2. Can you be a little more clear on the risks involved?
We give your child the ability to take on the responsibilities of hiring their work force, of purchasing equipment, and in setting the price on the painting of homes. They are really running their own business, and are responsible for the decisions that they make. If your son/daughter decides to go and purchase $2,000 worth of ladders (we set up a line of credit for them at a paint store,) and then they never use those ladders, they owe that money (just like the real world!). Your son/daughter is also responsible for hiring and setting the wages of the painters. If they want to hire their friends at $20 an hour – they can do that, however, the money will come off their profit.
We work very hard, and have a long history of training people without any business experience, without any painting experience, and without any money to run a successful business. We really care about our franchisees and their success, and we will provide them with ongoing consultation in order to help them make informed decisions.
A quick and simple example can show you how they make or lose money (these numbers are for demonstration purposes only and don’t represent, or imply that this is a typical scenario):
Let’s look at two examples – both are with a $1,000 paint job, and both have the same costs for College Pro, paint and supplies.
In our "how to lose money" situation, we will put in the example that your son/daughter decided to pay 3 painters $20 an hour. Let’s say the work took each painter 20 hours to paint the job (60 hours total). Labor costs would be $1,200 (60 hours (3 painters at 20 hours each) x $20).
In our other example, they paid 3 painters $10 an hour and they each took 10 hours to paint the job. Labor costs would be $300 (30 hours (3 painters at 10 hours each) x $10).
| Ex. 1 | Ex. 2 | |
| Revenue: | $1,000 | $1,000 |
| Costs: | ||
| College Pro, paint & supplies | $300 | $300 |
| Painters | $1200 | $300 |
| Profit | ($500) | $400 |
As you can see, in example #1, they brought in less money than they spent, and lost money. If this were the only job they did all summer (or all of your jobs went this way) – they would lose money.
That labor % would not be anywhere close to a typical labor percent, nor would that wage rate be a typical wage rate that our franchisees would pay their workers – so this scenario is not a typical situation. It’s provided to show how you can lose money.
Example #2 shows how the franchisee makes money – after paying out your labor, suppliers and College Pro – they get what’s left.
We could get rid of all of the risks involved, but the challenge, opportunity and reward wouldn’t be the same for our franchisees.
We spend a lot of time in teaching and reviewing the financial aspects of the business, and we give your son/daughter the tools to manage their profit on all of their jobs. Our on-line management system – CPOWER (College Pro’s Online Web-Enabled Resource) has financial management tools that track the profitability of every job the franchisees produce. We’re here to help them if they have questions, and to support and consult them in their decision-making.
College Pro wants your son or daughter to succeed, wants them to have a great experience, and wants them to return for another summer and grow, and realize their unlimited potentials – we’re on their side. All of our full-time GMs, VPs, Presidents and CEO were all franchisees! We’ve been there, and we want them to do well – we just can’t guarantee what they’ll do with the responsibility.