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 2021 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 2021 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 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD
- Section V – Presentation and analysis of Mosquito Joe’s financial performance representations, based on Item 19 of the company’s 2021 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 345 franchised and 2 affiliate-owned Mosquito Joe businesses whose outlets opened on or after 2013 and remained open on December 31, 2020, by years of operation
- average gross sales for each calendar quarter of 2019 and each calendar quarter of 2020 (each such calendar quarter, the “Reporting Period”) for all franchised businesses that were open and operating during the entire applicable Reporting Period
Section I – Background Information
13 Things You Need to Know About the Mosquito Joe Franchise
Honors Top Franchise Performers During Neighborly’s First-Ever Virtual Reunion
1. At the end of October 2020, Mosquito Joe announced its franchise network’s top performers of 2019 during Neighborly United, which was held earlier that month as the organization’s first-ever virtual reunion. Lou Schager, president of Mosquito Joe, said, “Neighborly’s annual reunion may have looked a bit different this year, but the pride we all have to be a part of the world’s largest family of home service brands shone as bright as ever. Despite the challenges 2020 presented to our Mosquito Joe network, our franchise owners have risen to the occasion to help make this a year of success and growth for our united team. While we may not have been able to celebrate these outstanding individuals in person, it was an honor to shine a spotlight on the Mosquito Joe owners who represented the very best of what our franchise network had to offer this year.”
2. Top award winners included:
- Franchisee of the Year: Dennis and Melissa Stein, owners of Mosquito Joe of South Shore, Long Island. This award is the highest honor that can be bestowed upon a franchise owner, presented by Mosquito Joe to the owner who has consistently grown through proper training and management of their organization with a consistently high level of sales through quality, professional service.
- Five Star Award: Brad and Stephanie Simon, owners of Mosquito Joe of Arkansas. This award is presented to the owner(s) with the most five-star reviews online.
- Most Improved NPS Score: Sloan Black, owner of Mosquito Joe of Southeast Charlotte. This award is presented to the owner(s) with the most improved Net Promoter Score (NPS) score.
3. In addition to celebrating the noteworthy success of these franchise owners, Mosquito Joe also had much to celebrate in terms of development and growth as it headed into the final quarter of 2020. By the end of September 2020, the brand had awarded more than 24 new franchise agreements just since January 2020, all amidst an ongoing pandemic.
KKR to Acquire Parent Company Neighborly
4. In early July 2021, KKR, a leading global investment firm, announced that it had agreed to acquire Neighborly, the world’s largest provider and franchisor of home service brands, from Harvest Partners. Financial details of the transaction were not disclosed.
5. Founded in 1981, Neighborly is a leading home services platform that connects more than 10 million residential and commercial customers with a community of professional services focused on repairing, maintaining, and enhancing consumers’ homes and properties. Through a portfolio of 28 brands, the company offers a wide array of services including plumbing, pest control, restoration, electrical, cleaning, HVAC, home inspection, and many more.
6. As one of the largest franchisors of “do-it-for-me” professional services, Neighborly has built a network of more than 4,800 franchises both in the U.S. and internationally. Over the past decade, the company has quickly grown its platform through the organic growth of its existing service brands and strategic acquisitions of complementary franchise service brands.
7. Mike Bidwell, president and CEO of Neighborly, said, “Today’s milestone is a strong validation of our business-building strategy and differentiated ability to deliver essential home services. We are excited to embark on our next chapter of growth with KKR’s support and global expertise and look forward to continuing to be a partner of choice for both customers and franchise owners in the years to come.”
8. Felix Gernburd, managing director at KKR, said, “In a large and highly fragmented industry, Neighborly stands out for its differentiated strategy of bringing together adjacent services under a diversified and tech-enabled platform, and – most importantly – for its unrivaled dedication to customer service. We are thrilled to be investing in the Neighborly team as they continue to execute on their mission: enriching people’s lives by delivering amazing experiences.”
9. Nicholas Romano, partner at Harvest Partners, said, “We are pleased to have worked with Mike and his team to continue building the premier residential service provider providing services that consumers need to repair, maintain and enhance their homes. Thoughtful investments in technology and human capital have resulted in a platform positioned for accelerated growth in the coming years.”
10. Harvest’s Neighborly investment team is led by Steve Eisenstein, Nicholas Romano, and David Schwartz. KKR is making the investment in Neighborly from its North American private equity fund. Harris Williams is acting as financial advisor to Neighborly, with White & Case acting as a legal advisor on the transaction. The transaction is expected to close in Q3 2021, subject to regulatory approvals and other customary closing conditions.
11. Mosquito Joe was founded in 2009 by Thomas Minton, Michael Burnette, John Mason, and Clay Winn in Norfolk, Virginia. The group of friends each had trouble getting rid of the mosquitoes in their backyards and they were unable to find a service that could get rid of all the mosquitoes safely. After some research and development, Minton, Burnette, Mason, and Winn came up with an effective and safe mosquito eliminating spray and began offering their services to others in the Norfolk area.
12. After a few years of success, the team established Buzz Franchise Brands in 2012 to operate Mosquito Joe. In 2015, Mosquito Joe started franchising and the brand quickly grew to 100 locations. Although Mosquito Joe was the top brand for Buzz Franchise Brands, the company was sold to the Dwyer Group (now Neighborly) in 2018. Today, Mosquito Joe has locations across the United States.
Entrepreneur’s Franchise 500
13. Mosquito Joe ranked No. 108 on Entrepreneur’s 2021 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 2021 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 2021 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 232
- Outlets at the End of the Year: 286
- Net Change: +54
- Outlets at the Start of the Year: 286
- Outlets at the End of the Year: 319
- Net Change: +33
- Outlets at the Start of the Year: 319
- Outlets at the End of the Year: 345
- Net Change: +26
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 4
- Net Change: 0
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 3
- Net Change: -1
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 2
- Net Change: -1
Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis
Part 1 – 2020 Reporting Period Data
- As of December 31, 2020, there were 155 franchisees operating 345 franchised Businesses in the United States and 2 corporate-owned Businesses in the United States.
- Part 1 of this Item 19 includes data from 345 franchised Businesses, which were all in operation and reporting sales as of December 31, 2020. Part 1 of this Item 19 excludes data from 2 corporate-owned Businesses.
- Ten franchised Businesses closed during the 2020 fiscal year, and so they did not report data to Mosquito Joe for the entire 12-month period in 2020 (the “2020 Reporting Period”) and therefore their data is also excluded from this Part 1 of Item 19. Of the 10 franchised Businesses that closed during the fiscal year 2020, two franchised Businesses closed after being open for less than 12 months.
A. Key Customer Sales Metrics of Franchised Businesses
- What percent of the previous year’s customers do your franchised Businesses retain each year?