Your CBD Store Franchise Cost and Opportunities for 2024
This article is based on its 2021 FDD
Your CBD Store offers herbal and nutritional supplements containing cannabidiol (“CBD”) from industrial hemp. Their products include capsules, dissolvable supplements, medicated cosmetics, dietary supplements, and others.
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The current CEO is Marcus Quinn, who is married to Your CBD Store founder Rachael Quinn. He has been in that role since 2019, previously serving as the President of Promotional Enterprises, Inc. from 2016 to 2019.
As of 2020, there were 161 franchised units and 1 corporate unit.
CBD Industry
Your CBD Store competes in the new but growing CBD industry. The industry was valued at about $7 billion in 2020, but is projected to grow rapidly over the next five years as the regulatory environment around CBD products becomes more favorable and as consumers become more comfortable with CBD products.
Their main competitors are other CBD franchises like CBD Authority and CBD American Shaman. They also compete with the recreational marijuana industry, which is only legal in a handful of states but is also expected to grow over the next several years.
Your CBD Store Franchise Cost
The initial Franchise Fee is $5,000. You have to pay this upfront fee when opening a Your CBD Store franchise.
The estimated total investment necessary to begin operation of one of their franchise ranges from $66,350 to $82,450.
The following costs are part of the upfront costs included in the initial investment in a Your CBD Store Franchise.
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 Your CBD Store franchise in 2021:
Estimated Initial Investment
| Type of expediture | Amount | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Initial Franchise Fee | $5,000 | Lump Sum | At the time you sign the Franchise Agreement | Your CBD Store |
| Rent | $3,000 to $7,500 (3 months) | As Arranged | As Arranged | Landlord |
| Security Deposit | $1,000 to $2,500 | As Arranged | As Arranged | Landlord |
| Real Estate and Improvements | $5,000 | As Arranged | Before Opening | Landlord, Contractors |
| Travel and Living Expenses while Training | $1,500 | As Incurred | During Training | Hotels, Restaurants, Airlines |
| Furnishings, Fixtures, Equipment and Decorating | $10,000 to $12,000 | As Arranged | Before Opening | Suppliers, Contractors |
| Signage | $2,500 | As Arranged | Before Opening | Suppliers, Contractors |
| Opening Inventory | $20,400 to $25,500 | As Arranged | Before Opening | Sunflora, Inc. |
| Computer Hardware/Software | $2,000 to $3,500 | As Arranged | Before Opening | Suppliers, Contractors |
| Technology Fee | $600 | As Arranged | As Arranged | Sunflora, Inc., Suppliers |
| Grand Opening | $3,000 | As Arranged | As Arranged | Suppliers |
| Proffesional Fees | $1,000 to $2,500 | As Arranged | Before Opening and Ongoing | Your Accountants, Lawyers, Real Estate Broker, Architectural Firm |
| Insurance | $600 | As Arranged | As Incurred | Insurance Providers |
| Miscellaneous Opening Costs | $750 | As Arranged | As Arranged | Suppliers, Utilities, Tradesmen, Contractors, Your CBD Store |
| Additional Funds – 3 months | $10,000 | As Arranged | As Arranged | Suppliers, Employees |
| Total | $66,350 to $82,450 | |||
Your CBD Store Franchise
Owning a Your CBD Store Franchise Requires Ongoing Fees.
Advertising Fund Fee: 3% of wholesale product purchase costs
Local Advertising: At least 3% of gross sales per quarter
Royalty Fee: 2% of the wholesale cost of products
Franchising Income Statement:
Your CBD Store, LLC
Statements of Operations and Members Equity
Statements of Operations and Members Equity
Years Ended December 31, 2020 and 2019
| 2020 | 2019 | |
| Total Income | $ 66,571 | $ – |
| Operating Income | $ 66,571 | – |
| Expenses: | ||
| Accounting | – | 5,000 |
| Advertising and Marketing | 6,980 | – |
| Bank Charges & Fees | 3 | 6 |
| Conferences/Events | 3,276 | – |
| Legal and Professional Fees | 96,842 | – |
| Licenses and Fees | 139 | – |
| Office Supplies and Software | 2,080 | – |
| Total expenses | $ 109,320 | 5,006 |
| Income from operations | (42,749) | (5,006) |
| Distributions | – | – |
| Members’ equity, beginning | (4,006) | 1,000 |
| Members’ contributions | 250,000 | – |
| Members’ equity, ending | $ 203,245 | $ (4,006) |
Your CBD Franchising, LLC Income Statement Key Insights:
None of the Your CBD Store locations opened their doors until 2020, so its franchising company did not record any operating income in 2019. The franchising company recorded $66,571 in total income in 2020 but since total expenses amounted to $109,320, the operating income was actually a deficit of $42,749. Most of the expenses ($96,842) are accounted for by legal and professional fees, which can be viewed as more of a short-term expense that can go down over the next few years as the legal questions surrounding the CBD industry get resolved.
How Many 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 | 2018 | 0 | 0 | 0 |
| 2019 | 0 | 0 | 0 | |
| 2020 | 0 | 161 | +161 | |
| Company-Owned | 2018 | 0 | 0 | 0 |
| 2019 | 0 | 0 | 0 | |
| 2020 | 0 | 1 | +1 | |
| Total Outlets | 2018 | 0 | 0 | 0 |
| 2019 | 0 | 0 | 0 | |
| 2020 | 0 | 162 | +162 |
Your CBD Store is a new and growing brand, with all of its 162 locations opened in 2020. Legal barriers and consumer acceptance are expected to drive even further growth in the CBD industry.
Conclusion
The CBD industry is still new and while it has grown tremendously over the last few years and has the potential for further growth, there is still a lot of uncertainty surrounding its future. Specifically, high legal fees threaten profits in the short term, and the profitability of the industry right now is difficult to determine. We recommend that you speak to current Your CBD Store franchisees or others in the CBD industry to learn more about sales and profit prospects.
While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz.
