HouseMaster Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)

1. Initial Franchise Fee: $42,500

The Initial Franchise Fee is $42,500 for a Territory of up to 75,000 owner-occupied homes. If your Territory has more than 75,000 owner-occupied homes, then you must also pay an additional amount of $0.57 per owner-occupied home over 75,000.

You must pay the initial franchise fee in full when you sign the franchise agreement.

HouseMaster may agree to finance a portion of the initial franchise fee, depending on your creditworthiness, the collateral that you have available, and HouseMaster’s then-current financing policies. Monthly payments depend on the amount financed.

2. Training Expenses: $500 to $3,000

You are not charged an additional fee for attending the initial training (including the classroom NIBI Technical Training) or participating in training webinars, which will be held remotely or at a field training facility at a location HouseMaster designates from time to time.

You must arrange for transportation and pay the expenses for meals and lodging for you and any associates who attend the training program. The total cost will depend on how far you must travel and the type of accommodations you choose.

3. Licensing Compliance Costs: $0 to $15,000

If your jurisdiction has a home inspector licensing law or other laws or regulations that require additional instruction beyond that provided by the NIBI Technical Training program (during the Initial Training Program), or supervised inspections or other criteria, such as examinations or peer review, that require individualized effort in order to comply with the laws or regulations, and HouseMaster or its affiliate cannot provide such instruction/services to you, you must retain a third-party supplier for licensing compliance services to assist you in navigating the required criteria.

You will also be responsible for fulfilling all other applicable licensure application requirements and fees.

4. Marketing Materials and Supplies: $3,000 to $6,000

You must purchase start-up supplies, which include letterhead, envelopes, business cards, advertising, and promotional materials, including inspection resource guides, postcards, and other standardized forms and documents necessary for the operation of your business, and inspector supplies.

5. Office Equipment, Furniture: $0 to $2,000

If you do not already have these items, you must purchase office equipment and furniture necessary to operate your business, which includes desks and chairs, file cabinet, telephone, fax/copy machine, and other office equipment.

6. Computer System: $150 to $4,850

You must purchase a computer system that meets HouseMaster’s requirements. The low estimate assumes that you already have a computer system that meets HouseMaster’s requirements. The high estimate includes the cost of a projector needed for performing presentations in your local market to real estate professional groups.

HouseMaster will cover the costs for new franchisees for 1 initial 12-month license of the required Home Inspection Report Writing software (currently, PCExpress). If additional licenses are needed or if the franchise is a resale and a license is not included in the transaction, the franchisee will need to purchase initial license(s) from the vendor or pay any associated software license fee.

7. Rent: $0 to $750

If you do not have office space or do not want to operate the business out of your home, you need suitable office premises for the Franchised Business of approximately 500-700 square feet. You can operate the business out of your home only if zoning regulations permit you to do so.

Rent varies depending on size of office, condition of office, geographic location, and other factors. The estimate is for the first month’s rent only. Rent after the first month is covered in the Additional Funds estimate.

8. Prepaid Expenses: $250 to $750

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This estimate covers expenses such as business license fees, fees for certification, registration or licensing of businesses or individuals conducting building inspections, and prepaid lease and utility deposits. These amounts vary considerably depending on the location of your office.

9. General Liability Insurance: $500 to $2,500

You must purchase the general liability insurance that HouseMaster requires. The estimate is for a 1-year premium. The cost of insurance will vary based on the types and limits of the insurance you purchase, your location, your driving record, and other factors affecting risk exposure.

10. Errors & Omissions Insurance: $3,500 to $6,500

You must purchase errors and omissions insurance, including bodily injury coverage, which meets the minimum specifications as required by HouseMaster. The cost estimate also covers the cost of obtaining cyber liability coverage that meets the minimum specifications as required by HouseMaster.

Typically you must pay the annual premium in full when the policy period begins. However, if you have the option to finance your insurance premium, you will not pay any money before the start of the policy period.

This estimate is for a new business. You can expect the cost of errors and omissions insurance to increase as your business volume increases.

11. Professional Fees: $0 to $1,000

These are estimates for fees that will be charged by your attorney to review the franchise agreement and other documents, to advise you, and to incorporate a business entity on your behalf if desired. This estimate also includes fees charged by an accountant and/or financial advisor.

12. Reunion Travel Expenses: $1,000 to $3,000

13. Vehicle and Vehicle Branding: $2,700 to $5,800

You must purchase a vehicle wrap or other branded vehicle signage which displays HouseMaster’s marks from HouseMaster’s approved supplier and have the vehicle used by you or your inspector in operating the business branded according to HouseMaster’s specifications.

The estimate includes the purchase and installation of a full vehicle wrap which is recommended.

An estimate has been included for a vehicle for business usage in the event that you do not already own a personal vehicle that you can use for business purposes. Of the estimate included for Vehicle and Vehicle Branding, HouseMaster has included the amount of $1,000 to $1,800 for a down payment and the first 3 months of payments for either leasing a vehicle or for purchasing a vehicle with financing.

The actual expense may vary depending on factors such as the type of vehicle chosen, whether you purchase or lease, and if purchased, how much is financed. HouseMaster recommends that you do not purchase a vehicle and pay for it in full.

14. Grand Opening Promotion Expense: $1,000 to $3,000

This estimate is for a direct mail, email, and field marketing campaign conducted within the first 3 months of operation.

15. Additional Funds for 3 Months: $6,000 to $11,000

This estimate covers business operating costs, including rent, payroll, office management and accounting software, costs associated with meeting licensing requirements, overhead, transportation, advertising, internet access fees, and administrative expenses.

16. Total: $61,100 to $107,650