Risk Score
Pending analysis
Investment Range
$761,700 - $1,198,000
Franchise Fee
$12,000
Total US Locations
72
Business Summary
ZIPS Franchising, LLC operates garment care businesses under the name ZIPS Cleaners. These businesses utilize a distinctive system that includes a physical plant, specific equipment layouts, a competitive flat pricing structure, and same-day services, all within an efficient, integrated production process. ZIPS Cleaners offers two types of facilities: a Plant Facility with an on-site processing plant and a Drop Facility for customer drop-off and pickup, with processing handled by a separate Plant Facility. New franchisees are required to open a Plant Facility as their initial outlet.
Corporate History
ZIPS Franchising, LLC was formed as a Maryland limited liability company on August 30, 2004, operating as a wholly-owned subsidiary of Value Drycleaners of America, LLC. The ZIPS Cleaners brand itself traces its roots to September 1996, when its founders began operating discount dry cleaner businesses under a different trademark. These original businesses were converted to ZIPS Cleaners Businesses in October 2002. ZIPS Franchising, LLC then began offering franchises for ZIPS Cleaners Businesses in 2006.
Financial Overview
Investment Range
$761,700 - $1,198,000
Franchise Fee (Low)
$12,000
Franchise Fee (High)
$30,000
Royalty %
6%
Marketing %
5%
Equipment Costs (Low)
$124,200
Equipment Costs (High)
$794,000
Working Capital
$150,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Value Drycleaners of America, LLC and its subsidiaries present audited financial statements. The independent auditors issued an unqualified opinion, meaning the financial statements are presented fairly in all material respects. However, the company experienced operating losses in all three years reported (2024, 2023, and 2022), with the largest operating loss in 2024. Additionally, the company had negative net cash flow from operating activities in 2024, although it reported net income for 2023 and 2024. The members' equity is positive.
Financing Details
ZIPS Franchising, LLC does not offer any direct or indirect financing to its franchisees. The franchisor also does not guarantee any franchisee's notes, leases, or other obligations.
Performance Metrics
Total US Locations
72
Franchised Units
70
Corporate Units
2
Avg Square Footage
3,250
Franchising Since
2006
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
ZIPS Franchising, LLC has no litigation to report, as stated in Item 3 of its Franchise Disclosure Document. No legal actions or proceedings are required to be disclosed for the franchisor, its predecessors, affiliates, or any person listed in Item 2.
Bankruptcy History
ZIPS Franchising, LLC has no bankruptcy history to disclose, as stated in Item 4 of its Franchise Disclosure Document. No bankruptcy proceedings involving the franchisor or its key personnel are required to be reported.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew the ZIPS Cleaners franchise agreement, franchisees must give written notice between 9 and 12 months before the initial term expires. They must satisfy all monetary obligations to ZIPS Franchising, LLC and its affiliates, be free of any defaults under their agreements, and not have been in default beyond the cure period for the 6 months prior to their notice and the 6 months prior to the expiration of the initial term. Franchisees must also renovate and modernize their business to meet current System standards, comply with the franchisor's current criteria for new franchisees, attend any required training, provide written confirmation of their right to possess the Franchised Location for the renewal term, and ensure all landlord obligations are current. Additionally, they must execute a general release of claims against the franchisor and its affiliates, demonstrate that they have operated their business according to System standards, and sign a new franchise agreement which may have substantially different terms, including royalty and advertising fees. Finally, a renewal fee of $10,000 is required.
Training & Support Program
Franchisor Assistance
ZIPS Franchising, LLC provides franchisees with various forms of assistance. Before opening, ZIPS Cleaners helps with site selection guidelines, reasonable consultation, and on-site evaluations for site acceptance. It provides a generic layout for the business and reviews site-specific plans. The franchisor also inspects the location during construction and offers access to its confidential Manuals. Initial training is provided for up to two people. Additionally, ZIPS Cleaners offers consultation and advice on development, operations, equipment, employee recruiting, purchasing, and opening assistance. After opening, ZIPS Cleaners manages and spends funds from the National Marketing Fund and any Regional Marketing Fund for advertising, provides general guidelines for local advertising, and approves content for its website. It also offers ongoing and additional training to franchisees and their managers, provides periodic business advice, conducts inspections of the business, and may set prices for services.
Initial Training Hours
160
Training Location
Corporate headquarters in Savage, Maryland and an approved plant and/or drop facility
Ongoing Support
After ZIPS Cleaners franchisees open their business, ZIPS Franchising, LLC provides ongoing support through several channels. It collects, administers, and spends monies from the National and any Regional Marketing Funds for advertising and promotional purposes, and provides general guidelines for local advertising. The franchisor also approves all content requested to be posted on its Internet website. ZIPS Cleaners offers ongoing and additional training programs and seminars for franchisees and their managers, though franchisees are responsible for travel and living expenses. Additionally, ZIPS Cleaners provides periodic advice and consultation on business operations, System developments, techniques, and improvements in areas like business design, pricing, management, and sales promotion. The franchisor also conducts inspections of the franchised business to ensure compliance with standards.
Franchise Requirements
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
Territory Size Requirements
ZIPS Cleaners' Protected Area, where the franchisor will not operate or license other ZIPS Cleaners Businesses, is defined for each franchisee after a site is accepted. This area may be described as a radius of approximately 2 miles around the franchised location, a metes and bounds description, or a group of zip codes. The initial Designated Area for site selection is determined on a case-by-case basis considering economic, demographic, and geographic information, such as population density, but does not offer territorial exclusivity or protection.
Staffing Notes
ZIPS Cleaners requires that the franchised business always be under the direct, on-site supervision of a trained and certified individual, who may be the franchisee, Operating Principal, a Store Manager, or a 10% Owner. Each business must employ at least one Store Manager who has successfully completed the franchisor's initial training program. If the business fails to have a certified Store Manager, the franchisee must hire a replacement within 10 days and enroll them in the training program. For franchisees operating three or more locations, ZIPS Franchising, LLC may require the employment of one or more District Managers to supervise day-to-day operations. Franchisees are solely responsible for hiring, setting employment terms, compensating, and supervising all their employees, as well as ensuring their appearance, behavior, and dress align with brand standards.