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Business Description

Outdoor Lighting is a North Carolina corporation that was incorporated on October 22, 2004. Our previous corporate name was Outdoor Lighting Perspectives Franchise Corporation. We changed our corporate name to Outdoor Lighting Perspectives Franchising, Inc. on March 16, 2005. We do not do business under any other name. Our current principal business address is 2924 Emerywood Parkway, Suite 101, Richmond, VA 23294 and our telephone number is (800) 722-4668. Exhibit D discloses our agents for service of process. We have been offering Outdoor Lighting franchises in the United States since March 25, 2005. We do not sell franchises in any other line of business. As described below, we grant franchises for the operation of design and installation businesses using the name “Outdoor Lighting Perspectives” (an “Outdoor Lighting Business”). We are not engaged in any other type of business activity.

Prior Experience

We have two parent companies. Our immediate parent, which is also a predecessor, is Outdoor Lighting Perspectives Franchise Corporation (“OLPF”), a North Carolina corporation, formed in August 1998. Outdoor Lighting Perspectives Franchise Corporation changed its name to Outdoor Lighting Perspectives Holdings Corporation (“OLPHC”) on October 18, 2004. OLPHC began offering franchises for Outdoor Lighting Businesses in September 1998. OLPHC assigned all of its franchise agreements to us on March 25, 2005. OLPHC never offered franchises in any other line of business and no longer offers franchises in any line of business. OLPHC's principal office address is 2924 Emerywood Parkway, Suite 101, Richmond, VA 23294. On September 29, 2008, the parent company of OLPHC, Outdoor Living Brands, Inc. (“Outdoor Living Brands”), acquired all of the stock of OLPHC. Outdoor Living Brands is a Delaware corporation with headquarters in Richmond, Virginia. Outdoor Living Brands principal address is 2942 Emerywood Parkway, Suite 101, Richmond, Virginia 23294. Outdoor Living Brands has never offered franchises in this or any other line of business other than as described below. The following “Affiliates” are required to be disclosed in this Item 1: Outdoor Living Brands Intellectual Property Corporation (“OLBIPC”) (formerly known as Outdoor Lighting Perspectives Technology Corp.), Outdoor Lighting Perspectives International, Inc. (“OLPII”), Archadeck Franchising Corporation (“AFC”) (formerly known as U.S. Structures, Inc.), Renew Crew Franchising Corporation (“RCFC”), Conserva Irrigation Franchising, LLC (“Conserva Irrigation”), Outdoor Living Brands Supply Corporation (“OLB Supply”), OLP Commercial Services, LLC (“OLP Commercial”) and Outdoor Living Brands Field Operations, Inc. (“OLBFO”). OLBIPC is a Delaware corporation formed on October 12, 2004. OLPII is a North Carolina corporation, formed on October 13, 2004. Except as otherwise specified, all of our Affiliates have the same principal business address as us. OLBIPC does not offer franchises in this or any other line of business. OLPII has offered franchises outside of the United States since July 2005. In July 1984, AFC began offering franchises for Archadeck® Outdoor Living businesses specializing in custom-designed and built decks, screened-in-porches, open porches, sunrooms, gazebos, patios and other hardscaped areas and design elements, outdoor kitchens, and related outdoor living structures (“Construction Sales and Service Business”). AFC currently offers Construction Sales and Service Businesses in the United States and internationally. AFC does business under the name “Archadeck®” and “Archadeck® Outdoor Living.” As of December 31, 2017, AFC had 53 franchisees located throughout the United States and Canada. AFC has never offered franchises for, nor owned nor operated, Outdoor Lighting Businesses. RCFC is the franchisor of the RENEW CREW® franchise systems in the U.S. and internationally. RENEW CREW franchises are businesses specializing in providing exterior cleaning and protection services to residential and commercial customers. RCFC has offered RENEW CREW franchises since October 1, 2012. As of December 31, 2017, RCFC had 23 RENEW CREW franchises located throughout the United States. RCFC has never offered franchises for, nor owned nor operated, Outdoor Lighting Businesses. Conserva Irrigation is the franchisor of the CONSERVA IRRIGATION® franchise system in the U.S. CONSERVA IRRIGATION® franchises are businesses offering repair, maintenance, service, design and construction of irrigation systems for residential and commercial customers with an emphasis on water conservation. Outdoor Living Brands began offering royalty-free pilot licenses for Conserva businesses in April 2014. All pilot licensees were offered the opportunity to enter into franchise agreements with Conserva Irrigation during 2017. As of December 31, 2017, Conserva Irrigation had 29 franchises located throughout the United States. Conserva Irrigation has never operated an Outdoor Lighting Business nor offered franchises in any other line of business other than described above. OLBFO has operated 2 Outdoor Lighting Businesses in the Charlotte, North Carolina area since March 2017. In addition, OLBFO operates ARCHADECK®, RENEW CREW® and CONSERVA IRRIGATION® businesses in the Charlotte, North Carolina area. OLB Supply was formed as a Delaware corporation on February 18, 2010. It is a wholly owned subsidiary of Outdoor Living Brands. OLB Supply was formed to engage in the sourcing and supply of certain products for sale to franchisees of Outdoor Living Brands or its Affiliates. OLB Supply does not own or operate an Outdoor Lighting Business and does not offer franchises in this or any other line of business. OLP Commercial was formed as a Delaware limited liability company on December 30, 2010. Its sole member is Outdoor Lighting Perspectives Holding Corporation. OLP Commercial's place of business is the same as ours. OLP Commercial was formed to contract directly to provide outdoor lighting installation services for commercial property applications, primarily in areas where no Outdoor Lighting Perspectives franchise location exists. OLP Commercial does not own or operate an Outdoor Lighting Business and does not offer franchises in this or any other line of business.

Business Offered

We authorize you to use our trademarks and to operate an Outdoor Lighting Business. An Outdoor Lighting Business provides outdoor lighting design, automated lighting control equipment, installation services, lighting sales, and seasonal, holiday and event lighting sales and installation services to residential and commercial customers through a uniform system consisting of high standards of service, use of quality products, and under the business format created and developed by Outdoor Lighting (“Outdoor Lighting System”). A franchise for an Outdoor Lighting Business will typically have a protected territory of 350,000 to 750,000 people with at least 30,000 qualified households. We also may consider granting a franchise for an Outdoor Lighting Business with a protected territory of 150,000 to 350,000 people with approximately 20,000 or fewer qualified households (“Micro Market Franchise”). Unless noted, all references to an Outdoor Lighting Business or an Outdoor Lighting Perspective franchise include a Micro Market Franchise. To provide incentives to you for referring prospective franchisees to us, we have, in the past, provided referral fees in the form of credits or cash, at our discretion, towards Products to those franchisees referring new franchisees. There are no assurances that we will continue paying referral fees in the future. Persons who receive financial incentives to refer franchise prospects to us may be required to register as franchise brokers under the laws of some states. At our option, if you are already operating an Outdoor Lighting Business, you may be offered the opportunity to purchase additional Territories. Each Territory must be purchased by paying the then- current Initial Franchise Fee, less any applicable discounts as outlined in the then current Franchise Disclosure Document, and by signing the then current Franchise Agreement. At this time, we do not grant any special area development rights for multiple territories.

Initial Fees

Standard Franchise If you purchase an Outdoor Lighting Business franchise, you pay a lump sum franchise fee (“Initial Franchise Fee”) of $39,500 for each Territory when you sign the Franchise Agreement. Conversion Franchise If you have an existing outdoor lighting business that has been operational for at least two continuous years with annual gross revenues (as we determine) of at least $100,000 in your last full fiscal year, that business is similar to an Outdoor Lighting Business and you agree to convert that business into the Outdoor Lighting Perspectives Business, we will discount the Initial Franchise Fee based on the annual gross revenues for your existing business in your last full fiscal year up to a maximum discount of 50% as shown below (the “Conversion Discount”) and discount the Royalty by up to 50% during the initial year of your Franchise Agreement. Micro Market Franchise If you purchase a Micro Market Franchise, you will pay a lump sum franchise fee of $20,000 for each Territory when you sign the Franchise Agreement. Add-On Discount for Existing Home Services Contracting Business If you operate an existing business offering home automation services or landscape, irrigation, or lawn service business or other related home services contracting business, and have continuously operated this business for at least the past two years and agree to diversify your existing business by adding an Outdoor Lighting Perspectives franchise in an affiliated but separate legal entity, you may be eligible for a discounted Initial Franchise Fee of $25,000 for each Territory when you sign the Franchise Agreement. VetFran Discount We are a member of the International Franchise Association (“IFA”), and we support and participate in IFA's VetFran Program. If you are an honorably discharged veteran who meets our qualifications, we will discount the applicable Initial Franchise Fee by 15%. The VetFran discount may be used only once and only on one Territory, not on any additional Territory or additional franchise concepts that you may purchase. Additional Territory Discount If you are an existing Outdoor Lighting Perspectives franchisee that: (a) has been an Outdoor Lighting Perspectives franchisee for at least 12 months, (b) has been in full compliance with your Franchise Agreement for at least 12 consecutive months, (c) meets our qualifications for expansion (as described in our Operations Manual), and (d) is licensing an additional Territory from us (for which you are signing a separate Franchise Agreement), the franchise fee will be based on the average annual Gross Receipts for all of your existing Businesses in your last full fiscal year up to a maximum discount of 50% as shown below. Additional Concept Discount We and our Affiliates offer a program to reward qualified franchisees who have been franchisees for at least two years that purchase a franchise from one of our Affiliates. If you have been a franchisee in full compliance under your Franchise Agreement for at least two years and you meet the qualification guidelines to be a franchisee of one of the other franchise concepts offered by one of our Affiliates, when you purchase a franchise from one of these Affiliate companies, the applicable initial franchise fee is discounted by 30%. Discount for Employees of Franchisees We have a discount program to reward qualified employees of our franchisees who have been recommended in writing by their employer, who have been employed in good standing by their employer for at least two years and who otherwise meet all of the qualification guidelines to be our franchisee. We offer a 5% discount off the applicable initial franchise fee for every year of service over two years, subject to a maximum discount of 50% off the applicable initial franchise fee. Combination and Application of Discounts The VetFran discount may be used only once and only on one territory, not on any additional territory or additional franchise concepts that you may purchase. The VetFran discount is the only discount that can be combined with any of our other discounts. If you qualify for the VetFran or employee discounts, you must maintain at least a 75% majority interest in the beneficial ownership and voting interest of the franchise if the franchisee is a corporation, partnership or other entity (not a natural person) during the entire term of the Franchise Agreement or the discounted amount of the Initial Franchisee will become immediately due and payable by you to us. Initial Inventory You may elect to order certain initial lighting inventory and the night time sales demonstration kit required for the operation of your Outdoor Lighting Business before opening. You will purchase these items from our affiliate, OLBSC. We estimate that the total cost of these items will range from $5,000 to $8,000. Miscellaneous We will refund 50% of the Initial Franchise Fee you paid to us within 30 days after notice of termination by us if you do not complete your training program to our satisfaction. We will notify you in writing not later than five days after completion of your training program if we decide to terminate your franchise and give you a partial refund of such fees. There are no refunds under any other circumstances. Except as described in ITEM 10, we do not provide any financing for the Initial Franchise Fee. At our option, and based upon your demonstrated ability to operate more than one Outdoor Lighting Business, you may be offered the opportunity to purchase additional Territories. Each Territory must be purchased by paying the then current Initial Franchise Fee and by signing the then current Franchise Agreement. At this time, we do not grant any special area development rights for multiple Territories. During 2017, franchisees paid us Initial Franchise Fees ranging from $29,625 to $39,500.

Financing

Except as indicated below, we require that the Initial Franchise Fee be paid to us in cash at the time of signing the Franchise Agreement. We make optional financing available to qualifying franchisees. If you meet our qualifications, we may finance up to 50% of your Initial Franchise Fee for a standard Outdoor Lighting Perspectives franchise up to 36 months, or up to 100% of your Initial Franchise Fee if you qualify for a Conversion Discount or add-on discount (as described in Item 5) or will operate a Micro Market Franchise. We will finance these amounts for up to 60 months, provided you sign the Promissory Note (“Note”) attached as Exhibit H to this Franchise Disclosure Document at the time you sign the Franchise Agreement. The effective annual interest rate will be three percentage points above the prime interest rate on the effective date of the Franchise Agreement. For those franchisees subject to California law, the highest interest rate permitted under California law is 10% per year. There is no prepayment penalty and the rule of 78 does not apply (the rule of 78 is a method of computing interest which requires the interest originally calculated to still be paid even if prepaid). No security interest is required and no person other than you and, if you are an entity, those individuals who are required to sign the form Guarantee and Assumption of Franchisee's Obligations attached as Attachment B to the Franchise Agreement, must sign the Note. If you accept financing from us and sign the Note, you will be required to waive and excuse presentment for acceptance and payment, notice of dishonor, and protest of dishonor. Other than as mentioned in the previous sentence, neither the Note, nor any other financing document you sign will contain any waiver of defense or similar provision. In the event payment of the Note is not made under its terms we may either accept a late payment, together with a late charge equal to 10% of the late payment, or declare the entire balance of the Note immediately due. If the balance of the Note is accelerated, we must give written notice to you and, if the balance is not paid within 10 days after notice is given, you must pay us interest at the maximum legal rate (not to exceed 18%) plus any attorneys' fees and other costs we incur in collecting the monies owed. We also have the right to terminate the Franchise Agreement if we accelerate the Note and the Note is not paid within the 10 days after acceleration. We have not in the past and do not currently intend to sell, assign or discount to any third party the Note or any other financing document you sign. We will comply with all appropriate laws governing any direct financing we offer to you including, if applicable, the California Finance Lenders Law. Other than as described above, we do not offer direct or indirect financing, do not guarantee your loans, lease or other obligations, and do not receive payments or other consideration for the placement of financing. We do not intend to sell, assign, or discount to a third party all or part of the financing arrangement. We reserve the right to terminate our financing program at any time, offer different terms or assist franchisees in obtaining financing in the future.

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances. Written substantiation of the data used in preparing the financial performance representations included in this ITEM 19 will be made available to you upon reasonable request. A. Average Gross Sales for Outdoor Lighting Businesses for the 12 Months Ending December 31, 2017 The following table presents Gross Sales information realized by certain Outdoor Lighting franchisees in the United States during the period between January 1, 2017 and December 31, 2017 (“Reporting Period”). The information provided in the table below was compiled from 41 Outdoor Lighting franchisees that were operational during the Reporting Period, including Outdoor Lighting franchisees operating in the United States and internationally (one in Canada and one in Kuwait). The data excludes 6 franchisees that were operational during the Reporting Period but operate in 2 Territories under 2 different Franchise Agreements during the entire Reporting Period and report Gross Sales to us for both Territories on the same report, and 4 franchisees that were operational during the Reporting Period that either began operations or ceased active operations during the Reporting Period. For the data that we received from the international franchisees, we calculated their Gross Sales in local currency and converted to US Dollars. B. Gross Margin Benchmarking Study for Outdoor Lighting Businesses for the 12 Months Ending December 31, 2016 In 2017, we conducted a financial Benchmarking Study for Outdoor Lighting franchisees. The Benchmarking Study was conducted solely on a voluntary basis and was offered only to franchisees who had been operating their Outdoor Lighting Businesses at least twelve months at the time of the Benchmarking Study. As a result, 4 franchisees who joined the system in 2016 were ineligible to participate in the Benchmarking Study. Interested franchisees were required to submit their income statements for the year ending December 31, 2016 (“Benchmarking Reporting Period”). We then calculated certain financial metrics to allow participants to compare their financial performance against their peer group of Outdoor Lighting franchisees. 41 out of 52 (79%) Outdoor Lighting franchised Territories as of December 31, 2016, participated in the Benchmarking Study. Of the 41 Outdoor Lighting franchised territories, 40 franchised Territories were located in the United States and 1 franchised Territory was located in Canada. We have reviewed the composition of franchise participants and believe it contains a random, representative sampling of Outdoor Lighting franchised Territories based on level of sales, years in the business and geography. The Benchmarking Study examined a number of key performance metrics, and we have determined that Gross Profit Margin is helpful to prospective franchisees looking to acquire the rights to operate one or more Outdoor Lighting Businesses. For purposes of the Benchmarking Study, Gross Profit Margin measures profitability after material, installation labor and other direct installation costs are subtracted from gross revenue. It is calculated by dividing gross profit dollars by gross revenues. While Gross Profit Margin measures profitability after material, installation labor and other direct costs are subtracted from gross revenue, it excludes royalties, any commissions and other operating expenses. C. Median Retail Price Per Project, Number of Fixtures Installed, and Median Retail Price Per Fixture during the Last Twelve Months Ending December 31, 2017. The table below presents the median and average “Average Retail Price Per Project,” median and average “Average Number of Fixtures Installed” and median and average “Average Retail Price Per Fixture” for new OUTDOOR LIGHTING PERSPECTIVES installation projects by certain Outdoor Lighting Businesses in the twelve month period ending December 31, 2017 (“Reporting Period”). The information provided in the table below was compiled from 30 of the 58 (52%) OUTDOOR LIGHTING PERSPECTIVES franchised territories that were operational during the Reporting Period, including all Outdoor Lighting franchised territories operating in the United States and internationally (“Reporting Franchised Territories”). The data excludes franchised territories that either began operations or ceased active operations during the Reporting Period and franchised territories that did not provide the data necessary to analyze the number of new lighting system installation projects or the number of fixtures installed in new lighting system installations. The information provided in the table below was compiled by examining 2,105 new OUTDOOR LIGHTING PERSPECTIVES installation projects identified from the 30 Reporting Franchise Territories as reported from annual reports captured from the Reporting Franchise Territories' customer relationship management software during the Reporting Period. Examination of the annual reports clearly identified 2,105 new OUTDOOR LIGHTING PERSPECTIVES installation projects, the total revenues from each new installation project and the number of lighting fixtures installed on new installation projects for each Reporting Franchise Territory. Further, it is important to note that installation of “new” outdoor lighting systems represents only a portion of the overall activities performed by an OUTDOOR LIGHTING PERSPECTIVES franchisee in the operation of the Outdoor Lighting Business. Other activities and revenue included in the Outdoor Lighting Business include revenue from the design and installation of holiday lighting systems, commercial outdoor lighting projects, maintenance and service on existing installed residential architectural and landscape lighting systems, add-ons or expansions of existing residential lighting systems, revenues from contractual annual maintenance plans, or revenue from retro fitting existing installed lighting systems to new LED technology.