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CertaPro Painters

CertaPro Painters Franchise   
"Selling dreams that become nightmares"      
NAVIGATION

 How Much Do CertaPro Franchisees Make?

According to an article in The Wall Street Journal, the average small business owner salary in 2006 was $233,600.
(source: http://online.wsj.com/article/S61019MEMOS.html)

How much does a CertaPro franchisee make?
How does $7.21 per hour sound?

(Current federal minimum wage: $7.25 per hour.)

According to information from CertaPro's 2010 FDD, the median (half make more, half make less) gross revenue for CertaPro franchisees was about $282,000. These numbers are from the year 2009.

Expenses which are deducted from gross sales include royalty, advertising, wages, paint, supplies, insurance and other business expenses, etc.

The average CertaPro franchisee's discretionary profit:: 8.7% of sales.
(Unclear: Whether or not these figures include "debt service"--paying taxes, your loans and credit card debt.)

Let's look at a couple of examples, assuming disposable income at 9% of sales::

     Sales: $250,000 (CertaPro's first-year "goal")
     Income: $22,500

     Sales: $400,000 (CertaPro's second-year "goal")
     Income: $36,000

Especially in the early years, you might work 60-70 hour weeks, and, there are variables which can affect your profitability, such as your painters' skills, direct mailings and any damages you'll have to pay for (e.g., replacing a customer's trampled bushes or broken coffee table).


How Much?

Based on a 60-hour work week, at $250,000 sales, it's about $7.21 per hour.
at $400,000 sales, it's about $12.98 per hour.

It could be less, and you could also lose money.

Median hourly wage for a painter in 2008: $15.85 (source: Bureau of Labor Statistics)
You could spend $150,000 to earn less, hourly, than your painters.
A big difference: The painters won't have "minimum annual franchise fees" to pay.

Of course, most Certapro franchisees end up going out of business.
So a Certapro franchisee will most likely end up looking for another job.

CertaPro franchise
Partial listing of failed franchisees
(this is unbelievable--horrendous)


Notes:
According to an independent franchisee survey by Gary Kowalski, CertaPro Painters franchisees reported working the following number of hours:

 
Hours worked Cumulative average
Less than 40 18%
40-50 28%
51-60 26%
More than 60 26%
Passive Investment 1%

 

 How Many Franchisees Can Even Make The Minimum?
 Based on CertaPro's minimum annual gross of $450K, then $500K, then $650K
The number in the far left column shows each franchisee's gross revenue.
The colored columns to the right show how many franchisees do NOT make the minimum
of $400K, $450K, $500K and $650K.



Note: These numbers are from CertaPro's 2010 FDD.
Some of these franchisees own multiple territories, which means
their minimum is greater.
(Number of territories) X (Minimum sales required).

Minimums are based on CertaPro's 2011 Franchise Agreement:

From subsection 2.3 (minimum franchise fee) and subsection 6.1 (minimum gross) of contract (franchise agreement)

CALENDAR YEAR GROSS SALES
1st calendar year $450,000 (min. $22,500 franchise fee)
3rd - 5th $500,000
6th - 10th $650,000

What the minimum franchise fee means:
The franchisee signs a contract which BINDS him/her to produce at least $4.5 MILLION and pay CertaPro at least $227,500 over the 10-year term of the contract.

That minimum franchise fee could prove to be cause of a franchisee's failure, as happened to me and others. I was struggling, trying to hang on and increase business when that demand for minimum franchise fee due arrived from CertaPro. I didn't have it. I believe Certapro's minimum franchise fee is the catalyst for many/most Certapro franchise failures.

Here's the question:
If a CertaPro Painters franchise is as successful as they'd like you to believe, WHY do they demand a minimum franchise fee? If you don't make the minimum, CertaPro still gets paid. It means CertaPro has no skin in the game, their revenue is not dependent on your success.
  

 

Review the numbers above, FROM CERTAPRO, then ask yourself this:
How reasonable is CertaPro's minimum annual gross sales requirement?

 


Believe The Reality, Not The Hype

The following is a quote from a 2005 Charlie Chase video
and an example of the hype:
  


The Hype:

Charlie Chase: "CertaPro has goals for 2006 and 2010
...by 2006 we would like to have 100 franchisees greater
than a million dollars in sales.
...By 2010 we want to have 250 franchisees
at a million or greater."

He also said, about those goals:
"Those are big hairy audacious goals but we have been
known for hitting our goals"

  


The Reality:


Number of franchisees grossing $1 million
or greater at the end of 2009:
 250 
 200 
 100 


28

"We have been known for hitting our goals"?
Yeah, right: "Certainty".
  


 



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