FDD Talk: The Molly Maid 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 Molly Maid franchise opportunity, including relevant news updates

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

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

• 2015 average gross sales, labor costs, insurance, auto expenses, advertising, royalties, cleaning expenses, all other expenses, total expenses, and available to owner, by quartile, for the 126 Molly Maid Operators who submitted their year-end profit and loss statement by February 15, 2015

• 2015 average gross sales for the 85 Molly Maid Operators in business for at least two full calendar years as of December 31, 2015, and who operated a single franchise

• 2015 average gross sales for the 133 Molly Maid Operators in business for at least two full calendar years as of December 31, 2015, and who operated more than one franchise

• 2011, 2012, 2013, 2014, and 2015 average weekly gross sales by year for all established Molly Maid Operators (i.e. those that started operation on or before December 31, 2012)

• 2011, 2012, 2013, 2014, and 2015 average price per clean for all Molly Maid Operators open during each year
  

• percentage of cleans performed in 2015 that were performed for recurring customers versus the percentage of cleans performed for occasional customers

Section I – Background Information

From Small Canadian Cleaning Service to Global Home Cleaning Franchise

Molly Maid was founded in 1979 by Chris and Adrienne Stringer in Mississauga, Ontario. That same year, the company officially started franchising as more Molly Maid locations opened in the Mississauga area. Over the next few years, Molly Maid continued to expand throughout Canada.

In 1984, entrepreneur Dave McKinnon brought Molly Maid to the United States by opening a location in Ann Arbor, Michigan. The home cleaning service soon caught on with busy families in the Ann Arbor area and more Molly Maid locations opened in other states.

Today, Molly Maid has more than 500 locations across Canada, the United States, the United Kingdom, Japan, and Portugal.

Molly Maid Testing Mobile App for Employees

In July 2016, Molly Maid launched a test run for a mobile app being developed specifically for employees. The company is testing the app as a way to help decrease employee turnover.

In an interview, Meg Roberts, President of Molly Maid, said the franchise tends to lose employees within the first four to eight weeks of their hiring. Roberts believes the app, which is rewards-based, will appeal to Molly Maid’s mostly millennial-aged employees.

Molly Maid hired Bluebridge Digital LLC and paid the company $10,000 to develop the app. Since the test launch in July, 10 Molly Maid locations, ranging in size from 10 to 100 employees, have been testing the app. If and when the app goes live, franchisees will pay $150 to $200 to use the app depending on how many employees they have.

The app will make it easy for employees who participate in training sessions, in the form of short safety videos, to receive rewards. Additionally, the app will have social features allowing employees to check in with each other, share information, and leave positive comments for fellow employees who do a good job.

Employees will be able to receive monetary or other awards including bonuses, scholarship drawings, or a pizza party. Franchisees will be able to poll their employees to see what kinds of awards they prefer.

20 Years of Helping Victims of Domestic Violence

In September 2016, Molly Maid marked 20 years of supporting victims of domestic violence through its Ms. Molly Foundation. The Ms. Molly Foundation, started by Dave McKinnon in 1996, is a non-profit organization whose mission is to raise awareness of domestic violence and to provide assistance to local shelters and agencies.

Molly Maid is the only cleaning service franchise to establish a 501(c)(3) nonprofit organization.

Since starting the foundation, Molly Maid has raised nearly $2.5 million for domestic violence shelters and agencies. The foundation provides help to over 140 shelters each year.

Every October, which is National Domestic Violence Awareness Month, Molly Maid runs its Ms. Molly Making a Difference Drive. Local Molly Maid franchises collect funds and personal care items to donate to community shelters and agencies. Franchise owners also donate a portion of every house cleaning during the month to the drive.

Consistently High Rankings on Entrepreneur’s Franchise 500

With the exception of 2017’s ranking at No. 245, Molly Maid has always done well on Entrepreneur Magazine’s annual Franchise 500 list. Typically, Molly Maid ranks somewhere in the top 100. This year’s rank is down from 2016’s spot at No. 97. Molly Maid’s highest ranking was at No. 78 in 2012.

Section II – Estimated Costs

• Please click here for detailed estimates of Molly Maid franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

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