Franchise Costs: Detailed Estimates of Merry Maids Franchise Costs (2019 FDD)

Updated November 17, 2019.

Detailed Estimates of Merry Maids Franchise Costs Based on Item 7 (Estimated Initial Investment) of Merry Maids’ 2019 Franchise Disclosure Document

1.  Initial Franchise Fee:  $41,500 to $51,500 for Full-Sized Market; $41,500 for Mid-Sized Market; and $37,500 for Small-Sized Market

• A Full-Sized Market Initial Franchise Fee is $41,500 to $51,500, depending on the territory. For a territory that is larger than 35,000, Merry Maids will charge a Territory Fee of $0.50 per each Qualified Household in the territory over 35,000.

• Merry Maids offers discounts off the Initial Franchise Fee as follows: 20% Military Discount, 10% Minority Discount, 10% Women-Owned Discount.

• Merry Maids’ affiliate, SMAC, offers financing to you, with approved credit, for up to 80% of each Initial Franchise Fee charged. The minimum down payment is $8,300 or $10,300 for the Full-Sized Market, $8,300 for the Mid-Sized Market, and $7,500 for the Small-Sized Market before any discounts.

• If your initial territory includes existing active Merry Maids customers of a Franchised Business, you will be charged a Customer Acquisition Fee of $525 per customer for all Merry Maids customers in your territory determined by the customer list attached to the Customer Acquisition Agreement.

• This fee may or may not be applicable to you; not all open territories have existing Merry Maids customers. The Customer Acquisition Fee is payable to Merry Maids upon signing the Franchise Agreement and is nonrefundable. You are required to sign a Customer Acquisition Agreement for the purchase of the existing active customers.

2.  Initial Training:  Included in Initial Franchise Fee

• Franchisee or a manager approved by Merry Maids must attend the Initial Training within six months of signing the Franchise Agreement.

• Merry Maids may allow one-week field training with a mentor office in order to begin operating your Merry Maids Franchised Business; however, franchisee or manager must also attend the next scheduled Initial Training Program.

3.  Travel, Lodging, Meals, and Incidental Expenses While Training:  $600 to $1,500

• Merry Maids will provide some meals and the lodging expense incurred for one person while at the Initial Training Program, a ten-day session held in Memphis, Tennessee.

• You will be responsible for travel, lodging, meals, and personal expenses while training, whether in the scheduled training in Memphis or other training.

4.  Real Estate and Improvements:  $2,000 to $4,000

• If you do not own adequate office space, you must lease an office. Typical locations are light industrial and commercial areas.

• The typical Merry Maids office occupies 450 to 1,800 square feet. Merry Maids estimates rent will be between $6,000 and $12,000 per year, depending on factors such as the size of your franchise and the location of the leased premises.

• The range in the table is an estimate only for the first three months of rent, the security deposit, and any leasehold improvements.

5.  Software Lease for MM360:  $35 to $45 per seat per month

6.  MM360 Software Mobile Application for iPad or Other Supported Mobile Device:  $12 per seat per month

7.  Service Mobility Software (recommended) for iPad or Other Supported Mobile Device (Extended Package):  $0 to $477

8.  Quick Books Accounting:  $175; Quick Books Payroll:  $300

• Quick Books Accounting and Quick Books Payroll are recommended accounting and payroll software programs. You may use other comparable systems upon Merry Maids’ approval; however, Quick Books is compatible with the MM360 software.

9.  A Tablet Device With Cellular Data Plan (IOS, Windows, or Android):  $300 to $900

10.  Office Equipment:  $5,250 to $6,850

• You may need to purchase office furniture, office fixtures, a washer and dryer, and office decorations.

• You will need to purchase a wireless mobile tablet device with a cellular data plan for pricing. You must bring this device with you to the Initial Training Program and Sales Training. The cost of a tablet ranges from $300-$450 used and $500-$900 new.

• Merry Maids will provide you the Merry Maids pricing application for your wireless mobile device.

11.  Insurance:  $3,400 to $9,400 per year

• Required insurance policies include:

• commercial general liability insurance, including product liability coverage, with minimum limits of $1,000,000 per occurrence/$2,000,000 aggregate;

• business automobile liability coverage for owned, hired, and non-owned auto or any auto, with minimum limits of $1,000,000 per occurrence for bodily injury and $100,000 for property damage liability ($150,000 is recommended);

• third-party fidelity bond coverage for $25,000;

• worker’s compensation with a $500,000 minimum employee liability;

• employment practices liability insurance coverage with minimum limit of $250,000 (or, if obtained as a sublimit to the general liability insurance, then a minimum limit of $100,000);

• umbrella coverage based on revenue ($1,000,000 limit up to $3,000,000 in revenue, $2,000,000 limit from $3,000,001 to $5,000,000 in revenue, $5,000,000 limit from $5,000,001 to $10,000,000 in revenue); and

• any other insurance required by the laws of the state in which the franchise is operated.

• Merry Maids strongly recommends care, custody, and control coverage, including coverage for damage to property in your employees’ control or property they are directly working on, with minimum limits of $150,000 per occurrence to adequately protect the operation of the business.

• Merry Maids estimates the cost for all insurance during the first year of operation will be $3,400 to $9,400.

• All insurance must be procured prior to attending Initial Training or before the commencement of business in transfer situations.

12.  Employee Background Check:  $60 to $130

13.  Employee Drug Screening:  $20 to $30 per test

14.  Telephone Answering Service 24/7:  $50 to $300 per month

15.  Opening Inventory Package:  Included in Initial Franchise Fee

• A complete list of inventory, equipment, cleaning supplies, and similar items, including cleaning equipment and related items, is outlined in Exhibit G to the disclosure document.

• The Opening Inventory Package is subject to change based upon business needs for products, equipment, and supplies.

16.  Shipping and Handling Costs Plus Sales Tax:  $300 to $600

• The shipping and handling costs and sales tax on the Opening Inventory Package are not included in the Initial Franchise Fee. The cost varies based upon your location and the suppliers’ locations and local sales taxes if applicable.

• Merry Maids estimates you will pay between $300 and $600.

17.  National Advertising Fund:  1.3% of weekly gross sales

18.  Local Digital Marketing:  0.7% of weekly gross sales

• Franchisees work directly with Merry Maids-approved vendors to place local digital marketing or, if Merry Maids approves, other local marketing and advertising. Merry Maids requires franchisees to submit reports showing their local digital marketing activity and amount spent.

• You may also purchase promotional items from Merry Maids, if you choose.

• The costs shown here do not include Yellow Page advertising should you choose to advertise in such directories.

19.  On-Line Marketing Fund Deposit:  $3,000

• This amount will be placed in a fund to be used for On-Line Marketing in your territory. Merry Maids will place an additional $2,000 of your Initial Franchise Fee or Transfer Fee into this fund.

• Merry Maids will assist you in using these funds during the first year of operation of your franchise, at times mutually agreed upon. Any portion of this fund not utilized during your first year of operation may be, at Merry Maids’ sole discretion, applied to offset your accounts with Merry Maids or its affiliates.

• If you are an existing franchisee purchasing another territory, this On-Line Marketing Fund does not apply to you, and Merry Maids is not required to add any money to such a fund for you.

20.  Miscellaneous Opening Costs:  $1,400 to $10,000

• You will incur various miscellaneous costs to open your business. These costs include your business license, security deposits, utilities, an insurance deposit, and incorporation fee (if you incorporate).

• You must also have high speed internet access at your office location. Fees for internet access providers will vary but should be approximately $100 per month.

• You will incur costs of stationery items, pre-printed customer agreement forms, marketing and advertising collateral. Merry Maids estimates the cost for a three-month supply to be approximately $1,000.

21.  Working Capital:  $30,000

• These expenses include payroll costs, additional equipment and supplies that you may choose to purchase, or additional marketing that you may do. This does not include salary expense for the owner(s).

• These figures are estimates, and Merry Maids cannot guarantee that you will not have additional expenses starting your business.

22.  Total Estimated Initial Investment:  $88,616 to $120,023 for Full-Sized Market; $88,616 to $110,023 for Mid-Sized Market; and $84,616 to $106,023 for Small-Sized Market

• Merry Maids based its estimates for expenses on the average costs for the entire Merry Maids system and has relied on its more than 30 years of experience to compile these costs. Your actual costs are likely to vary.