Posted by on September 12, 2020 7:57 am
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Categories: Franchise

Considering a Home Clean Heroes Franchise? Don’t Overlook These 23 Important Franchise Fees

Considering a Home Clean Heroes Franchise? Don’t Overlook These 23 Important Franchise Fees

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If you are considering a Home Clean Heroes franchise, don’t get blindsided by these 23 important franchise fees (from the initial franchise fee, to the royalty fee, to 21 other fees found in Items 5 and 6 of Home Clean Heroes’ 2020 FDD).

1.  Initial Franchise Fee:  $49,500

  • If you sign a single Franchise Agreement offered by the disclosure document, you must pay Home Clean Heroes an Initial Franchise Fee of $49,500 within 24 hours of signing.
  • Home Clean Heroes has established a “Community Heroes Program” and may offer a $1,000 discount to qualifying franchisees for the first Home Clean Heroes franchise they purchase, but no discount will be given for franchises under an Area Development Agreement. Home Clean Heroes includes firefighters, law enforcement, emergency medical technicians and personnel, teachers, and educational administrative staff in its Community Heroes Program.
  • Home Clean Heroes is a member of the International Franchise Association (IFA) and participates in the IFA’s VetFran Program. As part of the VetFran Program, Home Clean Heroes provides veterans of the U.S. Armed Forces a $5,000 discount on the Initial Franchise Fee for the first Home Clean Heroes franchise they purchase, but no discount will be given for franchises under an Area Development Agreement.

2.  Cumulative Franchise Fee:  $49,500 to $299,500

  • If Home Clean Heroes agrees to grant you the exclusive right to develop and operate two or more franchises in a defined Development Area through an Area Development Agreement, you must pay Home Clean Heroes the Cumulative Franchise Fee as follows:
  • One Territory (40,000 target households):  $49,500
  • Two Territories (80,000 target households):  $89,500
  • Three Territories (120,000 target households):  $119,500
  • Four Territories (160,000 target households):  $149,000
  • Five Territories (200,000 target households):  $178,000
  • Six Territories (240,000 target households):  $206,000
  • Seven Territories (280,000 target households):  $233,000
  • Eight Territories (320,000 target households):  $258,000
  • Nine Territories (360,000 target households):  $281,000
  • Ten Territories (400,000 target households):  $299,500
  • The Cumulative Franchise Fee is due and payable to Home Clean Heroes within 24 hours of execution of the Area Development Agreement.
  • When you sign the Area Development Agreement, Home Clean Heroes requires you to execute 1 Franchise Agreement, concurrent with the execution of the Area Development Agreement. You will sign the then-current Franchise Agreement for each subsequent Franchised Business to be opened in accordance with the development schedule in your signed Area Development Agreement.

3.  Start-Up Package:  $11,000

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  • You are required to purchase certain equipment, products, supplies, uniforms, and other items that Home Clean Heroes specifies from it or its affiliate, HCH Services (the “Start-Up Package”). Currently, the cost of the Start-Up Package is $11,000, payable immediately upon invoicing by HCH Services.
  • The Package should be sufficient to stock two complete vehicles and cleaning teams for a 1-3 month period of time once you open the Franchised Business, depending on the number of customers you have and/or procure once you open your Franchised Business.

4.  Royalty and Service Fee:  8% of Net Revenue

  • Due Date:  As incurred.
  • The Royalty and Service Fee is payable weekly for the previous week ended on Sunday and is due the first business day of each week by bank draft.

5.  Marketing Fee:  2% of Net Revenue

  • Due Date:  As incurred.
  • Payable each week with the Royalty and Service Fees for brand development, advertising, public relations, production of advertising materials, and expenses related to administration of the marketing fund.

6.  Mailer Program Fees, Consisting of Setup Fee, Mailing List Fee, and Postcard Fee:  currently, $1,000 (Setup Fee); $0.05 per Targeted Household on the mailing list obtained (Mailing List Fee); and $0.39 per postcard (Postcard Fee)

  • Due Date:  In advance.
  • HCH Services is currently the only approved supplier of the Mailer Program in which you must participate. You must purchase all Mailer Program services from Home Clean Heroes or its affiliate or approved third-party supplier.
  • The Mailer Program Fees are subject to change, with notice, to reflect changes in cost. The payment schedule for each year after the first year will require a payment each month in advance of the mailing. The amount of each payment will be determined by Home Clean Heroes based on the Targeted Households in your Territory and the mailing list Home Clean Heroes purchases for the Mailer Program.

7.  Digital Advertising Program Fees, Consisting of SEO Fees and Digital Marketing Fees:  currently, $300 per month (SEO Fee); $2,000 per month (Digital Marketing Fee)

  • Due Date:  Monthly or as incurred.
  • You must participate in the digital advertising program (“Digital Advertising Program”). Through the Digital Advertising Program, you are required to pay to HCH Services each year the SEO Fees.
  • The payment schedule for SEO Fees in each year after the first year will require you to pay $300 per month starting after the twelfth month that your website went live, payable in advance 1 month prior to the month of service. SEO is a per-website requirement.
  • In addition to the required purchase of SEO, Home Clean Heroes’ Digital Advertising Program also requires a minimum monthly spend of $2,000 per month for online placement services, such as pay-per-click advertising, social media advertising, remarketing, and various digital advertising services (the “Digital Marketing Fees”).
  • The Digital Marketing Fees are to be paid to Home Clean Heroes’ approved third-party supplier. The Digital Marketing Fees will typically be billed one month in advance.
  • The SEO Fees and the Digital Marketing Fees are collectively referred to as the “Digital Advertising Program Fees.”

8.  National Call Center Fees:  currently, $1.15 per minute

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  • Due Date:  As incurred.
  • To ensure quality customer service, all customer calls must be answered by a live person. Home Clean Heroes requires you to use the National Call Center.
  • Fees may apply to all customer calls, both inbound and outbound, as specified in the Operations Manual.
  • The National Call Center fee that you must pay is calculated using the calls that related to your Franchised Business.

9.  Integrated Business Management System:  currently, $350 per month

  • Due Date:  Monthly or as incurred.
  • To maintain the integrity of the System and provide the Franchised Businesses with an integrated business management solution, Home Clean Heroes has contracted with suppliers for the following: a web-based field service management system, website hosting, a franchise management system, email marketing management, a learning management system, email services, and telephone services.
  • Provider rates are subject to change and you must pay Home Clean Heroes in advance each month based on the then-current rates.
  • Home Clean Heroes may approve an affiliate or third-party supplier in the future.

10.  Employee Background Checks:  typically, $35 to $40 per employee

  • Due Date:  As incurred.
  • You must do a thorough background check on every employee providing customer services through Home Clean Heroes’ designated supplier or an approved alternate supplier.

11.  National/Regional Accounts:  10% on collected monies

  • Due Date:  After receipt of payment.
  • If Home Clean Heroes enters into a service agreement for a national/regional customer, secured by Home Clean Heroes, another franchisee, or others with sites in your territory, for which you provide service, you must pay 10% to Home Clean Heroes on collected monies from these agreements for their term and on any future renewal periods.
  • Upon payment by the customer, Home Clean Heroes remits 90% to you, less royalty and advertising fees owed by you on that bill.
  • You have the right to refuse to service any national/regional customer under a service agreement. But, in the event that you refuse to service a national/regional customer under the terms of a service agreement, Home Clean Heroes may provide service to such national/regional customer through another franchisee and/or through an affiliate, without any compensation to you.

12.  Transfer Fee:  $10,000

  • Due Date:  No transfer fee for transfer of the Area Development Agreement.
  • Upon approval by Home Clean Heroes of the transfer.
  • No fee is imposed for transfer to other Home Clean Heroes franchise owners.

13.  Sales Commission:  the commission on Home Clean Heroes finding a buyer for your Franchised Business will typically not be less than 10% of the sales price

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  • Due Date:  Upon the execution of the Purchase and Sales Agreement by both the buyer and seller.
  • You may engage Home Clean Heroes to sell your existing Franchised Business for a fee agreed upon in a Commission Agreement, which will typically not be less than 10% of the sales price.

14.  Renewal:  $5,000 per Franchise Agreement

  • Due Date:  At time of renewal.
  • You will sign a then-current Franchise Agreement and execute a general release upon renewal.

15.  Complaint Fee and Customer Refunds:  $50

  • Due Date:  As incurred.
  • Applies only if Home Clean Heroes responds to a customer complaint about your service.
  • Complaint fees are subject to change on 30 days’ notice to reflect changes in cost and must be paid weekly.
  • Home Clean Heroes may in its sole discretion refund all or a portion of revenue from a customer to resolve a customer complaint and you must reimburse Home Clean Heroes for such refunds.

16.  Late Report Fee:  $200 per report due

  • Due Date:  As incurred.
  • Failure to submit a weekly Net Revenue report on the first business day of the week will result in a $200 Late Report Fee which will be added to the Royalty and Service Fee due for the week.

17.  Interest on Overdue Payments:  18% or the highest interest rate permitted by law, whichever is less

  • Due Date:  Due with the payment of outstanding amounts.
  • Payable on overdue amounts.

18.  Indemnification:  will vary under circumstances

  • Due Date:  As incurred.
  • You will be required to reimburse Home Clean Heroes for any and all damages and claims (including reasonable attorneys’ fees) arising out of any suits, actions, proceedings, or claims filed against Home Clean Heroes, unless such claim is solely the result of actions by Home Clean Heroes.

19.  Audit:  cost of audit will include Home Clean Heroes’ employees’ and/or agents’ travel, room, and board expenses

  • Due Date:  On receipt of invoice.
  • You must pay any cost Home Clean Heroes incurs for any audit it performs which results in a finding that you have failed to comply with the Franchise Agreement or you have understated by 3% or more in any weekly period your Net Revenue.

20.  Training Fees:  costs and expenses incurred by your trainees in connection with any training programs and seminars. In addition, there is a $500 per day per trainee charge, plus any cost of travel, for additional training requested by you.

  • Due Date:  As incurred.
  • Costs and expenses incurred by your trainees in connection with any training programs (after your initial training) and seminars are your responsibility.
  • In addition, there is a $500 per day per trainee charge for additional training requested by you outside of Home Clean Heroes’ regularly scheduled training and seminar programs. There will be no charge for Home Clean Heroes’ regularly scheduled training and seminars.

21.  Regional Meetings/Annual Convention:  Annual Convention fee; costs and expenses incurred by your attendees, plus the costs of travel, lodging, and entertainment; $1,200 if you fail to attend the Annual Convention

  • Due Date:  As incurred; on receipt of notice for failure to attend the Annual Convention.
  • Home Clean Heroes does not charge a fee to attend required regional meetings, but it may charge a nominal fee to attend the required annual conventions. In addition, you are responsible for all costs and expenses incurred by your attendees, including travel, lodging, and entertainment.
  • The annual franchisee convention is a critical learning and networking experience for franchisees to continue to grow their business. As a result, attendance is key and if you fail to attend the annual convention, you must pay to Home Clean Heroes $1,200 upon receipt of notice from it.

22.  Taxes:  varies

  • Due Date:  As incurred.
  • You must reimburse Home Clean Heroes for any taxes that it must pay to any state or local taxing authority on account of your operation of your Home Clean Heroes Business or payments you make to Home Clean Heroes.

23.  Attorneys’ Fees and Other Costs:  will vary under the circumstances

  • Due Date:  As incurred.
  • Payable if Home Clean Heroes prevails in any legal dispute with you
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Published at Sat, 12 Sep 2020 05:00:19 +0000

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