FAQ’s of Owning a Kitchen Refresh
Design Studio

Who makes a good Kitchen Refresh franchisee? The following can be great fits:

• Carpenters: They already have the skillset to “hit the ground running.” If you’re also good with kitchen design recommendations and selling, then you mostly just need to learn our systems.

• Interior Designers: They also can hit the ground running and usually have carpenter, painter and other contacts to build out their team of contractors.

• Custom or Semi-Custom Cabinet Sales Professionals: They have kitchen design abilities and understand the cabinet world and how cost-competitive Kitchen Refresh is to custom cabinets. With their carpenter, painter and other connections they can also hit the ground running with a contractor team.

• Kitchen Design Specialists: Use your design, customer service, kitchen layout, and other related skills and your contractor connections to take you from employee to owner.

• Highly Skilled DIY’ers: Much like carpenters, they already have a carpentry skillset and primarily need to only learn the Kitchen Refresh systems as well as establish working relationships with a painter and some vendors such as countertop providers.

• Professional Salespersons: A good salesperson relies on deep product knowledge, objection handling and soft skills, all underlying essential keys to Kitchen Refresh success. You would also either use your own kitchen design skills or those of a strong designer, then acquire a carpenter and painter as subcontractors or employees, who typically also have connections to other subcontractors such as an electrician, countertop vendor, etc.

• Individuals with leadership and business operation experience: Similar to professional salespersons, your skills would combine with acquiring a carpenter and painter as subcontractors or employees, and their relationships to other contractors you need, and possibly an interior designer.

• Veterans: Those with military backgrounds have the discipline, perseverance, leadership skills, and task orientation to help them succeed as entrepreneurs. Those skills would be combined with acquiring a carpenter and painter as subcontractors or employees, and their relationships to other contractors you need, including possibly an interior designer.

According to Houzz, kitchens are the number one home renovation project, followed by guest and primary bathrooms in the number two and three spots, and laundry rooms at number seven.

Kitchen Refresh meets the high demand of being able to renovate all those rooms while also offering franchisees the following:

• No royalty fee

• Low monthly operating costs

• No inventory

• Advertising support

• Lead generation support

• Support of managing and nurturing leads

• A by-appointment-only design studio structure that typically eliminates need for additional staffing

• Up and running as quick as 45-90 days

• A low initial investment

• A net initial franchise fee as little as $2,500

Additionally, Kitchen Refresh enables franchisees to compete using a system to complete a typical Refresh in 5 days or less while saving clients up to 75% vs. custom cabinets

Lastly, we own and operate our own manufacturing facility to produce and deliver the doors, drawer fronts, drawer boxes, and related products to our franchisees. By controlling the manufacturing process we ensure the best quality materials are being used to produce the best quality components.

Kitchen Refresh is a Fast, Beautiful, and Affordable alternative to kitchen, bath, laundry room, and bar remodeling, saving clients up to 75% versus custom cabinet replacement.

With our process, we paint ONLY the cabinet boxes and then we custom manufacture and install all NEW one-piece pre-finished doors with soft-close hinges and all NEW drawer fronts with all NEW pull hardware. Our doors, drawer fronts, and other similar items are manufactured on a precision CNC machine using engineered wood and then coated in a durable Thermofoil color/finish. The approach we use makes our doors much more dimensionally stable than a typical 5-panel door, and our Thermofoil finish is much more durable then a stained or painted finish.

The typical Refresh is also completed in 5 days or less.

Additionally, our process also accommodates new drawer boxes, cabinet storage improvements, cabinet additions, island additions, layout changes, new countertops and backsplash, new flooring, and related remodel items.

Yes! As a Kitchen Refresh franchisee, you will buy the cabinet doors, drawer fronts, and other products from us, but you will work with local vendors and suppliers for offering any and all of the additional work that goes with kitchen remodeling: new flooring, new countertops, new backsplash, electrical, plumbing, and wall work, etc.

Nationwide, typically, in any given year, about 50% of ALL homeowners will have a home improvement project - and kitchen remodels top the list of their total spend (median spend of $15,000 in 2021) AND the total percentage of home improvement projects (28% in 2021) according to Houzz. There is also a much larger market of consumers who can afford a typical Kitchen Refresh transformation ($6,000 to $8,000) then who can afford an average kitchen remodel ($25,000) or a high end kitchen remodel ($50,000 or more). Additionally, according to Statista, total home improvement sales nationally in the United States were $391 billion in 2018, $407 billion in 2019, $497 billion in 2020, and $538 billion in 2021.

Our franchisees see the benefit in our system and process: We offer 1) a very attractive price point for homeowners while, 2) also being built for fast turnarounds to 3) deliver beautiful results - doors that install in just a few minutes, drawer box and rollout solutions that install quickly, etc. Our carpenter franchisee owners like that they can turn over 2 kitchens per week with 1-2 person teams vs. an average kitchen remodel that takes 4.9 months and requires a large crew. Our franchisees from professional sales, leadership, military, custom cabinet sales and kitchen designer backgrounds appreciate the larger market opportunity of the smaller price point, in addition to the quick turnaround, which helps deter client complaints that come from long, drawn out remodels. Interior designer owners like how Kitchen Refresh provides an area of speciality for them, and also how our price point opens up a much larger market of clients to their business, as well as the benefit of earning their own profits from kitchen remodeling sales.

Not necessarily. In most cases, your current business name can be co-branded into the Kitchen Refresh brand name. For example, if your current company name is ABC Contractors, you could do business as ‘Kitchen Refresh by ABC Contractors.’ However, we do want to see where Kitchen Refresh is the priority of the business, if not the sole function.

To be successful with Kitchen Refresh it needs to be your sole business commitment or the highest priority of your business. Having a divided interest results in a Kitchen Refresh location that underperforms to its full potential.

Kitchen Refresh is one of the most affordable franchise systems: Low initial franchise fees, no royalties, no inventory and low ongoing costs, so you may already have the resources in place. However, if you need financing, it may include one or some of the following: Savings, a home equity loan, a conventional business loan, SBA loan, retirement funds such as 401k, or IRA or pension.

Also, you may want to check out an option called Rollover For Business Startup financing that enables entrepreneurs to invest their 401k, IRA or other retirement savings into a new business venture without incurring taxes, early withdrawal penalties, or loan costs.

We developed a franchise tier system where, if you qualify, you could pay as little as a net initial franchise fee of $2,500 to begin as a Tier 3 franchisee.

For the Tier 2 level, the net initial franchise fee is $12,500.

For the Tier 1 level, the net initial franchise fee is $25,000.

The tradeoff of starting at Tier 3 is that you will pay a higher wholesale price to the home office for your doors and drawer front orders. At Tier 2, you pay the middle wholesale price for your doors and drawer fronts, and a Tier 1 franchisee pays us the lowest wholesale price.

Franchisees in good standing can start at Tier 3 or Tier 2 and move up in tiers by just paying the difference in price of the initial franchise fee to the tier they are moving to.

Understand that the initial franchise fee is just the cost to buy into the system and to secure a territory. There are other costs and fees such as a design studio lease and buildout, weekly advertising and lead nurturing fees, and more.

We recommend starting at the highest tier you can without it causing personal financial hardship since the higher the tier, the better the profit margin you’ll earn on your core door and drawer product.

Our Tier 3 net initial franchise fee of $2,500 was created for qualified individuals who don’t have, or are unable to obtain, the necessary capital to pay a higher franchise fee. This enables those franchisees with the right skill set, strong commitment and hard work ethic to at least get started into the Kitchen Refresh franchising system. If they maintain a position of good standing with Kitchen Refresh, they can then pay the difference later to advance to Tier 2 and/or Tier 1 where the better profit margins are.

However, if you have sufficient capital, we recommend starting at the Tier 2 level, a net initial fee of $12,500, or Tier 1 level, a net initial fee of $25,000, because they offer our better and best profit margins.

If you are a Kitchen Refresh franchisee who will be using employees or contractors for your carpentry and paint work, we would typically require you to begin as a Tier 2 at a minimum, or a Tier 1 - depending on the circumstances, due to the additional gross profit margin needed for the additional expense you would be incurring to pay out for labor.

Remember, you’ll be signing a 10-year agreement and will need to have a design studio, so even starting as a Tier 3, you are still making an investment and commitment.

In addition to basic daily responsibilities of running a business, franchisees perform 30-60 minute by-appointment-only design consultations virtually, in the design studio or in homes, and perform and/or project manage the transformations. And, because installs typically are completed in 5 days or less, managing the transformation projects are much less hassle than a 2-5 month typical home improvement project.

The design studio is the equivalent of a test drive for car sales: It is an integral and highly effective tool for improving your sales. The studio, combined with other related aspects of our system, has proven to increase the closing rate by double (or more). This is achieved by enabling your clients to see and touch Refreshed cabinets, as well as the additional options they have - our finish and hardware options, rollouts, soft-close drawers, soffit extensions, etc. Keep in mind: 1) The design studio is by appointment only, so no need to hire staff; 2) It can be as small as 350 sq. ft., so no large space is needed; 3) And it can be office space as opposed to high dollar retail space.

That depends on the role of your ownership.

At launch, some locations are a 1-owner setup where the owner handles the sales and then hires or contracts with a painter and installer to handle those aspects of the work.

Other locations are 2-owner setups where one owner handles the sales and the other owner does the installs, and a painter is contracted to do that work.

If your location and setup does need to hire an installer or painter, we have training videos and other items to assist in onboarding them. Also, installers earn $90 to $120 per hour based on the contracted rates we suggest, and painters earn $80-$90 per hour based on suggested contractor rates for them, too. These make for very attractive pay rates to find and retain contractors.

One important aspect is that you will need to add contractors or employees as your business grows.

The franchisee identifies a potential suitable by-appointment-only design studio space of at least 350 sq. ft. and storage for product orders shipped to you. You will also secure installer and paint contractors if you aren’t doing that work yourself, and then manage the studio buildout that can take place within a 45-90-day time period. There is also an online operations manual and design training manual that must be completed, online video training, step-by-step startup items, and home office personnel to walk you through each step to get you started.

We offer support regarding pricing, product knowledge, project queries, marketing, lead capturing and lead nurturing for conversion to sales. Marketing includes the website, Facebook marketing, Google marketing, email and text marketing, and other marketing platforms all managed by the home office. We also offer robust online training and reference resources to help you learn the Kitchen Refresh process and methods, including video training, that are available 24 hours a day 7 days week.

There are many factors that go into a location’s success - how closely you follow our systems, client satisfaction and referrals, competition and economic factors, etc., so we are unable to offer any guarantees of how your location might perform.

However, we can share the following information:

1) The top selling location for the 12-month period of 11/01/2021 to 10/31/2022 sold 125 Kitchen Refresh projects (10.5 kitchens per month).

2) The top 25% (top quartile) performing locations averaged 95 kitchens sold during that time period (8 kitchens per month)

3) The next 25% (2nd quartile) averaged 44 sales annually (about 4 kitchens per month).

4) The next 25% after that (3rd quartile) averaged 35 sales annually (3 kitchens per month).

5) And the bottom 25% (4th quartile) averaged 13 sales annually (about 1 kitchen per month).

A typical basic Refresh (new doors, new drawer fronts, painted cabinet boxes) retails for $6,000 to $8,000, but the total invoiced amount can be 2 to 3 times that ($12,000 to $24,000) or more for projects that have new countertops, new backsplash, cabinet additions or changes, new flooring, and other added components.

The gross product margin on the core products of a sale (doors and drawer fronts) would be 21.9% for a Tier 3 franchisee, 31.3% for a Tier 2, and 40.6% for a Tier 1.

Gross product margins can be even higher if you are performing the painting and carpentry work and not paying an employee nor contracting that work out.

As a hypothetical example, a two-owner Tier 1 franchise team selling 5-8 projects per month and performing their own painting and installs - with most projects completed in just 1-5 days - would potentially net a gross average profit of $3,325 per project for a basic Refresh - or $16,625 to $26,600 gross profit per month. This is pre-rent, advertising and other expenses, but also not factoring the 2 to 3 times additional up-sold and cross-sold sales revenues and profits of new countertops, new flooring, cabinet box additions, etc.

Every successful franchise relationship is built around systems. With Kitchen Refresh, our systems entail:

1. An easy pricing and estimating system that enables delivering an estimate at the consultation and takes into account product and labor costs and prices to help obtain profitability

2. High quality, custom-made door and drawer products along with a fast installation method

3. Social media, google, email, text and other marketing and lead nurturing efforts from the home office to help territories attract, nurture and develop potential prospects

4. Customer Relationship Management system to help manage prospects, clients and schedules through the lead acquisition to closing process

5. The company website managed by the home office - to free up your time for consultations and selling - complete with an online estimator to acquire leads, an online client inquiry form, online appointment setting, blog and other SEO/SEM engagement attributes

6. A client email newsletter managed by the home office to drive engagement and conversions - again, freeing up your time to focus on sales and project management

7. Text marketing managed by the home office to drive engagement and conversions

8. Support to help you get launched and to provide continued guidance and direction

9. Robust information, operations manual, and video training resources on an intranet system that can be referenced 24 hours a day, 7 days a week.

Our Tier 3 or Tier 2 initial franchisee fee options can be ideal matches for military veterans as they have low cost of entry with a net initial franchise fee as little as $12,500. Veterans can be a great fit to the Kitchen Refresh franchise because it involves leadership in such aspects as project management and managing people to complete tasks, time management, interpersonal skills that come from working as a team or serving others, and closely following processes and procedures.