Can I Operate Multiple Territories?
Chem-Dry is easy to scale, and there are few limits on growth
Chem-Dry is not only the world’s largest carpet cleaning franchise — it also is one of the most economical multi-unit franchises you can own. Chem-Dry has hundreds of multi-unit franchise owners throughout the United States. The top 5% of franchise owners generated over $1,000,000 in average revenue, and the top 25% of franchise owners generated $619,407 in average revenue in 2019, according to a survey of our franchisees.
For a breakdown of Revenue by Quartile, see our Item 19 FDD information:
|Group Ranked by Average Revenue||Number of Owners||Number of Franchises||Average Revenue / Owner||Median Revenue / Owner|
Chem-Dry is the largest carpet cleaning franchise in the world, and much of our growth has been thanks to ambitious franchisees who own multiple licenses and have built large businesses serving homeowners and businesses in their communities.
What Are the Advantages of Multiple Territories?
Starting a multi-territory Chem-Dry franchise is affordable. In fact, it’s not a lot more expensive than starting with a single territory. That’s because many of the startup costs that go into launching a Chem-Dry franchise are smaller or do not apply when launching a second territory.
Total startup costs for a single Chem-Dry franchise license range from $67,645 – $185,757, with much of the cost financed by Chem-Dry’s parent company, Harris Research Inc., and third-party vendors. The financing options allow a Chem-Dry owner to start a single territory with as little as $14,100 down.
Starting with two territories can be hugely beneficial, and it is still quite affordable. While Chem-Dry charges a franchise fee of $23,500 for the first territory, we discount it to $18,000 for subsequent territories. Many of the costs associated with operating a Chem-Dry business will be the same whether you operate one territory or two. After all, you are unlikely to need more telephone lines, business licenses, insurance, computers or rent. For the first year that you are growing your business, you may not even need a second van — but having multiple territories will allow you to maximize your marketing efforts and grow your business more quickly.
To ensure that Chem-Dry franchisees operating in the same city have plenty of customers, we only allow one franchise license for every 60,000 people in a county. So, in Tennessee’s Davidson County — home to our Nashville office — 13 licenses were available as of 2017 because the population was 789,778.
Newer franchisees are using multiple territories in a different way to quickly grow their businesses — with a goal of eventually achieving similar marketplace dominance. Rather than confining their sales activity in one county, they are purchasing adjoining territories. It’s a strong growth strategy because it maximizes the power of marketing efforts and customer referrals. Our largest and most established franchise owners have become the face of Chem-Dry in entire cities by purchasing all or most of the licenses in their territories.
Word-of-mouth is a powerful tool for growing a carpet cleaning business. When homeowners and business owners find a carpet cleaner that does a great job, they tend to be loyal — and they tell their friends, families and co-workers. Often, those friends and colleagues live in the next county. Without a license to operate in that county, a Chem-Dry franchise owner is left to refer that business to another carpet cleaner. If you have a license, though, all of those referrals are yours.
We call these “spillover leads” — and they are a natural consequence of marketing. If you market your business enough in New York City, you are bound to get some customer interest in New Jersey. The same thing applies for Dallas and Fort Worth, Minneapolis and St. Paul, or any number of cities that are ringed by suburban counties full of commuters. By owning multiple territories, you can not only enjoy the yields from your marketing efforts in your primary territory, but you can also win spillover leads from nearby territories that are full of likely Chem-Dry customers.
Multi-unit franchise owners enjoy lower costs when adding additional territories
The Chem-Dry investment model results in a franchise with tremendous scalability and earning potential. The tables below outline the costs of opening a Chem-Dry franchise with a single franchise license, but entrepreneurs who are eager to grow quickly can spend a little more for multiple licenses and lock down territories.
Not all of the costs outlined below will be incurred when you add territories. For instance, if you choose to rent a facility from which to operate your business, you won’t need to rent a second facility in order to serve two territories; you won’t need two phone lines or an extra computer. You will need to account for additional advertising, and we recommend setting aside additional funds. That’s why, while startup costs for a single Chem-Dry territory start at $67,645, startup costs for two territories start at just $85,645.
You don’t need to come up with all that money up front, either. In fact, we’d prefer that franchisees conserve some cash to bolster their marketing efforts and speed the process of winning customers. To make that easier, Chem-Dry offers in-house financing for the franchise fee. The initial franchise fee is $23,500, and we may finance $9,400 of the fee; the fee for additional territories is $18,000, and we may finance $7,200 of the fee. The loan for the initial franchise fee is interest- and payment-free until the fourth month of operation, and the loan for additional franchise fees typically start at staggered times several months out.
This chart details our financing terms by equipment package:
|OPTION||Initial License Fee||Total Investment||License Fee Down Payment||License Fee Balance Financed|
|Executive Portable Package||$23,500||$56,495||$14,100||$9,400|
|Executive Truck Mount Package||$23,500||$77,995||$14,100||$9,400|
|Executive Direct Drive Truck Mount Package||$23,500||$82,995||$14,100||$9,400|