Detailed Estimates of Handyman Connection Franchise Costs Based on Item 7 (Estimated Initial Investment) of Handyman Connection’s 2020 Franchise Disclosure Document
1. Initial Franchise Fee: $60,000
- The Initial Franchise Fee is $60,000 for a Territory. The Initial Franchise Fee is deemed fully earned and non-refundable upon receipt.
- Any additional Territories purchased after signing the Franchise Agreement must be purchased at the then-current Initial Franchise Fee and through additional Franchise Agreements.
2. Travel and Living Expenses While Training: $2,325 to $4,100
- This estimate is for lodging, meals, hotel, and airfare for one person only. Transportation costs and airfare will vary depending on which state you will be traveling from.
3. Real Estate (Leased): $1,600 to $4,800
- When possible, the franchisor recommends leasing rather than purchasing a space.
- The maximum recommended size is 500 square feet. The cost per square foot will vary by market, and if the lease includes other services such as cleaning, utilities, etc.
- The amount stated in Item 7 represents an estimate of rent expenses for the first month’s rent, and a security deposit equal to one month’s rent.
- You may not operate out of your home.
4. Office Equipment: $1,700 to $6,800
- This estimate covers the cost of acquiring and installing a telephone system, conference tables and chairs, work stations, filing cabinets, a copier, and other miscellaneous office items and suppliers.
- Phone equipment must be purchased from the franchisor’s required supplier.
5. Lease and Utility Deposits: $650 to $1,500
- Depending upon lease provisions and local regulations and requirements, deposits for leases and utilities vary. Lease deposits are normally a factor of annual or monthly rent.
6. Insurance: $1,940 to $6,250
- The range of insurance costs listed in Item 7 assume that all insurance costs are paid pro-rata on a monthly basis, except for the Employee Dishonesty Bond which usually is paid up front.
- If you choose an insurance company that requires a higher upfront fee and does not allow you to pay a pro-rata share of an annualized amount, your pre-opening expenses may be higher than the estimated range.
7. Licenses and Permits: $215 to $6,500
- Licensing laws and permit requirements, including fees, may vary from state to state and city to city, depending on state and local laws. You must comply with these laws.
8. Grand Opening Marketing, Advertising, and Promotion: $18,580 to $32,630
- The Grand Opening Marketing, Advertising, and Promotion costs include items such as the purchase of one vehicle wrap, the estimated initial investment for creating an online local presence, pay-per-click advertising, Search Engine Optimization (SEO), signs, mailings, business cards, vehicle magnets, etc. to help launch your initial marketing.
- The costs associated with the call center will vary depending on which options the franchisee selects, and both the high- and low-end costs are included in the range estimated here.
- There are currently 6 Tiers that a franchisee can choose from with respect to the call center. Each Tier contains different features and different packages of call minutes.
- In 2019, no new franchisee chose a Tier higher than Tier 2 (currently billed at $1,625 per month). Typically, new franchisees select Tier 1 when they launch their business (currently billed at $975 per month for up to 1,300 minutes). The low-end estimate in this chart includes the cost of the Tier 1 package, and the high-end estimate includes the cost of the Tier 2 package.
- It is possible, though not recommended, for a new franchisee to choose a higher Tier level, which could cost up to approximately $5,417 a month.
9. Computer Hardware and Software: $2,175 to $9,775
10. Proprietary Software License: $5,000
- This amount is an estimate of the cost for the hardware and auxiliary software that includes monthly software support and maintenance fees (after opening of the business).
- This estimate does not include the initial $5,000 proprietary software fee or the ongoing Technology Fee of 1% of Gross Sales, but does include the projection of between 1-3 monthly licensed users, which are charged at $125 per licensed user per month.
- The Technology Fee is used in part to support the mobile platform which the franchisor expects all of the franchisees to learn and utilize. The mobile platform requires some level of access for users, including the franchisee, CSRs, service advisors, and craftsmen.
11. Additional Funds – Working Capital (estimated for 3 months): $5,505 to $15,540
- Additional Funds is an estimate of certain funds needed to cover your business (not personal) expenses during the first three months of operation of the Franchised Business. You will need capital to support ongoing costs of your business, such as payroll, utilities, taxes, loan payments, and other expenses, to the extent that revenues do not cover business costs.
- New businesses (franchised or not) often have larger expenses than revenues. You may need additional funds during the first three months of initial operation or afterwards.
- In addition, the estimates presented relate only to costs associated with the Franchised Business, reflect minimal employee wages, and do not cover any personal “living” expenses, unrelated business or other expenses you may have such as royalty payments, Brand Development Fund Contributions, Technology Fee payments, debt service on any loans, state sales and/or use taxes on goods and services, and a variety of other amounts not described above.
12. Total: $99,690 to $152,895
- All of the figures are estimates of certain initial startup expenses. The chart is not all inclusive and the franchisor cannot guarantee you will not have additional expenses in starting your Handyman Connection business.
- The factors, basis, and experience that the franchisor considered in formulating its estimates for your initial start-up are based on over 20 years of experience in franchising and the assistance given to franchisees in establishing and operating their Handyman Connection franchises.