In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Property Management Inc. franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Property Management Inc. franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Property Management Inc. franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned Property Management Inc. outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Property Management Inc.’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average, median, high, and low annual income per door for Property Management Inc. franchised locations at least 12 months old that offer residential and/or commercial property management services
- 2018 average, median, high, and low annual income per unit, annual income per association, and unit count for Property Management Inc. franchised locations at least 12 months old that offer association management services
- 2018 average, median, high, and low annual income per key and key count for Property Management Inc. franchised locations at least 12 months old that offer short-term rental management services
- 2018 average, median, high, and low annual income for Property Management Inc. franchised locations at least 12 months old that offer real estate sales services
Section I – Background Information
20 Things You Need to Know About the Property Management Inc. Franchise
Targets Southern California for Next Wave of Franchise Expansion
1. At the end of February 2019, Property Management Inc. announced that it was setting its sights on development across Southern California. The brand already has a solid presence of property managers in cities throughout Southern California, particularly along the coast, and it is seeking to further strengthen its presence in the region. The area’s high tourist concentrations and real estate values are just two reasons Property Management Inc. wants to get in on the West Coast action.
2. Steven Hart, president of Property Management Inc., said, “Southern California is one of the most prosperous markets in the world. It’s no different for property management. Property values in Southern California are higher and property management is very lucrative in that part of the United States.”
3. Property Management Inc. has historically done extremely well in cities, states, and regions with large coastal areas, including Florida, Houston, and New England, as well as places that see high volumes of vacationers.
4. Danessa Itaya, senior vice president of Property Management Inc., said, “In Orlando, for example, we have five franchisees managing short-term vacation rentals, and they are very successful. Property management within beach cities can be especially lucrative, and we want to take advantage of what the Southern California market has to offer. From a vacation standpoint, Southern California is huge for short-term vacation rentals. Plus, it’s not just about proximity to the ocean. There are cities in the region filled with wineries and other huge tourist draws.”
5. What makes PMI such a great opportunity in Southern California is the business model. In addition to residential and commercial property management, PMI also offers association management and short-term vacation rentals. With Southern California not only being a great vacation destination, it is also an area with high home values, strong commercial real estate needs, and ever growing home owner/community associations.
6. Hart added, “We pride ourselves on being able to provide our franchisees with a variety of solutions. Our franchisees can take advantage of this by providing flexible services. Real estate markets often fluctuate, and when that happens, we want to make sure that our franchisees are set up for success no matter where they’re based. We’re especially confident that they’ll be able to thrive in Southern California.”
Enters Vacation Rental Space with PMI Travel
7. In mid-April 2018, Property Management Inc. announced the launch of its vacation rental platform and short-term rental booking website, PMI Travel. The addition of vacation rental management to its existing residential, commercial, and association management platforms creates a unique opportunity for PMI franchise owners to tap into an additional market. The vacation rental platform will deliver PMI property managers the tools, systems, and support needed to provide short-term rental management, from booking to checkout.
8. Brian Birdy, vice president of Property Management Inc., said, “With our powerful network of property managers, PMI is uniquely qualified to implement a branded quality of service to vacation property owners and travelers. Through PMI Travel, our skilled property management will provide efficient and effective short-term rental management throughout the United States, and internationally.”
9. Billy O’ Sullivan, director of vacation rental management for Property Management Inc., added, “When you’re dealing with vacation rentals, there’s nothing as valuable as a human touch. At PMI Travel, our boots-on-the-ground property managers are always available to meet travelers’ every need and their local expertise creates the extraordinary experience vacationers are seeking.”
10. Property Management Inc.’s vacation rental platform supports all types of short-term rentals in any area or market, not just vacation homes in resort towns, making it practical and accessible for property managers throughout the PMI network to use.
11. “The power of PMI Travel is cross-pollination,” said Steve Hart, president of Property Management Inc. “Some properties perform better as short-term rentals than long-term living spaces and vice versa, and with the opportunity to manage short-term rentals, PMI’s residential and association managers will be able to give property owners the best return on their investment, even if that means converting their property to a vacation rental.”
Appoints New Senior Vice President
12. Near the end of September 2018, Property Management Inc. appointed Danessa Itaya as senior vice president. Itaya brings over 25 years of experience in franchising to PMI where she will focus on advancing the property management franchise through marketing and sales.
13. Itaya’s career in franchising began at Molly Maid where she developed an expertise in franchising and held various leadership roles, including director of accounting, director of operations, and VP of operations. In addition to her corporate responsibilities, Itaya served as president and co-chair of Ms. Molly Foundation, a corporate sponsored non-profit organization supporting victims of domestic violence.
14. In 2013, Itaya left Molly Maid to pursue an opportunity with the brand-new Maid Right franchise, which is based on the winning model of its sister company, JAN-PRO, and has since grown to over 40 master franchises.
15. According to Itaya, “I love working directly with franchisees to help them grow their businesses and achieve their goals. PMI is an amazing opportunity for any franchisee because the 4 Pillar platform provides franchisees with a strong business model with multiple revenue streams through commercial, residential, HOA and vacation property management. I’m looking forward to implementing comprehensive marketing systems on both a local and national level to help PMI become the premier leader in real estate management.”
16. Steve Hart, president of Property Management Inc., added, “At PMI, we put our franchises first, constantly innovating with the best tools, training and resources we can find to help them succeed. PMI has experienced incredible growth during the last few years and with Danessa’s considerable franchise experience and marketing talent we will continue expanding our network as we maximize our potential.”
17. Property Management Inc. was founded in 2008 by Steve Hart in Lehi, Utah. Hart’s vision was to create the nation’s largest residential, commercial, and association management franchise network. Before starting Property Management Inc., Hart had a career in real estate and he realized that the property management sector of the industry had remained stable even in an unstable real estate climate.
18. Hart began franchising Property Management Inc. from the start and over the past decade has rolled out an aggressive expansion and technology innovation strategy, adding three additional differentiating markets: commercial, association, and vacation.
19. In 2018, PMI acquired a competitor, Book by Owner, and is currently converting units into PMI franchises. According to Property Management Inc., its goal is to become the largest property management franchise by 2020. Today, there are Property Management Inc. locations in more than 40 U.S. states, Puerto Rico, Malta, and Costa Rica.
Entrepreneur’s Franchise 500
20. Property Management Inc. ranked No. 262 on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Property Management Inc. franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Property Management Inc.’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 117
- Outlets at the End of the Year: 158
- Net Change: +41
- Outlets at the Start of the Year: 158
- Outlets at the End of the Year: 202
- Net Change: +44
- Outlets at the Start of the Year: 202
- Outlets at the End of the Year: 233
- Net Change: 31
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 2
- Net Change: 0
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 1
- Net Change: -1
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 2
- Net Change: +1
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
- As of December 31, 2018, Property Management Inc. had 235 franchised locations (including company-owned outlets).
- Based upon data and information for the 2018 calendar year, Property Management Inc. has created the financial performance representations made in this Item 19, detailed in the tables below.
- The material bases for such representations are as follows:
- Property Management Inc. used only actual historical financial figures, provided from either (i) unaudited financial and operating reports submitted to it by its franchises or (ii) Property Management Inc.’s accounting software, for the full calendar year ending December 31, 2018;
- Data from 49 franchises was not included because the franchise either failed to provide Property Management Inc. with data or the data was incomplete or insufficient;
- There were 39 franchises whose data related to Doors was not included because the franchises did not manage any Doors, were less than 12 months old, or the data was incomplete or insufficient;
- There were 115 franchises whose data related to Units was not included because the franchises did not manage any Units, were less than 12 months old, or the data was incomplete or insufficient;
- There were 168 franchises whose data related to Keys was not included because the franchises did not manage any Keys, were less than 12 months old, or the data was incomplete or insufficient;
- There were 146 franchises whose data related to real estate sales was not included because the franchises did not sell any real estate, were less than 12 months old, or the data was incomplete or insufficient;
- Other than as listed above, the data from all franchises (including company-owned outlets) for the full 2018 calendar year was included in the financial representations made in this Item 19. The characteristics of the franchised locations included in the financial representations made in this Item 19 do not differ materially from the franchises that may be offered to prospective franchisees.
Part 1 – Residential and/or Commercial Property Management
- Table 1 shows the actual numbers for High-Average-Median-Low annual income (“income” meaning total revenue generated by franchisees before any costs or expenses, i.e. royalty fees, advertising fees, etc. have been subtracted) per Door for eligible franchises older than 12 months that use Property Management Inc.’s accounting software or otherwise regularly report their financial and operational information.
- There are 147 franchised locations represented in Table 1 below. This represents 62.5% of the 235 franchised locations open as of year-end 2018.