Steamatic Franchise Costs & Fees
Date of Incorporation: 1948
Franchising Since: 1967
Headquarters: Fort Worth, Texas
Business Description: The franchisor is Steamatic, Inc. Steamatic grants franchises to use Steamatic Technology to perform Steamatic Services including catastrophe restoration and cleaning services to both structure and contents, residential and commercial carpet, hard surface, window coverings and furniture cleaning, and other retail cleaning services such as cleaning of air ducts and ventilation systems. Steamatic offers multiple levels of franchises depending on the size of the territory, the equipment required and the Steamatic Services to be provided.
Franchise Offer: The franchisor grants the right to use Steamatic Technology and perform some or all “Steamatic Services” in restoration and cleaning which generally includes (i) catastrophe (fire, smoke, water, wind, weather, explosion, and other similar events) restoration and cleaning services to both structure (interior and exterior) and contents, (ii) indoor and interior environmental and air quality services including, but not limited to, the testing, assessment, remediation, restoration and the cleaning of the interiors of structures (commercial and residential) and transportation vehicles including air conveyance, duct and ventilation systems; heating, furnace, and air conditioning units; chimneys; exhaust/ventilation systems; and carpets, rugs, furniture, drapes, other interior surfaces, contents and personal property, and (iii) other services and activities which are related to all types of cleaning, maintenance, dehumidification, drying, bioremediation, deodorization, and construction of both the interior and exterior of residential, commercial and industrial establishments.
Financial Assistance: Third party lenders may assign their rights under their loan documents to Steamatic or to any other party. Steamatic has financed initial equipment and supply packages itself in the past, and assigned some (but not all) of those financing arrangements to unaffiliated third parties. It does not currently do so, but may in the future. Except as disclosed above, Steamatic does not arrange financing from other sources. Neither Steamatic nor any affiliate receives payment from any other person for the placement of financing, but Steamatic reserves the right to change this in the future.
Training and Assistance: The franchisor conducts two weeks initial training program including classroom training at Steamatic headquarters in Fort Worth, Texas, and field training at a franchised location serving as a Steamatic regional training facility. Steamatic also currently provides other more limited training programs; some of those programs are provided at a fee. Franchisees are required to attend at least one national or regional Steamatic seminar each year. Generally, national seminars are held at Fort Worth, Texas, but they can be offered anywhere in the continental United States. The franchisor will conduct an initial visit to the franchisee’s location following initial training and commencement of business at a time reasonably acceptable to Steamatic for a period of time not to exceed one week. Steamatic will also provide additional field assistance if it determines, at its sole discretion, it to be necessary.
Territory: The size of the Territory will depend on the population, demographics, amount of industry and commercial business and the projected economic trends for the Territory. Generally speaking, territories for the services to be provided Steamatic Franchises fall within the following ranges: (1) “Small Market Territories” those territories containing less than 75,000 that are not part of a larger metropolitan area, and (2) territories containing a population up to 200,000. Territories containing a population in excess of 350,000 are considered multiple territories. Franchisees must operate the franchise from a location within their Territory, but they do not need prior approval of the location from Steamatic. Franchisees will not receive an exclusive territory and the franchise will be non-exclusive to the extent described in the FDD.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees are in good standing and in compliance with Steamatic’s financial and training requirements, they can renew for continuing 5-year terms by giving appropriate notice and paying the renewal fee.
Obligations and Restrictions: While Steamatic does not require that franchisees personally supervise the Franchised Business, it recommends that franchisees do so. If the franchisee is a business entity, Steamatic recommends that the “on premises” manager have at least a 50% ownership interest in the franchisee. Franchisees must investigate and take all steps reasonably necessary to insure that all employees of the business are competent to perform the services to be provided and that those employees will not intentionally harm others. Any “on premises” manager who is not an owner must successfully complete Steamatic’s training program and must not have an interest or business relationship with any of Steamatic’s competitors. Steamatic requires that franchisees offer only Steamatic Services to your customers. This requires that franchisees use only Steamatic equipment and cleaning materials or equipment and cleaning materials meeting Steamatic’s specifications. Franchisees must also perform those services in accordance with the standards and quality required by Steamatic as set forth in the Operations Manual and other materials provided from time to time by Steamatic.
Estimated Number of Units: 370
|Type of Fee||Amount|
|Royalty||Franchisees pay a royalty fee based on a percentage of Gross Revenues. The percentage will reduce as certain levels of annual aggregate Gross Revenues are achieved, and also varies based on whether revenues are from the Subcontract Portion of Gross Revenues, the Construction Portion of Gross Revenues or from Adjusted Gross Revenues.|
|Royalty Fee on Adjusted Gross Revenues||Starts at 8% each January 1 and can reduce to as low as 2%|
|Royalty Fee on Subcontract Portion of Gross Revenues||Starts at 4% each January 1 and can reduce to as low as 1%|
|Royalty Fee on Construction Portion of Gross Revenues||2% until aggregate annual Gross Revenues reach $1,000,000, and 1% for the remainder of the calendar year.|
|Advertising||5% of Gross Revenues.|
|Advertising Fund (if established)||2% of Gross Revenues maximum.|
|Fee for Job in Another Franchisee’s Territory||10% of Gross Revenues.|
|Referral Fee for Job in the Franchisee’s Territory Referred by Another Franchisee||5% of Gross Revenues.|
|Referral Fee for Jobs Referred by Steamatic or Special Contractor||Varies depending on the job. If franchisees participate in an optional national account program that results in administrative fees, Steamatic may charge an administrative fee of up to 3%|
|Audit||Cost of audit.|
|Advertising and Promotional Materials||Varies depending upon advertising needs.|
|Initial Training||Currently, no additional charge.|
|Additional Training and Materials||Varies, depending upon the program, number of people and certifications received.|
|Returned Check||$50, not to exceed maximum allowed by applicable law.|
|Interest||1.5% per month, not to exceed maximum allowable by applicable state law.|
|Late Reporting Fee||$20 per day.|
|Maintenance||Varies, depending on cost of specific maintenance received.|
|Integrated Business Service Fee||A monthly fee of $195 for up to 10 users and $10 per month for each user in excess of ten, in connection with the IBS Services.|
|Xactware Setup and License||Franchisees will be required to lease/license Xactimate estimating Software from Xactware, Inc. A monthly charge of $125 (3 months = $375)|
|National Convention Registration Fee||$495 ($395 for early registration).|
|Website Fee||$230 per month (3 months = $690)|
The above information has been taken from the FDD of Steamatic. Year of FDD: 2015
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