College Hunks Franchise Analysis (2022)
Written by: Parth Parth
This article is based on its most recent FDD.
College Hunks promises Honest, Uniformed, Nice, and Knowledgeable Service to its customers. They provide services in the moving industry A particular form or branch of economic or commercial activity. Subindustries are often referred to as categories on Vettedbiz.com 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.
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Omar considered it a summer job but a few months after graduation came back and established this business with Nick. At the close of 2021, they had 129 franchised and 3 company-owned units.
How is College Hunks Franchise Positioned in the Home and Building Services?
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.
How Much is a College Hunks Franchise?
The initial (Company) Franchise 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… Fee is between $45,000 and $65,000. You have to pay this upfront fee when opening a (Company) franchise. They also offer a $7,500 discount for veterans or a company owned at least 51% by veterans.
College Hunks Franchise Cost
The estimated total investment necessary to beg
in the operation of a College Hunks Franchise 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… 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.
Company Franchise 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… Cost (Detailed)
| 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 Is a fee that franchisees pay to franchisors when signing an agreement, for establishing a franchise relationship, and getting some initial services. It is… | 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 Professional fees are revenues or expenses of services from people specially trained in specific fields of arts and sciences. eg as doctors, architects, lawyers,… | 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 AFN = Projected increase in assets spontaneous increase in liabilities any increase in retained earnings Known as AFN or additional funds needed It is… (6 months) | 80,000 | 120,000 | As arranged | As needed | Us, Suppliers, Eployees and other Creditors |
| Total Estimated Initial Investment The amount of funds necessary to begin operations of a business or franchise including the first three months of operation. | 158,700 | 283,500 | As arranged | ||
College Hunks Franchise Requirements
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.
How much do College Hunks franchise owners make?
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 The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. for moving and $1,100 or 8% of Gross sales for junk removal
These fees are slightly higher than big names like UPS.
How much do College Hunks franchise owners make?
AVERAGE ANNUAL GROSS SALES, GROSS PROFIT, AND PROFIT MARGIN FOR FRANCHISED LOCATIONS 2019, 2020, AND 2021
| Year | 2019 | 2020 | 2021 | 2021 Bottom 25% Franchisees | 2021 Top 25% Franchisees |
|---|---|---|---|---|---|
| # In Group | 79 | 90 | 104 | 26 | 26 |
| Average Annual Gross Sales The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. | 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 |
(2020) College Hunks Median Franchise Sales: $1,037,467
| Initial Investment The amount of funds necessary to begin operations of a business or franchise including the first three months of operation. – Midpoint | %Profit Margin Of Average Franchise 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… Sales The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. | Estimated Profits | Time to Recoup Investment |
|---|---|---|---|
| 221,100 | 10% | 103,746 | 3 years |
| 221,100 | 15% | 155,620 | 2.5 years |
| 221,100 | 20% | 207,493 | 2 years |
(2021) College Hunks Median Franchise Sales: $1,204,266
| Initial Investment The amount of funds necessary to begin operations of a business or franchise including the first three months of operation. – Midpoint | %Profit Margin Of Average Franchise 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… Sales The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. | Estimated Profits | Time to Recoup Investment |
|---|---|---|---|
| 221,100 | 10% | 120,426 | 3 years |
| 221,100 | 15% | 180,639 | 2.5 years |
| 221,100 | 20% | 240,852 | 2 years |
Based on the median sales The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. provided by College Hunks’s franchise 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… 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.
Is the College Hunks Franchise Profit Worth the Franchise Cost?
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
- Estimated Selling Price = Net Sales – 0.44
$1 Million – $5 Million Net Sales
- Estimated Selling Price = Net Sales – 0.59
When you go to sell a College Hunks franchise 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… 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.
College Hunks (Franchisor) Income Statement Key Insights:
CHHJ FRANCHISING, LLC AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019
| 2021 | 2020 | 2019 | |
|---|---|---|---|
| REVENUE | |||
| Royalty Fees | 14,748,181 | 9,966,934 | 8,532,350 |
| Call Center Fees | 7,356,821 | 5,874,442 | 5,359,609 |
| Franchise 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… Fee Revenue | 1,120,803 | 1,003,028 | 595,070 |
| Other | 4,216,870 | 2,820,951 | 2,566,438 |
| Total Revenue | 27,442,675 | 19,665,355 | 17,053,467 |
| COST OF SERVICES | 6,682,821 | 5,067,655 | 4,734,133 |
| GROSS PROFIT The profit a business makes after deducting the costs involved in making, providing, and selling the goods and services. In an income statement, it… | 20,759,854 | 14,597,700 | 12,319,334 |
| OPERATING EXPENSES An operating expense is an expense a business incurs through its normal business operations. Often abbreviated as OPEX, operating expenses include rent, equipment, inventory… | |||
| Management Labor | 4,974,881 | 2,990,766 | 3,515,251 |
| Marketing | 3,236,088 | 2,582,036 | 2,354,925 |
| Payroll Taxes and Benefits | 1,280,797 | 960,054 | 1,019,339 |
| Facilities | 459,274 | 430,226 | 539,792 |
| Depreciation A reduction in the value of an asset over time, due to wear and tear. and Amortization The term œamortization? refers to: • In accounting, Amortization is very similar to depreciation, it’s a decrease in the value of an intangible asset, which… | 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 Operating Income = Revenue– COGS or cost of revenue−Operating Expenses or Operating Income=Gross Income−Operating Expenses Also known as Income from operations, income before interest… | 7,959,907 | 5,893,363 | 2,725,589 |
| OTHER INCOME | |||
| Other Income Income, also known as earnings or profits, is money that a person or a business receives in return for working, providing a product or… | 202,752 | 1,986,007 | 329,265 |
| Interest 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… Income | 1,000 | 4,394 | 18,872 |
| Total Other Income | 203,752 | 1,990,401 | 348,137 |
| OTHER EXPENSES | |||
| Interest Expense | 24,408 | 213,200 | 250,014 |
| NET INCOME | 8,139,251 | 7,670,564 | 2,823,712 |
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.
How many College Hunks units have opened and closed?
| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Changes |
|---|---|---|---|---|
| Franchised | ||||
| 2019 | 102 | 114 | 12 | |
| 2020 | 114 | 129 | 15 | |
| 2021 | 129 | 152 | 23 | |
| Company-Owned | ||||
| 2019 | 2 | 4 | 2 | |
| 2020 | 4 | 3 | -1 | |
| 2021 | 3 | 3 | 0 | |
| Total Outlets | ||||
| 2019 | 104 | 118 | 14 | |
| 2020 | 118 | 132 | 14 | |
| 2021 | 132 | 155 | 23 |
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.
Conclusion
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.
While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in Home and Building Services. Read more about Packing and Shipping here.
