Risk Score
Pending analysis
Investment Range
$162,000 - $655,000
Total US Locations
242
Business Summary
Five Star Bath Solutions offers franchises to qualified individuals and entities for owning and operating a bathroom renovation service. Franchisees provide quality bathroom renovation services to the public, utilizing Five Star Bath Solutions' service marks, trade names, programs, and systems.
Corporate History
Five Star Bath Solutions, LLC was organized in Utah on February 4, 2014, and began offering franchises in August 2014. Its parent company, Five Star Franchising, L.L.C., was formed in December 2014 as the successor to Five Star Franchising, Inc. (originally Five Star Painting, Inc., formed in December 2004). Five Star Painting, Inc. initially operated a painting business from 2004 to 2006. From 2007 to 2015, Five Star Bath Solutions' parent or its predecessor also owned and operated a painting business in Provo, Utah. Additionally, the parent's predecessor offered FIVE STAR painting franchises from 2006 to May 2007. In 2021, Five Star Bath Solutions underwent a change of ownership when it was acquired by FS PEP Holdco, LLC, which led to new affiliations with other companies under common control.
Financial Overview
Investment Range
$162,000 - $655,000
Franchise Fee (High)
$59,500
Royalty %
6%
Marketing %
2.5%
Equipment Costs (Low)
$10,500
Equipment Costs (High)
$136,000
Working Capital
$47,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
FS PEP Holdco, LLC, the parent company of Five Star Bath Solutions, has reported consistent net losses for the years ended December 31, 2024, and 2023, with losses of $12,250,006 and $15,967,953 respectively. The company also carries substantial long-term debt, totaling $46,197,321 in 2024. Despite these losses and high debt, the company's revenues are growing, reaching $47,493,372 in 2024 from $38,119,222 in 2023. While the loss from operations decreased slightly in 2024, cash flow from operating activities remained negative. The independent auditors issued an unqualified opinion on the consolidated financial statements, indicating that they present fairly in all material respects. Although the auditors are required to evaluate conditions that may raise substantial doubt about the company's ability to continue as a going concern, this was not included as a qualification in their opinion.
Financing Details
Five Star Bath Solutions does not offer any direct or indirect financing to its franchisees. Additionally, Five Star Bath Solutions does not guarantee any franchisee's note, lease, or other financial obligations.
Performance Metrics
Total US Locations
242
Franchised Units
239
Corporate Units
3
Franchising Since
2014
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
2
Litigation Summary
Five Star Bath Solutions has two historical litigation cases to report, neither of which are recent or ongoing. In April 2010, an investigation commenced by the Illinois Attorney General's Office against Five Star Bath Solutions' predecessor's affiliate, Five Star Painting, Inc., for selling a franchise in Illinois in 2008 without being registered. This was resolved in October 2010 with a Consent Judgment, an offer to rescind the franchise, and a $7,500 penalty. Additionally, in February 2015, the predecessor of Five Star Bath Solutions' Parent voluntarily filed a Notice of Violation in California due to not disclosing a bankruptcy matter in its Franchise Disclosure Document, which affected one franchisee.
Bankruptcy History
Five Star Bath Solutions has no bankruptcy history to report for itself, its predecessors, or its affiliates.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew the franchise agreement, Five Star Bath Solutions franchisees must provide written notice at least three months, but no earlier than six months, before the initial term expires. Franchisees must have faithfully performed under the initial agreement, refurbish the franchise and replace obsolete equipment, sign a general release, sign a new agreement, pay a renewal fee of up to $2,500 plus applicable taxes, and complete any prescribed retraining programs.
Training & Support Program
Franchisor Assistance
Five Star Bath Solutions provides various types of assistance to its franchisees. Before opening, the franchisor designates the Franchise Territory, provides initial orientation and training, assists with complying with local laws, loans a copy of the Operations Manual, and provides a list of approved suppliers. During operation, Five Star Bath Solutions offers continuing advice and guidance on topics such as product selection, employee hiring and training, marketing and promotional programs, administrative and operating procedures, system improvements, financial advice, and pricing guidelines. Franchisees can request additional training for a fee and may be required to attend refresher training programs or seminars, for which they are responsible for travel and living expenses. The franchisor also administers a national marketing program, conducts national and regional promotions, and inspects franchises and supplier facilities to ensure compliance and quality. Franchisees are required to attend regularly scheduled huddles, meetings, and conferences for ongoing training.
Initial Training Hours
64
Training Location
Virtual and FSBS Training Facility, Warren, MI
Ongoing Support
After opening, Five Star Bath Solutions franchisees receive ongoing advice and guidance on various aspects of their business, including product selection, purchasing, stocking, employee hiring and training, marketing programs, administrative procedures, system improvements, financial consultation, and pricing. Franchisees may also request additional training sessions at the franchisor's training center or other designated locations, though these come with additional costs for travel, lodging, meals, and a training fee. Five Star Bath Solutions may also provide refresher training programs and seminars, up to 20 hours annually, which franchisees or their managers may be required to attend, with franchisees responsible for their own travel and living expenses. The franchisor administers marketing programs and conducts national and regional promotions. Additionally, Five Star Bath Solutions conducts inspections of franchises and supplier facilities to maintain quality and compliance. Franchisees are required to attend regularly scheduled huddles, meetings, and conferences for continued training and business improvement.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Absentee Allowed
Territory Type
Limited
Territory Size Requirements
Five Star Bath Solutions franchisees are granted a territory, typically defined by a set of ZIP codes, consisting of up to approximately 150,000 households. The exact boundaries are determined by the franchisor's market analysis and market penetration plans. To maintain this territory's protection, franchisees must meet specific annual minimum revenue targets per household: $1.50 in Year 2, $2.00 in Year 3, and $3.00 in Year 4 and thereafter. Failure to meet these targets may result in a reduction of the territory size or allowing other franchisees to operate within the territory.
Staffing Notes
Five Star Bath Solutions requires its franchisees to hire and maintain sufficient staff to manage customer volume at all times. While the specific number of employees can vary based on territory size, the Operations Manual outlines the required roles. Any managers or crew leaders employed by the franchisee must successfully complete the franchisor's mandatory training program. All employees are expected to maintain a neat and clean appearance, provide friendly and courteous service, and comply with the grooming and training standards detailed in the Operations Manual, which may include background checks and drug testing. Franchisees are responsible for all employee wages, compensation, payroll taxes, and benefits. Employees and associates are not permitted to receive direct payments from customers. The franchisor also emphasizes that all employees and subcontractors must meet character, quality, and performance standards, as well as state and federal workers' compensation and insurance requirements.