September 6, 2022
What Does it Cost to Start a Painting Franchise?
Investing in a painting franchise is a smart way to immediately access enterprise-scale resources in a competitive but profitable industry. Like any business, starting a painting company and licensing a franchise brand involves upfront and ongoing costs. Start your research with a look at the painting industry’s economic outlook and some specific costs associated with a Color World Painting franchise.
Painting Industry Outlook Remains Strong
Residential painting companies thrived during COVID-19 by providing exterior home painting services. Consumer demand was piqued by considerable federal stimulus and a high household savings rate. Many painters capitalized on the increased interest in home remodeling and home improvement projects. Total home improvement spending increased by 82% from 2019 to 2021, with house painting revenue rising by 142.7%.
The elongated sales cycle of the residential painting industry indicates a broad slowdown, with annual growth slowing to 0.3%. New construction home building activity and the commercial market are expected to mitigate any consequential slowdowns.
Starting Your Painting Franchise: Costs and Considerations
Owning any business, including a franchise, involves a range of fees and associated costs. In franchising, many of the initial costs are detailed in the Franchise Disclosure Document, or FDD. This document provides information about franchise ownership, franchisor obligations, and defines the responsibilities of both parties. It also includes many of the costs of starting a painting franchise, including:
- Startup fees
- Royalty fees and rates
- Financial obligations
One of the benefits of the franchise model compared to private entities is the ability to forecast initial and future costs accurately. Because the FDD standardizes most of the startup costs, it removes much of the guesswork associated with starting a new business while also detailing resources to overcome other challenges, including accounting, recruiting, and marketing.
How Much It Costs to Start a Color World Painting Franchise
Our most recent 2023 FDD is based on real-world costs and agreements with current franchises. These amounts are subject to change on a quarterly or annualized basis, so make sure you get in touch for the most up-to-date information.
Franchise Fee – This fee is an upfront cost to license the Color World brand and associated resources. In Item 7 of the FDD, the Color World Painting franchise fee is $49,500. Veterans, women, and minorities may qualify for reduced franchise fees as a part of our commitment to diversity.
Startup costs – These are the expenses you incur when you start operating. This can vary from franchise to franchise based on real-world materials costs, location, and other factors. Item 7 outlines an estimated initial investment of Color World Painting ranging from $106,900-$168,000 which includes the aforementioned franchise fee. This estimate is informed by previous years’ performance, franchisee feedback, and our experience in the painting service industry. Note that this cost can also vary based on how closely franchise owners follow the system, management skills, and business acumen.
Recurring Fees – These include ongoing expenses that support you as a franchise owner. This includes royalty fees, advertising, marketing, technology, and other associated fees. Item 6 of the FDD outlines all the recurring fees for your review.
Is a Painting Business Profitable?
While profitability is subject to numerous factors, well-run painting franchises typically enjoy relatively high profit margins. Expect material and labor costs to account for 40-60% of total revenue, plus franchising fees. Of course, investing in a painting franchise also reduces the costs associated with full-time marketing and other related efforts.
The biggest factors that impact both revenue and profits are:
- Local competition
- Market size
- Service area size (which increases transportation expenses)
- Labor costs
- Material costs (especially during shortages)
Take the First Step Toward Owning Your Own Business
Color World Painting offers a relatively low-cost painting franchise opportunity for ambitious entrepreneurs. Count on our franchise development team to answer your questions and put you in a position to succeed. Ready to get started? Contact us today to receive your confidential questionnaire.