FDD Talk: The Merry Maids Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2016 post, you’ll learn the following:

• Section I – Background information on the Merry Maids franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Merry Maids franchise, based on Item 7 of the company’s 2016 FDD

• Section III – Presentation and analysis of Merry Maids’ financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:

• 3-year (2013 to 2015) average annual gross sales, cost of sale, customer advertising, sales overhead, support overhead, administrative overheard, total overhead, and net income for quartile 1, quartile 2, quartile 3, and quartile 4 of the 27 Merry Maids non-franchised company-operated branches performing residential cleaning services in the U.S. that have been operating for at least two years as of January 1, 2013

• 3-year (2013 to 2015) average annual gross sales for quartile 1, quartile 2, quartile 3, and quartile 4 of the 571 Merry Maids franchised branches performing residential cleaning services in the U.S. that started operating on or before January 1, 2012 and are currently active

Section I – Background Information

Dallen Peterson founded Merry Maids in 1979 in Omaha, Nebraska. With the help of his family, Peterson soon began franchising the business. In 1988, the ServiceMaster Quality Service Network acquired Merry Maids. ServiceMaster franchises other service companies including Terminex, American Home Shield, and AmeriSpec.

As the largest home cleaning franchise network in the United States, Merry Maids has over 1,600 locations throughout the nation and in countries like Denmark, Canada, Japan, and Hong Kong.

America’s Most Recommended Cleaning Service

According to the Women’s Choice Award, Merry Maids is the top home cleaning service in America. Merry Maids received the Women’s Choice Award seal of approval because a large number of women trust that Merry Maids will care for their home just as they would, and feel like they can trust the company to consistently provide excellent customer service.

The Women’s Choice Award is recognized as “The Voice of Women.” Receiving their seal of approval means that a brand can be trusted and that it deserves someone’s loyalty. The Women’s Choice Award also serves as a consumer advocacy group. If a company with the Women’s Choice Award seal receives complaints, they will investigate on behalf of the consumer to resolve the issue.

Merry Maids Honors Top Franchisees

In early September 2016, Merry Maids held their annual international franchise convention at the company’s headquarters in Memphis, Tennessee. At the convention, Merry Maids handed out their annual awards.

Their biggest award, the Merry Maids Founder’s Award, is given to the top U.S. franchisee based on customer service, growth, sales, operations, and team member development. This year’s Founder’s Award went to Laura and Chris Tygielski of the Merry Maids Redding, CA location. In just one year after opening in 2010, they grew their business by 63 percent and have posted annual growth of more than 20 percent each year since.

Merry Maids also gives out a U.K. Founder’s Award, which went to Bill and Catriona Grant from Iverness, East Highland, Scotland.

Another big award is the Merry Maids Rookie of the Year. This is given to a new franchisee with the greatest reported revenue growth in their first 26 weeks of business. This year’s award went to Brian and Penny Boyd of Merry Maids Colorado Springs.

Merry Maids Gives Back To Women

Since 2013, Merry Maids has partnered with the American Heart Association to raise awareness and money for women’s heart disease. Every year since, Merry Maids has been a part of the Go Red for Women campaign. During the month of February, the company donates $5 from every cleaning to the American Heart Association, up to $25,000.

In addition, local Merry Maids franchisees place red house-shaped coin banks in customers’ homes to collect loose change. At the end of February, a Merry Maids team member will pick-up the coin bank and donate 100 percent of the funds raised to the American Heart Association. The company was able to raise $150,000 for the American Heart Association in the first year of the Merry Maids Raise the Roof campaign.

In addition to making a monetary donation, Merry Maids helps spread awareness about heart disease by encouraging people to do their chores as a way to stay active. According to Merry Maids, vacuuming and cleaning the bathroom are two great ways to maintain a healthy heart.

Merry Maids is also one of several cleaning companies that provide free services to women recovering from cancer as part of Cleaning For a Reason, which is a non-profit organization that provides free cleaning services to women undergoing cancer treatments. As part of the Cleaning For a Reason program, participating Merry Maids locations provide cleaning for two homes per month for four consecutive months.

Top 100 Spot on Entrepreneur’s Franchise 500

Merry Maids has consistently maintained a spot in the top 100 of Entrepreneur’s annual Franchise 500 list. For 2016, Merry Maids landed at No. 48, which was also their rank on the previous year’s list.

The cleaning company has never dropped below the top 100. Merry Maids’ lowest spot was in 2012 at No. 66. The following year, they earned their highest position on the list at No. 38.

Section II – Estimated Costs

• Please click here for detailed estimates of Merry Maids franchise costs, based on Item 7 of the company’s 2016 FDD.

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis