Considering a PuroClean Franchise? Don’t Overlook These 22 Important Franchise Fees

Updated December 6, 2020.

If you are considering a PuroClean franchise, don’t get blindsided by these 22 important franchise fees (from the initial franchise fee, to the royalty fee, to 20 other fees found in Items 5 and 6 of PuroClean’s 2020 FDD).

1.  Initial Franchise Fee:  $25,000 to $50,000

• Upon signing the Franchise Agreement, you must pay to PuroClean an Initial Franchise Fee in the amount of $50,000.

• The Initial Franchise Fee is fully earned upon receipt and non-refundable in consideration of administrative and other expenses PuroClean incurs in entering into the Franchise Agreement, and for its lost or deferred opportunity to enter into the Franchise Agreement with others.

• PuroClean participates in the International Franchise Association’s VetFran Program and offers qualified individuals honorably discharged from any branch of the U.S. Military and who request it at the time of signing a Franchise Agreement a 25% discount off the Initial Franchise Fee.

• PuroClean also gives certain credits for training to existing franchisees that purchase more than one franchise and who would not require initial training.

• PuroClean offers Conversion Franchisees a discounted Initial Franchise Fee, based on the gross receipts their Existing Business earned from providing mitigation and/or reconstruction services within the 12-month period before the franchisee applied for a PuroClean franchise.

• Conversion Franchisees are entitled to a 5% discount per $200,000 in gross receipts earned by their Existing Business from providing mitigation and reconstruction services, up to a maximum 50% discount off the Initial Franchise Fee.

2.  Computer System:  $3,500

• You must obtain the Computer System from PuroClean. The total cost of the Computer System is $3,500, of which approximately $300 will be paid during the initial 3-month period if financed.

• The Computer System fee is non-refundable, is separate from the Initial Equipment and Supplies Package referenced in Item 7 (Franchise Costs), and may be financed.

3.  Equipment and Supplies:  varies

• If you sign a Franchise Agreement and do not have equipment and supplies meeting PuroClean’s standards and specifications, you will be required to purchase one of PuroClean’s Equipment and Supplies Packages.

4.  Royalty Fee:  8% to 10% of Gross Receipts for Mitigation Services; 3% of Gross Receipts for Reconstruction Services; subject to a minimum monthly royalty fee

• Due Date:  8th day of each month on Gross Receipts for the prior month.

• Gross Receipts means all revenue and income of every kind relating to the operation of the Franchise Business (including deposits and interest and any revenue or income you receive from the sale of supplies, services, or materials) and income derived from the direct or indirect use of PuroClean’s Proprietary Marks.

• Does not include taxes collected by the Franchise Business on behalf of the government.

5.  Optional Training Program Fee:  varies

• Due Date:  Before training.

• If you attend an optional program, course, or seminar, PuroClean may charge you a fee.

6.  Transfer Fee:  $25,000 or the then-current Transfer Fee at the time of the transfer

• Due Date:  Before transfer.

• Payable by the transferee, although any broker fee is paid by the franchisee.

7.  Renewal Fee:  $5,000

• Due Date:  Before renewal.

8.  Accounting Fee:  cost of accountant

• Due Date:  As incurred.

9.  Administrative and Bank Fees:  actual bank fees, plus $25

• Due Date:  As incurred.

• Insufficient Funds Fee and Verification of Balance Fees.

10.  Audit by Franchisor:  cost of audit

• Due Date:  As incurred.

• Required if audit reveals understatement of Gross Receipts by 5% or more in any month.

11.  Indemnification:  will vary under circumstances

• Due Date:  15 days after billing.

• You must reimburse PuroClean if it is held liable for claims from your operation of the Franchise Business.

12.  Late Fee (Royalty Fees):  greater of $10 or 5% per day after the Royalty Fee is due, although any rate will not exceed the lower of 18% per annum simple interest or the maximum permitted by applicable law

• Due Date:  If funds are not available by the 8th day of the month.

• Payable on overdue Royalty Fees.

13.  Taxes and Fees:  federal, state, or local taxes

• Due Date:  As incurred.

14.  Local Advertising:  2% of Gross Receipts on local advertising and promotion

• Due Date:  As agreed.

15.  Marketing Fee:  2% of Gross Receipts

• Due Date:  Same day as Royalty Fee.

16.  Annual National Convention Registration Fee:  $595 per year

• Due Date:  30 days before Convention.

17.  Minimum Equipment and Supply Purchase Requirements:  2% of franchisee’s Gross Receipts

• Due Date:  As incurred.

18.  PuroMetrix System:  $320 per month per office

• Due Date:  As agreed.

19.  IICRC AMRT Course:  $595

• Due Date:  Within 90 days of initial training.

20.  IICRC Examination Fees:  $280 (two exams at $65 each and one exam at $150)

• Due Date:  As incurred.

• Payable to IICRC.

21.  Optional Certified Priority Response Program Participation Fees:  $49 per job lead, plus costs of additional insurance and credit and criminal background checks

• Due Date:  As agreed.

22.  Liquidated Damages:  greater of $100,000 or the amount of the Royalty and Marketing Fees accrued under the Franchise Agreement during the 12 full calendar months of the operation of the Franchise Business preceding termination, multiplied by the lesser of five or the number of years remaining under the Initial Term

• Due Date:  Date of termination of the Franchise Agreement.

• Payment of liquidated damages is due if the Franchise Agreement is terminated due to your default or you otherwise prematurely terminate the Franchise Agreement.