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

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

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

Section III – Number of franchised and company-owned Hello Garage 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 Hello Garage franchise opportunity

Section V – Presentation and analysis of Hello Garage’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, highest, and lowest number of booked sales, average amount per booked sale, booked sales, install revenue, and lead to appointment conversion for the 21 franchised Hello Garage businesses operating in 56 territories that completed their first sales appointment in 2022 and have been making sales appointments for less than 2 years

• 2023 average, median, highest, and lowest number of booked sales, average amount per booked sale, booked sales, install revenue, and lead to appointment conversion for the 7 franchised Hello Garage businesses operating in 28 territories that completed their first sales appointment prior to the 2022 calendar year and have been making sales appointments for 2 or more years

• 2023 number of booked sales, average amount per booked sale, booked sales, install revenue, and lead to appointment conversion for the 2 corporate Hello Garage businesses operating in 12 territories that have been operating for 2+ years

• 2021, 2022, and 2023 gross revenue, certain costs (product cost, labor, Brand Services Fee, television, all other marketing, fuel and maintenance, technology, merchant services and insurance, small tools and equipment, and sales compensation), and gross revenue less certain costs for HG Corporate’s Hello Garage business

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

Section I – Hello Garage Franchise Costs

• Hello Garage franchise costs, based on Item 7 of the company’s 2024 FDD:

• Initial Franchise Fee:  $49,500
• Technology On-Boarding Fee and Software License Fees:  $844 to $912
• Minimum Opening Marketing Spend:  $20,000 to $30,000
• Launch Kit and Trade Show Booth:  $2,850 to $3,200
• Vehicle Financing and Vehicle Wrap:  $3,000 to $7,000
• Opening Inventory Purchase and Initial Equipment Package:  $44,604 to $49,187
• Business Licenses and Permits:  $140 to $250
• Computer System:  $0 to $4,000
• Travel Expenses to Attend Initial Training In-Person:  $2,000 to $3,000
• Insurance:  $700 to $1,500
• Franchise Resource Bookkeeping Fee – 3 Months:  $1,190 to $1,785
• Additional Funds – 3 Months:  $6,000 to $10,000
• Total Estimated Hello Garage Franchise Costs:  $130,828 to $ 160,334

Section II – Hello Garage’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Hello Garage’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

• Initial Franchise Fee:  $49,500
• Brand Services Fee:  the greater of $150 or 3% of Gross Revenue
• Minimum Local Advertising Spend Requirement:  for Franchised Businesses that operate in one Protected Territory, a minimum spend amounting to the greater of 10% of Gross Revenue or $60,000 per year. For Franchised Businesses that operate in two or more Protected Territories, a minimum spend amounting to the greater of 10% of Gross Revenue or $35,000 per Protected Territory per year.

Section III – Number of Franchised and Company-Owned Hello Garage Outlets

Franchised

2021

• Outlets at the Start of the Year:  15
• Outlets at the End of the Year:  92
• Net Change:  +77

2022

• Outlets at the Start of the Year:  92
• Outlets at the End of the Year:  141
• Net Change:  +49

2023

• Outlets at the Start of the Year:  141
• Outlets at the End of the Year:  119
• Net Change:  -22

Company-Owned

2021

• Outlets at the Start of the Year:  9
• Outlets at the End of the Year:  9
• Net Change:  0

2022

• Outlets at the Start of the Year:  9
• Outlets at the End of the Year:  10
• Net Change:  +1

2023

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  13
• Net Change:  +3

Section IV – News Updates on the Hello Garage Franchise

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

• Hello Garage’s affiliate, HG Operations Nebraska, opened one Hello Garage business in November 2019 that operates in 5 territories in the Omaha, Nebraska metropolitan area (3 territories in Nebraska, and 2 territories in Iowa) and 2 territories in Des Moines, Iowa (“HG Nebraska”).

• Hello Garage’s affiliate, HG Operations Kansas, opened one Hello Garage business in October 2020 that now operates 7 territories in the Kansas City, Missouri metropolitan area (“HG KC”).

• By January 1, 2023, the HG Nebraska and HG KC Hello Garage Businesses combined operations and are now under the same management team and operate as one Hello Garage Business in a total of 13 territories (“HG Corporate”).

• In addition, there were 28 franchised Hello Garage businesses operating in 84 territories that had completed sales appointments and were in operation for the full 12-month period ending December 31, 2023.

• Each of the territories contain about 75,000 qualified households.

• The charts include the value of all customer sales during the applicable periods.

Part 1 – 21 Franchised Hello Garage Businesses Operating for Less Than 2 Years During the 12-Month Period Ending December 31, 2023

• The table below represents 21 Hello Garage franchised businesses operating in 56 territories that completed their first sales appointment in 2022 and have been making sales appointments for less than 2 years for the 12-month period ending December 31, 2023.

Number of Booked Sales

• High:  227
• Average:  118
• Median:  113
• Low:  26

Average Amount Per Booked Sale

• High:  $6,540
• Average:  $4,854
• Median:  $4,662
• Low:  $3,009

Booked Sales

• High:  $1,265,770
• Average:  $577,279
• Median:  $559,695
• Low:  $118,598

Install Revenue

• High:  $1,294,370
• Average:  $557,781
• Median:  $511,846
• Low:  $102,776

Lead to Appointment Conversion

• High:  81%
• Average:  63%
• Median:  61%
• Low:  49%

Part 2 – 7 Franchised Hello Garage Businesses Operating for 2+ Years During the 12-Month Period Ending December 31, 2023

• The table below presents data Hello Garage collected respecting those remaining 7 Hello Garage franchised business operating in 28 territories that completed their first sales appointment prior to the 2022 calendar year and have been making sales appointments for 2 or more years for the 12-month period ending December 31, 2023.

Number of Booked Sales

• High:  261
• Average:  138
• Median:  137
• Low:  44

Average Amount Per Booked Sale

• High:  $5,356
• Average:  $5,013
• Median:  $5,179
• Low:  $4,607

Booked Sales

• High:  $1,384,509
• Average:  $706,035
• Median:  $651,853
• Low:  $202,718

Install Revenue

• High:  $1,318,973
• Average:  $666,064
• Median:  $694,838
• Low:  $126,494

Lead to Appointment Conversion

• High:  75%
• Average:  59%
• Median:  59%
• Low:  52%

Part 3 – 2 Corporate Hello Garage Businesses Operating for 2+ Years During the 12-Month Period Ending December 31, 2023

• The table below presents data Hello Garage collected respecting the HG Nebraska and HG KC Hello Garage Business operating in 12 territories.

Number of Booked Sales

• HG KC:  385
• HG Nebraska:  413

Average Amount Per Booked Sale

• HG KC:  $6,113
• HG Nebraska:  $8,034

Booked Sales

• HG KC:  $2,379,682
• HG Nebraska:  $3,438,351

Install Revenue

• HG KC:  $2,106,099
• HG Nebraska:  $2,950,470

Lead to Appointment Conversion

• HG KC:  65%
• HG Nebraska:  69%

• Not included in the tables above are any Hello Garage franchised businesses that completed their first sales appointments in 2023 or 2024 or HG Nebraska’s Des Moines territories which began operations during 2023.

• The 2023 data excludes 1 franchisee operating in 2 territories that transferred their business during the 12-month period ending December 31, 2023, 2 franchisees operating 5 territories that were not in operation for the entire 12-month period ending December 31, 2023, 11 franchisees operating in 43 territories that ceased operations during the 12-month period ending December 31, 2023, 10 franchisees operating in 28 territories that completed their first sales appointment during the 12-month period ending December 31, 2023, and 1 franchisee operating in 3 territories that opened and closed in 2023.

• “Booked Sales” are the total customer sales during the relevant period.

• “Average Amount Per Booked Sale” is the total Booked Sales divided by the Number of Booked Sales.

• “Install Revenue” is the total Gross Revenue received from installations performed during the relevant period.

• “Lead to Appointment Conversion” is the percentage of time that a customer lead resulted in a sales appointment.

Part 4 – Gross Revenue, Costs as a Percentage of Gross Revenue of HG Corporate’s Hello Garage Business for the 12-Month Period Ending December 31, 2021, December 31, 2022, and December 31, 2023

• The following table below includes the historic Gross Revenue and certain expenses during the 12-month period ending December 31, 2021, December 31, 2022, and December 31, 2023 based on data Hello Garage collected respecting HG Corporate.

2021

Gross Revenue:  $2,446,788 (100.00%)

Certain Costs as a Percentage of Revenue

• Product Cost:  36.15%
• Labor:  15.54%
• Brand Services Fee:  8.00%
• Television:  3.85%
• All Other Marketing:  8.54%
• Fuel and Maintenance:  1.83%
• Technology:  0.64%
• Merchant Services and Insurance:  2.56%
• Small Tools and Equipment:  1.36%
• Sales Compensation:  3.94%
• Total Certain Costs:  82.41%

Gross Revenue Less Certain Costs:  $430,485 (17.59%)

2022

Gross Revenue:  $3,990,678 (100.0%)

Certain Costs as a Percentage of Revenue

• Product Cost:  37.08%
• Labor:  14.51%
• Brand Services Fee:  8.00%
• Television:  4.62%
• All Other Marketing:  10.23%
• Fuel and Maintenance:  1.86%
• Technology:  0.57%
• Merchant Services and Insurance:  2.27%
• Small Tools and Equipment:  0.95%
• Sales Compensation:  6.18%
• Total Certain Costs:  86.27%

Gross Revenue Less Certain Costs:  $547,536 (13.72%)

2023

Gross Revenue:  $5,056,568 (100.00%)

Certain Costs as a Percentage of Revenue

• Product Cost:  37.8%
• Labor:  14.7%
• Brand Services Fee:  3%
• Television:  6.6%
• All Other Marketing:  9.1%
• Fuel and Maintenance:  2.1%
• Technology:  0.4%
• Merchant Services and Insurance:  2.5%
• Small Tools and Equipment:  1.1%
• Sales Compensation:  7.1%
• Total Certain Costs:  84.4%

Gross Revenue Less Certain Costs:  $787,965 (15.6%)

• “Gross Revenue” means the aggregate amount of all sales of goods and services, whether for cash, by check, credit card or otherwise, made or provided at or in connection with the Franchised Business. “Gross Revenue” does not include any federal, state, municipal or other sales, value added or retailer’s excise taxes that you pay or accrue. For the purposes of the Franchise Agreement, a sale occurs at the time the goods are provided or installed or the services are performed. Gross Revenue will not be adjusted for uncollected accounts.

• “Product Cost” reflects the costs as a percentage of revenue of the total costs incurred to acquire the required material inventory.

• “Labor” reflects the costs as a percentage of revenue of the amount spent on installation crew labor, including employees and independent contractors. Labor does not include a salary for a general manager or any sales or administrative staff. Hello Garage assumes that your Designated Owner will act as the Operating Manager.

• “Brand Services Fee” reflects the costs as a percentage of revenue of the brand services fee that will be due under the Franchise Agreement. As a new franchisee, you will pay the Brand Services Fee equal to the greater of 3% of Gross Revenue or $150 per year. Franchisees under older versions of the Franchise Agreement were required to pay a total of 8% of Gross Revenues on royalty and brand fund fees.

• “Television” reflects the costs as a percentage of revenue of the amounts that HG Corporate spent on television advertising.

• “All Other Marketing” reflects the costs as a percentage of revenue for all marketing costs that are not covered in the Brand Services Fee or Television advertising.

• “Fuel” reflects the costs as a percentage of revenue of the fuel for your vehicle, sales vehicle, and other equipment in the operation of your Franchised Business.

• “Maintenance” reflects the costs as a percentage of revenue of maintaining and repairing the equipment and vehicle.

• “Technology” reflects the costs as a percentage of revenue of the technology you are expected to purchase in the development and operation of your Franchised Business.

• “Merchant Services and Insurance” reflects the costs as a percentage of revenue of credit card processing fees and insurance.

• “Small Tools and Equipment” reflects the costs as a percentage of revenue of tools and equipment needed for the Dream Team installers.

• “Sales Compensation” reflects employees’ base salary and commission expenses as a percentage of revenue for the portion of that Gross Revenue that was not sold by the franchise owner or a General Manager.

• As noted, the information above only includes certain key expenses that HG Corporate incurred, but it does not include all expenses you will incur. Those expenses may include phones, printers, travel, benefits, rent, and interest expenses

• The data presented in Item 19 is based on the information reported to Hello Garage by its affiliates or franchisees. You should conduct an independent investigation of the costs and expenses you will incur in managing your own Hello Garage Franchised Business.

• There are no material financial and operational characteristics of the company-owned territories that are reasonably anticipated to differ materially from future operational franchise outlets.

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