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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Mr. Handyman Franchise Costs (2013 FDD)

by Franchise Chatter on March 13, 2014

in Franchise Costs, Home Repairs Franchise

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Detailed Estimates of Mr. Handyman Franchise Costs Based on Item 7 (Estimated Initial Investment) of Mr. Handyman’s 2013 Franchise Disclosure Document


  • The franchise owner will provide residential and business repair and maintenance services, utilizing the Mr. Handyman business system.
  • Estimates are based on a new franchise owner buying his/her first franchise. Except as otherwise described in the notes below, the table provides an estimate of your Initial Investment and the costs necessary to begin operating a Mr. Handyman franchise.
  • Actual costs will vary for each franchise location, depending on a number of factors, including, but not limited to, market condition and the geographic location of your business.

1.  Initial Licensing Fee:  $19,900

  • Mr. Handyman Franchise PhotoThe Initial Licensing Fee is waived for renewal terms; however, you will need to pay the renewal fee. Currently, the Initial Licensing Fee is waived for additional franchises awarded to you.
  • If this is a transfer, the Initial Licensing Fee is waived; however, you will need to pay the then current Transfer Fee.

2.  Territory Fee:  $30,000

  • The Territory Fee is waived for renewal terms or transfers, when no additional territory is being added to the Franchise Agreement.

3.  Initial Package Fee:  $9,500

  • You must purchase an Initial Package from the franchisor, which includes the proprietary Franchise Management Software System, computer, monitor, printer, trademarked office supplies, stationery, and the $1,000 Convention Allowance.
  • The Initial Package Fee is waived for renewal terms. Currently, it is also waived if this is an additional territory being awarded to you.
  • If this is a transfer and you are purchasing the entire business, currently you are only required to pay the $1,000 Convention Allowance. If you are only purchasing a portion of the business, you are required to purchase the entire Initial Package.
  • There are no refunds, except that if you attend the first Convention that is scheduled to begin within one year of your successful completion of the Initial Training Program, you will receive a $1,000 Convention Allowance (the “Allowance”).
  • The Allowance is to be used primarily towards the registration fee, but any remaining balance may be applied towards travel, lodging, and/or meals. The Allowance will be rebated to you after you attend the Convention. If you do not attend the Convention within the required time period, it will not be rebated to you.

4.  Vehicle Expenses:  $1,950 to $3,900

  • Franchised Businesses begin operation with a van that meets System standards and specifications. As your Franchised Business grows, you will need to add additional vans.
  • You should consult your personal financial advisor to determine whether you should lease or purchase your initial and subsequent vans.
  • The cost of purchasing and outfitting a van typically ranges from $22,000 to $25,000 plus applicable taxes.
  • When leasing, the amount of deposit will vary depending upon supplier pricing strategies, promotions, and willingness to provide start-up businesses with more advantageous pricing than they typically offer individuals leasing a single van.

5.  Real Estate and Utility Deposit:  $250 to $1,000

  • As required by the lessor and utility companies.

6.  Furniture, Fixtures, and Office Equipment:  $0 to $1,500

  • Estimated cost for items including desks, chairs, a file cabinet, telephone system, wastebaskets, and other equipment and supplies necessary to begin the operation of the Franchised Business.

7.  Tools and Equipment to Equip One Van:  $1,000 to $2,000

  • List of tools and equipment is included in the Manuals. These may be purchased locally through national suppliers or at a local home improvement store.

8.  Permits and Licenses:  $100 to $1,000

  • As required by local and state regulations.

9.  Prepaid Insurance Premiums – 3 Months:  $1,800 to $2,800

  • Typically, insurance companies require start-up businesses to pre-pay a portion of their premiums.

10.  Training Expenses – Travel, Food, and Lodging:  $3,000 to $4,000

  • Out-of-pocket travel expenses vary depending on your proximity to the franchisor’s training center in Ann Arbor, MI, as well as the field training site, the type of transportation you use, and your individual expenses during the Initial Training period of 5 days.
  • For purposes of this Item, the franchisor has estimated two individuals sharing one hotel room.

11.  Additional Funds – 3 Months:  $34,500 to $54,000

  • This Item estimates your initial start-up expenses for the first three months of operations, not including those expenses identified separately in the table. It includes payroll costs for operation and customer service employees, general vehicle maintenance and gasoline, advertising, Internet and telephone provider fees, some uniforms, and, at the high end of the range, office rental.
  • The estimate of additional funds does not include an owner’s salary or draw.
  • These figures are estimates and the franchisor cannot guarantee that you will not have additional expenses starting the business.

12.  Total Estimated Initial Investment:  $102,000 to $129,600

  • The franchisor has relied on the management team’s general experience with franchising in the United States, along with the experience of Mr. Handyman franchisees, to compile these estimates.

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