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Miracle Method Surface Restoration Franchise Costs & Fees

Date of Incorporation: 1977
Franchising Since: 1980
Headquarters: Colorado Springs, Colorado

Business Description: Pistor and Associates, Inc. (PAI), d/b/a Miracle Method US is the franchisor. Miracle Method businesses restore bathtubs, sinks, showers, tile, countertops, and similar surfaces in homes and businesses.

Franchise Offer: The franchisor offers franchises for the right to use our “Miracle Method” trademarks, trade names, service marks, and logos in the operation of Miracle Method businesses in a protected territory.

Financial Assistance: Upon approval by PAI, PAI may finance a portion of the Initial Franchise Fee. The franchisor rarely arrange financing from other sources, but may do so on a case-by-case basis. The franchisor receives no payments, either directly or indirectly, except regarding financing granted by the franchisor as disclosed.

Training and Assistance: Before the Miracle Method Business opens, franchisees and at least 3 members of their staff must complete the Initial Training Program to the franchisor’s satisfaction. The Initial Training Program is held at the franchisor’s corporate headquarters in Colorado Springs, Colorado or at a location designated by the franchisor. Franchisees will be required to secure an approved location for the Miracle Method Business and hire at least 2 technicians and 1 front office person before they qualify to attend the Initial Training Program. The Initial Training Program lasts approximately 15 business days. Training sessions may also be held at franchise locations as approved by the franchisor. From time to time, the franchisor may require that franchisees, designated managers, and other employees attend system-wide refresher or additional training courses. Some of these courses may be optional, while others may be required. Each calendar year, franchisees must meet the continuing education requirement as specified in the Confidential Operations Manual. Franchisees or their designated manager must attend each corporate sponsored convention. Franchisees or their designated manager must attend at least 1 workshop every calendar year. Each workshop is no longer than 3 days, and held in a city where a Miracle Method Franchise is located. The franchisor may provide and require franchisees and/or their designated manager to attend seminars or other training programs.

Territory: The Franchise Agreement for the Miracle Method Franchise grants franchisees a designated Territory based on the geographic area and population properties within that area and other relevant demographic characteristics. Franchisees will not receive an exclusive Territory. Franchisees may face competition from other franchisees, from outlets the franchisor owns, or from other channels of distribution or competitive brands the franchisor controls. Franchisees will operate a single Miracle Method Business within a specific Territory identified in the Franchise Agreement. The franchisor will grant only 1 license to a franchisee for any area with a population of approximately 300,000 persons in the designated geographical location.

Term of Agreement and Renewal: The length of the initial franchise term is 5 years. If franchisees are in good standing and they meet other requirements, they may add 1 successor term of 5 years.

Obligations and Restrictions: The Miracle Method Franchise shall be managed by franchisees, or if they are an entity, by one of the owners who is a natural person with at least a 25% ownership interest and voting power in the entity (Managing Owner). Under certain circumstances, the franchisor may allow franchisees to appoint a designated manager (Designated Manager) to run the day-to-day operations of the Miracle Method Franchise. Franchisees and the Designated Manager must successfully complete the Initial Training Program. A Designated Manager need not have an ownership interest in the franchise. To maintain uniform quality standards, franchisees must follow the franchisor’s directions concerning the products and services they provide.

Estimated Number of Units: 140

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $40,000 $50,250
3-Months’ Lease Rent $750 $4,000
Computer Hardware and Software $1,500 $2,000
Vehicle $4,100 $8,200
Equipment and Materials $6,000 $3,000
Office Equipment and Supplies $1,150 $4,455
Business Licenses and Permits $2,500 $2,500
Professional Fees $1,000 $1,000
Warranty $750 $9,000
Insurance $500 $500
Training Expenses $6,375 $12,770
Initial Marketing Program $10,000 $10,000
Additional Funds (first 3 months) $7,500 $20,175
ESTIMATED TOTAL $82,125 $136,850
Other Fees
Type of Fee Amount
Royalty The greater of 5.5% of Gross Revenues or the minimum royalty based on the size of the Territory.
National Advertising Fund Fee The greater of 1.5% of Gross Revenues, or $150 per month.
Coop Advertising As agreed by the Coop, but no less than the minimum coop advertising fee.
Territory Infringement Fines $1,000, plus invoice amount for first violation; $5,000, plus invoice amount for second and subsequent violations.
Warranty Fund Contribution $9,000
Accounting Fee Then current charge (estimated to be up to $500 annually).
Insurance Franchisees must reimburse the franchisor’s costs plus a 10% administrative fee.
Additional Training or Assistance Fees The then-current fee (currently $250-$300) per attendee per day, plus expenses.
Telephone Fee Approximately $35 per month.
Technology Fee Up to $1,000 per month.
Ongoing Training and Convention Fee Then-current fee (currently estimated to be $0 - $2,000 per meeting).
Absentee Fee $1,500 per person.
Excess Usage of Bonding Agent Then-current fee (currently $300 per bonding agent kit).
Supplier and Product Evaluation Fee Cost of inspection and test of sample (approximately $100 to $500 per test).
Customer Issue Resolution Reasonable costs we incur for responding to a customer complaint, which varies.
Payment Service Fee Up to 4% of total charge.
Late Fees $25 per day or the highest amount allowed by law.
Returned Check Or Insufficient Funds Fee $75 per occurrence.
Failure to Submit Required Financial Report Fee $100 per occurrence, and $100 per week until the report is submitted.
Audit Cost of audit and inspection, any understated amounts, and any related accounting and legal expenses (the franchisor estimates this cost to be between $1,000 and $15,000)
Indemnification Varies under circumstances.
Professional Fees and Expenses Varies under circumstances.
Successor Franchise Fee $4,000
Transfer Fee The lesser of $25,000 or 4% of the sale price of the Miracle Method Business.
Liquidated Damages Varies under circumstances.

The above information has been taken from the FDD of Miracle Method Surface Restoration. Year of FDD: 2016

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