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HouseMaster Franchise Cost & Fees

Date of Incorporation: 1971
Franchising Since: 1979
Headquarters: Ewing, New Jersey

Business Description: The franchisor, HouseMaster LLC, franchises the right to operate a building inspection and related services business using HouseMaster’s Proprietary Marks, the HouseMaster Method of conducting a building inspection business, and the HouseMaster strategy for marketing and promoting a building inspection business.

Franchise Offer: The HouseMaster franchisee will perform building inspection and related services for customers. Related services may include wood destroying insect testing and/or treatment, water testing, radon gas testing and/or mitigation, mold testing, septic tank evaluations/cleaning, lead paint testing, buried tank testing, preventative maintenance inspections and safety inspections. HouseMaster also offers existing HouseMaster franchisees the right to operate an add-on holiday lighting and decoration and related services business.

Financial Assistance: HouseMaster may offer financing of the initial franchise fee in certain limited situations subject to HouseMaster's sole discretion. HouseMaster may sell, assign or discount the secured promissory note to a third party. HouseMaster does not guarantee a franchisee’s note, lease or obligation. HouseMaster has registered this franchise with the Small Business Administration. HOUSEMASTER can assist franchisees in applying for SBA guaranteed financing.

Training and Assistance: The National Institute of Building Inspectors (NIBI) Technical Training is currently held at the NIBI training center in Ewing, New Jersey. The HouseMaster Marketing and Operations Training will be a combination of on-line, webinar and seminar training, segments of which will be held at HouseMaster’s corporate office in Ewing, New Jersey or other location chosen by HouseMaster. Franchisees must attend and participate in the initial training program. Their associates may also attend the training program at no additional fee. If HouseMaster holds an Annual Conference or Regional Meetings of franchisees, the franchisee or one of his or her managers must attend. HouseMaster may provide other training programs for franchisees and their employees. Franchisees will not be required to attend these programs.

Territory: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that HouseMaster owns, or from other channels of distribution or competitive brands that HouseMaster controls. Franchisees may conduct inspections and provide other related services anywhere other than in an existing franchisee's Limited Area or Reciprocal Opportunity Franchise Territory. For the franchisee's information, the franchisee will be provided a list of Excluded Territories within a 50 mile radius of their Franchise Location at the time the Franchise Agreement is signed.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If the franchisee meets the requirements, he or she may be eligible for a successor franchise agreement for a successive term.

Obligations and Restrictions: Franchisees must devote full time and effort to the active management and operation of the franchised business. Franchisees may hire a full-time manager for the franchised business only if prior written consent from HouseMaster is obtained. However, franchisees must continue to actively oversee the operations of the franchised business supervised by the manager. Franchisees must follow the HouseMaster Method in operating the franchise business and offer the services and products authorized under the HouseMaster Method.

Estimated Number of Units: 345

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $42,500 $42,500
Training Expenses $500 $3,000
Licensing Compliance Costs $0 $15,000
Marketing Materials and Supplies $3,000 $6,000
Office Equipment, Furniture $0 $2,000
Computer System $150 $4,850
Rent $0 $750
Prepaid Expenses $250 $2,500
General Liability Insurance $500 $2,500
Errors & Omissions Insurance $2,500 $3,500
Legal Services $1,000 $2,500
Conference Travel Expenses $1,000 $3,000
Vehicle Branding $1,700 $4,000
Grand Opening Promotion Expense $1,000 $3,000
Additional Funds - 3 months $6,000 $11,000
Estimated Total $60,100 $106,100
Other Fees
Type of Fee Amount
Royalty Service Fee 7.5% of first $125,000 in Gross Sales per year;
7% on $125,001- $250,000;
6.5% on $250,001 -$500,000;
6% on $500,001 -$1,000,000;
5.5% on $1,000,001 -$1,500,000;
5% on Gross Sales over $1,500,000. The franchisee must pay a minimum monthly royalty fee.
Marketing Contribution 2.5% of first $125,000 in Gross Sales per year;
2.25% on $125,001 - $250,000, and 2% over $250,000
Technology Fee Currently $150/per month, subject to increase.
Late Payment Fee at HouseMaster's option, $10 per day.
Transfer Fee $8,000
Annual Conference/Regional Meeting Registration Fee Up to $1,000. Fee may be adjusted annually to reflect increases in the national consumer price index.
Audit Cost of Audit
Successor Agreement Fee $2,500; plus an additional $500 if the franchisee signs a Successor Franchise Agreement after the expiration of the original Franchise Agreement, if HouseMaster permits the franchisee to sign after the expiration.
Reimbursement for Insurance Cost of Insurance plus HouseMaster's expenses.
Indemnification Loss, liability, damages and costs incurred by HouseMaster.
Internet Training Fee (Distance Learning Program) Currently $50 per module (approximately 11 modules for initial training), or $500 for all modules.
PC Ex press License/Support Fee Annual license renewal fee for support and upgrades; currently $300/year per license.
Cross Territory Fine $1,000 per occurrence.
Insurance Fine The greater of $5,000 or the cost of extended reported period insurance.
NIBI Training Fee and Materials Fee The cost of training materials, up to $350, plus shipping for each additional trainee.
Liquidated Damages The greater of 30% of your annual Gross Sales based on the preceding 3 years.
Fine for Violation of Covenants Not To Compete The greater of $25,000 or 20% of the franchisee’s average annual Gross Sales over the preceding 3 years.
Deferred Training Fee $52,500 plus the cost of NIBI technical training (for all employees attending).
Customer Refund Inspection fee paid by Customer.
Reimbursement of investigation fees Fee HouseMaster paid to investigator or secret shopper).
Fines for failure to comply with HouseMaster Method Amount published in HouseMaster Manual; currently $250 per occurrence.
Reimbursement for taxes paid Undetermined.
NIBI - Licensing Compliance Costs Between $0 - $15,000
Fees for services of affiliate Block 6 Services, LLC Fee published by affiliate; amount undetermined as of the date of this Disclosure Document.

The above information has been taken from the FDD of HouseMaster. Year of FDD: 2015

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