BoxDrop Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$25,000 - $225,400
Franchise Fee
$13,500
Total US Locations
184
Business Summary
BoxDrop operates a retail business under the "BoxDrop" brand that sells mattresses, bedding products, and additional furniture such as sofas and other home furnishings. Customers can choose to operate either a Mattress Only Business, focusing solely on bedding, or a Mattress and Sofa Business, which includes a broader range of furniture. BoxDrop Businesses typically operate from warehouse-style buildings and may be open by appointment only or with regular store hours. Franchisees purchase initial inventory packages of products, which can vary based on the chosen business type.
Corporate History
BoxDrop LLC was formed as an Ohio limited liability company on August 19, 2019. Its parent company, Retail Service Systems, Inc. (RSS), was formed in 2013 and acquired the BoxDrop franchise concept from predecessors Power Marketing Direct, Inc. (incorporated in 2001) and PMD Furniture Direct, Inc. (incorporated in 2008) in June 2013. Power Marketing Direct, Inc. previously offered franchises for this type of business from 2009 to 2013. BoxDrop LLC began offering its first BoxDrop franchise in December 2019, while RSS has operated businesses similar to the franchised type since 2013. The predecessors also operated independent furniture distribution stores since 2001.
Financial Overview
Investment Range
$25,000 - $225,400
Franchise Fee (Low)
$13,500
Franchise Fee (High)
$15,000
Equipment Costs (Low)
$1,000
Equipment Costs (High)
$7,500
Working Capital
$58,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
BoxDrop's financial statements show positive net income and working capital for the fiscal years ending December 31, 2024, 2023, and 2022. The company's net income from operations has consistently increased, reaching $787,530 in 2024. While cash balances have fluctuated, BoxDrop maintains a positive working capital position, with total current assets exceeding current liabilities. The independent auditors have issued an unqualified opinion, indicating that the financial statements present fairly, in all material respects, BoxDrop's financial position and cash flows. However, a significant portion of current assets, $3,585,000 in 2024, is due from related parties.
Financing Details
BoxDrop offers a financing plan solely for the Initial Franchise Fee. Franchisees can choose to pay the $15,000 fee with a $3,000 down payment upfront, and the remaining balance of $12,000 (or $10,500 for qualified veterans receiving a discount) is paid in 12 equal monthly installments. These installments accrue interest at the then-current Federal Rate for short-term loans. The financing is secured by a personal guaranty from the franchisee or the entity's owners, but BoxDrop does not require additional security in the franchisee's assets or a personal guaranty from a spouse. In case of default, the entire outstanding balance becomes immediately due, and this default also constitutes a cross-default of the Franchise Agreement, potentially leading to the loss of the franchise. BoxDrop does not typically sell, assign, or discount these financing arrangements to third parties.
Performance Metrics
Total US Locations
184
Franchised Units
182
Corporate Units
2
Avg Square Footage
3,675
Franchising Since
2009
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
BoxDrop is currently involved in an ongoing lawsuit, Organ Cole LLP v. Retail Service Systems, Inc., et al., which was originally filed on August 9, 2018, in the Franklin County, Ohio, Court of Common Pleas. The plaintiff, Organ Cole LLP, a former law firm for Scott Andrew and RSS, claims entitlement to legal fees for past work, including under a contingency fee arrangement. BoxDrop and Scott Andrew dispute these claims. The case is in the discovery and motions phase, and a trial date, initially set for 2021, has been vacated. A new trial date is anticipated for late 2025 or early 2026. Recent activity includes a Protective Order established in December 2024, a Motion for Partial Summary Judgment filed by Andrew and RSS in January 2025, and motions regarding an ongoing discovery dispute in February 2025, all of which are currently pending before the court.
Bankruptcy History
BoxDrop has no bankruptcy history to report for itself or its executive officers.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise, BoxDrop franchisees must provide written notice at least 6 months (but no more than 12 months) before their current agreement expires. They must be in full compliance with their Franchise Agreement, sign the then-current form of Franchise Agreement and a general release, pay a renewal fee, and meet BoxDrop's current financial and operational criteria. If applicable, they may also be required to renovate their business to meet current brand image and operational standards. The new franchise agreement at renewal may have terms and conditions that differ materially from the previous agreement, including different fee requirements and territorial rights.
Training & Support Program
Franchisor Assistance
BoxDrop provides franchisees with both pre-opening and ongoing assistance. Before opening, BoxDrop helps by designating the franchise territory, granting access to the Operations Manual and online dealer system, and providing specifications for the approved site. They also review and approve the BoxDrop Business site, offer advice on build-out, interior design, and layout, and provide a mandatory Initial Training Program that lasts up to 3 days. Additionally, BoxDrop sells the initial inventory package of products to franchisees. For those signing a Development Rights Agreement, BoxDrop helps determine the development schedule and territory, and grants franchises to approved entities. After opening, BoxDrop offers continuing support, including telephone consultations with a regional division business coach, access to advertising and promotional materials, and ongoing updates on products and system information. They make reasonable efforts to fill and ship product orders and process warranty claims on behalf of franchisees. Franchisees are authorized to use BoxDrop's trademarks and copyrighted materials. BoxDrop may also maintain and administer System Websites, mobile applications, and social media accounts for advertising, and periodically offers refresher training courses and video tutorials. If established, BoxDrop will administer a National Marketing Fund and/or Regional Advertising Program.
Initial Training Hours
24
Training Location
Corporate headquarters in Dublin, OH
Ongoing Support
After their BoxDrop Business opens and initial training is completed, franchisees receive ongoing support through various channels. They can access telephone consultations and advice from a regional division business coach regarding operations, sales techniques, customer relations, and products. BoxDrop provides access to advertising and promotional materials and ongoing updates on system information. The franchisor processes warranty claims with manufacturers on behalf of franchisees and allows the use of its trademarks and copyrighted materials. BoxDrop may also maintain System Websites, mobile applications, and social media accounts to market the brand. Optional refresher training courses and video tutorials are offered periodically. An onboarding coach assists franchisees for the first 30 days, followed by a Division Business Coach for day-to-day issues. National Sales Conferences are held twice a year, and attendance is highly encouraged for eligible franchisees.
Franchise Requirements
Ideal Candidate Profile
BoxDrop seeks franchisees who are willing to personally commit to the direct, full-time operation of their business. If the franchisee is a legal entity, its owner must participate full-time in the business. The franchisor may also grant multi-unit development rights to qualified franchisees, suggesting a preference for individuals or entities capable of managing multiple locations.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
full-time
Territory Type
Protected
Staffing Notes
BoxDrop's System Standards may regulate staffing levels, employee dress and appearance, and standards for customer service. Franchisees are responsible for ensuring a sufficient number of trained personnel are working at all times, commensurate with the business volume. While BoxDrop provides guidance on approved services and customer service standards, franchisees are the sole employers of their staff and are responsible for all employment decisions, actions, and ensuring adequate training for their workers. BoxDrop does not offer assistance in hiring employees.