Franchise Costs: Detailed Estimates of HouseMaster Franchise Costs (2019 FDD)

Detailed Estimates of HouseMaster Franchise Costs Based on Item 7 (Estimated Initial Investment) of HouseMaster’s 2019 Franchise Disclosure Document

1.  Initial Franchise Fee/Deposit Remittance Fee:  $42,500

• You will pay an initial franchise fee of $42,500 when you sign the Franchise Agreement.

• If you sign a Deposit Remittance Form, you will pay a Deposit Remittance Fee of $10,000 to reserve a Designated Geographic Marketing Area (DGMA). If you purchase a franchise within the time agreed upon in the Form, the $10,000 deposit fee will be applied toward the Franchise Fee and you will owe a balance of $32,500 when you sign the Franchise Agreement.

• If HouseMaster determines during training or within 15 days after training that you have not demonstrated the aptitude, abilities, or personal characteristics necessary or desirable to operate the Franchised Business, HouseMaster may terminate the Franchise Agreement and refund to you the initial franchise fee less an amount to cover a portion of its reasonable costs for your training.

2.  Training Expenses:  $500 to $3,000

• You are not charged an additional fee for attending the initial training at HouseMaster’s corporate office, participating in training webinars, or attending the NIBI Classroom technical training at the NIBI training center in Somerville, New Jersey. However, additional training through NIBI University or NIBI online courses will incur a nominal cost.

• You must arrange for transportation and pay the expenses for meals and lodging for you and any associates who attend the training program. The total cost will depend on how far you must travel and the type of accommodations you choose. This estimate is based on 1 person attending the training program.

3.  Licensing Compliance Costs:  $0 to $15,000

• If your jurisdiction has a home inspector licensing law or other laws or regulations that require additional instruction beyond that provided by the NIBI technical training program (during the Initial Training Program) or supervised inspections or other criteria such as examinations or peer review that require individualized effort in order to comply with the laws or regulations, you may choose to retain HouseMaster, its affiliate, or a third-party supplier for licensing compliance services to assist you in navigating the required criteria, provided HouseMaster, its affiliate, or the supplier has the ability to provide such assistance.

4.  Marketing Materials and Supplies:  $3,000 to $6,000

• You must purchase start-up supplies, which include letterhead, envelopes, business cards, advertising, and promotional materials, including inspection resource guides, postcards, and other standardized forms and documents necessary for the operation of your business, and inspector supplies.

• The cost of the supplies will vary depending on the size of your territory.

6.  Office Equipment, Furniture:  $0 to $2,000

• If you do not already have these items, you must purchase office equipment and furniture necessary to operate your business, which includes desks and chairs, file cabinet, telephone, fax/copy machine, and other office equipment.

7.  Computer System:  $150 to $4,850

• You must purchase a computer system that meets HouseMaster’s requirements. The low estimate assumes that you already have a computer system that meets HouseMaster’s requirements. The high estimate includes the cost of a projector needed for performing presentations in your local market to real estate professional groups.

• HouseMaster will provide new franchisees with 1 initial license of the PC Express Software. If additional licenses are needed or if the franchise is a resale and a license is not included in the transaction, the franchisee will need to purchase initial license(s) from HouseMaster.

8.  Rent:  $0 to $750

• If you do not have office space or do not want to operate the business out of your home, you need suitable office premises for the Franchised Business of approximately 500-700 square feet. You can operate the business out of your home only if zoning regulations permit you to do so.

• Rent varies depending on size of office, condition of office, geographic location, and other factors. The estimate is for the first month’s rent only. Rent after the first month is covered in the Additional Funds estimate.

9.  Prepaid Expenses:  $250 to $750

• This estimate covers expenses such as business license fees, fees for certification, registration or licensing of businesses or individuals conducting building inspections, and prepaid lease and utility deposits. These amounts vary considerably depending on the location of your office.

10.  General Liability Insurance:  $500 to $2,500

• You must purchase the general liability insurance that HouseMaster requires. The estimate is for a 1-year premium. The cost of insurance will vary based on the types and limits of the insurance you purchase, your location, your driving record, and other factors affecting risk exposure.

11.  Errors & Omissions Insurance:  $2,500 to $3,500

• You must purchase errors and omissions insurance, including bodily injury coverage, which meets the minimum specifications as required by HouseMaster.

• Typically you must pay the annual premium in full when the policy period begins. However, if you have the option to finance your insurance premium, you will not pay any money before the start of the policy period.

• This estimate is for a new business. You can expect the cost of errors and omissions insurance to increase as your business volume increases.

12.  Legal Services:  $1,000 to $2,500

• You must consult with your own attorney to incorporate your business and review the advertising and promotional materials, inspection forms, contracts, and other materials you will use with customers to ensure their compliance with all applicable state and local laws and regulations.

13.  Conference Travel Expenses:  $1,000 to $3,000

14.  Vehicle and Vehicle Branding:  $2,700 to $5,800

• You must purchase a vehicle wrap or other branded vehicle signage which displays HouseMaster’s marks from HouseMaster’s approved supplier and have the vehicle used by you or your inspector in operating the business branded according to HouseMaster’s specifications.

• The estimate includes the purchase and installation of a full vehicle wrap which is recommended.

• An estimate has been included for a vehicle for business usage in the event that you do not already own a personal vehicle that you can use for business purposes. Of the estimate included for Vehicle and Vehicle Branding, HouseMaster has included the amount of $1,000 to $1,800 for a down payment and the first 3 months of payments for either leasing a vehicle or for purchasing a vehicle with financing.

• The actual expense may vary depending on factors such as the type of vehicle chosen, whether you purchase or lease, and if purchased, how much is financed. HouseMaster recommends that you do not purchase a vehicle and pay for it in full.

15.  Grand Opening Promotion Expense:  $1,000 to $3,000

• This estimate is for a direct mail, email, and field marketing campaign conducted within the first 3 months of operation.

16.  Additional Funds for 3 Months:  $6,000 to $11,000

• This estimate covers business operating costs, including rent, payroll, call center fees, office management and accounting software, costs associated with meeting licensing requirements, overhead, transportation, advertising, internet access fees, and administrative expenses.

• These figures are estimates and HouseMaster cannot guarantee that you will not have additional expenses in starting your business.

• HouseMaster compiled these estimates based on the actual experience of its franchisees and its general business knowledge.

17.  Total:  $61,100 to $106,150