Five Star Painting Franchise in 2024: Costs, Fee & FDD

Discover why Five Star Painting is a top contender in the home services franchise space. With low overhead, multiple revenue streams, and strong support from Neighborly, this franchise offers solid growth potential in a booming industry.

Last updated 26 Sep 2024 Time 11 min read
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Five Star Painting, founded in 2004 by two entrepreneurial friends who started out painting houses to pay for college, has grown into a major player in the home services industry. Recognizing the potential in their business model, they expanded by selling franchises, eventually becoming a go-to name for both residential and commercial painting services. In 2015, Five Star Painting joined Neighborly®, a powerhouse in the home services industry, further cementing its reputation and resources with access to a network of 28 brands under the Neighborly umbrella.

The core offerings of Five Star Painting focus on high-quality interior and exterior painting services for both homes and businesses. They also provide related services, such as pressure washing and wallpaper removal, making them a one-stop solution for property improvement. Their primary customer base includes homeowners looking to refresh or transform their living spaces and business owners aiming to enhance their commercial environments. By blending quality craftsmanship with exceptional customer service, Five Star Painting stands out in a competitive market.

Today, Five Star Painting operates over 225 locations across the U.S. and Canada, delivering on their promise of high-quality painting services. With each location, they continue to serve hundreds of clients daily, offering consistency and reliability no matter where they’re located. Their growing presence is a testament to the demand for their trusted services in the ever-expanding home improvement sector.

As part of Neighborly, Five Star Painting franchisees benefit from a robust support system, which includes comprehensive training programs, marketing support, and a dedicated team to help with day-to-day operations. This level of support ensures that franchisees have the tools they need to run a successful business, whether they’re just starting out or looking to grow an established location. Being part of the Neighborly family also offers opportunities for cross-promotion with other well-established home service brands, adding even more value to the franchise package.

Five Star Painting Franchise Insights

  1. With over 225 locations across the U.S. and Canada, Five Star Painting is a rapidly growing franchise that shows strong demand in the residential and commercial painting sectors.
  2. Acquired by Neighborly® in 2015, Five Star Painting is backed by a network of 28 brands and 4,500+ franchise locations, offering franchisees access to a wealth of resources and cross-marketing opportunities.
  3. As a home-based business, Five Star Painting allows franchisees to operate with lower overhead, focusing on customer service and quality work without the need for a physical storefront.
  4. Offering both residential and commercial services, franchisees can tap into multiple revenue streams, ensuring more business opportunities throughout the year.

Five Star Painting Franchise Key indicators

Growth YOY (%)

2%

vs industry 4%


Total U.S. Franchised Units

234


3-Year Failure Rate

14%

vs industry 13%


Sales-to-Investment ratio

4.4:1

How much does it cost to open a Five Star Painting franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a Five Star Painting franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.

Min & Max Investment

Opening a Five Star Painting franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Five Star Painting below from the most recent Item 7 below:

Type of Expenditure  Minimum Investment  Maximum Investment 
Initial Franchise Fee  $45,000  $45,000 + $230 per 1,000 additional population over minimum 
Software System Fee  $1,250  $1,250 
Call Center Fee  $349.99  $349.99 
Vehicle  $3,000  $40,000 
Equipment, Supplies & Inventory  $2,400  $11,550 
Insurance  $2,500  $9,000 
Advertising & Promotional and Local Marketing Spending  $15,000  $50,000 
Training, Travel, Lodging & Food  $1,500  $4,000 
Deposits, Permits & Licenses  $0  $1,750 
Professional Fees  $250  $5,000 
Real Estate  $0  $6,000 
Additional Funds – 6 Months  $6,200  $10,600 
Total Investment  $77,449.99  $184,529.99 + any additional franchise fee + any real estate costs 

Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.

Required Capital

Opening a Five Star Painting franchise or a similar one in the home services industry generally requires a solid financial foundation. The overall investment and financial requirements typically cover various startup and operational expenses. Here’s a breakdown:

  • Initial Capital Investment To open a Five Star Painting franchise, the total investment ranges from $78,000 to $185,000, which covers costs like equipment, initial marketing, insurance, and technology fees. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
  • Liquid Assets Requirement Franchisees are typically required to have at least $50,000 – $75,000 in liquid assets to cover day-to-day expenses and early operational costs. This ensures you have immediate funds to manage payroll, supplies, and other overhead during the startup phase.
  • Net Worth Requirement A net worth of $200,000 – $300,000 is usually recommended for painting or similar service franchises, reflecting your overall financial health and ability to secure financing if needed.

How much does a Five Star Painting franchise owner make?

Calculating the salary of a Five Star Painting franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Five Star Painting franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.

Five Star Painting Revenue & Gross Sales

In recent years, Five Star Painting has shown strong revenue performance, with franchisees reporting a median gross sales of $572,580. This reflects the brand’s solid position in the growing home services market, particularly in residential and commercial painting.

Which key factors impact the average revenue performance of Five Star Painting franchisees?

Several factors likely contribute to the strong performance of U.S. Five Star Painting franchisees. First, the franchise benefits from a robust brand reputation built on consistent quality and reliable service, which attracts a steady stream of residential and commercial clients. The comprehensive support system provided by Five Star Painting, including training and marketing resources, enables franchisees to efficiently manage and grow their businesses. Additionally, the low overhead costs associated with operating a home-based service model allow franchisees to maximize profitability. The rising demand for home improvement services and the ability to offer a range of related services, such as pressure washing and wallpaper removal, further boost sales potential.

Five Star Painting Franchise Operational Costs

When considering opening a Five Star Painting franchise, it’s essential to account for several key ongoing operational costs. These expenses are crucial for maintaining daily operations and ensuring smooth business functionality. Here’s a breakdown:

  • Labor Costs This includes wages for employees and subcontractors, which can fluctuate based on the volume of work and regional wage rates.
  • Supplies and Equipment Regular expenses for paint, brushes, rollers, drop cloths, and other essential tools and materials required for painting jobs.
  • Vehicle Maintenance Costs related to maintaining and operating company vehicles used for transporting equipment and staff to job sites.
  • Insurance Coverage for liability, workers’ compensation, and vehicle insurance to protect against potential risks and claims.
  • Technology and Software Ongoing fees for software used for scheduling, customer management, and accounting, as well as updates and maintenance.

Understanding these operational costs helps in budgeting effectively and planning for long-term success in the franchise.

Five Star Painting Franchise Fees

When considering the financial aspects of opening a Five Star Painting franchise, it’s important to understand the key ongoing fees that will impact your profitability. These fees ensure that you have access to essential resources, support, and brand recognition, all of which are crucial for your success.

  • License Fee Franchisees are required to pay a license fee of 6% of gross sales. This fee supports the ongoing use of the Five Star Painting brand and its operational standards. Additionally, there is a minimum license fee, ensuring that all franchisees contribute a baseline amount regardless of their sales volume.
  • MAP Fee The Marketing, Advertising, and Promotional (MAP) fee is set at 2% of gross sales. This fee funds national marketing campaigns, helping to drive brand awareness and attract customers to your franchise.
  • Additional Fees There may be extra fees for various support services, including training programs, technology tools, and other resources provided by Five Star Painting.

Understanding these fees helps in effective financial planning and ensures that you are prepared for the ongoing costs of running a successful franchise.

Five Star Painting Franchise Earnings

The earnings potential for a Five Star Painting franchise owner can vary based on factors such as location, operational efficiency, and cost control. On average, franchisees with median gross sales of around $572,580 can expect estimated earnings of approximately $86,000, reflecting an operating profit margin of 15%. This figure underscores the potential for substantial income, especially for those who actively manage their operations.

For owner-operators, maintaining hands-on involvement and efficient management practices can significantly impact profitability. The estimated earnings highlight the potential for a rewarding return, particularly when franchisees effectively leverage the support systems and marketing resources provided by Five Star Painting. These figures demonstrate the financial benefits of a well-managed franchise, emphasizing the opportunity for strong returns with dedicated, day-to-day oversight.

How to Open a Five Star Painting Franchise

Becoming a franchisee with Five Star Painting involves a detailed process that ensures both you and the franchisor are aligned for success. Here’s a step-by-step guide to the journey from initial inquiry to starting your business:

  1. Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
  2. Application and Pre-Qualification Submit a franchise application to express your interest formally. This typically involves providing information about your financial background, business experience, and personal goals. Five Star Painting will review your application to pre-qualify you as a potential franchisee.
  3. Franchise Interview and Discovery Day Participate in interviews with the franchisor and attend a Discovery Day, where you’ll meet key team members, tour existing locations, and gain deeper insights into the business operations and culture.
  4. Financing and Legal Review Secure financing for your franchise investment, if necessary, and work with a financial advisor to ensure you meet all capital requirements. Additionally, review and sign the franchise agreement with legal guidance to formalize your commitment.
  5. Training and Preparation Complete the required training programs provided by Five Star Painting. This training covers various aspects of running the franchise, including operational procedures, marketing strategies, and customer service.
  6. Site Selection and Setup Work with the franchisor to select a suitable location if applicable, and set up your business, including procuring necessary equipment and establishing operational systems.
  7. Grand Opening and Start of Operations Launch your franchise with a grand opening event and begin daily operations. Utilize the marketing and operational support from Five Star Painting to attract customers and start building your business.

Pros & Cons

Pros

Low Overhead Costs: As a home-based business, Five Star Painting allows you to avoid expensive leases or retail locations, keeping operational costs lower.

Growing Industry: The painting and home improvement industry is on the rise, with demand for residential and commercial services increasing, making it a solid market opportunity.

Scalable Business Model: With multiple service offerings like exterior, interior, and commercial painting, there’s flexibility to grow and expand revenue streams.

Cons

Seasonality: Depending on your location, painting services can be affected by seasonal demand, especially in areas with harsh winters where exterior painting may be limited.

Competitive Market: The home services sector is competitive, with both large chains and local businesses vying for customers, requiring franchisees to stay on top of local marketing efforts.

Active Involvement: As an owner-operator model, the business may require significant hands-on involvement, especially in the early stages, which may not be ideal for those looking for passive income.

FAQs

Who owns Five Star Painting?

  • Five Star Painting is owned by Neighborly®, a global network of home service brands. Neighborly® acquired Five Star Painting in January 2015. Neighborly is a prominent franchisor with over 28 brands and 4,500+ franchise locations worldwide, providing a strong support system to Five Star Painting and its franchisees.
  • Yes, Five Star Painting is a franchise. The brand began franchising in 2005, quickly expanding across the U.S. and Canada. Today, it operates over 225 locations, offering residential and commercial painting services, making it an attractive option for franchisees seeking a home-based business.
  • Five Star Painting’s biggest competitor is CertaPro Painters, another large residential and commercial painting franchise. Alternatives include WOW 1 DAY Painting, known for its fast turnaround times, and Fresh Coat, which offers painting and additional home services. Local independent painters can also be strong competitors in specific markets.
  • Five Star Painting was founded in 2004 by two college friends who started painting houses to pay for tuition. Since then, the company has expanded significantly, and in 2015, it was acquired by Neighborly®, further strengthening its position in the home services industry.
  • As of the most recent data, Five Star Painting has 234 locations in the U.S., which are all franchised locations.
  • The most recent calculated 3-year failure rate of Five Star Painting was 14% in the U.S.
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