Franchising Since: 2020
Headquarters: Glen Allen, Virginia
Estimated Number of Units: 395
Franchise Description: The franchisor is Koala Insulation Franchisor, LLC. The franchisor’s parent company, Empower Brands, LLC. Koala Insulation franchises are businesses that offer insulation services in accordance with the franchisor’s system and operate under the Koala Insulation marks, associated logos, commercial symbols and other trade names, service marks and trademarks as of now or are later designated and in accordance with the system.
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Territory Granted: The franchise is for a specific location and will be operated from a home office and the franchisee’s Koala Rigs(s) within a specified territory, unless the franchisee opts to have a franchise location. The territory will be negotiated by franchisees and the franchisor before they sign the Franchise Agreement and specifically described in the Franchise Agreement. The minimum area for a territory is approximately the size necessary to include 200,000 people. Under the Franchise Agreement, franchisees are granted a non-exclusive, protected territory. Provided that franchisees remain in compliance with the Franchise Agreements, manual and all other agreements with the franchisor, the territory will remain protected. The franchisor will not sell other franchises under the system to any other franchisee within the protected territory.
Obligations and Restrictions: Franchisees, or if the franchisee is an entity, the majority shareholder or owner of the franchisee must devote their personal full-time attention and best efforts to the management and operation of the franchise, or they may delegate the day-to-day operation of the franchise to an operations manager who has completed, and passed to the franchisor’s satisfaction, the required training course at the franchisor’s facility. Franchisees must hire a full-time salesperson, or if they act as the full-time salesperson, they must hire a full-time manager. Franchisees must offer and sell all products and services which are part of the system and all services and products which the franchisor incorporates into the system in the future. Franchisees may only offer those products and services which the franchisor has previously approved.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees have complied with all of the provisions in the Franchise Agreement, they may renew the franchise for two additional terms of five years each, subject to certain contractual requirements.
Financial Assistance: Under limited and special circumstances, the franchisor may allow for a partial deferral or make optional financing available to qualifying existing franchisees. Other than as described, the franchisor does not offer direct or indirect financing and the franchisor does not guarantee a franchisee’s note, lease or obligation. If franchisees are an honorably discharged veteran who meets the qualifications for new Koala Insulation franchises, the franchisor will discount the franchise fee by 15%.
Estimated Initial Investment
Name of Fee | Low | High |
Initial Franchise Fee | $49,500 | $49,500 |
Training Expenses | $500 | $3,000 |
Equipment and Vehicles | $50,025 | $68,922 |
GPS Tracking Systems | $350 | $600 |
Insurances | $3,500 | $6,000 |
Initial Advertising/ Marketing | $26,000 | $30,000 |
Professional Fees | $2,500 | $6,000 |
Rent (parking location/office) | $0 | $4,000 |
Office Expense | $500 | $1,250 |
Computer, Phone and Technology Systems | $700 | $3,000 |
Technology Activation Fee | $5,000 | $5,000 |
Business Licenses and Permits | $500 | $5,000 |
Additional Funds – 3 Months | $50,000 | $50,000 |
ESTIMATED TOTAL | $189,075 | $234,272 |
Other Fees
Type of Fee | Amount |
Royalty Fee | The greater of (i) the aggregate of the minimum royalty fees for each of the franchisee’s territories or (ii) the percent-based royalty fee based upon the combined gross sales among each of the territories. |
Opening Advertising (Initial Six Months) | Minimum of $2,500 per month for the month prior to opening and five months after opening. |
Local Marketing (Ongoing) | The greater of $2,000 or 5% of gross sales per month, plus advertising agency management fees. |
Brand Fund Contribution | Currently 1% of gross sales. Maximum of 2% of gross sales. |
Technology Fee | $344 per month. If the franchisee has more than one territory, the total technology fee for up to 4 contiguous territories shall be equal to the then-current technology fee for one territory. |
Bookkeeping Services Fee | Currently, $350 per month, plus $55 per hour of additional support. |
Computer, Software Expenses | Varies. |
Supplier Approval / Testing Costs | Costs and expenses associated with approving an unapproved product or supplier. |
Interest Charge | 1.5% per month from the due date, or the maximum allowed by law. |
Late Fee | $50 per day or portion thereof for each payment or report not received when due. |
Transfer Fee | Greater of 20% of the then-current franchise fee or $10,000. |
Renewal Fee | Greater of 25% of the franchise fee or $5,000 per territory. |
Insurance Procurement | Amount paid by the franchisor to secure insurance to fulfil the franchisee’s insurance obligations. |
Costs and Attorneys’ Fees | Will vary under circumstances. |
Indemnity | Will vary under circumstances. |
Audit Costs | Cost of the audit plus related expenses, provided that the costs of the audit are only due if an irregularity of greater than 5% is discovered in any reported amount, or if reports are not submitted as required. |
Failure to Comply with Operational Standards | A reasonable charge (currently, a $100 per diem charge per violation). |
Inspection Fee | The franchisor’s reasonable expenses. |
Seminars, Conventions or Programs | The then-current fee (between $500 to $750) per person), plus the actual cost of materials (if any). |
Refresher Training / On-site Training | All expenses incurred by the franchisee’s representatives in attending refresher training are their responsibility; for additional on-site training, franchisees must pay the then-current per diem charges and out-of-pocket expenses. |
Initial Training | No fee is charged for initial training. |
Additional Initial Training | Additional trainees or replacement trainees may attend any future training courses based on available space and scheduling at no additional cost. If no courses are scheduled, or no space is available, the current training fee may be assessed. This fee is currently $5,000 per trainee. For training at the franchisee’s location, the then-current daily fees per trainer will be charged. Currently the fee is $250 per trainer per day plus travel, per diem and lodging expenses as required. |
Additional Opening Assistance | The franchisor’s service fee as specified in the manuals (which is currently $500 per day), plus its expenses and costs. |
Additional Advertising and Promotional Materials | $250 - $500 |
Liquidated Damages | Average of monthly royalties and brand fund contributions for the past 12 months (or for such shorter period of time that the franchise has been in operation) multiplied by 24 months (or remaining months in term), discounted to present value. |
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