Franchising Since: 1985
Headquarters: New Haven, Connecticut
Estimated Number of Units: 140
Franchise Description: The franchisor is American Leak Detection, Inc. The franchisor is wholly owned by Water Intelligence plc, a UK public limited company. The basic business to be conducted by franchisees is leak detection services, together with related repair and other services. Services to be offered by the franchisee include water, gas, pool, spa, sewer leak and other detection and repair, and pipeline location. Franchisees will detect plumbing leaks hidden by concrete slabs, asphalt, earth, walls and other concealed areas and utility lines. The general market for the services will be swimming pool and spa owners and residential and commercial property owners with hidden leak problems. As the business develops, the franchisor may authorize the franchisee to offer leak correlation services for main distribution lines to municipalities, water districts (both rural and urban), industrial estates and other such customers.
Training Overview: New franchisees must attend initial training. Their spouse or other technician may attend initial training at no additional fee. The training program includes home study, classroom and on-the-job training, and setup training, which are generally provided before or concurrent with the opening of the franchised business. Home study is an evening self-study program conducted during the training phase. Much of the training is on-the-job application of the fundamentals learned in the training phase. Training is conducted at (i) various locations but principally at the franchisor’s Bridgeport, Connecticut training center and (ii) a franchisee location, conducted by approved franchisee personnel. Franchisees must complete initial training to the franchisor’s satisfaction. Franchisees must attend additional and/or refresher training programs conducted at location(s) specified by the franchisor as it, on a reasonable basis, designates. In addition, attendance at the franchisor’s annual convention is mandatory for one out of every three years of operation of the business.
Territory Granted: Franchisees are granted a specific territory (operating territory) in which they are exclusively awarded the right to operate an American Leak Detection franchise as specified in the Franchise Agreement. The operating territory is normally specified at the time the Franchise License Agreement is signed and will be based, in part, on a population of not less than 300,000, and will not overlap with another operating territory. Franchisees are allowed to make marketing presentations to persons and companies headquartered anywhere but, to the extent permitted by law, they may only provide leak detection and/or repair services within the operating territory, except in the case of special provisions, on a case-by-case basis, with regard to unsold territories. Provided that franchisees are not in default of any of their obligations to the franchisor, it will not operate or award a franchise for the operation of another American Leak Detection office in the operating territory.
Obligations and Restrictions: The franchisor highly recommends and encourages owner participation in the franchise business. However, the Franchise License Agreement does not require personal “hands on” participation in the direct operation of the franchised business although it does require franchisees to use their best efforts to fully develop the operating territory. If franchisees are not personally involved in the direct operation of their American Leak Detection business, the franchisor requires that their manager must have successfully completed the training provided to new franchisees. Franchisees are required to use the American Leak Detection system and marks only as permitted by the Franchise License Agreement and the American Leak Detection manuals and only for the operation of a franchised American Leak Detection office engaged in leak detection and related repair and other related services.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees are not then in default and have substantially complied with the Franchise Agreement and all other agreements, they may renew for another 10-year term.
Financial Assistance: The franchisor does not offer financing nor does it place financing and therefore it does not receive payments for the placement of financing. Nor does the franchisor guarantee any of the franchisee’s notes.
Estimated Initial Investment
| Name of Fee | Low | High |
| Initial Franchise Fee | $29,500 | $120,000 |
| Equipment and Products Package | $25,500 | $52,000 |
| Training Package | $3,000 | $6,000 |
| Business Licenses (depending on area) | $0 | $250 |
| Telephone Security Deposit | $30 | $250 |
| Personal Working Hand Tools | $200 | $2,000 |
| Work Vehicle | $0 | $35,000 |
| Desk, Computer Hardware, Incidental Office Supplies (depending on nature of items) | $100 | $5,000 |
| Shipping | $100 | $750 |
| Insurance | $750 | $3,000 |
| Sales Taxes, City, County, State | $0 | $2,500 |
| Business Management Accounting Software (resold or transferred franchises only) | $75 | $300 |
| Additional Funds to Commence Operations | $17,500 | $32,500 |
| ESTIMATED TOTAL | $76,755 | $259,550 |
Other Fees
| Type of Fee | Amount |
| Royalty Fees | The applicable percentage of adjusted gross volume for each reporting month. |
| Fate Fees; Dishonored Checks | $25 for late payments/reports and $5/day late penalty; $25/dishonored check fee. |
| Transfer of Business or Rights | 1.5 % of total sale price, with a minimum of $2,500 and not to exceed $5,000 transfer fee; training of buyer at $150 per day for a minimum of four weeks at company; or other reasonable fee the franchisor determines. |
| Audit Expenses | Costs of audit. |
| Training | Fee for optional training and expenses incurred. |
| Indemnification | Will vary under circumstances. |
| Renewal Fees and Expenses | Currently none. |
| Business Management Accounting Software | $75 - $300 |
| Required Purchases | Will vary under circumstances. |
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