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

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

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

Section III – Number of franchised and company-owned Pool Scouts 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 Pool Scouts franchise opportunity

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

• 2023 revenue, cost of goods sold (technician labor, materials costs), gross profit, itemized expenses (royalty and service fee, marketing fee, advertising expense, credit card fees, automobile expense, insurance expense, fuel expense, fuel expense, other expenses, integrated business system fees, wages and benefits), and operating cash flow before non-itemized expenses for the VA-001 territory and the VA-002 territory (collectively, the “Entity”) of the affiliate-owned Pool Scouts business

• 2023 revenue, customer count, and service count per territory for the Entity as well as for VA-001 and VA-002

• 2023 and 2022 average revenue, customer count, and service count for the 60 franchised Pool Scouts territories that have been open and operating for 12 months or more as of December 31, 2023, by quartile

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

Section I – Pool Scouts Franchise Costs

• Initial Franchise Fee:  $50,000
• Setup Fee:  $1,000
• Mailing List Fee:  $300 to $500
• Postcard Fees:  $18,060
• Search Engine Optimization Fee:  $3,600
• Digital Marketing Fees (first 3 months):  $3,000
• Integrated Business Management Pre-Opening Fee:  $395 to $1,185
• Vehicle and Decals:  $1,800 to $5,100
• Initial Training:  $1,000 to $2,000
• Insurances:  $2,100 to $4,200
• Professional Fees:  $0 to $2,000
• Licenses:  $500 to $1,500
• Computer, Internet Devices, Phones, Software Setup:  $0 to $1,500
• Additional Funds for 3 Months:  $20,000 to $40,000
• Total Estimated Pool Scouts Franchise Costs:  $102,805 to $134,830

Section II – Pool Scouts’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $50,000
• Royalty and Service Fee:  8% of Net Revenue
• Marketing Fee:  2% of Net Revenue

Section III – Number of Franchised and Company-Owned Pool Scouts Outlets

Franchised

2021

• Outlets at the Start of the Year:  28
• Outlets at the End of the Year:  49
• Net Change:  +21

2022

• Outlets at the Start of the Year:  49
• Outlets at the End of the Year:  71
• Net Change:  +22

2023

• Outlets at the Start of the Year:  71
• Outlets at the End of the Year:  79
• Net Change:  +8

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 Pool Scouts Franchise

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

• Pool Scouts considers the pool service and maintenance industry (“Industry”) to be segmented into seasonal and year-round business models.

• Pool Scouts believes the Industry to be predominantly seasonal in the northern two-thirds of the United States (“Seasonal Business”). The locations operated by Pool Scouts’ affiliate, Local Operations, are Seasonal Businesses, running predominantly from mid-March to mid-November.

• Pool Scouts believes the Industry to be predominantly year-round in the remaining warmer climate states (“Year-Round Business”).

• In the Seasonal Business market, Pool Scouts segments the services provided into three distinct categories: (1) pool openings; (2) pool service/maintenance; and (3) pool closings.

• The Year-Round Business market consists primarily of pool service/maintenance visits, with a relatively few pool openings or closings.

• Most franchisees perform repair work at the equipment pad, which Pool Scouts teaches and supports. Some franchisees initially use third-party service providers to perform such repair services. Over time, Pool Scouts expects that most or all franchisees will obtain the appropriate technical training, experience, and any certification or licensure (as required by applicable state law), to offer repair services directly to their customers.

Part 1 – PS Local Operations (Pool Scouts’ Affiliate)

• PS Local Operations commenced business operations in January 2016, following the acquisition of the service arm of a Virginia Beach, Virginia-based pool construction firm (“Acquisition”). The Acquisition consisted of 31 service customers, 2 service vehicles, and an experienced pool service professional.

• PS Local Operations consists of two territories, VA-001 (with an estimated 8,797 Targeted Households across 8 ZIP Codes) and VA-002 (with an estimated 7,474 Targeted Households across 23 ZIP Codes).

A. Income Statement for the Period from January 1, 2023 through December 31, 2023

• The Income Statement below illustrates the expenses associated with territories VA-001 and VA-002 for PS Location Operations (collectively referred to in the table below as “Entity”) for the period from January 1, 2023 through December 31, 2023.

Entity

Revenue:  $1,276,961 (100.0%)

Cost of Goods Sold

• Technician Labor:  $307,118 (24.0%)
• Materials Costs:  $248,288 (19.4%)
• Total Cost of Goods Sold:  $555,406 (43.4%)

Gross Profit:  $718,555 (56.3%)

Itemized Expenses

• Royalty and Service Fee:  $101,917 (8.0%)
• Marketing Fee:  $25,479 (2.0%)
• Advertising Expense:  $69,488 (5.4%)
• Credit Card Fees:  $39,712 (3.1%)
• Automobile Expense:  $33,363 (2.6%)
• Insurance Expense:  $30,550 (2.4%)
• Fuel Expense:  $21,505 (1.7%)
• Other Expenses: $35,260 (2.8%)
• Integrated Business System Fees:  $4,740 (0.4%)
• Wages and Benefits:  $152,667 (12.0%)
• Total Itemized Expenses:  $514,681 (40.4%)

Operating Cash Flow Before Non-Itemized Expenses:  $203,874 (15.9%)

• The information set forth in the Income Statement summarizes the combined financial performance for PS Local Operations’ two territories, VA-001 and VA-002, from January 1, 2023 through December 31, 2023.

• “Revenue” means the revenue billed for pool openings, recurring customer services, pool closings, and one-time services and repairs.

• “Technician Labor” includes all costs (wages, taxes, etc.) for the technicians that performed the services.

• “Materials Costs” includes the actual cost of chemical products, parts, and consumables required to complete the total services for the period.

• PS Local Operations did not pay Pool Scouts any royalty fees during 2023. Pool Scouts supplemented the PS Local Operations Income Statement to include a “Royalty and Service Fee” entry to reflect the Royalty and Service Fee of 8%.

• You will be required to pay to Pool Scouts, its affiliates, or its designated suppliers all of the fees described in the disclosure document. Other than the Royalty and Service Fee, PS Local Operations incurs the same costs for these items as Pool Scouts’ franchisees will incur.

• Other expenses include bank fees, licenses and permits, charitable contributions, dues and subscriptions, office supplies, field supplies and safety gear, phone and internet, franchisee convention registration, repairs and maintenance, taxes. and uniforms.

• PS Local Operations employs a full-time general manager and a full-time assistant to run the local operations business. While PS Local Operations typically only employs one general manager, during 2023 there was approximately a 4-month period of time in which it employed 2 general managers to allow for the transition of that position to a new employee.

• The above information is stated as Operating Cash Flow Before Non-Itemized Expenses. Non-Itemized Expenses may include but are not limited to (a) rent and utilities should you decide to operate the business from a commercial location, and professional expenses such as accounting services should you decide to outsource this function.

B. Revenue, Customer, and Service Metrics

Local Operations Revenue by Territory

2022

• VA-001:  $552,491
• VA-002:  $399,512
• Entity:  $952,003

2023

• VA-001:  $703,098
• VA-002:  $562,182
• Entity:  $1,265,280

Year-Over-Year Growth Rate

• VA-001:  27%
• VA-002:  41%
• Entity:  33%

Local Operations Customer Count by Territory

2022

• VA-001:  539
• VA-002:  403
• Entity:  942

2023

• VA-001:  554
• VA-002:  377
• Entity:  931

Year-Over-Year Growth Rate

• VA-001:  3%
• VA-002:  -6%
• Entity:  -1%

Local Operations Service Count by Territory

2022

• VA-001:  4,145
• VA-002:  2,872
• Entity:  7,017

2023

• VA-001:  4,686
• VA-002:  3,616
• Entity:  8,302

Year-Over-Year Growth Rate

• VA-001:  13%
• VA-002:  26%
• Entity:  18%

C. 2023 PS Local Operations Business Performance Metrics

• The following are based on Pool Scouts’ CRM data for Local Operations.

• Customer Acquisition Cost:  PS Local Operations recruited 376 new customers for 2023 on a local marketing spend of $69,488 for an average acquisition cost of $184 per customer. The median cost to acquire a customer was $140.

• Technician Cost:  The average hourly rate during 2023 for PS Local Operations technicians was $17.09/hour. The range was $15.50/hour to $25/hour. The median wage for technicians was $16.50/hour.

• Services Per Customer:  PS Local Operations provided 8,302 services to 931 unique customers for 2023, for an average of 9 services per customer. The range of services per customer was 1 to 52. The median services per customer was 4.

• Revenue Per Truck:  PS Local Operations averaged 7 trucks during the season and generated approximately $181,994 per vehicle.

• Customers Per Truck:  The number of customers that a single truck can service will depend on the geographic market in which you operate, the density of your customer base, the efficiency of your routing and the type of service being provided. During the 2023 summer months, PS Local Operations was able to provide recurring service to 8-14 customers per truck per day, with one or two technicians. For opening and closing services, two technicians were able to service 2-5 customers per truck per day.

• Revenue Per Customer:  PS Local Operations’ average revenue per customer for 2023 was $1,359. The median revenue per customer for 2023 was $817. The high was $14,968 and the low was $51.

• Revenue Per Pool Opening:  PS Local Operations’ average revenue per pool opening for 2023 was $359. The median net revenue per pool opening for 2023 was $358. The high was $570 and the low was $100.

• Revenue Per Service Visit:  PS Local Operations’ average revenue per visit for 2023 was $153 per visit. The median net revenue per visit 2023 was $118 per visit. The high was $7,993 and the low was $10.

• Revenue Per Pool Closing:  PS Local Operations’ average revenue per pool closing for 2023 was $331 per service. The median net revenue per pool closing for 2023 was $333. The high was $844 and the low was $122.

Part 2 – Pools Scouts Franchised Businesses

• Unless otherwise noted, the following tables are based on the results of the 60 Franchised Businesses which have been open and operating for 12 months or more as of December 31, 2023.

Quartile 1

• 2023 Average Revenue:  $554,805
• 2022 Average Revenue:  $535,304
• Year-Over-Year Growth (2022-2023):  4%

• 2023 Average Number of Customers:  349
• 2022 Average Number of Customers:  350
• Year-Over-Year Growth (2022-2023):  0%

• 2023 Average Number of Services:  7,821
• 2023 Average Number of Services:  7,010
• Year-Over-Year Growth (2022-2023):  12%

Quartile 2

• 2023 Average Revenue:  $297,966
• 2022 Average Revenue:  $202,934
• Year-Over-Year Growth (2022-2023):  47%

• 2023 Average Number of Customers:  201
• 2022 Average Number of Customers:  159
• Year-Over-Year Growth (2022-2023):  26%

• 2023 Average Number of Services:  4,079
• 2023 Average Number of Services:  3,119
• Year-Over-Year Growth (2022-2023):  31%

Quartile 3

• 2023 Average Revenue:  $200,460
• 2022 Average Revenue:  $126,158
• Year-Over-Year Growth (2022-2023):  59%

• 2023 Average Number of Customers:  127
• 2022 Average Number of Customers:  107
• Year-Over-Year Growth (2022-2023):  19%

• 2023 Average Number of Services:  2,099
• 2023 Average Number of Services:  1,920
• Year-Over-Year Growth (2022-2023):  9%

Quartile 4

• 2023 Average Revenue:  $115,107
• 2022 Average Revenue:  $83,895
• Year-Over-Year Growth (2022-2023):  37%

• 2023 Average Number of Customers:  76
• 2022 Average Number of Customers:  72
• Year-Over-Year Growth (2022-2023):  6%

• 2023 Average Number of Services:  1,281
• 2023 Average Number of Services:  917
• Year-Over-Year Growth (2022-2023):  40%

• The growth rate represents the change in location performance in revenue for calendar years 2022 and 2023.

• Revenue from out of territory zip codes is included in the table for all Franchised Businesses.

• Revenue from repair services (including required parts required for those repair services) for these 60 Franchised Businesses was 13% of total revenue in calendar year 2023 and 14% in calendar year 2022.

Part 3 – 2023 Franchise System Business Performance Metrics

• Pool Scouts provided 258,117 services to 13,557 unique customers in 2023 for an average of 19 services per customer. The range of services per customer was 2 to 52. The median services per customer was 12.

• Pool Scouts averaged $1,552 per customer in 2023. The median revenue per customer was $1,115. The high was $52,263 and the low was $5.

• Pool Scouts acquired 6,875 new customers in 2023 for an average cost of $228. The median cost to acquire a customer was $232.

• System-wide revenue grew 46% in 2023.

• System-wide customer counts grew 23% in 2023.

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