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

Section I – Estimated initial investment (franchise costs) for an Archadeck Outdoor Living franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for an Archadeck Outdoor Living franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Archadeck Outdoor Living 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 Archadeck Outdoor Living franchise opportunity

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

• 2023 average, median, maximum, and minimum gross sales for the 43 Archadeck Outdoor Living franchisees that operated 70 territories and were operational for the entire 12-month period ending September 30, 2023, grouped by sales volume (greater than $2.5M, between $1.5M and $2.5M, between $1M and $1.5M, less than $1M, and all)

• average gross sales for Archadeck franchisees in their respective first three full years of operations as of 2017, 2018, 2019, 2020, 2021, and 2022

• 2022 average gross revenue, cost of goods sold, gross profit margin, operating expenses, EBITDA, total owner expense, and average revenue less average costs of revenue and average operating expenses adjusted for owner’s related expenses for the 41 Archadeck Outdoor Living franchisees operating in 65 territories that had been open and operating on a full-time basis for 12 months as of December 31, 2022

• total number and average and median contract sales price for residential projects for the entire Archadeck Outdoor Living franchise system for the 12 months ending September 30, 2023

• average contract value of 1,800 of the 1,964 residential projects by project type (decks, screened porches, open porches, deck/porch combination, sunroom, deck/sunroom combination, pergola, hardscape patio, and hardscape patio with other design elements) completed by the entire Archadeck Outdoor Living franchise system for the 12 months ending September 30, 2023

Section VI – Key ratios, comparables, computations, and analyses for the Archadeck Outdoor Living franchise opportunity (exclusive content for Platinum subscribers)

Section I – Archadeck Outdoor Living Franchise Costs

• Franchise Fee:  $59,500
• Guarantee Fund Initial Payment:  $5,000
• Tools and Equipment:  $1,000 to $2,500
• Travel and Living Expenses While Training:  $6,000 to $7,500
• Computer Hardware and Software:  $3,900 to $4,800
• Start-up Advertising for First 3 Months:  $15,000 to $25,000
• Start-Up Expenses and Working Capital for First 3 Months:  $30,000 to $35,000
• Total Estimated Archadeck Outdoor Living Franchise Costs:  $120,400 to $139,300

Section II – Archadeck Outdoor Living’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Franchise Fee:  $59,500 per Territory
• Royalty:  based on monthly Gross Sales equal to: $0 to $1,000,000: 6.5%; over $1,000,000 to $2,000,000: 5.5%; over $2,000,000 to $3,000,000: 4.5%; over $3,000,000: 3.5%. Beginning in the second full calendar year following the Operational Start Date (as defined in the Franchise Agreement), during the months of March through November, the Royalty must exceed $1,500 (“Minimum Royalty”).
• National Branding & Marketing Fee:  currently, 1.5% of Gross Sales
• Individual Advertising Investment:  a minimum of $50,000 per Territory each year. Minimum $80,000 per calendar year if you are granted two contiguous Territories, plus an additional $20,000 per calendar year for each additional contiguous Territory.
• Digital Marketing Fee:  Archadeck’s then-current fee, currently $300 per month

Section III – Number of Franchised and Company-Owned Archadeck Outdoor Living Outlets

Franchised

2021

• Outlets at the Start of the Year:  63
• Outlets at the End of the Year:  72
• Net Change:  +9

2022

• Outlets at the Start of the Year:  72
• Outlets at the End of the Year:  70
• Net Change:  -2

2023

• Outlets at the Start of the Year:  70
• Outlets at the End of the Year:  86
• Net Change:  +16

Company-Owned

2021

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  0
• Net Change:  -3

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 Archadeck Outdoor Living Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Archadeck Outdoor Living Franchise (Item 19, 2024 FDD)

Part 1 – Average Gross Sales for Archadeck Outdoor Living Franchisees for the 12 Months Ending September 30, 2023

• The following table presents the average annual Gross Sales realized by certain Archadeck Outdoor Living franchisees in Archadeck’s prior fiscal year from October 1, 2022 through September 30, 2023 (the “2023 Fiscal Year Period”).

• The information provided in the table below was compiled from 43 Archadeck Outdoor Living franchisees that operated 70 Territories and were operational for the entire 2023 Fiscal Year Period.

• The data excludes franchisees that began operations during the 2023 Fiscal Year Period, and 5 territories that ceased active operations during the 2023 Fiscal Year Period.

• 12 of the 43 Archadeck Outdoor Living franchisees operate in 2 Territories under 24 different Franchise Agreements, one of the Archadeck Outdoor Living franchisees operates in 3 Territories under 3 different Franchise Agreements, one of the Archadeck Outdoor Living franchisees operates in 4 Territories under 4 different Franchise Agreements, one of the Archadeck Outdoor Living franchisees operates in 5 Territories under 5 different Franchise Agreements, and one Archadeck Outdoor Living franchisee operated in 7 Territories under 7 different Franchise Agreements.

• These Archadeck Outdoor Living franchisees report Gross Sales to Archadeck for all their Territories on the same report. As a result, for the purposes of this Item 19, each of these Archadeck Outdoor Living franchisees was considered to be one franchisee even though they operate in more than one Territory.

A. Combined Multi-Territory and Single-Territory Franchisees

Sales Volume: Greater Than $2.5M

• Number of Franchisees:  9
• Minimum Gross Sales:  $2,513,511
• Average Gross Sales:  $4,383,833
• Maximum Gross Sales:  $8,510,527
• Median Gross Sales:  $3,733,968
• Number and Percent of Franchisees Above Average:  3 (33%)
• Average Years in Business:  18.1
• Percent of Franchisees:  20.9%

Sales Volume: Between $1.5M and $2.5M

• Number of Franchisees:  11
• Minimum Gross Sales:  $1,582,539
• Average Gross Sales:  $1,953,767
• Maximum Gross Sales:  $2,482,372
• Median Gross Sales:  $1,908,584
• Number and Percent of Franchisees Above Average:  5 (46%)
• Average Years in Business:  8.2
• Percent of Franchisees:  25.6%

Sales Volume: Between $1M and $1.5M

• Number of Franchisees:  12
• Minimum Gross Sales:  $1,032,517
• Average Gross Sales:  $1,198,743
• Maximum Gross Sales:  $1,429,850
• Median Gross Sales:  $1,154,908
• Number and Percent of Franchisees Above Average:  4 (33%)
• Average Years in Business:  8.3
• Percent of Franchisees:  27.9%

Sales Volume: Less Than $1M

• Number of Franchisees:  11
• Minimum Gross Sales:  $234,639
• Average Gross Sales:  $620,689
• Maximum Gross Sales:  $913,018
• Median Gross Sales:  $699,272
• Number and Percent of Franchisees Above Average:  6 (55%)
• Average Years in Business:  9.9
• Percent of Franchisees:  25.6%

All

• Number of Franchisees:  43
• Average Gross Sales:  $1,910,661
• Median Gross Sales:  $1,406,602
• Number and Percent of Franchisees Above Average:  14 (33%)
• Average Years in Business:  10.8
• Percent of Franchisees:  100.0%

B. Single-Territory Franchisees Only

Top Third

• Number of Franchisees:  9
• Minimum Gross Sales:  $1,706,019
• Average Gross Sales:  $2,980,137
• Maximum Gross Sales:  $5,356,777
• Median Gross Sales:  $2,513,511
• Number and Percent of Franchisees Above Average:  4 (44%)

Middle Third

• Number of Franchisees:  9
• Minimum Gross Sales:  $880,120
• Average Gross Sales:  $1,160,621
• Maximum Gross Sales:  $1,615,056
• Median Gross Sales:  $1,145,508
• Number and Percent of Franchisees Above Average:  4 (44%)

Bottom Third

• Number of Franchisees:  9
• Minimum Gross Sales:  $234,639
• Average Gross Sales:  $559,382
• Maximum Gross Sales:  $863,387
• Median Gross Sales:  $512,458
• Number and Percent of Franchisees Above Average:  4 (44%)

All

• Number of Franchisees:  27
• Average Gross Sales:  $1,566,713
• Median Gross Sales:  $1,145,508
• Number and Percent of Franchisees Above Average:  10 (37%)

C. Multi-Territory Franchisees Only

Top Half

• Number of Franchisees:  8
• Minimum Gross Sales:  $1,908,584
• Average Gross Sales:  $3,667,411
• Maximum Gross Sales:  $8,510,527
• Median Gross Sales:  $2,880,619
• Number and Percent of Franchisees Above Average:  3 (38%)

Bottom Half

• Number of Franchisees:  8
• Minimum Gross Sales:  $1,062,305
• Average Gross Sales:  $1,314,735
• Maximum Gross Sales:  $1,587,817
• Median Gross Sales:  $1,314,802
• Number and Percent of Franchisees Above Average:  4 (50%)

All

• Number of Franchisees:  16
• Average Gross Sales:  $2,491,073
• Median Gross Sales:  $1,748,201
• Number and Percent of Franchisees Above Average:  4 (25%)

Part 2 – Average Gross Sales for Certain Archadeck Outdoor Living Franchisees for the 12 Months Ending December 31, 2022

• The following table presents information for Archadeck franchisees in their respective first three full years of operation as of 2017, 2018, 2019, 2020, 2021 and 2022.

2017 New Franchisees

• Number of Reporting Franchisees:  4
• First Year Average Sales:  $478,673
• Second Year Average Sales:  $716,494
• Third Year Average Sales:  $896,980

2018 New Franchisees

• Number of Reporting Franchisees:  4
• First Year Average Sales:  $435,054
• Second Year Average Sales:  $555,990
• Third Year Average Sales:  $904,626

2019 New Franchisees

• Number of Reporting Franchisees:  2
• First Year Average Sales:  $524,916
• Second Year Average Sales:  $396,205
• Third Year Average Sales:  $441,850

2020 New Franchisees

• Number of Reporting Franchisees:  8
• First Year Average Sales:  $784,448
• Second Year Average Sales:  $1,033,315
• Third Year Average Sales:  $1,217,690

2021 New Franchisees

• Number of Reporting Franchisees:  6
• First Year Average Sales:  $731,697
• Second Year Average Sales:  $709,292

2022 New Franchisees

• Number of Reporting Franchisees:  4
• First Year Average Sales:  $722,597

Part 3 – Benchmarking Study for Archadeck Outdoor Living Franchisees for the 12 Months Ending December 31, 2022

• Archadeck provide prospective franchisees with information from a financial benchmarking study (the “Benchmarking Study”) conducted for the Archadeck Outdoor Living franchise system by Profit Planning Group (“PPG”), an independent third-party financial benchmarking organization serving trade associations and franchise networks across the country.

• In 2022, PPG conducted an independent financial Benchmarking Study for Archadeck Outdoor Living franchisees. The Benchmarking Study was conducted solely on a voluntary basis. Interested franchisees were required to submit their income statements for the year ending December 31, 2022, to PPG. PPG then calculated certain financial metrics to allow participants to compare their financial performance against their peer group of Archadeck Outdoor Living franchisees.

• 41 out of 52 (79%) Archadeck Outdoor Living franchisees as of December 31, 2022 participated in the Benchmarking Study (“Reporting Franchisees”).

• Part 3 presents information for those 41 Reporting Franchisees operating in 65 territories that had been open and operating on a full-time basis for 12 months as of December 31, 2022. 15 of the 41 Reporting Franchises contained in the chart below operate in multiple territories. The chart below reflects the average revenues, certain costs, and expenses in the 2022 calendar year by these 41 Reporting Franchisees.

Average Revenue Less Average Costs of Revenue and Average Operating Expenses Adjusted for Owner’s Related Expenses

Gross Revenue:  $2,037,549 (100.0%)

Cost of Goods Sold

• Cost of Material:  $646,648 (31.7%)
• Construction Labor:  $402,540 (19.8%)
• Other Construction Costs (permits, fees, ancillary subs):  $229,945 (11.3%)
• Total Cost of Goods Sold:  $1,279,133 (62.8%)

Gross Profit Margin:  $758,415 (37.2%)

Operating Expenses

• Royalty Fees:  $121,690 (6.0%)
• National Brand Marketing Fund:  $22,500 (1.1%)
• Sales Salaries and Commissions:  $55,660 (2.7%)
• Salaries, Wages, Payroll Taxes, and Benefits:  $173,341 (8.5%)
• Telephone and Communications:  $10,685 (0.5%)
• Rent, Utilities, Repairs, and Maintenance:  $21,270 (1.0%)
• Advertising and Marketing:  $86,869 (4.3%)
• Vehicle Expenses:  $30,315 (1.5%)
• Insurance:  $17,266 (0.8%)
• Warranty Expenses:  $3,976 (0.2%)
• All Other Operating Expenses:  $94,125 (4.6%)
• Total Operating Expenses:  $637,695 (31.3%)

Earnings before Interest, Depreciation and Amortization:  $120,720 (5.9%)

Total Owner Expense:  $147,648 (7.2%)

Average Revenue Less Average Costs of Revenue and Average Operating Expenses Adjusted for Owner’s Related Expenses:  $268,368 (13.2%)

Part 3 – Average Contract Price and Residential Contract Price by Project Type for Archadeck Outdoor Living Franchisees for the 12 Months Ending September 30, 2023

• The following table presents data regarding the average project size for the entire Archadeck Outdoor Living franchise system for the 12 months ending September 30, 2023. The information provided was compiled from every Archadeck Outdoor Living franchisee that sold at least one project during that period.

Residential Projects

• Total Number of Projects:  1,964
• Average Contract Sales Price:  $42,946
• Median Contract Sales Price:  $34,393
• Number and Percent of Projects at or Above Average Contract Sales Price:  752 (38%)

• The following data presents additional breakdown of the average contract value of 1,800 of the 1,964 Residential Projects by project type completed by the entire Archadeck Outdoor Living franchise system for the 12 months ending September 30, 2023.

• The 9 Residential Project Types presented below represent the most commonly sold project types sold by Archadeck Outdoor Living franchisees. The remaining 164 Residential Projects were not included because Archadeck Outdoor Living did not receive enough information about these projects to be able to classify the projects into one of the project types listed below.

Decks

• Average Contract Sales Price:  $37,203
• Median Contract Sales Price:  $29,995
• Total Number of Projects:  879
• Number and Percent of Projects at or Above Average Contract Sales Price:  314 (36%)

Screened Porches

• Average Contract Sales Price:  $54,139
• Median Contract Sales Price:  $51,645
• Total Number of Projects:  118
• Number and Percent of Projects at or Above Average Contract Sales Price:  52 (44%)

Open Porches

• Average Contract Sales Price:  $45,031
• Median Contract Sales Price:  $35,125
• Total Number of Projects:  104
• Number and Percent of Projects at or Above Average Contract Sales Price:  33 (32%)

Deck/Porch Combination

• Average Contract Sales Price:  $76,328
• Median Contract Sales Price:  $69,250
• Total Number of Projects:  157
• Number and Percent of Projects at or Above Average Contract Sales Price:  65 (41%)

Sunroom

• Average Contract Sales Price:  $63,146
• Median Contract Sales Price:  $49,799
• Total Number of Projects:  47
• Number and Percent of Projects at or Above Average Contract Sales Price:  17 (36%)

Deck/Sunroom Combination

• Average Contract Sales Price:  $83,655
• Median Contract Sales Price:  $74,700
• Total Number of Projects:  23
• Number and Percent of Projects at or Above Average Contract Sales Price:  10 (43%)

Pergola

• Average Contract Sales Price:  $17,519
• Median Contract Sales Price:  $14,013
• Total Number of Projects:  61
• Number and Percent of Projects at or Above Average Contract Sales Price:  24 (39%)

Hardscape Patio

• Average Contract Sales Price:  $28,586
• Median Contract Sales Price:  $25,261
• Total Number of Projects:  197
• Number and Percent of Projects at or Above Average Contract Sales Price:  82 (42%)

Hardscape Patio with Other Design Elements

• Average Contract Sales Price:  $69,544
• Median Contract Sales Price:  $60,270
• Total Number of Projects:  214
• Number and Percent of Projects at or Above Average Contract Sales Price:  81 (38%)

• The Residential Project types listed above are defined as follows:

• “Deck” Residential Projects include structures built on or above the ground and covered by wood or composite decking material.

• “Screen Porches” Residential Projects include structures built on or above the ground with roof coverings and enclosed with screens.

• “Open Porches” Residential Projects include structures built on or above the ground with roof covering and no material, neither windows nor screen, enclosing the structure.

• “Deck/Porch Combination” Residential Projects include projects involving both a deck and a porch structure.

• “Pergola” Residential Projects include structures built on or above the ground covered with open roof that provides partial shade.

• “Hardscape Patio” Residential Projects include concrete, natural stone, or paver patio coverings built at ground elevation.

• “Hardscape Patios with Other Design Elements” Residential Projects include projects with hardscape patios built at ground elevation that include an additional hardscape feature built above the ground such as sitting walls, retaining walls, fireplaces, fire pits, outdoor kitchens, or other hardscape decorative design features.

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

Section VI – Archadeck Outdoor Living Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️