In this FDD Talk post, you’ll learn the following:

• Section I – Estimated initial investment (franchise costs) for a Mr. Electric franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for a Mr. Electric franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned Mr. Electric outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

• Section IV – Background information on the Mr. Electric franchise opportunity, including relevant news updates

• Section V – Presentation and analysis of Mr. Electric’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• 2021 average, median, highest, and lowest gross sales per job for the top 10%, 1st quartile, 2nd quartile, 3rd quartile, 4th quartile, bottom 10%, and all 162 Mr. Electric businesses that were in operation and reported gross sales for any part of the Reporting Period (January 1, 2021 through December 31, 2021)

• Section VI – Key ratios, comparables, computations, and analyses for the Mr. Electric franchise opportunity (exclusive content for Platinum subscribers)

Section I – Mr. Electric Franchise Costs

• Mr. Electric franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $42,500 for a territory of up to 100,000 in population + $425 per 1,000 additional population over 100,000
• Vehicle:  $2,400 to $35,000
• Equipment, Supplies, and Inventory:  $11,000 to $17,000
• Insurance:  $3,000 to $4,500
• Advertising & Promotional and Local Marketing Spending for Marketing Start-up Phase:  $9,000 to $40,000
• Training, Travel, Lodging, and Food:  $4,000 to $7,000
• Deposits, Permits, and Licenses:  $1,000 to $2,500
• Professional Fees:  $0 to $5,000
• Additional Funds for 3 Months:  $35,000 to $85,000
• Real Estate:  $0 to $6,000
• Total Estimated Mr. Electric Franchise Costs:  $107,900 (does not include real estate costs) to $244,500 + any additional franchise fee + any real estate costs

Section II – Mr. Electric’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Mr. Electric’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $42,500 for a territory of up to 100,000 in population + $425 per 1,000 additional population over 100,000
• License Fee:  4% to 7% of Gross Sales except for specialty services and “roll-in” sales. In addition, minimum license fees apply.
• Marketing, Advertising, and Promotion Fee:  2% of Gross Sales
• Local Marketing Groups:  not to exceed 3% of Gross Sales

Section III – Number of Franchised and Company-Owned Mr. Electric Outlets

Franchised

2019

• Outlets at the Start of the Year:  137
• Outlets at the End of the Year:  147
• Net Change:  +10

2020

• Outlets at the Start of the Year:  147
• Outlets at the End of the Year:  158
• Net Change:  +11

2021

• Outlets at the Start of the Year:  158
• Outlets at the End of the Year:  170
• Net Change:  +12

Company-Owned

2019

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

2020

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

2021

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

Section IV – Background Information on the Mr. Electric Franchise

12 Things You Need to Know About the Mr. Electric Franchise

Ranked in Entrepreneur’s 42nd Annual Franchise 500 in 2021

1.  At the beginning of February 2021, Mr. Electric ranked first overall in the Electrical Services category in Entrepreneur magazine’s Franchise 500. Recognized as an invaluable resource for potential franchisees, the Franchise 500 selected Mr. Electric for its outstanding performance in areas including unit growth, financial strength and stability, and brand power. Mr. Electric’s inclusion on the 2021 Franchise 500 follows a year of impressive growth for the brand, with 29 agreements awarded and 29 new franchise locations opened in 2020.

2.  Joel Worthington, president of Mr. Electric, said, “Placement in Entrepreneur’s annual Franchise 500 is such a highly sought-after honor in the franchise industry, and Mr. Electric to not only be included in the ranking, but to also be named the top brand named to the Electrical Services category is an outstanding achievement. Given all the obstacles we had to overcome in 2020 due to circumstances brought on by the pandemic, being recognized as a top franchise opportunity feels better than ever and sets us up for continued growth and success in the new year.”

3.  In Entrepreneur’s continuing effort to best understand and evaluate the ever-changing franchise marketplace, the company’s 42-year-old ranking formula continues to evolve as well. The key factors that go into the evaluation include costs and fees, size and growth, support, brand strength, and financial strength and stability. Each franchise is given a cumulative score based on an analysis of more than 150 data points, and the 500 franchises with the highest cumulative scores become the Franchise 500 in ranking order.

4.  Jason Feifer, Entrepreneur’s editor-in-chief, said, “2020 was a challenging year for everyone, but it was also a year of unusual opportunity. Franchises were able to be nimble and innovative, serving the needs of franchisees and customers in ways that will resonate for many years to come. We believe that, when we eventually look back on this time, we’ll see it as a moment when many brands defined themselves for the future.”

5.  Mr. Electric is one of 16 Neighborly brands to be included in the 2021 Franchise 500 ranking. Other Neighborly brands on the 2021 list of top franchises include: Molly Maid, Mosquito Joe, Mr. Appliance, Mr. Rooter Plumbing, Five Star Painting, Real Property Management, Aire Serv, Mr. Handyman, ShelfGenie, Rainbow International Restoration, Glass Doctor, The Grounds Guys, HouseMaster, Precision Door Service, and Window Genie.

Parent Company Appoints New Chief Strategy & Marketing Officer

6.  In early March 2021, Neighborly appointed Roger Chacko as its new chief strategy & marketing officer. As chief strategy & marketing officer for Neighborly, Chacko will be responsible for all of the company’s marketing and strategy divisions. Neighborly currently employs a significant number of associates in various marketing and strategy roles, and Chacko’s direction will be a driving force behind the continued growth of the organization in the coming years.

7.  Mike Bidwell, president and CEO of Neighborly, said, “To help build further on the growth momentum we have at Neighborly, I am delighted to welcome Roger Chacko to lead the marketing and strategy of our organization. Chacko has a proven track record of developing and delivering segment-defining marketing and sales programs across several business segments and geographies. The intersection between brands and consumers is narrowing through consumer experiences, and Chacko’s global experience and transformational marketing and strategy work at this intersection of consumers and brands will prove invaluable in Neighborly’s journey to creating and delivering exceptional home service experiences to our consumers and franchise partners.”

8.  Chacko brings over 25 years of global brand building, corporate strategy, and growth catalyst experiences. He has held various marketing, commercial, and strategy roles with global companies including Carlson Hotel Group, Bloomin’ Brands, USAA, Kellogg’s, and more. Immediately prior to joining Neighborly, Chacko served global fitness chain Planet Fitness as its chief commercial officer. Chacko earned his doctorate degree in management from Oklahoma State University and his master’s degree in management from Massachusetts Institute of Technology.

9.  Chacko said, “Neighborly has the potential to become an iconic global brand that delivers exceptional home service experiences to communities around the world, and I am committed to making this vision a reality. Achieving Neighborly’s ultimate vision of ‘Owning the Home’ through its family of home service brands will require strategy, innovation and marketing, and I look forward to working with Neighborly’s executive leadership and global marketing teams to make that happen.”

Company History

10.  Mr. Electric was founded in 1994 as the fourth company under The Dwyer Group (now called Neighborly) franchising corporation. At the time, there weren’t any franchises that provided national residential and commercial electrical services. The first Mr. Electric franchise was purchased by Mike Mulhman, who opened Mr. Electric of Waco, Texas. The Mr. Electric concept was a success from the beginning and the brand grew quickly around the U.S.

11.  In 1996, Mr. Electric opened its first international location in Canada. As growth continued around North America, Mr. Electric opened franchises in the United Kingdom and Australia. Today, Mr. Electric is one of the largest franchises in Neighborly’s umbrella.

Entrepreneur’s Franchise 500

12.  Mr. Electric ranked No. 240 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Mr. Electric Franchise (Item 19, 2022 FDD)

• The sales figures listed below are averages and medians derived from historical operating results of the Mr. Electric businesses indicated for the time periods covered.

• Neighborly’s predecessor obtained these sales figures from information provided to Neighborly’s predecessor by Mr. Electric franchisees using Mr. Electric’s software program for the period from January 1, 2021 through December 31, 2021 (the “Reporting Period”).

• Neither Neighborly, its predecessor, nor its independent certified public accountants have audited or verified any of the sales figures reported to the franchisor. Franchisees are not required to use generally accepted accounting principles when reporting these figures.

• As of December 31, 2021, there were 170 Mr. Electric businesses in operation in the United States, all of which were franchised businesses. Of these, 162 businesses were in operation and reporting gross sales for any part of the Reporting Period (“Reporting Businesses”).

• The information provided in this Item 19 does not include data from eight franchised businesses that failed to properly report reliable data to Mr. Electric.

• “Gross Sales” means the total revenues and receipts from whatever source (whether in the form of cash, credit, agreement to pay, barter, trade, or other consideration) that arise, directly or indirectly, from the operation of – or in connection with – a Mr. Electric business whether under any of the Marks or otherwise.

• Gross Sales exclude sales taxes collected from customers and paid to the appropriate taxing authority and any other bona fide refunds, rebates, or discounts that Neighborly authorizes in writing. Gross Sales also exclude sales from any Excluded Services.

• All of the franchised businesses for which sales results are reported below were operated by franchisees. Neither Neighborly nor its predecessor operated any of the businesses. All of the franchised businesses are comparable to the franchised businesses offered by the disclosure document and offered substantially the same services to the public.

• You should be aware, however, that the franchised businesses for which sales results are reported below include some businesses that are “conversions,” businesses that were in operation before purchasing a franchise and “converting” from an independent business to a business utilizing Mr. Electric’s system and brand.

• No adjustments, including adjustments for geographic location, have been made to these reported sales. This report does not include information about previous periods or any future periods. Also, because these are Gross Sales results only, no costs or expenses are taken into account.

• Some outlets have earned this amount. Your individual results may differ. There is no assurance you will earn as much.

Statement of 2021 Average and Median Gross Sales Per Job

Top 10%

• Number in This Group:  16
• Average Gross Sales Per Job:  $1,300
• Highest Gross Sales Per Job:  $1,790
• Lowest Gross Sales Per Job:  $1,178
• Median Gross Sales Per Job:  $1,419
• Number and Percentage in Group That Attained the Group Average or Greater:  11/68.8%

1st Quartile

• Number in This Group:  41
• Average Gross Sales Per Job:  $986
• Highest Gross Sales Per Job:  $1,790
• Lowest Gross Sales Per Job:  $844
• Median Gross Sales Per Job:  $1,025
• Number and Percentage in Group That Attained the Group Average or Greater:  22/53.7%

2nd Quartile

• Number in This Group:  41
• Average Gross Sales Per Job:  $730
• Highest Gross Sales Per Job:  $833
• Lowest Gross Sales Per Job:  $626
• Median Gross Sales Per Job:  $736
• Number and Percentage in Group That Attained the Group Average or Greater:  22/53.7%

3rd Quartile

• Number in This Group:  41
• Average Gross Sales Per Job:  $549
• Highest Gross Sales Per Job:  $625
• Lowest Gross Sales Per Job:  $463
• Median Gross Sales Per Job:  $554
• Number and Percentage in Group That Attained the Group Average or Greater:  23/56.1%

4th Quartile

• Number in This Group:  39
• Average Gross Sales Per Job:  $368
• Highest Gross Sales Per Job:  $462
• Lowest Gross Sales Per Job:  $168
• Median Gross Sales Per Job:  $388
• Number and Percentage in Group That Attained the Group Average or Greater:  23/59.0%

Bottom 10%

• Number in This Group:  16
• Average Gross Sales Per Job:  $292
• Highest Gross Sales Per Job:  $363
• Lowest Gross Sales Per Job:  $168
• Median Gross Sales Per Job:  $351
• Number and Percentage in Group That Attained the Group Average or Greater:  9/56.3%

100%

• Number in This Group:  162
• Average Gross Sales Per Job:  $683
• Highest Gross Sales Per Job:  $1,790
• Lowest Gross Sales Per Job:  $168
• Median Gross Sales Per Job:  $627
• Number and Percentage in Group That Attained the Group Average or Greater:  68/42.0%

• The Reporting Businesses are divided into groups based on the level of Individual Business Per-Job Average (as defined below) achieved during the Reporting Period (i.e., top 10%, 1st, 2nd, 3rd, and 4th quartile, bottom 10%, and all (100%)).

• Mr. Electric calculated the average and median Gross Sales Per Job as follows:

• (i) first, Mr. Electric received the annual Gross Sales of each Reporting Business during the Reporting Period, as provided to it through its Software System,
• (ii) Mr. Electric then received the total number of jobs of each Reporting Business during the Reporting Period, as provided to Mr. Electric through its Software System,
• (iii) next Mr. Electric divided the annual Gross Sales for each Reporting Business by the total number of jobs for that Reporting Business to determine each Reporting Business’s average annual Gross Sales per job (the “Individual Business Per-Job Average”), and
• (iv) then Mr. Electric calculated the average and median of all Reporting Businesses’ Individual Business Per-Job Average for the Reporting Period.

• The highest and lowest Gross Sales per Job refer to the highest Individual Business Per-Job Average and the lowest Individual Business Per-Job Average, respectively.

Section VI – Mr. Electric Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️