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

• Section I – Estimated initial investment (franchise costs) for an Ace Handyman Services franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for an Ace Handyman Services franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned Ace Handyman Services 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 Ace Handyman Services franchise opportunity, including relevant news updates

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

• 2021 average gross revenues, cost of goods sold, gross profit, expenses, net profit, and franchise owner executive wages for the 38 Ace Handyman Services Single Reporting Territories that had been open for at least 12 months as of December 31, 2021

• 2021 average gross revenues, cost of goods sold, gross profit, expenses, net profit, and franchise owner executive wages for the 13 Ace Handyman Services Multi-Territory Reporting Groups that had been open for at least 12 months as of December 31, 2021

• Section VI – Key ratios, comparables, computations, and analyses for the Ace Handyman Services franchise opportunity (exclusive content for Platinum subscribers)

Section I – Ace Handyman Services Franchise Costs

• Ace Handyman Services franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $65,000
• Travel and Living Expenses While Training:  $3,500 to $5,000
• Lease Deposit:  $1,000 to $3,000
• Rent for First 3 Months:  $3,000 to $4,500
• Leasehold Improvements and Signage:  $800 to $5,000
• Furnishings:  $800 to $5,000
• Tools and Equipment:  $0 to $3,500
• Truck or Van:  $0 to $2,950
• Computer Hardware and Office Equipment:  $2,250 to $5,000
• Software and Internet Fees (3 months):  $1,497
• Start-up Advertising:  $7,500 to $9,000
• Utility Deposits and Fees:  $100 to $450
• Licenses and Permits:  $630 to $1,600
• Insurance:  $4,000 to $5,100
• Professional Fees:  $500 to $3,000
• Miscellaneous Opening Costs:  $2,000 to $4,500
• Additional Funds for 3 Months:  $20,000 to $35,000
• Total Estimated Ace Handyman Services Franchise Costs:  $112,577 to $159,097, plus any additional Initial Franchise Fee

Section II – Ace Handyman Services’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Ace Handyman Services’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $65,000 for up to 70,000 households; $0.50 for each additional household over 70,000
• Royalty Fee:  6% of your actual Gross Revenues of the previous month, subject to annual reconciliation based on your Minimum Annual Gross Revenues requirements
• National Brand Fee:  2% of your actual Gross Revenues, subject to annual reconciliation based on your Minimum Annual Gross Revenues requirements

Section III – Number of Franchised and Company-Owned Ace Handyman Services Outlets

Franchised

2019

• Outlets at the Start of the Year:  115
• Outlets at the End of the Year:  115
• Net Change:  0

2020

• Outlets at the Start of the Year:  115
• Outlets at the End of the Year:  123
• Net Change:  +8

2021

• Outlets at the Start of the Year:  123
• Outlets at the End of the Year:  225
• Net Change:  +102

Company-Owned

2019

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  7
• Net Change:  0

2020

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  7
• Net Change:  0

2021

• Outlets at the Start of the Year:  7
• Outlets at the End of the Year:  7
• Net Change:  0

Section IV – Background Information on the Ace Handyman Services Franchise

19 Things You Need to Know About the Ace Handyman Services Franchise

Partners with Dispatch

1.  In mid-February 2022, Dispatch – the leading field service software platform for home service franchise businesses – announced that it has partnered with Ace Handyman Services to give customers Ace Hardware’s renowned expertise and customer experience for their home projects. Ace Handyman Services – formerly Handyman Matters – is Ace Hardware’s new handyman division, created to help loyal Ace customers achieve their home improvement project goals. Ace Handyman Services allows customers to hire reliable, experienced craftsmen to come into their homes and assist with projects that may need an extra hand or some additional expertise.

2.  Handyman Matters was a long-time customer of Dispatch, already providing an unparalleled home service experience in the handyman market with Dispatch’s powerful field service toolset. Ace Hardware saw this emphasis on customer experience – enabled by Dispatch – and acquired Handyman Matters to provide the infrastructure for their new handyman services arm.

3.  “Ace had services on the radar for quite some time, and when they went out to find a business like ours, our core values really lined up – our already great customer reviews, and our tagline of helping you love your home,” said Chris Bue, who was in a leadership role at Handyman Matters and is now president at Ace Handyman Services.

4.  Since the acquisition, Dispatch and Ace Handyman Services have successfully implemented their offering at over 160 Ace Hardware locations and counting, creating a holistic home improvement destination at popular stores around the country.

5.  Avi Goldberg, founder and chief strategy officer of Dispatch, has seen this before. He said, “Retailers across industries are realizing that pairing services with their retail offering is the best way to build loyalty, drive foot traffic, and provide a complete experience to their customers – and Ace has quickly become a leader in this space.”

6.  Dispatch works with home service enterprises to provide visibility into the performance of their locations and independent contractors, and to enable every home service customer experience to be a modern and branded one. With the consumerization of technology and the increasing demand for modern home service delivery, brands need to evolve to stay competitive.

7.  Aaron Williams, vice president of technology for Ace Handyman Services, added, “Customer experience is even more important when you’re thinking about stepping into someone’s home. It’s one thing for a customer to step into your store, but when you step into the customer’s home – that attention to a customer’s needs, and just showing respect and being truly helpful is really very important.”

8.  In a recent case study, Ace Handyman Services details how using the Dispatch platform has enabled their handyman business to scale and align with Ace Hardware’s famous focus on customer experience. Through using Dispatch, Ace Handyman Services was able to show measurable growth across several important success indicators, leading to:

• Increased service requests;
• Increased location job volume and revenue;
• Increased customer satisfaction; and
• Higher service ratings

9.  These results, in addition to the best-in-class service experience delivered to every Ace Handyman customer, has cemented Ace as the leader in handyman services, and enabled their explosive growth over the past year.

Embraced Technology to Fuel Growth During the Pandemic

10.  In a blog post from January 2021, Ace Handyman Services highlighted the brand’s use of technology to aid its growth. Ace Handyman Services said it has always valued the advantages that mobile- and home-based businesses offer, including low overhead expenses and flexibility.

11.  “With our model, what we have always done, over the last 23 years, is focus on technology,” explained Colette Bell, vice president of franchise development. “The goal has always been to have a central base for all of our data so that franchisees can evaluate key performance indicators of the business, whether they are there while it’s happening or not. The business itself is actually happening in customers’ homes.”

12.  Easy to run from anywhere, Ace Handyman Services is a true service-based business that utilizes exceptional marketing and the trusted Ace name to build its customer base. With the “do it yourself” (DIY) mentality declining and a significant rise in the “do it for me” (DIFM) segment, the handyman industry stands poised for skyrocketing growth.

13.  Bell points out that the company follows a W2 employee-based paradigm and doesn’t hire subcontractors, distinguishing them from others in the field. This model allows for improved quality and customer service controls, both of which are currently lacking in the home improvement industry. Plus, these costs are offset naturally. Hired craftsmen own their tools, and Ace Hardware supplies the needed materials, so there is no inventory for franchisees to manage.

14.  Bell added, “Our motto is we want our franchise owners to work on the business, not get stuck working in the business. They’ll grow their business faster because they are going to hire more craftsmen.”

15.  COVID-19 did not shut down training or onboarding for new Ace Handyman Services franchise owners. As of March 2020, Ace Handyman Services has been running virtual training, with plans to monitor safe travel and move toward in-person training when possible in 2021.

Company History

16.  Ace Handyman Services was founded as Handyman Matters in 1998 by Andy Bell and Mark Douglass in Denver, Colorado. Bell, who had spent a decade in the corporate world and food industry, moved back home to Colorado to start a family and was looking for a change of pace in his career. He founded a small business repairing swamp coolers, a skill he had to learn while managing restaurants. Bell’s business was a success from the start, and clients began asking him to take a look at the other problems they had around their home. He realized that high quality handyman services were needed and shifted his focus.

17.  Over the next few years, Bell, with help from Mark Douglass, continued to expand Handyman Matters and started franchising in 2001. Bell and Douglass successfully ran Handyman Matters over the next decade. In 2019, the company was acquired by Ace Hardware. In 2020, Ace Hardware relaunched the company as Ace Handyman Services. Ace Handyman Services continues to operate as a stand-alone subsidiary of Ace Hardware Corporation, and Bell continues to serve as the company’s CEO. Douglass has also stayed with the company as president of operations.

18.  Today, there are Ace Handyman Services locations across the United States.

Entrepreneur’s Franchise 500

19.  Ace Handyman Services ranked No. 238 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Ace Handyman Services Franchise (Item 19, 2022 FDD)

• As of December 31, 2021, there were 225 franchised Ace Handyman Services Businesses and seven affiliated Ace Handyman Services Businesses in operation, with the franchised outlets operated by a total of 56 different franchise owners (referred to in this Item 19 as the “Operators”).

• In addition, 32 franchise owners representing 40 Territories have purchased Ace Handyman Services Businesses that are expected to be opened in 2022.

• A combined total of 92 Territories had not been open for at least 12 months as of December 31, 2021, and are not reported in the tables below. Out of the remaining Territories, 39 Territories are owned by Operators who did not provide Ace Handyman Services with complete financial reports during the full year of 2021, and Ace Handyman Services has therefore also excluded those Territories from these tables.

• There were 10 total Territories, operated by eight Operators, that closed at some point during the year 2021, two of which had been open for less than 12 months before closing. None of these closed Territories or Operators are included in this Item 19.

• The remaining 94 Territories as of December 31, 2021, operated by 48 Operators, are shown in the tables below. These Territories are referred to as the “Reporting Territories” and these Operators are referred to as the “Reporting Operators.”

• The seven outlets operated by Ace Handyman Services’ affiliate are not included in this Item 19.

• Of the 48 Reporting Operators as of December 31, 2021, 35 constitute Operators that either (i) operated in a single Territory and reported data just for that Territory in 2021, or (ii) operated in multiple Territories but reported the Gross Revenues and other financial data on a single Territory basis for one or more of their Territories in 2021. There are 38 of these Territories, referred to in this Item 19 as the “Single Reporting Territories.”

• The remaining 13 Reporting Operators owned and operated in two or more Territories in 2021, yet reported a combined Gross Revenues and other financial data for all of their Territories together. The group of Territories operated and reported by each of them are referred to herein as “Multi-Territory Reporting Groups.” These 13 Multi-Territory Groups collectively consist of 56 Territories.

• The 38 Single Reporting Territories and the 13 Multi-Territory Reporting Groups are referred to herein collectively as the “Reporting Units,” for a total of 51 Reporting Units in 2021.

• Because Multi-Territory Reporting Groups’ results may vary significantly from those of Single Reporting Territories, Ace Handyman Services includes below separate tables for the results of the Single Reporting Territories and Multi-Territory Reporting Groups.

Part 1 – Single Reporting Territories Average Performance Chart Based on Gross Revenues of 38 Single Reporting Territories

Sales

• Labor Revenue:  $370,709 (73.80%)
• Material Revenue:  $75,365 (15.00%)
• Service Charge Revenue:  $36,743 (7.31%)
• Trash, Rental, Etc. Revenue:  $2,599 (0.52%)
• Subcontractor Income:  $15,169 (3.02%)
• Other Revenue:  $1,743 (0.35%)
• Gross Revenue:  $502,328 (100.00%)

Less: Cost of Goods Sold (COGS)

• COGS – Labor:  $135,109 (26.90%)
• Job Materials Expense:  $64,721 (12.88%)
• Service Charge – Taxable Income:  $8,627 (1.72%)
• Trash – Dump Expense:  $874 (0.17%)
• Subcontractor Expense:  $16,728 (3.33%)
• Equipment Rental Expense:  $555 (0.11%)
• COGS – Other:  $391 (0.08%)
• Royalty Expense:  $28,565 (5.69%)
• Total COGS:  $255,570 (50.88%)

Gross Profit:  $246,758 (49.12%)

Less: Expenses

• Craftsman Recruitment:  $958 (0.19%)
• Background Checks:  $155 (0.03%)
• Drug Tests:  $27 (0.01%)
• Craftsman Insurance (Worker’s Comp, Liability, Health):  $9,931 (1.98%)
• Permit & Fees:  $179 (0.04%)
• Tool Purchases:  $1,771 (0.35%)
• Shop Supplies – Truck Stock:  $977 (0.19%)
• Transaction Fees – Credit Card Sales Fee:  $6,728 (1.34%)
• Local Marketing:  $39,516 (7.87%)
• National Brand Fund:  $9,287 (1.85%)
• Franchise Owner – Executive Wages:  $33,505 (6.67%)
• Office Team Wages – General Manager Wages:  $4,755 (0.95%)
• Office Team Wages – Office Manager Wages:  $30,462 (6.06%)
• Office Team Wages – Customer Service Wages:  $8,051 (1.60%)
• Office Team Wages – FLSA, 401K, Vacation Training, Payroll Taxes):  $10,873 (2.16%)
• Office Team Insurance – Dishonesty, Health, Other:  $4,036 (0.80%)
• Professional Fees – Accounting, Consulting, Legal:  $3,639 (0.72%)
• Rent:  $9,447 (1.88%)
• Utilities:  $1,191 (0.24%)
• Repairs and Maintenance:  $353 (0.07%)
• Office Supplies:  $2,998 (0.60%)
• Phone and Internet Fees:  $4,245 (0.85%)
• Ace Handyman Services Software Fees:  $5,988 (1.19%)
• Meals and Entertainment:  $1,876 (0.37%)
• Travel:  $1,190 (0.24%)
• Automobiles – Maintenance, Gas, Insurance:  $12,356 (2.46%)
• Dues and Subscriptions:  $804 (0.16%)
• Charitable Contributions:  $360 (0.07%)
• Postage and Delivery:  $189 (0.04%)
• Continuing Education:  $121 (0.02%)
• Business License:  $254 (0.05%)
• Bank Service Charges:  $389 (0.08%)
• Taxes and Licenses:  $1,387 (0.28%)
• Total Expenses:  $207,998 (41.41%)

Net Profit:  $38,760 (7.72%)

Franchise Owner Executive Wages:  $33,505 (6.67%)

Total Net Profit and Executive Wages:  $72,265 (14.39%)

Part 2 – Multi-Territory Groups Combined Average Performance Chart Based on Gross Revenues of 13 Multi-Territory Reporting Groups (with 56 Reporting Territories)

• Labor Revenue:  $634,281 (79.05%)
• Material Revenue:  $116,007 (14.46%)
• Service Charge Revenue:  $40,834 (5.09%)
• Trash, Rental, Etc. Revenue:  $4,206 (0.52%)
• Subcontractor Income:  $6,610 (0.82%)
• Other Revenue:  $415 (0.05%)
• Gross Revenue:  $802,353 (100.00%)

Less: Cost of Goods Sold (COGS)

• COGS – Labor:  $255,418 (31.83%)
• Job Materials Expense:  $97,559 (12.16%)
• Service Charge – Taxable Income:  $13,748 (1.71%)
• Trash – Dump Expense:  $2,255 (0.28%)
• Subcontractor Expense:  $14,131 (1.76%)
• Equipment Rental Expense:  $372 (0.05%)
• COGS – Other:  $1 (0.00%)
• Royalty Expense:  $46,522 (5.80%)
• Total COGS:  $430,006 (53.59%)

Gross Profit:  $372,347 (46.41%)

Less: Expenses

• Craftsman Recruitment:  $1,275 (0.16%)
• Background Checks:  $149 (0.02%)
• Drug Tests:  $69 (0.01%)
• Craftsman Insurance (Worker’s Comp, Liability, Health):  $27,274 (3.40%)
• Permit and Fees:  $106 (0.01%)
• Tool Purchases:  $1,323 (0.16%)
• Shop Supplies – Truck Stock:  $590 (0.07%)
• Transaction Fees – Credit Card Sales Fee:  $12,255 (1.53%)
• Local Marketing:  $42,343 (5.28%)
• National Brand Fund:  $13,244 (1.65%)
• Franchise Owner – Executive Wages:  $63,480 (7.91%)
• Office Team Wages – General Manager Wages:  $9,536 (1.19%)
• Office Team Wages – Office Manager Wages:  $22,542 (2.81%)
• Office Team Wages – Customer Service Wages:  $21,181 (2.64%)
• Office Team Wages – FLSA, 401K, Vacation Training, Payroll Taxes):  $8,127 (1.01%)
• Office Team Insurance – Dishonesty, Health, Other:  $2,659 (0.33%)
• Professional Fees – Accounting, Consulting, Legal:  $6,750 (0.84%)
• Rent:  $13,230 (1.65%)
• Utilities:  $1,382 (0.17%)
• Repairs and Maintenance:  $664 (0.08%)
• Office Supplies:  $5,034 (0.63%)
• Phone and Internet Fees:  $6,067 (0.76%)
• Ace Handyman Services Software Fees:  $5,527 (0.69%)
• Meals and Entertainment:  $1,225 (0.15%)
• Travel:  $1,561 (0.19%)
• Automobiles – Maintenance, Gas, Insurance:  $18,401 (2.29%)
• Dues and Subscriptions:  $85 (0.01%)
• Charitable Contributions:  $715 (0.09%)
• Postage and Delivery:  $331 (0.04%)
• Continuing Education:  $291 (0.04%)
• Business License:  $207 (0.03%)
• Bank Service Charges:  $932 (0.12%)
• Taxes and Licenses:  $2,321 (0.29%)
• Total Expenses:  $290,876 (36.25%)

Net Profit:  $81,471 (10.15%)

Franchise Owner Executive Wages:  $63,480 (7.91%)

Total Net Profit and Executive Wages:  $144,951 (18.07%)

• “Gross Revenue” means all revenue derived from the Reporting Operators’ Ace Handyman Services Businesses in the Reporting Territories, excluding sales tax and discounts, in calendar year 2021.

• “Total COGS” refers to Cost of Goods Sold, and includes the eight categories of expenses listed immediately above this line item in each table, including the costs for personnel including craftsmen and subcontractors, service charges, material expenses, and the Royalty Fees paid by the Reporting Operators to Ace Handyman Services, in calendar year 2021.

• “Gross Profit” was computed using the “Gross Revenue” less “Total COGS.”

• “Net Profit” was computed using the Gross Profit less the other additional expenses identified in each table, including the National Brand Fund Fees paid by the Reporting Operators to Ace Handyman Services.

• The information in the tables were prepared from data obtained from the unaudited reports submitted by the Reporting Operators shown in each table to Ace Handyman Services from their QuickBooks software for calendar year 2021. Ace Handyman Services has not audited these reports and cannot guarantee their accuracy.

• Some Ace Handyman Services Businesses have sold and earned these amounts. Your individual results may differ. There is no assurance that you will sell or earn as much.

Section VI – Ace Handyman Services Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️