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Hoodz Franchise Costs & Fees

Date of Incorporation: 2008
Franchising Since: 2009
Headquarters: Ann Arbor, Michigan

Business Description: The franchisor is Hoodz International, LLC. Hoodz franchises perform commercial exhaust hood system and oven cleaning, inspection, maintenance, preventative maintenance, repair and restoration services.

Franchise Offer: The franchise offered is for the establishment and operation of a business offering commercial cleaning, maintenance and repair, including but not limited to commercial kitchen equipment cleaning, utilizing the Hoodz business system.

Financial Assistance: The franchisor may offer franchisees financing for a portion of the Initial Franchise Fee if they meet its qualifications. Additionally, there is a potential source of vehicle financing available through Trans Lease, but franchisees are not required to finance their vehicle through Trans Lease. Trans Lease may offer franchisees financing for their vehicle if they meet their qualifications.

Training and Assistance: The Managing Owner and, if applicable, Designated Manager, must successfully complete the Initial Training Program before attending Business Manager and Technical Operations and before the opening of the Franchised Business. This Initial Training Program is a self-guided process, with additional guidance from the franchisor’s training team, along with the Hoodz System Standards. Before franchisees begin operating the Business and after they have completed the Initial Training Program, the franchisor will furnish Business Manager and Technical Operations Training to the Managing Owner and, if applicable, the Designated Manager. The Business Manager and Technical Operations Training will last up to ten days in duration at the franchisor’s headquarters or another location designated by the franchisor. Upon the successful completion of training, there will be a transitional period of approximately 90 days, in which franchisees and or their Service Technician will have the opportunity to observe actual commercial exhaust hood and oven cleaning work for Customer Service Locations located in their Territory which have been previously serviced by an existing Hoodz franchisee or Company Store. The Managing Owner or, if applicable, the Designated Manager, must attend the Hoodz annual convention every year. The Managing Owner or, if applicable, the Designated Manager also must attend periodic refresher training courses and conferences, not to exceed one convention/conference per year, at the times and locations the franchisor determines, and for which it may charge fees.

Territory: Within the Territory, franchisees have the right to advertise and service any customer for services, except as described in the Franchise Agreement. Franhisees may not advertise to or service in any way, any customers or Customer Service Locations outside the Territory, without the franchisor’s prior written consent. The business office site must be located within the Territory, and we must approve such Office Site. The Office Site must contain a minimum of 300 square feet and meet all applicable fire and safety codes for storage of materials and supplies used by the System. The franchisor will not alter the Territory during the term of the Franchise Agreement and any renewal agreements without the franchisee’s prior written consent. The Territory that has been awarded to franchisees is where we will not allow another Hoodz franchisee or Company Store to advertise in print or media, primarily directed to persons in their Territory.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees substantially comply with the Franchise Agreement, including payment provisions, they can add two additional consecutive renewal terms of 10 years for a franchise.

Obligations and Restrictions: Franchisees must designate one Managing Owner, who is either an individual franchisee or a person with an ownership interest in a corporation or Limited Liability Company franchisee, who will have day-to-day responsibility and authority to run the Franchised Business, and who will be the franchisor’s primary individual contact with the Franchised Business, and who the franchisor approves in its sole discretion.

Estimated Number of Units: 135

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $59,900 $89,900
Initial Package Fee $12,500 $12,500
Food and Lodging While Training, Not Including the Cost of Transportation $1,250 $3,000
Vehicle for 3 Months $9,195 $12,585
Full Time Service Technician for 3 Months $5,760 $15,360
Business Telephone Fee $25 $40
High Speed Internet, Anti-Virus Software and Electronic Mail $89 $159
Computer System $0 $2,875
Uniform Cleaning/Delivery $300 $364
Insurance for the First 3 Months $1,600 $4,500
Global Positioning System/Data Communications Services Fee $36.5 $36.5
Digital Camera $100 $300
International Kitchen Exhaust Cleaners Association (IKECA) Annual Membership Fee $0 $1,130
International Kitchen Exhaust Cleaners Association (IKECA) Certification Fee $0 $350
Shipping, Handling and Taxes for the Initial Package $150 $1,000
Rent - 3 Months $0 $2,400
Leasehold Improvements $0 $1,200
Security Deposits/Utility Deposits $0 $950
Licenses and Permits $35 $200
Additional Funds - First 3 Months $10,000 $30,000
ESTIMATED TOTAL $100,941 $178,850
Other Fees
Type of Fee Amount
Royalty 10% of all Gross Sales generated; if franchisees fail to achieve the minimum Gross Sales, the franchisor may collect a minimum royalty.
Additional Training or Assistance Hosting Fee $25 per person, per day, of any training conducted at the franchisor’s headquarters, or the then current fee.
Additional Technician Training Up to 50% of the contributions made to Advertising Fund.
Technology, Licensing and Upgrade Fee The then current fee, which is presently $25 per week.
Synchronize QuickBooks The then-current fee, which is presently a onetime payment of $300
Conventions, Regional Meetings and/or Additional Training The then current fee, which is presently $400 max. per person per event, and $1,000 fee for not attending the Annual Convention.
Transfer of Corporation Fee $500
Transfer Fee The then current fee, per Territory; presently, this is $9,900 if transferred to a new franchisee, or $2,000 if transferred to a current franchisee.
Transfer Fee – Broker Fee If franchisees authorize the franchisor to enlist a third party broker to locate the transferee, there will also be a broker fee, which currently ranges from $24,000 - $30,000
National Marketing Fund Up to 1% of Gross Sales, if established.
Local Marketing Requirement Quarterly mailings to a minimum of 1,600 locations, if implemented.
Outstanding Royalties, Support Fees, and Other Fees of Transferor Will vary under circumstances.
Renewal Fee 20% of the then current Initial Franchise Fee.
Late Report Fee $20 per week that a report is late.
Late Payment Fee 5% of amount due or $50 per week, whichever is greater.
Administrative Fee The then current fee, which is presently $500 per transaction.
Collection Fee The then current fee, which is presently up to 10% of gross amounts collected on the franchisee’s behalf.
Non-Sufficient Funds (NSF) Fee The then current fee, which is presently $33 per NSF.
Audit Cost of inspection or audit estimated at $2,500-$3,000, plus 100% of understated Royalty and interest, at the rate of 18% per annum or the maximum rate permitted by applicable law, whichever is less, and all late fees, from the date originally due until the date of payment; if an understatement of Royalty is greater than 3%, franchisees also must pay the franchisor an additional penalty fee equal to 10% of the total amount of the understated Gross Sales.
Interest Lesser of 18% per annum or the maximum permitted by law, whichever is less.
Indemnification Will vary under circumstances.
Improper Marketing or Service Fee Greater of $500 or cost of job.
Costs and Attorneys’ Fees Will vary under circumstances.

The above information has been taken from the FDD of Hoodz. Year of FDD: 2016

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