Five Star Painting Franchise Costs, Fees & FDD

Year Business Began: 2002

Franchising Since: 2005

Headquarters: Waco, Texas

Estimated Number of Units: 260

Franchise Description: The franchisor is Five Star Painting SPV LLC. The franchisor is a direct, wholly-owned subsidiary of Neighborly Assetco LLC. Franchises perform professional painting services for both residential and commercial customers and other related services and products.
Training Overview: At least one owner must attend and complete Phase I and Phase II Training to the franchisor’s satisfaction. Key employees may attend Phase I and/or Phase II training with, but not in lieu of, the owner. The training requirements may vary depending on the franchisee’s experience and other factors specific to the business. The franchisor (or an affiliate) 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/ videoconferencing. If the franchisor requires, franchisees must attend the Phase I Training with their assigned franchise consultant or other designated person prior to participating in other training. The Phase I Training will generally last two to six days but training time may vary depending upon the knowledge, qualifications, and experience of the franchisee. After Phase I Training has been completed, franchisees will attend Phase II training, which generally will last four to six 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/ videoconferencing at various times during the year. In addition, franchisees will be required to attend field training including visiting the office of a designated existing franchised business selected by the franchisor for a period of one to five days to observe the office and field processes and procedures (although this training may be conducted remotely/virtually). Franchisees must also attend, every year, at their expense, the annual training or conference event specified by the franchisor, currently referred to as “Reunion,” and any other training it designates as mandatory.

Territory Granted: Franchisees will receive the right to operate a Five Star 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 300,000. 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). Franchisees will not receive an exclusive territory. However, 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 brand franchise because of previous business mergers) with rights to market within the 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 (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.

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.

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 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 (collectively, obligations). 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 the franchisee meets certain requirements. The franchisor may periodically agree with third party lenders to make financing available to its qualified franchisees and it 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 VetFran discount or the rural franchise special pricing, if franchisees qualify for them, may bring the initial franchise fee to an amount below $45,000.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$45,000	$45,000 + $230 per 1,000 additional population over minimum
Software and Other Fees	$1,250	$1,250
Call Center Fee	$350	$450
Vehicle	$3,000	$40,000
Equipment, Supplies & Inventory	$2,400	$11,550
Insurance	$2,500	$9,000
Advertising & Promotional and Local Marketing Spending	$15,000	$50,000
Training, Travel, Lodging & Food	$1,500	$4,000
Deposits, Permits & Licenses	$0	$1,750
Professional Fees	$250	$5,000
Real Estate	$0	$6,000
Additional Funds – 6 months	$6,200	$10,600
ESTIMATED TOTAL	$77,450 (does not include real estate costs)	$184,600 + 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. In addition, minimum license fees apply.
Marketing, Advertising and Promotion (MAP) Fee	2% of gross sales except for “roll-in” sales.
Local Marketing Groups	Not to exceed 3% of gross sales.
Software System Monthly Fees	Currently, $197 per month. If franchisees obtain QuickBooks Online through ZorWare, they will pay an additional fee of $30-$200 per month depending on the license tier that they select.
Late Fees (on Software System Monthly Fees)	$25 per month or the maximum amount allowed under the law, whichever is less.
Call Center Program Fees	Current fees: $349.99 - $449.99/month (depending on the third-party vendor NCS is able to use) plus $15 per booked appointment.
Annual Convention (Reunion) Fees	Currently $1,000 plus travel, lodging, meals and other expenses.
Transfer Fee	The greater of (i) $7,500 or (ii) 5% of the transfer sales price.
Late Fees	$10 per day.
Dishonored Check or ACH Draft	$50
Interest	12% on unpaid balances.
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 franchisees fail to timely make available to the franchisor in connection with an audit; and/or: cost of audit, if audit is rescheduled due to the franchisee’s failure to cooperate with the audit.
Renewal Fee	$5,000
Amendment Fee	$300
Indemnification and Attorneys’ Fees and Costs	Varies according to loss.
Tax Reimbursement	Varies according to tax.
Additional Training Fee	The then-current fee, currently $125 per hour.
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 compiled from the FDD of Five Star Painting. Year of FDD: 2025.
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