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ZIPS Dry Cleaners Franchise ProfileCleaning Franchises > Dry Cleaning |
What Are the Initial Investment Requirements for a ZIPS Dry Cleaners Franchise?
To open a ZIPS Dry Cleaners franchise, you will need to consider a range of initial investment costs. The total investment can vary significantly, with a low end of approximately $163,250 and a high end reaching up to $1,175,000. The initial franchise fee is set at $30,000, while ongoing fees include a royalty fee of 6% and a marketing fee of 5%. Additionally, prospective franchisees should have cash reserves between $100,000 and $200,000 and a net worth ranging from $500,000 to $1,000,000.
What Is the Revenue Potential for a ZIPS Dry Cleaners Franchise?
ZIPS Dry Cleaners franchises have a promising revenue potential. The average annual revenue per unit is around $922,718, with a median revenue of $849,422. Some units have reported annual revenues as low as $56,475, while others have reached as high as $2,155,431. This wide range indicates that location and management can significantly impact profitability. The franchise also boasts a breakeven time of just 12 months, suggesting a relatively quick return on investment.
What Are the Average Expenses for Operating a ZIPS Dry Cleaners Franchise?
Operating a ZIPS Dry Cleaners franchise involves various expenses that franchisees need to account for. The average annual operating expenses total approximately $582,595. Labor costs are the most significant expense, averaging $391,697, followed by rent at $128,843. Other expenses include repairs and maintenance, totaling $19,007, and utilities, which average $43,048. Understanding these costs is crucial for effective financial planning and management.
How Many Franchise Units Does ZIPS Dry Cleaners Have?
ZIPS Dry Cleaners has experienced steady growth in its franchise operations over recent years. In 2020, there were 63 franchised units and 2 corporate units, increasing to 64 franchised units and 3 corporate units in 2021. By 2022, the number of franchised units slightly decreased to 63, while corporate units remained stable at 3. This consistency in unit count reflects the brand's stability and potential for future expansion in the dry cleaning industry.
ZIPS Dry Cleaners 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:
ZIPS Dry Cleaners Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 65 | 67 | 66 |
| Net Change YoY | 2 | -1 | |
| Franchised Units | 63 | 64 | 63 |
| Net Change YoY | 1 | -1 | |
| Corporate Units | 2 | 3 | 3 |
| Net Change YoY | 1 | 0 |
Initial Investment
The ZIPS Dry Cleaners franchise offers a range of initial investment costs, with a low end of $163,250 and a high end reaching up to $1,175,000. This flexibility allows potential franchisees to assess their financial readiness and choose a suitable entry point based on their resources and business goals.
Franchise Fees
The initial franchise fee for ZIPS Dry Cleaners is set at $30,000. Franchisees are also subject to ongoing royalty fees of 6% of gross sales and a marketing fee of 5%. These fees contribute to the overall support and branding efforts provided by the franchisor, ensuring franchisees benefit from established market presence.
Financial Performance
ZIPS Dry Cleaners franchises have shown promising financial performance, with average annual revenue per unit reported at $922,718. The median revenue stands at $849,422, while the range varies significantly, with some units generating as low as $56,475 and others as high as $2,155,431. This data highlights the potential for profitability within the franchise model.
Breakeven and Payback
Franchisees can expect a breakeven period of approximately 12 months, which is indicative of the brand's operational efficiency and market demand. Additionally, the investment payback period mirrors this timeframe, suggesting that franchisees can recover their initial investment relatively quickly, provided they effectively manage their operations.
Required Financials
To qualify for a ZIPS Dry Cleaners franchise, prospective franchisees must demonstrate a net worth between $500,000 and $1,000,000. Additionally, having cash reserves of $100,000 to $200,000 is essential to cover initial setup costs and ensure smooth operations during the early stages of the business.
Corporate and Franchise Units
As of 2022, ZIPS Dry Cleaners operates a total of 66 units, with 63 being franchised and 3 corporate-owned. The growth in franchised units has been steady, reflecting the brand's appeal and successful expansion strategy. This balanced approach between corporate and franchise ownership allows for a robust support system for franchisees while maintaining brand consistency.
Frequently Asked Questions
The initial investment for a ZIPS Dry Cleaners franchise ranges from $163,250 to $1,175,000, depending on various factors such as location and facility size.