Posted by on September 13, 2020 8:00 am
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Categories: Franchise

Franchise Costs: Detailed Estimates of Home Clean Heroes Franchise Costs (2020 FDD)

Franchise Costs: Detailed Estimates of Home Clean Heroes Franchise Costs (2020 FDD)

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Detailed Estimates of Home Clean Heroes Franchise Costs Based on Item 7 (Estimated Initial Investment) of Home Clean Heroes’ 2020 Franchise Disclosure Document

1.  Initial Franchise Fee:  $49,500

  • The Initial Franchise Fee for a single unit franchise is $49,500. If you have signed an Area Development Agreement, you will pay the Cumulative Franchise Fee based on the number of franchises you acquire.
  • If you qualify to participate in the franchisor’s Community Heroes Program, your Initial Franchise Fee will be $48,500.
  • The franchisor participates in IFA’s VetFran program; as part of that program the franchisor provides veterans of the U.S. Armed Forces a $5,000 discount on the Initial Franchise Fee for the first Franchised Business, but no discount will be given for subsequent franchises under the Area Development Agreement.

2.  Set-Up Fee:  $1,000

3.  Mailing List Fee:  $2,000

4.  Postcard Fees:  $31,200

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  • The franchisor’s affiliate, HCH Services, is currently the only approved supplier of the Mailer Program in which you must participate. The franchisor may approve a different affiliate or a third-party supplier in the future.
  • Through the Mailer Program, you are required to send 80,000 postcards to the Targeted Households located in your Territory for your Franchised Business each year. The actual schedule, distribution, and frequency will be determined by the franchisor in cooperation with you each year.
  • Currently, the Postcard Fee is $0.39 per postcard.
  • You must pay the Setup Fee, which is currently $1,000.
  • You must pay the Mailing List Fee, which is currently $0.05 per Targeted Household on the mailing list. The Mailing List Fee is based on 40,000 Targeted Households. The mailing list is purchased on an annual basis by HCH Services. Specific addresses and names are not shared with franchisees.
  • The Mailer Program Fees are subject to change, with notice, to reflect changes in cost.
  • For the first year of each Franchised Business opened, 100% of the Mailer Program Fees must be paid 30 days prior to the Scheduled Opening Date, provided that if you are not an existing franchisee and you purchased a developed territory, the Setup Fee must be paid at the time you purchased the developed territory.
  • The Mailer Program Fees are nonrefundable.

5.  SEO Fees:  $3,600

6.  Digital Marketing Fees (first 3 months):  $6,000

  • You must participate in the Digital Advertising Program.
  • In the first year in which your Franchised Business is open, 100% of the SEO Fee for SEO must be paid at the time your website goes live. The franchisor’s affiliate, HCH Services, is currently the only approved supplier of SEO.
  • The payment schedule for the SEO Fee for SEO in subsequent years 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. For a multi-territory franchisee operating from a single website, the SEO fees will be $300 per month regardless of the number of territories open. You may only have 1 website.
  • In addition to SEO, the franchisor also requires you to pay the Digital Marketing Fee, currently a minimum of $2,000 per month per territory for online placement services, such as pay-per-click, social media advertising, remarketing, and various other digital advertising services.
  • The Digital Marketing Fees will typically be billed one month in advance and will be paid to the franchisor’s approved supplier of digital advertising services. The franchisor may approve an affiliate or a third-party supplier in the future.

7.  Start-Up Package (equipment, uniforms, marketing supplies, and office supplies):  $11,000

  • You will be required to purchase from the franchisor or its affiliate, HCH Services, a Start-Up Package containing certain equipment, products, branded or proprietary supplies, and uniforms that the franchisor specifies.

8.  Vehicles and Decals:  $1,875 to $3,060

  • The only service vehicles the franchisor has approved are a recent model (3 years or less) Ford Focus or Ford Transit Connect, as specified in the Operations Manual.
  • You will be required to utilize a vehicle and apply decals the franchisor has approved. No vehicle may be used without the franchisor’s approval.
  • Vehicles must meet the franchisor’s specifications including body style, color, and model years and the franchisor estimates that you will need two vehicles.
  • The franchisor does not currently sell or lease vehicles. It estimates the cost of leasing a vehicle is $312 per month.
  • The franchisor’s approved decals must also be installed on each vehicle, at an estimated cost of $2,700 each.
  • Your investment may vary depending upon your decision to lease a new or used vehicle, or to purchase a new vehicle. The low estimate ($1,875) listed above is the franchisor’s estimate of leasing two vehicles with all costs bundled into the lease and the high estimate ($3,060) includes the cost of purchasing two vehicles including decals.
  • If you would like to use your existing vehicle, you must submit the vehicle for approval, meet the specifications noted above, and receive approval from the franchisor.

9.  Initial Training:  $500 to $2,000

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  • You will incur expenses associated with the franchisor’s initial training program. For this training program, the franchisor provides instructors and instructional materials.
  • You must pay for transportation, lodging, food, and wages for you and your employees. The cost will depend on the distance you must travel to the training location, the type of accommodations you choose, and the number of employees being trained.
  • The estimate is based on travel to the franchisor’s headquarters in Virginia Beach, Virginia for training lasting for 7 days.

10.  Insurances and General Office Supplies:  $2,700 to $3,600

  • The franchisor estimates that the range given will be sufficient to cover prepayment of insurances, initial basic office supplies, certain forms and supplies unique (non-proprietary) to the Franchised Business for the initial phase of the operation of the Franchised Business.

11.  Professional Fees:  $0 to $1,000

  • You may wish to consult with an attorney, accountant, consultant, or other professional to evaluate the Franchise Disclosure Document and Franchise Agreement. If you elect not to engage one of these professionals, your expenses will be $0.

12.  Licenses and Certifications:  $500 to $1,500

  • You may be required by state and/or local laws and regulations, or by the franchisor, to obtain and maintain a license, bonding, and certifications.

13.  Computer, Internet Devices, Phones, Software Setup:  $1,650 to $3,600

  • Prior to opening your Franchised Business, you must acquire computer equipment, internet service, telephone equipment, and implement and be trained on software systems and/or services (i.e. service management, accounting, telephone system, integrated business management system, credit card processing, and any other software necessary to operate the Franchised Business) required by the franchisor, at your sole expense.

14.  Additional Funds for 3 Months:  $6,000 to $15,000

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  • You will need to support ongoing expenses, such as payroll, fuel, supplies, and other operating costs to the extent these costs are not covered by gross revenue of the Franchised Business. New businesses often generate negative cash flow. The franchisor estimates that the amount stated will be sufficient to cover ongoing expenses for the initial phase of the business, which it calculates to be 3 months.

15.  Totals:  $117,525 to $134,060

  • The franchisor relied on the past experience of HCH Local Operations and its performance when preparing these figures.
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Published at Sun, 13 Sep 2020 05:00:37 +0000

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