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Five Star Painting Franchise Costs & Fees

Date of Incorporation: 2002
Franchising Since: 2005
Headquarters: Waco, Texas

Business Description: The franchisor is Five Star Painting, LLC. Franchises perform professional painting services for both residential and commercial customers and other related services and products.

Franchise Offer: Franchisees will operate the franchised business under the franchisor’s service marks Five Star Painting, and the additional principal service marks, trademarks, trade names, logos, emblems, slogans or indicia of origin which are or may be designated by the franchisor in the future for use in accordance with the methods and processes developed by the franchisor in connection with the franchise within a specified geographical area.

Financial Assistance: The franchisor has no obligation to provide franchisees any financing, but it may agree to finance a portion of the initial franchise fee for qualified prospective franchisees under specified terms and conditions. The franchisor limits the amount that it will finance -- currently to an amount less than 50% of the total equity, debt and other financial support of the Business. Subject to the obligation limit, the franchisor’s standard financing is up to 70% of the initial franchise fee, and it may agree, in its sole discretion, to finance up to 80% of the initial franchise fee if franchisees meet certain requirements. The franchisor may periodically agree with 3rd party lenders to make financing available to its qualified franchisees and it may, in its sole discretion, refer franchisees to a 3rd party lender for financing. The franchisor does not guarantee a franchisee’s obligations to third parties.

Training and Assistance: The training requirements may vary depending on the franchisee’s experience and other factors specific to the Business. The franchisor may, but is not obligated to, provide Phase I Training which may be conducted at a location of the franchisor’s choosing or via webinar/video-conferencing. After Phase I Training has been completed, franchisees will attend Phase II training, which generally will last 5 days. Phase II Training occurs at the franchisor’s offices in Waco, Texas or at such other locations as it may designate, or via webinar/video conferencing at various times during the year. At least one owner or designated manager must attend and complete Phase I and Phase II Training to the franchisor’s satisfaction and in the case of Phase II training an owner as well as any manager of a location must attend and complete training to its satisfaction. Franchisees must also attend, every year, at their expense, the annual training or conference event specified by the franchisor and currently referred to as “Reunion”), and any other training it designates as mandatory.

Territory: Franchisees will receive the right to operate either a Five Star Painting or Protect Painting business at a location within the territory that meets the franchisor’s site selection guidelines. The Franchise Agreement will also specify a designated territory that will provide franchisees limited territory protection. The territory will have a minimum population that is generally at least 150,000 and a maximum population that is generally no more than 2,500,000. A larger population may be allowed under certain circumstances (e.g., densely populated urban areas or a high percentage of the prospective territory is impoverished). Provided franchisees are in full compliance with their Franchise Agreement, the franchisor will not operate or grant a franchise for the operation of another Five Star Painting franchise or Protect Painters franchise with rights to market within the territory during the term of the Franchise Agreement. The Franchise Agreement does not grant franchisees any territorial rights beyond the territory.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. The franchise agreement can be renewed for one additional 10-year term by executing the then-current form of the franchise agreement and meeting the other requirements for renewal.

Obligations and Restrictions: If franchisees are an individual, they must directly perform or supervise the operation of the Business unless the franchisor consents otherwise. If franchisees are a corporation or other legal entity, direct, on-site supervision must be done by a designated owner who has successfully completed the training program unless we consent otherwise (principal owner). While they own the Franchise, franchisees cannot have an interest or relationship with any competitors. Franchisees must offer and sell only the goods and services that conform to the franchisor’s standards and specifications. Franchisees must offer the goods and/or services that the franchisor designates as required for all franchisees and they may elect to offer other products and/or services only if the franchisor approves them in advance.

Estimated Number of Units: 165

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $40,000 $40,000 + $200 per 1,000 additional population over minimum
Software and Other Fees $1,250 $1,250
Vehicle $2,000 $39,500
Equipment, Supplies and Inventory $2,400 $11,550
Insurance $1,000 $2,000
Advertising & Promotional and Local Marketing Spending for Marketing Startup Phase $7,500 $15,000
Training, Travel, Lodging and Food $1,000 $4,000
Deposits, Permits and Licenses $0 $1,750
Professional Fees $250 $5,000
Additional Funds - 6 months $6,200 $10,600
Real Estate $0 $10,600
ESTIMATED TOTAL $61,600 (does not include real estate costs) $136,150 + any additional franchise fee + any real estate costs
Other Fees
Type of Fee Amount
License Fee 6% of Gross Sales except for “roll-in” sales, and sales in TAFS. In addition, minimum license fees apply.
MAP Fee 2% of Gross Sales except for “roll-in” sales. In addition, minimum MAP fees apply.
Advertising Cooperative Not to exceed 8% of Gross Sales.
Call Center Services Monthly Fees $600
Annual Convention (Reunion) Fees Currently $1,000 or less.
Transfer Fee The greater of (i) $5,000 or (ii) 5% of the sales price.
Late Fees $10 per day.
Dishonored Check or ACH Draft $25
Interest 12% on unpaid balances.
Failure to Maintain Insurance The franchisor’s actual cost for insurance premiums and a reasonable fee for expenses it incurs.
Audit Cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees.
Renewal Fee $5,000
Amendment Fee $250
Unapproved Supplies The franchisor’s actual out-of-pocket costs of inspection or testing.
Indemnification and Attorneys’ Fees and Costs Varies According to Loss.
Tax Reimbursement Varies according to tax.
Franchisor Employee Training Fee $7,500 or then current amount.
Electronic Mail The franchisee’s first email account is free for the first year and then $25 annually thereafter. Additional email accounts are $25 per account, billed annually, with a one-time $25 setup fee per account.
Key Accounts/Management Fee Up to 5% of total Gross Sales related to Key Account work, including Gross Sales that relate to Key Accounts; Gross Sales that are the result of any lead or any agreement developed by the franchisor’s Business Development Department or any similar group that is part of its company or is its designee; Gross Sales for work that is dispatched from any call center operated by the franchisor or its designee; Gross Sales that are audited by the franchisor or its designee according to Key Accounts standards or Gross Sales that otherwise benefit from our Key Accounts activities or management.

The above information has been taken from the FDD of Five Star Painting. Year of FDD: 2016

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