In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Merry Maids franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Merry Maids 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 Merry Maids franchise, based on Items 5 and 6 of the company’s 2018 FDD
- Section IV – Number of franchised and company-owned Merry Maids 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 Merry Maids’ financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- average, median, high, and low annual gross sales during the 3-year period 2015-2017, by quartile, for all Ownership Groups who reported sales for at least 3 years
Section I – Background Information
14 Things You Need to Know About the Merry Maids Franchise
Named Top Home Cleaning Franchise by Entrepreneur Magazine
1. At the end of March 2018, Merry Maids announced that it had earned the top ranking among home cleaning companies in Entrepreneur’s 2018 Franchise 500 list. This is the second year in a row that Merry Maids has led the category.
2. Mary Kay Wegner, president of ServiceMaster Franchise Services (Merry Maid’s parent company), said, “As a franchisor with franchisees worldwide, we’re thrilled with this recognition and believe it’s a testament to the value, expertise and support that we provide our network. Entrepreneurs come to us to help them achieve their dreams, and we don’t take that lightly. We’re honored by the trust they’ve put in us and work hard every day to help them grow and succeed.”
3. Companies in the list are evaluated in five categories: costs, size and growth, support, brand strength, and financial strength and stability. These categories include more than 15 factors, including franchise fee and total investment, growth rate, marketing support, training, financing availability, size and years in business, and audited financial statement.
4. One of the biggest myths of franchising, says Wegner, is that you have to be an expert in a particular field before buying a franchise. She added, “That may have been true years ago, but the face of franchising is changing. We’re looking for people who have solid business skills and a passion to win; we’ll teach them how to run an effective business. If you are willing to invest in a proven model and trusted brand, then we will help you grow that investment into your dream business.”
Parent Company Appoints New Vice President of Supply Management
5. In late October 2018, ServiceMaster, the parent company of Merry Maids, announced that it had appointed James Summerville as vice president of supply management. Summerville reports to Tony DiLucente, senior vice president and chief financial officer of ServiceMaster.
6. In his new position, Summerville also leads facilities management, real estate, distribution, corporate travel, events management, aviation, and product sales. His strong leadership and operational expertise add significant value to ServiceMaster’s businesses.
7. DiLucente said, “Jim is a proven leader and brings a valuable understanding of logistics for multi-site businesses, strategic sourcing and cost management. All of which are vital in helping us drive an increased focus on cost analysis, strategic partnerships and product strategy.”
8. Summerville joins ServiceMaster from Parker Hannifin, headquartered in Cleveland, Ohio, where he was vice president of supply chain for the filtration group. There he was responsible for inventory management, supplier quality and working capital performance and improvements for the group.
Encourages Customers to Give Their Mothers the “Gift of Clean”
9. At the beginning of May 2018, Merry Maids was promoting its cleaning services as one of the best gifts that people could give to their mothers on Mother’s Day. Debra Johnson, Merry Maids’ home cleaning expert, said, “Moms do it all. They are the go-to for everyone’s needs and always find a way to get it all done. It’s a stressful job, taking care of a home, a family, a job and everything else life brings, and it doesn’t always leave time to enjoy the things she loves most. Giving her the gift of a clean home will mean the world to her!”
10. Johnson added that Merry Maids made it easier to give the “Gift of Clean” with the brand’s easy-to-order gift cards. She also said that many Merry Maids locations provide cleaning estimates by text, allowing customers to purchase gift cards in the correct amount.
11. As a final note, Johnson said, “I can’t imagine a mom who wouldn’t love to have her home professionally cleaned, whether she has kids at home or is an empty nester. It’s a great way to show her how much you appreciate all she does, and help her enjoy this special day.”
12. Merry Maids was started in 1979 by Dallen W. Peterson in Omaha, Nebraska. Peterson worked with his family to create the Merry Maids system and the following year started franchising the Merry Maids concept.
13. After a decade of growth in the United States, the Petersons sold Merry Maids to ServiceMaster in 1988. All of the ServiceMaster companies specialize in home services, which meant that Merry Maids was a great fit for the company’s portfolio of brands. ServiceMaster’s other brands include Amerispec, Furniture Medic, Terminix, ServiceMaster Restore, and ServiceMaster Clean. Today, Merry Maids is headquartered in Memphis, Tennessee and has locations around the world.
Entrepreneur’s Franchise 500
14. Merry Maids ranked No. 38 on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Merry Maids 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 Merry Maids’ 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
- Outlets at the Start of the Year: 759
- Outlets at the End of the Year: 886
- Net Change: +127
- Outlets at the Start of the Year: 886
- Outlets at the End of the Year: 989
- Net Change: +103
- Outlets at the Start of the Year: 989
- Outlets at the End of the Year: 998
- Net Change: +9
- Outlets at the Start of the Year: 212
- Outlets at the End of the Year: 103
- Net Change: -109
- Outlets at the Start of the Year: 103
- Outlets at the End of the Year: 3
- Net Change: -100
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 3
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
- The following financial performance representation consists of historical data for Merry Maids franchised branches for residential cleaning services in the United States of America. The franchisor has not included data from similar franchises in Canada or any other foreign country or territory.
- Many franchisees have more than one franchise agreement related to their business. Franchisees with multiple franchises typically do not have separate operations for each franchise agreement. Therefore, the franchisor has aggregated data based on “Ownership Groups” to more accurately reflect a franchisee’s business.
- The tables below include 319 Ownership Groups. Of the 319 Ownership Groups, 303 Ownership Groups have revenue for Residential Cleaning Services in 2017, 2016, and 2015. There were 2 Ownership Groups that ceased operations and did not report revenue in 2017 and 14 Ownership Groups that were too new and reported revenue for 2 years or less during this 3-year period.
- The franchisor compiled this information from the reported gross sales from franchisees during the last three years, January 2015 through December 2017.
- During 2015, 2016, and 2017, the franchisor divested all except three of its company-owned branch territories to franchised businesses. Revenue from company-owned branches during this 3-year period was not included. Revenue from franchised outlets that were formerly company-owned branches was included in the reported franchisee gross sales for this 3-year period.
- The franchisor has not independently verified the information received from franchisees. These financial statements were not prepared in accordance with Generally Accepted Accounting Principles (GAAP), but are believed to be reliable.
Average Annual Gross Sales During the 3-Year Period 2015-2017, by Quartile, for All Ownership Groups Who Reported Sales for at Least 3 Calendar Years