Considering a Pillar to Post Home Inspectors Franchise? Don’t Overlook These 16 Important Franchise Fees

If you are considering a Pillar to Post franchise, don’t get blindsided by these 16 important franchise fees (from the initial franchise fee, to the royalty fee, to 14 other fees).

1.  Initial Franchise Fee:  $35,900 to $45,900 for Tier 1 exclusive territory; $29,900 for Tier 2 exclusive territory; $19,900 for Tier 3 exclusive territory

• You must pay Pillar to Post the initial franchise fee when the Franchise Agreement is signed.

• The amount of the initial franchise fee for an individual franchise in a Tier 1 exclusive territory is between $35,900 and $45,900. The amount of the initial franchise fee for an individual franchise in a Tier 2 exclusive territory is $29,900. The amount of the initial franchise fee for an individual franchise in a Tier 3 exclusive territory is $19,900.

• Exclusive Territories are classified as Tier 1, Tier 2, or Tier 3 based on a combination of demographic factors that include housing units, housing re-sale activity, real estate offices, and population.

• The initial franchise fee is not refundable in whole or in part.

• Included in the initial franchise fee is the cost of initial training, 1 inspection tablet computer, access to certain Pillar To Post proprietary manuals and computer software, and the registration fee for attendance at Pillar to Post’s annual convention during your first year. Hotel accommodations, meals, and instruction materials provided at the initial training are also included.

2.  Royalty:  7% of Gross Revenues; minimum monthly payment of $280 per month

• Due Date:  Monthly Royalty Fee payments due on the 10th day of the next month for the previous month’s revenues.

• Gross Revenues include all revenue from the franchised business, excluding sales or use tax.

3.  Brand:  up to 4% of Gross Revenues; minimum monthly payment of $160 per month and minimum yearly payment of up to 4% of minimum Gross Revenues required by Franchise Agreement

• Due Date:  Same as Royalty Fee.

• The Brand Fee is currently 4% of Gross Revenues.

4.  IT Fee:  the current IT Fee is $3 for every home inspection performed

• Due Date:  IT Fee payments due on the 10th day of the next month for home inspections performed in the previous month.

• Pillar to Post may increase the IT Fee upon 90 days’ notice to you in the event the costs owed to third parties incurred by Pillar to Post in connection with providing such software are increased or when Pillar to Post determines that maintenance, repair, or upgrade is required. In no event will the IT fee be adjusted more than one time in any calendar year.

5.  Inspection Numbers and Binders:  the current cost of each Inspection Number and Binder is $25

• Due Date:  Purchased as needed, typically 20 at a time. Invoiced as purchased.

• Inspection numbers are purchased from and assigned by Pillar to Post.

• The cost of the inspection number includes the presentation binder that will be delivered through the designated supplier. You will be required to pay shipping and handling to the designated supplier to receive the binders.

• Pillar to Post may increase the cost of each inspection number and binder upon 90 days’ notice to you in the event the costs incurred by Pillar to Post are increased.

6.  EZ Book Connections:  the current user fee for EZBook Connections is $35 per inspection booked

• Due Date:  The user fee for EZBook Connections is due on the 10th day of the next month for services provided in the previous month.

• EZBook Connections provides telephone answering and inspection booking services.

• Pillar to Post may change or increase the user fee for these services upon 90 days’ notice to you in the event the costs incurred by Pillar to Post are increased.

7.  Brand Conference:  the registration fee for Brand Conference is typically between $650 and $850. The registration fee for the 2019 Brand Conference was $850.

• Due Date:  The registration fee for Brand Conference is determined each January for the Brand Conference scheduled the following January. The registration fee is paid in 12 monthly installments from January through December each year.

• You are required to attend Pillar to Post’s Brand Conference, which is held annually at a location Pillar to Post chooses. The amount of the registration fee is set annually based on costs and location.

• The registration fee for your attendance at Brand Conference during your first year is included in the initial franchise fee.

8.  Transfer:  $4,000

• Due Date:  Due prior to consummation of transfer.

• Payable when franchise is transferred.

9.  Renewal:  $2,500

• Due Date:  Due 1 year to 6 months prior to renewal.

• You are required to pay an administrative fee upon renewal after the first 5-year term and each 5-year term thereafter.

10.  Audit:  cost of audit, plus underpayment, plus interest of 18% on underpayment

• Due Date:  Due 30 days after billing.

• Cost of audit payable only if audit shows underpayment of at least 2% of Gross Revenues for any month.

11.  Transfer to Entity Wholly Owned by Franchisee:  $1,000

• Due Date:  Due prior to consummation of transfer.

• Payable upon execution of transfer documents unless assignment occurs within 6 months of execution of the Franchise Agreement.

12.  Miscellaneous Software:  $250 to $850

• Due Date:  Licensing costs due as needed for Microsoft Office, antivirus software, other software licenses, and any maintenance, repairs, or upgrades that are required.

13.  Lab and Added Service Fees:  varies

• Due Date:  Due upon receipt of added services from approved suppliers.

• Fees are paid directly to approved supplier for any added services included with home inspection services provided.

14.  Interest on Late Payments:  18% per annum calculated daily, or maximum rate permitted by law

• Due Date:  Due immediately.

• This interest rate applies to any money you owe Pillar to Post after the due date.

15.  Attorneys’ Fees and Other Costs:  will vary under circumstances

• Due Date:  Due as incurred.

• Payable if you fail to comply with the Franchise Agreement or if Pillar to Post is joined in a lawsuit based on your operation of the franchise.

16.  Indemnification:  will vary under circumstances

• Due Date:  Due as incurred.

• You must reimburse Pillar to Post for its losses and expenses as a result of third-party claims arising from your failures or breaches under the Franchise Agreement, your operation of the franchise, and any other unauthorized acts.