Verified — real FDD extraction
SBA-eligible · directory code S1982 since 2017
ZIPS DRY CLEANERS
Other · independent · est. —
ZIPS Cleaners is a garment care franchise offering same-day dry cleaning and laundering at a single low per-item price. A franchisee operates a plant store that cleans garments on site, sometimes supporting smaller drop-off locations, serving retail customers.
ZIPS DRY CLEANERS net unit count grew +4.3% from 2014–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & strong
Distress
Enough units and history to judge, and the record is good: growing or stable units with clean exits by the standards of its disclosed record. The main concern in the record: too many owners are failing outright rather than selling.
Exit rate · latest year
31.4%
fiscal 2025, per Item 20
Cost to open
$868K–$1.3M
Item 7 total investment range
SBA loan defaults
15.4%
13 loans resolved — directional only
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 22 of 70 franchised outlets left the system — a 31.4% annualized exit rate. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2014 | 2015 | 2016 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Outlets at start | 36 | 38 | 42 | 66 | 69 | 72 |
| Opened | 2 | 4 | 4 | 5 | 4 | 4 |
| Transfers | 2 | 0 | 0 | 0 | 1 | 2 |
| Terminations | 0 | 0 | 0 | 0 | 0 | 2 |
| Non-renewals | 0 | 0 | 0 | 0 | 0 | 0 |
| Reacquired by franchisor | 0 | 0 | 0 | 0 | 0 | 0 |
| Ceased — other reasons | 0 | 0 | 0 | 2 | 0 | 20 |
| Outlets at end | 38 | 42 | 46 | 69 | 72 | 72 |
| Net change | +2 | +4 | +4 | +3 | +3 | 0 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 29 SBA-backed loans to ZIPS DRY CLEANERS franchisees since 2010. Only 13 have resolved so far — too thin for a reliable default rate, but 2 of them charged off.
—
13 resolved · too thin to rate
—
avg. charged-off $ ÷ approved $
—
default rate × loss severity
$962,522
what recent franchisees borrowed
63 mo
approval → charge-off, defaulted loans
5 vs 7
distinct banks still lending
Charge-off rate by loan approval year (%)
Loan performance by state
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO ZIPS DRY CLEANERS BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
A typical ZIPS DRY CLEANERS buyer since 2020 borrowed $963K through SBA — about $142K a year in debt service. Against the brand's own disclosed median unit revenue of $1.1M, that is 13.5% of every dollar the store takes in — before rent, payroll, food, or royalty.
Who finances it
Truist Bank
14.8% of this brand's loans
That lender charges off 8.3% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
61.5%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
Not enough resolved loans to split
Computed from 29 SBA 7(a)/504 loans to ZIPS DRY CLEANERS franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $40K franchise fee (Item 5) and a total investment of $868K–$1.3M (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$868K–$1.3M
all-in investment range
Franchise fee (Item 5)
$40K
upfront, one-time
Royalty (Item 6)
6%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$60K
6% of sales, before profit
Over a 10-yr term
$600K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for ZIPS DRY CLEANERS with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 2 wage cases against operators of this system, recovering $27K in back wages for 37 workers. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
2
Back wages owed
$27K
Employees affected
37
Since 2020
0
Read this carefully. The employers in these cases are individual ZIPS DRY CLEANERS franchisees — separately owned businesses operating under the brand name — not ZIPS DRY CLEANERS itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2013.
Modeled risk
FDD Risk Score · modeled from the public record
The public record puts this brand toward the riskier end of the systems we score — but the evidence is thin, so treat it as a range, not a number.
Risk percentile (range)
81–100 / 100
Directional
Modeled SBA charge-off
22.4%
Observed SBA charge-off
15.4%
Top drivers: Item 20 exit rate (raises) · System size (log units) (raises) · Net unit growth (raises) · Investment ceiling (log) (lowers). Thin loan history — treat this as a range, not a number. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
No recent closures, bankruptcies, or major lawsuits found in the news for ZIPS DRY CLEANERS. That's a good sign — but it reflects news coverage, not a guarantee.
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing ZIPS DRY CLEANERS's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →ZIPS DRY CLEANERS franchise questions, answered from the filings
What percentage of ZIPS DRY CLEANERS franchises closed last year?
In ZIPS DRY CLEANERS's latest FDD Item 20 (fiscal 2025), 22 of 70 franchised outlets left the system — an annualized exit rate of 31.4%. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a ZIPS DRY CLEANERS franchise cost?
Per ZIPS DRY CLEANERS's 2026 FDD, buying in requires an initial franchise fee of $40K (Item 5) and a total initial investment of $868K–$1.3M (Item 7).
What royalty does ZIPS DRY CLEANERS charge?
ZIPS DRY CLEANERS charges an ongoing royalty of 6.0% of gross sales, per Item 6 of its 2026 FDD.
Does ZIPS DRY CLEANERS disclose earnings (Item 19)?
Yes — ZIPS DRY CLEANERS makes a financial performance representation in Item 19 of its 2026 FDD, reporting a median unit volume of $1.1M. Read it closely: franchisors choose which units and which metrics to include.