Detailed Information on Servpro’s Initial Franchise Fee, Royalty Fee + 40 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Franchise License Fee:  $70,000

2.  Equipment and Products Package:  $78,500

• The Standard Purchase Price is $148,500. It includes an initial franchise license fee of $70,000 and a standard Equipment and Products Package costing $78,500.

• The minimum initial franchise license fee is $70,000. The minimum population in a non-exclusive territory is generally 50,000, and the maximum population is generally 80,000. A larger population may be allowed under certain exceptional circumstances, such as densely-populated urban areas or if a significant portion of the prospective territory is impoverished.

• You may purchase additional territory, if available and approved by Servpro, at a price of $778 per 1,000 population.

• Servpro gives you a 2.5% discount ($3,712.50) on the Standard Purchase Price if you pay Servpro in cash when you sign the Franchise License Agreement or if your promissory note is paid in full within 90 days (the cash discount of $3,712.50 will be subtracted from the balance of the note).

• You must pay Servpro the initial franchise license fee and purchase from Servpro’s affiliate an Equipment and Products Package when you sign the Franchise License Agreement.

• The cost of your initial training, excluding QuickBooks, Xactimate, lead paint, subrogation, and Applied Structural Drying (“ASD”) training/certification, is included in the initial franchise license fee. Financing may be available.

3.  Deposit:  $3,000

• You may qualify and pay $3,000 as a deposit to reserve a given territory for 6 months. At any time within the 6-month period, you may, subject to Servpro’s usual qualification and approval procedures for the sale of new franchises, purchase a franchise for the reserved territory at the price and under the terms available on the date of purchase of the franchise. The $3,000 deposit will be applied to the purchase price.

• Servpro does not refund your deposit if you decide not to purchase the franchise or if you are not approved or do not qualify to purchase the franchise. You may not transfer or assign the deposit.

4.  Royalty Fee:  ranges from 3% to 10% of your monthly Gross Volume

• Due Date:  Monthly, on a date Servpro designates.

5.  Fixed Fee:  $45 to $115 based on your monthly Gross Volume

• Due Date:  Same date as Royalty Fee.

6.  Minimum Royalty Fee:  $100

• Due Date:  Monthly, on a date Servpro designates.

7.  Brand Fund Fee:  0.5% of your Gross Volume, not including Gross Volume from Subcontract Services, plus 2.5% of your annual Gross Volume, not including Gross Volume from Subcontract Services

• Due Date:  Same date as Royalty Fee.

• Servpro may collect up to 3% of your monthly Gross Volume as a Brand Fund Fee. Currently, Gross Volume subject to the 2.5% portion of the Brand Fund Fee is “capped” at $1,050,000.

8.  Electronic Funds Transfer Fee:  $1.50 per transaction

• Due Date:  At the same time payment is made.

9.  Transfer Fee:  up to $20,000

• Due Date:  Before transfer is effective.

10.  Initial Training Fee:  initial training will be provided to additional persons or for your employees on a space-available basis at a cost of $1,000 each for the New Franchise Training Program (NFTP) and $545 for attendance at the classroom portion of the Mold Remediation Course currently instructed by EHS Services, LLC

• Due Date:  Before training.

11.  Applied Structural Drying (“ASD”) Training and Certification:  the fee can vary from $500 to $1,500 per person for training and $100 for certification by the Institute of Inspection Cleaning and Restoration Certification (“IICRC”)

• Due Date:  Before initial training Business Consultation Meeting 6 is completed.

12.  Subrogation Training:  the fee can vary from $75 to $150

• Due Date:  Before training.

• This online training is required to provide services for insureds of certain Select National Accounts. You will be provided with third-party resource information to help you identify causes and origins of losses covered by insurance.

13.  Lead Paint Training and Certification (EPA’s Lead Renovation, Repair and Painting Rule (RRP Rule)):  the cost can vary from $550 to $1,000

• Due Date:  Before training.

14.  New Training Programs:  Servpro may charge you its then-current training fee for training courses

• Due Date:  Net 30 after billing.

15.  Failure to Complete BDP Steps 1, 2, and 3:  loss of convention allowance and required to pay minimum royalty and fixed fees

• Due Date:  Until new franchise training program is completed.

16.  Convention Registration Fee:  currently $500, if registered by June 25th and $550, if registered after June 25th; $200 guest registration fee, if registered by June 25th and $275 guest registration fee, if registered after June 25th. On-site registration or registration after July 16th will be $650.

• Due Date:  Before annual convention. This will be deducted from your convention allowance, if available; otherwise, you must pay it.

17.  Computer Consulting:  $75 per hour and travel expenses, if applicable

• Due Date:  Net 30 after billing.

18.  Job Lead Fees:  a fee not to exceed $50 for each National Account, Commercial Account, Select National Account, Reconstruction Account, and other job lead referred by Servpro and its affiliates (if and when you qualify); currently, the fee is $20 and is subject to change upon notice

• Due Date:  25th of the month after billing.

19.  Third-Party Electronic Assignment/Integration Administrative Fee:  a fee not to exceed $50 for job leads assigned electronically through third parties; currently, this fee is $20 and is subject to change upon notice; an additional fee for local jobs utilizing Servpro third-party integration (pricing database) technology not to exceed $20 per local assignment; currently, this fee is $4 per local job utilizing third-party integration

• Due Date:  25th of the month after billing.

20.  Job File Audit Fee:  a fee not to exceed $50 for an audit of certain Select National Accounts, National Accounts, and Commercial Accounts job files

• Due Date:  25th of the month after billing.

21.  Renewal Fee:  $1,000 if timely and an additional $1,000 if the renewal date is extended, subject to change upon 30 days’ written notice, but not to exceed $10,000

• Due Date:  Before renewal is effective.

22.  Financing Fee:  up to $150

• Due Date:  Fee due with application.

23.  Administrative Fee:  $500 per license

• Due Date:  Fee due with application.

• You must pay Servpro an administrative processing fee for any and all modifications made to your Franchise License Agreement at your request or required by Servpro due to actions you have taken, or when Servpro provides services for which a fee is not specified.

24.  UCC Filing Fee:  $100 per UCC filed or amended

• Due Date:  Fee due at time of filing or amending.

25.  Resale Referral Fee:  up to 10% of gross sales price, including goodwill, equipment, and license

• Due Date:  Before transfer is effective.

26.  ServproNET:  initial hook-up to Servpro’s network using its Internet Access Package is included in the Equipment and Products Package

• Due Date:  No fee.

• Servpro may charge you for future updates to ServproNET.

27.  Franchise Website Packages:  there is no cost for a Basic Website; the Professional Website is provided for an annual fee of up to $499, plus $239 for each additional franchise for the Professional Website Package

• Due Date:  Net 30 after billing.

28.  Social Media Program:  up to $599 per year for the first franchise license and up to $500 per year for each additional license (service optional)

• Due Date:  Net 30 after billing.

29.  Advertising Customization Fee:  $25 to modify an ad; $35 to create a new ad; $50 per hour for extensive customization project

• Due Date:  Net 30 after billing.

30.  WorkCenter Office and WorkCenter Marketing:  $200 per month for 60 months beginning the 1st day of the third month after you sign the Franchise License Agreement, subject to change. After the first 60 months, the fee will be $133 per month due the 1st of each month thereafter.

• Due Date:  Net 30 after billing.

31.  Restocking Fee:  15%

• Due Date:  Will be deducted from your refund.

32.  Commercial Fee:  up to 5%

• Due Date:  Upon your receipt of payment for job.

33.  Dishonored Check Fee:  $50

• Due Date:  Upon demand.

34.  Late Reports or Late Payment:  $50 late fee for each report or payment made after its due date

• Due Date:  When payment is overdue.

35.  Examination:  cost of conducting an examination is $300 per day whether conducted from Servpro’s offices or your premises, plus lodging and travel costs to and from your location

• Due Date:  Net 30 after billing.

36.  Failure to Keep Records:  up to $5,000 per month

• Due Date:  Net 30 after billing.

37.  Failure to Maintain Insurance:  Servpro’s actual cost, plus 10% interest or processing fee of $500

• Due Date:  Upon demand.

38.  Territorial Policy Violations:  up to $5,000 per occurrence or up to 2 times the amount involved in each violation, whichever is greater

• Due Date:  Net 30 after billing.

39.  Indemnification:  Servpro’s actual costs

• Due Date:  Upon demand.

• You must indemnify Servpro and hold it harmless from any fines, claims, judgments, damages, costs, and expenses of any nature, including attorneys’ fees and expert witness fees, that it incurs as a result of your franchise.

40.  Miscellaneous:  Servpro’s actual costs

• Due Date:  Upon demand.

41.  Taxes:  amount imposed by federal, state, and local tax authorities on any fees or amounts payable to Servpro by you

• Due Date:  Upon demand.

42.  Reinstatement Fee:  $500

• Due Date:  Upon demand.

• If your license is terminated, Servpro may grant your request to reinstate at its sole discretion under its then-current guidelines, including the payment of a fee (currently $500).