Franchise Costs: Detailed Estimates of Mosquito Joe Franchise Costs (2017 FDD)

Detailed Estimates of Mosquito Joe Franchise Costs Based on Item 7 (Estimated Initial Investment) of Mosquito Joe’s 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $2,500 to $30,000

• The Initial Franchise Fee for a single unit franchise is $30,000. If you have signed an Area Development Agreement, the Initial Franchise Fee is $2,500.

• The total low fee above is calculated based on the Initial Franchise Fee under an Area Development Agreement and high fees calculated above are based on a single unit franchise and use the Initial Franchise Fee of $30,000 for a Franchise Agreement. However, additional per franchise Area Development Fees will also apply.

• If you qualify to participate in Mosquito Joe’s Community Heroes Program, your Initial Franchise Fee may be $27,500.

• Mosquito Joe may, in its sole discretion, finance a portion of your Initial Franchise Fee. The annual interest rate is typically 12%, but can vary depending on your creditworthiness.

• Financing must typically be repaid over 1-3 years through monthly payments that would vary depending on the amount financed.

2.  Mailer Program Fees:  $32,000

• Mosquito Joe or its affiliate, BFB Services, or another affiliate of Mosquito Joe are the only approved supplier of the Mailer Program in which you must participate. You must purchase all Mailer Program services from Mosquito Joe or its affiliate.

• Though the Mailer Program, you are required to pay to Mosquito Joe or its affiliate the sum of $32,000 for direct mail, which includes a $2,000 setup fee for the first Season and the cost of obtaining the mailing list for each subsequent Season.

• Currently, the price per postcard is $0.35.

• If your Franchised Business exceeds $400,000 in Net Revenue for at least one Season during the first full 5 years of operation, you may elect to reduce the Mailer Program to $22,000 (inclusive of the annual list purchase). If you elect to reduce the spend on the Mailer Program, you must supplement this reduction by spending a minimum of $5,000 in digital advertising with Mosquito Joe, an affiliate, or approved supplier, which can include $3,000 in SEO per website.

3.  Digital Advertising Program Fees:  $3,000

• Mosquito Joe or its affiliate, BFB Services, or another affiliate of Mosquito Joe are the only approved supplier of the required Digital Advertising Program in which you must participate.

• For the first Season that the Franchised Business is open, 100% of the Digital Advertising Program Fees for SEO must be paid at the time your website goes live.

• For a multi-territory franchisee operating from a single website, the Digital Advertising Program Fee for SEO will be $3,000 regardless of the number of territories open. You may only have 1 website.

4.  Real Property:  $0 to $4,000

• Mosquito Joe encourages you to operate your franchise from your home, if local zoning laws permit. If you think your home is not properly zoned or suitable for franchise operations, you may need to lease or purchase suitable facilities.

• Mosquito Joe estimates you would need an office/warehouse of 200 to 1,000 square feet for the Franchised Business. The rent will likely vary from $8 to $12 per square foot depending on the size, condition, and location of the facilities.

• If you purchase property for an office, the costs could be significantly higher.

• The Real Property figures represent a security deposit and 3 months’ rent of 1,000 square feet at $12 per square foot, for a lease in Virginia Beach, Virginia. You may also need to purchase or lease certain office equipment, signage, furniture, and fixtures that Mosquito Joe may specify.

5.  Office Furnishings, Signage, and Fixtures:  $0 to $1,500

6.  Tools, Equipment, Product, Chemicals, Uniforms, and Supplies:  $5,500 to $6,000

• You will need to purchase certain tools, equipment, products, chemicals, supplies, and uniforms that Mosquito Joe specifies. Cost will vary from state to state.

7.  Vehicle, Shelving, and Decals:  $2,500 to $9,000

• The only service vehicle Mosquito Joe has approved is a recent model (3 years or less) Ford Transit Connect or Ford Transit 150, as specified in the Operations Manual. However, other similar vehicles may be approved by Mosquito Joe.

• Mosquito Joe estimates the cost of leasing a vehicle is $2,500.

• Mosquito Joe’s approved decals and interior upfit must also be installed on each vehicle, at an estimated cost of $6,300 each.

• The low estimate ($2,500) listed above is Mosquito Joe’s estimate of leasing a vehicle with all costs bundled into the lease, and the high estimate ($9,000) includes the cost of leasing or purchasing a vehicle and purchasing decals and interior upfit separately.

8.  Initial Training:  $100 to $2,000

• You will incur expenses associated with Mosquito Joe’s initial training program. For this training program, Mosquito Joe provides instructors and instructional materials. You must pay for transportation, lodging, food, and wages for you and your employees.

• The cost will depend on the distance you must travel to the training location, the type of accommodations you choose, and the number of employees being trained.

• The estimate is based on travel to Mosquito Joe’s headquarters in Virginia Beach, Virginia for training lasting for 5 days.

9.  Insurances, Office and Marketing Supplies, and Forms:  $5,000 to $6,000

• Mosquito Joe estimates that the range given will be sufficient to cover prepayment of insurances, initial office supplies, and certain forms and supplies unique to the Franchised Business for the initial phase of the operation of the Franchised Business.

10.  Professional Fees:  $0 to $1,000

• You may need to employ an attorney and/or other professionals.

11.  Licenses:  $0 to $500

• You may be required by state and/or local laws and regulations to obtain and maintain a license.

12.  Additional Funds for 3 Months:  $14,000 to $24,000

• You will need to support ongoing expenses, such as payroll, fuel, supplies, and other operating costs to the extent these costs are not covered by gross revenue of the Franchised Business.

• Mosquito Joe relied on past experience of other franchisees and Local Operations and their performance when preparing these figures.

13.  Computer, Internet, Devices, Phones, Software Setup:  $2,000 to $4,500

• Prior to opening your Franchised Business, you must acquire computer equipment, internet service, telephone equipment, and implement and be trained on software systems and/or services (i.e. service management, accounting, telephone system, credit card processing, and any other software necessary to operate the Franchised Business) required by Mosquito Joe, at your sole expense.

14.  Deposits:  $0 to $4,000

• Mosquito Joe encourages you to operate your Franchised Business from your home. If you elect to lease space for your Franchised Business, you may be required to pay lease and utility deposits for such space.

15.  Totals (Single Franchise):  $66,600 to $127,500