FDD Talk 2019: MaidPro Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

• Section I – Background information on the MaidPro franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a MaidPro 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 MaidPro franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned MaidPro 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 MaidPro’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• average total monthly gross sales, monthly recurring gross sales, monthly one-time sales, job costing payroll, cost per inquiry, and gross monthly sales per average number of recurring customers for the 223 franchised MaidPro businesses in operation a minimum of 18 months as of August 1, 2018 and still in continued operations as of December 31, 2018 (“Same Franchised Units”)

• average total monthly gross sales, monthly recurring gross sales, monthly one-time sales, job costing payroll, cost per inquiry, and gross monthly sales per average number of recurring customers for a subset of 49 of the Same Franchised Units that met the definition above and had multiple units in operation

• average MaidPro National Sales Center signup percentage and recurring signup percentage for the 166 franchised MaidPro businesses that used the MaidPro National Sales Center, full-time, for internet leads and overflow leads, and had at least 1 quote contacted by the MaidPro National Sales Center during the month of August 2018

Section I – Background Information

16 Things You Need to Know About the MaidPro Franchise

Lands on Cover of Franchising Today Magazine

1.  In early April 2019, MaidPro announced that it was featured on the cover of that month’s edition of Franchising Today magazine, a leading trade publication for franchise professionals. In the cover story, which can also be read on the Franchising Today website, Richard Sparacio, president of MaidPro, shared the interesting story of how he co-founded the company right out of college with fellow entrepreneur Mark Kushinsky, and how the company grew from a small 200-square-foot office with second-hand furniture into a franchise brand with 275 franchise locations across the U.S. and Canada.

2.  In his interview with Franchising Today, Sparacio also explained why MaidPro’s early investment in technology has been instrumental to this day in helping the brand stand out from the competition, and why the company believes in treating people, both customers and its employees, with respect. MaidPro is currently working on expanding its services to become an even more recognized household brand. “We want to be known as the brand you can trust,” Sparacio told Franchising Today. This year, MaidPro expects to open 20 to 25 new franchises.

3.  Sparacio added, “The demand for owning a house cleaning business continues to increase.” He told the magazine that there is a demand for house cleaning service because many people want to spend their time doing things other than cleaning. And many franchise owners also realize that they don’t have to necessarily clean houses to own a house cleaning business.

Five Locations Receive Best of HomeAdvisor Award for 2019

4.  In late June 2019, MaidPro announced that five of its franchisees had received the Best of HomeAdvisor Award for 2019. This prestigious award is given to top-rated professionals that exemplify quality practices and premier services.

5.  All winners of the HomeAdvisor Award for 2019 had to meet strict criteria for eligibility. This includes having an average customer rating of 4.0 or higher, with at least three reviews from the last six months. Recipients also had to be in good standing for the six months prior to the date the award was designated and approved, and active for match 75% of the time over the last six months with no problem resolutions.

6.  The MaidPro recipients of the 2019 HomeAdvisor Award are: MaidPro of Birmingham in Alabama; MaidPro Saint Johns and MaidPro of Tampa in Florida; MaidPro Clarksville in Tennessee; and MaidPro of the Triangle in Raleigh, North Carolina.

7.  Mark Kushinsky, co-founder and CEO of MaidPro, said, “We’re very proud of our franchisees who’ve been recognized by HomeAdvisor for the quality and service of their work, and their outstanding dedication to the customers that they serve in their communities and surrounding areas.”

Completes Fifth Mission Trip to Belize Children’s Home

8.  At the end of March 2019, a team from MaidPro Cares, MaidPro’s non-profit organization, returned home after completing its fifth mission trip to visit children at the Liberty Children’s Home in Ladyville, Belize. MaidPro Cares is a 501(c)(3) non-profit organization that strives to make a difference for orphaned and high-risk children living in underfunded children’s homes around the world.

9.  Richard Sparacio, president of MaidPro, said, “Helping children in need is very rewarding for all of us at MaidPro. We first established a relationship with the Children’s Home in Belize in 2013 and we’ve been delighted to pay visits to the orphanage and help the children living there ever since.”

10.  The MaidPro Cares team not only delivers valuable supplies such as clothing, fresh food, and medicine with each visit, but also provides technology to aid in the children’s education and funding to improve the overall conditions for the children at the home. Nearly 100% of MaidPro Cares funding goes directly to improving the quality of life of the children.

11.  In Belize, the team from MaidPro Cares spent time interacting with both the staff and children to create connections that ensure the children thrive well into the future. Sparacio added, “Like all the children’s homes we serve, we work directly with the first line caregivers in Belize to assist with both immediate and long-term needs.”

Company History

12.  MaidPro was founded in 1991 by Mark Kushinsky and Richard Sparacio in Boston, Massachusetts. Kushinsky and Sparacio were inspired to start their own high-quality cleaning service after Kushinsky experienced poor service from two different cleaning companies, including one that was more expensive. After sharing his story with Sparacio, the two came up with the MaidPro concept.

13.  Kushinsky and Sparacio’s concept was a hit and within a year, the company had cleaned over 1,000 homes. Not only did MaidPro launch MaidPro University to ensure consistency, but the company also developed its own proprietary service management software. In 1996, MaidPro began selling the software under the name ServiceCEO. The following year, MaidPro started franchising and grew to five locations over the next two years.

14.  In 2003, MaidPro started its partnership with Procter & Gamble using the best cleaning supplies in the industry. Over the next few years, MaidPro continued its expansion across the United States and reached 100 locations in 2008. MaidPro opened its first international location the next year in Canada.

15.  MaidPro celebrated its 25th anniversary in 2016. That same year, MaidPro had grown to more than 200 locations in North America.

Entrepreneur’s Franchise 500

16.  MaidPro ranked No. 121 on Entrepreneur’s 2019 Franchise 500.

Section II – Estimated Costs

• Please click here for detailed estimates of MaidPro 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 MaidPro’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

Franchised

2016

• Outlets at the Start of the Year:  202
• Outlets at the End of the Year:  227
• Net Change:  +25

2017

• Outlets at the Start of the Year:  227
• Outlets at the End of the Year:  249
• Net Change:  +22

2018

• Outlets at the Start of the Year:  249
• Outlets at the End of the Year:  258
• Net Change:  +9

Company-Owned

2016

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2018

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

• The information provided is a historic financial performance representation about a subset of the MaidPro franchise system’s existing outlets.

• Because business maturation can take up to 18 months or longer, MaidPro is reporting only on those Businesses open 18 months or more.

• Based on MaidPro’s 28 years of experience in the residential cleaning industry, MaidPro is selecting offices that have been in business a minimum of 18 months, as MaidPro expects it takes this length of time to secure an appropriate location for the business, acquire a branded company vehicle, successfully complete its extensive training process, stabilize their employee recruitment, acquire a recurring revenue base, and demonstrate their ability to implement on all required and/or recommended processes.

• If a franchisee had more than one territory, the Gross Sales include revenues from all of the franchisee’s territories.

• “Gross Sales” shall mean and include all revenues and income from whatever source derived and/or received by the franchisee from, through, by, or on account of the operation of the Franchised Business. No items have been deducted from Gross Sales.

• Based upon the performance of the franchises which were in operation for a minimum of 18 months as of August 1, 2018, MaidPro is providing the following disclosure of the actual averages for these units.

• August 2018 was selected as it is the month that had the largest number of active Franchised Businesses that meet the definition of “Same Franchised Units” found below.

• MaidPro defines “Same Franchised Units” as a franchised business in operation a minimum of 18 months as of August 1, 2018 and still in continued operations as of December 31, 2018.

• Out of the 251 franchised businesses, operated by 168 franchisees, that were in operation on August 1, 2018, MaidPro is reporting on 223 franchised businesses, operated by 140 franchisees, which complies with the definition for Same Franchised Units.

• MaidPro’s company-owned Massachusetts location is not included in this item.

• Monthly Gross Sales, however, will fluctuate somewhat throughout the year. The locations of the franchised businesses are across the United States, and the franchised businesses are located in both major metropolitan areas, suburban areas, and rural areas.

• The figures below, which reflect Gross Sales, not profits, were calculated based upon information reported to MaidPro by its franchisees in MaidPro’s cloud-based software which is used by MaidPro for calculating Royalties.

• The figures were as of March 31, 2019. Any revisions or updates after this date, made by MaidPro or its franchisees, will affect the figures. MaidPro’s cloud-based software is housed within Salesforce.com Software.

• The figures above have not been audited by MaidPro.

• The figures do not reflect all costs of sales, operating expenses, or other costs and expenses that must be deducted from the Gross Sales figures to obtain your net income or profit.

Part 1 – Average Same Franchised Unit Data for Month Ending August 31, 2018

• The Average Same Franchised Unit data for the month ending August 31, 2018 is as follows: