Chem-Dry franchise

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Chem-Dry is a franchised carpet cleaning business. They claim to be the best carpet cleaning franchise, offering entrepreneurs the chance to grab a piece of an industry worth £6.6 billion per year.

Chem-Dry business details

Launched in 1977 and now headquartered in Nashville, Tennessee, Chem-Dry have offered franchise opportunities since 1978. Franchisees operate a mobile business, using branded vehicles to visit residential and commercial premises to provide carpet cleaning, upholstery cleaning, spot removal, protective services and other authorised services. Currently, they have over 3500 locations worldwide and operations in more than 30 countries.

Chem-Dry at a glance:

  • Stores: More than 3500
  • Required Investor net worth: not stated
  • Required investor liquid cash: £30,000
  • Min. investment: £72,000
  • Max. investment: £254,000
  • Standard franchise term: 5 years

Can I start a Chem-Dry franchise?

You won’t need deep pockets to get into your Chem-Dry franchise. After covering the franchise fee, new business owners are required to show liquid cash reserves of only £30k. There is no minimum net-worth requirement or any need for previous cleaning industry experience. Additionally, because Chem-Dry is a mobile business there are minimal real estate costs. You could operate your Chem-Dry business from your own home or a low-cost industrial unit. There’s no need for an expensive main street retail outlet. Best of all, Chem-Dry does not require franchisees to manage the day-to-day running of the business. You can hire someone to do that for you. This makes a Chem-Dry franchise a good option for investors seeking a passive investment opportunity.

How much does a Chem-Dry franchise cost?

Chem-Dry provides one of the more affordable franchise opportunities, with franchisees expected to spend between £72,000 and £254,000 to get their new business up and running. 

The initial franchise fee is £23,500 (40% of which may be financed through Chem-Dry). Military and first-responder veterans may be eligible for a 10% discount off this fee.

After opening, you are required to pay an array of ongoing fees and charges. They include:

  • Monthly flat fee: £466
  • Annual minimum purchase amount: £3,244
  • Software fee: One-time data fee of £500 then £100 to £500 per month
  • Successor fee: £1,000
  • Monthly marketing fee: £1,000 per month for four months, then £2,000 per month 
  • Brand marketing fund contribution: £160
  • Transfer fee: £1,500 to £3,000
  • Franchised area transfer fee: £2,000
  • Training costs: £175 to £500
  • Administration fee: £500 per transaction
  • Franchise advanced website fee: £25 to £100 per month per website

Estimated key costs to open a Chem-Dry franchise:

Key Costs GuideLowHigh
Franchise fee£23,500£23,500
New business starter equipment (set)£39,495£84,495
Optional equipment£0£28,525
Cargo van£0£75,000
Equipment installation costs£600£6,000
Three months’ rent£0£5,000
Telephone and business license£400£4,000
Technology £800£2,000
Advertising – three months (on top of monthly marketing fee)£3,000£5,000
Optional digital advertising – start-ups – three months£0£1,349
Additional costs – first three months£2,500£9,000

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Are Chem-Dry franchises profitable?

Yes, but very modestly. Chem-Dry’s own figures suggest average annual revenues of £113,000 per franchise, whilst other research suggests excellent gross profit margins of 53% to 63% depending on labor, fuel and product costs. Taking a middle figure of 55% delivers a typical gross profit of £62,150 per year. Net profits – what you have left after taking out all costs could be 50% to 60% of this sum, so anywhere from £31,000 to £37,000 per year. This is well below the average UK franchise owner’s annual income (all franchises) of £60,000 per year, and it explains why most Chem-Dry franchisees have multiple locations to multiply their income.

What is the failure rate for a Chem-Dry franchise?

High to very high. The failure rate for a Chem Dry franchise is 14% in the first year, rising to 56% by year three.

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What are the franchise territory policies for Chem-Dry?

Chem-Dry franchisees must operate their business within a non-exclusive area that the company assigns and approves. The minimum size of a franchised area will typically cover a population of at least 60,000 but in some less-populated areas the franchised area might cover a population as small as 5,000. Franchisees must conduct their Chem-Dry businesses from a single location within the franchised area from which they may operate as many crews, teams, sales agents and vans as they desire.

What franchise resources does Chem-Dry offer?

Chem-Dry support for franchisees includes:

  • Training: Before opening, franchisees must complete the initial training program to master the operation of a Chem-Dry business and must also train their employees. The program consists of two weeks of home-study and five days of classroom/hands-on training. Franchisees are also required to complete at least one in-person training course per calendar year and various online or other electronic training modules or seminars.
  • Marketing support: Chem-Dry provides promotional and other marketing support for their franchisees.
  • Third-party financing: Chem-Dry provides limited financial support for investors seeking franchise funding. Alternatively you may be able to obtain more economical and flexible funding solutions from the many independent funders who provide business loans to franchise operators.

Why would you start a Chem-Dry franchise?

Firstly, there are billions of square feet of carpet installed in homes and businesses across the UK every year. They all need cleaning at some point. Secondly, carpet cleaning is a year-round business. There is no seasonal volatility. Thirdly, starting a Chem-Dry franchise is highly affordable and even with net profits of around £37,000 per year per franchise, you could still get your investment back in 3 to 4 years. Lastly, you hire someone to run this business for you and manage it as a passive investment. 

However, the downsides cannot be ignored: The extraordinary failure rate for Chem-Dry franchises by year three – more than half closing their doors for good – is concerning. And, the potential for competition from the 37,000 other carpet cleaning businesses that currently operate in the UK is very high. In summary, if you can accept the challenges and you like the idea of running a business from your armchair whilst making modest income, then a Chem-Dry franchise could work for you.

Secure franchise funding with Swoop

Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your new cleaning business like too much hard work. Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across the UK. Just tell us what you need and leave the rest to us.

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Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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