Buildingstars Franchise: Profitable in 2024?
Buildingstars franchise is a leading provider of commercial cleaning services, offering franchise opportunities to individuals looking to start their own business in this growing industry. As a Buildingstars franchisee, you will be responsible for operating your own business that provides quality cleaning services to commercial premises in your area.
With a strong emphasis on customer satisfaction and a commitment to delivering the highest level of service, Buildingstars is a trusted choice for businesses seeking professional cleaning solutions. Buildingstars offers the support and resources you need to succeed, whether you are a seasoned entrepreneur or new to the world of business ownership.
If you are looking for a rewarding career that allows you to make a positive impact in your community, you might want to consider becoming a Buildingstars franchisee.
In this article, we focus on Buildingstars’ Corporate offering. Let us know if you want us to explore any of their other programs.
The Corporate franchise option is the only large building franchise available in the industry. Franchise owners in this program are some of the most successful in the industry, measured by highest average earnings over the longest period of time. Buildingstars is the only cleaning franchise that can back this up with a written earnings claim. Average monthly billing, average longevity and the ability for owners to sell the franchise and recoup their investment are all also much greater
From Buildingstar’s website
How Much Is a Buildingstars Franchise?
The initial Buildingstars Franchise Fee is $33,000 – $39,000 ($10,000 in Monthly Contract Revenue). You have to pay this upfront fee when opening a Buildingstars franchise.
Buildingstars Franchise Cost
The estimated total investment necessary to begin the operation of a Buildingstars Franchise ranges from $39,600 – $53,200. The following costs are part of the upfront costs included in the initial investment for Buildingstars. 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 Buildingstars franchise in 2022.
Estimated Initial Investment
| Type of expediture | Amount | To Whom Payment Is To Be Made | |
|---|---|---|---|
| Low | High | ||
| Initial Franchise Fee | $33,000 ($10,000 in Monthly Contract Revenue) | $39,000 ($10,000 in Monthly Contract Revenue) | Us |
| Travel and living expenses during training | $0 | $1,000 | Airlines, hotels, restaurants |
| Equipment | $2,500 | $5,000 | Suppliers, us or our Affiliates |
| Insurance | $300 | $1,000 | Insurance company and/or us |
| Legal, accounting and professional fees | $500 | $1,500 | Attorneys, accountants, etc. |
| Opening inventory (supplies) | $300 | $700 | Suppliers, us, or our Affiliates |
| Additional Funds – 3 months | $3,000 | $5,000 | Employees, suppliers, utilities |
| TOTAL | $39,600 | $53,200 | |
Owning a Buildingstars Franchise Requires Ongoing Fees
Royalty: 10% of Gross Sales
Account Sales Fee: 400% of Monthly Contract Revenue
Administration Fee: 5% of Gross Sales
Insurance Program Fee: 3.5% of Gross Sales
How Much Do Buildingstars Franchise Owners Make?
| Average Monthtly Contract Revenue | Number of Franchisees | Percentage of Franchisees |
|---|---|---|
| IN BUSINESS MORE THAN 12 MONTHS | ||
| Less than $5,000 | 2 | 11.8% |
| Between $5,001 and $12,000 | 2 | 11.8% |
| Between $12,001 and $18,000 | 3 | 17.6% |
| Between and $18,001 and $24,000 | 1 | 5.9% |
| Between $24.001 and $30,000 | 0 | 0% |
| Between $30,001 and $36,000 | 0 | 0% |
| Between $36,001 and $54,000 | 4 | 23.5% |
| Over $54,001 | 5 | 29.4% |
Buildingstars Median Franchise Sales Estimate: $21,000
| Initial investment (midpoint) | %Profit margin of median franchise sales | Estimated Profits | Time to recoup investments |
|---|---|---|---|
| $46,400 | 40% | $8,400 | 7 years |
| 50% | $10,500 | 6 years | |
| 60% | $12,600 | 5 years |
Based on the median sales provided by Buildingstars’s franchise locations, at an average of a 50% profit margin it will take around 6 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 50% 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, menu mix, and competition in the marketplace; the presence of other Cleaning and Maintenance stores; and the extent of market penetration and brand awareness that Buildingstars franchise stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.
Is the Buildingstars Franchise Profit Worth the Franchise Cost?
To assign a valuation multiple for Buildingstars 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 where more transaction data is available.
Under $5 Million Net Sales
- Estimated Selling Price = Net Sales * 0.58
When you go to sell a Buildingstars franchise based on the median multiple of .58 and net sales of $21,000, it would sell for $12,180. This is significantly lower than the midpoint investment of $46,400.
The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.
Buildingstars (Franchisor) Income Statement Key Insights
| Years ended December 31, | |||
|---|---|---|---|
| 2021 | 2020 | 2019 | |
| REVENUES | $63,186,280 | $54,564,749 | $48,509,149 |
| COST OF REVENUE | 45,245,924 | 39,178,545 | 34,648,783 |
| GROSS MARGIN | 17,940,356 | 15,386,204 | 13,860,366 |
| OPERATING EXPENSES | |||
| General and administrative expenses | 10,204,617 | 8,416,494 | 7,579,748 |
| Depreciation and amortization | $307,150/td> | 282,776 | 13,860,366 |
| 10,511,767 | 8,699,270 | 7,863,674 | |
| OTHER INCOME | |||
| Paycheck protection | – | 688,700 | – |
| NET INCOME | $7,428,589 | $7,375,634 | $5,996,692 |
Buildingstars is a very profitable business for the franchisor with retained earnings of $7.42 million in 2021. Compared to $5.99 million in 2019, they saw an increase of almost 50% from 2019 to 2021. This is a good indication of high growth as a company overall.
How Many Buildingstars Units Have Opened and Closed?
How many [brand] units have opened and closed?
| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 | 604 | 680 | +76 |
| 2020 | 680 | 688 | +8 | |
| 2021 | 688 | 807 | +119 | |
| Company-Owned | 2019 | 6 | 7 | +1 |
| 2020 | 7 | 8 | +1 | |
| 2021 | 8 | 9 | +1 | |
| Total Outlets (United States) | 2019 | 610 | 687 | +77 |
| 2020 | 687 | 696 | +9 | |
| 2021 | 696 | 816 | +120 |
Over the last three years, the company has been expanding. From 2019 to 2021, it grew from 604 to 816 franchises for around a 33% growth rate.
Conclusion
Buildingstars franchise is another player in the huge cleaning industry. Franchisees are essentially buying a second job/ income stream on top of their day-to-day work. It looks promising, but we recommend talking to 3 – 5 franchisees before starting your own business.
While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Cleaning and Maintenance industry.
