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GO MINI’S FRANCHISE Cost WORTH Profits? (2022)

Written by: Parth Parth
Last Updated by Rocío Torres: October 18, 2022
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This article is based on its most recent FDD

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.

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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 expeditureAmountTo Whom Payment Is To Be Made
LowHigh
Initial franchise fee$45,000$45,000Us
Fee for additional territory$0$60,000Us
Rent for 3 months and lease security deposit$30,000$102,000Landlord
Utility deposits$100$500Utilities
Leasehold Improvements$0$10,000Contractors
Signane$500$2,000Sign contractor
Go Mini’s containers$235,380$258,480Us
Equipment and fixtures$0$5,000Approved suppliers
Office and supplies$500$1,000Approved suppliers
Computer hardware, software, monthly subscription fee (3 months) and annual fee for credit card processing$1,149$2,799Suppliers and Us
Transport vehicle(s)$4,500$125,000Approved dealer or approved seller
Travel, salary, living, expenses – training$0$3,250Airlines, Hotels, Restaurants
Go Mini’s technology fee$675$675Us
Business licenses and permits$200$1,000Government agencies
Professional fees$1,000$5,000Your lawyer and/or CPA
Forming an entity$0$5,000State and professional advisors
Insurance$800$3,000Insurance companies
Grand opening advertising$5,000$5,000Media and other suppliers
Other costs$3,000$3,000Various
Additional funds$15,000$25,000Funds 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

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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 salesEstimated ProfitsTime to recoup investments
$502,75410%$12,40040 years
15%$18,60027 years
20%$24,80020 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
 MarketingOperatingTOTAL
Ordinary Income/Expense Income
Royalty Income0206,360.01206,360.01
Marketing Fund Income82,335.54082,335.54
Marketing Fund Admin Income09,124.399,124.39
Trademark License Income04,791.04,791.00
Franchise Sub Licensing Income07,500.007,500.00
Inventory Sale – Container Sales02,331,454.002,331,454.00
Inventory Sales – Parts Sales07,011.937,011.93
Franchising Sales045,000.0045,000.00
Franchising 606 Deferred Revenue02,724.992,724.99
Operation System Income0260.00260.00
National Income0401.15401.15
Website Income039,880.0039,880.00
Total Income82,335.542,654,507.472,736,843.01
Cost of Goods Solds
Inventory Purchase Containers02,093,458.622,093,458.62
Inventory Purchase Parts05,831.535,831.53
Opreation System Expense07,057.357,057.35
Website Cost of Goods Sold036,417.0036,417.00
Total COGS02,142,764.502,142,764.50
Gross Profit82.335.54511,742.97594,078.51
Expense
Accounting021,000.0021,000.00
Marketing Expense
Marketing Software4,125.3504,125.35
Marketing Innovative Projects108,042.2200108,042.22
Marketing Payroll Expense
Marketing Payroll Salaries000
Marketing Payroll Expense000
Marketing Payroll Tax Employers000
Marketing Expense112,167.570112,167.57
Franchising Development
Franchising Development011,342.0011,342.00
Franchise Training113.862,475.322,592.18
Franchising Development113.8613,820.3213,934.18
Annual Conference0720.00720.00
Bank and Credit Card Charges04,749.554,749.55
Computer and Internet Expenses60.0024,820.6624,820.66
Contract Services021,328.2121,328.21
Insurance Expenses04,812.224,812.22
Legal Fees
Lewitt and Hackman01,342.121,342.12
Total01,342.121,342.12

0

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.

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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 TypeYearOutlets at the Start of the YearOutlets at the End of the YearNet Change
Franchised20198582-3
202082820
20218294+12
Dealers unuder prior form of dealer agreement201944440
202044440
20214439-5
Total Go Mini’s Outlets2019129126-3
20201261260
2021126133+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.

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