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

• Section I – Background information on the Mr. Rooter Plumbing franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Mr. Rooter Plumbing 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 Mr. Rooter Plumbing franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Mr. Rooter Plumbing 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 Mr. Rooter Plumbing’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017 average, median, highest, and lowest gross sales for the 163 Mr. Rooter Plumbing franchised businesses in business 12 months or more with full 12 months of sales in 2017

• 2017 average, median, highest, and lowest work orders (in dollars) for the 163 Mr. Rooter Plumbing franchised businesses in business 12 months or more with full 12 months of sales in 2017

Section I – Background Information

12 Things You Need to Know About the Mr. Rooter Plumbing Franchise

Celebrates ‘National Hug a Plumber Day’ and Educates Public About Common Plumbing Issues

1.  In early April 2019, in an effort to educate consumers and provide them with tips on how to tackle common plumbing issues, Mr. Rooter Plumbing commissioned a national survey asking homeowners about the most common plumbing issues they face. The results of the survey, which was conducted by Google Consumer Surveys, showed that nearly 20% of homeowners frequently have to deal with a clogged toilet, while only 9% are dealing with a clogged sink. Another 15% spend time fixing backed-up drains, and close to 6% of homeowners are experiencing low water pressure. Only 4% face garbage disposal issues.

2.  Doyle James, president of Mr. Rooter Plumbing, said, “Being a homeowner is a fulfilling and rewarding accomplishment, but it can also bring new responsibilities and tasks that many aren’t prepared for. This survey gave us tremendous insight as to the most common plumbing problems that homeowners deal with, along with their go-to methods for fixes. We learned that when faced with a plumbing issue, nearly 46% of homeowners research DIY tips and attempt to fix the problem themselves. That’s why it’s vital to educate consumers about the do’s and don’ts of plumbing, so they can hopefully avoid back-ups, bursts or other potential catastrophes down the line.”

3.  To help prepare homeowners for any unforeseen disasters, Mr. Rooter offered expert tips on how to handle some of the most common plumbing issues, including:

• Clogged Toilet: Do not try to flush the toilet, as this will only lead to an overflow. Find a plunger and make sure to have a good and consistent connection with the plunger and the toilet. Being quick and repetitive with the plunging motion and keeping an eye out for movement in the toilet is key to unclogging it.

• Backed-Up Drain: Use a regular wire coat hanger and straighten it out as much as possible. Bend one end to create a hook, push it through the drain and start fishing. Hair and all the buildup, aka gunk, should pull out. Once it’s all pulled out, run the hot water and it should clear up.

• Clogged Sink: Mix 1/3 of a cup of baking soda and 1/3 of a cup of vinegar until it starts to fizz. Pour it immediately down the drain to help break down the gunk, hair, and grime. Let it sit for about an hour (overnight is even better) and then flush it with hot water.

• Low Water Pressure: Screw off the aerator, clean off the gunky residue, and screw it back onto the faucet. This should help the water pressure get back to normal.

• Garbage Disposal: Never use chemical cleaners to clear a backed-up garbage disposal. To check for clogs, remove the unit and visually inspect the pipe for obstructions.

4.  James added, “Every year, millions of homeowners require the expertise and hard work of an experienced plumber. And with National Hug a Plumber Day coming up on April 25, now is the perfect time to not only highlight the importance of proper plumbing maintenance, but to also say ‘thank you’ to the dedicated technicians and plumbers who always show up when disastrous situations go down.”

5.  To further celebrate the holiday, Mr. Rooter is recognizing America’s unsung heroes who go above and beyond the call of duty to keep our pipes – and lives – flowing smoothly. Fans are encouraged to visit Mr. Rooter’s Facebook page and share a first-hand story of how a plumber saved their day for a chance to win a smart home leak detector along with other Mr. Rooter swag.

Part of ‘The Neighborly Project’

6.  In early March 2018, Neighborly, the parent company of Mr. Rooter Plumbing and several other home service brands, launched The Neighborly Project, an initiative to honor a veteran with complimentary home repair services. The initiative kicked off in Jacksonville, Florida and nominations were accepted from March 1 to March 31. Participating Jacksonville Neighborly brands included Mr. Rooter Plumbing, Glass Doctor, Mr. Appliance, Mr. Handyman, Window Genie, Rainbow International, and Molly Maid.

7.  Lisa Zoellner, chief strategy and marketing officer of Neighborly, said, “Neighborly is dedicated to serving our community and connecting homeowners with trusted home service providers in virtually every category. With the launch of The Neighborly Project, we’re able to utilize our vast community of experienced service professionals to honor veterans who have put their lives on the line to protect and serve our nation. Several members of our leadership team and franchise owners are proud veterans, so kicking off this initiative in Jacksonville by recognizing these American heroes was a natural fit, and we look forward to expanding this project nationwide.”

8.  The Neighborly Project was open to the public, and nominees had to meet the following criteria: a former enlisted serviceman or woman who was honorably discharged from service; preferably served in a deployed location; a homeowner, preferably living in an older home that could benefit from Neighborly’s services; plans to live in the Jacksonville area for the foreseeable future; and be willing to participate in interviews and share his or her story with the community. The recipient was selected in April with home repairs beginning shortly after.

9.  Michael McCalley, owner of the Mr. Handyman serving Greater Jacksonville, said, “Being a part of The Neighborly Project allows businesses like mine to make a huge impact in the neighborhoods where we live and serve. Neighborly is dedicated to serving the community with our time and our talents, and we look forward to working together with the deserving veteran.”

Company History

10.  Mr. Rooter Plumbing was founded in 1968 by David Duck in Oklahoma City, Oklahoma. Duck began franchising the Mr. Rooter concept in 1972 and grew the company over the next decade. After negotiations between Duck and Don Dwyer of The Dwyer Group (now Neighborly), Dwyer purchased Mr. Rooter Plumbing in 1989. Following the sale of the company, Duck maintained ownership of his original store and is still a franchise owner today.

11.  Since Neighborly’s ownership, Mr. Rooter Plumbing has grown across the United States, Canada, and the United Kingdom (as Drain Doctor). Neighborly’s suite of home service brands also includes Molly Maid, Mosquito Joe, Mr. Handyman, Mr. Electric, Window Genie, Glass Doctor, Drain Doctor, and several others.

Entrepreneur’s Franchise 500

12.  Mr. Rooter Plumbing ranked No. 291 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Mr. Rooter Plumbing 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 Mr. Rooter Plumbing’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:  206
• Outlets at the End of the Year:  194
• Net Change:  -12

2016

• Outlets at the Start of the Year:  194
• Outlets at the End of the Year:  192
• Net Change:  -2

2017

• Outlets at the Start of the Year:  192
• Outlets at the End of the Year:  197
• Net Change:  +5

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:  0
• Net Change:  0

2017

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

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

• The sales figures listed below include average and median Gross Sales derived from historical operating results of the franchised businesses indicated for the time periods covered.

• The franchisor obtained these sales figures from information provided to it by its franchisees for the period of January 1, 2017 through December 31, 2017 (the “Reporting Period”). Neither the franchisor nor its independent certified public accountants have audited or verified any of the sales figures reported to it. Operators are not required to use generally accepted accounting principles when reporting these figures.

• As of December 31, 2017, the company had 197 Mr. Rooter Plumbing businesses in operation in the United States, all of which were franchised businesses. Of these, 163 franchised businesses were in operation and reporting Gross Sales for the full 12 months of the Reporting Period.

• The information provided below does not include franchised businesses that were not in operation for the entire Reporting Period. Such businesses would likely have average sales figures that are different from (and likely lower) than the figures reported below.

• All of the franchised businesses for which sales results are reported below were operated by franchisees. The franchisor did not operate any of the businesses. All of the franchised businesses are comparable to the franchised businesses offered by the disclosure document and offered substantially the same services to the public.

• You should be aware, however, that the franchised businesses for which sales results are reported below include some businesses that are “conversions,” i.e., businesses that were in operation before purchasing a franchise and “converting” from an independent business to a business utilizing the franchisor’s system and brand.

• The franchisor does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets.

• No adjustments, including adjustments for geographic location, have been made to these reported sales. In addition, the information in this Item 19 is based on sales in one 52-week period. Also, because these are Gross Sales results only, no costs or expenses are taken into account.

• Sales and profit results are directly impacted by various factors, including: competition from other similar businesses in the area; the quality of management and service in a franchisee’s operations as well as the extent to which the franchisee follows established systems, policies, and guidelines; contractual relationships and terms with individual landlords and suppliers; the cost of capital and the extent to which a franchisee might have financed its operations; legal, accounting, and other professional fees; federal, state, and local income and other taxes; and discretionary expenditures.

• You should therefore use the information in this Item 19 only as a general reference when conducting your own analysis. The franchisor encourages you to carefully review this material with your attorney, business advisor, and/or accountant.

Average Gross Sales in 2017 Attained by Franchised Businesses in Business 12 Months or More with Full 12 Months of Sales in 2017

Annual Gross Sales