Anchored Tiny Homes Franchise in 2024: Costs, Fee & FDD
Discover if Anchored Tiny Homes is the right investment for you! Explore the brand’s impressive growth, earning potential, and key factors to consider when entering the booming tiny home market. Ready to invest in sustainable living? Read more!
Table of Contents:
Anchored Tiny Homes is a standout franchise in the growing tiny home industry. Founded by Scott and Shelly Littrell, this family-owned business began with a passion for simplifying life through minimalistic living spaces. The company has since evolved into one of the top providers of custom tiny homes, offering people across the U.S. a unique opportunity to embrace smaller, more efficient homes without sacrificing comfort or style. Anchored Tiny Homes has been recognized for its craftsmanship, sustainability, and commitment to delivering high-quality living solutions in a fast-evolving housing market.
At its core, Anchored Tiny Homes specializes in building custom tiny homes on wheels (THOWs), allowing homeowners to enjoy mobile, eco-friendly living. They offer a range of customizable floor plans, from modern minimalist designs to rustic, cabin-inspired styles. In addition to tiny homes, they provide ancillary services like ADU (Accessory Dwelling Units) installations and conversion projects for backyards, targeting clients looking to create rental units or guest spaces. Their core market includes retirees downsizing, eco-conscious millennials, and adventurous nomads seeking affordable and flexible housing options.
Anchored Tiny Homes currently operates across several states in the U.S., with a growing presence due to the increasing demand for alternative housing. With multiple franchise locations, they are scaling rapidly and have solidified their place in the home and building services sector. Their team helps customers navigate the tiny home buying process, serving thousands of clients each year while adhering to high customer service standards.
Franchisees benefit from a comprehensive support system that includes thorough training in building processes, sales strategies, and marketing techniques. Additionally, they offer ongoing operational support and assistance in navigating local regulations and building codes. With access to a dedicated team of experts and marketing tools, franchise owners are set up for success as they tap into a booming niche of the real estate market.
Anchored Tiny Homes Franchise Insights
- Anchored Tiny Homes is experiencing a remarkable year-on-year unit growth rate of 500%, vastly outpacing the tiny home industry average growth of just 4%, showcasing its strong market demand and successful business model.
- Their flexibility in building both mobile tiny homes and fixed ADUs positions them as a versatile company that caters to different housing needs, from urban backyard units to nomadic living solutions.
- With sustainability being a core focus, the company draws in environmentally-conscious customers looking for greener living alternatives, which boosts its appeal to a growing demographic prioritizing eco-friendly lifestyles.
- Anchored Tiny Homes’ personalized approach and commitment to quality has built a loyal customer base, which is enhanced by the company’s strong focus on customer satisfaction and tailored solutions.
Anchored Tiny Homes Franchise Key indicators
Growth YOY (%)
500%
vs industry 4%
Total U.S. Franchised Units
6
3-Year Failure Rate
0%
vs industry 13%
Sales-to-Investment ratio
19.1:1
How much does it cost to open a Anchored Tiny Homes franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Anchored Tiny Homes franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Anchored Tiny Homes franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Anchored Tiny Homes below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $59,500 | $59,500 |
| Construction and Leasehold Improvements | $0 | $10,000 |
| Commercial Parking | $0 | $1,000 |
| Furniture, Fixtures, and Equipment | $1,000 | $5,000 |
| Initial Inventory | $500 | $1,000 |
| Computer, Software, and Business Management System | $3,000 | $7,000 |
| Service Vehicle | $2,500 | $5,000 |
| Start-Up Marketing | $15,000 | $25,000 |
| Utility Deposits | $250 | $1,000 |
| Signage | $1,500 | $5,000 |
| Insurance Deposits (Three Months) | $1,000 | $2,500 |
| Travel for Initial Training | $2,500 | $6,000 |
| Professional Fees | $1,500 | $5,000 |
| Licenses and Permits | $1,000 | $2,000 |
| Additional Funds (Three Months) | $25,000 | $50,000 |
| Total Estimate | $113,750 | $185,000 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a franchise in the Home & Building Services sector, like Anchored Tiny Homes or similar companies, the required capital typically involves both initial investment costs and a minimum net worth requirement set by the franchisor. Here’s an estimate based on industry standards for this type of franchise:
- Initial Investment The total estimated initial investment for home and building services franchises ranges from $114,000 to $185,000. This estimate covers costs such as franchise fees, equipment, materials, and initial marketing expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Requirement Many home services franchises require franchisees to have a minimum of $75,000 to $150,000 in liquid assets. This ensures the franchisee can handle unexpected expenses and maintain smooth operations, especially during the early stages of the business.
- Net Worth Requirement The net worth requirement for these franchises typically ranges from $250,000 to $500,000. This includes the value of real estate, investments, and other personal assets, minus any debts. Having a solid financial foundation is critical for ensuring long-term stability in the franchise.
How much does a Anchored Tiny Homes franchise owner make?
Calculating the salary of a Anchored Tiny Homes franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Anchored Tiny Homes franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Anchored Tiny Homes Revenue & Gross Sales
Based on the most recent analysis, Anchored Tiny Homes franchises achieved a median gross sales of $3,424,000 showcasing the strong demand for alternative housing solutions. This impressive financial performance highlights the franchise’s ability to generate substantial revenue, driven by the growing interest in tiny homes and ADUs.
Which key factors impact the average revenue performance of Anchored Tiny Homes franchisees?
The impressive median gross sales performance of Anchored Tiny Homes franchisees in the past year can likely be attributed to several key factors. The rising demand for affordable and sustainable housing solutions, driven by the growing popularity of tiny homes and ADUs, played a significant role. Additionally, urban areas have seen an increase in homeowners looking to add secondary income through ADU rentals, further boosting sales. The franchise’s focus on customization and eco-friendly features appeals to a broad customer base, including retirees and millennials. Lastly, the housing market’s affordability crisis has pushed more consumers to explore alternative living options, creating a favorable environment for Anchored Tiny Homes franchisees to thrive.
Anchored Tiny Homes Franchise Operational Costs
Operational costs for a franchise like Anchored Tiny Homes are the ongoing expenses required to manage the day-to-day operations of the business. These costs ensure that projects run smoothly, from the design phase to delivery. For an Anchored Tiny Homes franchise, operational costs include:
- Material and Supply Costs The expenses incurred from purchasing building materials, such as lumber, insulation, fixtures, and customizations for tiny homes or ADUs.
- Labor Costs Wages, salaries, and benefits for construction teams, project managers, and administrative staff involved in building and customer service.
- Transportation and Delivery Costs associated with transporting homes or materials to construction sites, including fuel, vehicle maintenance, and logistics management.
- Permitting and Regulatory Fees Ongoing expenses for securing the necessary building permits, adhering to zoning laws, and complying with local regulations.
- Utilities Costs related to electricity, water, gas, internet, and other utilities needed to operate construction and administrative facilities.
- Maintenance and Repairs Routine upkeep for construction equipment and vehicles, along with any unexpected repairs to ensure smooth project delivery.
- Marketing and Lead Generation Expenses for local advertising, digital marketing, and lead generation to attract potential buyers and expand brand awareness.
- Warranty and Service Costs associated with providing post-sale services, including customer warranties and any follow-up support for tiny home owners.
Careful budgeting and management of these operational costs are essential for ensuring the financial success and sustainability of your Anchored Tiny Homes franchise.
Anchored Tiny Homes Franchise Fees
When considering the operational costs of an Anchored Tiny Homes franchise, it’s important to account for various ongoing fees associated with running the business. These fees are essential for maintaining the franchise’s brand, operational support, and overall success. Below is an overview of some key ongoing fees:
- Royalty Franchisees are required to pay the greater of 6% of gross sales or $3,500 per territory per month. This fee is due monthly on the first Tuesday of the month for the preceding month and is subject to a minimum monthly royalty fee, depending on the size of the operating territory.
- Brand Development Fund This fee is up to 2% of gross sales, with the current rate set at 1% of gross sales. Like the royalty fee, it is due monthly on the first Tuesday of the month for the preceding month. This fee supports national branding and marketing efforts to maintain brand visibility and appeal.
- Additional Fees There may be other miscellaneous fees such as local marketing contributions, technology support, and additional training costs that can vary based on your specific territory and operational needs.
Franchisees should carefully plan for these fees as they play a crucial role in maintaining the brand’s operational excellence and providing the necessary support for success.
Anchored Tiny Homes Franchise Earnings
Franchisees of Anchored Tiny Homes can expect significant earning potential, especially given the median gross sales figure of $3,424,000. As an owner-operator, your earnings can be quite robust, with a reported average of $616,000 in annual profit. This highlights the strong demand for tiny homes and ADUs, positioning the franchise as a lucrative opportunity for those who are hands-on in managing the business.
With the growing popularity of sustainable and affordable housing solutions, an Anchored Tiny Homes franchise offers solid returns for dedicated operators. By focusing on maximizing sales, minimizing costs, and actively managing projects, franchisees can optimize profitability while contributing to the expanding tiny home movement. This strong financial performance underscores the potential for substantial revenue in the right market conditions.
How to Open a Anchored Tiny Homes Franchise
Here’s an overview of the process and steps involved in becoming an Anchored Tiny Homes franchisee, from the initial inquiry to the start of operations:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Franchise Application Next, you’ll fill out a formal franchise application, providing details about your financial background, relevant experience, and business goals. This helps the franchisor assess whether you meet their qualifications.
- Review and Discovery Day If your application is approved, you’ll be invited to attend a Discovery Day. This is an opportunity to meet the corporate team, ask questions, and learn more about the business model, franchise operations, and long-term growth potential.
- Franchise Agreement After Discovery Day, if both parties are ready to move forward, you will sign the Franchise Agreement. This legally binds you to the terms and conditions of the franchise, including your territory rights, fee structure, and operational guidelines.
- Financing and Site Selection Once the agreement is in place, you’ll work on securing financing if needed. At the same time, you’ll collaborate with the franchisor to choose the best territory or location, whether for a mobile tiny home operation or a fixed facility for ADU construction.
- Training and Onboarding After securing a location, you will undergo comprehensive training on building processes, customer management, marketing, and other key aspects of running the business. This includes hands-on training with the franchise’s systems and operational procedures.
- Pre-Opening Preparations During this phase, you’ll set up your business infrastructure, purchase equipment, and prepare your team for launch. Marketing and lead generation efforts will begin to create buzz and attract customers.
- Grand Opening Once everything is in place, you’re ready for the grand opening. The franchisor will support you with marketing materials and operational guidance to ensure a smooth and successful launch.
Pros & Cons
Pros
Growing Market Demand: With the rising popularity of tiny homes and ADUs, there is a strong demand for affordable, sustainable housing solutions, providing a consistent customer base.
High Earnings Potential: The franchise reports median gross sales of $3,424,000 and owner-operator earnings of $616,000, offering significant profitability for those willing to manage operations closely.
Eco-Friendly Appeal: Anchored Tiny Homes taps into the growing trend of sustainable living, which can attract environmentally-conscious customers and lead to positive brand recognition.
Customizable Products: The flexibility in offering custom homes and ADUs allows for a wide range of customers, from retirees to property owners looking for additional rental income.
Cons
Regulatory Hurdles: Depending on your location, navigating local zoning laws and building permits for tiny homes and ADUs can be complex and time-consuming.
Market Saturation: In areas where tiny home and ADU providers are already well-established, competition could limit growth potential.
Hands-On Management Required: Success as an owner-operator requires significant time and effort in overseeing projects, from construction to customer service.
