T Mobile Franchise Cost: Worth the Investment? (2024)
T-Mobile is the brand name used by some of the mobile communications subsidiaries of the German telecommunications company Deutsche Telekom AG. It is a telecom company that provides wireless voice, messaging, and data services in the United States mainland including Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands under the T-Mobile and Metro by T Mobile franchise brands. The company operates the second-largest wireless network in the U.S. market with over 95 million customers and annual revenues of $32 billion. On April 29, 2018, T-Mobile and Sprint announced a $26 billion merger deal, with the resulting company operating under the name T-Mobile.
How Much is a T-Mobile franchise?
T-Mobile does not offer franchises but it offers an authorized retailer concept where you earn by selling T-Mobile products.
T Mobile Franchise Cost
The estimated total investment necessary to begin the operation of a T-Mobile Franchise depends on whether or not you already have a store that you are looking to convert into a licensed T-Mobile store.
What Are the Benefits of a T-Mobile Franchise
- Turnkey point-of-sale system: To sell their wireless plans and devices in your store
- Fully supported inventory and management: Provided at no cost to you
- Complimentary in-store merchandising: Displays, fixtures, signage, and digital assets, too
- National & local advertising: They’ll help drive store traffic for you
- Extensive assistance and support: You’ll have direct line to a personal support team and manager. Plus other experts are available 24/7
- Expert-led education: Learn sales and marketing tactics with best-in-class training, ongoing education, and workshops
As you can see, T-Mobile provides a lot of support for its authorized retailers.
How Much Do T-Mobile Franchise Owners Make?
T-Mobile states that “you earn commissions for every T-Mobile product and service you sell, and there is no cap on what you can earn.”
Looking at the sales of existing T-Mobile stores, we estimate that depending on your geographic setting and footfall, you will make $28,000 – $70,000 per year.
Below are some examples of T-Mobile stores that existing owners are looking to sell:
Profitable Metro by T-Mobile Store for Sale
| St. Louis, MO |
|---|
| Asking Price: | $150,000 | Cash Flow: | N/A |
| Gross Revenue: | $700,000 | Inventory: | $30,000 |
| EBITDA: | N/A | Rent: | – |
| FF&E: | N/A | Established: | – |
7 Profitable Metro by T-Mobile Stores for Sale
| South Florida |
|---|
| Asking Price: | $1,050,000 | Cash Flow: | $525,000 |
| Gross Revenue: | $8,500,000 | Inventory: | $140,000 |
| EBITDA: | N/A | Rent: | – |
| FF&E: | $315,000 | Established: | – |
Is the T-Mobile Franchise the same as the Metro by T-Mobile Franchise?
Yes, as mentioned earlier, T-Mobile acquired Metro in 2018. As such, both networks are now operated by T-Mobile.
T-Mobile (Franchisor) Income Statement Key Insights
Statement of Income
| (in millions, except share and per share amounts) | Year Ended December 31 | ||
|---|---|---|---|
| 2021 | 2020 | 2019 | |
| Revenues | |||
| Postpaid revenues | $42,562 | $36,306 | $22,673 |
| Prepaid revenues | 9,733 | 9,421 | 9,543 |
| Wholesale revenues | 3,751 | 2,590 | 1,279 |
| Other service revenues | 2,323 | 2,078 | 1,005 |
| Total Service Revenues | $58,369 | $50,395 | $34,500 |
| Operating expenses | |||
| Cost of services, exclusive of depreciation and amortization shown separately below | 13,934 | 11,878 | 6,622 |
| Cost of equipment sales, exclusive of depreciation and amortization shown separately below | 22,671 | 16,388 | 11,899 |
| Selling, general and administrative | 20,238 | 18,926 | 14,139 |
| Impairment expense | – | 418 | – |
| Depreciation and amortization | 16,383 | 14,151 | 6,616 |
| Total operating expenses | $73,226 | $61,761 | $39,276 |
| Operating income | 6,892 | 6,636 | 5,722 |
| Other income (expense) | |||
| Interest expense | (3,189) | (2,483) | (727) |
| Interest expense to affiliates | (173) | (247) | (408) |
| Interest income | 20 | 29 | 24 |
| Other expense, net | (199) | (405) | (8) |
| Total other expense, net | (3,541) | (3,106) | (1,119) |
| Income from continuing operations before income taxes | 3,351 | 3,530 | 4,603 |
| Income tax expense | (327) | (786) | (1,135) |
| Income from continuing operations | 3,024 | 2,744 | 3,468 |
| Income from discontinued operations, net of tax | – | 320 | – |
| Net Income | $3,024 | $3,064 | $3,468 |
T-Mobile is a very profitable business for the franchisor with retained earnings of $3.02 billion in 2021. Compared to $3.46 million in 2019, they saw a decrease of 12% from 2019 to 2021.
How Is T-Mobile Financially?
The graph above compares the 5-year cumulative total returns of T Mobile franchise, the S&P 500 index, the NASDAQ Composite index, and the Dow Jones U.S. Mobile Telecommunications TSM index. The graph tracks the performance of a $100 investment, with the reinvestment of all dividends, from December 31, 2016, to December 31, 2021. While T-Mobile stock has generally done better than the overall market, it has trended a bit lower in recent years.
| (in millions) | Years ended December 31 | 2021 Versus 2020 | 2020 Versus 2019 | ||||
|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2019 | S Change | % Change | S Change | % Change | |
| Merger-related costs | |||||||
| Cost of services, exclusive of depreciation and amortization | $1,015 | $646 | – | $369 | .57% | $646 | NM |
| Cpst of equipment sales | 1,018 | 6 | – | 1,012 | NM | 6 | NM |
| Selling, general and administrative | 1,074 | 1,263 | 620 | (189) | (15)% | 643 | 104% |
| Total Merger-related costs | $3,107 | $1,915 | $620 | $1,192 | 62% | $1,295 | 209% |
Conclusion
T-Mobile is one of the biggest telecom providers in the world, and if your territory supports opening an authorized retail store, you should go for it. Make sure to do your own thorough market research and speak to at least 3 to 5 existing stores, though.
Make sure to check Vetted Biz website for more information about franchise opportunities in the United States!
