What does 'Average Years Operating' represent in the Chem Dry financial performance data?

According to Chem Dry's 2024 Franchise Disclosure Document, the 'Average Years Operating' reflects the average length of time in years that the Responding Franchise Owners have been operating their Chem-Dry business. This metric is used in the Item 19 financial performance representation to give prospective franchisees an idea of how long existing franchisees have been in business. The Responding Franchise Owners represent approximately 41.9% of Chem Dry's U.S. franchise owners who owned their businesses for at least 1 year and operated those franchises throughout all of 2023.

Specifically, the FDD includes a table that breaks down financial performance by groups ranked by average revenue. Within this table, the 'Average Years Operating' is provided alongside other key metrics such as average revenue per job, median revenue per job, and the percentage of owners exceeding average revenue per owner. For example, the 'Total' row in the table shows an average of 20.0 years operating for that group. This data point provides context for the revenue figures, as franchises that have been operating longer may have established a stronger customer base and brand recognition in their market.

It is important to note that the Responding Franchises have operated for long periods of time, some of them for longer than 18 years. These Responding Franchises report that they have developed a customer base over time that provides a recurring revenue stream. Chem Dry cautions that a new franchisee starting a new Chem-Dry business franchise would not start with that base of customers and should expect to realize lower revenues. Additionally, the Chem-Dry brand is well established in many of the markets in which the Responding Franchises operate, where advertising of the brand over the long term enhances brand awareness. If you operate your Chem-Dry business franchise in a market where the Chem-Dry brand is not yet well developed, your franchise may not benefit as much from an established trade identity in the market or from historic and current marketing activities that other Chem-Dry business franchise owners in the same market. Franchises in new markets for the Chem-Dry brand may produce lower revenue than revenue reported by Responding Franchise Owners in established markets.

Prospective franchisees should consider the 'Average Years Operating' in conjunction with other factors, such as market saturation and brand recognition in their target area, to develop realistic financial projections. They should also be aware that the financial performance data is based on a sample of franchisees using Chem Dry's Customer Management Software and has not been audited or independently verified. Chem Dry will provide written substantiation for the data used to prepare this financial performance representation upon your reasonable request.