Download Our Exclusive Education A franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More Guide
Code Ninja is a child focused educational program that teaches kids a variety of subjects such as computer programming, coding, math, logic, and teamwork. Code Ninja’s curriculum teaches kids to code using games that they already know such as two popular names in the industry: Minecraft and Roblox.
The first Code Ninjas Center began operations March 2017 in Pearland, Texas. Currently Code Ninja has 243 franchised locations and 4 company or affiliate owned locations. A “Code Ninjas Center” operates from a fixed retail location designed to make the location welcoming, comfortable, and easily identifiable for customers. Code Ninjas Centers operate from retail locations ranging from 1,200 to 2,400 square feet.
Franchisees also have the option to choose to add an optional Dojo2Go mobile ‘edutainment’ trailer to your A franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate. What is a Franchise?… More. “Dojo2Go” enables franchisees to host external gaming events and parties for schools, businesses, and other events within their respective territory.
David Graham founded the company and was the Manager since inception until August 2020. In August 2020, Mr. Graham became the Chairman of the Board. Mr. Graham had previous experience in the educational coding business. As from 2010 to 2016 he was the President and CEO of Coder for Rent LLC in the Houston Texas area.
The initial license fee for a Code Ninja franchise is $31,000. This is the upfront fee that must be paid when opening a Code Ninja franchise.
The estimated total investment necessary to begin operation of a Code Ninja franchise ranges from $130,3000 to $348,550.
You also have the option to pay an additional $80,000 to $100,000 if you choose to add an optional Dojo2Go mobile ‘edutainment’ trailer to your franchise.
The following costs are part of the upfront costs included in the The amount of funds necessary to begin operations of a business or franchise including the first three months of operation….. Many of these are one-time fees that are needed to launch the franchise.
|Business Licenses & Incorporation||$200– $1,000|
|Leasehold Improvements||$30,000 – $165,000|
|Furniture, Fixtures, Equipment, and Supplies||$35,000 – $70,000|
|Architect / Engineering Fees||$2,500 – $10,000|
|Rent, Security Deposits and Utility Deposits||$4,000 – $12,000|
|Other Professional Fees||$500 – $3,000|
|Insurance Deposit||$500 – $4,000|
|Initial The value of the total finished and unfinished goods and materials the business holds for future sale…. of Product and Supplies||$5,000 – $12,000|
|Training Expenses||$5,000 – $12,000|
|Grand Opening Advertising||$500 – $2,500|
|Additional Funds (For the initial 3 months of operations)||$15,000 – $30,000|
|Total Estimated Initial Investment||$130,300 – $348,550|
|Optional: Dojo2Go Mobile||$ 80,000 – $ 100,000|
The Code Ninja franchise royalty fee is 6.5% of net sale or the minimum amount of $500. The franchisee must pay the higher of the two.
Code Ninjas Holdings LLC does not disclose any individual retail location sales in Item 19 of their Franchise Discloser Document (FDD). However, if you are purchasing an existing outlet, the company may provide you with the actual financial records of that outlet.
We can access and analyze Code Ninjas Holdings LLC’s One of the major financial statements focused on a business’s revenues and expenses in a particular period. It is also known as the profit and loss statement. The income statement includes the gross profit, earnings before tax, and net profit.Tax Returns: The forms a business makes on an annual statement of income and personal circumstances sent to the IRS to… and therefore are able to gauge a rough estimate of the sales of each location.
Code Ninja Holdings LLC Royalty Income was $ 1,771,304 in 2020.
This represents 6.5% (Royalty fee) of the net sales of all franchised locations. By having these two numbers we can infer 2020 total net sales (only franchise locations)= $ 27,250,830
To discount the locations that recently opened, we take the franchise location total from the prior year’s end. In this case, there were 194 franchise locations at the end of 2019.
Estimated single location net sales $27,250,830/ 194 = $ 140,468.
Code Ninja Franchise Sales are estimated to be $140,000 per year. This figure might be lower than a typical year given the 2020 pandemic.
|Franchise revenue||$ 3,185,554|
|Sales revenue||$ 352,023|
|Royalty income||$ 1,771,304|
|Royalty income – related party||$ 608,291|
|Rebate income||$ 372,304|
|Administrative fees||$ 529,377|
|One-time income||$ 688,155|
|Total Revenue||$ 7,507,008|
|General and administrative||$ 533,159|
|Professional fees||$ 924,265|
|Salaries and wages||$ 3,083,837|
|Royalty expense – related party||$ 608,291|
|Also known as Cost of Sales, Cost of Goods Sold includes the direct costs associated with generating revenue. Depending on the business, it can be physical products, supplies, and/or payroll…. More||$ 2,654|
|Bad debt||$ 178,826|
|A reduction in the value of an asset over time, due to wear and tear….||$ 32,675|
|Total Expenses||$ 7,094,183|
|Net income from Operations.||$ 412,825|
|Other expense||$ (52,249)|
|Exchange gain||$ 5,214|
|A payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off over time to borrow in purchasing a business…. expense||$ (3,089)|
|Interest expense – loan cost amortization||$ (70,000)|
|Paymentirkind interest expense||$ (167,496)|
|Net Other Expense||$ (287,620)|
|Net Income before State Margin Tax||$ 125,205|
|State Margin Tax||$ (42,109)|
|Net Income||$ 83,096|
Overall, Code Ninja is a When the earnings in a given period of time is more than the expenses in a business…. business, with a net income of $83,096 in 2020. The highest revenue stream is from Franchise Revenue which accounts for over $3 million. Royalty Income, which is 6.5% of net sales of each franchise, accounts for about $1.8 million. The Franchise fee of 6.5% is only slightly bigger than the industry average of 6%.
Their expenses are also relatively equal compared to their revenue with net income from operations of just over $ 400,000. The biggest expense item is salaries and wages which is just above $3 million indicating the management team is distributing Total earnings received by a business based on the U.S. Income Tax Return. The financial numbers of these earnings depend on the type of business, but can include income, guaranteed payments, compensation, interest, depreciation, elective deferrals, and contributions.For further details on how to calculate earnings and where to find financial numbers on tax return forms based on the type of… back to themselves and taking profits instead of leaving it in the business.
|Cash Flows from Operating Activities|
|Net Income||$ 83,096|
|Adjustments to reconcile net income net cash used by operating activities:|
|Payment-in-kind interest expense||$ 167,496|
|Bad debt||$ 178,826|
|Changes in operating assets and liabilities:|
|Accounts receivable||$ (52,848)|
|Prepaid expenses||$ (38,210)|
|Security deposit||$ (3,625)|
|Accounts payable||$ 370|
|Credit car payable||$ 20,225|
|Accrued payroll||$ 97,792|
|Deferred franchise revenue||$ (1,663,220)|
|Net Cash Used By Operating Activities||$ (1,255,706)|
|Cash Flows from Investing Activities|
|Repayment on related-party payables||$ (471,293)|
|Collection on related party receivables||$ 3,725,002|
|Purchase of property and equipment||$ (57,512)|
|Net Cash Provided by Investing Activities||$ 3,196,197|
|Cash Flows from Financing Activities|
|Borrowing on paycheck protection program loan||%%EDITORCONTENT%%nbsp; 512,518|
|Borrowing on notes payable||%%EDITORCONTENT%%nbsp; 2,992,778|
|Member contributions||$ 13,005|
|Member distributions||$ (4,764,529)|
|Net Cash Used by Financing Activites||$ (1,246,228)|
|Net Increase in Cash||$ 694,263|
|Cash, beginning of year||$ 1,195,004|
|Cash, end of year||$ 1,889,267|
|Supplemental The net profit before taxes plus payments to the owner(s), interest, and depreciation of assets…. information|
|Cash paid for interest||$ 3,089|
|Cash paid for state margin tax||$ 20,947|
In 2020, Code Ninjas net income was a little over $80,000, but their cash and cash equivalents were almost $ 1.9 million an increase of almost 60% from the beginning of the year. This indicates the company’s cash flows from investing activities is producing a good return.
The number of Code Ninja centers has been growing over the past three years. In 2018 the company started with just 3 outlets, 2 franchised and 1 company or affiliated owned and ended the year with 73 outlets. In 2019 the company ended the year with 196 outlets, a 168% Growth Rate The Growth Rate is the percentage change of total franchise units from one year to the next. A higher Growth Rate signifies an expanding franchise system…. More for new locations. For 2020 the company ended the year with 247 units, a 26% increase in locations. Due to how new Code Ninja franchise system is, it explains the high growth in locations opening and should continue to increase as the company matures.
Code Ninja is a relatively new concept in the Education industry but has seen exponential growth in franchise openings over the last three years. As technology becomes a prominent focus in our society, skills like coding, logic, and math are being demanded more.
While we are unable to provide exact figures on the potential earnings of franchisees, through analyzing the Income Statement and Cash Flow Statement of Code Ninja Holdings LLC it is apparent that they currently are in good financial health and profitable just a couple years after inception in 2017. Since the company or their affiliates only operates 4 locations and have 243 franchise locations, this is a clear indicator that the Franchisor is committed to building out and expanding their franchise locations. We strongly recommend you speak to atleast 5 Code Ninja franchisees to better understand the financials (see questions to ask).
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