Before you quit your job and spend $100,000 or more on a painting franchise, shouldn’t you know who has the best painting franchise? Which painting franchise has the best value and opportunity for you to grow?
This review looks at seven franchises and the critical parts of the Franchise Disclosure Document that determine startup costs, ongoing fees, territory size, and training.
I was surprised to see such a wide gap in many critical areas that can enhance or suppress profits and potential growth.
This article evaluates seven painting franchises, in four of the most important categories.
First, the painting franchises:
To find out who has the best painting franchise, we will discover which one has:
All data is taken straight from each franchisor’s 2020 FDD to compare apples to apples.
Let me explain if you are unfamiliar with Franchise Disclosure Documents or FDD. The FDD is a document that includes all fees, costs, restrictions, and guidelines about the franchise.
FDDS are all laid out in specific topics in a particular order, so it’s easier to find and compare. For example, all FDDs will have information on royalties and other fees attached to gross sales in ITEM 6.
Below is the table of contents taken from Klappenberger & Son. All franchises are required to have their information in the same order.
FDD are lengthy documents, and not taking the time to read and understand the details can be a costly mistake. You will see that there are significant differences in all four categories. It will be your ultimate decision to deduce which ones are important to you to find the best painting franchise.
I will only focus on the parts that will affect the profitability and growth of a business, which would include Item 6,7,11,12 of each FDD.
In our quest to evaluate the best painting franchise, lets start with:
Most people who buy a painting franchise do not have any experience in the industry.
That makes training and support very critical. Short and incomplete training will lead to a slower ramping process and more mistakes. And it is safe to say that mistakes cost time and money, and only give you headaches and stress. Therefore, proper training is paramount.
The task of painting is not very complicated. However, there is a lot to learn about the industry. Therefore it is paramount for the training to include significant time on:
Crucial: What is the best type of training?
|Type of training||Effectiveness|
Below is a list of the seven franchises and how they stack up in the type and length of training from first to last.
Table 2 Training
There is a two way tie for the shortest training with no onsite training.
With 40 hours of training, there is little time to learn anything but the business basics. Also, there is no on-site training included.
Below is a schedule of Color World HousePainting training taken from their FDD. There is no mention of:
360 Painting –(96 hours) 60 of the hours are through a webinar and only 36 hours of corporate training.
CertaPro – (102 hours)For having one of the most expensive franchise fees, the training could be more in-depth and commit to some on-site training. There is no on-site training.
Five Star Painting (80-120 hours) Five Star provides 1-5 days of on-site training. Even if the trainer stays for a couple of days, it can improve the new franchisees’ confidence and morale. Five Star also requires an annual mandatory “reunion training” at franchisees’ expense. The reunion training is a good idea and will help fill in some of the information that was never taught or forgotten.
Wow 1 Day Painting has an in-depth training program, but wow, does it require a lot of traveling. There are three separate trips to Vancouver, Canada!
Also, Phase 3 is concerning. It includes 4-6 weeks of sales and marketing “targets” but no opportunity to start jobs?
Phase 5, Wow 1 Day Painting, has an instructor arrive on-site (2-5 days) for continued training.
The last phase concludes with a trip back to Vancouver for final training.
From the start of training to completion is about three months. I struggle with the fact that no income will be able to be generated for three months. That can be very stressful for you and your family.
For individuals without experience in the painting industry, the six-week program enables the franchisee to learn, practice, and grow with its founder.
All things being equal, we can all agree the lower ongoing fees are better than, the higher ones.
Ongoing fees can come in many forms, such as advertising, royalties, and other forms. In the quest to find the best painting franchise, we want to know if we gross the same amount of money, which franchises allows us to keep the most?
Fees attached to gross sales add up, and it all comes out of your bottom line. Evaluating ongoing fees attached to gross sales and monthly fees makes a massive difference in your bottom line.
Knowing and understanding your royalties and advertisement fees is very important. The difference between franchises adds up to hundreds of thousands of dollars!
These fees are charged based on gross sales. If a company has a net margin of 20%, a 2 % margin equals a 10% cut in your pay!
The marketing fees generally go to anything the franchisor chooses as long it goes toward brand awareness.
But just because you pay into it does not mean you will find a direct benefit in proportion to what you pay.
These fees are in addition to what you are obligated to spend on advertising. The chart below shows how much these single-digit charts add up. Five franchises hover in the 2-3% range for marketing fees. CertaPro and Wow-1 Day can add up to two or three times higher!
Painting Franchise Territories:
Having smaller territories can limit broader marketing methods such as billboards, radio, and TV. Even joining a local networking group such as a BNI or Chamber can generate jobs outside of what the franchisor will permit the franchisee to work.
When You buy a franchise, you are buying the rights to use the franchisors trademarks in a given territory. The franchise fee is always tied into the size of the territory. With all franchises, if you want a larger territory you will pay a higher franchise fee.
In column 5, I divided the franchise fee into the size of the territory to get a per-person cost. Whether you conclude the population size of the territory is the most important, or the per-person cost, Klappenberger & Son is the best value of the painting franchises.
Color World HousePainting – has the smallest territories and the highest franchise fee.
Color World House Painting Additional Territory Chart
A 10% discount for additional territories is the lowest of the painting franchises.
CertaPro – Does not have the smallest territories, but they do have the most restrictions.
Also, CertaPro does not give the franchisee exclusive rights to the territories.
First, you can face competition from other franchisees and other affiliates or channels of distribution that they control.
Furthermore, franchisees have no right to do commercial work in their territory unless they become certified to perform Commercial Services.
The certification comes with a $6,000 price tag. If the franchisee elects not to get certified, another franchisee can do the work with no compensation to the franchisee’s territory.
CertaPro does not mention the size of their territories in their FDD. It states territories will be created before the signing and allocated by zip codes. Also, there is no mention of what a second territory would cost. This vagueness is not encouraging. I have been able to surmise that the CertaPro Painting franchises in MD are between 150,000 – 250,000.
Fresh Coat – With a territory of (175,000 – 200,000), it is very conceivable that one might want some additional customers.
Unfortunately, Fresh Coat charges $500.00 per thousand, which ties for second-most.
Another significant downside is, if your territory is outside your home or community, you will have to lease office space. This additional expense will affect your bottom line.
Such a Deal!
Five Star Painting territory size (150k – 200k) is similar to Fresh Coat (175k-200k). A slightly more significant advantage would be in cases where the franchisee would like a larger territory. Five Star charges $200 per $1,000 people instead of $500 per 1,000.
Wow 1 Day Painting – divides their territories by households and call them sub-territories. A painting franchisee starts with two sub-territories. Additional sub-territories are 12k. Territories are based on zip codes, but typical territory sizes are 200,000
Discounts for a second and third franchise are 20% and 50% off, respectively.
The downside: Your sub-territory is not exclusive. ITEM 12 of the FDD reads:
The non-exclusivity only extends to commercial accounts and not residential customers. The franchisor will not open another Wow 1 Day Painting inside your territory.
360 Painting – Due to their larger territories than most (300,000 people) and reasonable charges for additional areas (.18-.20 per person), 360 Painting came in second place. The franchisor guarantees that at least 100,000 households will have incomes over $75,000. These metrics should generate territories of approximately 300,000 people.
Klappenberger & Son –franchises are easily 2-3 times larger than the competitors making it the best value. Furthermore, each person in a given area is between 6 and 11 cents. The size of the Klappenberger & Son territory is so large that buying multiple territories is not necessary. However, additional territories are only $20,000, which comes out to .04 per person.
For instance, Fresh Coat can be as low as $53,945, and CertaPro starts at $133,250. That is nearly an 80,000-dollar difference! In other words, does CertaPro give you $80,000 more in value, or does Fresh Coat underestimate the start-up costs?
When franchisors create an FDD, they put in allowances for necessary expenses such as trucks, accounting fees, tools, etc. So, you would assume that many expenses would be about the same.
There is a great disparity between each painting franchises initial start-up cost.
Because there is so much data to cover, we will break this down into two separate charts. The first chart, table 5, will focus on the estimated additional capital while ramping up your business and an advertising budget.
The advertising budget is only important to compare with each franchise because it plays a substantial role in start-up cost totals. However, it is subjective for me to grade what I think is the optimum amount for an advertising budget.
Highlighted in yellow are 3 franchises that have very low estimated additional capital to fund your business and your personal expenses while your business is ramping up. In other words, each painting franchise should similar amount for additional capital. But instead we differences from $2,000 – $30,000!
Additional capital is for:
Fresh Coat, Five Star Painting, and Color World HousePainting can boost low initial startup costs partly because they have low additional capital allowances to start a painting franchise.
Having low additional capital allowances makes the painting franchise more attractive on paper. However, you may find you need an additional $10,000 – $15,000 in the upcoming weeks.
The green column on the far right of Table 5 shows how Fresh Coat was able to keep its initial high and low investment low by partly underestimating additional capital and advertising budgets.
First, what do I mean by “best initial start-up cost”? I evaluated this section and graded it in four different ways. Does a franchise have:
All costs listed in table 7 are either one-time fees or ongoing. The squares that are colored represent something unusual.
As you can clearly see, Fresh Coat has 4-5 reds (necessary expenses with no allowance). And, 5-6 yellows allowances (unrealistically low estimates compared to the others) which is why they state to have such low start-up costs.
On other hand, CertaPro has five expenses that offer at no additional charge. Also they have four charges that are substantially higher than the other painting franchises. Hence, CertaPro initial start-up cost is amongst the highest.
CertaPro: Apples to Apples Excerpt from 2020 FDD
Of all the franchises, CertaPro has the best brand recognition and that should be taken into account as a benefit. However, of the seven franchises, CertaPro has the highest fees attached to gross sales and one-time fees.
Besides the unique initial fees, CertaPro has the highest expenses attached to gross sales.
Below is a chart that shows the high and low fees for a CertaPro Painting Franchise that grosses 1 million dollars compared to a Klappenberger & Son franchise.
The Fees are based on annual revenue of $1,000,000
*Certapro charges a 12% fee for any franchisor-related jobs. In this example, an estimated 0 – 10% of gross sales were projected from franchisor referrals.
Color World is at or near the bottom of all critical factors in evaluating who has the best franchise.
Fresh Coat underestimates the start-up costs of its franchise. The allowances they give are substantially lower than other painting franchises.
The two graphs below show Fresh Coat Fees are either unaccounted for or unrealistic.
Below are areas where Fresh Coat had unrealistically low allowances.
Fresh Coat Painting:
* underestimates costs * small territories
* inadequate training * poor value
Wow-1 Day Painting has scored very well in all categories except fees attached to gross sales.
Additional fees could add up to $165,000- $315,000 taken out of your net profit in five years.
Wow 1 Day Painting Overall Score
|Catagory||Wow 1 Day Painting Rankings||Score|
|Fees attached to gross sales (Royalties and marketing funds)||6th||2|
|One-time fees and fixed fees||Very Good||6|
360 Painting has very reasonable fees attached to gross sales. Their fixed cost is in line with what most franchisors are factoring in. The territory size is reasonable (300,000), but the training was short, with no on-site training.
Five Star will have the highest startup cost because they give the highest allowances for several categories. If you reduce the allowances to what other franchises are factoring, they fall into the middle of the pack.
Pound for pound, Klappenberger & Son has the best painting franchise value. When comparing each painting franchise FDDs to one another, Klappenberger & Son scored the highest on 3 out of 4 critical items.
* Bookkeeping For Painters– organizes your records and performs job cost analysis.
This unique feature saves you time and gives you valuable insight into how the franchise functions.
Klappenberger & Son has a franchisee guarantee that was not discussed. The franchise guarantee states that if you follow their marketing plan and fail to gross $500,000 in your first 20 months, Klappenberger & Son will reimburse the franchise fee.
In full disclosure, I am one of the franchises included in the list! Before franchising, I started Klappenberger & Son, a painting and handyman company, in 1989. In 2015, I began to franchise and continue and have 6 franchises in the MD, DC Northern VA area.
However, I have gone to great lengths to be as objective and neutral as possible.
As I mentioned, all data comes from each franchisor’s own 2020 FDD. I do include my analysis of the data, which comes from my 30 years of experience.