,700 annually. Key costs include advertising ($1,000), telephone services ($3,500), and professional fees ($8,000). Additionally, setting aside $100,000 for additional funds over six months is crucial for maintaining smooth operations during the early stages of your franchise. Understanding these costs will help you manage your budget effectively and ensure long-term profitability.
Westaff 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:
Westaff Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2015 | 2016 | 2017 |
|---|---|---|---|
| Total Units | 54 | 51 | 53 |
| Net Change YoY | -3 | 2 | |
| Franchised Units | 54 | 51 | 53 |
| Net Change YoY | -3 | 2 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY |
Investment Overview
The Westaff franchise offers a low to moderate initial investment range, with costs between $151,840 and $258,280. The initial franchise fee is set at $39,950, while ongoing royalty and marketing fees are both 10% of gross sales. Potential franchisees should be prepared with a cash requirement that aligns with the total investment range and a net worth between $80,000 and $120,000 to qualify for ownership.
Revenue Potential
Franchisees can expect significant revenue potential, with average annual revenue per unit reported at $8,675,856 and a median of $13,479,043. The highest annual revenue recorded for a unit is a remarkable $71,128,332, showcasing the scalability and profitability of the Westaff franchise model.
Financial Performance
The average annual revenue for Westaff franchises is approximately $1,000,000. With a cost of goods sold (COGS) estimated at $340,000, franchisees can enjoy a gross profit margin of 66%. After accounting for operating expenses of $500,000, the EBITDA stands at $160,000, translating to 16% of total revenue, indicating a healthy profit potential for franchise owners.
Breakeven and Payback
Westaff franchises demonstrate a strong financial return, with a breakeven time of just 12 months. This rapid payback period allows franchisees to recover their initial investment quickly, making it an attractive opportunity for aspiring entrepreneurs looking for a viable business model.
Franchise Growth
Since 2015, Westaff has maintained a steady growth trajectory, with 54 franchised units in 2015, slightly decreasing to 51 in 2016, and then rising to 53 in 2017. This consistency in unit growth reflects the brand's stability and appeal in the franchise market, indicating a solid foundation for future expansion.
Operational Expenses
Franchisees should anticipate annual running expenses totaling approximately $113,700. Key costs include professional fees at $8,000, advertising at $1,000, and additional funds for initial supplies and operational needs. Understanding these expenses is crucial for effective financial planning and maintaining profitability within the franchise framework.
Frequently Asked Questions
The initial investment for a Westaff franchise ranges from $151,840 to $258,280. This includes the franchise fee, equipment, and other startup costs.