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FDD Talk 2019: CertaPro Painters Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

  • Section I – Background information on the CertaPro Painters franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a CertaPro Painters franchise, based on Item 7 of the company’s 2019 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a CertaPro Painters franchise, based on Items 5 and 6 of the company’s 2019 FDD
  • Section IV – Number of franchised and company-owned CertaPro Painters outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
  • Section V – Presentation and analysis of CertaPro Painters’ financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
  • 2018 average gross sales (consisting of sales for labor, material, or services) for the 319 CertaPro franchisees that operated a CertaPro franchise for the full 12 months of 2018, including those that are certified and perform commercial services
  • 12-month average revenue for the 16 franchisees who have been in production for 24 months as of December 31, 2018 (Production Year Two), sorted into three categories based on revenue; and the 17 franchisees who have been in production for 12 months (Production Year One), sorted into three categories based on revenue
  • 2018 average revenue for the 302 CertaPro franchisees that were in production for more than 2 full years as of December 31, 2018
  • 2018 total sales for residential and commercial services work produced by all CertaPro franchisees that were active at any time during the year listed, whether for a full year or only a portion of the year, including any that started or ceased operations during the year
  • 2018 average revenue, cost of goods sold, gross profit, sales expense, operations expense, marketing expense, royalty and fees, general and administrative expense, occupancy expense, other expense, and EBITDA plus owner’s compensation for 137 geographically diverse CertaPro franchisees, most of whom participate in CertaPro’s Flight Program
  • 2018 average EBITDA plus owner’s compensation for the top third, middle third, bottom third, and all 137 geographically diverse CertaPro franchisees, most of whom participate in CertaPro’s Flight Program
  • 2018 average revenue for the top third, middle third, bottom third, and all 137 geographically diverse CertaPro franchisees, most of whom participate in CertaPro’s Flight Program

Section I – Background Information

8 Things You Need to Know About the CertaPro Painters Franchise

Tennessee Franchisees Receive Top Honor

1.  At the end of January 2019, CertaPro Painters announced that Jeff and Joann Brown, Knoxville residents and the owners of CertaPro Painters of Knoxville and East Tennessee, received the company’s highest honor, the CertaCup award. The criteria for this coveted award are that the franchisee and team embody the golden rule and the company’s values, and consistently deliver an extraordinary customer experience. In addition, the winner has experienced growth in their residential and commercial painting business.

2.  For 16 years, the Browns have been serving the region and have built a strong team at every level. They continue to strive for, and deliver, the utmost in customer service.

Franchises Ranked by Average Revenues and ProfitsFranchises Ranked by Average Revenues and Profits

3.  Jeff Brown is a US Air Force veteran and was in the trucking industry for 17 years prior to owning their CertaPro Painters business. While in the trucking industry, he held many roles (sales, operations, and senior management) which helped him prepare for owning a business. According to Jeff, “CertaPro Painters was a great match and I haven’t looked back ever since. Our business is the second largest franchise in North America.”

4.  Joann Brown added, “We’re thrilled to be selected for this prestigious award. Our customers inspire us to always do our best and that is the credo of CertaPro Painters. We’re glad to have been named winners and hope that we can serve as role models for other franchisees in the system.”

Offering More Than Just Painting Services

5.  While CertaPro Painters’ main expertise is exterior and interior paint services, the brand offers a wide array of residential and commercial services that go beyond painting. Some of CertaPro’s other services include:

  • Cabinet Refinishing and Repainting – Instead of completely replacing old cabinets, CertaPro Painters can breath new life into wood surfaces with a fresh coat of paint.
  • Concrete Staining and Epoxy Finish – CertaPro Painters can apply a stain to interior or exterior concrete floors. To enhance the durability of the new stain, CertaPro will also apply an epoxy floor coating.
  • Crown Molding Services – In addition to painting crown molding, CertaPro Painters professionals are also trained to install decorative borders around fireplace mantles, baseboards, ceilings, wainscoting, and door casings.
  • Drywall Repair – Before CertaPro Painters adds a fresh new coat of paint, the team will patch, sand, and prime walls to create a flawless surface to paint on.
  • Popcorn Ceiling Removal – The crew at CertaPro Painters is trained to remove popcorn ceilings in an effective way that will leave ceilings feeling fresh.
  • Power Washing – Before painting exteriors, CertaPro Painters will power wash the exterior of a home to remove mold, oil, and old paint.
  • Wallpaper Removal and Installation – CertaPro Painters understands how difficult it can be to remove and install wallpaper. The crew at CertaPro Painters is skilled at removing wallpaper and works with clients to choose the perfect new wallpaper style.

Company History

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6.  CertaPro Painters was founded in 1992 by Charlie Chase in Oaks, Pennsylvania. Chase started the company to make residential and commercial painting services easier and more convenient for homeowners and business owners. After growing CertaPro Painters over the next decade, Chase brought on Rich Wilson to help with franchising in 2003.

7.  Today, CertaPro Painters is a subsidiary of FirstService Brands, which is also the parent company of College Pro Painters, California Closets, Pillar to Post Home Inspectors, BrandPoint Services, and TLS. There are now CertaPro Painters locations across the United States and Canada.

Entrepreneur’s Franchise 500

8.  CertaPro Painters ranked No. 284 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of CertaPro Painters franchise costs, based on Item 7 of the company’s 2019 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on CertaPro Painters’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

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  • Outlets at the Start of the Year:  332
  • Outlets at the End of the Year:  332
  • Net Change:  0

2017

  • Outlets at the Start of the Year:  332
  • Outlets at the End of the Year:  334
  • Net Change:  +2

2018

  • Outlets at the Start of the Year:  334
  • Outlets at the End of the Year:  334
  • Net Change:  0

Company-Owned

2016

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

2017

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

2018

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

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

Part 1 – Gross Sales for Franchisees in Business for At Least 12 Months

  • Gross Sales is defined as the total revenue derived from sales for labor, materials, or services performed or rendered by the franchisee, or any third-party subcontractors of the franchisee who perform services for the franchisee’s clients as part of the franchisee’s services.
  • Average Gross Sales was determined by dividing the number of franchisees into the total Gross Sales. The Median is the middle figure, with 50% being both above and below that figure.
  • Some franchisees may own more than one territory.
  • All figures are based upon information provided to CertaPro by franchisees who operated a CertaPro franchise for the full 12 months of the year, including those that are certified and perform commercial services.
  • Franchisees who provided incomplete or partial financial information during the reporting year were excluded from the chart.
  • For the purpose of the chart, if an entire existing business was sold to a new buyer, then the business was considered a continuous operation; if it were a partial sale of an existing business, the buyer was considered a new franchisee.

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