Franchising Status
Eligibility for SBA Loan

04/01/2020

Active

Kitchen Tune-Up

Single Unit | Area Development

Financial Statements | List of Franchisees

Business Description

We are a South Dakota corporation that was incorporated on April 15, 1988. Our principal business address is 813 Circle Drive, Aberdeen, SD 57401, and our telephone number is 605-225-4049. We do business as KTU Worldwide, Inc. and Kitchen Tune-Up. We do not conduct business under any other name. We have no parent company KTU has no predecessors, or parents, and at the present time, it has no affiliates.

Prior Experience

KTU grants franchises for the operation of Kitchen Tune-Up businesses. David L. Haglund, Founder and Chairman of the Board of KTU Worldwide, Inc., previously operated this type of business. We are not engaged in any other business activities except that we serve as an approved supplier of some products used by franchisees.

Business Offered

You will sell on-site wood restoration and repair services, replacement of cabinet doors and cabinet hardware, painting cabinets, installation of cabinet refacing materials, new cabinets, and shelf organizers, and granite sealing. You may also sell other services and products generally related to home improvement and remodeling. You may be required to offer additional related services and products as we develop or refine them. You will be operating a franchise concept that will provide services and products in homes, offices, and other commercial businesses.

Initial Fees

You must pay a Deposit of $15,000 to reserve a standard Franchise Territory of approximately 41,000 Single Family Demographically Adjusted Owner-Occupied Households with contiguous United States Postal Zip Codes. This Deposit is nonrefundable. Franchise (Standard Territory) : One Franchise Unit: The total fees you must pay for a franchise with a standard Franchise Territory is $72,000 ($25,000 Franchise Fee, $35,000 Territory Fee, and $12,000 Training and Startup Package). A deposit of $15,000 is due to reserve your territory and is applied to the initial investment and is non- refundable. The remaining balance of $57,000 will be due upon signing the franchise agreement and is nonrefundable. Second Franchise Territory: If purchased at the same time as the first franchise, the total fees for a second franchise with a non-contiguous, standard Franchise Territory is $67,000 ($25,000 Franchise Fee, $30,000 Territory Fee and $12,000 Training and Startup Package). Another deposit of $15,000 is due to reserve the second territory and is applied to the initial Investment and is non-refundable. The remaining balance of $52,000 will be due upon signing the second franchise agreement, which must be signed at the time you sign the first franchise agreement and is non-refundable. Executive Franchise : If you have an interest in a Franchise Territory with a greater number of households, we offer an Executive Franchise option. Below is a breakdown of the fees which will be due at signing: Executive Franchise Agreement - Two Unit Option: The total fees for the (2) contiguous territory units option is $122,000 ($50,000 Franchise Fee, $60,000 Territory Fee, and $12,000 Training and Startup Package). A deposit of $25,000 is due to reserve the territory and is applied to the initial investment and is non-refundable. This Agreement is offered to markets with contiguous United States Postal Zip Codes not to exceed 82,000 Single Family Demographically Adjusted Owner-Occupied Households. Executive Franchise Agreement - Three Unit Option: The total fees for the (3) contiguous territory units' option is $172,000 ($75,000 Franchise Fee, $85,000 Territory Fee, and $12,000 Training and Startup Package). A deposit of $25,000 is due to reserve the territory and is applied to the initial investment and is non-refundable. This Agreement is offered to markets with contiguous United States Postal Zip Codes not to exceed 123,000 Single Family Demographically Adjusted Owner-Occupied Households. Franchise Developer If you have an interest in developing and operating (3) or more Franchise Territories that do not have to be contiguous to each other (that is, they may be in other population centers or other states), we offer a Development Program with special pricing beyond the initial franchise purchase. Below is a breakdown of the fees for a person or entity who is qualified and approved for our Development Program: Three Pack: The total fees you must pay to operate (3) Franchise Territories are $200,000 ($75,000 Franchise Fee, $89,000 Territory Fee and $36,000 Training and Startup Package). A deposit of $45,000 is due to reserve the territories and is applied to the initial investment and is nonrefundable. The remaining balance of $164,000 will be due in stages upon opening each franchise, which must be signed at the time you sign the first franchise agreement. Four Pack: The total fees you must pay to operate (4) Franchise Territories are $258,000 ($100,000 Franchise Fee, $110,000 Territory Fee and $48,000 Training and Startup Package). A deposit of $60,000 is due to reserve the territories and is applied to the initial investment. The remaining balance of $110,000 will be due in stages upon opening each franchise, which must be signed at the time you sign the first franchise agreement and is nonrefundable. Five Pack: The total fees you must pay to operate (5) Franchise Territories are $310,000 ($125,000 Franchise Fee, $125,000 Territory Fee and $60,000 Training and Startup Package). A deposit of $75,000 is due to reserve the territories and is applied to the initial investment. The remaining balance of $250,000 will be due in stages upon opening each franchise, which must be signed at the time you sign the first franchise agreement and is nonrefundable. Six Pack: The total fees you must pay to operate (6) Franchise Territories are $357,000 ($150,000 Franchise Fee, $135,000 Territory Fee and $72,000 Training and Startup Package). A deposit of $90,000 is due to reserve the territories and is applied to the initial investment. The remaining balance of $285,000 will be due in stages upon opening each franchise, which must be signed at the time you sign the first franchise agreement and is nonrefundable. Seven Pack: The total fees you must pay to operate (7) Franchise Territories are $404,000 ($175,000 Franchise Fee, $145,000 Territory Fee and $84,000 Training and Startup Package). A deposit of $105,000 is due to reserve the territories and is applied to the initial investment. The remaining balance of $320,000 will be due in stages upon opening each franchise, which must be signed at the time you sign the first franchise agreement and is nonrefundable. Eight Pack: The total fees you must pay to operate (8) Franchise Territories are $451,000 ($200,000 Franchise Fee, $155,000 Territory Fee and $96,000 Training and Startup Package). A deposit of $130,000 is due to reserve the territories and is applied to the initial investment. The remaining balance of $355,000 will be due in stages upon opening each franchise, which must be signed at the time you sign the first franchise agreement and is nonrefundable. Nine Pack: The total fees you must pay to operate (9) Franchise Territories are $498,000 ($225,000 Franchise Fee, $165,000 Territory Fee and $108,000 Training and Startup Package). A deposit of $135,000 is due to reserve the territories and is applied to the initial investment. The remaining balance of $390,000 will be due in stages upon opening each franchise, which must be signed at the time you sign the first franchise agreement and is nonrefundable. Ten Pack: The total fees you must pay to operate (10) Franchise Territories are $545,000; ($250,000 Franchise Fee, $175,000 Territory Fee and $120,000 Training and Startup Package). A deposit of $150,000 is due to reserve the territories and is applied to the initial investment. The remaining balance of $425,000 will be due in stages upon opening each franchise, which must be signed at the time you sign the first franchise agreement and is nonrefundable. The Territory Fee for each franchise unit is for a Standard exclusive territory up to 41,000 demographically adjusted, owner-occupied households, which averages approximately 260,000 people. In large metropolitan markets, you may be offered a non-exclusive territory. The Executive Franchise Agreement for a Franchise Territory with a Two Unit Option will consist of up to 82,000 Single Family Demographically Adjusted Owner-Occupied Households. A Franchise Territory with a Three Unit Option will consist of up to 123,000 Single Family Demographically Adjusted Owner- Occupied Households. As an option to a lump sum payment, we may finance the payment of a part of your Initial Franchise Fee and Territory Fee. Details of the financing plan are presented in Item 10. We offer a $7,500 discount off of the Initial Franchise Fee on your first Franchise purchased to any veteran honorably discharged from any of the United States Armed Services. We must receive a copy of your DD Form 214 along with the Deposit Agreement. We offer a $7,500 discount off of the Initial Franchise Fee on your first Franchise purchased to any first responder, to include law enforcement, firefighters, and any emergency medical responders, who is responsible for going to the scene of an accident.

Financing

NULL

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. The information provided below represents actual average and median gross sales and costs for the service categories noted. This gross sales and cost information is not a forecast, projection, or prediction of how your franchise will perform. The gross sales and costs amounts should not be relied upon as the actual or potential gross sales and costs that will be realized by you. It is likely that your gross sales and costs will differ from the information in these financial performance representations. As of December 31, 2018, KTU had 134 franchisees providing Kitchen Tune-Up services in 190 Franchise Territories. Among the services that our franchisees provide, kitchen cabinet restoration, cabinet painting cabinet refacing, cabinet door replacement, and new cabinet installation historically have been the 5 major services we provide. The information received from our franchisees involved residential projects, and services for commercial projects such as apartment complexes. There are differences in which franchises provide our 5 major services to customers. For example, some franchisees focus on kitchen cabinet restoration and others focus on new cabinet installation or cabinet refacing or cabinet door replacement. Those differences depend upon the markets in which franchises are located and the personal preferences of franchisees. Average and median sales and costs for each of our 5 major services are analyzed in the following charts. The chart below shows the averages for the entire franchise system.