Considering a Mr. Handyman Franchise? Don’t Overlook These 28 Important Franchise Fees

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If you are considering a Mr. Handyman franchise, don’t get blindsided by these 28 important franchise fees (from the initial franchise fee, to the royalty fee, to 26 other fees found in Items 5 and 6 of Mr. Handyman’s 2019 FDD).

1.  Initial Franchise Fee:  $59,900

  • The Initial Franchise Fee is a fee for a territory that includes approximately 40,000 to 60,000 households that meet Mr. Handyman’s current target household demographic criteria.
  • Mr. Handyman reserves the right to charge a greater or smaller Initial Franchise Fee when a larger or smaller territory is granted.
  • In the year ended December 31, 2018, the average Initial Franchise Fee paid by Mr. Handyman franchisees was approximately $49,491 and the Initial Franchise Fee paid during such period ranged from $30,000 to $64,481 based on the qualified target households in the territory purchased and available discounts.

2.  Initial Package Fee:  $11,000

  • The Initial Package Fee includes an initial enrollment fee of $1,250 for Mr. Handyman’s Software System, as well as the cost of marketing materials, trademarked office supplies and stationery, a $1,000 convention allowance (the “Convention Allowance”), and a $1,000 allowance (the “Training Allowance”) for a subsequent training to be held at the headquarters of Mr. Handyman’s parent (currently, Waco, Texas) (the “Neighborly Headquarters”).
  • Mr. Handyman may change the items included in the Initial Package from time to time to reflect the changing needs of the Business in accordance with Mr. Handyman’s System procedures and changes in suppliers and/or product specifications.
  • As a member of the International Franchise Association (“IFA”), Mr. Handyman participates in the IFA’s VetFran Program. If you are a United States or Canadian honorably discharged veteran who meets Mr. Handyman’s qualifications for purchasing a franchise, Mr. Handyman will discount the minimum Initial Franchise Fee ($59,900) by 15%.

3.  Software System Fees:  $1,250 per license

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  • You must pay to Mr. Handyman, or its designee, an enrollment fee for use of its Software System (currently ServiceTitan, Qvinci, QBO, one Listen 360 site, a Franchise Portal, and two ZeeMail email accounts). The amount of the enrollment fee is currently $1,250 per license granted to you.

4.  License Fee:  7% of Gross Sales except for material revenue, subcontractor revenue, and “roll in” sales. In addition, Minimum License Fees apply. In the case of material revenue and subcontractor revenue, the License Fee shall be 3.5% of Gross Sales.

  • Due Date:  Due by automatic debit each Thursday.
  • For the use of the Marks, System, Territory, and Manuals.

5.  MAP (Marketing and Promotions) Fee:  2% of Gross Sales except for “roll in” sales. In addition, Minimum MAP Fees apply.

  • Due Date:  Due by automatic debit each Thursday.
  • National marketing efforts to consumers.

6.  Local Marketing Requirement:  $3,000 per month per Franchise Agreement, subject to adjustment for multiple Franchise Agreements

  • Due Date:  Payable per supplier’s terms.
  • Promotional handouts, door hangers, media inserts, direct mail, newspaper, Internet paid placement, and Yellow Pages.

7.  DSL, Cable, or Satellite High-Speed Internet; Email; Anti-Virus Software:  the then-current fee. Presently, the current fee is $89 to $159 per month for 1 account/user on 1 computer.

  • Due Date:  Payable per supplier’s terms.
  • Payable to a third party. To be operable within one month of the time you sign the Franchise Agreement.

8.  Internet Homepage:  the then-current fee. Presently, the current fee is $180 per year.

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  • Due Date:  Due by automatic debit on January 15 of each year or in monthly installments.
  • For maintenance and upkeep of Homepage on the Mr. Handyman site.

9.  Software System Monthly Fees:  $65 per month, plus a $2.50 fee per month for each additional ZeeMail email account (after the second email account). Any support or maintenance on the point-of-sale system (currently ServiceTitan) is provided at Mr. Handyman’s then-current hourly rates (currently $125 per hour). Additional Listen 360 sites are $20 per month.

  • Due Date:  When you are billed, starting the earlier of the month you begin operating your Business, or the month when the first software solution is set up.
  • You must use the business management software that Mr. Handyman specifies (currently ServiceTitan) and the accounting, reporting, and other software Mr. Handyman specifies. You pay the license fees for the use of ServiceTitan directly to the third-party provider, Service Titan, Inc.
  • Mr. Handyman (or its designee) provides support and maintenance services on ServiceTitan at Mr. Handyman’s then-current hourly rates.

10.  Mr. Handyman Toll-Free Phone Number Usage:  the then-current fee. Presently, the current fee is $0.12 for each minute.

  • Due Date:  Payable per supplier’s terms.

11.  Call Center Services Fees:  the then-current fee. Presently, the current fee is $0.75 per minute and $10 per month.

  • Due Date:  Payable per supplier’s terms.
  • All sales phone calls must be answered by a live person. Mr. Handyman requires you to use the Call Center for rollover, evenings, and weekends.

12.  Conventions and Regional Meetings:  the then-current fee. Presently, the current fee is $275 to $425 per person per event.

  • Due Date:  Before the start of the event.
  • Meeting rooms, some meals, audio visual, handouts, speakers, etc. Not including travel, lodging, or all meals.

13.  Failure to Attend Convention:  $1,000

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  • Due Date:  As incurred.
  • In no event more than once every two years.
  • Mr. Handyman reserves the right to charge you this fee if you fail to attend its conventions at least once every two years.

14.  Renewal Fee:  $5,000

  • Due Date:  When you sign your successor Franchise Agreement.

15.  Change of Legal Entity Fee:  $500

  • Due Date:  Due upon signing transfer documents.
  • Due if you change the legal entity that owns the franchise more than once.
  • There is no transfer fee for an initial transfer from an individual franchisee to an entity established solely for convenience of ownership and operation of the Business.

16.  Transfer Fees:  the then-current fee. Presently, the current fee is $9,900 ($500 if transfer to an immediate family member), plus $11,000 Transfer Initial Package Fee to receive the Transfer Initial Package

  • Due Date:  The transfer fee and the Transfer Initial Package Fee are due with the Franchise Agreement.
  • The Transfer Initial Package Fee paid by the transferee will include the initial enrollment fee for ServiceTitan.

17.  Failure to Maintain Insurance:  Mr. Handyman’s actual cost for insurance premiums and a fee of 18% of the premium cost for expenses Mr. Handyman incurs

  • Due Date:  On demand.
  • If you fail to maintain the required insurance coverage on your franchise, Mr. Handyman may acquire and pay for the insurance coverage and charge you.

18.  Interest:  12% per annum on unpaid balances

  • Due Date:  On demand.
  • Payable on all overdue amounts.
  • The 12% charge is calculated as a per annum rate but may be collected on demand, including weekly or monthly through automatic bank draft.

19.  Late Fees:  $10 per day

  • Due Date:  On demand.
  • Applies to overdue fees from the due date until all sums are paid.

20.  Dishonored Check or ACH Draft:  $25

  • Due Date:  On demand.
  • You must pay Mr. Handyman for each check returned or ACH draft refused by your financial institution for insufficient funds in your account.

21.  Audit:  cost of audit plus expenses, plus any amount owed as shown by the audit, plus interest and late fees

  • Due Date:  When you are billed.
  • Payable only if Mr. Handyman finds an understatement of Gross Sales of 2% or more or if you fail to provide requested information within 30 days of Mr. Handyman’s request.

22.  Indemnification and Attorney’s Fees and Costs:  varies according to loss

  • Due Date:  On demand.
  • If Mr. Handyman must engage an attorney to enforce its rights under the Franchise Agreement and Mr. Handyman prevails, or if it is sued because of something you do or fail to do, you must indemnify Mr. Handyman and/or reimburse it for all costs, including reasonable attorneys’ fees (which may include outside counsel fees and in-house legal costs charged at rates comparable to outside attorneys), court costs, and expenses expended or incurred in enforcing Mr. Handyman’s rights.

23.  Territory Violation:  will vary depending on the type and severity of the violation

  • Due Date:  As incurred.
  • Only due if you service customers in a neighboring franchisee’s territory without prior written consent.

24.  Amendment Fee:  $250

  • Due Date:  When you are billed.
  • You must pay Mr. Handyman a processing fee for modifications to your Franchise Agreement that are made at your request.
  • When you request an amendment to your Franchise Agreement or related agreements, Mr. Handyman may require that you sign a general release releasing it from all claims you may have except claims which, under state law, may not be released.

25.  Unapproved Suppliers:  Mr. Handyman’s actual out-of-pocket costs of inspection or testing

  • Due Date:  On demand.

26.  Tax Reimbursement:  varies according to tax

  • Due Date:  When you are billed.
  • You must pay Mr. Handyman or to taxing authorities (as applicable) an amount equal to any sales tax, use tax, gross receipts tax, documentary stamp tax, or similar tax (other than income tax), fees, or charges imposed on Mr. Handyman due to any required payments you make to it.
  • You must pay Mr. Handyman such additional amounts as necessary so that it receives all payments from you in full as if no such tax applied.

27.  Additional Training Fee:  the then-current fee; currently, $500

  • Due Date:  When you are billed.
  • If you request training in addition to the initial training program, Mr. Handyman may charge you a training fee, plus you must pay your costs and expenses in connection with such training.

28.  Key Accounts/Management Fee:  up to 3% of total Gross Sales related to Key Account work

  • Due Date:  When you are billed or when the fee is deducted from your payment(s) for work performed or added to the invoice.
  • If you participate in Mr. Handyman’s Key Accounts program, Mr. Handyman reserves the right to require you to pay a Key Accounts/Management Fee to it or its designee.
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