GO MINI’S FRANCHISE Cost WORTH Profits? (2023)
Written by: Parth Parth
Last Updated by
Rocío Torres: January 20, 2023
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Go Mini’s is a storage and moving franchise that provides “a storage and moving business featuring use of portable containers”. As of 2021, they had 133 locations in operation.
Contents
How is Go Mini's Franchise Positioned in the Home Building and Services Industry?
The Moving services industry makes $1.2 billion in profit every year and pays $4.2bn in an industry where the annual revenue is $18.5 billion.
Go Mini’s competes in the Home Building and Services market against big brand companies such as Walmart, College Hunks, etc. Go Mini’s franchisees also compete against other nearby moving and storage shop locations.
How Much is a Go Mini's Franchise?
The initial Go Mini’s Franchise Fee is $45,000. You have to pay this upfront fee when opening a Go Mini’s franchise. They reduce the fee to $36,000 for U.S. veterans with supporting credentials. The initial franchise fee is waived for a Go Mini’s dealer signing the Franchise Agreement. For container dealers in business for more than one year converting from other concepts to the Go Mini’s System and who already own at least 40 containers, the initial franchise fee is reduced to $10,000 for a territory containing a population of up to 400,000 people; however, such converting dealers must pay $10,000 for each additional 100,000 population they receive.
Go Mini's Franchise Cost
The estimated total investment necessary to begin the operation of a Go Mini’s Franchise ranges from $342,804 – $662,704. The following costs are part of the upfront costs included in the initial investment for a Go Mini’s. 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 Go Mini’s franchise in 2022.
Estimated Initial Investment
| Type of expediture | Amount | To Whom Payment Is To Be Made | |
|---|---|---|---|
| Low | High | ||
| Initial franchise fee | $45,000 | $45,000 | Us |
| Fee for additional territory | $0 | $60,000 | Us |
| Rent for 3 months and lease security deposit | $30,000 | $102,000 | Landlord |
| Utility deposits | $100 | $500 | Utilities |
| Leasehold Improvements | $0 | $10,000 | Contractors |
| Signane | $500 | $2,000 | Sign contractor |
| Go Mini’s containers | $235,380 | $258,480 | Us |
| Equipment and fixtures | $0 | $5,000 | Approved suppliers |
| Office and supplies | $500 | $1,000 | Approved suppliers |
| Computer hardware, software, monthly subscription fee (3 months) and annual fee for credit card processing | $1,149 | $2,799 | Suppliers and Us |
| Transport vehicle(s) | $4,500 | $125,000 | Approved dealer or approved seller |
| Travel, salary, living, expenses – training | $0 | $3,250 | Airlines, Hotels, Restaurants |
| Go Mini’s technology fee | $675 | $675 | Us |
| Business licenses and permits | $200 | $1,000 | Government agencies |
| Professional fees | $1,000 | $5,000 | Your lawyer and/or CPA |
| Forming an entity | $0 | $5,000 | State and professional advisors |
| Insurance | $800 | $3,000 | Insurance companies |
| Grand opening advertising | $5,000 | $5,000 | Media and other suppliers |
| Other costs | $3,000 | $3,000 | Various |
| Additional funds | $15,000 | $25,000 | Funds in your posession |
| Total | $342,804 | $662,704 | |
Owning a Go Mini's Franchise Requires Ongoing Fees
Royalty: 8% of Gross Sales with a monthly minimum of $400. Converting dealers from other concepts get a reduced rate of 7% of Gross Sales with a monthly minimum of $400. Converting Go Mini’s dealers receive a reduced royalty rate for the first 2 years 5% of Gross Sales in year 1 and 6% of Gross Sales in year 2. Thereafter, royalty rates increase to 7% with a monthly minimum of $400.
Annual Container purchase: $5,385 (est.) per 20-foot container; $5,085 (est.) per 16-foot container; $4,795 (est.) per 12-foot container. After year 1 and annually thereafter, you must buy at least 12 containers per year for each 100,000 population from us until you have 48 containers per 100,000 population. For example, for a 400,000 population, you must buy at least 48 a year until you have a minimum of 192 containers.
Marketing Fund: 2% of Gross sales
Is the Go Mini's Franchise Profit Worth the Franchise Cost?
Go Mini’s does not disclose direct data about the revenue for its franchises, so we are calculating Average Unit Volume (AUV) using the marketing fund figures that are available.
Between January and March 2022, Go Mini’s collected $82,335 from franchises in Marketing Fund Contributions. This amounts to an AUV of around $31,000 per quarter or $124,000 per year. This would definitely be on the low side of what we expect AUV to be for Go Mini’s. Unfortunately, they do not disclose financial so key to check with existing franchisees.
Go Mini’s AUV: $124,000
| Initial investment (midpoint) | %Profit margin of median franchise sales | Estimated Profits | Time to recoup investments |
|---|---|---|---|
| $502,754 | 10% | $12,400 | 40 years |
| 15% | $18,600 | 27 years | |
| 20% | $24,800 | 20 years |
Based on the median sales provided by Go Mini’s’s franchise locations, at an average of a 15% profit margin it will take around 27 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.
Looking at Go Mini’s Income Statement below, we can see that the franchise makes a whole lot more money from selling containers to its franchisees than from customers or royalties. This is a red flag and we recommend talking to at least 3-5 Go Mini’s Franchise owners before entering into business with them. On the face of it, it looks like the franchisor makes money solely from selling containers which is not a sustainable business model.
Profit & Loss by Class – January through March 2022
| Accrual Basis 4/24/22 | |||
|---|---|---|---|
| Marketing | Operating | TOTAL | |
| Ordinary Income/Expense Income | |||
| Royalty Income | 0 | 206,360.01 | 206,360.01 |
| Marketing Fund Income | 82,335.54 | 0 | 82,335.54 |
| Marketing Fund Admin Income | 0 | 9,124.39 | 9,124.39 |
| Trademark License Income | 0 | 4,791.0 | 4,791.00 |
| Franchise Sub Licensing Income | 0 | 7,500.00 | 7,500.00 |
| Inventory Sale – Container Sales | 0 | 2,331,454.00 | 2,331,454.00 |
| Inventory Sales – Parts Sales | 0 | 7,011.93 | 7,011.93 |
| Franchising Sales | 0 | 45,000.00 | 45,000.00 |
| Franchising 606 Deferred Revenue | 0 | 2,724.99 | 2,724.99 |
| Operation System Income | 0 | 260.00 | 260.00 |
| National Income | 0 | 401.15 | 401.15 |
| Website Income | 0 | 39,880.00 | 39,880.00 |
| Total Income | 82,335.54 | 2,654,507.47 | 2,736,843.01 |
| Cost of Goods Solds | |||
| Inventory Purchase Containers | 0 | 2,093,458.62 | 2,093,458.62 |
| Inventory Purchase Parts | 0 | 5,831.53 | 5,831.53 |
| Opreation System Expense | 0 | 7,057.35 | 7,057.35 |
| Website Cost of Goods Sold | 0 | 36,417.00 | 36,417.00 |
| Total COGS | 0 | 2,142,764.50 | 2,142,764.50 |
| Gross Profit | 82.335.54 | 511,742.97 | 594,078.51 |
| Expense | |||
| Accounting | 0 | 21,000.00 | 21,000.00 |
| Marketing Expense | |||
| Marketing Software | 4,125.35 | 0 | 4,125.35 |
| Marketing Innovative Projects | 108,042.220 | 0 | 108,042.22 |
| Marketing Payroll Expense | |||
| Marketing Payroll Salaries | 0 | 0 | 0 |
| Marketing Payroll Expense | 0 | 0 | 0 |
| Marketing Payroll Tax Employers | 0 | 0 | 0 |
| Marketing Expense | 112,167.57 | 0 | 112,167.57 |
| Franchising Development | |||
| Franchising Development | 0 | 11,342.00 | 11,342.00 |
| Franchise Training | 113.86 | 2,475.32 | 2,592.18 |
| Franchising Development | 113.86 | 13,820.32 | 13,934.18 |
| Annual Conference | 0 | 720.00 | 720.00 |
| Bank and Credit Card Charges | 0 | 4,749.55 | 4,749.55 |
| Computer and Internet Expenses | 60.00 | 24,820.66 | 24,820.66 |
| Contract Services | 0 | 21,328.21 | 21,328.21 |
| Insurance Expenses | 0 | 4,812.22 | 4,812.22 |
| Legal Fees | |||
| Lewitt and Hackman | 0 | 1,342.12 | 1,342.12 |
| Total | 0 | 1,342.12 | 1,342.12 |
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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 Home Building and Services stores; the extent of market penetration and brand awareness that Go Mini's stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.
Is the Go Mini's Franchise Profit Worth the Franchise Cost?
To assign a valuation multiple for Go Mini’s 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 * 0.44
When you go to sell a Go Mini’s franchise based on the median multiple of .44 and net sales of $124,000, it would sell for $54,560. This is significantly lower than the midpoint investment of $502,754.
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.
How many Go Mini's units have opened and closed?
| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 | 85 | 82 | -3 |
| 2020 | 82 | 82 | 0 | |
| 2021 | 82 | 94 | +12 | |
| Dealers unuder prior form of dealer agreement | 2019 | 44 | 44 | 0 |
| 2020 | 44 | 44 | 0 | |
| 2021 | 44 | 39 | -5 | |
| Total Go Mini’s Outlets | 2019 | 129 | 126 | -3 |
| 2020 | 126 | 126 | 0 | |
| 2021 | 126 | 133 | +7 |
Over the last three years, the company has expanded. Franchising units have increased but company-operated stores have decreased. 3 franchises closed in 2019, there was no net change in 2020, and 12 new ones opened up in 2021.
Conclusion
Go Mini’s offers people the opportunity to be a part of the moving business but it remains to prove its potential as a stable franchisor that can sustain growth. While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Home Building and Services Industry.
