Servpro Distributorship
Servpro Distributorship offers professional cleaning and restoration services including fire damage, water mitigation, and mold remediation. Known for comprehensive property recovery solutions, Servpro operates in the residential and commercial cleaning and disaster restoration industry.
Servpro Distributorship franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Servpro franchise for an associate license ranges from $263,305 to $385,570. This includes $212,000 that must be paid to the franchisor or its affiliate [p.1].
What is the initial franchise fee?
The minimum initial franchise fee is $100,000 [p.31]. This fee may be financed depending on the prospective franchisee's creditworthiness and other factors [p.31], but it is not generally refundable except as specified in Item 5 of the FDD [p.31].
What are the ongoing royalty and advertising fees?
The FDD does not specify exact amounts for ongoing royalty and advertising fees. However, it outlines that franchises must pay royalties and advertising/brand fund fees as set forth in the Franchise License Agreement [p.371]. These payments are crucial for franchise operations but their specific amounts are not detailed in these excerpts.
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement typically has a term of 5 years [p.256]. The operator may renew the franchise for an additional 5-year term by giving written notice at least 30 days prior to the expiration of the current term [p.89].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, a franchisor can refuse to permit the transfer of ownership of a franchise except for good cause. Good cause includes but is not limited to unspecified factors [p.5(g)]. This means you may need the franchisor's approval before selling or transferring your franchise.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity to cure, not exceeding 30 days [p.5]. Additionally, the franchisor has the right to immediately terminate the agreement if the franchisee files for bankruptcy, is adjudicated bankrupt or insolvent, makes an assignment for the benefit of creditors, seeks protection from creditors under any statute, law, or regulation, discontinues its business or dissolves its business, or if a receiver is appointed for the franchisee or its business [p.158].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does discuss financial criteria [p.105], but it focuses on demonstrating adequate financial resources and capital as determined by the franchisor, rather than specific net worth or liquid capital requirements.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory [p.62]. You may face competition from other franchisees, outlets owned by the company, and other channels of distribution controlled by the company within your operating territory [p.62, p.44, p.17, p.169].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training through a Business Development Program including home study prerequisites, consultation meetings, new franchise training program, set-up training, and new franchise business consultation meetings. Within the first 6 months of operation following setup training, at least three ½-day business consultation meetings are provided by an assigned Franchise Development Integration Consultant either in-person or virtually. Ongoing support is offered through a combination of phone and personal meetings at the franchise's location, local meetings requested by the operations team at HQ, and virtual meetings. Additionally, an Applied Structural Drying (ASD) course must be completed within 6 months after New Franchisee Training Program (NFTP), with travel, lodging, and meals costs borne by the franchisee. [p.44]
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor is permitted to provide actual records of an existing outlet if you are purchasing one, but they cannot make representations about future financial performance or past performance of company-owned or franchised outlets without a reasonable basis. Additionally, if there is a difference from the information provided in Item 19, the franchisor can supplement it by providing information about possible performance at a particular location or under specific circumstances [p.72].
What am I restricted to selling, and where must I buy supplies?
You are required to offer and sell only the goods and services that conform to the franchisor's standards and specifications [p.68]. You generally have no right to buy any items from an unapproved supplier or request approval for a new supplier; you may acquire all products and services only from suppliers designated or approved by the franchisor [p.40].