Molly Maid
Date of Incorporation: 1979
Franchising Since: 1979
Headquarters: Ann Arbor, Michigan
Country: U.S.
Description: The Molly Maid Franchised Business is devoted to effectively meeting the residential cleaning needs of consumers and, in so doing, enhances their quality of life.
Franchise Offer: The franchisor develops, promotes, and awards franchises for the operation of professional residential housekeeping services under the Molly Maid name using methods and operating systems as defined in Molly Maid operating manuals. Molly Maid has developed a carpet cleaning program for existing owners who are averaging $7,000 in Gross Sales a week, or who have at least 150 regular customers, for one calendar quarter, and who are in full compliance with their franchise agreement. Owners who meet the above qualification may purchase the carpet cleaning program, which was developed in addition to the standard residential housekeeping services. Molly Maid has also developed a program for existing owners who meet certain criteria. These owners may have the opportunity to purchase additional territory through the Expansion Program.
Financial Assistance: Molly Maid has been deemed eligible for streamlined and expedited loan processing through the Small Business Administration. The franchisor may offer financing for the initial fees if the franchisee meets the qualifications and credit standards. The franchisor also suggests third party lending sources. Enterprise may offer franchisees financing for vehicles if they meet their qualifications; however, franchisees are not required to purchase or lease their vehicles from them. Other than the described instances, Molly Maid Inc. will not guarantee any notes, leases or obligation.
Training and Assistance: Initial Training begins with Right Start, which is Molly Maid’s comprehensive preparation program. With guidance from the training team, along with training Manuals, the franchisee begins a six to eight week program that includes numerous pre-opening activities. Classroom and hands-on training sessions will be conducted at Molly Maid’s home office in Ann Arbor, MI for five days and at one of their Owner Training Centers for an additional five days. The instructional materials consist of Manuals, DVDs, demonstrations, presentations and on the job practice. This training will be conducted by the Molly Maid training staff, franchise services team and experienced franchise owners.
Territory: Territories are identified by US Census Bureau Census Tracts or physical or political boundaries. Within the Territory, the franchisee and Molly Maid will agree upon an approximate number of Target Households that meet Molly Maid’s current demographic formulation. The Standard-Market Size Territory includes approximately 30,000 to 40,000 target Households. In certain areas of the country Molly Maid will approve a Mid-Size Market Territory. The Mid-Market Size Territory includes approximately 20,000 to 30,000 Target Households. The minimum Territory Size is 20,000 target Households.
Term of Agreement and Renewal: The length of the franchise term is 10 years from date of signing of agreement. If the franchisee is in good standing and full compliance with the franchise agreement he or she can add two additional renewal terms of 10 years.
Obligations and Restrictions: The franchisee must at all times faithfully, honestly, and diligently perform his/her obligations under the franchise agreement. The franchisee must not engage in any other business or activity that conflicts with his/her obligations to operate the franchised business. The franchisee must designate one managing owner as a primary contact with the franchised business. In the case of multiple owners, only one managing owner will be required to work full-time in the franchised business. The managing owner must successfully complete the initial training program. The franchisee must offer and provide all of the services required for Molly Maid franchises, and in the manner prescribed. The franchisee may not market or perform any services that the franchisor has not authorized.
Total Number of Units: 630 units worldwide.
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $14,900 | $14,900 |
| Territory Fee | $20,000 | $40,000 |
| Initial Package Fee | $9,900 | $9,900 |
| Auto Lease Deposit and 3 Months Lease Expense | $2,400 | $4,800 |
| Leasehold Improvements | $0 | $2,000 |
| Real Estate, Utility Deposits and Three Months Rent | $3,000 | $5,000 |
| Furniture, Fixtures and Equipment | $2,000 | $3,000 |
| Permits and Licenses | $100 | $1,000 |
| Insurance Deposit and Three Months Insurance Expense | $2,200 | $5,300 |
| Local Marketing Requirement for three months | $5,000 | $10,000 |
| Training Expenses for Travel, Food and Lodging | $2,000 | $4,000 |
| Additional Funds-3 Months | $10,025 | $16,300 |
| Total | $71,525 | $116,200 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty | Percentage based on a calendar year sliding scale of Gross Sales: $0-400,000 or if not in compliance = 6.5% $400,001-800,000 = 6% $800,001-1,200,000 = 5.5% $1,200,001-$1,600,000 = 5% $1,600,001-2,000,000 = 4.5% $2,000,001-$2,400,000 = 4% $2,400,001-$2,800,000 = 3.5% $2,800,001 and up = 3% |
| National Marketing Fund | The then Current Fee. Presently, the current fee is $150 per month not to exceed 2% of Gross Sales. |
| Local Advertising | $1 per Target Household per year; declines as Gross Sales increase, to a minimum of $0.25 per Target Household if criteria are met. |
| Internet Connection & Electronic Mail & Anti-Virus | The then current fee. Presently, the current fee ranges from $79.00-$ 159.00 per month for 1 account/user on 1 computer. |
| Technology Fee | The then current fee. Presently the current fee is $26 per week for a single user, and $36 per week for a multi-user. |
| Call Center | The then current fee. Presently, the current set-up fee is $99, plus $25 monthly fee, a per estimate fee of $20 if booked during business hours and $25 if booked in the evenings or on the weekend. |
| Conventions and Regional Meetings and Additional Training | The then current fee. Presently, the current Convention fee is $185-235 per person and $50 per person for Regional Meetings. The current training fee is $0 for the first two attendees and $500 thereafter. |
| Renewal | The then current fee. Presently, the current fee is $3,000 for one or more Franchise Agreements being renewed at the same time. |
| Transfer | The then current transfer fee. Presently, the fee is $9,900 if being transferred to a new franchise owner or $2,000 if being transferred to an existing franchise owner. If the franchisee authorizes Molly Maid to enlist a third party broker to locate the transferee, the current fee is $17,000. Outstanding royalties and fees that were not timely paid by Predecessor are also due. |
| Carpet Cleaning Program and Training | The then current fee. Presently, the current fee is $4,837.07 for the equipment, and $79 per person for the training. Travel and lodging expenses are extra. Additional ongoing cost of local marketing, presently ranging from $500-$ 1,000 per year |
| Expansion Royalty Rates | The royalty rates for each Franchise Agreement may be averaged and aggregated together to form one royalty rate and threshold scale for the all of the Franchise Agreements. In averaging and aggregating the rates and levels, Molly Maid will take into account the ratio of the then current number of Target Households in each Franchise Agreement. |
| Transfer of Company Fee | The then current fee. Presently this is $500 per transaction. |
| Insurance | Cost of insurance. |
| Interest | Greater of 12% per annum or the maximum permitted by law. |
| Late Royalty Report and Payment Fee | The then current fee. Presently, the fee is accessed per week late: $20 per late report; 5% Royalty or $20 (the greater) per late payment; Non-sufficient funds is $33. |
| Late Reporting Fee | The then current fee. Presently, the current fee is $20 per week that the report is late. |
| Costs and Attorneys Fees | Will vary under circumstances |
| Audit | Cost of inspection/ audit, presently estimated at $2,500-$3,000; 100% of understated Royalty; interest (12% per annum); and late fees. |
| Indemnification | Will vary under circumstances |
Date of FDD: 2010
The above information has been taken from the UFOC/FDD and online sources of Molly Maid.
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