American Leak Detection
Date of Incorporation: 1974
Franchising Since: 1985
Headquarters: Palm Springs, California
Country: U.S.
Description: The franchisor operates businesses which offer leak detection services, together with related repair and other services, using the "American Leak Detection" name and the American Leak Detection logo which are federally registered trademarks. The franchisor has also begun to engage in and offer to franchisees the option to offer environmentally-friendly bioremediation services that involve the use of proprietary strains of bacteria that remediate waste products (such as fats, oils and grease) and/or products and services involving biodegradable sanitary cleaning and odor products. These types of services are conducted using our above name and logo as well as the name "B-Environmental” name and the B-Environmental logo.
Franchise Offer: The basic business to be conducted by the franchisee 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. The franchisee 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.
Financial Assistance: American Leak Detection does not offer financing nor do they place financing. American Leak Detection does not guarantee any of the franchisee’s notes. Franchisees of American Leak Detection are eligible for expedited and streamlined Small Business Administration (SBA) loan processing through the SBA's Franchise Registry Program.
Training and Assistance: Attendance at initial training is mandatory for all new American Leak Detection franchisees. In addition, attendance at the annual convention is mandatory during the first three years of operation of the business; attendance is recommended, but is optional thereafter. The initial 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.
Territory: The franchisee is granted a specific territory in which they are exclusively awarded the right to operate an American Leak Detection Franchise as specified in the Franchise Agreement. The franchisor will not operate or award a franchise for the operation of another American Leak Detection office in the franchisee’s Operating Territory. The franchisee is 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.
Term of Agreement and Renewal: The initial franchise term is for 10 years, and provided that the franchisee is not then in default and has substantially complied with the Franchise Agreement, they may renew for another 10-year term.
Obligations and Restrictions: The franchisor does not require personal “hands on” participation in the direct operation of the franchised business, although it does require the franchisee to use their best efforts to fully develop the Operating Territory. If the franchisee is not personally involved in the direct operation of the American Leak Detection business, it is required that the manager must have successfully completed the training provided to new franchisees. The leak detection and repair services may, in some localities, require the franchisee to hold certain vocational and/or other licenses (e.g. contractor's licenses, etc.). These requirements vary in different states and local authorities. The franchisee is required to comply with all applicable laws.
Total Number of Units: 153 units throughout the U.S.
Investment Tables
Initial Investment:
| Expenditures | Low | High |
|---|---|---|
| Initial Franchise Fee | $29,500 | $80,000 |
| Equipment, Products and Training Package | $25,500 | $52,000 |
| Training Fee | $4,500 | $6,000 |
| Bioremediation and Equipment and Products package | $5,000 | $5,000 |
| Business Licenses | $0 | $250 |
| Telephone Security Deposit | $30 | $250 |
| Personal Working Hand Tools | $200 | $2,000 |
| Work Vehicle | $0 | $35,000 |
| Desk, Typewriter, Computer, Incidental Office Supplies | $100 | $4,000 |
| Additional Funds (3 months) | $15,000 | $25,000 |
| Shipping | $100 | $750 |
| Insurance | $750 | $3,000 |
| Sales Taxes, City, County, State | $0 | $2,000 |
| Business Management Accounting Software | $75 - Resold or Transferred Franchises only | $300 - Resold or Transferred Franchises only |
| Miscellaneous Costs to Commence Operations | $2,500 | $7,500 |
| Total | $83,255 | $233,550 |
Ongoing Fees:
| Name 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/check dishonored check fee |
| Transfer of Business or Rights | 1½ % 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 determined |
| Audit Expenses | Costs of audit |
| Training | Fee for optional training and expenses incurred |
| Indemnification | Will vary under circumstances |
| Fees and Expenses for Successor Franchise | Will vary under circumstances |
| Business Management Accounting Software | $75 - $300 |
| Required Purchases | Will vary under circumstances |
Date of FDD: 2010
The above information has been compiled from the FDD of American Leak Detection along with online sources.
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