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Metal Supermarkets Franchise ProfileIndustrial Franchises > Manufacturing Support Services |
What Are the Initial Investment Requirements for a Metal Supermarkets Franchise?
To open a Metal Supermarkets franchise, you will need to prepare for an initial investment ranging from $340,500 to $592,500. This includes a franchise fee of $44,500. Additionally, you should have a net worth between $250,000 and $500,000. It's essential to have sufficient cash reserves to cover not just the franchise fee but also other startup costs and initial operating expenses.
What Are the Ongoing Fees and Financial Performance Metrics?
Metal Supermarkets requires franchisees to pay a royalty fee of 6% on gross sales, along with a marketing fee of 2%. The average annual revenue per unit is approximately $2,160,901, with a median revenue of $1,955,191. Understanding these financial metrics is crucial for evaluating the potential profitability of your franchise investment.
How Long Does It Take to Break Even with a Metal Supermarkets Franchise?
Franchisees can expect to reach breakeven within about 18 months of operation. The investment payback period is notably short, averaging just 6 months. This rapid return on investment can be an attractive feature for potential franchisees looking for a profitable venture in the metal supply industry.
What Is the Growth Trend for Metal Supermarkets Franchises?
The number of franchised units has shown consistent growth, increasing from 64 units in 2021 to 81 units in 2023. This upward trend indicates a healthy demand for the franchise model and could suggest a strong market presence. Understanding this growth can help potential franchisees assess the viability of entering the Metal Supermarkets network.
Metal Supermarkets Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
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Metal Supermarkets Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes shown in the chart and table.
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| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 68 | 75 | 83 |
| Net Change YoY | 7 | 8 | |
| Franchised Units | 64 | 72 | 81 |
| Net Change YoY | 8 | 9 | |
| Corporate Units | 4 | 3 | 2 |
| Net Change YoY | -1 | -1 |
Investment Overview
The Metal Supermarkets franchise offers an initial investment range between $340,500 and $592,500, making it accessible for aspiring entrepreneurs. The franchise fee is set at $44,500, with ongoing royalty fees of 6% and a marketing fee of 2%. Potential franchisees should also be prepared to meet a net worth requirement of $250,000 to $500,000, ensuring that they have the financial stability to support their new venture.
Revenue Potential
Franchisees can expect significant revenue potential, with average annual revenue per unit reported at $2,160,901. The median annual revenue stands at $1,955,191, while revenue can range from as low as $284,230 to as high as $6,092,476. This broad range indicates the potential for profitability, depending on factors such as location and operational efficiency.
Breakeven and Payback
New franchise owners can anticipate breakeven within approximately 18 months. The investment payback period is notably swift, averaging just 6 months. This rapid return on investment highlights the business model's efficiency and potential for generating cash flow early in the franchise lifecycle.
Franchise Growth
Metal Supermarkets has demonstrated consistent growth in its franchised units, increasing from 64 in 2021 to 81 in 2023. This upward trajectory reflects the brand's expanding market presence and the growing demand for metal supply solutions. Additionally, the number of corporate units has slightly decreased, indicating a strategic focus on franchising as a primary growth avenue.
Operational Expenses
Franchisees should be aware of average annual operating expenses totaling around $210,000. Key expense categories include rent and utilities at $50,000, management and administrative salaries at $120,000, and marketing and advertising at $15,000. Understanding these costs is essential for effective budgeting and financial planning.
Financial Performance
The financial performance of Metal Supermarkets franchises shows a gross profit margin of 48.7%, suggesting a healthy balance between revenue and cost of goods sold, which averages $1,109,229. However, the EBITDA stands at -$11,557, indicating that while revenues are strong, operational efficiencies may need to be improved to achieve profitability. This insight is crucial for franchisees aiming to optimize their financial performance.
Frequently Asked Questions
The initial investment for a Metal Supermarkets franchise ranges from $340,500 to $592,500, which includes the franchise fee and other startup costs.