Handyman Connection Franchise: Average Sales ($715K) vs. Cost ($105K-$213K)

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

Section I – Estimated initial investment (franchise costs) for a Handyman Connection franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Handyman Connection franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Handyman Connection outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Handyman Connection franchise opportunity

Section V – Presentation and analysis of Handyman Connection’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022, 2021, and 2020 average, median, high, and low gross sales and average job size for the U.S. franchisees who were in operation for more than 12 months as of December 31 of the applicable year and were not sold during that 12-month period

• 2022 average, median, high, and low number of leads from repeat customers and referrals for 32 U.S. franchisees (representing 34 franchised territory outlets), who were in operation for more than 12 months as of December 31, 2022 and were not sold during that 12-month period

• top 10 services that Handyman Connection franchisees have categorized as Quoting (or Estimating) in the CRM system for all franchisees across North America, regardless of their time operating their business, presented as a percentage of the total number of services Quoted

• 2022 average, median, high, and low gross margin percentage for 30 U.S. franchisees (representing 32 franchised territory outlets) who operate in a single territory, were in operation for more than 12 months as of December 31, 2022, and were not sold during that 12-month period

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

Section I – Handyman Connection Franchise Costs

• Handyman Connection franchise costs, based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $65,000
• Travel and Living Expenses While Training:  $2,075 to $4,700
• Real Estate (leased):  $1,800 to $4,800
• Office Equipment:  $1,100 to $7,800
• Lease and Utility Deposits:  $850 to $2,100
• Insurance:  $3,135 to $7,624
• Licenses and Permits:  $215 to $7,250
• Grand Opening Marketing, Advertising, and Promotion:  $21,685 to $57,900
• Computer Hardware and Software:  $1,425 to $10,025
• Proprietary Software License:  $5,000
• Additional Funds – Working Capital (estimated for 3 months):  $3,235 to $41,625
• Total Estimated Handyman Connection Franchise Costs:  $105,520 to $213,824

Section II – Handyman Connection’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Handyman Connection’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $65,000

• Royalty Fee:  5% of Gross Sales

• Minimum Royalty Fee:  for Calendar Years 3 through 5 (Calendar Year 2 if the Franchise Agreement is signed in either January or February), the amount of Minimum Royalty is $11,250 per Household Group (HH Group) in your Territory less the amount of actual Royalty due in a given year; for Calendar Years 6 through 10, the amount of Minimum Royalty is $17,500 per HH Group in your Territory less the amount of actual Royalty Fees due for a given year of operations

• Brand Development Fund Contributions:  3% of Gross Sales up to $3,000,000 of sales. The BDF will be reduced to an amount equal to (i) 2.5% for annual Gross Sales between $3,000,000 and $5,000,000, and (ii) 2% for annual Gross Sales over $5,000,000.

• Local Marketing (including Local Cooperative Fees, if applicable):  10% of Gross Sales over 1st Year of operations, 8% of Gross Sales over each subsequent years

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

Franchised

2020

• Outlets at the Start of the Year:  61
• Outlets at the End of the Year:  61
• Net Change:  0

2021

• Outlets at the Start of the Year:  61
• Outlets at the End of the Year:  61
• Net Change:  0

2022

• Outlets at the Start of the Year:  61
• Outlets at the End of the Year:  58
• Net Change:  -3

Company-Owned

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

2022

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

Section IV – News Updates on the Handyman Connection Franchise

• Handyman Connection Recognized in the 2022 Home Improvement Pro List by Qualified Remodeler

• Handyman Connection Recognized in Franchise Times’ 2022 Top 500

• Handyman Connection Named 2022 STAR Award Winner by Franchise Update Media

• Handyman Connection Seeks National Expansion Through Franchising

• Handyman Connection Did Not Rank on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Handyman Connection Franchise (Item 19, 2023 FDD)

• This Item sets forth certain historical data reported to Handyman Connection by franchisees of the Handyman Connection System. Handyman Connection has not audited this information, nor independently verified this information.

Part 1 – Annual Gross Sales, Leads from Repeat Customers and Referrals, and Top Categories of Services Quoted

• Part 1 of this Item was created using information Handyman Connection obtained directly from its CRM system, and provides the Annual Gross Sales, Leads from Repeat Customers and Referrals, and a list of the top categories of services “Quoted” (or “Estimated”) in Handyman Connection’s IT system for the period of January 1, 2022 through December 31, 2022 (the “2022 Data Period”).

• Part 1 of this Item presents information for 32 out of the 33 U.S. franchisees (representing 34 of the 35 franchised territory outlets in the U.S.), who were in operation for more than 12 months as of December 31, 2022 and were still operating as of the time of the current FDD, and were not sold during that 12-month period (“Reporting Businesses”).

• Excluded from this Item 19 are 12 U.S. franchises that were not open and operating for the entire 2022 Data Period or as of the Issuance Date of the current Franchise Disclosure Document, or were sold during the 2022 Data Period. Also excluded from this Item 19 is the one U.S. franchise that does not report information via Handyman Connection’s CRM system.

• Of the 32 franchisees included in this Financial Performance Representation, 30 franchisees operate in a single territory, and two franchisees operate in two territories each and report sales separately.

A.  Annual Gross Sales

• The following table presents: (i) the Gross Sales as reported to Handyman Connection by the Reporting Businesses; (ii) the high, low, average, and median Gross Sales for the Reporting Businesses during the 2022 Data Period; and (iii) certain information regarding average job size and territory size of the Reporting Businesses.

• In addition, this table shows the same information for the 28 out of the 31 U.S. franchises (representing 34 of the 35 franchised territory outlets in the U.S.), who were in operation for more than 12 months as of December 31, 2021 (“2021 Reporting Businesses”) and 33 out of the 34 U.S. franchisees (representing 37 of the 38 franchised territory outlets in the U.S.), who were in operation for more than 12 months as of December 31, 2020 (“2020 Reporting Businesses”).

2022

• Number of Reporting Franchisees in the U.S.:  32
• Cumulative Number of Territory Outlets Owned by Reporting Franchisees:  34
• High Gross Sales Among Reporting Franchisees:  $2,833,548
• Low Gross Sales Among Reporting Franchisees:  $269,531
• Average Gross Sales Among Reporting Franchisees:  $715,448
• Median Gross Sales Among Reporting Franchisees:  $523,460
• Average Job Size Among Reporting Franchisees:  $1,191
• Number of Reporting Franchisees Exceeding the Average:  10 (31%)
• Average Number of Households/Single-Family Dwelling Units for Reporting Franchisees:  130,010
• Average Number of Households/Single-Family Dwelling Units for Reporting Franchisees Exceeding the Average:  156,810

2021

• Number of Reporting Franchisees in the U.S.:  28
• Cumulative Number of Territory Outlets Owned by Reporting Franchisees:  31
• High Gross Sales Among Reporting Franchisees:  $2,151,074
• Low Gross Sales Among Reporting Franchisees:  $99,229
• Average Gross Sales Among Reporting Franchisees:  $715,675
• Median Gross Sales Among Reporting Franchisees:  $592,291
• Average Job Size Among Reporting Franchisees:  $933
• Number of Reporting Franchisees Exceeding the Average:  10 (36%)
• Average Number of Households/Single-Family Dwelling Units for Reporting Franchisees:  166,260
• Average Number of Households/Single-Family Dwelling Units for Reporting Franchisees Exceeding the Average:  155,992

2020

• Number of Reporting Reporting Franchisees in the U.S.:  33
• Cumulative Number of Territory Outlets Owned by Reporting Franchisees:  37
• High Gross Sales Among Reporting Franchisees:  $1,561,008
• Low Gross Sales Among Reporting Franchisees:  $218,731
• Average Gross Sales Among Reporting Franchisees:  $636,321
• Median Gross Sales Among Reporting Franchisees:  $543,028
• Average Job Size Among Reporting Franchisees:  $897
• Number of Reporting Franchisees Exceeding the Average:  10 (30%)
• Average Number of Households/Single-Family Dwelling Units for Reporting Franchisees:  160,120
• Average Number of Households/Single-Family Dwelling Units for Reporting Franchisees Exceeding the Average:  157,933

• “Gross Sales” is defined as a franchisee’s total sales invoices or other items or services billed to the customer for all completed sales, less any discounts and cancellations reported to Handyman Connection on its software system.

• The Territory presently being offered generally includes 75,000 to 100,000 Households (“HHs”).

B.  Leads from Repeat Customers and Referrals

• Offering many different services through the Handyman Connection System will give you the opportunity to serve your customers in multiple ways at a single residence. In the course of operating your Handyman Connection Franchised Business, Handyman Connection recommends that you monitor certain performance measurements, such as Leads from Repeat Customers and Referrals.

• Service requests from Repeat Customers indicate multiple contacts for different services. Referrals can indicate satisfaction with the quality of service received, resulting in recommendations to others.

• This table presents the Percentage of Leads from Repeat Customers and Referrals as reported to Handyman Connection by Reporting Businesses, as defined above.

• Number of Reporting Businesses in the U.S.:  32
• Cumulative Number of Territory Outlets Owned by Reporting Businesses:  34
• High Number of Leads from Repeat and Referral Customers:  1,923
• Low Number of Leads from Repeat and Referral Customers:  81
• Average Number of Leads from Repeat and Referral Customers:  634
• Median Number of Leads from Repeat and Referral Customers:  477
• Average Percentage of Leads from Repeat and Referral Customers:  46%
• Number of Reporting Businesses Exceeding the Average:  10 (31%)
• Average Number of Households/Single-Family Dwelling Units for Reporting Businesses:  130,010
• Average Number of Households/Single-Family Dwelling Units for Reporting Businesses Exceeding the Average:  157,304

C.  Quote Breakdown

• The following table represents a listing of the top 10 services that Handyman Connection franchisees have categorized as Quoting (or Estimating) in the CRM system for all franchisees across North America, regardless of their time operating their business, presented as a percentage of the total number of services Quoted during the 2022 Data Period.

• Franchisees often will make more than one Quote on a job.

Summary of Top 10 Services Quoted and Categorized

• Handyman:  18.74% of total Quote items
• Carpentry:  12.11% of total Quote items
• Electric:  8.90% of total Quote items
• Door:  8.49% of total Quote items
• Plumbing:  7.93% of total Quote items
• Drywall:  7.29% of total Quote items
• Miscellaneous:  6.46% of total Quote items
• Painting:  5.86% of total Quote items
• Remodel:  3.93% of total Quote items
• Deck:  3.86% of total Quote items
• Total:  83.58% of total Quote items

Part 2 – Annual U.S. Gross Sales Comparison

COVID-19 Impact 2020-2022

• As the world was impacted by the outbreak of COVID-19 in March of 2020, the U.S. franchisees of Handyman Connection were also impacted.

• Although the majority of the country started to face shutdowns in activities in March of 2020, the franchisees were deemed an “essential business” and were able to remain open and operate with increased precautions put in place.

• For the year, when Handyman Connection compares its 2020 U.S. franchisees to its 2019 U.S. franchisees, the same-store sales were up vs. 2019.

• Handyman Connection’s 2021 U.S. franchisees also continued to remain open throughout the different variations of COVID, and had year-over-year same-store sales growth. Additionally, the 2022 franchisees in both the US and in Canada, had year-over-year same-store sales growth.

Part 3 – Gross Margin on Service Revenue

• Part 3 of this Item provides information regarding the Gross Margin on Service Revenue for the 2022 Data Period, based on unaudited Profit and Loss Statements provided to Handyman Connection by the Reporting Businesses.

• Number of Reporting Businesses in the U.S.:  30
• Cumulative Number of Territory Outlets Owned by Reporting Businesses:  32
• High Gross Margin Percentage Among Reporting Businesses:  73%
• Low Gross Margin Percentage Among Reporting Businesses:  25%
• Average Gross Margin Percentage Among Reporting Businesses:  49%
• Median Gross Margin Percentage Among Reporting Businesses:  48%
• Number of Reporting Businesses Exceeding the Average Gross Margin:  13 (43%)
• Average Number of Households/Single-Family Dwelling Units for Reporting Businesses:  139,443
• Average Number of Households/Single-Family Dwelling Units for Reporting Businesses Exceeding the Average:  147,788

• “Gross Margin” is defined as Total Revenue – (Labor Cost + Material Cost), and “Gross Margin %” is defined as Total Revenue – (Labor Cost + Material Cost) / Total Revenue.

• “Total Revenue” is defined as revenue from labor and materials.

• Handyman Connection received unaudited Profit and Loss Statements from 32 of the 34 Reporting Businesses from whom it requested these statements, but both of the Franchisees who own two territories reported their P&Ls as one combined set of numbers, and therefore this number is represented as 30 of the 32 Reporting Businesses.

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