In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the PuroClean franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a PuroClean franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a PuroClean franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned PuroClean outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of PuroClean’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017 average and median gross sales for the 152 PuroClean franchisees in operation for the full 2017 calendar year that had been opened for one or more full years and reported their sales data for every month of the 2017 calendar year, broken down by the number of years the reporting franchisee has been in operation (between 1 and 4 full years, between 5 and 8 full years, between 9 and 12 full years, more than 12 full years, and all reporting franchisees)

• 2017 average and median gross sales for the top third, middle third, and bottom third of the 152 PuroClean franchisees in operation for the full 2017 calendar year that had been opened for one or more full years and reported their sales data for every month of the 2017 calendar year

Section I – Background Information

11 Things You Need to Know About the PuroClean Franchise

Awarded a Free Franchise to One U.S. Military Veteran

1.  In July 2018, PuroClean offered military veterans the opportunity to win a free PuroClean franchise. Through the PuroVet program, one lucky veteran will have his or her initial franchise fee covered. This was the first time ever that PuroClean offered such an opportunity to veterans. The winner of the PuroClean franchise was announced on Military Makeover: Operation Career airing on the Lifetime Network in early November 2018. Military Makeover: Operation Career helps to transform the homes and lives of military families across the country.

2.  Veterans, including all active duty, reserve, honorably discharged, or retired personnel, were able to apply or be nominated by members of the public at BeAPuroVet.com by September 10, 2018. Each veteran applicant or nominee was required to submit a résumé and business plan showing how he or she would successfully run the business. A group of PuroClean executives evaluated the submitted business plans and graded them on profitability, preparedness, and his or her overall business acumen. The veterans with the top five grades were then invited to meet with Steve White, president and chief operating officer of PuroClean, a former captain in the United States Army and a member of the International Franchise Association’s VetFran committee.

3.  White said, “Military veterans have sacrificed so much for our country, and we want to offer them the opportunity to have a great second career. Veterans have proven themselves to be strong leaders, know how to follow the processes set up by a franchise system, work until the job is done, and have ultimately become some of our top franchise owners. We hope that by offering this opportunity to win a free franchise, veterans across the country see what life after service can be like as a successful entrepreneur.”

4.  Due to PuroClean’s dedication to creating a profitable entrepreneurial opportunity for veterans, it was recently named a top franchise for veterans on the Military Times: Best Franchises 2018 list. In addition to the opportunity to win a free franchise, PuroClean offers veterans of the U.S. Armed Forces a discounted rate in which they save $12,500 off the franchise fees through the PuroVet program.

5.  PuroClean has also secured additional savings for veterans from equipment vendors and MatchU Franchising, who will reduce their commission by 25 percent for all veterans the company matches with PuroClean.

Appoints New Vice President of Franchise Development

6.  At the end of June 2017, PuroClean announced that Timothy Courtney, CFE, has joined the company as the new vice president of franchise development. In his new role, Courtney leads the company’s franchise sales efforts and comes to PuroClean with extensive experience and knowledge. His addition to PuroClean’s executive team is assisting the company to achieve its ambitious goal to double the franchise network within five years. Courtney also spearheads the franchise recruitment process in targeted growth markets and leads the charge to grow the PuroClean network to 400 locations by 2020.

7.  Prior to joining PuroClean, Courtney was vice president of franchise development at World Travel Holdings for 17 years. He led the strategic lead generation plan which resulted in 135% growth in the company’s franchise network of travel agencies (from 500 to 1,100 franchisees).

8.  Mark Davis, chairman and CEO of PuroClean, said, “The addition of Tim Courtney to a key leadership position in our company is a clear sign of our commitment to build a world-class brand and make PuroClean the only name customers, insurance carriers, and other commercial users think of when in need of restoration services.”

Company History

9.  PuroClean was founded in 1990 to offer water, fire, smoke damage remediation, mold removal, biohazard cleanup, and reconstruction services. Franchising started a year later and the company experienced a large wave of growth over the next few years. In 2001, the company established PuroSystems, LLC to take its growth even further in the United States and Canada.

10.  In 2015, PuroClean was acquired by the company’s current chairman and CEO Mark Davis and vice chairman Frank Torre. Today, PuroClean is based out of Tamarac, Florida and there are locations across the United States and Canada. PuroClean is currently seeking franchisees throughout the U.S., Australia, New Zealand, Canada, Central America, Eastern Europe, Mexico, South America, and Western Europe.

Entrepreneur’s Franchise 500

11.  PuroClean ranked No. 258 on Entrepreneur’s 2018 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of PuroClean franchise costs, based on Item 7 of the company’s 2018 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on PuroClean’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  190
• Outlets at the End of the Year:  190
• Net Change:  0

2016

• Outlets at the Start of the Year:  190
• Outlets at the End of the Year:  188
• Net Change:  -2

2017

• Outlets at the Start of the Year:  188
• Outlets at the End of the Year:  207
• Net Change:  +19

Company-Owned

2015

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2016

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  2
• Net Change:  +2

2017

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

• This Item 19 contains certain historical data submitted to PuroClean by its franchisees for the period January 1, 2017 to December 31, 2017 (the “2017 Measurement Period”).

• There were 172 PuroClean franchisees in operation for the full 2017 Measurement Period that had been opened for one or more full years. Of the 172 franchisees, 152 franchisees reported their sales data for every month of the 2017 Measurement Period and are included as part of a sub-set in this Item 19 (the “Reporting Franchisees”).

• Included in this Item 19 is information regarding the Average and Median Annual Gross Sales for the Reporting Franchisees, based on (1) the number of years of operation and (2) the top, middle, and bottom third gross sales, for the 2017 Measurement Period.

• The 20 franchisees not included in this Item 19 did not report their sales data for every month of the 2017 Measurement Period.

• The information contained in this Item 19 includes data that was submitted to PuroClean by its franchisees through the royalty reporting tool PuroFAB Financial Analysis & Benchmarking. PuroClean has not audited this information, nor independently verified this information.

• The franchisees included in this Item 19 operate businesses substantially similar to the business being offered in the Disclosure Document.

• “Average Annual Gross Sales” is defined as the total of all paid and/or collected sales invoices or other items or services billed to the customer for all “completed sales” less any discounts. Sales of products and services are considered “completed sales” when the franchisee collects payment from the customer. The average is determined by dividing the sum of the Reporting Franchisee’s Annual Gross Sales by the number of Reporting Franchisees.

• “Median Annual Gross Sales” is defined as the middle value, above and below which an equal number of Reporting Franchisees lie. In other words, half of the Reporting Franchisees for each sub-set exceeded this value and half of them did not.

Part 1 – Average and Median Annual Gross Sales by Number of Years

• The following table presents the Average and Median Annual Gross Sales for the Reporting Franchisees broken down by the number of years the Reporting Franchisee has been in operation.

Years in Operation: Between 1 and 4 Full Years