Considering a HouseMaster Franchise? Don’t Overlook These 27 Important Franchise Fees

Updated March 23, 2021.

If you are considering a HouseMaster franchise, don’t get blindsided by these 27 important franchise fees (from the initial franchise fee, to the royalty fee, to 25 other fees found in Items 5 and 6 of HouseMaster’s 2020 FDD).

1.  Initial Franchise Fee:  $42,500

• The initial franchise fee you must pay to HouseMaster is $42,500 for a Territory made up of contiguous zip codes consisting of up to approximately 75,000 owner-occupied homes.

• The initial franchise fee for any Territory that contains more than 75,000 owner-occupied homes at the time of purchase will be increased by an additional amount of $0.57 per owner-occupied home for every owner-occupied home above 75,000; provided that if you wish to purchase Territory that will have 120,000 or more owner-occupied homes, HouseMaster will require you to purchase the Territory under multiple separate franchise agreements.

• As a member of the International Franchise Association (“IFA”), HouseMaster participates in the IFA’s VetFran Program. If you are a United States or Canadian honorably discharged veteran who meets HouseMaster’s qualifications for purchasing a franchise, you will receive a $6,000 discount.

2.  Deposit for an Option for Additional Territory:  $10,000

• If qualified, you may purchase an option for an additional Territory by paying HouseMaster, at the time you purchase your franchise, a deposit of $10,000 for such additional Territory and executing an Option to Purchase Agreement.

• Under the Option to Purchase Agreement, at any time prior to January 15th of the calendar year immediately following the effective date of your franchise agreement, you may purchase the additional Territory if you are in compliance with your franchise agreement by paying HouseMaster the balance of the initial franchise fee applicable to such Territory.

• The $10,000 deposit will be applied to the purchase price. HouseMaster does not refund your deposit if you decide not to purchase the additional Territory.

3.  License Fee:  7.5% of first $125,000 in Gross Sales per year, 7% on Gross Sales of $125,001-$250,000, 6.5% on Gross Sales of $250,001-$500,000, 6% on Gross Sales of $500,001-$1,000,000, 5.5% on Gross Sales of $1,000,001-$1,500,000, and 5% on Gross Sales over $1,500,000, in each case other than “roll-in” sales. You must pay a minimum monthly License Fee for each Territory.

• Due Date:  10th day of the month for Gross Sales for the previous calendar month.

• HouseMaster requires payment by electronic transfer of funds.

4.  Marketing, Advertising, and Promotions (MAP) Fee:  2.5% of first $125,000 in Gross Sales per year, 2.25% on Gross Sales of $125,001-$250,000, and 2% on Gross Sales over $250,000

• Due Date:  Same as License Fee.

5.  Local Marketing Groups (LMG):  not to exceed 2% of Gross Sales

• Due Date:  Determined by LMG members.

• HouseMaster may designate local advertising markets and advertising cooperatives and/or local marketing groups for such markets (collectively, “LMGs”), and if designated, you must participate in and contribute to the LMG’s advertising and marketing programs in your market.

6.  Technology Fee:  currently $75/month, subject to increase upon 60 days’ notice

• Due Date:  Same as License Fee.

• You must use the technology HouseMaster specifies, which currently includes its intranet, required office management and related software, email security software, review generation software, and a business cellular telephone number assigned to you by HouseMaster (the “Technology Package”).

7.  Proprietary Inspection Report Writing Software License Fee:  if HouseMaster develops proprietary inspection report writing software, it reserves the right to charge you up to $200 per month upon 60 days notice, subject to increase upon 60 days’ notice

• Due Date:  When you are billed.

8.  Key Accounts/Management Fee:  up to 5% of total Gross Sales related to Key Account work

• Due Date:  When you are billed or when the fee is deducted from your payment(s) for work performed or added to the invoice.

• If you participate in HouseMaster’s Key Accounts program, HouseMaster reserves the right to require you to pay a Key Accounts/Management Fee to it or its designee.

9.  Annual Convention (“Reunion”) Fee:  currently, $1,000 or less per registrant

• Due Date:  When you are billed, which may be via automatic bank draft, or within 30 days after Reunion via automatic bank draft.

• HouseMaster charges you a per-person registration fee to attend the Reunion. The registration fee for one attendant to your first Reunion is included in the initial franchise fee.

• You must attend the Reunion each year. HouseMaster will charge you this fee regardless of whether you actually attend.

10.  Transfer Fee:  the greater of (i) $7,500 or (ii) 5% of the sales price

• Due Date:  Before transfer.

• You must pay HouseMaster this fee on the total gross sales price of the Business, including all assets of the Business, when you sell your Business, but HouseMaster may discount or waive the transfer fee if the transfer is to a legal entity you control or to a member of your immediate family.

11.  Late Fees:  $10 per day

• Due Date:  On demand.

• Applies to overdue fees from the due date until all sums are paid.

12.  Dishonored Check of ACH Draft:  $25

• Due Date:  On demand.

• You must pay HouseMaster for each check returned or ACH draft refused by your financial institution for insufficient funds in your account.

13.  Interest:  12% on unpaid balances

• Due Date:  On demand.

• Payable on all overdue amounts.

• The twelve percent (12%) charge is calculated as a per annum rate but may be collected on demand, including weekly or monthly, through automatic bank draft.

14.  Internet Training Fee (NIBI Distance Learning Program):  currently $0, but HouseMaster reserves the right to charge up to $50 per module (approximately 11 modules for initial training), or up to $500 for all modules

• Due Date:  Upon registration for this optional program.

• Currently, NIBI Distance Learning modules are available at no cost to HouseMaster franchisees. However, HouseMaster reserves the right to implement these fees for this NIBI online training.

15.  NIBI Technical Training Materials Fee:  the cost of training materials, up to $350, plus shipping for each additional trainee

• Due Date:  Before training.

• Payable if you want to purchase a set of training materials when you send more than one person to NIBI Technical Training.

16.  CommercialPro Training:  up to $750 per attendee

• Due Date:  When you are billed; before training.

• HouseMaster may offer CommercialPro training from time to time and you will have the option to participate, and HouseMaster reserves the right to charge a fee for such training.

• In addition to this fee, you will be responsible for all expenses incurred to attend the training, including transportation, accommodations, meals, entertainment, and salary/wages.

17.  Additional Training Fees:  the then-current fee, currently up to $500 per trainee per day

• Due Date:  When you are billed.

• If you request any other training in addition to the Initial Training Program or the CommercialPro Training, HouseMaster may charge you a training fee, plus you must pay your costs and expenses in connection with such training.

18.  Insurance Fine:  the greater of $5,000 or the cost of extended reported period insurance, plus HouseMaster’s expenses

• Due Date:  Upon demand.

• Payable if you fail to purchase the required extended reported period insurance within 30 days of expiration or termination of the franchise agreement.

19.  Reimbursement for Insurance:  cost of insurance, plus HouseMaster’s expenses

• Due Date:  When billed.

• Payable only if HouseMaster pays your premium when you fail to do so.

20.  Audit:  cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees

• Due Date:  When you are billed.

• Payable only if HouseMaster finds an understatement of Gross Sales of 3% or more or if you fail to provide requested information within 30 days of HouseMaster’s request.

21.  Renewal Fee:  $5,000

• Due Date:  On renewal.

22.  Amendment Fee:  $250

• Due Date:  When you are billed.

• You must pay HouseMaster a processing fee for modifications to your franchise agreement that are made at your request. When you request an amendment to your franchise agreement or related agreements. HouseMaster may require that you sign a general release releasing it from all claims you may have except claims which, under state law, may not be released.

23.  Unapproved Suppliers:  HouseMaster’s actual out-of-pocket costs of inspection or testing

• Due Date:  On demand.

24.  Indemnification and Attorneys’ Fees and Costs:  varies according to loss

• Due Date:  On demand.

• If HouseMaster must engage an attorney to enforce its rights under the franchise agreement and it prevails, or if it is sued because of something you do or fail to do, you must indemnify HouseMaster and/or reimburse it for all costs, including reasonable attorneys’ fees (which may include outside counsel fees and in-house legal costs charged at rates comparable to outside attorneys), interest, court costs, and expenses expended or incurred in enforcing its rights.

25.  Tax Reimbursement:  varies according to tax

• Due Date:  When you are billed.

• You must pay HouseMaster or to taxing authorities (as applicable) an amount equal to any sales tax, use tax, gross receipts tax, documentary stamp tax, or similar tax (other than income tax), fees, or charges imposed on HouseMaster due to any required payments you make to it. You must pay HouseMaster such additional amounts as necessary so that it receives all payments from you in full as if no such tax applied.

26.  Customer Refund:  inspection fee paid by customer

• Due Date:  Upon demand.

• Payable if you do not resolve a customer service complaint, the customer contacts HouseMaster and HouseMaster determines a request for refund of inspection fee is reasonable, and HouseMaster pays a refund to the customer to resolve the complaint.

27.  Cross Territory Fine:  up to $5,000 per occurrence, plus 50% of revenue generated from such infringing activity

• Due Date:  Upon demand.

• Payable if you conduct an inspection in an Excluded Territory or if you engage in prohibited marketing activities. Fine is in addition to HouseMaster’s right to terminate for breach.