Koala Insulation Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$183,000

-

$211,000

OPERATING PROFIT

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Adam

Updated

February 27, 2024

Is

Koala Insulation

a franchise?

Yes,
Koala Insulation
is a franchise and
currently
accepts
franchise
applications

Koala Insulation, established in 2018 and franchising since 2019, positions itself in the essential service industry of insulation, catering to both new constructions and existing structures. The franchise operates with a mission to enhance energy efficiency in homes and buildings, thereby contributing to environmental sustainability by reducing greenhouse gas emissions.

 With a vision centered around delivering efficiency and improving comfort, Koala Insulation emphasizes customer-oriented service, including post-job cleanup to maintain the integrity of clients' homes and businesses. Koala Insulation's training and support system is comprehensive, requiring no prior industry experience from franchisees. 

The brand provides extensive training, from basic operations to master-level industry certification readiness, coupled with ongoing professional development and business coaching. The franchise's support extends beyond training to include marketing and lead generation, leveraging the brand's proprietary technology and central operations team to generate leads and support franchisees in customer acquisition.

Located in Melbourne, FL, Koala Insulation is part of a growing and profitable $52 billion insulation industry, offering a recession-resistant business model in an essential service sector. The franchise's commitment to environmental sustainability, coupled with its proven business model and extensive support system, makes it an attractive opportunity for individuals looking to enter the home services industry​​​​​​.

How many

Koala Insulation

franchises

are there?

In 2022, there were
313
outlets in the United States, of which
313
are franchises, and
0
are corporate-owned.

What are the

Koala Insulation

franchise

fees?

Initial franchise fee

$49,500

Royalty fee

4.9%

Advertising fee

1% +up to 2%

Initial Franchise Fee

The Initial Franchise Fee is $49,500 for a baseline population of 200,000, with the option to purchase additional population at a cost of $0.25 per person.

Royalty Fee

The Royalty Fee is 6.5% of Gross Sales during the first 6 months of operations. Beginning at month 7 of operations, the fee is the greater of 6.5% or the required Minimum Royalty. For Gross Sales over $1,000,000 annually, the fee is 5% for the remainder of the calendar year; over $2,000,000, it's 4.5%; and over $3,000,000, it's 3.5%.

Opening Advertising (Initial Six Months)

A minimum of $2,500 per month for the month prior to opening and five months after opening.

Local Marketing (Ongoing)

The greater of $2,000 or 5% of Gross Sales per month, plus advertising agency management fees.

Brand Fund Contribution

Currently 1% of Gross Sales, with a maximum of 2%.

Technology Fee

The fee is $80 per week. For franchisees with more than one Territory, the total Technology Fee for up to 4 contiguous Territories is equal to the Technology Fee for one Territory.

Transfer Fee

The greater of 20% of the then-current Franchise Fee or $10,000.

Renewal Fee

Greater of 25% of the Franchise Fee or $5,000 per Territory.

How much does

it cost

to start a

Koala Insulation

franchise?

It costs between
$183,000
and
$211,000
to start a
Koala Insulation
franchise.
Type of Expenditure Amount
Initial Franchise Fee $49,500
Training Expenses $500 to $3,000
Equipment and Vehicles $45,008 to $54,157
GPS Tracking Systems $350 to $600
Insurances $3,500 to $6,000
Initial Advertising/Marketing $24,500 to $24,500
Professional Fees $2,500 to $6,000
Rent (parking location/office) $0 to $2,500
Office expense $500 to $1,250
Computer, Phone and Technology Systems $700 to $3,000
Technology Activation Fee $5,000
Business Licenses and permits $500 to $5,000
Additional Funds – 3 Months $50,000
Total Estimated Initial Investment $182,558 to $210,507

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Koala Insulation

provide

training

to its

franchisees?

Yes,
Koala Insulation
provides training to its franchisees.

The franchisor provides a comprehensive training program for the franchisee's Operating Principal, Manager, Salesperson, and potentially other employees. This initial training covers various aspects critical to the franchise operation, including:

  • Company overview
  • Insulation basics and comparison of types
  • Reading building plans and estimating
  • Sales process, customer types, and marketing
  • Position descriptions and hierarchy
  • Recruiting, interviewing, and hiring
  • Staff management
  • Building envelopes and construction terminology
  • Online resources and post-test review
  • Blow-in (loose-fill) insulation equipment, safety, and process
  • Blow-in (dense-pack) insulation process
  • Blow-in insulation removal equipment, safety, and process
  • Blanket/batt insulation installation and removal
  • Spray polyurethane foam (SPF) safety and logistics
  • SPF customer contact, estimating, and quoting

The franchisor is responsible for the costs of instruction and materials for the initial training of the Operating Principal, Manager, and Salesperson. However, the franchisee is responsible for any costs associated with training subsequently hired or replacement staff, including travel expenses, accommodation, and salaries during the training period.

Additionally, the franchisor may provide and require attendance at refresher training programs or seminars, including an annual conference. The franchisee is responsible for the annual conference fee for each person required to attend and all related expenses.

Does

Koala Insulation

provides

territory

protection?

The franchisor provides a "Protected Territory" to franchisees, which means that no other franchisee will be allowed to operate within this designated area while it is protected. However, the territory is not exclusive, and franchisees may still face competition from other franchisees, company-owned outlets, or other channels of distribution or competitive brands controlled by the franchisor.

The protected status of a territory can be revoked if the franchisee fails to comply with all agreements with the franchisor or fails to maintain sufficient equipment and staff to serve all customers in the territory who desire to purchase the services and products offered.

If the protected status is revoked, the franchisor may allow others to service customers within the territory, sell additional franchises within the territory, or open a company-owned location within the territory, leading to potential competition for the franchisee.

Can a

Koala Insulation

franchise

be run as

a passive

investment?

The franchisor requires either direct participation from the franchisee in the operation of the franchise or delegation to a qualified Manager who has completed and passed the required training course to the franchisor's satisfaction. Specifically, if the franchisee is an entity, the majority shareholder or owner must devote their personal full-time attention and efforts to managing and operating the franchise.

Alternatively, they may delegate the day-to-day operation to a Manager, provided this Manager has successfully completed the required training and certification at the franchisor's facility. The Salesperson, who also needs to be approved by the franchisor, must fulfill a full-time role, and any replacements for the Manager or Salesperson must attend and successfully complete the necessary training and certification​​.

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