Franchise Deep Dive: USA Insulation's Franchise Costs, Fees, Profit and Data

The home insulation concept offers a great low-cost opportunity under the trusted Threshold Brands umbrella.

By Katie Porter1851 Franchise Contributor

Updated 2:14PM • 03/19/23

LAST UPDATED: January 3, 2023

FRANCHISE WEBSITE: https://www.usainsulationfranchise.com/

NUMBER OF LOCATIONS: 75+ units

REPORTED COST TO GET IN: $271,000 – $399,500

AVERAGE GROSS SALES: $1,281,499 (2022 FDD)

USA Insulation is a leading insulation company that serves the needs of homeowners in over a dozen states. The brand has been franchising for over 15 years and has seen great interest in recent years, doubling its development efforts in the last half-decade. As a company under franchisor Threshold Brands, USA Insulation is able to offer best-in-class business ownership opportunities to its franchisees. The brand competes in the franchise space against brands like Koala Insulation and Synergy Spray Foam Insulation.

How Many USA Insulation Locations Are There?

USA Insulation currently has 75 locations and is growing. The brand has been on a strong streak of adding units each year since beginning its franchise journey in 2006. VettedBiz data shows that the company has been growing steadily for the last five years, experiencing a big jump in franchise interest in 2021 with double-digit growth.

Over the years, there have been a few USA Insulation units that have closed, but the numbers have been minimal in comparison to growth. Each year since 2017, two or three locations have closed.

USA Insulation has also climbed the rankings of franchise listings over the years, reaching #114 on Entrepreneur’s Franchise 500 in 2022 and placing number one in its category.

The company has been around since 1977 and was incorporated in 1985. After opening to franchising 16 years ago, the brand has since expanded to reach many areas of the United States. USA Insulation states that it has “strong development opportunities from the West Coast and Midwest to the Southern states and the Northeast corridor.” Some of its hottest territories right now are Tennessee, Florida, New York and Texas.

During its time in business, the franchise has insulated more than 100,000 residences in America, as well as important commercial buildings like Jacobs Fields, Gund Arena, and University Hospitals of Cleveland.

What is the USA Insulation Business Model?

Franchisees with USA Insulation operate a business that offers and sells insulation products, including the brand’s proprietary injection foam, polyurethane spray foam insulation and fiberglass insulation. The company offers territory-based units that encompass an area of up to 150,000 “older homes, Franchise Direct states, with franchise agreements that are a 10-year term length.

Prior to starting operations, new franchise owners and their installers are required to go through the initial training program at the franchisor’s headquarters, which comprises 28 hours of on-the-job training and 74 hours of classroom instruction.

Entrepreneur estimates that each USA Insulation operation needs between six and eight employees for full-time operations. The company does not allow absentee ownership, part-time management or for franchisees to run the business from home. Franchise Gator reports that the average start-up time for owners to get up and running is about four to six months.

How Much Can USA Insulation Franchise Owners Make?

While there is no exact data on how much USA Insulation owners make annually after costs and expenses, the brand’s 2022 FDD showed that the average gross sales for the high performing franchisee with one territory was $1,827,318 with the average franchisee making $1,281,499.

The brand is in an industry that’s rapidly growing, too, meaning franchise owners can anticipate sales (and therefore profits) to rise. Insulation services were valued to be worth $8 billion industry in 2021, with a projected compound annual growth rate of 3.79% until 2027.

How Much Does it Cost to Open a USA Insulation?

The estimated total investment necessary to begin the operations for USA Insulation is between $271,000 and $399,500, 1851 Franchise reports. This investment “ensures a protected territory, training, and continued marketing, business development, coaching support, inventory, initial marketing costs, professional fees and more.”

Franchise Direct has broken down the cost ranges for what is included in the initial investment:

Real Property: $6,000 – $12,000
Leasehold Improvements: $12,000 – $15,000
Insulation Truck and Upfit: $100,000 – $110,000
Equipment: $5,000 – $15,000
Office Supplies, Fixtures & Signs: $8,000 – $14,000
Professional Fees: $500 – $5,000
Deposits: $2,000 – $10,000
Opening Inventory: $14,000 – $30,000
Initial Marketing Spend: $29,000 – $67,000
Training and Travel Expenses: $4,000 – $9,000
Insurance: $4,000 – $6,000
Additional Funds: $30,000 – $50,000

Ongoing Costs and Fees include:

Royalty: The greater of: 5% of gross sales of your franchised business from the preceding reporting period or $1,000 per month.
Brand Fund Fee: The greater of: 2% of the gross sales of the franchised business from the preceding reporting period or $500 per month.
Technology Fee: $500 per month.
Ongoing Product Purchases
Training Fee: $500 per day per trainer for on-site, $495 per attendee for off-site
Convention Fee: $100 per month.

What is the Franchise Fee for USA Insulation?

The franchise fee to sign for a USA Insulation unit is $55,000. This is the upfront fee that must be paid when the agreement is executed. Veterans are offered a 20% discounted fee as an incentive to help them open their own businesses.

Who is the Leadership of USA Insulation?

What Helpful Articles Can I Read to Learn More About USA Insulation?

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