Risk Score
Pending analysis
Investment Range
$41,500 - $1,534,900
Franchise Fee
$20,000
Min Cash Required
$8,300
Total US Locations
83
Business Summary
Lapels® businesses are full-service environmentally friendly dry cleaning plants, satellite dry cleaning stores, pick-up and delivery models, and laundromats. Lapels® offers a full range of services including dry cleaning, shirt service, laundry, tailoring, shoe repair, wedding gown and fur storage, suede and leather processing, and other ancillary services. Depending on the business type, some or all services may be subcontracted to qualified professionals.
Corporate History
Next Step Franchising, LLC, the current franchisor of the Lapels® franchise, was formed in Delaware on March 9, 2018, and began offering franchises that same month. This company acquired substantially all assets, including existing franchise agreements, from its predecessor, Next Step Franchising, Inc. The predecessor company, Next Step Franchising, Inc., a Massachusetts corporation, had been offering Lapels franchises since September 2000 until the acquisition in March 2018, establishing the brand's long-standing presence in the dry cleaning and laundry service industry.
Financial Overview
Investment Range
$41,500 - $1,534,900
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$50,000
Minimum Cash Required
$8,300
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$3,800
Equipment Costs (High)
$1,291,000
Working Capital
$10,600
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Next Step Franchising, LLC's financial statements show positive net income for both 2023 ($377,580) and 2022 ($32,062), reversing a net loss in 2021. The company's cash position improved from $355,001 in 2022 to $497,646 in 2023. Furthermore, Lapels maintains a healthy working capital, which significantly increased from $348,069 in 2022 to $785,690 in 2023. The independent auditor's report for the years ended December 31, 2023, 2022, and 2021 expresses an unqualified opinion and does not raise any substantial doubt about Lapels's ability to continue as a going concern.
Financing Details
Lapels does not offer any direct or indirect financing to its franchisees. Additionally, Lapels does not guarantee any notes, leases, or other financial obligations for its franchisees.
Performance Metrics
Total US Locations
83
Franchised Units
83
Corporate Units
0
Avg Square Footage
1,917
Franchising Since
2000
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Lapels® has no litigation to report in Item 3 of its Franchise Disclosure Document. The document states that no litigation is required to be disclosed in this item.
Bankruptcy History
Lapels® has no bankruptcy history to report in Item 4 of its Franchise Disclosure Document. The document states that no bankruptcy information is required to be disclosed in this item.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew a Lapels franchise, franchisees must bring their location up to the then-current brand standards, model, and décor. They are also required to sign a new franchise agreement, which may contain terms and conditions materially different from their original agreement, and pay a successor franchise fee equal to 25% of the then-current Initial Franchise Fee.
Training & Support Program
Franchisor Assistance
Lapels provides comprehensive support to its franchisees, starting with pre-opening assistance that includes site selection guidelines, review and approval of chosen locations, and guidance for securing a lease. Lapels also provides suggested floorplans, signage mockups, and handles the ordering, delivery, and installation of machines, equipment, and supplies as part of the Start Up Supplies and Equipment Package. Franchisees receive a proprietary Operations Manual and grand opening marketing materials. After opening, Lapels offers ongoing assistance through a representative for store opening support, advice on operations via electronic media, telephone, or in-person consultations based on franchisee reports or inspections. Franchisees have continuous access to the Operations Manual, which may be updated, and receive consultation services. Lapels' representatives may conduct discretionary on-site visits for guidance and quality assurance. Lapels reviews and approves all franchisee-developed advertising and website content, requiring franchisees to use the Lapels-provided website. Additional training or specialized employee training can be requested, subject to per diem fees. General guidance on operating issues and discretionary pricing guidance are also offered.
Initial Training Hours
133
Training Location
Franchisor offices in Hanover, Massachusetts, and training facilities in Waltham, West Roxbury, and Wellesley, Massachusetts; Fort Mill, South Carolina; and Gilbert, Arizona. Some training may also occur at the franchisee's operating plant.
Ongoing Support
Lapels provides ongoing support after store opening, including assistance from a representative at the initial store opening, and advice on operations via electronic media, telephone, or in-person consultations based on franchisee reports or inspections. Franchisees have continuous access to the Operations Manual, which may be updated, and receive consultation services. Lapels representatives may visit stores periodically for guidance and quality assurance. The franchisor also reviews and approves advertising materials and website content, requiring franchisees to use a Lapels-provided website. Additional training or specialized employee training can be requested, subject to per diem fees. General guidance on operating issues and discretionary pricing guidance are also offered.
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
Supervisory
Territory Type
Limited
Territory Size Requirements
Lapels territories are defined at the franchisor's discretion, considering factors such as geographic area, population density, neighborhood character, location, and local competition. While the exact size varies, a typical territory extends from the business location, covering up to three miles in less populated areas and one city block in urban areas, with the premises at the approximate center.
Staffing Notes
Lapels expects that either the franchisee or a full-time, on-site manager approved and trained by Lapels will supervise the franchise. For multi-store owners who do not provide full-time on-site supervision, their managers are expected to be fully trained by either the franchisee or a certified Lapels trainer. Managers must also agree to confidentiality and non-competition restrictions similar to those in the Operations Manual.