HouseMaster Franchise Costs, Fees & FDD

Year Business Began: 1971

Franchising Since: 1979

Headquarters: Waco, Texas

Estimated Number of Units: 255

Franchise Description: The franchisor is HouseMaster SPV LLC. The franchisor’s parent company is Neighborly Assetco LLC. Franchisees will operate a business providing building inspection and related services to residential and commercial customers.
Training Overview: Prior to commencement of business, franchisees and their designated manager, if one has been designated, must successfully complete, to the franchisor’s satisfaction, the required training and pass a comprehensive test, upon completion of classroom training, that covers the materials included in the manuals. The initial training program consists of two parts: the HouseMaster Marketing and Operations Training, which is four days of training, and the National Institute of Building Inspectors (NIBI) Technical Training, which is nine days of training. In some cases, additional educational and training requirements may need to be competed to obtain a home inspector license, certification or registration under applicable law. 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 the franchisor designates as required. The franchisor may also require franchisees to attend and complete a “refresher” training course or advanced training course if it determines that they are not current on all aspects of the system or are otherwise in need of training.

Territory Granted: Franchisees will receive the right to operate the business at a location within their 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 Franchise Agreement does not grant franchisees any territorial rights beyond the territory except as described in the FDD. The franchisor estimates that the territory will have generally approximately 75,000 owner-occupied homes. Franchisees will maintain rights to the territory even if the population in the territory increases. The franchisor may, in its sole discretion, permit franchisees to add additional purchased postal codes. Provided franchisees are in full compliance with their Franchise Agreement, the franchisor will not operate or grant a franchise for the operation of another HouseMaster franchise with rights to market within their territory during the term of the Franchise Agreement.

Obligations and Restrictions: If franchisees are individuals, 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 the franchisor consents otherwise. While franchisees own the business, they 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. Franchisees must comply with all applicable laws and regulations and obtain all appropriate governmental approvals for the business.

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 Franchise Agreement and meeting the other requirements for renewal.

Financial Assistance: The franchisor may agree to finance a portion of the initial franchise fee for qualified prospective franchisees under specified terms and conditions. The franchisor’s decision to finance the initial franchise fee will be based, in part, on the franchisee’s credit-worthiness, the collateral the franchisee has available to secure the financing and the franchisor’s then-current financing policies. The franchisor does not provide any financing in any transaction in which brokers are involved. The franchisor may periodically agree with third party lenders to make financing available to its qualified franchisees and the franchisor may, in its sole discretion, refer franchisees to a third party lender for financing. The franchisor does not guarantee a franchisee’s obligations to third parties. The franchisor offers discount programs for United States or Canadian honorably discharged veterans and “community heroes” (firefighters, law enforcement, emergency medical technicians and personnel, teachers, and educational administrative staff), if requirements are met for those programs.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$42,500	$42,500
Training Expenses	$500	$2,500
Licensing Compliance Costs	$0	$10,000
Marketing Materials and Supplies	$1,000	$2,000
Office Equipment, Furniture	$0	$1,500
Computer System	$100	$2,500
Rent	$0	$750
Prepaid Expenses	$250	$750
Insurance	$4,000	$9,000
Professional Services	$0	$1,000
Reunion Travel Expenses	$1,000	$3,000
Vehicle & Vehicle Branding	$3,000	$5,700
Starter Tool Kit	$475	$475
Additional Funds - 3 months	$6,000	$11,000
ESTIMATED TOTAL	$58,825	$92,675

Other Fees

Type of Fee	Amount
License Fee	7.5% of first $200,000 in gross sales per year, 7% on $200,001 - $325,000, 6.5% on $325,001 - $575,000, 6% on $575,001 - $1,075,000, 5.5% on $1,075,001 - $1,575,000, 5% on gross sales over $1,500,000. Franchisees must pay a minimum monthly license fee for each territory.
Marketing, Advertising and Promotion (MAP) Fee	2.5% of first $125,000 in gross sales per year, 2.25% on $125,001 - $250,000, and 2% over $250,000.
Local Marketing Groups	Not to exceed 3% of gross sales.
Software System Fees	Package fee is currently $104/month. Fees vary for additional programs.
Late Fees (on Software System Fees)	$25 per month or the maximum amount allowed under the law, whichever is less.
Key Accounts/ Management Fee	If franchisees participate in the key accounts program, the franchisor reserves the right to require them to pay a key accounts / management fee to it or its designee.
Call Center Service Fees	$349.99 - $449.99/month plus $25 per booked appointment (subject to annual increase of up to 30% in addition to any third-party vendor direct price increases).
Annual Convention (Reunion) Fee	Currently $1,000 or less per registrant. $2,000 if franchisees fail to attend or participate in the annual convention.
Transfer Fee	The greater of (i) $7,500 or (ii) 5% of the sales price of the business.
Late Fees	$10 per day.
Dishonored Check of ACH Draft	$50
Interest	12% on unpaid balances.
Internet Training Fee (NIBI Distance Learning Program)	Currently $0, but the franchisor reserves the right to charge up to $50 per module (approximately 11 modules for initial training), or up to $500 for all modules.
NIBI Technical Training Materials Fee	The cost of training materials, up to $350, plus shipping for each additional trainee.
Additional Training Fees	The then-current fee per trainee/per day, currently $0.
Insurance Fine	The greater of $10,000 or the cost of extended reported period insurance plus the franchisor’s expenses.
Audit	Cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees.
Audit Noncompliance Fee	$500 per document (up to $2,500 per audit) that the franchisee fails to timely make available to the franchisor in connection with an audit; and/or: cost of audit, if audit is rescheduled due to the failure to cooperate with the audit.
Renewal Fee	$2,500 for a five-year renewal term; $3,500 for a ten-year renewal term.
Amendment Fee	$300
Unapproved Suppliers	The 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.
Customer Refund	Inspection fee paid by customer.
Cross Territory Fine	Up to $5,000 per occurrence plus 50% of revenue generated from such infringing activity.

The above information has been compiled from the FDD of HouseMaster. Year of FDD: 2025.
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