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

Section I – Estimated initial investment (franchise costs) for a Superior Fence & Rail franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Superior Fence & Rail franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Superior Fence & Rail 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 Superior Fence & Rail franchise opportunity

Section V – Presentation and analysis of Superior Fence & Rail’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• fiscal year 2023 average, median, highest, and lowest gross revenues for the 33 single-territory, 11 multi-territory, and 44 single and multi-territory (combined) Superior Fence & Rail franchisees (operating in 66 territories) that were operational for the full 12 months ending September 30, 2023, and fiscal year 2023 gross revenues for the two company-owned operations that operated in North Florida and Oviedo, Florida

• first, second, and third year average gross revenues for Superior Fence & Rail franchisees that conducted their first full calendar year of operations in 2019, 2020, 2021, 2022, or 2023

• 2022 average revenues, cost of revenues, gross profit, and operating expenses for 13 Superior Fence & Rail franchisees operating in 16 territories that had been open and operating on a full-time basis for at least two full years as of December 31, 2022

• fiscal year 2023 average sale, number of jobs, and leads for the 44 Superior Fence & Rail franchisees (operating in 66 territories) that were operational for the full 12 months ending September 30, 2023, and fiscal year 2023 average sale, number of jobs, and leads for the two company-owned operations that operated in North Florida and Oviedo, Florida

• 2019, 2020, 2021, 2022, and 2023 system-wide gross revenues for the two company-owned operations that operated in North Florida and Oviedo, Florida, and all Superior Fence & Rail franchisees whose Superior Fence & Rail businesses were operational for any part, even as little as one month if the franchisee completed initial training in September of their initial year of operations

Section VI – Key ratios, comparables, computations, and analyses for the Superior Fence & Rail franchise opportunity (exclusive content for Platinum subscribers)

Section I – Superior Fence & Rail Franchise Costs

• Superior Fence & Rail franchise costs, based on Item 7 of the company’s 2024 FDD:

• Initial Franchise Fee:  $59,500
• Travel and Living Expenses While Training:  $2,000 to $3,000
• Tools and Equipment:  $10,000 to $35,000
• Computer Hardware and Software:  $800 to $2,000
• Inventory:  $15,000 to $25,000
• Trade Show Booth:  $2,500
• Rent and Security Deposit for Office and Storage Facility:  $4,000 to $12,000
• Furniture and Fixtures:  $1,200 to $7,800
• Vehicle:  $3,000 to $10,000
• Vehicle Signage and Outfitting:  $2,500 to $5,000
• Initial Marketing Expenses:  $10,000 to $15,000
• Additional Funds for 3 Months:  $20,000 to $30,000
• Total Estimated Superior Fence & Rail Franchise Costs:  $130,500 to $206,800

Section II – Superior Fence & Rail’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Superior Fence & Rail’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

• Initial Franchise Fee:  $59,500
• Monthly Branding Royalty:  $0 to $1,999,999: 6% of gross revenue; $2,000,000 to $3,999,999: 5% of gross revenue; $4,000,000 and above: 4% of gross revenue. Beginning on the 24-month anniversary of the Operational Start Date, the Monthly Branding Royalty payable will be equal to the greater of: (a) the amount described above based on year-to-date Gross Revenue; or (b) $1,000.
• Individual Advertising Investment:  minimum $40,000 per calendar year for one territory; minimum $60,000 if you are granted two contiguous territories. A minimum of $20,000 for each additional contiguous territory.
• National Branding and Marketing Fee:  1% of gross revenue

Section III – Number of Franchised and Company-Owned Superior Fence & Rail Outlets

Franchised

2021

• Outlets at the Start of the Year:  16
• Outlets at the End of the Year:  29
• Net Change:  +13

2022

• Outlets at the Start of the Year:  29
• Outlets at the End of the Year:  74
• Net Change:  +45

2023

• Outlets at the Start of the Year:  74
• Outlets at the End of the Year:  240
• Net Change:  +166

Company-Owned

2021

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2022

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

2023

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section IV – News Updates on the Superior Fence & Rail Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Superior Fence & Rail Franchise (Item 19, 2024 FDD)

• For purposes of this Item 19, the term “Gross Revenue” means the total of all receipts derived from all sales of products and services in connection with each franchisee’s Superior Fence & Rail business, including, without limitation, labor, insurance claims for lost profits to the extent a claim is paid by the insurer, and all other products and services sold or performed by or for its franchised business or by means of the business conducted under its Franchise Agreement, whether the receipts are evidenced by cash, credit, checks, gift certificates, scrip, coupons, services, property, or other means of exchange.

• Gross Revenues do not include: (i) the amount of any tax imposed by any federal, state, municipal, or other governmental authority; and (ii) all customer refunds, valid discounts and coupons, and credits made by the franchisee.

• The following tables below present financial information from 44 different franchise outlets that operated during the reporting period ending September 30, 2023.

• Excluded from this entire Item 19 are 5 licensees that are not required to provide, nor does Superior Fence & Rail collect, the type of information reflected in this Item 19.

Part 1 – Gross Revenues for Superior Fence & Rail Businesses for the Full 12 Months Ending September 30, 2023

• The following table presents Gross Revenue information realized by certain Superior Fence & Rail franchisees during the period between October 1, 2022 and September 30, 2023 (“Reporting Period”).

• The information provided in the table below was compiled from 44 Superior Fence & Rail franchisees (operating in 66 territories) that were operational during the Reporting Period. 11 of the 44 franchisees included in the table below operated more than one franchise territory but reported Gross Revenue as one location.

• The data excludes 51 franchisees (operating in 66 territories) that commenced operations during the Reporting Period. No franchisees ceased operations during the Reporting Period.

Combined Multi-Territory and Single-Territory Franchisees

• Number of Franchisees:  44
• Minimum Gross Revenue:  $378,902
• Maximum Gross Revenue:  $8,915,591
• Average Gross Revenues:  $3,041,691
• Median Gross Revenues:  $2,439,513

Single-Territory Franchisees Only

• Number of Franchisees:  33
• Minimum Gross Revenue:  $378,902
• Maximum Gross Revenue:  $8,135,603
• Average Gross Revenues:  $2,783,077
• Number and Percentage of Franchisees Above Average:  14 (42%)
• Median Gross Revenues:  $2,365,085

Multi-Territory Franchisees Only

• Number of Franchisees:  11
• Minimum Gross Revenue:  $1,059,787
• Maximum Gross Revenue:  $8,915,591
• Average Gross Revenues:  $3,817,533
• Number and Percentage of Franchisees Above Average:  4 (36%)
• Median Gross Revenues:  $2,849,333

• The information presented above also excludes the results of two company-owned operations that operated in North Florida and Oviedo, Florida and generated $15,123,759 and $8,198,819 of Gross Revenues during the Reporting Period respectively.

Part 2 – Gross Revenues of Certain Superior Fence & Rail Businesses for the Full 12 Months Ending September 30, 2023, 2022, 2021, 2020, and 2019

• The following table presents information for Superior Fence and Rail franchisees that conducted their first full fiscal year of operations in 2019, 2020, 2021, 2022, or 2023.

• As of September 30, 2023, there were 3 franchisees that conducted their first full fiscal year of operations ending September 30, 2019, there were 5 franchisees that conducted their first full fiscal year of operations ending September 30, 2020, there were 3 franchisees that conducted their first full fiscal year of operations ending September 30, 2021, there were 19 franchisees that conducted their first full fiscal year of operations ending September 30, 2022, and there were 15 franchisees that conducted their first full fiscal year of operations ending September 30, 2023.

• The below table excludes 51 franchisees that had not conducted a full year of operations as of September 30, 2023.

2019 New Franchisees

• Number of Reporting Franchisees:  3
• First Year Average Sales:  $1,574,993
• Second Year Average Sales:  $2,152,964
• Third Year Average Sales:  $3,503,916

2020 New Franchisees

• Number of Reporting Franchisees:  5
• First Year Average Sales:  $1,406,697
• Second Year Average Sales:  $3,326,212
• Third Year Average Sales:  $4,481,486

2021 New Franchisees

• Number of Reporting Franchisees:  3
• First Year Average Sales:  $924,351
• Second Year Average Sales:  $1,524,262
• Third Year Average Sales:  $1,510,516

2022 New Franchisees

• Number of Reporting Franchisees:  19
• First Year Average Sales:  $2,288,848
• Second Year Average Sales:  $3,136,641

2023 New Franchisees

• Number of Reporting Franchisees:  15
• 2022 Average Gross Sales:  $1,816,858

• The Gross Revenue figures presented above represent the total dollar value of customer installation contracts sold during the respective calendar year by the Superior Fence and Rail franchisees identified above. The financial performance representations above do not reflect the costs of sales, royalties, or operating expenses that must be deducted from the Gross Revenue figures to obtain a net income or owner’s profit number.

Part 3 – Benchmarking Study for Superior Fence and Rail Businesses for the 12 Months Ending December 31, 2022

• In 2023, Superior Fence and Rail conducted a financial Benchmarking Study for Superior Fence and Rail franchisees.

• The Benchmarking Study was conducted solely on a voluntary basis and was offered only to franchisees who had been operating their Superior Fence and Rail franchises at least 12 months at the time of the Benchmarking Study. As a result, 12 franchisees who joined the system in 2022 and operated 42 Territories were ineligible to participate in the Benchmarking Study.

• Interested franchisees were required to submit their income statements for the year ending December 31, 2022 (“Benchmarking Reporting Period”).

• This Part 3 presents information for 13 Reporting Franchisees operating in 16 territories that had been open and operating on a full-time basis for at least two full years as of December 31, 2022. Two of the 13 reporting franchises contained in the chart below operate in multiple territories.

Revenues:  $4,152,839 (100.0%)

Cost of Revenues:

• Materials:  $1,601,026 (38.6%)
• Installation Labor:  $697,159 (16.8%)
• Vehicle Expense:  $67,477 (1.6%)
• Other Costs of Revenues:  $80,464 (1.9%)
• Total Cost of Revenues:  $2,446,126 (58.9%)

Gross Profit:  $1,706,713 (41.1%)

Operating Expenses

• Royalties:  $226,114 (5.4%)
• National Brand Fund:  $41,528 (1.0%)
• Advertising and Marketing:  $103,008 (2.5%)
• Sales Commissions:  $220,900 (5.3%)
• Office and Warehouse Salaries, Wages, Payroll Taxes and Benefits:  $321,011 (7.7%)
• Merchant Fees and Financing Costs:  $57,056 (1.4%)
• Rent and Utilities:  $82,299 (2.0%)
• Shop, Tools, and Warehouse Expenses:  $46,649 (1.1%)
• Insurance:  $44,854 (1.1%)
• IT & Telephone:  $37,075 (0.9%)
• Other Operating Expenses:  $57,615 (1.4%)
• Total Operating Expenses:  $1,238,109 (29.8%)
• Total Revenue Less Cost of Revenues and Certain Disclosed Operating Expenses:  $468,604 (11.3%)

• “Revenue” has the same general meaning as in the Franchise Agreement, which is defined in the Franchise Agreement as: the total of all receipts derived from all sales of products and services in connection with your Superior Fence and Rail, not including taxes or refunds.

• “Materials” includes all products utilized in the installation of a fence installation including, without limitation, posts, concrete, hardware fasteners and fence panel fabrications made of wood, vinyl, aluminum, steel or chain-link and other accessories.

• “Installation Labor” includes direct payroll and payroll taxes for employee fence installers. In addition, some franchisees hire subcontracted labor for fence installations and those costs are included in Installation Labor. Installation Labor does not include benefits or unemployment insurance.

• “Vehicle Expense” includes the cost of vehicle lease, fuel and maintenance costs for service vehicles. It does not include automobile insurance costs and if the Reporting Franchisees own the vehicle, it does not include depreciation expense associated with the vehicle.

• “Other Costs of Revenue” includes supplies utilized by installers, dump fees, occasional equipment rental and building permits.

• “Royalties” was calculated by first determining the amount of Monthly Branding Royalty that each of the 13 Reporting Franchisees would have paid under this FDD, and then taking the total average of such amount.

• “National Brand Marketing Fund Investments” has the same general meaning as the National Branding & Marketing Fees as described in the FDD. The amount shown was calculated by determining the amount that the 13 Reporting Franchisees would have paid under the current FDD. However, some of the 13 Reporting Franchisees are entitled to pay a lower National Branding & Marketing Fee under their older form of franchise agreement.

• “Advertising and Marketing” means the amount spent on advertising and marketing activities within their territories.

• “Sales Commissions” means the amount of commission wages paid to certain employees involved in the sales of fencing and railing products and services.

• “Office and Warehouse Salaries, Wages, Payroll Taxes and Benefits” means compensation paid to either part-time or full-time office administration staff to answer phones, respond to new customer inquiries, assist in scheduling, help maintain data in the field services IT platform, and sometimes light bookkeeping. Additionally, warehouse staff manages inventory and stocks vehicles for daily fence installations. Benefit costs include health, dental or other benefit programs for all staff.

• “Merchant Fees and Financing Costs” means customary fees associated with maintaining a local banking relationship and accepting payment from customers via credit cards or consumer financing programs.

• “Rent and Utilities” includes the cost of rent and utilities for power, water and gas for offices, warehouse and storage facilities.

• “Shop, Tools and Warehouse Expenses” includes the costs of forklifts, installation tools and equipment, shop fabrication tools and supplies, equipment and facilities repairs and maintenance, and uniforms.

• “Insurance” means the amount spent on insurance coverage policies required under the current FDD.

• “IT & Telephone” means the amount spent on licensing the field services technology platform for office and field devices and maintaining a VOIP phone system.

• “Other Operating Expenses” includes bad debt, business licenses and permits, office expenses, professional fees, training expenses, travel, meals and entertainment expenses and rebates earned from credit card purchases.
• “Total Revenue Less Cost of Revenues and Certain disclosed operating expenses” means the average total Revenue minus the average Materials, Installation Labor, Vehicle Expenses, Other Costs of Revenues, Royalties, National Brand Marketing Fund Investments, Advertising and Marketing, Sales Commissions, Office and Warehouse Salaries, Wages, Payroll Taxes and benefits, Merchant Fees and Financing Costs, Rent and Utilities, Shop Tools and Warehouse Expenses, Insurance, IT & Telephone expenses and Other Operating Expenses.

• This amount does not equal the average gross profit of the 13 Reporting Franchisees that had been open and operating on a full-time basis for at least two years as of December 31, 2022, as they each incurred additional costs and expenses that are not reflected in this Part 3.

Part 4 – Average Sale Per Project, Annual Number of Jobs, and Customer Leads During 12 Months Ending September 30, 2023

• The information provided below was compiled from 44 Superior Fence & Rail franchisees (operating in 66 territories) that were operational for the full fiscal year ending September 30, 2023 (the “Reporting Period”) and reported to Superior Fence & Rail an annual Profit and Loss statement (“P&L”) and Job and Lead data maintained in the proprietary customer relationship management (“CRM”) software used by Superior Fence & Rail franchisees to operate their franchise.

• They are the same 44 Superior Fence & Rail franchisees included in Part 1 above. The data excludes 51 franchisees (operating in 166 territories) that commenced operations during the Reporting Period.

• “Average Sale” per project is calculated by dividing the total Gross Revenue by the number of Jobs installed during the Reporting Period.

• A “Job” is a fence or rail installation project that was completed and generated Gross Revenue during the Reporting Period, and a “Lead” reflects any customer inquiry for a fence installation project. Leads can be recorded by phone calls, website or social media inquiries, or customer referrals.

• Number of Franchisees:  44
• Average Sale:  $7,651.65
• Average Number of Jobs:  396
• Average Leads:  2,546

• The data above also excluded results from the two company owned stores including North Florida that reported Average Sale, Jobs, and Leads of $9,517.78, 1,589, and 11,266, respectively.

• Oviedo Florida reported Average Sale, Jobs, and Leads of $6,959.95, 1,178, and 8,745, respectively.

Part 5 – Superior Fence & Rail Franchise System Sales for Fiscal Years Ending September 30, 2019, 2020, 2021, 2022, and 2023

• The information provided in the table below is based on the aggregate Gross Revenues (“System Sales”) reported to Superior Fence & Rail from all Superior Fence & Rail franchisees whose Superior Fence & Rail businesses were operational for any part, even as little as one month if the franchisee completed initial training in September of their initial year of operations, of each fiscal year ended September 30, 2019, September 30, 2020, September 30, 2021, September 30, 2022, and September 30, 2023

• 2019 System Gross Revenues:  $17,127,733 (16 outlets/territories as of fiscal year end)
• 2020 System Gross Revenues:  $23,206,187 (18 outlets/territories as of fiscal year end)
• 2021 System Gross Revenues:  $55,734,099 (31 outlets/territories as of fiscal year end)
• 2022 System Gross Revenues:  $106,883,321 (76 outlets/territories as of fiscal year end)
• 2023 System Gross Revenues:  $188,497,364 (240 outlets/territories as of fiscal year end)

Section VI – Superior Fence & Rail Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️