NiteLites Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$66,275 - $110,785
Franchise Fee
$9,747
Min Cash Required
$10,000
Total US Locations
16
Business Summary
NiteLites sells superior-quality LED lighting products and services, and designs and installs architectural and landscaping LED illumination products for upscale homeowners and commercial enterprises.
Corporate History
NiteLites Franchise Systems, Inc. was incorporated in Ohio on January 21, 2004. It offers franchises for businesses that sell and install superior-quality LED lighting products for upscale homeowners and commercial clients under the NiteLites brand. The company began offering franchises on August 26, 2004. An affiliate, NL Manufacturing and Distribution Systems, Inc., incorporated in 2002, develops and supplies the proprietary NiteLites Products and Equipment to franchisees. From 2002 to 2004, NL Manufacturing also offered distributorships, which differed from franchises as they did not include assistance or a system. NiteLites Franchise Systems, Inc. does not own or operate NiteLites businesses itself, though one of its executives does.
Financial Overview
Investment Range
$66,275 - $110,785
Franchise Fee (Low)
$9,747
Franchise Fee (High)
$42,995
Minimum Cash Required
$10,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$29,730
Equipment Costs (High)
$31,140
Working Capital
$10,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Going concern qualification
Financial Health Notes
NiteLites Franchise Systems, Inc. has faced ongoing losses from its operations and has a net capital deficiency. The auditors have raised substantial doubt about NiteLites Franchise Systems, Inc.'s ability to continue as a going concern.
Financing Details
NiteLites offers two financing options for a portion of the initial Franchise Fee: up to 50% for 3 years at 10.5% interest, or up to 25% for 2 years at 9% interest. Franchisees must sign a promissory note and provide a personal guaranty from all owners. Payments are monthly and begin on the earlier of the 15th day of the first full calendar month after opening or 6 months after signing the agreement. The loan can be accelerated if payments are late or the Franchise Agreement is breached. For NiteLites Products and Equipment from NL Manufacturing, franchisees may be permitted to purchase on open account with full payment due no more than 30 days after invoicing, depending on credit, with an 18% annual finance charge for late payments. Personal guaranties from owners are required for Supply Agreement obligations. NiteLites does not offer financing that requires confession of judgment or waiver of defenses, arrange financing from other sources, or guarantee third-party obligations.
Performance Metrics
Total US Locations
16
Franchised Units
10
Corporate Units
6
Avg Square Footage
280
Franchising Since
2004
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
1
Litigation Summary
NiteLites Franchise Systems, Inc. and its affiliate NL Manufacturing & Distribution Systems, Inc. filed a lawsuit in 2013 against a former franchisee, NiteLites, Inc., for breach of contract. The court granted summary judgment, ordering the former franchisee to pay $14,276.19 and to permanently cease using NiteLites' confidential information and marks. The former franchisee has not paid the ordered sum but has ceased business operations under the NiteLites name.
Bankruptcy History
NiteLites Franchise Systems, Inc. has no bankruptcy history to report.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew, NiteLites franchisees must substantially comply with the Franchise Agreement, have access to a suitable location for the renewal term, provide written notice of intent to renew 9-12 months before the initial term ends, and sign the then-current Franchise Agreement (without paying a new initial franchise fee, but terms may differ). Franchisees must also make any required capital expenditures to maintain system uniformity, meet current qualifications and training requirements, and satisfy all monetary obligations to NiteLites or its affiliates.
Training & Support Program
Franchisor Assistance
NiteLites provides pre-opening assistance, including designating a Protected Territory, reviewing lease/purchase agreements, offering standard plans for premises, vehicles, and products, and providing a list of Approved Suppliers. Franchisees receive approximately 35 hours of initial training over one week. Electronic access to the NiteLites Operating Manual is provided. Ongoing assistance includes approximately 3 days of on-site guidance around opening, telephone and email support during business hours, periodic visits for consultation, electronic manual updates, and access to ongoing training programs. For advertising and promotion, franchisees must spend 5% of gross sales on local advertising and contribute 2% of wholesale product purchases to a system-wide Marketing Fund. NiteLites manages national Internet marketing for a semi-annual fee of $400. Franchisees must spend at least $5,000 on Grand Opening Advertising. NiteLites also operates a centralized call center for customer inquiries and appointment scheduling for a $750 monthly fee, and an affiliate provides accounting services for a fee based on gross sales. Franchisees are required to use specific computer hardware (Windows/MAC laptop, cellular iPad) and software (QuickBooks Enterprise Solutions hosted on NiteLites' VPN), with NiteLites having access to accounting data and requiring annual system upgrades.
Initial Training Hours
35
Training Location
Multiple locations: Ft. Myers, FL; Nashville, TN; or Cincinnati, OH
Ongoing Support
After opening, NiteLites provides approximately 3 days of on-site assistance and guidance. Franchisees can access telephone, email, or facsimile support from NiteLites during normal business hours for advice. NiteLites conducts periodic visits for consultation and guidance, provides electronic modifications to the Operating Manual, and makes available changes and additions to the System. Ongoing training programs are also offered as needed. Additionally, NiteLites operates a centralized call center to manage customer inquiries and schedule appointments for franchisees for a monthly fee. An affiliate also provides accounting services for a monthly fee based on annual gross sales.
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
Non-Exclusive
Territory Size Requirements
NiteLites territories are defined based on population, with sizes ranging from 0 to 3,000,000 people. The population figures are determined using the most recent available U.S. Census data and a computer mapping application. Different population classes (e.g., 0-500,000, 500,001-1,000,000) correspond to different initial franchise fees.
Staffing Notes
NiteLites requires the franchised business to be under the direct, full-time supervision of either the franchisee (if an individual) or a Designated Manager (if a business entity), with 'full-time' defined as at least 35 hours per week. Franchisees are solely responsible for hiring employees and/or subcontractors. NiteLites franchisees must conduct background checks on all prospective employees who will enter client residences, screening for violence, dishonesty, negligence, or criminal convictions within the past seven years. Key roles mentioned in the manual include Master Technician/Owner Operator and Assistant Technician/Installer.