Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of One Hour Heating & Air Conditioning Franchise Costs (2016 FDD)

by Franchise Chatter on June 5, 2016

in Franchise Costs, Home Repairs Franchise

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Don't Invest in a Franchise Until You Check Out This List

One Hour Air Conditioning & Heating

Detailed Estimates of One Hour Heating & Air Conditioning Franchise Costs Based on Item 7 (Estimated Initial Investment) of One Hour’s 2016 Franchise Disclosure Document

For Start-Up Franchises

1.  Initial Fees:  $43,000

  • The $43,000 in Initial Fees applies to the franchisee that signs the Franchise Agreement, and that has a Territory whose population is approximately 100,000. Territories may differ in size.
  • A Territory of approximately 100,000 is the required minimum size for a new franchisee.
  • Some franchisees may be able to finance the Initial Fees.

2.  Rent/Lease of Real Property:  $3,000 to $13,500

  • These numbers anticipate that you will lease a facility. The franchisor estimates the cost per month for a 2,000 square foot facility to range from $1,000 to $4,500, and the initial period covers the first three months.
  • The estimated initial investment for a start-up franchisee could include the cost of security deposits of one month’s or two months’ rent which may be required by the landlord.

3.  Leasehold Improvements:  $7,500 to $15,000

  • You will need to install wiring for communications systems that comply with the franchisor’s specifications — high speed ASP compatibility, e-mail, and exclusive phone and fax lines.
  • Paint, inside and out, and flooring must be new or like new.

4.  Computer Systems:  $0 to $2,250

  • You will need a computer (approximately $1,500) with internet access and e-mail capability, telephone, dedicated fax machine (approximately $250), a video disc player (i.e. DVD), and television (approximately $500).

5.  Software:  $1,810 to $4,360

  • You will have to install SuccessWare21 (ASP Option) software (and all other software the franchisor designates for use in your Franchised Business) within three months after the franchisor designates this use.

6.  Office Furniture and Equipment:  $7,600 to $19,250

  • You will need desks, shelving, seating, copy machines, and other office furniture and equipment.

7.  Machinery, Tools, and Equipment:  $15,500 to $25,500

  • You will need to equip your trucks with machinery, tools, and other equipment. The Operations Manual provides a list of recommended machinery, tools, and other equipment purchases.

8.  Trucks:  $40,000 to $90,000

  • You must own, lease, or buy at least two trucks that are operable and meet the requirements in the Operations Manual and are less than seven years old, and have one other office vehicle.
  • Trucks cost from $20,000 to $45,000 each if purchased.

9.  Signage for Trucks:  $10,500 to $28,000

  • Truck paint or wrap, and decal is approximately $3,500 per truck.

10.  Office Signage:  $2,500 to $3,000

  • You must identify your office by the Licensed Marks with approved signage.

11.  Yellow Pages, Internet-Based Pay Per Click, Direct Response, and Radio:  $6,000 to $33,000

  • You must be represented in the local Yellow Pages or comparable telephone directory, including both print and internet-based directories, if available, covering your Territory as soon as possible after opening your Franchised Business.
  • You must conduct extensive advertising before and just after opening your Franchised Business, but it is expected that these costs will gradually decrease to $5,000 per month by month three of operations.
  • The costs for these items are approximately $1,000 to $3,000 per month for Yellow Pages or comparable telephone directory, approximately $4,000 for direct response marketing, and approximately $8,000 per month for radio advertising.
  • The franchisor recommends that you spend at least 8% to 12% of Net Sales each year on advertising, including methods (commonly referred to as “Pay Per Click”) to promote internet traffic to your Franchised Business.

12.  Initial Promotional Inventory:  $1,000

  • The franchisor recommends you purchase promotional items, including stickers, magnets, and other logo emblazoned items, announcing your new affiliation with One Hour. It should cost approximately $1,000 to purchase an opening stock of promotional items.

13.  Travel Expenses for Initial Classroom Training:  $1,100 to $3,300

  • You must pay for transportation, lodging, and meals for Owner(s) and any managers or employees who attend classroom training, and you will have to pay the wages of your manager and employees.
  • These estimates are for one manager and an Owner.

14.  Travel Expenses for Initial Computer Training:  $1,100 to $3,300

15.  Initial Computer Training:  $1,795 to $3,590

  • Your managers and an Owner all have to be trained to use the SuccessWare21 (ASP option) software.
  • The cost is $1,795 per person payable directly to SuccessWare, Inc. A second person may attend the same training class at no additional cost, when they share the same computer.
  • This estimate is to train one to three persons.

16.  Initial Vehicle Inventory:  $0 to $10,000

  • You must purchase an opening inventory of supplies for your trucks before opening your Franchised Business. A typical service truck needs up to $6,000 of supplies, and a maintenance truck up to $2,000 of supplies.
  • It is expected that you will start with two supply trucks and one maintenance truck.

17.  Workers’ Compensation Insurance Premium:  $0 to $4,000

  • The franchisor estimates that deposits for insurance for workers’ compensation may be approximately $2,000 per employee per year, with total workers’ compensation premiums of approximately $4,000.

18.  Start-up Supplies:  $1,000 to $21,000

  • You will need to purchase business cards, stationery, invoices, uniforms, and patches from approved suppliers. Also, you will need to purchase basic office supplies.

19.  Insurance:  $2,000 to $20,000

  • The franchisor estimates that you may have other insurance costs, for instance:  general liability (approximately $4,000), vehicles (approximately $4,000), health (approximately $12,000).

20.  Truck Registration Fees:  $600 to $1,000

  • You will need to register your three to eight trucks with the state and local motor vehicle authorities.

21.  Decals for Consumer Units:  $500

  • You will need to purchase and maintain a supply of decals with the One Hour logo and phone number to attach to consumer units you service or install.

22.  Personal Tools for Technicians:  $1,000 to $2,000

  • Your technicians should have their own tools. However, you may need to keep a set of tools on hand to loan to a technician.

23.  Additional Funds for 1-3 Months:  $115,750 to $205,750

  • You will need to have sufficient additional capital to cover ongoing expenses, such as salaries for approximately two employees and yourself, and the expense of uniforms and drug testing for your employees.
  • The estimate given is the amount of additional funds the franchisor estimates you will need to cover these expenses during the initial first three months.

24.  Totals:  $263,255 to $552,300

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