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Ductz Franchise Costs & Fees

Date of Incorporation: 2002
Franchising Since: 2003
Headquarters: Ann Arbor, Michigan

Business Description: The franchisor is Ductz International, LLC. The franchise offered is for the establishment and operation of a business offering HVAC cleaning and restoration services for residential and commercial dwellings and buildings, utilizing the Ductz business system.

Franchise Offer: The franchisor grants franchises for establishing, marketing, promoting, advertising, managing, conducting and operating businesses that perform HVAC cleaning and restoration services under its marks.

Financial Assistance: The franchisor may offer franchisees financing for a portion of the Initial Franchise Fee if they meet qualifications. Additionally, there is a potential source of financing for the vehicle available through Trans Lease, but franchisees are not required to finance their vehicle through Trans Lease.

Training and Assistance: Franchisees must successfully complete the franchisor’s JumpStart training program within one month of signing the Franchise Agreement, before attending Business Management and Technical Operations Training and before the opening of the Ductz Business. This program includes the franchisor’s comprehensive preparation program that includes numerous pre-opening activities and may last six to eight weeks, depending on the pace the franchisee establishes to complete activities. After franchisees have completed JumpStart initial training, the franchisor will furnish business manager and technical operations training to the Managing Owner or, if applicable, the Designated Manager. The Business Manager and Technical Operations Training will last up to 11 days in duration at the franchisor’s headquarters or another location designated by the franchisor. The Managing Owner or, if applicable, the Designated Manager, must attend the Ductz Annual Convention at least once every two years. The Managing Owner or, if applicable, Designated Manager also must attend periodic refresher training courses and conferences, not to exceed one convention/conference per year, at the times and locations the franchisor determines, and for which it may charge fees.

Territory: The franchisee’s specific “DOT” and “RSA” are collectively referred to as the “Territory” and are described in the Franchise Agreement. The DOT consists of the specific zipcode(s) specified in the Franchise Agreement that have been awarded to franchisees, within which the franchisor will not allow another Ductz franchisee or Company Store to advertise in print or media. The RSA is a geographical area close to the DOT, also specified in the Franchise Agreement by zip-code(s). Franchisees do not have any ownership rights to the RSA. Within the RSA, franchisees may not advertise in print or media, they may not protect Referring Partners located in the RSA without the franchisor’s prior written permission; however, they may follow Referring Partner leads and service customers for the Franchised Business. A DOT will generally include up to 200,000 households. It will include a minimum of 100 potential Referring Partners located within the DOT.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If they substantially comply with the Franchise Agreement, including payment provisions, franchisees can add two additional consecutive renewal terms of 10 years for a franchise.

Obligations and Restrictions: Franchisees must designate at least one managing owner who will be the franchisor’s primary individual contact with the Ductz Business and who the franchisor will approve in its sole discretion. However, the franchisor may, in its sole discretion, require franchisees to designate a person who will serve as the primary individual contact for a Ductz Business (the Designated Manager) under certain circumstances. The franchisor must approve of the Designated Manager in writing, which it may grant in its sole discretion. Franchisees must offer and provide all of the services that the franchisor periodically requires for Ductz franchisees in the manner it prescribes. Franchisees may not market or perform any duct or HVAC cleaning services that the franchisor has not authorized, including those listed on the then-current exception list, or other insurance restoration services, without the franchisor’s expressed, prior written approval.

Estimated Number of Units: 100

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $49,900 $74,900
Initial Package Fee $0 $700
Hand Tools, Miscellaneous Supplies $500 $2,500
Food and Lodging While Training, Not Including the Cost of Transportation $1,500 $3,000
Vehicle for 3 months $10,098 $10,506
Full Time Technician for 3 months $0 $7,200
Computer System $0 $1,500
DSL, Cable or Satellite High Speed Internet, Anti-Virus Software and Electronic Mail $270 $475
Insurance for the 3 First Months $1,200 $3,500
National Air Duct Cleaning Association (NADCA) Annual Membership Fee $800 $800
National Air Duct Cleaning Association (NADCA) Certification Fee $385 $385
Shipping, Handling and Taxes for the Initial Package $150 $1,200
Real Estate or Storage for the First 3 Months $0 $1,200
Additional Funds for the First 3 Months $9,000 $20,000
TOTAL ESTIMATED INITIAL INVESTMENT & ADDITIONAL EXPENSES $92,803 $144,866
Other Fees
Type of Fee Amount
Royalty 10% of Gross Sales generated; if franchisees fail to achieve the Minimum Gross Sales that the franchisor designates it may collect a minimum royalty.
National Marketing Fund Up to 1% of Gross Sales, if established.
Additional Training or Assistance Hosting Fee $75.00 per day per person.
Technology Licensing and Upgrade Fee The then current fee, which is presently $25 per week.
Annual Convention Savings $25 per week.
Annual Convention, Regional Meetings and/or Additional Training The then current fee, which is currently (a) $300 - $400 per person to attend the Annual Convention, and (b) $0 - $200 per person per event for Regional Meetings and/or Additional Training.
Transfer of Corporation Fee $500
Transfer Fee The then current fee, per territory; presently this is $9,900 if transferred to a new Ductz franchise owner, or $2,000 if transferred to a current Ductz franchise owner.
Resale of the Franchised Business 10% of the purchase price.
Broker Fee - Resale If franchisees authorize the franchisor to enlist a third party broker to locate the transferee, there will also be a broker fee, which currently ranges from $24,000 - $30,000
Outstanding Royalties, Support Fees, and Other Fees of Transferor Will vary under the circumstances.
Renewal Term Fee 20% of the then current Initial Franchise Fee.
Late Report Fee $20 per week that a report is late.
Late Payment Fee 5% of amount due or $50 per week, whichever is greater.
Administrative Fee The then current fee, which is presently $500 per transaction.
Collection Fee The then current fee, which is presently up to 10% of gross amounts collected on the franchisee’s behalf.
Non-Sufficient Funds (NSF) Fee The then current fee, which is presently $33 per NSF.
Convention Non-Attendance Fee The then current fee, which is presently $1,300
Out of DOT Territory Marketing Fine The present fine for marketing outside of the franchisees DOT and in another franchisee’s DOT without permission is up to $1,000
Audit Cost of inspection or audit estimated at $2,500-$3,500, plus 100% of understated Royalty and interest, at the rate of 18% per annum or the maximum rate permitted by applicable law, whichever is greater, and all late fees, from the date originally due until the date of payment; if an understatement of Royalty is greater than 3%, franchisees also must pay the franchisor an additional penalty fee equal to 10% of the total amount of the understated Gross Sales.
Interest Fee 18% per annum or the maximum permitted by law.
Indemnification Will vary under the circumstances.
Costs and Attorney's Fees Will vary under the circumstances.

The above information has been taken from the FDD of Ductz. Year of FDD: 2016

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