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Mr. Appliance Franchise ProfileHome Based Franchises > Home Repair Services |
What Are the Initial Investment Costs for a Mr. Appliance Franchise?
To start a Mr. Appliance franchise, you'll need to budget for an initial investment that ranges from $113,750 to $204,350. This includes a franchise fee of $63,750, along with additional costs for equipment, inventory, and other startup expenses. It's important to have cash available within this range, as well as a net worth between $100,000 and $500,000 to qualify for ownership. Understanding these financial requirements is crucial to ensure you’re prepared for the journey ahead.
What Are the Ongoing Fees and Royalties for Mr. Appliance Franchisees?
Franchisees of Mr. Appliance are required to pay a royalty fee that typically falls between 5% and 7% of their gross sales. Additionally, there is a marketing fee of 2% to help promote the brand and support local marketing efforts. These ongoing fees are essential for maintaining brand standards and accessing the collective resources of the franchise network, so it’s vital to factor them into your financial planning.
What Is the Average Revenue Potential for a Mr. Appliance Franchise?
On average, a Mr. Appliance franchise generates annual revenue of approximately $613,664, with a median revenue of $252,000. The revenue can vary significantly, with some units earning as low as $195,000 and others reaching as high as $1,250,000. This potential for earnings can be influenced by factors such as location, market demand, and operational efficiency, making it important for franchisees to actively manage their business for optimal performance.
What Is the Financial Outlook for Mr. Appliance Franchisees?
Franchisees can expect a breakeven period of around 18 months, with an investment payback period of approximately 24 months. The average EBITDA stands at about $139,987, which represents 25.45% of revenue. With operating expenses averaging $254,378, careful management of both revenue and costs is critical to achieving profitability. Understanding these financial metrics can help you make informed decisions as you navigate the franchise landscape.
Mr. Appliance 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.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Mr. Appliance Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 288 | 315 | 325 |
| Net Change YoY | 27 | 10 | |
| Franchised Units | 288 | 315 | 325 |
| Net Change YoY | 27 | 10 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Initial Investment
The Mr. Appliance franchise requires a low initial investment of $113,750 and a high initial investment of $204,350. The franchise fee is set at $63,750, with a cash requirement in the same range. This investment structure allows aspiring franchisees to enter the home appliance repair industry with a manageable financial commitment.
Revenue Potential
Franchisees can expect an average annual revenue of $549,180, with a median revenue of $252,000 per unit. The revenue range varies significantly, with the lowest annual revenue reported at $195,000 and the highest at $1,250,000. This potential for high earnings makes Mr. Appliance an attractive option for those looking to invest in a service-based franchise.
Royalty and Marketing Fees
Mr. Appliance charges a royalty fee of 5% to 7% of gross sales, along with a marketing fee of 2%. These fees contribute to the overall support and resources provided by the franchise, ensuring that franchisees benefit from a strong brand presence and marketing initiatives.
Breakeven and Payback Period
The average breakeven time for a Mr. Appliance franchise is approximately 18 months, with an investment payback period of around 24 months. This relatively quick return on investment is appealing for new franchisees, allowing them to see financial results sooner than in many other business models.
Franchise Growth
Mr. Appliance has shown consistent growth, increasing from 288 franchised units in 2021 to 325 in 2023. This upward trend indicates a strong brand reputation and market demand, providing potential franchisees with confidence in the franchise's stability and future expansion opportunities.
Operational Insights
Average operating expenses for a Mr. Appliance franchise are around $254,378 annually, which is about 46.24% of revenue. With a gross profit margin of 71.82%, franchisees can maintain a healthy EBITDA of approximately $139,987, showcasing the franchise's financial viability and operational efficiency.
Frequently Asked Questions
The initial investment for a Mr. Appliance franchise ranges from $113,750 to $204,350, which includes the franchise fee and other startup costs.