Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Considering a The Maids Franchise? Don’t Overlook These 23 Important Franchise Fees

by Franchise Chatter on March 30, 2017

in Franchise Fees, Maid Franchise

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

If you are considering a The Maids franchise, don’t get blindsided by these 23 important franchise fees (from the initial franchise fee, to the royalty fee, to 21 other fees found in Items 5 and 6 of The Maids’ 2017 FDD).

1.  Initial Franchise Fee:  Initial License Fee of $12,500 and an Initial Territory Fee of $0.95 for each potential customer in your Designated Market Area

  • The Initial Franchise Fee includes an Initial License Fee of $12,500 and an Initial Territory Fee of $0.95 for each potential customer in your Designated Market Area.
  • Potential customers are defined by using demographic data provided by GbBis. Every household in your market area that has an annual income of over $75,000 is a potential customer (“Potential Customer”). Other criteria may apply.
  • For example, if there are 30,000 Potential Customers in your Designated Market Area, you would pay to The Maids an Initial License Fee of $12,500 plus a Territory Fee of $28,500 ($0.95 multiplied by 30,000) for a total of $41,000. You must pay these amounts when you sign the Franchise Agreement.
  • If you qualify and elect to purchase additional Franchise Territories after you sign the Franchise Agreement and pay the Initial License Fee, you will not have to pay the Initial License Fee portion of the Initial Franchise Fee. You will, however, have to pay an Initial Territory Fee of $0.95 per Potential Customer in your newly acquired territories.
  • To be eligible to purchase additional territories, you must not be in breach or default of any agreement with The Maids, and you must meet its then-current criteria for expansion. Any additional Franchise Territories to be purchased are subject to final approval by The Maids.
  • As described in Item 12 of the Disclosure Document, your Designated Market Area will consist of two or more Franchise Territories. Designated Market Areas range in size from approximately 20,000 to 70,000 households. Your Designated Market Area will be defined by hard boundaries, such as streets, highways, rivers, or other identifiable physical boundaries.
  • The Maids may terminate your Franchise Agreement if you provide it with any inaccurate financial, personal, or other information, or if you or your manager fails to successfully complete The Maids’ training program within 180 days of signing the Franchise Agreement or upon mutual agreement.
  • If your Franchise Agreement is terminated as described above, The Maids will refund your Initial Franchise Fee after deducting all of its reasonable administrative and out-of-pocket expenses. These expenses will include its training costs, salespersons’ commissions, brokers’ fees, attorneys’ fees, audit fees, and travel expenses.
  • Otherwise, the Initial Franchise Fee is nonrefundable. You will not be charged an amount for these expenses which exceeds the amount of the Initial Franchise Fee.
  • The Maids is a member of the VetFran and DiversityFran program. If you are a veteran of the United States Armed Services and/or a minority, your Initial Licensing Fee will be discounted by $5,000.

2.  Initial Equipment/Supply Package:  $11,750 to $12,750

3.  Software Licensing Fee:  $950

  • When you sign the Franchise Agreement, you must pay to The Maids $11,750 to $12,750 for the initial equipment/supply package necessary to commence operation of your The Maids Business. You will receive an itemized list of the contents of your initial equipment/supply package before signing a Franchise Agreement.
  • You must also pay to The Maids an Initial Software Licensing Fee of $950. These payments are nonrefundable unless your Franchise Agreement is terminated as described above.
  • If, after signing the Franchise Agreement for your first The Maids Business, you purchase an additional territory, then you will not be required to purchase an additional initial equipment/supply package or pay an additional Initial Software Licensing Fee.
  • If your Franchise Agreement is terminated as described above, The Maids will refund your payment for the initial equipment and supply package and Initial Software Licensing Fee after it receives, freight prepaid, the returned equipment and supply package, and deducts the costs of any items not returned to it in a new and saleable condition.

4.  Continuing License Fees:  6.9% to 3.9% of Gross Revenues. In addition, minimum Continuing License Fees apply.

  • Due Date:  Wednesday of each week for the preceding week.

5.  Technology Fee:  currently 0.25% of Gross Revenues, may be increased to 1% of Gross Revenues, with a cap of $15,000 per franchisee per year. Subject to change with 90 days’ notice.

  • Due Date:  Wednesday of each week for the preceding week.
  • The Technology Fee you pay to The Maids is deposited in The Maids National Technology Fund.

6. Advertising Fee:  2% of Gross Revenues

  • Due Date:  Wednesday of each week for the preceding week.
  • The Advertising Fee you pay to The Maids is deposited in The Maids National Advertising Fund.

7.  Local Advertising Expenditures:  $45,000 minimum for the first two years of the Franchise Agreement

  • Due Date:  As negotiated.
  • Payable to local advertising suppliers or local advertising co-op; you must provide The Maids with local advertising expenditures reported according to its then-current reporting requirements as described in the Operations Manual.

8.  Audit Fees:  amount incurred by the franchisor to audit your The Maids Business, but no less than $5,000

  • Due Date:  Within 10 days of receipt of an invoice.
  • Payable only if The Maids’ audit reveals that you understated your Gross Revenues by more than 2% or underpaid your Continuing License Fees by more than $500 during any 12-month period.

9.  Transfer Fee:  $15,000

  • Due Date:  Before the date you transfer the Franchise Agreement or a controlling interest in a corporation or partnership that is the franchisee.
  • The Maids must approve the transfer.
  • The Transfer Fee is $5,000 if an existing franchisee is the transferee.

10.  Lead Fee:  $7,500

  • Due Date:  Before the date you transfer the Franchise Agreement.
  • Payable to the Maids when it refers an organic lead to you, who subsequently purchases your The Maids Business.

11.  Collection Costs for Unpaid Fees:  amount The Maids incurs to collect fees

  • Due Date:  On demand.
  • Includes the amount of actual attorneys’ fees, deposition costs, expert witness fees, investigation costs, accounting fees, filing fees, and travel expenses.

12.  Interest Charges for Unpaid Fees:  18% per annum or the maximum legal rate allowable in the state in which your The Maids Business is located

  • Due Date:  On demand.
  • Applies to all delinquent fee payments due to The Maids.

13.  ACH Draft – Insufficient Funds:  $25

  • Due Date:  On demand.
  • You must pay The Maids for each ACH draft refused by your financial institution for insufficient funds in your account.

14.  National Convention:  currently $450 for Registration Fee

  • Due Date:  Before attending the National Convention.
  • You must also pay your travel and lodging expenses.

15.  Requested On-Site Training and Consulting Services Provided by the Franchisor:  currently $500 to $1,000 per day, plus travel expenses

  • Due Date:  After services have been rendered.
  • You must also pay all applicable travel and lodging.

16.  Renewal Fee:  10% of the then-current Initial Territory Fee

  • Due Date:  Upon signing the then-current Franchise Agreement.

17.  Software and Support Fee:  currently $105 to $265 per month (additional $30 per month per additional office), based on prior calendar year’s annual Gross Revenues

  • Due Date:  Subject to change with 30 days’ notice.
  • Monthly Software and Support Fee will begin upon completion of Corporate Training.

18.  Corporate Training Fees for New Manager:  franchisee is responsible for travel, lodging, and other incidental expenses

  • Due Date:  While the new manager attends training.
  • The Maids recommends all managers attend training to participate in your The Maids Business.

19.  (Optional Service) National Sales Center Fees – Full Time:  $55 per week; $35 per sold quote; $10 in-home estimate: $7 per unsold quote; $1 per minute for operations calls

  • Due Date:  Weekly.
  • Fees are subject to change with 30 days’ notice.

20.  Territory Infringement Fee:  varies depending on the type and severity of the infringement

  • Due Date:  As incurred.
  • Only due when you service customers in a neighboring franchisee’s Designated Market Area without prior written consent.

21.  Cost of Alternative Supplier Evaluation:  The Maids’ costs, which may vary under the circumstances

  • Due Date:  As incurred.

22.  Costs and Attorneys’ Fees:  will vary under the circumstances

  • Due Date:  As incurred.
  • Payable upon your failure to comply with the Franchise Agreement.

23.  Indemnification:  will vary under the circumstances

  • Due Date:  On demand.
  • You must indemnify and hold The Maids, its officers, directors, employees, and affiliates harmless with respect to any and all claims, losses, costs, expenses, liabilities, attorneys’ fees, and damages arising directly or indirectly from, as a result of, or in connection with your The Maids Business operation and defending against them.

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