ShelfGenie Franchise in 2024: Costs, Fee & FDD

ShelfGenie is a home organization and improvement franchise, founded in 2000 by Andrew Kerwin. The company initially aimed to solve the common problem of disorganized and inefficient storage, particularly in kitchens. It quickly grew in popularity due to its innovative, customized storage solutions. What began as a small, local business has now developed into a leader in the home improvement and custom shelving industry, establishing itself as a go-to for homeowners looking for smart, functional storage solutions.

At its core, ShelfGenie offers custom-built, glide-out shelving systems that improve the accessibility and organization of kitchens, pantries, bathrooms, and closets. The main products are pull-out shelves that maximize space and make stored items easier to reach. Ancillary services include free in-home design consultations and expert installation, ensuring a full-service approach. Their core market is homeowners, particularly those over 50, looking to enhance the functionality and comfort of their homes, though the brand also appeals to individuals of all ages interested in home improvement.

With over 200 franchise locations across the United States and Canada, ShelfGenie has scaled impressively, and its reach continues to grow. While it remains focused on North America, the franchise services thousands of customers every month, providing tailored storage solutions. Their ability to scale efficiently without losing quality has contributed to their strong reputation in the home improvement industry.

One of ShelfGenie’s standout features is its robust franchise support system. Franchisees receive comprehensive training, covering everything from sales and marketing to operations and design consultation. This support extends post-launch, with ongoing assistance in marketing, technology tools, and customer acquisition. They also provide dedicated coaching to ensure franchisees succeed, making the ShelfGenie opportunity appealing for anyone looking to invest in the home improvement sector.

ShelfGenie Franchise Insights

1. ShelfGenie operates over 250 franchise locations across the U.S. and Canada, showcasing its strong foothold in the North American home improvement market.
2. Franchisees benefit from a 5-week training program, including sales and design training, plus ongoing marketing and operational support.
3. ShelfGenie experienced a year-over-year unit growth rate of 13%, significantly outperforming the home improvement franchise industry average of 4%, highlighting its strong market demand and expansion potential.
4. The brand’s in-home consultation service is free for customers, making it an easy entry point for franchisees to connect with potential clients and drive sales.

ShelfGenie Franchise Key indicators

How much does it cost to open a ShelfGenie franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a ShelfGenie 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 ShelfGenie 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 ShelfGenie below from the most recent Item 7 below:

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 ShelfGenie franchise, the required capital involves both the initial investment costs and a net worth requirement set by the company. Let’s take a closer look below:

• Initial Investment The total estimated initial investment for a ShelfGenie franchise ranges from $83,000 to $137,000. This includes all startup costs such as the franchise fee, training, equipment, marketing expenses, and working capital to cover initial operating costs. 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 ShelfGenie typically requires franchisees to have a minimum of $70,000 in liquid assets. This ensures that franchisees have enough financial flexibility to handle unexpected expenses and maintain operations during the startup phase.
• Net Worth Requirement The recommended net worth for potential ShelfGenie franchisees is typically around $150,000 to $200,000. This includes the total value of assets such as property, investments, and other holdings, minus any liabilities. Having this financial backing is crucial for long-term stability and business growth.

How much does a ShelfGenie franchise owner make?

Calculating the salary of a ShelfGenie 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 ShelfGenie 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.

ShelfGenie Revenue & Gross Sales

Based on the most recent analysis, ShelfGenie franchises have a median gross sales of $132,212. This solid financial performance highlights the brand’s consistent demand within the home improvement sector, offering franchisees a promising opportunity for steady revenue generation.

Which key factors impact the average revenue performance of ShelfGenie franchisees?

Several factors likely contributed to the performance of U.S. ShelfGenie franchisee median gross sales this past year. First, the ongoing demand for home improvement projects, particularly in kitchen and storage optimization, has driven customer interest, as more homeowners focus on enhancing functionality within their living spaces. Additionally, the aging population, which makes up a significant portion of ShelfGenie’s target market, continues to seek solutions that improve accessibility and convenience in their homes. The brand’s proven sales and marketing strategies, combined with an increase in repeat business from satisfied customers, have also played a role in sustaining strong sales performance. Finally, the personalized, in-home consultation model has likely boosted conversion rates, leading to higher revenue growth.

ShelfGenie Franchise Operational Costs

Operational costs for a franchise like ShelfGenie are the ongoing expenses required to run the day-to-day operations of the business. These costs are essential for maintaining the business’s functionality and ensuring smooth operations. For a ShelfGenie franchise, operational costs include:

• Materials and Supplies Costs Expenses for purchasing the custom glide-out shelving systems and related materials used in installations. This includes wood, hardware, and other storage components necessary to fulfill client orders.
• Labor Costs Wages and salaries for skilled designers and installers, who play a vital role in providing in-home consultations and completing custom installations for customers.
• Vehicle and Transportation Costs Ongoing expenses for maintaining and fueling vehicles used to transport materials and staff to and from customer locations for consultations and installations.
• Marketing and Advertising Expenses Costs associated with local and digital marketing campaigns to attract new customers, including online ads, direct mail, and promotions.
• Technology and Software Expenses for managing customer relationships, scheduling appointments, and providing design consultations. This includes CRM systems, design software, and other essential tools.
• Insurance Costs for various insurance policies, including general liability, vehicle insurance, and worker’s compensation to protect your business and employees.
• Maintenance and Repairs Regular upkeep of any equipment, tools, or vehicles used in daily operations, as well as unexpected repair costs that may arise during business activities.

Careful planning and budgeting for these operational costs are essential for the financial health and success of your ShelfGenie franchise.

ShelfGenie Franchise Fees

Owning a ShelfGenie franchise is different from owning an independent, non-franchised business. Like most franchises, ShelfGenie requires its franchisees to pay ongoing fees to operate. These include:

• License Fee Franchisees pay either the greater of $400 per month per territory (for an Executive Franchise) or $200 per month (for an Owner/Operator Franchise), or 5%-7% of gross sales, depending on the annual gross sales of the business. This fee is due every Wednesday of the week.
• Marketing and Advertising Fee (MAP Fee) Franchisees are required to contribute 2% of their gross sales to marketing and advertising efforts. This is in addition to the required Minimum Local Marketing Spending, with payments due every Wednesday.
• Additional Fees There may be additional fees for items such as training, technology, or other services that the franchise provides to help support the business.

These ongoing fees are essential to consider when planning the financial aspects of owning and operating a ShelfGenie franchise. They cover the costs of brand support, marketing, and other operational assistance provided by the franchisor.

ShelfGenie Franchise Earnings

Earnings are estimated to be around $23,798 annually based on industry operating profit margins. This figure represents a typical income after accounting for ongoing operational costs and fees, such as the license fee, marketing contributions, and other expenses necessary to run the business.

While $23,798 may seem low for some investors, it’s important to consider that ShelfGenie’s low initial investment and flexible operational model make it appealing for those seeking a manageable business with potential for growth. As the franchise expands and customer demand for home organization solutions increases, there are opportunities to boost sales and profitability, particularly for franchisees able to effectively manage multiple territories or scale their business over time.

How to Open a ShelfGenie Franchise

Becoming a ShelfGenie franchisee involves a structured process, from initial inquiry to starting operations, offering a rewarding opportunity to join a recognized brand in the home improvement sector.

The full process for opening a ShelfGenie franchise is outlined below:

1. 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).
2. Application Once your inquiry is accepted, you’ll complete a detailed application, providing information about your personal and professional background, financial status, and reasons for wanting to become a franchisee.
3. Interview Process If your application is successful, you’ll proceed to interviews with ShelfGenie representatives. These interviews evaluate your business skills, alignment with the brand, and ability to run a franchise.
4. Background and Financial Check A comprehensive background and financial review is conducted to ensure you meet ShelfGenie’s standards, including liquidity and net worth requirements.
5. Approval After passing the evaluations, you’ll receive approval to become a franchisee. At this point, you’ll discuss available territories and prepare for the next steps.
6. Training Program Before launching your franchise, you’ll attend a training program that covers sales, design consultations, and operations. This training ensures you’re fully prepared to manage your business.
7. Territory Setup and Marketing After training, you’ll begin setting up your territory, hiring staff, and starting local marketing efforts to build brand awareness.
8. Launch Once everything is in place, you’ll officially launch your ShelfGenie franchise, with ongoing support from the corporate team to ensure a smooth and successful start.
9. Ongoing Support Post-launch, ShelfGenie provides continuous support through marketing, operational guidance, and regular evaluations to help you grow and succeed.

Pros & Cons

Pros

Low Initial Investment: Compared to many other franchises, ShelfGenie offers a relatively low initial investment, making it accessible for many potential franchisees.

Home-Based Business Model: ShelfGenie operates without the need for a physical retail location, reducing overhead costs like rent and utilities.

Growing Demand for Home Improvement: With a focus on storage and organization solutions, the franchise taps into a growing market, especially among homeowners aged 50 and above.

Flexibility: The business model offers flexibility, allowing franchisees to scale their operations by expanding into additional territories or hiring more installers.

Cons

Modest Earnings Potential: The median gross sales and owner-operator earnings can be lower than other franchise opportunities, which might limit profit margins unless territories are expanded.

Physical Labor Required: The nature of the business involves physical work, particularly in installations, which could be a downside for franchisees who prefer a more managerial role.

Local Market Dependence: Success may depend heavily on local demand for home improvement services, which can vary based on geography and economic conditions.

Competition: The home improvement sector is competitive, and there may be local competitors offering similar services.