Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Chem-Dry Franchise Costs (2016 FDD)

by Franchise Chatter on December 15, 2015

in Carpet Cleaning Franchise, Franchise Costs

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Chem-Dry Photo1

This post was updated on December 21, 2016 to reflect information from Chem-Dry’s 2016 FDD (Item 7).

Detailed Estimates of Chem-Dry Franchise Costs Based on Item 7 (Estimated Initial Investment) of Chem-Dry’s 2016 Franchise Disclosure Document

1.  Initial License Fee:  $3,000 to $21,500

  • In order to acquire a Chem-Dry franchise, you must pay the franchisor the Initial Fee for the chosen package.
  • The Initial Fee is non-refundable, and can be paid in a single lump sum payment or you may be eligible for financing of the Initial License Fee portion of the Initial Fee.
  • Prior to signing the Franchise Agreement and the Business Note, you must generally pay a down payment of $3,000 to $6,000 to the franchisor toward the Initial License Fee.

2.  New Business Set:  $0 to $53,395

  • Other than in the states of Hawaii and Alaska, the franchisor does not offer financing on the New Business Set equipment package portion of the Initial Fee.

3.  Additional Equipment Purchases:  $0 to $7,639

4.  Cargo Van:  $0 to $35,000

  • At least one white cargo van is required for the operation of each Chem-Dry Business to transport equipment and cleaning solutions to a job site.
  • If you already own a suitable insurable van, there may be no need to purchase or lease an additional van; however, the van must comply with standards of professionalism a consumer would expect when contracting for Chem-Dry services and meet the current Advertising Rules and Guidelines regarding type of van and proper markings.

5.  Three Months’ Rent:  $0 to $4,000

  • The purchase or lease of real property is not necessary to the operation of a Chem-Dry Business. You may operate out of your own home (where zoning and other laws and regulations permit) as space requirements are minimal, provided your home is within the non-exclusive area designated on the Franchise Agreement (“Franchised Area”).
  • If you have no storage facilities whatsoever, the rental of a unit the size of a single car garage, in which a telephone can be installed, inventory and equipment can be stored, and which is in accordance with all operational standards, is adequate.

6.  Telephone and Business License:  $400 to $4,000

7.  Training and Convention Attendance Expenses:  $1,000 to $3,000

  • The Initial Fee includes the registration costs for up to two attendees at the New Franchise Training and for one person to attend the next Chem-Dry Annual Convention following completion of Initial Training.
  • Additional attendees and franchisees purchasing an existing Chem-Dry franchised business will pay $50 per person per day to attend New Franchise Training.
  • You are responsible for costs associated with travel to attend training and convention and for your own accommodations and meals while there.

8.  Insurance:  $600 to $6,000

  • You must obtain and maintain business liability coverage as well as vehicle liability coverage as a condition for receiving and maintaining a franchise.
  • The minimum amount of business liability coverage required is $1,000,000 per occurrence.
  • The minimum amount of $100,000/$300,000/$50,000 (or $300,000 Combined Single Limit) is required for the vehicle coverage. All non-owned or hired vehicles must be insured with the same limits.
  • You must also have Workers’ Compensation insurance based on statutory requirements.

9.  Additional Funds for 3 Months:  $2,500 to $9,000

  • This item estimates your initial start-up expenses. These expenses include payroll costs, but do not include any draw or salary for you. These figures are estimates and the franchisor cannot guarantee that you will not have additional expenses starting the business.

10.  Computer System:  $800 to $2,000

  • A computer system suitable to maintain and service your business is required. If you already own a suitable computer system, there may be no need to purchase an additional one.
  • You must also maintain an Internet connection and an email account and must check your email account at least daily. Cable or DSL internet connection is highly recommended.

11.  Advertising – 3 Months:  $5,000 to $10,000

  • This item estimates direct mail, internet marketing, telephone directories, and other advertising for your business.

12.  Total Estimated Initial Investment:  $13,300 to $155,534

  • The franchisor relied on its over 36 years of experience in the carpet and upholstery/drapery cleaning, spot removal, and protective services business to compile these estimates.

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