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The Grout Medic Franchise Cost & Fees

Date of Incorporation: 1997

Franchising Since: 2001

Headquarters: Southlake, Texas

Country: U.S.

Description: Grout Medic franchises use the trademarks of and to operate a Grout Medic Outlet. A Grout Medic Outlet provides grout and tile restoration, maintenance, and refurbishing services through a uniform system.

Franchise Offer: Grout Medic Outlets are mobile businesses in which the services are sold and then provided in customer's homes, and therefore a franchise is only granted you if the franchisee currently owns or leases a personal vehicle suitable for traveling to customers' homes and providing Grout Medic services.  Grout Doctor offers two tiers of franchises, Tier One for metropolitan areas of at least 300,000 people (with a higher initial fee and minimum sales requirements) and Tier Two for lower density areas with between 200,000 and 300,000 people who live within 60 miles of your home.  Franchises are not granted for rural areas that have less than 200,000 people within 60 miles of the franchisee’s home.

Financial Assistance: Grout Medic does not offer direct or indirect financing. The franchisor also does not guarantee any note, lease or other obligation. 

Training and Assistance: The franchisee or Designated Manager must successfully complete the five-day initial training program before the beginning of operation of the franchisee’s Grout Medic Outlet.  The cost of the initial training program for up to two trainees is included in the Initial Franchise Fee, but the franchisee must pay the travel and living expenses for him or her and employee(s).  Pre-opening or opening assistance at the franchisee’s site isn’t provided unless the optional additional pre-opening training is purchased.

Territory: The franchisee will be granted an exclusive Territory, meaning that as long as you are in compliance with your Franchise Agreement and achieve the required sales volume, as described below, we will not establish or operate or license others to establish or operate other franchises in the business of selling grout and tile restoration services to owners of residential property within your protected Territory.  The Territory will have a population of at least 300,000 people if a Tier One franchise, or between 200,000 and 300,000 people if a Tier Two franchise.  The population of your Territory will be determined based upon a review of reputable sources of demographic information including boundary streets, highways, ZIP codes, towns or county lines.

Term of Agreement and Renewal: The length of the franchise term is seven years.  If the franchisee is in good standing, he or she can renew on the then current terms for up to three successive seven-year terms.

Obligations and Restrictions: Grout Medic does not require that the franchisee personally supervise the franchised business. The business must be directly supervised on premises by a Designated Manager who has successfully completed Grout Medic's management training program. The franchisee must begin operations within six months of signing the Franchise Agreement.  Each owner of a 20% or greater interest in the franchisee entity and their spouse must sign the Guaranty and Assumption of Franchisee's Obligations.

Total Number of Units: 60 units.

 

Investment Tables:
Initial Investment:

Name of Fee Low High
Initial Franchise Fee $13,800 $23,700
Initial Equipment and Start-up Supplies Package (if required) $0 $3,500
Initial Training Fee for Additional Franchises (if required) $0 $1,000
Travel and Living Expenses $1,300 $2,250
Rent or Real Estate and Improvements $0 $4,000
Utility Deposits and Connection Fees $500 $1,000
Vehicle Decoration $600 $2,500
Insurance $1,350 $1,850
Legal and Accounting fees $500 $4,000
Opening Inventory $50 $500
Advertising $6,000 $15,000
Computer Equipment and Software $600 $1,500
Office Furniture and Equipment $0 $2,000
Additional Funds (3 Month Initial Phase) $2,500 $11,500
Estimated Total $27,200 $74,300

 

Ongoing Fees:

Name of Fee Amount
Royalty For Tier One franchises:
First 2 months of the initial term: $220/month
Months 3 through 12: $450/month
Year 2: $780/month
Years 3 through 7: $970/month
In addition, franchisee must pay a 5% Royalty Fee on annual total Gross Revenue in excess of $200,000.
For Tier Two franchises:
First 2 months of the initial term: $155/month
Months 3 through 12: $315/month
Year 2: $545/month
Years 3 through 7: $680/month
In addition, franchisee must pay a 5% Royalty Fee on annual total Gross Revenue in excess of $140,000.
National Fund (Advertising) Up to 3% of Gross Revenue; currently $75 per month
Business Management Software $100 per month
Customer Center Services Fee Up to 6% of Gross Revenues; the current charge is 4%
Grout Restoration Supplies and Equipment Franchisor will give you the current price list to review before you pay sign the Franchise Agreement
Marketing Collateral and Business Forms Franchisor will give you the current price list to review before you sign the Franchise Agreement
Additional Headquarters Training Fee $1,000 per person or $200 per additional day (Training for two people for up to 5 days is included in the Franchise Fee)
Additional On-Site Consulting Charges Our daily rate as specified in the Operations Manual, currently $200 per day, plus our incidental costs
Breach Fee Up to $2,500 for breach of territorial restriction, in-term non-compete or confidentiality obligation; Up to $1,000 for any other breach
Transfer Fee $5,000
Relocation Fee $2,000
Renewal Fee $2,000
Audit Full amount of deficiency if discovered through audit, plus Cost of audit if there is a discrepancy of 2% or more
Interest on Past Due Amounts 18% per year or the highest amount allowed by applicable law, whichever is less.
Attorney Fees Amount incurred by prevailing party
Indemnification All damages and costs including attorneys' fees

 Date of FDD: 2011

 

The above information has been compiled from the FDD of The Grout Medic along with online sources.
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