FDD Talk 2020: Mosquito Joe 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 Mosquito Joe franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Mosquito Joe franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Mosquito Joe franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Mosquito Joe outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Mosquito Joe’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• percentage of previous year’s customers that franchised Mosquito Joe businesses retain each year

• percentage of customers of franchised Mosquito Joe businesses that are recurring customers

• average, median, high, and low gross sales per treatment that franchised Mosquito Joe businesses generate

• average gross sales and number of customers for the 319 franchised and 2 affiliate-owned Mosquito Joe businesses whose outlets opened on or after 2013 and remained open on December 31, 2019, by years of operation

Section I – Background Information

21 Things You Need to Know About the Mosquito Joe Franchise

Announces Elite Partnership with Pesticide Environmental Stewardship Program

1.  In mid-July 2019, Mosquito Joe announced that it was now a member of the U.S. Environmental Protection Agency’s Pesticide Environmental Stewardship Program (PESP). This elite partnership offers Mosquito Joe the opportunity to further demonstrate its deeply held commitment to responsible product application and environmental stewardship while leading the industry in pest management solutions that are effective for all.

2.  Established in 1994 by the Office of Pesticide Programs’ Environmental Stewardship Branch, the PESP is the only federal stewardship organization that engages commercial, private, and public users of pesticides in a program that encourages members to reduce risk, seek alternative methods of treatment, and explore new approaches to pest management challenges.

3.  The PESP advocates for Integrated Pest Management which takes a comprehensive approach to the pest lifecycle and their interactions with the environment, placing importance on minimizing the hazard to people and property.

4.  Mosquito Joe’s partnership with the program was spearheaded by David Price, a certified urban entomologist and the company’s technical manager. In the succeeding months, Price developed and disseminated a series of educational resources regarding specific guidelines, procedures, and metrics that align with Mosquito Joe’s commitment with the PESP.

5.  Prior to joining Mosquito Joe in March 2019, Price had previously initiated a program partnership, developed a strategic plan, and managed implementation for another pest control company.

6.  According to Price, “I am excited for this significant milestone for Mosquito Joe. Our partnership with the PESP demonstrates our commitment to reducing pest management risk and creating sustainable pest management practices that combat common challenges found in the field. This is a great opportunity to demonstrate why we are at the top of our industry and to show our customers that we remain dedicated to not only ridding their yards of mosquitoes, ticks and fleas, but by doing so in the most responsible way possible.”

7.  Mosquito Joe, an expert in outdoor pest control, is now among the few pest control companies affiliated with the PESP. With this partnership, Mosquito Joe aims to reduce the risk from pesticides in areas in which people live, work, and play while educating the public on the importance and impact of integrated pest management.

8.  Establishing the partnership is a strategic step in the ongoing development of an actionable plan and evaluation of measurable goals. Through this program, Mosquito Joe will contribute to lowering risk and advancing an environmentally sustainable approach to pest control.

Launches Eighth Annual Beat the Bloodsuckers Campaign in Honor of Mosquito Control Awareness Week

9.  In late June 2020, Mosquito Joe launched its annual philanthropic campaign. The eighth annual Beat the Bloodsuckers campaign took place June 21-27, 2020, in honor of the American Mosquito Control Association’s Mosquito Control Awareness Week.

10.  Participating Mosquito Joe locations gave back to their communities in one of two ways:

• Franchise owners who chose to work with Nothing But Nets donated $10 for every new customer serviced during Mosquito Control Awareness Week. This donation sends two life-saving mosquito nets to those who live at risk of contracting malaria in areas such as sub-Saharan Africa, Latin America, and the Caribbean.

• Franchise owners who chose to work with the American Red Cross or a local blood bank donated 10 percent of new customer sales during Mosquito Control Awareness Week to the respective organization.

11.  Since 2013, Mosquito Joe franchise owners have collectively donated more than $200,000 in charitable giving through the Beat the Bloodsuckers campaign. Over the four years of Mosquito Joe’s partnership with Nothing But Nets, the generosity of the Mosquito Joe community has raised more than $105,000 and provided over 29,400 insecticide-treated mosquito nets to families in need.

12.  Lou Schager, president of Mosquito Joe, said, “Every year our franchise owners look forward to Mosquito Control Awareness Week to rally together to raise awareness and funds that benefit our domestic and global communities. With families spending time in their homes now more than ever, we are passionate about making sure each home’s outdoor space is itch-free and fun for everyone. Through Mosquito Control Awareness Week, we are able to educate our customers on the real dangers of mosquitoes and how they can protect themselves and their families.”

Named a 2020 Top Low-Cost Franchise by Franchise Business Review

13.  In mid-April 2020, Mosquito Joe was identified by independent franchise market research firm Franchise Business Review as being one of only 100 franchises to qualify for its 2020 Top Low-Cost Franchises list. Brands on the list had to have high franchisee satisfaction and an investment of under $100,000 at the time their franchisees participated in Franchise Business Review’s survey.

14.  More than 9,000 franchisees representing over 153 low-cost brands participated in Franchise Business Review’s franchisee satisfaction survey between July 2018 and February 2020.

15.  Mosquito Joe franchisees were surveyed on 33 benchmark questions about their experience and satisfaction regarding critical areas of their franchise systems, including training and support, operations, franchisor/franchisee relations, and financial opportunity.

16.  Franchise Business Review provides the only rankings of franchises based solely on actual franchisee satisfaction and performance. Franchise Business Review publishes its rankings of top franchises in its annual Guide to Today’s Top Franchises, as well as in quarterly reports throughout the year that rank the top franchises in specific sectors.

17.  Eric Stites, CEO of Franchise Business Review, said, “Many people never consider buying a franchise because they think they can’t afford it. But what they don’t know is that there are a number of very solid business opportunities out there that can provide the satisfaction and perks of business ownership but don’t require a huge financial investment. The low-cost franchises that made this year’s list are excellent options for those who are looking to make the leap to business ownership.”

Company History

18.  Mosquito Joe was founded in 2009 by Thomas Minton, Michael Burnette, John Mason, and Clay Winn in Norfolk, Virginia. After they each had trouble eliminating the mosquitoes in their own backyards, the business partners and friends realized that there was a need for local mosquito control services that were safe and effective. Minton, Burnette, Mason, and Winn came up with an effective mosquito eliminating spray and began offering their services to others in the Norfolk area.

19.  As demand for Mosquito Joe’s services grew, the founders established a franchising company, Buzz Franchise Brands, in 2012. A year later, Mosquito Joe started franchising and by 2015, Mosquito Joe had grown to 100 locations. Although Mosquito Joe was the lead brand for Buzz Franchise Brands, Mosquito Joe was acquired by the Dwyer Group (now Neighborly) in 2018.

20.  At the time of the acquisition, Mosquito Joe had over 288 locations across 34 states and the District of Columbia. Under Neighborly, Mosquito Joe plans to expand even further.

Entrepreneur’s Franchise 500

21.  Mosquito Joe ranked No. 218 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Mosquito Joe franchise costs, based on Item 7 of the company’s 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Mosquito Joe’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  169
• Outlets at the End of the Year:  232
• Net Change:  +63

2018

• Outlets at the Start of the Year:  232
• Outlets at the End of the Year:  286
• Net Change:  +54

2019

• Outlets at the Start of the Year:  286
• Outlets at the End of the Year:  319
• Net Change:  +33

Company-Owned

2017

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  4
• Net Change:  +2

2018

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  4
• Net Change:  0

2019

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  3
• Net Change:  -1

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

Part 1 – 2019 Reporting Period Data

• As of December 31, 2019, Mosquito Joe had 142 franchisees operating 319 franchised Businesses in the United States and 3 corporate-owned Businesses in the United States.

• Part 1 of this Item 19 includes data from 319 franchised Businesses, which were all in operation and reporting sales as of December 31, 2019. Part 1 of this Item 19 excludes data from 3 corporate-owned Businesses.

• Six franchised Businesses closed during the 2019 fiscal year, and so they did not report data to Mosquito Joe for the entire 12-month period in 2019 (the “2019 Reporting Period”) and therefore their data is also excluded from this Part 1 of Item 19. Of the 6 franchised Businesses that closed during the fiscal year 2019, one franchised Business closed after being open for less than 12 months.

A. Key Customer Sales Metrics of Franchised Businesses

Customer Retention

• What percent of the previous year’s customers do your franchised Businesses retain each year?