College Hunks promises Honest, Uniformed, Nice, and Knowledgeable Service to its customers. They provide services in the moving industry ranging from junk removal to local and long-distance moving. College Hunks was founded by Omar Soliman and Nick Friedman when Omar noticed an opportunity to sell services that moved people’s old furniture to their new homes when they were buying new furniture at his mother’s establishment.
The Moving services industry makes $1.2bn in profit every year and pays $4.2bn in an industry where the annual revenue is $18.5bn.
College Hunks competes in the moving market against other local moving companies and giants like Walmart and UPS that offer moving services.
The estimated total investment necessary to beg
in the operation of a College Hunks Franchise ranges from $158,700 to $283,500.
The following costs are part of the upfront costs included in the initial investment for a College Hunks. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a College Hunks franchise in 2022.
|Site Built Location|
|Type of Expenditure||Estimated Amount Low||Estimated Amount High||Method of Payment||When Due||To Whom Payment is to be Made|
|Initial Franchise Fee||45,000||65,000||Lump Sum||When you sign the Franchise Agreement||Us|
|Rent||1,600||4,500||As arranged||As arranged||Landlord|
|Lease, Utility and Security Deposits||2,000||5,000||As arranged||As arranged||Landlord, Utility Companies|
|Paint and Signage for Service Vehicle||3,100||5,500||As arranged||As incurred||Approved Suppliers|
|Down Payment on Service Vehicle||3,000||24,000||As arranged||As incurred||Approved Suppliers|
|Equipment and Hand Tools||2,000||8,000||As arranged||As arranged||Approved Suppliers|
|Office Equipment and Hand Tools||2,000||6,000||As arranged||As incurred||Suppliers|
|Business Licenses & Permits||500||3,000||As arranged||As incurred||Local and other State Government Agencies|
|Professional Fees||1,000||2,500||As arranged||As arranged||Various Service Providers and Contractores|
|Insurance Deposit||7,500||24,000||As arranged||As arranged||Insurance Providers|
|Training Expense||1,500||5,000||As arranged||Payments terms arranged with suppliers and your employees||Suppliers and your Employees|
|Preopening Business Ramp Up Advertising||9,500||11,000||As arranged||As arranged||Suppliers|
|Additional Funds (6 months)||80,000||120,000||As arranged||As needed||Us, Suppliers, Eployees and other Creditors|
|Total Estimated Initial Investment||158,700||283,500||As arranged|
Once you submit an application to College Hunks, they will invite you for a Discovery Day which is followed up with next steps from them.
Royalty: 7% of Gross sales payable monthly
Technology Fee: 1% of Gross sales
Brand Development Fee: 2% of Gross sales
Renewal Fee: $5,000
Local Marketing: Greater of $1,500 or 8% of Gross sales for moving and $1,100 or 8% of Gross sales for junk removal
These fees are slightly higher than big names like UPS.
|Year||2019||2020||2021||2021 Bottom 25% Franchisees||2021 Top 25% Franchisees|
|# In Group||79||90||104||26||26|
|Average Annual Gross Sales||1,257,610||1,311,775||1,638,839||583,044||3,400,536|
|Median Annual Gross Sales||1,037,062||1,037,467||1,204,266||638,836||2,899,633|
|Number of Franchised Businesses Who Achieved or Surpassed Average Annual Gross Sales||27||31||31||–||–|
|Percentage of Franchised Businesses Who Achieved or Surpassed Average Annual Gross Sales||34%||34%||30%||–||–|
|Highest Annual Gross Sales||6,606,385||7,363,557||10,393,072||828,362||10,393,072|
|Lowest Annual Gross Sales||131,991||276,162||210,229||210,229||1,904,669|
|Average Royalty Costs (% of Revenue)||7%||7%||7%||7%||7%|
|Median Royalty Costs (% of Revenue)||7%||7%||7%||7%||7%|
|Average Disposal Costs (% of Revenue)||4%||4%||3%||3%||3%|
|Median Disposal Costs (% of Revenue)||3%||3%||2%||2%||2%|
|Average Truck Labor Costs (% of Revenue)||29%||29%||29%||27%||28%|
|Median Truck Labor Costs (% of Revenue)||29%||29%||29%||26%||28%|
|Average Truck Fuel Costs (% of Revenue)||4%||3%||4%||4%||3%|
|Median Truck Fuel Costs (% of Revenue)||4%||3%||4%||4%||3%|
|Average Truck Maintenance Costs (% of Revenue)||2%||2%||2%||2%||2%|
|Median Truck Maintenance Costs (% of Revenue)||2%||2%||2%||1%||2%|
|Average Credit Card Fees (% of Revenue)||2%||2%||2%||2%||2%|
|Median Credit Card Fees (% of Revenue)||2%||2%||2%||2%||2%|
|Average Moving Supply Cost (% of Revenue)||1%||1%||1%||1%||2%|
|Median Moving Supply Cost (% of Revenue)||1%||1%||1%||1%||1%|
|Average Total Cost of Service||648,854||667,150||823,218||287,372||1,658,332|
|Median Total Cost of Service||549,495||489,813||643,988||297,681||1,452,254|
|Average Total Cost of Profit||608,756||644,626||815,621||295,672||1,742,204|
|Median Total Cost of Profit||489,936||509,267||588,936||310,724||1,473,364|
|Highest Total Cost of Profit||3,271,406||4,030,598||5,596,913||453,163||5,596,913|
|Lowest Total Cost of Profit||71,031||182,121||86,770||86,770||861,679|
Based on the median sales provided by College Hunks’s franchise locations, at an average of a 15% profit margin it will take around 2.5 years to recoup your investment. This is very fast compared to a lot of other franchise opportunities. You may not get a 15% 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, and competition in the marketplace. The presence of other moving company stores; the extent of market penetration and brand awareness that College Hunks stores have attained in your market. Also, the quality of management and service at your Franchised Store will affect customer retention and satisfaction.
While it might take some time initially to scale up the business, once it is scaled up in the right locations, median profits start ranging in the $500,000 to $600,000 per year range.
To assign a valuation multiple for College Hunks 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 like Anytime Fitness where more transaction data is available.
Under $1 Million Net Sales
$1 Million – $5 Million Net Sales
When you go to sell a College Hunks franchise based on the median multiple of .44 and net sales averaging between 2020 and 2021 of $1,204,266, it would sell for $529,877. This is almost double of the midpoint investment of $221,100.
|Call Center Fees||7,356,821||5,874,442||5,359,609|
|Franchise Fee Revenue||1,120,803||1,003,028||595,070|
|COST OF SERVICES||6,682,821||5,067,655||4,734,133|
|Payroll Taxes and Benefits||1,280,797||960,054||1,019,339|
|Depreciation and Amortization||579,601||282,504||326,183|
|Bad Debt Expense||13,144||25,625||37,314|
|Other Operating Expenses||2,256,162||1,433,126||1,800,941|
|Total Operating Expenses||12,799,947||8,704,337||9,593,745|
|NET OPERATING INCOME||7,959,907||5,893,363||2,725,589|
|Total Other Income||203,752||1,990,401||348,137|
College Hunks is a very profitable business for the franchisor with retained earnings of $8.13 million in 2021. Compared to $2.82 million in 2019, They saw an increase of 188% from 2019 to 2010. This is a good indication of high growth as a company overall.
|Outlet Type||Year||Outlets at the Start of the Year||Outlets at the End of the Year||Net Changes|
Over the last three years, the company has been expanding. Franchised units have almost doubled. Over the last three years, franchises have opened at an average rate of 3 units a year. This is an indicator that these stores might be performing well.
College Hunks offers people the opportunity to be a part of a business that is not going out of business soon. The moving industry in the USA stands at $18.5bn in annual revenue.
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