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

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

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

Section III – Number of franchised and company-owned Fastest Labs 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 Fastest Labs franchise opportunity

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

• 2023 gross revenue, cost of goods sold and contract labor, gross profit, core operating expenses, and adjusted earnings for the one affiliate location in the Reporting Group

• 2023 average, median, highest, and lowest gross revenue for the top 1/3, middle 1/3, bottom 1/3, and all 88 franchised locations in the Reporting Group

• 2023 average, median, highest, and lowest gross revenue for the franchised locations in the Reporting Group that operate in Large, Standard, and Mid-Size territories, separately stated

• 2020 to 2023 affiliate location gross revenue, franchised locations gross revenue, and systemwide gross revenue reported by the respective systemwide Reporting Group (including the excluded outlets and those outlets that were open for less than 12 months in each respective calendar year so long as the franchised locations were open as of the end of the fiscal year)

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

Section I – Fastest Labs Franchise Costs

• Initial Franchise Fee:  $59,500
• Airfare and Living Expenses While Training:  $1,000 to $1,500
• Lease and Utility/Security Deposits:  $2,500 to $5,000
• Exterior Signage and Installation:  $5,000 to $9,000
• Office Equipment:  $3,500 to $6,500
• Initial Testing Equipment:  $3,500 to $5,000
• Insurance and Miscellaneous Opening Expenses:  $5,500 to $11,000
• Computer Hardware and Software:  $6,000 to $7,500
• Start-Up Kit and Uniforms:  $1,000 to $1,500
• Internet Marketing SEO, Keywords, and Social Media Advertising Expenses:  $18,000
• Additional Funds (3 months):  $20,000 to $40,000
• Total Estimated Fastest Labs Franchise Costs:  $125,500 to $164,500

Section II – Fastest Labs’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $59,500
• Royalty Fee:  greater of 7% of Gross Revenue or the Minimum Royalty due. The Minimum Royalty is not due for the first 6 months of operation. After this grace period, the Minimum Royalty will be equal to $500 per month.
• National Brand Fund:  2% of monthly Gross Revenue
• Local and Regional Advertising Cooperatives:  established by cooperative members, between 1% and 2% of Gross Revenue

Section III – Number of Franchised and Company-Owned Fastest Labs Outlets

Franchised

2021

• Outlets at the Start of the Year:  54
• Outlets at the End of the Year:  61
• Net Change:  +7

2022

• Outlets at the Start of the Year:  61
• Outlets at the End of the Year:  91
• Net Change:  +30

2023

• Outlets at the Start of the Year:  91
• Outlets at the End of the Year:  181
• Net Change:  +90

Company-Owned

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2022

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2023

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section IV – News Updates on the Fastest Labs Franchise

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

• As of December 31, 2023, Fastest Labs had 181 Fastest Labs franchises (“Franchised Locations”) and one affiliate-owned Fastest Labs location (“Affiliate Location”).

• The information in Parts 1 and 2 below is a historical financial performance representation for the one Affiliate Location and 88 Franchised Locations (“Reporting Group”) that were in operation for at least 12 months as of December 31, 2023 (the “Reporting Criteria”). The Franchised Locations in the Reporting Group operate in Large, Standard, and Mid-Size territories.

• 93 of the Franchised Locations were not open for the entire 2023 calendar year and are not included in the Reporting Group or this Item 19, except in the “Systemwide Reporting Group” described below.

• In addition to the historical performance of the Reporting Group, Fastest Labs also includes systemwide data for all Fastest Labs Businesses operating as of year-end (each, a “Systemwide Reporting Group”) in calendar years 2020 to 2023 as described further in the notes to Part 5. Fastest Labs refers to each calendar year as a “Reporting Period.”

• The financial performance information for the Affiliate Location was taken from its unaudited profit and loss statement for 2023. The financial performance information for the Franchised Locations was taken from reports submitted to Fastest Labs.

• The financial performance information for the Affiliate Location was prepared on an accrual basis of accounting. Franchised Locations revenue information is reported on an accrual basis of accounting. Fastest Labs has presented the financial performance information of the Franchised Locations separate from that of the Affiliate Location below. All figures have been rounded to the nearest dollar.

• Franchised Fastest Labs Businesses will share many of the same characteristics as Fastest Labs’ Affiliate Location, including degree of competition and services offered, except that the Affiliate Location does not pay the Royalty Fee or Technology Fee.

• In February 2024, Fastest Labs implemented the Technology Fee. In March 2024, Fastest Labs implemented the National Brand Fund Fee. The Affiliate Location does pay the Technology Fee. The Affiliate Location does not pay the National Brand Fund Fee and is not subject to the monthly Keywords and Search Engine Optimization expenditure.

Part 1 – Gross Revenue, Gross Profit, and Net Profit for the Affiliate Location During the 2023 Reporting Period

• The information provided in Part 1 below consists of the actual performance of the Affiliate Location.

• Because the Affiliate Location is under Fastest Labs’ control, Fastest Labs is able to obtain detailed information that it is unable to obtain from all franchisees.

• The numbers have been rounded to the nearest dollar for sake of presentation.

Gross Revenue:  $575,975 (100%)

Less: Cost of Goods Sold and Contract Labor:  $165,302 (28.70%)

Gross Profit:  $410,672 (71.30%)

Expenses

Core Operating Expenses

• Advertising and Business Promotion:  $18,000 (3.13%)
• Bank Charges and Fees:  $8,845 (1.53%)
• Insurance: Building, Worker’s Compensation, and General Liability Insurance:  $3,790 (0.71%)
• Office Supplies and Expenses:  $13,301 (2.31%)
• Professional Services:  $1,400 (0.24%)
• Rent:  $29,100 (5.05%)
• Payroll (2 full-time collectors):  $67,472 (11.71%)
• Payroll Taxes:  $5,833 (1.01%)
• Total Core Operating Expenses:  $147,741 (25.65%)

Adjusted Earnings:  $262,931 (45.65%)

• “Gross Revenue” means the aggregate amount of all sales of services and products, and the aggregate of all charges for services performed by the Fastest Labs Business net of discounts and bad debts.

• “Cost of Goods Sold and Contract Labor” equal the costs of purchases and contract labor paid by the Affiliate Location.

• “Gross Profit” equals Gross Revenue less Cost of Goods Sold and Contract Labor.

• “Core Operating Expenses” includes those operating expenses actually incurred by Fastest Labs’ Affiliate Location that Fastest Labs anticipates its franchisees will also incur. This includes the following operating expenses: payroll for non-owners and managers; advertising; business promotion; bank charges and fees; entertainment; insurance; office supplies; professional services; rent; security; payroll taxes; and utilities.

• This category does not include the following operating expenses and non-operating expenses actually incurred by the Affiliate Location (the “Excluded Operating Expenses”): (i) owner’s salary (as well as the associated taxes) made by the owner of the company, which totaled $78,033; (ii) administrative costs paid to Fastest Labs’ payroll provider, which totaled $6,590 (Fastest Labs expects Fastest Labs Businesses to conduct their own payroll); (iii) 401k costs Fastest Labs paid to employees, which totaled $7,301; (iv) costs the Affiliate Location incurred in providing health insurance to its employees, which totaled $18,626; (v) manager’s salary totaling $51,226; (vi) entertainment, which totaled $141; (vii) meals, which totaled $349; (viii) taxes (except for payroll tax); and (ix) payroll (as well as associated taxes) for additional employees in excess of typical headcount, which totaled $72,801.

• Fastest Labs does not expect Fastest Labs Business owners to provide health insurance or 401k contributions to their employees. The manager’s salary is excluded as the salary is above market, and Fastest Labs does not anticipate all franchisees will employ both a manager and an owner in a full-time role. Expenses relating to employee bonuses and related payroll taxes ($127,068) have been excluded as these expenses are discretionary.

• Franchise-Related Adjustments: When reviewing the financial results of the Affiliate, certain fees should be imputed as they would be paid by Franchised Locations, but not the Affiliate. An imputed Royalty Fee of 7% of Gross Revenue ($40,318) and the National Brand Fund Fee effective in 2024 of 2% of Gross Revenue ($11,520) should be considered as they would be charged to a Franchised Location, but are not charged to the Affiliate Location.

• Fastest Labs did not impute the monthly marketing expenditures for Keywords and Search Engine Optimization because the Affiliate Location spent more than the required amount on these advertising expenditures, which is reflected in the operating expenses within Part 1.

• The financial performance representations in Part 1 do not reflect all operating expenses, cost of services provided, and other costs or expenses that must be deducted from the Total Sales figures, including the Excluded Operating Expenses and non-operating expenses, to obtain net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your Fastest Labs Business.

• “Adjusted Earnings” equals Gross Profit less the Adjusted Expenses (i.e., the Core Operating Expenses and Franchise-Related Adjustments). Adjusted Earnings does not include the deduction of Excluded Operating Expenses or the following non-operating expenses: taxes (except for payroll taxes), interest, depreciation, amortization. Adjusted Earnings is not equal to Net Income.

• In making the Franchise Related Adjustments, Fastest Labs assumed that any additional expenses would not have a direct or indirect material effect on revenue or other expenses.

Part 2 – Gross Revenue for the Franchised Locations in the Reporting Group During the 2023 Reporting Period

All Franchised Locations in the Reporting Group

• Average Gross Revenue:  $177,550
• Highest Gross Revenue:  $502,437
• Lowest Gross Revenue:  $11,890
• Median Gross Revenue:  $150,966
• Number and Percentage That Met or Exceeded Average:  37 of 88 (42%)

Top 1/3 (57.6%) Gross Revenue

• Average Gross Revenue:  $310,318
• Highest Gross Revenue:  $502,437
• Lowest Gross Revenue:  $224,924
• Median Gross Revenue:  $275,307
• Number and Percentage That Met or Exceeded Average:  12 of 29 (41%)

Middle 1/3 (29.5%) Gross Revenue

• Average Gross Revenue:  $158,943
• Highest Gross Revenue:  $222,468
• Lowest Gross Revenue:  $99,929
• Median Gross Revenue:  $156,173
• Number and Percentage That Met or Exceeded Average:  13 of 29 (45%)

Bottom 1/3 (12.9%) Gross Revenue

• Average Gross Revenue:  $67,195
• Highest Gross Revenue:  $99,629
• Lowest Gross Revenue:  $11,890
• Median Gross Revenue:  $70,227
• Number and Percentage That Met or Exceeded Average:  18 of 30 (60%)

Large (47.7%) Gross Revenue

• Average Gross Revenue:  $176,467
• Highest Gross Revenue:  $502,437
• Lowest Gross Revenue:  $11,890
• Median Gross Revenue:  $136,968
• Number and Percentage That Met or Exceeded Average:  16 of 42 (38%)

Standard (40.9%) Gross Revenue

• Average Gross Revenue:  $158,557
• Highest Gross Revenue:  $389,841
• Lowest Gross Revenue:  $38,842
• Median Gross Revenue:  $142,908
• Number and Percentage That Met or Exceeded Average:  17 of 36 (47%)

Mid-Size (11.4%) Gross Revenue

• Average Gross Revenue:  $250,476
• Highest Gross Revenue:  $389,556
• Lowest Gross Revenue:  $25,991
• Median Gross Revenue:  $260,601
• Number and Percentage That Met or Exceeded Average:  5 of 10 (50%)

• “Gross Revenue” means the aggregate amount of all sales of services and products, and the aggregate of all charges for services performed by Fastest Labs Businesses in the Reporting Group net of discounts and bad debts.

• Territory sizes are defined based on the number of businesses within the defined territory boundaries as follows:

• “Large”: More than 12,000 businesses and up to 14,000 businesses;
• “Standard”: Between 8,500 businesses and up to 12,000 businesses; and
• “Mid-Size”: Up to 8,499 businesses.

Part 3 – Systemwide Gross Revenue for the Systemwide Reporting Groups in Calendar Years 2020 to 2023

2020

• Affiliate Location Gross Revenue:  $466,234
• Franchised Locations Gross Revenue:  $5,974,537
• Systemwide Gross Revenues:  $6,440,771
  
• Year-Over-Year Growth (Systemwide):  23.4%
  
• Systemwide Reporting Group Size:  55

2021

• Affiliate Location Gross Revenue:  $603,807
• Franchised Locations Gross Revenue:  $9,318,702
• Systemwide Gross Revenues:  $9,922,509
• Year-Over-Year Growth (Systemwide):  54.1%
  
• Systemwide Reporting Group Size:  62

2022

• Affiliate Location Gross Revenue:  $603,802
• Franchised Locations Gross Revenue:  $12,434,811
• Systemwide Gross Revenues:  $13,038,613
• Year-Over-Year Growth (Systemwide):  31.4%
  
• Systemwide Reporting Group Size:  92

2023

• Affiliate Location Gross Revenue:  $575,766
• Franchised Locations Gross Revenue:  $17,396,916
• Systemwide Gross Revenues:  $17,972,682
• Year-Over-Year Growth (Systemwide):  37.8%
  
• Systemwide Reporting Group Size:  182

• Fastest Labs defines “Systemwide Gross Revenue” as the sum of all Gross Revenue reported by the respective Systemwide Reporting Group (including the Excluded Outlets and those outlets that were open for less than 12 months in each respective calendar year so long as the Franchised Locations were open as of the end of the fiscal year).

• As used in Part 3, “Franchised Locations Gross Revenue” refers to the total of all Gross Revenue produced by Franchised Locations during the calendar year, which were active and operational as of the end of the calendar year.

• “Year-Over-Year Growth” refers to the year-over-year percent change when comparing the Systemwide Gross Revenue of a Reporting Period as compared with the Systemwide Gross Revenue reported in the previous Reporting Period. Year-Over-Year Growth is based on the total Systemwide Gross Revenue reported in each Reporting Period and does not reflect the individual year-over-year percent change in Gross Revenue for Franchised Locations or the Affiliate Location in each Systemwide Reporting Group.

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

Section VI – Fastest Labs Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️