Considering an Ace Handyman Services Franchise? Don’t Overlook These 16 Important Franchise Fees

If you are considering an Ace Handyman Services franchise, don’t get blindsided by these 16 important franchise fees (from the initial franchise fee, to the royalty fee, to 14 other fees found in Items 5 and 6 of Ace Handyman Services’ 2020 FDD).

1.  Initial Franchise Fee:  $20,000

• The Initial Franchise Fee for a single Ace Handyman Services Business franchise is $20,000.

• Ace Handyman Services is a member of the International Franchise Association’s VetFran initiative. If you have served as a veteran of any branch of the United States Armed Forces, you may receive a discount of $2,500 off of the Initial Franchise Fee for the first Franchise Agreement you sign.

• For the first Franchise Agreement you sign to acquire your first Ace Handyman Services Business franchise, if you do not generate at least $200,000 in Gross Revenues (as defined in the Franchise Agreement) through your business during the first 12 months following the date you commence operations (the “Performance Evaluation Period”), you will be eligible to receive a refund credit in the amount of 50 percent of the Initial Franchise Fee for a single franchise (the “Performance Refund”).

• To receive the Performance Refund, you must have maintained full compliance with the Franchise Agreement and Ace Handyman Services’ standards and specifications with no material defaults for the entire term of your Franchise Agreement through such time as the Performance Refund is granted.

• The Performance Refund, if granted, is given to you in the form of a credit against your future Royalty Fees beginning 90 days after the end of the Performance Evaluation Period. This Performance Refund is only available for your first Franchise Agreement you sign, and is not available if you or any party affiliated with you has previously acquired an Ace Handyman Services Business franchise.

2.  Territory Fee:  $35,000, plus $0.50 for each additional household over 80,000

• In addition to the Initial Franchise Fee, you also pay Ace Handyman Services a Territory Fee based on the size of the Territory you acquire. The minimum Territory Fee for a single Ace Handyman Services Business franchise is $35,000 for a Territory of between 60,000 and 80,000 households.

• If your actual Territory size exceeds 80,000 households, the Territory Fee is increased $0.50 for each additional household located in the Territory.

• Unless you and Ace Handyman Services agree otherwise based on demographic considerations, the maximum size of a Territory is 105,000 households. If you want to acquire a larger area, you must acquire another franchise and pay Ace Handyman Services the Territory Fee for each 80,000 households or portion thereof that you acquire.

• All Territories include the businesses in the Territory.

• If you desire to acquire multiple Territories at the same time, Ace Handyman Services will waive the Initial Franchise Fee for your second and subsequent Territories. The waiver of the Initial Franchise Fee only applies to acquiring multiple Territories at the same time.

• If you acquire multiple Territories, you will sign a separate Franchise Agreement for each Territory you acquire.

• The amount of the Initial Franchise Fee and Territory Fee payable by you are due in full upon the signing of the Franchise Agreement.

3.  Royalty Fee:  6% of your actual Gross Revenues of the previous reporting period, subject to annual reconciliation based on your Minimum Annual Gross Revenues requirements

• Due Date:  Payable twice a month within 5 days of the close of each reporting period.

• You must meet certain Minimum Annual Gross Revenues obligations.

4.  Minimum Individual Marketing Expenditure:  $30,000 in your first year of operations, $40,000 in your second year of operations, and $50,000 for each subsequent year

• Due Date:  As incurred.

• You must spend a minimum amount for local marketing on an annual basis.

5.  National Brand Fee:  2% of your actual Gross Revenues, subject to annual reconciliation based on your Minimum Annual Gross Revenues requirements

• Due Date:  Payable twice a month within 5 days of the close of each reporting period.

• You must meet certain Minimum Annual Gross Revenues obligations.

6.  Software and Internet Fees:  currently $499 per month, but may be changed by Ace Handyman Services upon 30 days’ notice

• Due Date:  Payable on the 1st of each month for that month, beginning in the first full calendar month after you commence operations.

• For use of Ace Handyman Services’ scheduling software, e-mail, location website, website, online marketing services, for Ace Handyman Services’ expenses associated with maintenance of its e-mail and Intranet sites, and for the website development, search engine optimization, and related online marketing services provided by Ace Handyman Services’ designated supplier.

7.  Meeting and Convention Fees:  if you do not attend: $1,500 per meeting; if you attend but do not stay at the designated hotel or do not stay for the entire meeting or convention: $750 per meeting

• Due Date:  As incurred.

8.  Transfer Fee:  generally, $10,000. There is no Transfer Fee for a transfer to a business entity wholly-owned by franchisee, and the Transfer Fee is reduced to $3,500 for transfers to an existing franchisee of Ace Handyman Services or to a family member.

• Due Date:  Before acceptance of transfer.

• Payable before you transfer your franchise.

• You will also be required to pay additional fees to outside franchise brokers or to Ace Handyman Services if it, or its resources, finds the buyer for you.

9.  Audit Fee:  cost of audit

• Due Date:  Upon completion of audit and determination of amounts due.

• You also pay the cost of the audit if audit shows an understatement of at least 2% of Gross Revenues during the audit period.

• Any amounts unpaid, unreported, or underreported must be paid in full, with a late fee of 18% interest per annum.

10.  Returned Electronic Funds Transfer Fee:  $100

• Due Date:  Upon notice.

• This fee is imposed when an Electronic Funds Transfer transaction is not honored, in addition to any late fees and interest that may apply.

11.  Successor Franchise Fee:  $5,500

• Due Date:  Upon execution of successor Franchise Agreement.

• If you are in good standing, you may acquire a successor franchise after your initial term.

12.  Supplier Approval:  currently none. However, Ace Handyman Services reserves the right to charge a fee in the future.

• Due Date:  As incurred.

• If Ace Handyman Services requires you to obtain goods, services, or any other materials from only approved suppliers, and you request approval of a new supplier, Ace Handyman Services may charge this fee. This only applies for those items for which Ace Handyman Services has previously designated an approved supplier.

13.  Additional Training:  Ace Handyman Services’ then-current rate. The rate as of the date of the current Disclosure Document is $55 per hour per person plus out-of-pocket expenses.

• Due Date:  Payable within 30 days of date of invoice.

• Ace Handyman Services provides opening training for free.

14.  Interest and Late Fees on Late Payments and/or Reports:  not to exceed 18% per annum on all amounts owed. Also, $75 per occurrence per late report or fee.

• Due Date:  Due upon payment of late fee or submittal of late report.

• No amounts charged will exceed any legal limits or restrictions.

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

• Due Date:  As incurred.

• May be payable if you do not prevail in an action based on the Franchise Agreement.

16.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You will have to reimburse Ace Handyman Services if it is held liable for claims arising from your Ace Handyman Services Business.