Considering a Stanley Steemer Franchise? Don’t Overlook These 21 Important Franchise Fees

Updated December 18, 2018.

If you are considering a Stanley Steemer franchise, don’t get blindsided by these 21 important franchise fees (from the initial franchise fee, to the royalty fee, to 19 other fees found in Items 5 and 6 of Stanley Steemer’s 2018 FDD).

1.  Initial Franchise Fee:  varies

• In order to acquire a Stanley Steemer Carpet Cleaner franchise, you must pay Stanley Steemer an initial franchise fee. The amount of this fee will be negotiated between you and Stanley Steemer.

• In negotiating this initial franchise fee, Stanley Steemer will consider factors such as the population of the area, demographics of the population, trends in population, existing and projected competition, the existing Stanley Steemer advertising and/or existing sales in the area (if any), average household income, and related factors.

• As a general rule, the initial franchise fee is approximately $20,000 for each 100,000 in population or fraction of 100,000 in population in your area. Typically, the range of initial franchise fees charged to franchisees is $20,000 to $100,000.

2.  Option Fee:  not to exceed 10 percent of the estimated initial franchise fee

• If Stanley Steemer agrees, it may allow you to reserve an area prior to becoming a Stanley Steemer franchisee for a period of up to 6 months by paying a nonrefundable option fee not to exceed 10 percent of the estimated initial franchise fee.

• This option fee will be applied toward payment of the initial franchise fee if you purchase a franchise and, with Stanley Steemer’s consent, you can transfer this fee to reserve another area or purchase another Stanley Steemer franchise.

3.  Stanley Steemer Carpet Cleaning Machines and Distinctive Van-Type Vehicles:  varies

• In addition to the initial franchise fee, you must purchase one or more Stanley Steemer Carpet Cleaning Machines and distinctive van-type vehicles from Stanley Steemer.

• The Stanley Steemer Vehicle equipped with a Stanley Steemer Carpet Cleaning Machine and/or bearing the Trademarks is referred to in the disclosure document as the “Stanley Steemer Vehicle.”

• The number of Stanley Steemer Vehicles will be agreed to by you and Stanely Steemer based upon the size of your area and your business plan. The cost of each Stanley Steemer Vehicle can vary from $53,900 to $60,000 based upon how you elect to accessorize it.

• Further, you must purchase certain equipment to perform water damage mitigation and restoration services. The cost of this equipment can vary from $5,000 to $25,000 depending upon the size of your area and your business plan.

• You will also need certain cleaning chemicals, cleaning supplies, office supplies, advertising materials, and similar items to begin your Stanley Steemer Carpet Cleaner business. These can be purchased from Stanley Steemer or directly from a supplier approved by it. The total cost of an initial inventory of these items will vary from $23,500 to $34,500, depending upon the size of your area and your business plan.

• You may also acquire the PowerMagic and Nimbus Mobile software from Stanely Steemer. There is currently no License Fee to acquire and/or use the software. The fee for hardware setup/conversion is $495 per person per day.

4.  Stanley Steemer Duct Cleaning Service License:  $10,000

• In order to acquire a Stanley Steemer Duct Cleaning Service license to add on to your existing Stanley Steemer Carpet Cleaner business, you must pay Stanley Steemer in lump sum an initial license fee of $10,000 when you execute the Addendum to Stanley Steemer International, Inc. Franchise Agreement for Air Duct Cleaning Service (the “Air Duct Cleaning Addendum”).

• In addition to the initial license fee, you must purchase one or more sets of Stanley Steemer air duct cleaning equipment (“Air Duct Cleaning Equipment”) and distinctive duct cleaning van-type vehicles from Stanley Steemer or a vendor approved by it.

5.  Monthly Royalty:  monthly royalty payment equal to 7% of gross sales (10% in select parts of Ohio and Indiana)

• Due Date:  Payable monthly on the 15th day of the next month.

6.  Minimum Annual Royalty:  if the total of monthly royalty payments paid by you during a one-year period are not at least equal to the Minimum Annual Royalty amount negotiated by you and Stanley Steemer as set out in your Franchise Agreement, you must pay Stanley Steemer the difference

• Due Date:  Payable within 30 days following the end of each Minimum Annual Royalty Year.

7.  Additional Royalty:  0 to 3% of total gross sales

• Due Date:  Payable monthly on the 15th day of the next month.

8.  Late Payment Fee:  the lesser of 18% interest per annum or the maximum amount allowed under applicable law on all amounts not paid when payment is due to Stanley Steemer

• Due Date:  When payment is overdue.

9.  Advertising:  10% of total gross sales

• Due Date:  Payable as incurred, but total amount must be spent within calendar year.

10.  National Advertising Fee:  2% of monthly gross sales

• Due Date:  Payable monthly on the 15th day of the next month.

11.  1-800-STEEMER and Location Based Call Routing Fees:  actual cost of usage on per minute basis. Stanley Steemer estimates actual cost to be between $.05 and $.08 per minute.

• Due Date:  30 days after billing.

12.  National Customer Contact Center Usage Fees:  actual cost of usage on per minute basis. Stanley Steemer estimates actual cost to be $.85 to $.90 per minute.

• Due Date:  30 days after billing.

13.  Additional Training Fee:  $185 to $625 per person for each training session

• Due Date:  30 days after billing.

14.  Transfer Fee:  $5,000

• Due Date:  Before transfer is effective.

15.  Renewal Fee:  $10,000

• Due Date:  Before renewal is effective.

16.  Audit Fee:  actual cost of audit, plus late payment fee. Stanley Steemer estimates the actual cost of an audit to range between $4,000 and $8,000.

• Due Date:  Immediately upon billing.

17.  Basic Training Fee Related to PowerMagic and Nimbus Mobile:  $150

• Due Date:  Immediately upon billing.

18.  Insurance:  cost of insurance

• Due Date:  Immediately upon billing by insurance company.

19.  Indemnification of Stanley Steemer for Expenses of Claims:  the amount of all damages, losses, and expenses that Stanley Steemer incurs in connection with legal actions arising out of your ownership, operation, construction, or improvement of your Stanley Steemer business

• Due Date:  Upon receipt of invoice.

20.  Testing and Inspection:  the costs of testing products, supplies, and other items used in your Stanley Steemer business; and following an inspection of your business premises, equipment, and cleaning methods, the reasonable costs and expenses incurred by Stanley Steemer in the removal, replacement, repair, or remodel of equipment and products that do not conform to Stanley Steemer specifications

• Due Date:  Upon receipt of invoice; no later than the date the next royalty payments are due under the Franchise Agreement.

21.  Ongoing Purchases From Stanley Steemer:  the typical franchisee pays Stanley Steemer $12,943 to $45,301 annually for ongoing purchases from Stanley Steemer

• Due Date:  Upon receipt of invoice.

• These ongoing purchases may include cleaning products, supplies, equipment, and machinery, as well as certain accessory cleaning equipment, Stanley Steemer Vehicle accessories and replacement and spare parts, replacement and spare parts for your Stanley Steemer Carpet Cleaning Machine, Stanley Steemer Professional Carpet and Upholstery Spot Remover, and Stanley Steemer Odor Out.