Stratus Building Solutions Master Franchise Costs, Fees & FDD

Year Business Began: 2004

Franchising Since: 2006

Headquarters: North Hollywood, California

Estimated Number of Units: 4,185 (unit franchises)

Franchise Description: SBS Franchising, LLC is the franchisor. Stratus Building Solutions franchises provide cleaning and/or maintenance related services, including commercial, industrial, institutional and residential cleaning services on a daily, weekly, or monthly basis and the providing of such specialty services as carpet care, floor care, window washing, wall cleaning, or programs of cleaning, sanitizing, deodorizing, and other related cleaning and/or maintenance services. The franchisor grants master franchises providing for the right to sell and license individual commercial cleaning franchises using the Stratus Building Solutions system and trademarks known as a “unit franchise” to independent businesses within a designated territory. 
Training Overview: Franchisees or another person with a principal financial interest in the master franchise are required to attend the training program. Regional directors also have to complete the training program. The “regional director” is the person or entity designated by franchisees to be personally responsible for the day-to-day management of the franchise and for compliance with the terms of the Master Franchise Agreement, if franchisees will not be working in such a capacity themselves. The franchisor will provide franchisees with a four-phase training program. Phase I (Week 1) will last one week. The first week will be conducted at the franchisor’s home office in Los Angeles, California. Phase I (Week 2 and Week 3) and Phases II, III, and IV will be conducted at the franchisee’s offices approximately 30, 90 and 180 days after the office is opened. The franchisor will provide an additional period of on-site assistance in the office start up, sales, operations, and administrative procedures implementation. The franchisor will also provide annual and/or regional master franchise meetings and seminars from time to time. Franchisees’ attendance at these sessions is mandatory.

Territory Granted: Master franchisees will be licensed and permitted to operate under the Master Franchise Agreement in a specific territory as designated in the Master Franchise Agreement. The territory is typically delineated by the boundaries of the designated Standard Combined Statistical Area, and/or specific county, city or country borders sufficient to encompass a specified population. Currently, there is a minimum territory of 500,000 in population to start a master franchise region, and the largest territory the franchisor grants is for an area having a population of 3,036,114. During the term of the Master Franchise Agreement, the franchisor will not establish or operate, or grant other franchisees the right to establish or operate, a SBS Master Franchisee business under the system and the Stratus Cleaning marks, within the territory, except under the limited circumstances provided for in the Master Franchise Agreement related to the failure of the master franchisee to meet the minimum growth obligation or a termination of the Master Franchise Agreement, and as otherwise provided by the franchisor.

Obligations and Restrictions: Master franchisees are required to participate in the direct operation of the business. The terms of the Master Franchise Agreement require that master franchisees are directly involved in the day to day operations of the business either through their full time participation or by the management of a full time regional director. Master franchisees are limited in the operation of the franchise business to the sale of Stratus unit franchises within their territory. Master franchisees are required to provide continuing oversight of their unit franchisees who offer to the public complete cleaning and/or maintenance related services. Master franchisees must comply with all laws and regulations governing the sale of franchises.

Term of Agreement and Renewal: The length of the initial master franchise term is 15 years. If master franchisees are in good standing, they can renew the master franchise. Master franchisees may be asked to sign an agreement with materially different terms and conditions than their original Master Franchise Agreement.

Financial Assistance: To assist in the purchase of a master franchise, the franchisor may, at its sole option, based on various objective and subjective internal determinants – including without limitation with respect to the franchisee’s creditworthiness, liquid cash and available working capital, the geographic area in which they are interested in acquiring the master franchise, competition in the market, and other factors that it determines – finance up to 20% of the initial franchise fee.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$75,000	$210,000
Real Estate, Fixtures, Leasehold Improvements, and Utility Deposits (varies depending on the market)	$1,500	$15,000
Initial Supplies and Inventory	$500	$1,000
Equipment	$2,800	$5,450
Licenses, Permits, Security deposits etc.	$750	$5,000
Insurance	$1,000	$3,500
Training (varies)	$3,000	$6,000
Additional Funds (6 months)	$25,000	$100,000
ESTIMATED TOTAL	$109,550	$345,950

Ongoing Fees

Type of Fee	Amount
Royalty on Contract Services and Sales	4%/3.5%/3% of gross revenues.
Royalty on Unit Franchise Fees	20%/15%/10% of total down payment of the sale of each unit franchise, including deferred down payments (financing) and upgrades on unit franchisees.
Advertising and Public Relations Fund	$150 or 1% per month of gross billing, whichever is greater.
Transfer Fee	10% of all proceeds given as consideration for the sale, transfer or assignment with a minimum of $25,000, but not to exceed $75,000.
Technology Costs	Currently, $200 to $700 per month.
Annual Conference	The conference is free. However, master franchisees must pay for their own travel and lodging.
Annual Conference Non-Attendance Fee	$2,500 multiplied by the number of annual conferences the franchisee has failed to attend.
In-depth Business Consultation after first 12 months	$350 per day, plus actual and reasonable expenses.
Late Payment Fee	5% of delinquent amounts.
Late Reporting Fee	$50 per day.
Penalty for Non-Compliance	$500 per day for each day of non-compliance.
Attorney Fees and Costs	The cost of legal fees and other expenses.

The above information has been compiled from the FDD of Stratus Building Solutions. Year of FDD: 2025.
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