Franchise Costs: Detailed Estimates of PuroClean Franchise Costs (2018 FDD)

Detailed Estimates of PuroClean Franchise Costs Based on Item 7 (Estimated Initial Investment) of PuroClean’s 2018 Franchise Disclosure Document

1.  Initial Franchise Fee:  $50,000

2.  Vehicle:  $1,500 to $2,040 (finance option); $43,200 (base purchase price)

• To ensure that the system-wide vehicle fleet is well kept and to project the highest brand standards, PuroClean requires you to acquire your vehicle from its designated supplier. PuroClean reserves the right to change its designated vehicle supplier or identify other designated vehicle suppliers from time to time.

• You may purchase or lease your vehicle.

• The estimate for vehicle payments shown above represents the amount it will cost you to lease your vehicle from PuroClean’s current designated vehicle supplier for a period of 3 months, which is the initial phase for the Franchise Business.

• If you purchase your vehicle, the estimated base purchase price is $43,200.

3.  Equipment and Supplies Package:  $3,450 to $4,500 (financed); $56,000 (purchase)

• You also must obtain an initial package of inventory, equipment, and supplies that must be purchased from PuroClean’s designated supplier (the “Equipment and Supplies Package”).

• PuroClean strongly recommends that you lease these items through a third-party finance company.

• The initial costs associated with leasing these items will range from $1,250 to $1,600 per month.

• If you buy (rather than lease) the Equipment and Supplies Package, then you will pay the designated supplier $52,500, which excludes freight and sales tax.

• The estimate above represents an estimate of the monthly finance payments for a period of 3 months, which is the initial phase for the Franchise Business. You may be required to make a down payment.

• The Supplies and Equipment Package includes, among other items, new dehumidifiers, drying and cleaning equipment, carpet cleaners, and an initial supply of cleaning products.

• The purchase of pre-owned equipment from unapproved sources, including other franchisees, is strictly prohibited.

• The third-party financing company will acquire these items from PuroClean’s designated supplier and then provide them to you.

4.  Computer System:  $300 (finance option); $3,500 (purchase)

• You will 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.

• The Computer System fee is non-refundable and may be leased through a third-party finance company.

5.  Insurance Premium:  $1,375 to $1,750

• The amount above represents an estimate of the monthly insurance premium payments for a period of 3 months, which is the initial phase for the Franchise Business.

• Average annual expenses range from $5,500 to $7,000. You may be required to pay the entire annual premium initially or a portion as a down payment.

• These figures do not include Workers’ Compensation Insurance. You must obtain Workers’ Compensation Insurance to cover your employees in the amount required by applicable state law.

6.  Office Furniture:  $0 to $2,200

7.  Office Supplies:  $100 to $300

• Supplies you will need include office furniture, calendar, stationery, and other general office supplies. The amount of office supplies identified in the chart represents an estimate of the monthly expenses for the initial phase of 3 months.

8.  Telephone and Utility Deposits and Fees:  $350 to $500

• You will be required to pay telephone and utility deposits. The amount of the deposits will depend on the practices of the utility companies and the lessor.

• The amount above represents an estimated range of the monthly payments for the initial phase of 3 months for an office or rental facility.

9.  High-Speed Internet Access:  $150 to $225

10.  VOIP Telephone Equipment and Services Fee:  $455

• Phone equipment must be purchased from PuroClean’s required supplier, currently Clarity Communication Advisors, Inc.

• The estimate in the table above includes the cost of required equipment, initial activation fees, and 3 months of monthly service fees.

11.  Professional Fees:  $0 to $500

• You may elect to consult the services of an accountant, attorney, or other professional service provider.

12.  Uniforms:  $200 to $500

• At your sole expense, your technical employees and sales staff are required to wear the standard PuroClean uniforms leased or sold to you by PuroClean or one of its approved vendors or by an alternative uniform service of your choice who is able to supply the required uniforms.

• Current charges are averaging $100-$250 per employee, which initially includes one technician and owner.

13.  Opening Advertising and Marketing Materials:  $0 to $2,200

14.  Training Expenses:  $4,300

• You will incur expenses associated with the PuroClean Academy initial training program.

• The estimate above includes the costs associated with the IICRC WRT and ASD certification and testing during the initial training program.

• The estimate also includes IICRC AMRT training and subrogation training that must be completed within 90 days of completion of the initial training program.

• PuroClean offers IICRC AMRT training from time to time at a cost of $595, plus a $150 exam fee.

• For the IICRC training PuroClean offers, PuroClean provides instructors and instructional materials, but you will need to arrange and pay for transportation, lodging, and food for yourself and any employees, and for any wages for the employees. The total cost will depend on the distance you must travel to the training location, the type of accommodations you choose, and the number of people who attend training.

15.  Continuing Education Courses:  $0 to $2,000

• You must hold 4 continuing education courses during the first year after you begin operating your Franchise Business. PuroClean recommends that you hold one continuing education course every 3 months during the first 12 months that you operate your Franchise Business.

16.  Facility Rent:  $0 to $2,500

17.  Business Licenses:  $0 to $550

• Some states (or other governmental bodies) require you to obtain a license before beginning operations. The specific requirements and the costs of the license will vary.

18.  Laser Printer:  $150 to $350

19.  PuroMetrix System:  $927

• You must use the PuroMetrix System and you will license the PuroMetrix System from PuroClean. The cost of the PuroMetrix System includes a monthly user fee of $309 per month per office.

• The estimate above includes the PuroMetrix System user fee for a period of 3 months. PuroClean may increase this fee from time to time. PuroClean may require you to use an alternative operating system in the future.

20.  Insurance Industry Claims Estimating Software:  $375

• You will be required to purchase and utilize the Insurance Industry Claims Estimating Software provided by Xactware Solutions, Inc., PuroClean’s current designated supplier.

• The cost of this software is approximately $125 per month for each user license you obtain. The estimate above represents the cost to license this software for the initial period of 3 months.

21.  Security Deposit:  $0 to $3,000

• Depending on your credit score and credit history, you may be required to pay PuroClean’s designated vehicle supplier a security deposit. On average, the security deposit will range from $1,000 to $3,000.

22. Camera:  $100 to $250

23.  Additional Funds (3-Month Period):  $9,000 to $15,000

• You will need capital to support ongoing expenses, such as payroll and utilities, to the extent that these costs are not covered by sales revenue.

24.  Total (With Finance Options):  $72,732 to $94,722; Total (With Purchase of Vehicle and Equipment and Supplies Package):  $170,182 to $190,582

• PuroClean relied on its 20 years in the business to compile the amounts included in the chart. However, all figures are estimates.