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Sculpture Hospitality Franchise ProfileBusiness Services Franchises > Consulting |
What Are the Initial Investment Requirements for a Sculpture Hospitality Franchise?
To open a Sculpture Hospitality franchise, you’ll need an initial investment ranging from $45,500 to $64,500. This includes a franchise fee of $25,000. Additionally, you should have cash reserves between $45,500 and $49,500 and a net worth of $250,000 to $500,000. Understanding these financial requirements is crucial for aspiring franchisees to gauge their readiness for this investment opportunity.
What Are the Ongoing Fees Associated with Sculpture Hospitality?
As a franchisee, you will be responsible for ongoing fees, including an 8% royalty fee on gross sales and a 3% marketing fee. These fees contribute to the brand’s overall marketing efforts and operational support, which can be vital for sustaining business growth and brand recognition in your local market. It’s essential to factor these fees into your financial planning to ensure profitability.
What is the Average Revenue Potential for a Sculpture Hospitality Franchise?
Sculpture Hospitality franchises have shown promising revenue potential, with an average annual revenue of approximately $1,758,408 per unit. The median annual revenue stands at $1,429,000, indicating a solid financial outlook for franchisees. Understanding these revenue figures can help you assess the viability of this franchise model in your market.
How Long Does it Take to Break Even with a Sculpture Hospitality Franchise?
Franchisees can expect to reach breakeven within approximately 18 months of operation. This timeline is critical for potential investors to consider, as it reflects the speed at which they can recoup their initial investment and start generating profit. Having a clear understanding of the breakeven period can help in strategic planning and financial forecasting.
Sculpture Hospitality 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:
Sculpture Hospitality Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 238 | 214 | 197 |
| Net Change YoY | -24 | -17 | |
| Franchised Units | 227 | 203 | 183 |
| Net Change YoY | -24 | -20 | |
| Corporate Units | 11 | 11 | 14 |
| Net Change YoY | 0 | 3 |
Investment Overview
The Sculpture Hospitality franchise offers a compelling investment opportunity with a low initial investment ranging from $45,500 to $64,500. The franchise fee is set at $25,000, along with ongoing royalty and marketing fees of 8% and 3%, respectively. Prospective franchisees should be prepared to have cash reserves between $45,500 and $49,500, and a net worth requirement between $250,000 and $500,000 to ensure adequate financial backing for their venture.
Revenue Potential
Sculpture Hospitality franchises have demonstrated strong revenue potential, with an average annual revenue per unit of approximately $1,758,408. The median annual revenue stands at $1,429,000, showcasing the brand's ability to generate substantial income. Even at the lower end, units have achieved revenues of $1,347,720, indicating a solid business model that can support franchisee profitability.
Breakeven and Payback Period
Franchisees can expect to break even within approximately 18 months of operation. This relatively quick breakeven time is attractive for new investors, as it allows for faster recovery of initial investments. The investment payback period aligns with the breakeven timeline, providing a clear path to financial stability.
Franchise Growth
Sculpture Hospitality has experienced fluctuations in the number of franchised units over the years, with 227 units in 2020, 203 in 2021, and 183 in 2022. Despite the decrease in units, the franchise maintains a robust presence in the market, indicating resilience and potential for future growth. Corporate-owned units have also increased from 11 in 2021 to 14 in 2022, reflecting the brand's commitment to expanding its footprint.
Financial Performance
The average annual revenue for Sculpture Hospitality franchises is reported at $3,516,816, with a gross profit margin of 91.45%. However, the average operating expenses are notably high, totaling approximately $554,456.51 annually. This indicates that while revenue potential is strong, careful management of expenses is crucial for achieving profitability and positive EBITDA, which currently shows a negative figure of $(178,882).
Operational Insights
Franchisees should be aware of the various operating expenses that contribute to overall costs. Key expenses include payroll and benefits averaging $321,705.26, administrative and selling expenses at $141,713.80, and professional fees totaling $38,618.96. Understanding these costs is essential for effective budgeting and financial planning, ensuring that franchisees can manage their operations efficiently while maximizing profitability.
Frequently Asked Questions
The initial investment for a Sculpture Hospitality franchise ranges from $45,500 to $64,500, which includes a franchise fee of $25,000.