Why College Hunks is the Best Franchise Opportunity for You By Vetted Biz

Written by: Parth Parth
Last Updated by Maria Fernandez Amato: October 25, 2022
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This article is based on a video originally recorded on Vetted Biz Youtube Channel.

College Hunks promises Honest, Uniformed, Nice, and Knowledgeable Service to its customers. They provide services in the moving industry, ranging from junk removal to local and long-distance moving. College Hunks was founded by Omar Soliman and Nick Friedman when Omar noticed an opportunity to sell services that moved people’s old furniture to their new homes when they were buying new furniture at his mother’s establishment.

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Omar considered it a summer job, but a few months after graduation came back and established this business with Nick. At the close of 2021, they had 129 franchised and 3 company-owned units

How is College Hunks Franchise Positioned in the Home and Building Services?

The Moving services industry makes $1.2bn in profit every year and pays $4.2bn in an industry where the annual revenue is $18.5bn. 

College Hunks competes in the moving market against other local moving companies and giants like Walmart and UPS that offer moving services.

How Much is a College Hunks Franchise?

The initial (Company) Franchise Fee is between $45,000 and $65,000. You have to pay this upfront fee when opening a (Company) franchise. They also offer a $7,500 discount for veterans or a company owned at least 51% by veterans.

college hunks

College Hunks Franchise Cost

The estimated total investment necessary to begin the operation of a College Hunks Franchise ranges from $158,700 to $283,500.

The following costs are part of the upfront costs included in the initial investment for a College Hunks. 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 College Hunks franchise in 2022.

Company Franchise Cost (Detailed)

Site Built Location
Type of Expenditure Estimated Amount Low Estimated Amount High To Whom Payment is to be Made
Initial Franchise Fee 45,000 65,000 Us
Rent 1,600 4,500 Landlord
Lease, Utility and Security Deposits 2,000 5,000 Landlord, Utility Companies
Paint and Signage for Service Vehicle 3,100 5,500 Approved Suppliers
Down Payment on Service Vehicle 3,000 24,000 Approved Suppliers
Equipment and Hand Tools 2,000 8,000 Approved Suppliers
Office Equipment and Hand Tools 2,000 6,000 Suppliers
Business Licenses & Permits 500 3,000 Local and other State Government Agencies
Professional Fees 1,000 2,500 Various Service Providers and Contractores
Insurance Deposit 7,500 24,000 Insurance Providers
Training Expense 1,500 5,000 Suppliers and your Employees
Preopening Business Ramp Up Advertising 9,500 11,000 Suppliers
Additional Funds (6 months) 80,000 120,000 Us, Suppliers, Eployees and other Creditors
Total Estimated Initial Investment 158,700 283,500

College Hunks Franchise Requirements

Once you submit an application to College Hunks, they will invite you for a Discovery Day which is followed up with next steps from them.

Ongoing Fees

Royalty: 7% of Gross sales payable monthly

Technology Fee: 1% of Gross sales

Brand Development Fee: 2% of Gross sales

Renewal Fee: $5,000

Local Marketing: Greater of $1,500 or 8% of Gross sales for moving and $1,100 or 8% of Gross sales for junk removal

These fees are slightly higher than big names like UPS.

How much do College Hunks franchise owners make?

AVERAGE ANNUAL GROSS SALES, GROSS PROFIT, AND PROFIT MARGIN FOR FRANCHISED LOCATIONS 2019, 2020, AND 2021

Year 2019 2020 2021 2021 Bottom 25% Franchisees 2021 Top 25% Franchisees
# In Group 79 90 104 26 26
Average Annual Gross Sales 1,257,610 1,311,775 1,638,839 583,044 3,400,536
Median Annual Gross Sales 1,037,062 1,037,467 1,204,266 638,836 2,899,633
Number of Franchised Businesses Who Achieved or Surpassed Average Annual Gross Sales 27 31 31
Percentage of Franchised Businesses Who Achieved or Surpassed Average Annual Gross Sales 34% 34% 30%
Highest Annual Gross Sales 6,606,385 7,363,557 10,393,072 828,362 10,393,072
Lowest Annual Gross Sales 131,991 276,162 210,229 210,229 1,904,669
Average Royalty Costs (% of Revenue) 7% 7% 7% 7% 7%
Median Royalty Costs (% of Revenue) 7% 7% 7% 7% 7%
Average Disposal Costs (% of Revenue) 4% 4% 3% 3% 3%
Median Disposal Costs (% of Revenue) 3% 3% 2% 2% 2%
Average Truck Labor Costs (% of Revenue) 29% 29% 29% 27% 28%
Median Truck Labor Costs (% of Revenue) 29% 29% 29% 26% 28%
Average Truck Fuel Costs (% of Revenue) 4% 3% 4% 4% 3%
Median Truck Fuel Costs (% of Revenue) 4% 3% 4% 4% 3%
Average Truck Maintenance Costs (% of Revenue) 2% 2% 2% 2% 2%
Median Truck Maintenance Costs (% of Revenue) 2% 2% 2% 1% 2%
Average Credit Card Fees (% of Revenue) 2% 2% 2% 2% 2%
Median Credit Card Fees (% of Revenue) 2% 2% 2% 2% 2%
Average Moving Supply Cost (% of Revenue) 1% 1% 1% 1% 2%
Median Moving Supply Cost (% of Revenue) 1% 1% 1% 1% 1%
Average Total Cost of Service 648,854 667,150 823,218 287,372 1,658,332
Median Total Cost of Service 549,495 489,813 643,988 297,681 1,452,254
Average Total Cost of Profit 608,756 644,626 815,621 295,672 1,742,204
Median Total Cost of Profit 489,936 509,267 588,936 310,724 1,473,364
Highest Total Cost of Profit 3,271,406 4,030,598 5,596,913 453,163 5,596,913
Lowest Total Cost of Profit 71,031 182,121 86,770 86,770 861,679
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(2020) College Hunks Median Franchise Sales: $1,037,467

Initial Investment – Midpoint %Profit Margin Of Average Franchise Sales Estimated Profits Time to Recoup Investment
221,100 10% 103,746 3 years
221,100 15% 155,620 2.5 years
221,100 20% 207,493 2 years

(2021) College Hunks Median Franchise Sales: $1,204,266

Initial Investment – Midpoint %Profit Margin Of Average Franchise Sales Estimated Profits Time to Recoup Investment
221,100 10% 120,426 3 years
221,100 15% 180,639 2.5 years
221,100 20% 240,852 2 years

Based on the median sales provided by College Hunks’s franchise locations, at an average of a 15% profit margin it will take around 2.5 years to recoup your investment. This is very fast compared to a lot of other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

Many factors affect the sales, costs and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, and competition in the marketplace. The presence of other moving company stores; the extent of market penetration and brand awareness that College Hunks stores have attained in your market. Also, the quality of management and service at your Franchised Store will affect customer retention and satisfaction.

college hunks

Is the College Hunks Franchise Profit Worth the Franchise Cost?

While it might take some time initially to scale up the business, once it is scaled up in the right locations, median profits start ranging in the $500,000 to $600,000 per year range.

To assign a valuation multiple for College Hunks franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems like Anytime Fitness where more transaction data is available.

Under $1 Million Net Sales

  • Estimated Selling Price = Net Sales – 0.44

$1 Million – $5 Million Net Sales

  • Estimated Selling Price = Net Sales – 0.59

When you go to sell a College Hunks franchise based on the median multiple of .44 and net sales averaging between 2020 and 2021 of $1,204,266, it would sell for $529,877. This is almost double of the midpoint investment of $221,100.

College Hunks (Franchisor) Income Statement Key Insights:

CHHJ FRANCHISING, LLC AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019

2021 2020 2019
REVENUE
Royalty Fees 14,748,181 9,966,934 8,532,350
Call Center Fees 7,356,821 5,874,442 5,359,609
Franchise Fee Revenue 1,120,803 1,003,028 595,070
Other 4,216,870 2,820,951 2,566,438
Total Revenue 27,442,675 19,665,355 17,053,467
COST OF SERVICES 6,682,821 5,067,655 4,734,133
GROSS PROFIT 20,759,854 14,597,700 12,319,334
OPERATING EXPENSES
Management Labor 4,974,881 2,990,766 3,515,251
Marketing 3,236,088 2,582,036 2,354,925
Payroll Taxes and Benefits 1,280,797 960,054 1,019,339
Facilities 459,274 430,226 539,792
Depreciation and Amortization 579,601 282,504 326,183
Bad Debt Expense 13,144 25,625 37,314
Other Operating Expenses 2,256,162 1,433,126 1,800,941
Total Operating Expenses 12,799,947 8,704,337 9,593,745
NET OPERATING INCOME 7,959,907 5,893,363 2,725,589
OTHER INCOME 
Other Income 202,752 1,986,007 329,265
Interest Income 1,000 4,394 18,872
Total Other Income 203,752 1,990,401 348,137
OTHER EXPENSES
Interest Expense 24,408 213,200 250,014
NET INCOME 8,139,251 7,670,564 2,823,712

College Hunks is a very profitable business for the franchisor with retained earnings of $8.13 million in 2021. Compared to $2.82 million in 2019, They saw an increase of 188% from 2019 to 2010. This is a good indication of high growth as a company overall.

How many College Hunks units have opened and closed?

Outlet Type Year Outlets at the Start of the Year Outlets at the End  of the Year Net Changes
Franchised
2019 102 114 12
2020 114 129 15
2021 129 152 23
Company-Owned
2019 2 4 2
2020 4 3 -1
2021 3 3 0
Total Outlets
2019 104 118 14
2020 118 132 14
2021 132 155 23

Over the last three years, the company has been expanding. Franchised units have almost doubled. Over the last three years, franchises have opened at an average rate of 3 units a year. This is an indicator that these stores might be performing well.

Conclusion

College Hunks offers people the opportunity to be a part of a business that is not going out of business soon. The moving industry in the USA stands at $18.5bn in annual revenue.

While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in Home and Building Services. Read more about Packing and Shipping here.