Detailed Information on Property Management Inc.’s Initial Franchise Fee, Royalty Fee + 20 Other Fees (Items 5 and 6, 2022 FDD)
1. Initial Franchise Fee: $25,000 to $80,000
- The non-refundable initial franchise fee (“Franchise Fee”) depends on the type of franchise you purchase, and may differ from the information below if the franchise is located outside of the US.
- The initial Franchise Fee is $55,000 for a “Standard Territory” (population of 100,000 or above). The Franchise Fee is $50,000 for a “Local Territory” (population below 100,000).
- For non-U.S. residents who have or are obtaining E-2 Investor Visas for the purpose of a franchise located within the US, the Franchise Fee for a Standard Territory and a Local Territory is $80,000.
- The Franchise Fee for an existing property management company (“EPMC”), whether the EPMC is located in a Standard Territory or a Local Territory, is based on the existing gross revenue for the EPMC at the time of becoming a franchisee, and is as follows:
- a. $55,000 for gross monthly revenues below $2,000;
- b. $45,000 for gross monthly revenues between $2,001 to $5,000;
- c. $35,000 for gross monthly revenues between $5,001 to $15,000;
- d. $30,000 for gross monthly revenues between $15,001 to $30,000;
- e. $27,500 for gross monthly revenues between $30,001 to $50,000; and
- f. $25,000 for gross monthly revenues above $50,001.
- The Franchise Fee for multiple Territories is the full Franchise Fee for the first Territory, with a 20% discount on the Franchise Fee of the next 4 Territories, up to a total of 5 Territories.
- The Franchise Fee must be paid in full by wire transfer or certified check when you sign the Franchise Agreement. Once you have signed the Franchise Agreement, no portion of the Franchise Fee is refundable to you.
- The Franchise Fee is payment, in part, for expenses incurred by Property Management Inc. to furnish assistance and services to you, as set forth in the Franchise Agreement, and for costs incurred by it, including general sales and marketing expenses, training, legal, employee, office, accounting, and other general and professional fees.
2. Royalty: monthly (i) 5.0% of Brokerage, plus (ii) a tiered percentage of Gross Revenue (the greater of 7% or $350, $700, $1,050 based on TSQ, on Gross Revenue up to $35,000; plus 6% of Gross Revenue from $35,001-$75,000; plus 5% on Gross Revenue above $75,001), plus (iii) 0.5% on self-owned doors, units, and suites and 1% on self-owned keys of rent and leasing fees collected
- Due Date: Payable monthly; due on the 15th of each calendar month. Gross Revenue and Brokerage must be reported by the 15th of each month.
- The fees shall be automatically debited from your bank account via electronic funds transfer (“EFT”).
3. National Advertising Fee: 2.0% of Gross Revenue
- Due Date: Payable monthly; due on the 15th of each calendar month.
4. Local Advertising: minimum of $1,500 per month and $1,000 per month for each additional pillar (Digital Marketing Program counts toward the $1,500 and $1,000 for each additional pillar per month minimum)
- Due Date: As required, according to marketing channels used, but any amounts owed to Property Management Inc. are due on the 1st of each calendar month.
5. PMiBOOKS Bookkeeping Program: minimum monthly fee is presently: (i) for Doors and Suites, the greater of (a) $15 per Door/Suite managed or (b) $100; (ii) for Units, the greater of: (a) 20% of the management fee the franchisee is paid for managing Units or (b) $75 per Association plus an initial $3.00 per Unit setup fee; and (iii) for Keys, presently, the
greater of (a) $50 per key managed or (b) $100, and $50 onboarding fee per key
- Due Date: Mandatory until you have completed all training and assignments deemed necessary for you to demonstrate the ability to manage your company’s bookkeeping; payable monthly on the 1st day of each calendar month.
6. PMiSOFT Software (for franchisees that manage Residential and/or Commercial properties): presently, one-time setup fee of $300; no per Door monthly fee
- Due Date: Payable upon setup.
7. PMiWARE Software (for franchisees that manage Associations): presently, $35 per Association and a one-time setup fee of $500
- Due Date: Payable monthly; due on the 1st of each calendar month via EFT.
8. PMiSTR Software (for franchisees that manage Short-Term Rentals): presently, a one-time set-up fee of $500 for 1-5 Keys or $700 for 5+ Keys (for EPMC franchisees, the set-up fee is generally $250 per Key and the initial set-up fee); and (i) a monthly software user fee that is the greater of (a) $25 flat fee or (b) $10.95 per Key for Keys 1-10, $8.95 per Key for Keys 11-30, $6.95 per Key for Keys 31-50, and $4.95 per Key for Keys 51+. For more than 2 users, there is a $5.00 per additional users per month fee and (ii) a monthly fee of 1% of the collected gross booking and guest fees.
- Due Date: Payable to Property Management Inc. at time of set-up; thereafter, monthly; due on the 1st day of each calendar month via EFT.
9. Accounting Software: presently, a monthly fee of $75-$150 (based on the number of users)
- Due Date: Payable on the 1st of each month via EFT.
10. PMiPrograms: presently, a monthly fee of $80, plus $1.00 per Door, Suite, or Key, and $0.10 per Unit managed
- Due Date: Payable monthly upon completion of Workshop or 120 days after Franchise Agreement is signed; due on the 1st of each calendar month via EFT.
11. Audit Fee: if Brokerage or Gross Revenue is understated by 5% or more, you pay the costs of audit, a charge of 50% of the understated amount, plus the Royalties and fees (plus interest) that would have been owed on the understated amount
- Due Date: On demand.
12. Transfer Fee: $12,000
- Due Date: Payable immediately at time of transfer.
13. Franchise Renewal: presently $10,000
- Due Date: Payable upon Effective Date of Renewal Franchise Agreement.
- The Renewal Term is ten years.
14. Late Fees, Insufficient Funds Fees, or Interest on Late Payments: presently, $50 per day that payment is late, plus highest applicable legal rate for open account business credit, or if there is no maximum, not less than the rate of 1.5% per month. Property Management Inc. will pass on any insufficient fund fees for payments from you to it, that are charged to it.
- Due Date: Due on receipt of invoice.
15. Insurance and Late Fee: an annual premium of approximately $750-$3,000; late fee: if proof of insurance is not received by Property Management Inc. prior to your opening day or not maintained during term, you will be assessed a late fee of $50 per day
- Due Date: As incurred.
- Property Management Inc. has the right to acquire insurance on your behalf if you fail to do so and charge you an administrative fee and late fees.
16. PMiWorkflow: presently, an annual subscription of $270 per license
- Due Date: Prior to attending workshop.
17. Extraordinary Training Cost: the then-current fee, which is presently a minimum of $600 to $800 per day, plus travel reimbursement
- Due Date: 10 days before visit.
- Only if you require or request Extraordinary Training.
18. Monthly Phone Service Fee: presently, a one-time set-up fee of $94.95-$149.90 before FCC regulated fees and taxes, and $65.87 per month before FCC regulated fees and taxes
- Due Date: Monthly on or before the 1st of each month.
- Required of all franchisees.
19. Annual Summit Fee: the then-current fee, which is presently $500-$800 per attendee
- Due Date: At time of registration.
20. Trust Account Reconciliation Fee: presently, $5 per Door
- Due Date: As incurred.
21. Compliance Fee: presently, $25 per day if you are out of compliance with Property Management Inc.’s quality measures in the Franchise Agreement
- Due Date: As incurred.
22. Broker Fee (for residential and commercial Pillars): presently, can range from $0 to 30% of leasing fee
- Due Date: As incurred.