Detailed Estimates of Property Management Inc. Franchise Costs Based on Item 7 (Estimated Initial Investment) of Property Management Inc.’s 2019 Franchise Disclosure Document
1. Franchise Fee: $15,000 to $50,000
- The Franchise Fee is for a specific, non-exclusive geographic territory. The Franchise Fee is earned upon payment and is non-refundable.
- The Territory will be determined by certain population and growth calculations, county lines, geographic, physical, and other boundaries before the Franchise Agreement is signed.
2. Rent: $0 to $1,500
- You are required to have a physical address, approved in writing by the franchisor, located within your Territory from which to operate the Business, whether a professional office or a home office owned by you (your “Office”).
- The stated monthly fee you pay, if any, to lease such space (“Rent”) is an estimate only and will vary depending upon the market in your location, availability of space, and other factors.
3. Rental Improvements: $0 to $2,500
- As part of leasing Office space, you may spend the stated amount, or more, for rental improvements, such as putting in new carpet or painting walls.
4. Deposits: $0 to $2,500
- As part of your lease requirements, you will also likely be required to pay deposits for the Office space and deposits for utilities and suppliers.
5. Pillar Certification (Training Program, Workshop, PMiLAUNCH, and PMiSPRINT): $0 to $3,800 for Primary Pillar; $5,000 for each additional Pillar
- You are required to receive full education on each property management industry sector (“Pillars”), prior to being eligible to offer such Pillar as part of your Business.
- Unless you are an existing property management company (“EPMC”) that is already providing property management services in more than one Pillar, before or on the date of signing your Franchise Agreement, you must select your first property management industry Pillar (e.g. Residential) that you will provide as part of your Business (“Primary Pillar”).
- You must then complete Pillar Certification, consisting of (i) the Training Program, (ii) Workshop, (iii) PMiLAUNCH, and (iv) PMiSPRINT for this Primary Pillar.
- Thereafter, if you wish to provide property management services in an industry sector other than your Primary Pillar (each, an “Additional Pillar”), you must meet the following criteria: (i) the franchisor must determine, in its sole discretion, that you are properly trained and successfully providing services in your Primary Pillar; (ii) you must be in full compliance with your Franchise Agreement, including all monies owed to the franchisor; (iii) you must pay a fee of $5,000 (“Additional Pillar Fee”) for each Additional Pillar; and (iv) you must successfully complete Pillar Certification for each Additional Pillar (collectively, “Additional Pillar Requirements”).
- If you are an EPMC that is already providing property management services in multiple Pillars, you will be allowed to continue providing your existing Pillars without the Additional Pillar Requirements. However, following entering into the Franchise Agreement, should you add an Additional Pillar, you must meet the Additional Pillar Requirements.
- Before opening your Business, your Operating Principal (and up to one other person of your choosing) must complete the franchisor’s training program (the “Training Program”) for your Primary Pillar.
- For each Pillar, the franchisor’s Training Program is segmented into two parts: a six-week program that consists of weekly live calls and video training covering many different areas of property management and Business operations (“Training”) and a six-week program that runs concurrently with Training, consisting of weekly phone calls, status updates, and tasks associated with opening your Business (“Opener”).
- The franchisor does not charge a fee for your Operating Principal and up to one other person of your choosing to participate in its Training Program.
- After completing the Training Program (Training and Opener) for each Pillar, your Operating Principal (and up to one other person of your choosing) must attend Workshop at the franchisor’s headquarters in Utah for approximately 5 days and thereafter, participate in the franchisor’s launch program (“PMiLAUNCH”). PMiLAUNCH will begin the week immediately following Workshop.
- PMiLAUNCH is a task-based implementation program helping franchisees take advantage of and participate in the System, and you are required to participate in PMiLAUNCH until your Gross Revenue in the applicable Pillar exceeds $3,000 per month.
- The franchisor does not charge a fee for your Operating Principal and up to one other person of your choosing to attend Workshop; however, any additional participants must pay a fee of $500 per person.
- Additionally, you will be responsible for the compensation, travel, lodging, and living expenses incurred in connection with attending Workshop.
- After successfully completing PMiLAUNCH, for each Pillar, your operating Principal (and up to one other person of your choosing) must participate in the franchisor’s sprint program (“PMiSPRINT”). PMiSPRINT will begin the week immediately following the successful completion of PMiLAUNCH.
- PMiSPRINT is a task-based program that you are required to participate in until your Gross Revenue for the applicable Pillar exceeds $8,000 per month. If you do not fully participate in PMiLAUNCH or PMiSPRINT for your Primary Pillar, you will be considered in default of your Franchise Agreement.
- Any fees or costs paid to outside vendors as part of PMiLAUNCH and PMiSPRINT are likely non-refundable.
6. Equipment and Business Supplies: $500 to $3,000
7. Computer Hardware and Software (including PMiSOFT, PMiWARE, PMiPrograms, PMiSTR, as required): $300 to $5,500
- This includes a computer, smartphone, mobile phone service, copier/scanner/fax/printer, shredder, software, phone system, locking filing cabinet(s), Internet service (e.g. cable, wi-fi, DSL), various business supplies (e.g. business cards, corporate letterhead, envelopes, etc.), and all other necessary office equipment.
- This amount will vary depending on whether you already have these items.
- The franchisor has no specifications for the computer, except that your computer must have the ability to operate the latest personal computer operating system, as well as operate the required Franchisor Software.
- Any fees or costs for equipment and supplies are likely non-refundable.
- You must obtain a start-up package of supplies including corporate letterhead, envelopes, business cards, clothing, signs, corporate brochures, and promotional giveaway items (“Business Supplies”), at a present cost of $350.
- These start-up Business Supplies can be obtained at the PMiSTORE, a dedicated website where PMI franchisees can order marketing and branding materials and apparel for use in the Business (“PMiSTORE”).
- Fees for Business Supplies are non-refundable.
- You may also take the franchisor’s templates to an approved outside vendor for printing or, if the franchisor approves, you may purchase the required materials and supplies directly from another vendor.
- You will also receive access from the franchisor to a list of Approved Vendors.
- You will be required to have certain off-the-shelf computer hardware. You may already have equipment which meets this need.
8. PMiBOOKS (different divisions listed; only 1 will apply in the first year): ResidentialBOOKS: $0 to $18,000; AssociationBOOKS: $0 to $26,200; VacationBOOKS: $0 to $12,100
- You are also required to subscribe to the franchisor’s software solutions (e.g. PMiSOFT, PMiWARE, PMiSTR, and PMiPrograms, collectively referred to herein as “Franchisor Software”), as applicable to your Business.
9. Local Advertising Expenses for Period of 3 Months: $4,500 to $6,000
- This is the estimated amount that you will spend on Local Advertising over a period of three months following the opening of your Business.
- The Local Advertising estimated amount includes a monthly fee of $400 paid to the franchisor for providing the Digital Marketing Program. You must participate in the franchisor’s Digital Marketing Program. The Digital Marketing Program fees commence on the first day of the month following your completion of the Training Program.
- This estimate also includes funds spent toward advertising efforts such as your own lead generation campaigns, local advertising and marketing, social media, pay-per-click, pay-per-quote, as well as direct marketing.
- The estimate also takes into consideration the Local Advertising Quota of $1,500, which obligation begins on the earlier of (i) the first calendar day of the month following your completion of the Training Program or (ii) 120 days after the Effective Date of the Franchise Agreement.
- At your election and for a one-time set-up fee of $500 plus $250 per month, a Short-Term Rental website is available. A Short-Term Rental website includes an optimized booking integrated website, including hosting maintenance and updates, with platform blogging capabilities. The $250 monthly fee for a Short-Term Rental website will count toward your Local Advertising Quota.
- Advertising fees are non-refundable.
10. Insurance: $750 to $3,000
- You must purchase and maintain the following types and minimum amounts of insurance for the full Initial Term of the Franchise Agreement:
- a. “All risk” (special form) property insurance coverage for assets of the Franchised Business, which must include adequate business interruption insurance;
- b. Comprehensive general liability insurance, including contractual liability, with a minimum liability coverage of $1,000,000 per occurrence and $2,000,000 aggregate;
- c. Workers’ compensation insurance and employer liability coverage with a minimum limit of $1,000,000;
- d. Errors and omissions insurance (E&O) professional liability insurance with a minimum limit of $1,000,000; and
- e. Automobile liability insurance of at least $1,000,000 that includes hire/non-owned liability.
- Insurance costs may be refundable for any unused portions.
11. Professional Services: $0 to $1,500
- You may need to employ an attorney, an accountant, and other consultants as needed to assist you in establishing your Business.
12. EPMC Conversion: $100 to $2,500
- There is a one-time conversion fee for an EPMC (“EPMC Conversion Fee”) that has Doors, Units, or Keys that are not using a PMiSOFT, PMiWARE, or PMiSTR software vendor.
- The present EPMC Conversion Fee for Residential is $3.00 per Door, with a $350 minimum. For Short-Term Rentals, the present EPMC Conversion Fee is generally $250 per Key. The EPMC Conversion Fee for Associations is $1 per Unit. These fees may change in the future.
13. Initial Trust Account Deposit for Short-Term Rental Operations: $500 to $1,000
- If you are doing Short-Term Rental management, an initial bank deposit is required to absorb initial fees, such as merchant account fees, bank fees, etc.
14. Additional Funds for Period of 3 Months: $0 to $20,000
- The estimate of additional funds for the initial phase of your Business is based on recurring expenses and operating expenses for the first 3 months of operation. The estimate of additional funds does not include an owner’s salary, draw, or staff wages.
15. Total: $22,750 to $175,100