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Clean Eatz Franchise Has Amazing Returns in 2023

Written by: Vetted Biz Franchise Research Team
Last Updated by Ailen Faiad: January 23, 2023
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This article is based on its 2022 FDD

Clean Eatz franchise is a healthy restaurant concept that features weekly meal plans and individual meals for in-café and take-home eating. It launched in 2011 and started franchising in 2015. It was co-founded by husband and wife Don and Evonne Varady.

Contents

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How Is Clean Eatz Franchise Positioned in the Food and Beverage Industry?

The Food and Beverage industry in the U.S. accounts for 13% of all manufacturing employment in the country. Around 1.46 million people get employed in this industry. Food franchises make up to 36% of the total franchise establishments in the U.S., and it is expected to create 1.6 million more jobs by 2027. The annual growth rate in the industry is around 2% and the EBITDA multiplier is around 3x.

Clean Eatz Franchise

How Much Is a Clean Eatz Franchise?

The initial Clean Eatz Franchise Fee is $49,500. You have to pay this upfront fee when opening a Clean Eatz franchise

Clean Eatz Franchise Cost

The estimated total investment necessary to begin the operation of a Clean Eatz Franchise ranges from $256,000 to $662,000. The following costs are part of the upfront costs included in the initial investment for a Clean Eatz. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it cost to buy a Clean Eatz franchise in 2022.

Estimated Initial Investment

Type of expeditureAmountTo Whom Payment Is to Be Made
LowHigh
Initial Franchise Fee$49,500$49,500Us
Travel and Living Expenses$500$2,000Airlines, Hotels, Restaurants. etc
Rent or Real Estate$2,500$16,000Lessor
Cafe Construcction$140,000$377,000General contractors, subcontractors
Furniture$0$5,000Vendors
Signage$5,000$20,000Vendors
Miscellaneous Opening Costs$4,000$10,000Suppliers, Utilities, etc
Initial Inventory$10,000$12,000Approved suppliers
Equipment$14,500$110,000Exclusive equipment vendor
Advertising/Marketing$5,000$10,000Distribution service and media
Insurance$2,500$5,000Insurance Company / Agent
Technology Package$2,500$4,000Vendors
Additional Funds for Initial Three Months$20,000$40,000Suppliers, Professional Advice, Utilities
Delayed Opening Fee$0$1,500Us
TOTALS$256,000$662,000 

Ongoing Fees

Royalty: The Royalty Fee is 6% of Gross Sales, $100 weekly minimum

Regional Advertising Co-Op: 1%3% of Gross Revenues

Local Marketing: Minimum of 1% of Gross Revenues per week

National Marketing: 2% of Gross Revenues per week

Technology Fee: $150 per month

Clean Eatz Franchise

How Much Do Clean Eatz Franchise Owners Make?

Category Average of Category Top 25% of Category Bottom 25% of Category Median of Category
Gross Sales $1,050,858 $1,313,468 $649,477 $1,054,946
Cost of Goods Sold $416,979 $556,088 $264,116 $404,261
Labor $138,116 $260,373 $80,138 $162,631
Occupancy Cost $63,284 $118,425 $42,323 $77,059
Other Operating Costs $236,871 $309,036 $239,837 $193,524
Miscellaneous Income $52,861 $0 $100 $92,584

2021 Clean Eatz Median Franchise Sales: $1,054,946

Initial investment (midpoint)%Profit margin of median franchise salesEstimated ProfitsTime to recoup investments
$459,00020%$210,9893.75 years
22.5%$237,3623.5 years
25%$263,7373.25 years

Based on the median sales provided by Clean Eatz’s franchise locations, at an average of a 22.5% profit margin it will take around 3.5 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 22.5% profit margin, which would elongate getting a return on your investment.

Many factors affect the sales, costs, and expenses of your Franchised Store, such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace; the presence of other Food and Beverage stores; and the extent of market penetration and brand awareness that Clean Eatz stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.

Clean Eatz Franchise

Is the Clean Eatz Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Clean Eatz franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $5 Million Net Sales

  • Estimated Selling Price = Net Sales * 0.55

When you go to sell a Clean Eatz franchise based on the median multiple of .55 and net sales in 2021 of $1,054,946, it would sell for $580,220. This is significantly higher than the midpoint investment of $459,000.

The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.

Clean Eatz (Franchisor) Income Statement Key Insights

Clean Eatz Franchising LLC Statements of Operations and Member’s Equity:

Years ended December 31,
2021 2020
SALES
Franchise Fees $ 832,838 $ 257,072
Royalty Fees 3,223,397 1,989,034
Advertising Fees 645,719 334,698
Tech Fees 105,300 21,750
Other Income 110,293 165,215
Total Sales 4,927,547 2,767,769
COST OF SALES
Sales comission 681,177 77,734
Gross Profit 4,246,370 2,690,035
OPERATING EXPENSES
Advertising 512,891 563,679
Office Expenses 84,782 65,849
Other operating expenses 423,317 338,622
Payroll & Payroll Taxes 511,288 386,266
Rent 39,764 41,198
Professional Fees 198,386 154,760
Events 3,100
Interest expense 2,324 2,969
Depreciation 17,569 17,886
Amortization 6,667 2,667
Total Operating Expenses 1,800,118 1,573,896
Net Operating Income 2,446,252 1,116,139
Extinguishment of debt 50,600
Gain on disposal of assets 8,179
Employee Retention Tax Credit 123,113
Net Income 2,569,365 1,174,918

Clean Eatz is a profitable business for the franchisor with retained earnings of $2.56 million in 2021. Compared to $1.17 million in 2020, they saw an increase of 124% from 2020 to 2021. This is a good indication of high growth as a company overall.

Clean Eatz Franchise

How Many Clean Eatz Units Have Opened and Closed?

Outlet TypeYearOutlets at the Start of the YearOutlets at the End of the YearNet Change
Franchised20193941+2
20204148+7
20214867+19
Company-Owned2019330
2020330
202132-1
Total Outlets (United States)20194244+2
20204451+7
20215169+18

Over the last three years, the company has been in expansion. Over the last three years, franchises have opened at a rate of 9 units a year. Considering it is a relatively newer franchise, this rate of growth is good.

Conclusion

Clean Eatz is a good offering on the market. Their average EBITDA is amazing and can be attributed mostly to their five revenue streams – café menu, Grab ‘N’ Go options, weekly meal plans, Marketplace products, and catering.

While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Food and Beverage industry.

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