One Hour Heating & Air Conditioning: $1.20M Average Sales Per Territory vs. $128K-$223K Franchise Cost (2024)

In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a One Hour Heating & Air Conditioning franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a One Hour Heating & Air Conditioning franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned One Hour Heating & Air Conditioning outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the One Hour Heating & Air Conditioning franchise opportunity

Section V – Presentation and analysis of One Hour Heating & Air Conditioning’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 aggregate, average, median, highest, and lowest gross revenue per territory for the 78 One Hour Heating & Air Conditioning franchisees representing 323 territories that were in operation for the entire 2022 fiscal year (by quartile and overall)

• 2022 aggregate, average, median, highest, and lowest gross revenue for the 78 One Hour Heating & Air Conditioning franchisees representing 323 territories that were in operation for the entire 2022 fiscal year (by quartile and overall)

• active franchise revenue growth (2022 vs. 2021) for the One Hour Heating & Air Conditioning franchisees in business and reporting as of December 31, 2021 and as of December 31, 2022

Section VI – Key ratios, comparables, computations, and analyses for the One Hour Heating & Air Conditioning franchise opportunity (exclusive content for Platinum subscribers)

Section I – One Hour Heating & Air Conditioning Franchise Costs

• One Hour Heating & Air Conditioning franchise costs (start-up franchise), based on Item 7 of the company’s 2023 FDD:

• Franchise Fee: $43,000
• Rent/Lease of Real Estate: $3,000 to $12,000
• Leasehold Improvements: $1,000 to $4,000
• Computer Systems: $800 to $2,000
• Software: $2,492 to $3,176
• Office Furniture and Equipment: $2,500 to $5,000
• Machinery, Tools, and Equipment: $3,000 to $10,000
• Vehicles: $3,600 to $7,200
• Signage for Vehicles: $10,000 to $20,000
• Office Signage: $2,000 to $4,000
• Travel Expenses for Initial Training: $2,500 to $3,800
• Initial Vehicle Inventory: $2,500 to $10,000
• Insurance: $4,000 to $15,000
• Start-up Supplies: $2,500 to $5,000
• Professional Fees and Licensing: $2,500 to $11,500
• Vehicle Registration Fees: $2,200 to $4,400
• Decals for Consumer Units: $300 to $500
• Telephone Services: $62 to $162
• Personal Tools for Technicians: $1,000 to $3,000
• Additional Funds – 3 Months: $40,000 to $60,000
• Total Estimated One Hour Heating & Air Conditioning Franchise Costs: $128,954 to $223,738

Section II – One Hour Heating & Air Conditioning’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• One Hour Heating & Air Conditioning’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee: $43,000

• Royalty Fee: 6% of Gross Revenue or $1,500 per month (the “Minimum Royalty”), whichever is greater

• Brand Fund Contribution: currently, the contribution is based on your Gross Revenue for the calendar year and is payable according to the following schedule: 1.5% of the first $5,000,000 of Gross Revenue in the then-current calendar year; then 1.25% of Gross Revenue in excess of $5,000,000 and up to $10,000,000 in the then-current calendar year; then 1% of Gross Revenue in excess of $10,000,000 and up to $15,000,000 in the then-current calendar year; then 0.75% of Gross Revenue in excess of $15,000,000 and up to $20,000,000 in the then-current calendar year; then 0% with respect to Gross Revenue in excess of $20,000,000 in the then-current calendar year.

• Local Marketing and/or Cooperative: effective until notice of 2023 Local Marketing Fee change: One Hour Heating & Air Conditioning recommends, but does not require, that you spend at least 8% to 12% of Gross Revenue annually on Local Marketing. However, if you fail to achieve your Minimum Performance, One Hour Heating & Air Conditioning may require you to spend at least 8% of Gross Revenue on Local Marketing during each of the following 12 months. Effective on notice of 2023 Local Marketing Fee change: You are required to pay One Hour Heating & Air Conditioning $36,000 annually (an average of $3,000 per month) for Local Marketing (the “Annual Local Marketing Fee”).

Section III – Number of Franchised and Company-Owned One Hour Heating & Air Conditioning Outlets

Franchised

2020

• Outlets at the Start of the Year: 340
• Outlets at the End of the Year: 321
• Net Change: -19

2021

• Outlets at the Start of the Year: 321
• Outlets at the End of the Year: 340
• Net Change: +19

2022

• Outlets at the Start of the Year: 340
• Outlets at the End of the Year: 351
• Net Change: +11

Company-Owned

2020

• Outlets at the Start of the Year: 33
• Outlets at the End of the Year: 33
• Net Change: 0

2021

• Outlets at the Start of the Year: 33
• Outlets at the End of the Year: 33
• Net Change: 0

2022

• Outlets at the Start of the Year: 33
• Outlets at the End of the Year: 33
• Net Change: 0

Section IV – News Updates on the One Hour Heating & Air Conditioning Franchise

• One Hour Wraps Up an Incredible Year of Franchising in the HVAC Industry

• One Hour Heating & Air Conditioning Launches the HVETerans Giveaway to Honor One Deserving Veteran

• One Hour Heating & Air Conditioning Launches Annual HVAC Entrepreneur Recruitment Contest

• One Hour Heating & Air Conditioning Ranked No. 282 on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the One Hour Heating & Air Conditioning Franchise (Item 19, 2023 FDD)

• In this Item 19, the franchisor presents historical information for franchised One Hour Heating & Air Conditioning businesses for the 2022 fiscal year and prior years. The data in this Item from the period prior to May 14, 2021 was collected by the franchisor’s predecessor, OHAC. As of December 31, 2022, One Hour Heating & Air Conditioning had 91 franchisees operating in 351 Territories.

• Parts 1 and 2 present information on 78 franchisees (representing 323 Territories) that were in operation for the entire 2022 fiscal year.

• Excluded from these tables are 5 franchisees (representing 16 Territories) that use a business software system other than Successware and thus did not follow the same reporting procedures as the included franchisees. One Hour Heating & Air Conditioning has no reason to believe the results for this excluded group are atypical, but for data integrity it cannot combine them with results reported via Successware.

• The tables also exclude 3 franchisees (representing 5 Territories) that ceased operation during 2022. The tables also exclude 8 franchisees (representing 12 Territories) that opened during the 2022 year as these franchisees were not operational for the entire 2022 fiscal year.

Part 1 – Gross Revenue by Territory, by Quartile for the Fiscal Year Ended December 31, 2022

Top 25%

• Number of Franchisees in Group: 20
• Number of Territories in Group: 37
• Aggregate Gross Revenue of Territories in Group: $135,407,170
• Average Gross Revenue of Territories in Group: $3,659,653
• Highest Gross Revenue of Territories in Group: $6,873,353
• Lowest Gross Revenue of Territories in Group: $2,305,790
• Median Gross Revenue of Territories in Group: $3,149,562
• Number and Percent of Territories Exceeding Group Average: 15 / 41%

2nd Quartile

• Number of Franchisees in Group: 19
• Number of Territories in Group: 59
• Aggregate Gross Revenue of Territories in Group: $99,735,655
• Average Gross Revenue of Territories in Group: $1,690,435
• Highest Gross Revenue of Territories in Group: $2,120,422
• Lowest Gross Revenue of Territories in Group: $1,406,761
• Median Gross Revenue of Territories in Group: $1,849,283
• Number and Percent of Territories Exceeding Group Average: 14 / 24%

3rd Quartile

• Number of Franchisees in Group: 19
• Number of Territories in Group: 119
• Aggregate Gross Revenue of Territories in Group: $126,195,946
• Average Gross Revenue of Territories in Group: $1,060,470
• Highest Gross Revenue of Territories in Group: $1,383,065
• Lowest Gross Revenue of Territories in Group: $714,381
• Median Gross Revenue of Territories in Group: $865,932
• Number and Percent of Territories Exceeding Group Average: 71 / 60%

Bottom 25%

• Number of Franchisees in Group: 20
• Number of Territories in Group: 108
• Aggregate Gross Revenue of Territories in Group: $27,064,474
• Average Gross Revenue of Territories in Group: $250,597
• Highest Gross Revenue of Territories in Group: $631,797
• Lowest Gross Revenue of Territories in Group: $35,885
• Median Gross Revenue of Territories in Group: $285,856
• Number and Percent of Territories Exceeding Group Average: 38 / 35%

Totals

• Number of Franchisees in Group: 78
• Number of Territories in Group: 323
• Aggregate Gross Revenue of Territories in Group: $388,403,244
• Average Gross Revenue of Territories in Group: $1,202,487
• Highest Gross Revenue of Territories in Group: $6,873,353
• Lowest Gross Revenue of Territories in Group: $35,885
• Median Gross Revenue of Territories in Group: $1,383,065
• Number and Percent of Territories Exceeding Group Average: 165 / 51%

• In some cases, a franchisee may have increased or decreased its number of Territories during the fiscal year. For purposes of the table, One Hour Heating & Air Conditioning includes all of the Territories operated by a franchisee that were operated during any time in the 2022 fiscal year, including 1 franchisee that increased its total number of Territories by 3 and 1 franchisee that increased its total number of Territories by 1 (and in each case opened those respective Territories during the 2022 fiscal year).

Part 2 – Gross Revenue of Franchisees, by Quartile for the Fiscal Year Ended December 31, 2022

Top 25%

• Number of Franchisees in Group: 20
• Number of Territories in Group: 152
• Aggregate Gross Revenue of Franchisees in Group: $258,845,016
• Average Gross Revenue of Franchisees in Group: $12,942,251
• Highest Gross Revenue of Franchisees in Group: $48,383,607
• Lowest Gross Revenue of Franchisees in Group: $5,101,307
• Median Gross Revenue of Franchisees in Group: $8,906,512
• Number and Percent of Franchisees Exceeding Group Average: 8 / 40%

2nd Quartile

• Number of Franchisees in Group: 19
• Number of Territories in Group: 63
• Aggregate Gross Revenue of Franchisees in Group: $73,670,837
• Average Gross Revenue of Franchisees in Group: $3,877,412
• Highest Gross Revenue of Franchisees in Group: $5,072,225
• Lowest Gross Revenue of Franchisees in Group: $2,890,931
• Median Gross Revenue of Franchisees in Group: $3,803,325
• Number and Percent of Franchisees Exceeding Group Average: 9 / 47%

3rd Quartile

• Number of Franchisees in Group: 19
• Number of Territories in Group: 43
• Aggregate Gross Revenue of Franchisees in Group: $40,573,743
• Average Gross Revenue of Franchisees in Group: $2,135,460
• Highest Gross Revenue of Franchisees in Group: $2,875,013
• Lowest Gross Revenue of Franchisees in Group: $1,472,341
• Median Gross Revenue of Franchisees in Group: $2,118,216
• Number and Percent of Franchisees Exceeding Group Average: 7 / 37%

Bottom 25%

• Number of Franchisees in Group: 20
• Number of Territories in Group: 65
• Aggregate Gross Revenue of Franchisees in Group: $15,313,648
• Average Gross Revenue of Franchisees in Group: $765,682
• Highest Gross Revenue of Franchisees in Group: $1,468,157
• Lowest Gross Revenue of Franchisees in Group: $83,645
• Median Gross Revenue of Franchisees in Group: $684,543
• Number and Percent of Franchisees Exceeding Group Average: 9 / 45%

Totals

• Number of Franchisees in Group: 78
• Number of Territories in Group: 323
• Aggregate Gross Revenue of Franchisees in Group: $388,403,244
• Average Gross Revenue of Franchisees in Group: $4,979,529
• Highest Gross Revenue of Franchisees in Group: $48,383,607
• Lowest Gross Revenue of Franchisees in Group: $83,645
• Median Gross Revenue of Franchisees in Group: $2,875,013
• Number and Percent of Franchisees Exceeding Group Average: 22 / 28%

• The averages reported in the table are per franchisee, not per Territory. “Franchisee” refers to the business entity that signed the Franchise Agreement; some franchisees are under common ownership by the same individual or group of individuals.

Part 3 – Active Franchise Revenue Growth (In Business and Reporting as of December 31, 2021 and as of December 31, 2022)

• Part 3 below shows the total Gross Revenue growth between calendar years 2021 and 2022 for 75 Franchisees that were in business and reporting revenue as of December 31, 2021 and as of December 31, 2022.

• These Franchisees operated a total of 306 Territories during calendar year 2021 and during calendar year 2022. A Franchisee was considered in business as of December 31, 2021 or December 31, 2022 if it reported Gross Revenue greater than $0 during the month of December 2021 or December 2022, respectively.

2021

• Same Store Sales: $329,571,326
• Year-Over-Year Growth: N/A
• Same Store Sales Territory Count: 306

2022

• Same Store Sales: $386,132,096
• Year-Over-Year Growth: 17.2%
• Same Store Sales Territory Count: 306

• Some outlets have sold this amount. Your individual results may differ. There is no assurance that you will sell as much.

• The financial information One Hour Heating & Air Conditioning utilized in preparing the preceding financial performance representations was based entirely upon information reported to it by franchisees. No independent accountant or auditing firm has audited, reviewed, or otherwise evaluated this information for accuracy or expressed an opinion with regard to its content or form.

Section VI – One Hour Heating & Air Conditioning Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️