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Board and Brush – Franchise Opportunities (For 2022)

Written by: Anna Marchesseault
Last Updated by Rocio Somoza: September 2, 2022
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Board and Brush franchise offer workshops to DIY your decoration and learn some new art techniques. This franchise is a trendy and modern studio where your friends and family can be creative.

Their goal is to turn each customer into a “DIY master” where customers can create their pieces at home

If you are interested, you might consider becoming a franchise owner of Board and Brush Creative studio.

Contents

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History of Board and Brush’s Franchise

Julie Selby founded Board and Brush Creative Studio in 2015. Julie began holding parties to make wood signs in 2014 and the success of this led to her opening up the first studio a year later. The first studio opened in Hartland, Wisconsin, and soon expanded into a franchise.

Board and Brush’s Franchise Cost

The Board and Brush franchise fee is $25,000 which is non-refundable when you sign the Franchise Agreement. Although if you are a veteran, active-duty military personnel or this is the second franchise agreement you sign with Board and Brush the initial franchise fee is $20,000 instead.

Your estimated Initial Investment

Type of Expenditure Amount Method of Payment When Due To Whom Payment is Made
Initial Franchise Fee $25,000 Lump sum payment in cash or available funds Upon signing the Franchise Agreement Us
Your Training Expenses $1,439 $4,586 As required by suppliers of transportation lodging & meals As required by suppliers of transportation, loading & meals Suppliers of transportation, lodging & meals
Premises lease deposits $1,000 $2,400 As required by landlord As required by landlord Landlord
Utilities Deposits $0 – $250 As required by utility providers As required by utility providers Utilities providers
Leasehold Improvements, Construction and/or Remodeling $5,500 $9,000 As required by supplier, contractor or landlord Before opening, as required by supplier Suppliers, contractor and/or Landlord
Furniture, Fixtures and Equipment $8,200 $9,800 As required by supplier Before opening Suppliers
Signage $1,300 $4,500 As incurred Before opening Suppliers
Business Licenses and Permits $1,000 $2,000 As required by government agencies Before opening, as required by government agencies Government Agencies
Computer Systems $1,500 $2,000 As required by suppliers Before opening Suppliers
Initial Inventory to Begin Operating $1,500 $2,000 As required by suppliers Before opening Suppliers
Office Supplies $250-$500 As required by suppliers Before opening Suppliers
Professional Fees $1,000 $5,000 As required by providers As incurred Attorney, Accountant, Other Professional Service Providers
Grand Opening Advertising $2,100 As required by supplier As required by supplier Suppliers
Insurance $400-$500 As required by insurer Before opening Insurer
Operating Expenses/Additional Funds – 3 months $8,900 $15,825 As incurred Payroll weekly, other purchases according to agreed-upon terms Employees, utilities, suppliers, etc
TOTAL $63,589 to $90,461

The estimated initial investment is $65,589 to $90,461 which is quite lower than most franchise investments which can cost up to millions of dollars. Most of the costs come from training, furniture, insurance, and operating expenses. The most expensive fee there other than the initial franchise fee is the operating expenses which just makes sure your business can operate for 3 months. This can cost between $8,900-$15,825 which is quite pricey but overlaps with the ongoing costs.

Board and Brush’s ongoing costs and fees

Other fees

Type of Fee Amount Due date Remarks
Continuing Royalty Fee 6% of monthly Gross Revenue Monthly by electronic funds transfer on the fifth day of the calendar month for gross revenues of the prior month Payable to us.
Required Minimum Expendure for Local Marketing and Advertising After the first ninety days, a minimum of $250 per calendar month. During the first ninety days of operation, you are required to spend at least $2,100 on grand opening marketing activities, which includes a minimum of $1,200 on branded promotional materials As incurred Payable to third-party suppliers. All advertising must be approved by us. Expenditures must be reported to us on or before the fifth day of the calendar month for expenditures in the prior month
Brand Fund Contribution 1% of monthly Gross Revenue, subject to increases not to exceed 3% of monthly Gross Revenue Monthly by electronic funds transfer on the fifth day of the calendar month for gross revenues of the prior month Payable to us
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Type of Fee Amount Due date Remarks
Late charge $75 As incurred If you fail to pay us the Continuing Royalty Fee, Brand Fund Fee, or if you fail to submit your Gross Revenue report when due, we may charge you $75 for insu
Interest Charge 1.5% per month from due date, or maximum allowed by law As incurred If you fail to pay us any amount when due, we may charge you interest on the unpaid balance until the payment is received
Non-Sufficient Funds Fee $50 As incurred If your check is returned on our electronic funds transfer from your bank account is denied for insufficient funds, for each occurence we may charge you an Insufficient Funds Fee
Renewal Fee $2,000 Before signing renewal agreement Payable to us
Transfer Fee 75% of the then-current initial franchise fee. For transfers to: (i) an existing franchisee in good standing, the transfer fee is 50% of the then-current initial franchise fee, (ii) an entity owned and controlled by the franchisee for convenience purposes, the transfer fee is $2,500 and (iii) a spouse, parent or child upon death or permanent disability, the transfer fee is $3,500 Before we approve the transfer Payable to us
Initial Training No charge for initial training of up to two (2) people. You pay all travel and other Travel and related expenses are due as incurred. Fees for training your key Initial training takes place in Hartland, Wisconsin. You must complete electronic pre-training modules prior to attending the

Board and Brush Franchise Royalty Fee

The Royalty Fee is 6% of monthly gross revenue.

For local marketing and advertising, it is $250 per month except for the first 90 days of the studio opening. The fee for the first 90 days is $2,100 for the grand opening and this includes the $1,200 of branded promotional materials. Also for advertising, there is a brand fund contribution which is 1% which could increase in the future but it cannot exceed 3%. The last advertising cost is advertising cooperative which is up to one half your required minimum local advertising expenditure.

There are many fees such as examining the facility that doesn’t have a clear cost so getting an estimate on this is crucial especially since it’s an ongoing fee. Also, keep in mind there are consequences when it comes to opening up your franchise late or closing it without the Board and Brush’s permission. It will cost $200 per week for every week not open from the supposed opening date and $2,000 if you close the business.

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How much do Board and Brush franchise owners make?

Board and Brush Creative Studio provide the sales of 2018, 2019, and 2020 of how much franchisors make. We have reviewed the Brush and Board franchise income for the prior few years.

In 2018, Board and Brush franchises averaged $225,571 in sales (gross revenue).

 

In 2019, Board and Brush franchises averaged $199,554  in sales (gross revenue).

Then in 2020, there were mandatory shutdowns for most studios because of Covid. The franchisor did not disclose financials for 2020 other than Board and Brush revenue fell 28% from the year before.

This is an important factor to consider whether Covid will have a large role in the success of your franchise. There is no predicting what will happen with this pandemic but with any franchise, there is a risk making sure you take precautions will give you a better chance of becoming successful.

Board and Brush Units Opened and Closed

System-wide Outlet Summary

Outlet type Year Outlets at the Start of the Year Outlets at the End of the Year Net Change
Franchised 2018 100 184 +84
2019 184 241 +57
2020 241 238 +33
Company-Owned 2018 7 5 -2
2019 5 5 0
2020 5 4 -1
Total Outlets 2018 107 189 +82
2019 189 246 +57
2020 246 242 -4

The table shows a positive net change in the number of franchised outlets except for 2020. The company-owned businesses are negative net change except for 2019 which is 0. The positive of the franchised outlets is that the majority of Board and Brush studios are franchises and they are continuously growing them each year. Each year they open up a few hundred new franchises while the company-owned franchises there are only around 4 or 5 to open each year.

This is a good sign for a future franchise owner where Brush and Board’s main focus is to open up franchises thus they put more effort and money towards them. 3 franchised outlets closed in 2020 which is most likely due to Covid. Many of the studios shut down because of the pandemic which caused a significant loss of revenue which forced some to close. For being a franchise owner excluding Covid, your franchise will most likely not close which shows it is profitable and sustainable.

How much do the owners of Board and Brush make?

Consolidated Statements of Income and Changes in Member’s Equity

2020 2019 2018
Revenue
Franchise fees $808,711 $1,297,500 $1,577,057
Royalties 1,643,331 2,284,966 1,736,836
Gift card breakage 587, 198 429,975
Brand fund contributions 235,434
Other 75,530 50,899 21,994
Total Revenue 3,350,204 4,064,340 3,335,887
Operating expenses
Employment expenses 968,658 1,254,478 975,530
Franchise business development and operational support 327,064 252,600 194,022
Brand fund marketing 235,434
General and administrative 410,208 503,474 435,691
Total operating expenses 1,941,364 2,010,562 1,605,243
Income from operations 1,408,840 2,052,788 1,730,644
Other income
Paycheck Protection Program loan forgiveness 219,950
Interest income 28,330 10,291
Total other income 219,950 28,330 10,291
Net income 1,628,790 2,081,118 1,740,935
Member’s equity- beginning of year, as reported 358,185 1,424,666 639,257
Cumulative effect of change in accounting principle (417,311)
Member’s (deficit) equity – beginning of year, as adjusted (59,126) 1,424,666 639,257
Memberes distributions (931,851) (3,147,599) (955,526)
Member’s equity – end of year $637,813 $358,185 $1,424,666

The income statement above it shows the total revenue in 2020 is $3.3 million. This was a big decrease from 2019 which was $4 million. The operating expenses were $1.4 million in 2020 which is half of the total revenue. The operating expenses take a large portion of the revenue which leaves a lot less money for you and the franchise.

franchise specialist

Board and Brush Cash flow

Consolidated Statements of Cash Flows

2020 2019 2018
Cash flows from operating activities
Net income $1,628,790 $2,081,118 $1,740,935
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 26,178 27,600 17,027
Paycheck Protection Program loan forgiveness (219,950)
Changes in assets and liabilities
Accounts receivable 104,375 (27,231) (141,822)
Related party receivables 2,810 (4,727) (1,490)
Interests Receivables (28,330) (10,291)
Prepaid expenses 10,650 (18,399) 29,400
Accounts payable 47,840 942 51,672
Related party payables 9,037 (25,582) (23,603)
Retirement plan contributions payable (55,609) 9,072 46,537
Accrued liabilities 8,402 19,165 (4,649)
Marketing liabilities (113,459) 13,218 66,954
Gift cards payable (147,764) 53,634 387,588
Contract liabilities, franchise fees (102,460) (36,250) 145,000
Net cash provided by operating activities 1,198,840 2,064,230 2,303,258
Cash flows from investing activities
Issuance of notes receivable – members (1,400,000)
Purchase of property and equipment (4,431) (23,106) (71,889)
Net cash used in investing activities (4,431) (23,106) (1,471,889)
Cash flows from financing activities:
Proceeds from long-term debt 150,000
Proceeds from Paycheck Protection Program loan 219,950
Members distributions (931,851) (1,608,276) (955,526)
Net cash used in financing activities (561,901) (1,608,276) (955,526)
Net change in cash 632,508) 432,848 (124,157)
Cash, beginning of year 1,384,416 951,568 1,075,725
Cash, ending of year $2,016,924 1,384,416
Non-cash investing activities:
Note and interest receivable distributed to member $1,539,323
Non-cash financing activity:
Forgiveness of Paycheck Protection Program loan $219,950

The Board and Brush net income in 2018 was $1.7 million, 2019 was $2.08 million and 2020 was $1.6 million. Board and Brush is profitable and even has cash on hand. Board and Brush Creative Studio has around $2 million of cash since 2020 which is a great sign. If Board and Brush have some rough periods such as Covid they have the cash to fall back on.

Conclusion

Board and Brush Creative Studio is a financially viable company that has cash on hand and is profitable. Due to Covid it did decrease revenue for the company and caused many studios to shut down. It is important to track consumer behavior and how the business picks back up post COVID.

Are you thinking about investing in Board and Brush Creative Studio, or interested in exploring more options? Make sure to check out Vetted Biz’s website for listings of other similar franchises in the Retail Product and Services industry.

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