Johnstone Supply

For prospective investors navigating the complex landscape of B2B distribution franchises, the critical challenge is identifying an opportunity that combines a proven operational model, substantial market presence, and a clear growth trajectory, all while mitigating the inherent risks of significant capital deployment. Many promising concepts falter due to inadequate infrastructure or an inability to adapt to evolving industry demands, leaving franchisees exposed to volatile markets and eroding returns. However, some brands stand out as resilient guides through these challenges, offering a structured path to capitalize on essential services. Johnstone Supply, a prominent wholesale distributor in the Heating, Ventilation, Air Conditioning, and Refrigeration (HVAC/R) industry, presents such a unique franchise opportunity, built on a long history of strategic growth and a distinctive business model that has evolved from a cooperative to an LLC structure.

Johnstone Supply's foundational story traces back to 1953, when it was initially established by two individuals named Johnson and Stone with a primary focus on refrigeration. The company experienced early struggles until John Shank acquired it for a modest $19,000, subsequently transforming it into a viable and profitable enterprise through the establishment of a strong merchandising foundation complemented by a comprehensive product catalog. John Shank is also credited with founding Johnstone Supply's "The Founders Group," which operates as a third-generation family business within the broader Johnstone network, underscoring a legacy of entrepreneurial continuity. A significant structural transformation occurred in 1981 when John Shank restructured the company into a member-owned cooperative, a strategic move prompted by increased franchise reporting requirements and escalating legal costs. This conversion saw all 32 existing stores and franchises become integral parts of the new cooperative structure, with ownership transferring from Shank to the co-op members, and the new company's headquarters firmly established in Portland, Oregon. This cooperative foundation laid the groundwork for a collaborative growth model that would define the brand for decades.

In a pivotal development in September 2021, Johnstone Supply, Inc. announced that its members had approved a definitive conversion agreement with Redwood Capital Investments LLC. This landmark agreement facilitated the conversion of Johnstone's business structure from its long-standing Oregon Cooperative into a Delaware limited liability company, now operating under the name Johnstone Supply, LLC, with Redwood Capital Investments LLC becoming the majority owner. Under this new structure, Johnstone Supply LLC maintains its core function as a wholesale distributor based in Portland, exclusively providing products and services to the former members of the Johnstone Cooperative, who are now referred to as "Business Owners." Over 90 individual Johnstone Business Owners were expected to execute exclusive territory distribution agreements with Johnstone Supply, LLC and remain significant equity holders in the new entity, signaling a continuation of shared success within a modernized framework. The current CEO of Johnstone Supply is Lance Devin, appointed in April 2022, bringing 30 years of leadership and operational experience to guide the company's strategic direction from its corporate office located at 11632 NE Ainsworth Circle, Portland, Oregon 97220, United States.

The brand's scale and market position highlight its dominance within the HVAC/R distribution sector. From its initial 32 locations in 1981, the cooperative expanded robustly, reaching 75 member stores by 1985 and a substantial 245 stores nationwide by 2000 under the direction of Jerry Schultz. The company celebrated a significant milestone in March 2006 with the opening of its 300th store in Everett, WA, demonstrating consistent expansion. By 2017, the cooperative's 102 members operated 410 locations across 47 U.S. states, Guam, and Canada, illustrating its broad geographical footprint. More recently, as of 2021, Johnstone Supply had approximately 446 Johnstone Supply branded locations owned by members and their affiliated non-members across 47 U.S. states and Ontario, Canada. By 2022/2023, the network comprised 443 total U.S. locations, consisting of 426 open franchises and 17 corporate locations. The growth continued, with Johnstone Supply reaching a network of over 457 stores nationwide by December 2025, supported by six cutting-edge, computerized distribution centers. Across the U.S. and Canada, the company boasts over 450 wholesale locations, further buttressed by multiple regional distribution centers, solidifying its position as a market leader. This extensive network and long history of growth position Johnstone Supply as a dominant force in the HVAC/R wholesale distribution market, providing a comprehensive, contractor-focused product catalog featuring over 75,000 parts, making it a critical one-stop shop for industry professionals and a compelling franchise opportunity for investors seeking a stable, essential service sector.

The HVAC/R wholesale distribution industry, specifically categorized under Hardware & Plumbing & Heating Equipment & Supplies Merchant Wholesalers (NAICS Code 4237), represents a substantial and relatively stable total addressable market for the Johnstone Supply franchise opportunity. Demand within this sector is largely driven by the extensive installed base of HVAC units across the U.S., ensuring a consistent need for repair and replacement parts, which is often non-discretionary for homeowners and businesses alike. This inherent stability creates a robust foundation for franchise investment, distinguishing it from more volatile consumer-driven markets. Key consumer and industry trends are actively shaping and expanding this market, including a pronounced increase in focus on energy-efficient and eco-friendly HVAC/R products, driven by both regulatory pressures and growing consumer environmental consciousness. Concurrently, there is a rising demand for smart home automation systems, encompassing smart thermostats and advanced leak detection systems, which integrate with and often require specialized HVAC/R components.

Secular tailwinds benefiting Johnstone Supply specifically include the ongoing need for infrastructure maintenance and upgrades across residential and commercial sectors, coupled with new construction in expanding metropolitan areas. The industry also grapples with, and adapts to, the impact of fluctuating metal prices on the cost of plumbing materials, requiring sophisticated inventory management and supply chain resilience. The expansion of e-commerce in wholesale distribution is another significant trend, necessitating robust digital platforms and efficient logistics to serve contractor clients effectively. Heightened competition from direct manufacturers and online retailers further underscores the importance of a strong distribution network and value-added services, which Johnstone Supply aims to provide. A growing emphasis on offering value-added services, such as installation support and customization, helps differentiate distributors in a competitive landscape. The adoption of advanced technologies for inventory management and logistics is crucial for efficiency and responsiveness, particularly with a product catalog exceeding 75,000 parts. Shifts in regulatory standards for plumbing and heating systems continuously drive demand for updated and compliant products, while the intensification of global supply chain challenges necessitates robust and diversified sourcing strategies. Finally, an increased adoption of private labeling by wholesalers is observed, allowing brands to differentiate products and build loyalty. These macro forces, including urbanization driving new commercial and residential development, particularly in the Western and Southeastern regions, create sustained opportunities for the HVAC/R distribution industry. The stable demand for repair and replacement, combined with these evolving trends, makes the industry an attractive category for franchise investment, offering a blend of resilience and growth potential within a critical infrastructure sector.

Investing in a Johnstone Supply franchise requires a substantial financial commitment, positioning it as a premium opportunity within the B2B distribution landscape. The franchise fee, as per the 2022 FDD, ranges from $72,000 to $117,000, with one specific source indicating a franchise fee of $72,000. This initial fee is notably higher than the typical average investment for HVAC sub-sector franchises, which generally range from $195,649 to $509,725, signaling Johnstone Supply's established market position and comprehensive support system. The total investment range for establishing a Johnstone Supply franchise is between $808,200 and $3,402,000. This significant spread in the total investment is driven by several factors, primarily the capital-intensive nature of HVAC equipment distribution, which necessitates extensive inventory holdings, robust warehouse facilities, and specialized infrastructure tailored to serve a professional contractor base across diverse geographic markets. The scale of required facilities, including potentially a 4,000-square-foot showroom and large distribution warehouses as seen in Braintree, Massachusetts, directly impacts the overall capital outlay.

Prospective franchisees must meet stringent liquidity requirements to qualify for this investment. The minimum cash required to open a Johnstone Supply franchise is stated as $808,200 in one summary, while another source indicates a minimum cash requirement of $290,000. Ideal investors should possess $1-2 million in liquid capital, reflecting the need for substantial working capital to manage inventory, operational expenses, and expansion initiatives in a capital-intensive wholesale business. Furthermore, candidates are expected to have substantial business management experience, particularly in B2B distribution or trade services, underscoring the operational complexity and strategic demands of running a Johnstone Supply location. Regarding ongoing fees, the Franchise Disclosure Document (FDD) summaries available do not explicitly disclose a royalty fee or an advertising fund (ad fund) for Johnstone Supply, listing these as "N/A." While general franchise industry standards typically see royalty fees ranging from 4-8% of gross sales and national advertising funds usually between 1-3% of sales, the absence of explicit disclosure means prospective franchisees should conduct thorough due diligence to understand any other recurring fees or contributions to marketing and technology platforms that may be part of the operational agreement with Johnstone Supply, LLC, now majority-owned by Redwood Capital Investments LLC. This robust investment profile clearly positions Johnstone Supply as a premium franchise opportunity, requiring significant capital and proven business acumen, reflecting the scale and strategic importance of its operations within the HVAC/R wholesale distribution sector.

The operating model for a Johnstone Supply franchisee is deeply rooted in wholesale distribution, focusing on serving the specific, evolving needs of HVAC professionals as a contractor-focused business. Daily operations involve managing an extensive product selection, which includes complete HVAC systems, specialized parts, and tools, drawing from a comprehensive catalog of over 75,000 parts. Franchisees, now referred to as "Business Owners" under the new LLC structure, are responsible for exclusively providing these products and services to their local markets, effectively acting as the front-line distribution arm for Johnstone Supply, LLC. This requires a robust understanding of local market demand, inventory management, and B2B customer service excellence. Staffing requirements are significant, encompassing roles for warehouse management, logistics coordination, sales, and customer support to ensure efficient order fulfillment and expert advice for professional contractors. The operational footprint typically involves dedicated store locations, often supported by larger distribution warehouses, such as the 4,000-square-foot showroom and substantial distribution warehouse established by the Johnstone Supply Parker Global Group in Braintree, Massachusetts, or the new 25,000-square-foot facility in North Fond du Lac, Wisconsin, completed in summer 2020. These facilities are designed for high throughput and efficient inventory management, leveraging the support of six cutting-edge, computerized distribution centers that underpin the entire Johnstone Supply network across the U.S. and Canada.

Johnstone Supply provides new franchisees with a comprehensive training program, typically spanning two weeks at Johnstone Supply's headquarters, which incorporates a blend of intensive classroom instruction and practical, hands-on learning experiences. This foundational training is complemented by access to a robust resource library, including detailed operational guides and marketing materials, recommended for continuous business development and strategic planning. A key aspect of their ongoing support structure is Johnstone University, an online training portal that provides extensive educational resources, notably including the Air Conditioning Contractors of America (ACCA)'s entire training library. This online platform features ACCA's Qtech® training courses, which are meticulously designed around ACCA's industry-leading HVAC design, installation, and maintenance standards, ensuring franchisees and their teams remain at the forefront of industry best practices. The company strongly emphasizes proven operational systems, comprehensive training programs, and the cultivation of strong relationships with leading manufacturers, which is critical for product sourcing and competitive pricing in the wholesale market. The legacy of the cooperative structure, even after its conversion to an LLC, aims to allow franchisees (now "Business Owners" with exclusive territory distribution agreements and equity holdings) to share in the organization's collective success while maintaining crucial local market autonomy. Franchisees benefit from ongoing operational assistance, strategic marketing initiatives, timely technology updates to enhance efficiency, and continuous brand development efforts. Furthermore, territory rights and market exclusivity are provided, offering competitive protection within designated operational areas, which is vital for long-term growth. While specific multi-unit requirements are not explicitly detailed, the growth of groups like "The Founders Group" suggests a clear path for expansion, and the expectation is for owner-operators with substantial business management experience to drive performance.

Item 19 financial performance data, which typically provides average revenue per unit, median revenue, or profit margins, is not disclosed in the current Franchise Disclosure Document for Johnstone Supply. While franchisors are not legally mandated to provide this information, its absence means prospective franchisees cannot directly estimate unit-level profitability from the FDD alone. It is crucial to understand that reported revenue figures do not equate to profit, as profit is the net amount remaining after all operating costs—including labor, rent, utilities, marketing, and extensive inventory expenses—are meticulously paid. Despite this lack of specific per-unit disclosure, the company's overall financial performance has demonstrated remarkable strength and consistent growth throughout its history, providing a robust indicator of the brand's market power and underlying business health.

Johnstone Supply officially topped $1 billion in total yearly sales during the 12-month period ending March 2006, marking a significant milestone in its financial trajectory. This growth accelerated, reaching $2 billion in annual sales by June 2017 under the leadership of previous CEO DeWight Wallace. By September 2021, Johnstone Supply, as a North American HVACR brand, had surpassed $3 billion in annual sales, generated collectively by its 90+ members operating approximately 450 independently owned store locations. This figure underscores the substantial sales volume achieved across the network. The company's revenue continued its upward trend, with Johnstone Supply's company revenue reported as $4.5 billion by December 2025, reflecting sustained, aggressive growth. Furthermore, one of its prominent member groups, "The Founders Group," saw its revenue grow impressively from $25 million in 2003 to $154 million in 2022, demonstrating the significant revenue potential at the group level within the Johnstone network. Johnstone Supply LLC's annual revenues for 2023 were estimated to be over $500 million, indicating the robust financial health of the core entity post-conversion to an LLC. While these figures do not provide precise unit-level profitability, the consistent multi-billion-dollar revenue generation at the corporate level, coupled with the impressive growth of member groups, strongly suggests a high-volume business model that supports substantial sales activity across its extensive network of over 450 locations. This collective financial performance, despite the absence of Item 19 data, indicates a powerful and resilient brand within the HVAC/R wholesale distribution sector, signaling a strong market position that underpins the franchise opportunity.

Johnstone Supply has demonstrated a significant and consistent growth trajectory throughout its history, marked by a steady increase in unit count and strategic corporate developments. Starting with 32 locations in 1981, the network expanded to 75 member stores by 1985 and a substantial 245 stores nationwide by 2000. By March 2006, the company celebrated the opening of its 300th store, and by 2017, the cooperative’s 102 members operated 410 locations across 47 U.S. states, Guam, and Canada. More recently, as of 2021, Johnstone Supply had approximately 446 branded locations, growing to 443 total U.S. locations (comprising 426 open franchises and 17 corporate locations) by 2022/2023. The network continued its expansion, reaching over 457 stores nationwide by December 2025, supported by six cutting-edge distribution centers, illustrating a consistent net addition of units annually. Recent corporate developments include the pivotal conversion in September 2021 of Johnstone Supply, Inc. from an Oregon Cooperative into a Delaware limited liability company, Johnstone Supply, LLC, with Redwood Capital Investments LLC becoming the majority owner. This strategic restructuring, while maintaining former members as significant equity holders with exclusive territory distribution agreements, positions the company for continued growth under a modernized corporate framework.

Leadership changes have also marked recent developments, with Lance Devin appointed CEO in April 2022, bringing 30 years of leadership experience to guide the company. The brand's expansion efforts are evident in new branch openings, such as the Johnstone Supply Parker Global Group's new location in Braintree, Massachusetts, opened in July 2022, featuring a 4,000-square-foot showroom and one of Johnstone Supply’s largest distribution warehouses in New England. In August 2024, Johnstone Supply – The Ware Group announced the grand opening of its newest branch in Doral, Florida, marking its 24th branch in Florida and over 40 locations across the Southeast (Florida, Georgia, and South Carolina), highlighting regional concentration and market penetration. Further infrastructure investments include a new 25,000-square-foot facility completed in North Fond du Lac, Wisconsin, in summer 2020, and the expansion of Columbus, Ohio, operations in July 2025 with a new industrial space. Strategic acquisitions also underscore the brand's growth strategy, as evidenced by Johnstone Supply’s investment in Dunphey-Smith Supply, a company founded in 1919, in February 2026.

Johnstone Supply's competitive moat is built upon several formidable advantages. Its long history, tracing back to 1953, has fostered deep brand recognition and trust within the HVAC/R industry. The company boasts a strong merchandising foundation with a comprehensive product catalog of over 75,000 parts, positioning it as a one-stop shop for contractors. Its extensive distribution network, comprising over 450 wholesale locations across the U.S. and Canada and supported by six cutting-edge distribution centers, ensures efficient supply chain management and broad market reach. Strong relationships with leading manufacturers provide access to a wide array of products and competitive pricing. The unique cooperative model, now evolved into an LLC structure with business owners holding equity, fosters a collaborative environment that leverages local market autonomy while benefiting from centralized resources. The brand is adapting to current market conditions by emphasizing energy-efficient and eco-friendly products, catering to the rising demand for smart home automation systems, and leveraging advanced technologies for inventory management and logistics to enhance efficiency and customer service. These strategic investments and operational efficiencies create a robust competitive advantage, ensuring Johnstone Supply remains a leading player in the essential HVAC/R wholesale distribution sector.

The ideal candidate for a Johnstone Supply franchise is an investor with substantial business management experience, particularly within B2B distribution or trade services, given the specialized nature of the HVAC/R wholesale market. This is not an absentee owner model; the expectation is for an engaged operator who can navigate complex supply chains, manage extensive inventory, and cultivate strong relationships with professional contractor clients. Ideal investors should possess significant liquid capital, with a minimum cash requirement stated as $808,200 in one summary, or $290,000 in another, and ideally $1-2 million in liquid capital, reflecting the capital-intensive nature of the business and the need for robust working capital. The emphasis on business management experience, rather than direct HVAC/R technical expertise, indicates that the operational systems and supplier relationships are well-established, allowing a skilled manager to thrive.

While not explicitly stated as a requirement, the significant growth of groups like "The Founders Group" from $25 million in 2003 to $154 million in 2022 strongly suggests that multi-unit ownership is a viable and encouraged pathway for expansion within the Johnstone Supply network. This allows successful franchisees to leverage their operational expertise across multiple locations, capitalizing on economies of scale and broader market penetration. Available territories and geographic focus are strategically identified, with expansion opportunities particularly noted in the Western and Southeastern regions of the U.S. These areas are targeted due to strong commercial and residential development, which inherently drives high HVAC service demand, and their proximity to existing distribution networks, optimizing logistics and supply chain efficiency. Metropolitan areas within these regions are particularly attractive for new branch locations, as exemplified by the new branch in Braintree, Massachusetts, and the 24th branch in Florida in Doral, both serving densely populated and growing markets. The franchise agreement term length is not available, nor are specific details regarding transfer and resale considerations. However, the brand's long history and robust growth indicate a stable and valuable asset for a long-term investment horizon.

For serious investors evaluating a high-capital, high-growth franchise opportunity within the essential HVAC/R wholesale distribution sector, Johnstone Supply presents a compelling, data-rich case. The brand's evolution from its 1953 founding to a $4.5 billion enterprise by December 2025, underpinned by over 450 locations across North America and a strategic conversion to an LLC majority-owned by Redwood Capital Investments LLC, demonstrates exceptional resilience and a clear path for continued expansion. Despite the absence of Item 19 financial performance data in its FDD, the consistent multi-billion-dollar annual sales figures for the overall company and significant revenue growth experienced by member groups like "The Founders Group" (from $25 million in 2003 to $154 million in 2022) provide strong indicators of a high-volume, robust business model. This opportunity is positioned within an industry characterized by stable, non-discretionary demand for HVAC/R equipment repair and replacement, further buoyed by secular tailwinds such as increasing demand for energy-efficient products and smart home automation systems, alongside ongoing commercial and residential development in key metropolitan areas. Johnstone Supply’s significant total investment range of $808,200 to $3,402,000, and ideal liquid capital requirement of $1-2 million, reflects the scale and capital-intensive nature of operating a comprehensive wholesale distribution business with an extensive catalog of over 75,000 parts, supported by a network of six cutting-edge distribution centers. The comprehensive two-week training program at headquarters, coupled with ongoing support through Johnstone University and strong manufacturer relationships, positions franchisees as well-equipped operators in a critical sector. PeerSense provides exclusive due diligence data including SBA lending history, FPI score, location maps with Google ratings, FDD financial data, and side-by-side comparison tools, offering the most comprehensive independent analysis available. Explore the complete Johnstone Supply franchise profile on PeerSense to access the full suite of independent franchise intelligence data.