In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Kitchen Tune-Up franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Kitchen Tune-Up franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Kitchen Tune-Up outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Kitchen Tune-Up franchise opportunity

Section V – Presentation and analysis of Kitchen Tune-Up’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2022 and 2023 average and median gross sales for Kitchen Tune-Up franchisees with a single territory and with multiple territories, that were in business throughout the applicable calendar year

• 2023 average cost of goods sold (that is, the cost to franchisees of Kitchen Improvements products and consumables sold by the franchisees) as a percentage of the price at which the franchisees sold those products and consumables to their customers, for the 145 Kitchen Tune-Up franchisees (representing 286 territories) that were open for all of 2023

• 2023 average sale amount and gross profit by service line for the 145 Kitchen Tune-Up franchisees (representing 286 territories) that were open for all of 2023

• 2023 percentage of volume by service line for the 145 Kitchen Tune-Up franchisees (representing 286 territories) that were open for all of 2023

• 2023 average and median closing rate for the 145 Kitchen Tune-Up franchisees (representing 286 territories) that were open for all of 2023

Section VI – Key ratios, comparables, computations, and analyses for the Kitchen Tune-Up franchise opportunity (exclusive content for Platinum subscribers)

Section I – Kitchen Tune-Up Franchise Costs

• Initial Franchise Fee:  $19,950
• Initial Territory Fee:  $60,000
• Travel and Living Expenses While Training:  $1,750 to $3,000
• Office/Work Space:  $500 to $3,000
• Vehicle:  $7,000 to $30,000
• Credit Card Processing Technology:  $30 to $500
• Miscellaneous Tools and Office Supplies:  $1,000 to $3,000
• Miscellaneous Opening Costs:  $2,000 to $3,500
• Lead Safe Certification:  $300 to $500
• Contractor’s License and Bond:  $150 to $1,500
• Auto Insurance:  $1,000 to $3,000
• Commercial General Liability Insurance:  $500 to $2,400
• Professional Fees:  $750 to $3,500
• Initial Marketing for 3 Months:  $15,000 to $25,000
• Additional Funds Before Opening and First Three Months:  $20,000 to $30,000
• Total Estimated Kitchen Tune-Up Franchise Costs:  $129,930 to $188,850

Section II – Kitchen Tune-Up’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $19,950
• Royalty:  if you purchase only one territory, you must pay the greater of (a) 7.0% to 4.0% of your Gross Revenue for the immediately preceding month or (b) $750 per month for the first year and $1,500 per month thereafter. During the first three months, Royalty only paid on actual Gross Revenue with no minimum.
• National Advertising Fund Payment:  you must pay the greater of (a) 1% of your Gross Revenue for the immediately preceding month or (b) $500

Section III – Number of Franchised and Company-Owned Kitchen Tune-Up Outlets

Franchised

2021

• Outlets at the Start of the Year:  196
• Outlets at the End of the Year:  234
• Net Change:  +38

2022

• Outlets at the Start of the Year:  234
• Outlets at the End of the Year:  258
• Net Change:  +24

2023

• Outlets at the Start of the Year:  258
• Outlets at the End of the Year:  274
• Net Change:  +16

Company-Owned

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2022

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2023

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section IV – News Updates on the Kitchen Tune-Up Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Kitchen Tune-Up Franchise (Item 19, 2024 FDD)

• The following is historical financial information concerning the unaudited reported annual sales of a subset of Kitchen Tune-Up’s existing outlets, namely, those franchisees who reported gross sales and who were open for business for all of calendar year 2023 (85 single territory franchisees and 60 multiple territory franchisees, representing an aggregate total of 242 territories, or 85% of the territories open for all of 2023).

Part 1 – Annual Sales Levels

• The following table shows annual gross sales reported by franchisees with a single territory and with multiple territories, that were in business throughout calendar year 2023.

• Figures for franchisees that had multiple territories are total sales for all territories – not average per territory – and if a franchisee’s additional territory opened during 2023, the total sales do not represent a full year of sales for the additional territory.

• All gross sales figures are presented without regard to the size of the territory. Although Kitchen Tune-Up currently grants territories that include approximately 41,000 households, not all territories are that size. These variations in size arise both because Kitchen Tune-Up formerly sold territories of differing sizes and because territories can experience either growth or contraction after a franchise is sold.

• During 2023, there were 85 reporting franchisees who operated a single territory throughout the year, and 60 reporting franchisees who operated multiple territories each throughout the year.

• These sales results are based upon the sales reported to Kitchen Tune-Up by the franchisees.

A. Single-Territory Franchisees

2023

• Number of Single-Territory Franchisees:  85
• Number of Territories:  85
• Average Sales:  $503,133
• Median Sales:  $428,254
• Average Sales of 75th Percentile:  $697,272
• Average Sales of Middle 50%:  $412,783
• Average Sales of 25% Percentile:  $210,943

2022

• Number of Single-Territory Franchisees:  91
• Number of Territories:  91
• Average Sales:  $547,765
• Median Sales:  $461,956
• Average Sales of 75th Percentile:  $712,741
• Average Sales of Middle 50%:  $460,492
• Average Sales of 25% Percentile:  $245,001

B. Multi-Territory Franchisees

2023

• Number of Multi-Territory Franchisees:  60
• Number of Territories:  157
• Average Sales:  $1,016,467
• Median Sales:  $711,724
• Average Sales of 75th Percentile:  $1,508,519
• Average Sales of Middle 50%:  $808,568
• Average Sales of 25% Percentile:  $536,024

2022

• Number of Multi-Territory Franchisees:  45
• Number of Territories:  118
• Average Sales:  $1,115,077
• Median Sales:  $850,892
• Average Sales of 75th Percentile:  $1,331,107
• Average Sales of Middle 50%:  $907,052
• Average Sales of 25% Percentile:  $612,058

Part 2 – Franchisee Data as Reported via the CRM System for 2023

• The following unaudited data are as reported by Kitchen Tune-Up’s franchisees via the company’s CRM System for 2023. Kitchen Tune-Up excluded the CRM System data of franchisees who were not open for all of 2023. The following data are for the 145 franchisees (representing 286 territories) open for all of 2023.

A. Cost of Goods Sold

• The average cost of goods sold (that is, the cost to franchisees of Kitchen Improvements products and consumables sold by the franchisees) as a percentage of the price at which the franchisees sold those products and consumables to their customers was 45% of the gross (retail) sales price. This comprises average labor costs of 15% of the gross (retail) sales price and average products cost of 30%.
  

• Kitchen Tune-Up has not independently verified the amount reported by its franchisees, but that figure is consistent with information concerning suggested mark-ups that is discussed during franchisee training classes.

• Your cost of goods sold may vary from this average, depending upon the number and nature of competitors in your area, the prices at which they sell similar decorative coatings, your abilities and efforts, and other factors.

• In addition to the cost of goods sold, you will also incur other expenses that are not included in this calculation, such as:

• monthly payments (lease or financing) for the required vehicle,
• labor costs for anyone you hire,
• rent for office/warehouse space,
• telephone and other utility expenses,
• automobile,
• general liability and other types of insurance,
• royalties and advertising expenses,
• federal, state, and local taxes, and
• financing expenses if you finance any part of your investment.

• You may also incur other expenses, depending upon the manner in which you operate the business.

B.  Average Sale Amount and Gross Profit by Service Line

Wood Restoration

• Average Sale Amount:  $4,009
• Average Gross Profit (i.e., gross sales less labor and materials):  65% of gross sales

Refacing

• Average Sale Amount:  $17,730
• Average Gross Profit (i.e., gross sales less labor and materials):  53% of gross sales

Redooring

• Average Sale Amount:  $14,697
• Average Gross Profit (i.e., gross sales less labor and materials):  57% of gross sales

Cabinets

• Average Sale Amount:  $24,052
• Average Gross Profit (i.e., gross sales less labor and materials):  48% of gross sales

Painting

• Average Sale Amount:  $9,743
• Average Gross Profit (i.e., gross sales less labor and materials):  52% of gross sales

All Services

• Average Sale Amount:  $13,219
• Average Gross Profit (i.e., gross sales less labor and materials):  51% of gross sales

C.  Average Product Mix

• Wood Restoration:  4.6% of total sales
• Refacing:  45.3% of total sales
• Redooring:  17.5% of total sales
• Cabinets:  22.0% of total sales
• Painting:  10.6% of total sales

D.  Closing Rate

• The average of all franchisees was 50%. The median was 43%.

• Some outlets have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much.

Section VI – Kitchen Tune-Up Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️