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

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

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

• Section III – Number of franchised and company-owned Mosquito Joe 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 Mosquito Joe franchise opportunity, including relevant news updates

• Section V – Presentation and analysis of Mosquito Joe’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 customer retention and percentage of customers that are recurring customers for the 371 franchised Mosquito Joe businesses, which were all in operation and reporting sales as of December 31, 2021
  

• 2021 average, median, high, and low gross sales per treatment for the 371 franchised Mosquito Joe businesses, which were all in operation and reporting sales as of December 31, 2021

• 2021 average, median, high, and low gross sales, number of customers, and number of jobs for the 344 franchised Mosquito Joe businesses that had been operating for at least 12 months as of December 31, 2021

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

Section I – Mosquito Joe Franchise Costs

• Mosquito Joe franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $42,500
• Postcard Fees:  $28,500 to $39,900
• Setup Fee:  $1,000
• Mailing List Fees:  $1,250 to $1,750
• Digital Advertising Program Fees:  $3,000
• Real Property:  $0 to $6,000
• Office Furnishings, Signage, and Fixtures:  $0 to $1,500
• Tools, Equipment, Products, Uniforms, and Supplies:  $5,500 to $6,000
• Vehicles, Shelving, and Decals:  $3,000 to $10,000
• Initial Training:  $100 to $2,000
• Insurances, Office and Marketing Supplies, and Forms:  $5,000 to $6,000
• Professional Fees:  $0 to $1,000
• Licenses:  $100 to $3,200
• Additional Funds for 3 Months:  $16,000 to $26,000
• Computer, Internet, Devices, Phones, Software Setup:  $2,500 to $5,000
• Deposits:  $0 to $4,000
• Total Mosquito Joe Franchise Costs:  $109,700 to $148,700

Section II – Mosquito Joe’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Mosquito Joe’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
• License Fee:  10% of Gross Sales for Gross Sales of up to $500,000 (in a calendar year, per territory); 7% of Gross Sales for Gross Sales above $500,000 (in the same calendar year, in the one territory). In addition, minimum license fees apply.
• Marketing and Promotion (MAP) Fee:  2% of Gross Sales
• Local Marketing Groups:  2% of Gross Sales. As of the issuance date of the current Franchise Disclosure Document, Mosquito Joe may require that all or a portion of your LMG contribution (currently, 2% of your Gross Sales) be paid for use towards the Neighborly marketing and brand awareness initiatives.

Section III – Number of Franchised and Company-Owned Mosquito Joe Outlets

Franchised

2019

• Outlets at the Start of the Year:  286
• Outlets at the End of the Year:  319
• Net Change:  +33

2020

• Outlets at the Start of the Year:  319
• Outlets at the End of the Year:  345
• Net Change:  +26

2021

• Outlets at the Start of the Year:  345
• Outlets at the End of the Year:  372
• Net Change:  +27

Company-Owned

2019

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  3
• Net Change:  -1

2020

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  2
• Net Change:  -1

2021

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  2
• Net Change:  0

Section IV – Background Information on the Mosquito Joe Franchise

12 Things You Need to Know About the Mosquito Joe Franchise

Shares Ways Homeowners Can Protect Their Families and Pollinators

1.  In mid-August 2022, Mosquito Joe announced that it was awarded the Silver Tier by the EPA’s Pesticide Environmental Stewardship Program (PESP) for its work on emphasizing integrated pest management (IPM), education, pollinator protection, and stewardship of the environment. The national brand is committed to educating homeowners on how to protect themselves and pets from diseases that mosquitoes and ticks present while also caring for pollinators on their property.

2.  As members of PESP, Mosquito Joe has made the commitment to use low-risk, environmentally conscious processes and products. The PESP advocates for Integrated Pest Management, which takes an inclusive approach to the pest lifecycle and their interactions with the environment, placing importance on minimizing the hazard to people, property, and pollinators.

3.  Here are some ways homeowners can protect their family from mosquito, tick, and flea bites while also caring for pollinators:

• Know the Area Before Treatment: Service providers should take inventory of outdoor areas prior to treatment. Most mosquitoes thrive and reproduce where water is present, so every effort should be made to tip and toss away standing water. Ticks thrive in humid, dense vegetation and under low brush and leaf litter, so keep the grass trimmed and remove fallen foliage and debris. In addition, providers should identify flowering bushes, gardens and plants that attract pollinators, reported beekeepers, and bee boxes in the area. The area determines the application procedures and an application is not made within 10 feet of specific flowering bushes, gardens and plants that attract pollinators. Additionally, service providers should consider wind direction and drift management techniques.

• Ask About the Product: Always ask what treatment options are available to you and your family. There are products that are friendly to pollinators and different applications available. Mosquito Joe only uses EPA-registered products which include a variety of solutions applied by its service professionals.

• While specific options may vary by location, Mosquito Joe has a few natural solution options. One option consists of an essential oil blend that continues to repel and eliminate adult mosquitoes even when dried. The repellent is strongest when wet and may repel pollinators until dried. This solution can leave an odor of essential oils in your yard for one to two hours after application.

• Mosquito Joe also uses a natural garlic spray, similar to the garlic in your kitchen but stronger and more potent. The company uses this product around ponds, vegetable gardens, flowering shrubs and flowers to not harm aquatic life and pollinators (e.g., honeybees). The products themselves are water-based, mixed in water and will not harm plants.

• Mosquito Joe also offers a synthetic form of pyrethrins called pyrethroids. Pyrethrins are the natural byproduct of the Chrysanthemum flower. Synthetic pyrethroids have a similar chemical structure as the pyrethrins and are used in numerous commercial products such as household insecticides, pet shampoos and sprays, and even lice shampoos.

4.  David Price, associate certified entomologist for Mosquito Joe, said, “We are committed to being environmental stewards through pesticide risk reduction and providing consumers peace of mind that Mosquito Joe is taking every precaution necessary when handling, applying, and disposing of our products. We believe our continued action in specified risk reduction and educational goals will bring us one step closer in our next application to be accepted into the Gold Tier.”

Parent Company Appoints New Vice President of Franchise Development

5.  At the end of September 2021, Neighborly, parent company of Mosquito Joe and other home service brands, announced the appointment of Brian Woods as its new group vice president of franchise development. Under the direction of Neighborly Chief Development Officer Brad Stevenson, Woods oversees global franchise development efforts for Neighborly’s repair cluster of brands.

6.  Stevenson said, “Given the significant impact franchising makes on the continued growth of Neighborly’s global portfolio, we are thrilled to welcome a skilled executive like Brian to elevate our ongoing expansion efforts. His extensive expertise in finance and franchise development strategy complements our talented development team and will help to accelerate growth for our service brands.”

7.  Woods began his career on Wall Street as an investment banker working in the food and agribusiness and media and telecommunications sectors before moving on to various corporate finance positions with PepsiCo and Frito Lay. He then transitioned into corporate strategy and worked for AT&T on several key strategic growth initiatives prior to his latest role with Motel 6, where he led the franchise growth strategy with a focus on critical lead generation, target growth markets and diversity franchise recruitment.

8.  Woods holds a bachelor’s degree in finance and accounting from the University of Michigan’s Ross School of Business and an MBA in Finance from the University of Texas at Austin McCombs School of Business.

9.  According to Woods, “Neighborly’s home service brands are recognized for their strong reputation and impressive influence on thousands of communities across the globe. Continued expansion of this already global network will require strategy and innovation, and I look forward to contributing to these efforts alongside Neighborly leadership as we continue pushing the organization to fulfill its vision to Own the Home.”

Company History

10.  Mosquito Joe was founded in 2009 by Thomas Minton, Michael Burnette, John Mason, and Clay Winn in Norfolk, Virginia. All of the friends/business partners had trouble dealing with mosquitoes in their backyards. They decided to deal with the problem themselves and worked on developing a way to safely get rid of the mosquitoes. 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.

11.  Over the next few years, they successfully ran and grew Mosquito Joe. In 2012, the team established Buzz Franchise Brands to operate Mosquito Joe. Franchising began three years later, and Mosquito Joe 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 all across the United States.

Entrepreneur’s Franchise 500

12.  Mosquito Joe ranked No. 207 on Entrepreneur’s 2022 Franchise 500 list.

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

• The information in this Item 19 has been prepared by the franchisor and its predecessor without an audit. Mosquito Joe’s independent certified public accountants have not audited, reviewed, or performed any level of service on the information. Neither the franchisor, its predecessor, nor its independent certified public accountants have audited or verified any of the sales figures reported to the franchisor by its franchisees.

• This Item 19 excludes data from the two company-owned Businesses.

• One franchised Business closed during the 2021 fiscal year, and so it did not report data to Mosquito Joe for the entire 12-month period in 2021 (the “Reporting Period”) and therefore its data is also excluded from this Item 19. No franchised business closed after being open for less than 12 months.

• As used herein, “Gross Sales” means and includes 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 Mosquito Joe 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 Mosquito Joe authorizes in writing. Gross Sales also exclude sales from any Excluded Services (as defined in a mutually executed Excluded Services Addendum).

Part 1 – 2021 Customer Retention Metrics and Gross Sales Per Treatment Data

• As of December 31, 2021, there were 170 franchisees operating 372 franchised Businesses in the United States and two corporate-owned Businesses in the United States.

• Part 1 of this Item 19 includes data from all 371 franchised Businesses, which were all in operation and reporting sales as of December 31, 2021. One business was excluded because it did not operate and did not report any revenue in 2021.

2021 Customer Retention Metrics of Franchised Businesses (source: business management software)

• What percent of the previous year’s customers do your franchised Businesses retain each year? 71%. Many of these customers in 2020 were partial season customers that turned into full season customers.

• What percent of the customers of the franchised Businesses are recurring customers? 87%.

2021 Gross Sales Per Treatment for Franchised Businesses (source: business management software)

• What amount of Gross Sales per Treatment did your franchised Businesses generate? The average gross sales per treatment in 2021 for all franchised Businesses was $79.23 and the median was $78.52. The highest gross sales per treatment was $116.62 and the lowest gross sales per treatment was $57.50.

• 156 franchised Businesses, or 42.05% of the franchised Businesses, had average gross sales per treatment in excess of the average.

• Gross Sales Per Treatment is the gross effective invoice price.

Part 2 – Annual Gross Sales, Annual Number of Customers, and Annual Number of Jobs for Franchised Businesses in 2021

• Of the 372 franchised Businesses, 344 Businesses had been operating for at least 12 months as of December 31, 2021. This Part 2 of Item 19 excludes 28 franchised Businesses (the “Reporting Businesses”) that opened during the year 2021 and therefore did not have data for the entire Reporting Period.

• The following tables show average and median annual Gross Sales, annual number of customers, and annual number of jobs for the Reporting Businesses for the Reporting Period.

2021 Annual Gross Sales Data

• Number of Businesses:  344
• High Annual Gross Sales:  $1,460,894
• Low Annual Gross Sales:  $25,901
• Average Annual Gross Sales:  $347,438
• Number/Percent at or Above Average:  135/39%
• Median Annual Gross Sales:  $263,347

2021 Annual Number of Customers Data

• Number of Businesses:  344
• High Annual Number of Customers:  2,286
• Low Annual Number of Customers:  12
• Average Annual Number of Customers:  596
• Number/Percent at or Above Average:  133/39%
• Median Annual Number of Customers:  474

2021 Annual Number of Jobs Data

• Number of Businesses:  344
• High Annual Number of Jobs:  19,739
• Low Annual Number of Jobs:  137
• Average Annual Number of Jobs:  4,545
• Number/Percent at or Above Average:  133/39%
• Median Annual Number of Jobs:  3,631

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

Section VI – Mosquito Joe Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️