What factors can affect the 'Labor Costs' for Cd One Price Cleaners?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
This figure does not cover all costs associated with occupying the Cost Reporting Stores, such as facility maintenance and ongoing store cleaning costs.
- (2) "Labor Costs" reflect salaries and wages (including overtime), incentive compensation, vacation pay and associated payroll taxes paid to the Stand-Alone Plant Store's or Group's employees. This figure does not cover all employee-related costs associated with operating the Cost Reporting Stores, such as payroll processing fees, health insurance or workers' compensation insurance premiums, uniforms, or meal, travel and other expenses for employees. Factors affecting Labor Costs include the managers' operational ability (including experience with managing and scheduling staff), the manager's commitment to training staff and implementing
employee retention programs, the local labor market, and any applicable federal or state minimum wage laws.
The Plant Stores that are part of the Cost Reporting Stores use a variety of management staffing models, with some using only one or 2 managers and others using more store managers. Factors impacting the management staffing decisions include the overall gross revenue of the Plant Store or Group, the number of full-time or part-time workers on staff, the longevity of the employees and the number of employees that are cross-trained for position flexibility. Many CD Store franchise owner(s) fill some management duties themselves. Because these franchise owners receive compensation both for their work at the Cost Reporting Store and as owner based on the store's cash flow/profits, the salaries and wages that these owners pay themselves for these services vary widely. In order to normalize Labor Costs, we contacted our franchise owners to understand what amounts they paid themselves and included in their reporting of Labor Costs, and what they felt were "market rate" Labor Costs for the positions that the franchise owners maintained at their Cost Reporting Stores. Some franchise owners then modified their initially-reported Labor Costs based on our inquiry. No franchise owner increased their reported Labor Costs to reflect a market rate for the management positions that the franchise owner maintained, because no franchise owner felt that they were paying below-market compensation for those roles. However, at 7 of the Plant Stores that are part of the Cost Reporting Stores, the franchise owner decreased the reported Labor Costs to reflect a market rate for the manager positions that they held, because those owners were paying themselves above-market compensation for those roles.
Source: Item 19 — Financial Performance Representations (FDD pages 63–68)
What This Means (2025 FDD)
According to Cd One Price Cleaners' 2025 Franchise Disclosure Document, several factors can influence labor costs for franchisees. These factors include the managers' operational abilities, such as their experience in managing and scheduling staff, and their commitment to training staff and implementing employee retention programs. The local labor market conditions also play a significant role, as does compliance with federal and state minimum wage laws. These elements collectively determine the overall labor expenses a Cd One Price Cleaners franchise will incur.
The FDD also indicates that management staffing models can vary among Plant Stores, with some using only one or two managers while others use more. These staffing decisions are influenced by the store's gross revenue, the number of full-time and part-time workers, employee longevity, and the extent of cross-training for position flexibility. Many Cd One Price Cleaners franchise owners also take on some management duties themselves, which can affect reported labor costs.
To normalize labor costs for the financial performance representation, Cd One Price Cleaners contacted franchise owners to understand the amounts they paid themselves and included in their labor cost reporting. They also inquired about what the owners felt were "market rate" labor costs for the positions they maintained. Some owners adjusted their initially reported labor costs based on this inquiry. At seven of the Plant Stores, franchise owners decreased their reported labor costs to reflect a market rate for their manager positions, because they were paying themselves above-market compensation for those roles. This suggests that owner involvement and compensation strategies can significantly impact the reported labor costs for Cd One Price Cleaners franchises.