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The REAL Marriott Franchise Cost
A hotel franchise may be a sizable investment, but it provides long-term benefits. For example, many need an accommodation because of their business or leisure trips. One such hotel that many recognize and has a tried and tested system is the Marriott. In fact, they have an established model that can guarantee revenue. But how much does a Marriott Franchise cost?
In this article, learn how you can start a Marriott hotel franchise and know its cost.
The Marriott Franchise and the Market
Before Marriott International, Inc. became one of the leaders in the hospitality industry, it was once an A&W root beer stand in Washington DC. The owners, J. Willard and Alice Marriott grew that business into a restaurant chain. Eventually, that success helped them develop Marriott International.
So far, the Marriott franchise has 30 brands under its portfolio. They classify them into three categories: luxury, premium, and select. As for occupancy for each hotel, it varies. Their hotels have around 100 to 2,000 guest rooms available.
However, they face competition against Wyndham Hotels, the Four Seasons, and Hilton. Even so, Marriott Hotels reported a Revenue per Available Room (RevPAR) of $116.48 in 2019.
Presently, the Marriott brand has over 570+ hotels worldwide. But for all 30 Marriott brands, there are more than 7,000 in operation in 135 countries.
So far, the Marriott hotels and its brand partners have locations in these regions:
- North America
- Europe
- The Middle East and Africa
- Asia Pacific
- Caribbean and Latin America
Training Overview
Franchisee personnel must comply with the training requirements by Marriott. In addition, personnel must also undergo a web-based and marketing training provided by the franchisor. Meanwhile, for web-based training, trainees can access training materials anytime. On the other hand, for the marketing-based training, trainees will attend one in their country in a specific location.
Additional training instances include:
- General managers of the hotel should attend a General Managers Conference held by the franchisor.
- Moreover, franchisees interested in attending leadership seminars or training by the franchisors may attend one.
Obligations & Restrictions
Franchisees may either operate the hotel or outsource management approved by the franchisor. A general manager must oversee operations once training is complete.
Franchisors expect the following:
- All managers should work in the Marriott hotel or brand full-time.
- If an entity manages the franchise, the principals of the entity should sign a guaranty.
- The franchisor provides the goods and services that a franchisee must offer to its guests or clients.
How Much Does a Marriott Franchise Cost?
Marriott estimates that the lowest initial investment a potential franchisee may pay is $74,129,480.00. Meanwhile, you might have to pay $117,209,490 at the most. However, this estimate is applicable only for a 300-room Marriott hotel.
As indicated in the table below, the application fee is at $100,000. However, franchisees have the option to buy an existing Marriott franchise for the greater of $150,000 or $500 per guest room.
Check out the tables below on the breakdown of Marriott franchise cost initial fees and other expenses you might shell out.
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Application Fee | $120,000 | $120,000 |
| Pre-Opening Training, Revenue Management, Marketing Support, and Related Services | $129,000 | $196,000 |
| Property Management System, Reservation System, Yield Management System, Sales and Catering System | $260,000 | $300,000 |
| Other Systems and Training | $84,000 | $104,000 |
| Market Feasibility Study | $15,000 | $25,000 |
| Real Estate | Not determinable because of variables. | |
| Building Permit, Tap, and Impact Fees | Not determinable because of variables. | |
| Building Construction (per guestroom) | $187,900 | $298,600 |
| Kitchen and Laundry Equipment (per guestroom) | $5,600 | $6,900 |
| Furniture and Fixtures (per guestroom) | $24,700 | $30,100 |
| Technology Hardware & Software and Network Infrastructure (per guestroom) | $2,500 | $13,300 |
| Operating Supplies (per guestroom) | $5,800 | $7,100 |
| Professional Design Services (per guestroom) | $9,400 | $14,900 |
| Insurance | $99,000 | $287,000 |
| Start-Up Costs (per guestroom) | $4,800 | $7,500 |
| Hard Cost Contingency (10% of hard costs) | Not determinable because of variables. | |
| Food Safety and Sanitation Compliance (assuming 7 people at $70 per kitchen manager and engineering leader with responsibility for kitchen equipment) | $490 | $490 |
| Opening Advertising | $115,000 | $200,000 |
| Additional Funds per guestroom (first 3 months) | $3,500 | $8,000 |
| ESTIMATED TOTAL* | $74,129,490 | $117,209,490 |
Other Fees
| Type of Fee | Amount |
|---|---|
| Franchise Fees | 6% of gross room sales and 3% of gross food & beverage sales. |
| Program Services Contribution | An amount equal to: 1.62% of gross room sales. This includes a contribution to the marketing fund of 1% of gross room sales as well as $50,000 per year; plus $510 per guestroom per year. |
| Marriott Bonvoy | An amount equal to: 4.2% of the total guest folio generated by guests earning loyalty points or miles; plus for a group event (involving at least 10 guestrooms) and/or a catering event arranged by a meeting planner or other individual earning loyalty points or miles for such event, 1% of the gross revenues generated by each such group or catering event, up to a maximum amount of $300 per event. |
| Revenue Management Advisory Services | $2,750 to $7,875 per month, plus a one-time set-up fee that ranges from $3,500 to $5,000. |
| Cluster Revenue Management | Varies. |
| Area/Account Sales and Group Sales | Varies. |
| Area/Account Sales: Group Lead | 6% of gross group room revenue. This is calculated by multiplying the number of rooms booked, reduced by 10% to account for slippage, by the average room rate in the group sales contract for leads generated from an area/account sales market other than the one in which the hotel participates. 10% of gross group room revenue (calculated as provided above) for hotels that do not participate in area/account sales. In both cases, this fee will not exceed $30,000 per booking. |
| MI LEAD | 6% of gross group room revenue and gross event/catering revenue. This charge will not exceed $30,000 per booking. |
| Business Transient (BT) Booking | $112.50 to $266.67 per month, depending on the number of guestroom nights that are centrally reserved for the hotel through the area/account sales organization during the immediately preceding calendar year. |
| Customer Engagement Center (CEC) Property Support Services (PSS) | The cost of this program is allocated among participating hotels. |
| National Group Sales:Group LeadCatering LeadExtended-Stay Lead | $2.60 per room night booked. $105 per catering opportunity booked. $2.60 per room night booked. |
| Group Demand Generation | $1.00 per group room night booked. |
| General Sales Agents: Group Lead | $2.50 per room night booked. |
| Cooperative Advertising and Marketing Initiatives | Varies. |
| Gift Cards | Varies. |
| Intermediary Payments and Centralized Travel Agent Commission (CTAC) Usage | Varies. |
| QuickGroup Online Booking | 6% of gross group room revenue booked using QuickGroup. Added to that, 6% of any event space rental, catering, and audio visual revenue. No adjustments are made for changes after the initial booking. |
| Field Marketing | $5,700 to $170,000 per year, depending on the services provided. |
| Marriott Digital Services | Varies depending on the product or service selected. |
| Transaction-Based Media | 9% of applicable gross room revenues, not to exceed $200 per stay. |
| Luminous | $995 |
| Point-of-Sale (POS) System | $9.64 per month per POS workstation for software and support. |
| EMPOWER: Guest Experiences Reservations Add-On License | $493 per year per reservations agent at the hotel. |
| Varies | |
| Opera Exchange Interface (OXI) License and Support | $440 per year. |
| Unauthorized Electronic Identifier | $100 per day an unauthorized email address, domain name, mobile application name, website, or other electronic identifier is in use. |
| Credit Card Processing | $0.047 per settlement transaction. |
| Computer and Server Software and Support | $11.07 to $22.71per PC per month; $20.65 to $66.46 per Apple computer per month; $137 to $1,080 per server per month. |
| Event Technology Services | Varies. |
| Mobile Device Management | $5.00 to $5.50 per device per month. |
| Mobile Key | $8 to $11 per guestroom per year for software and support. |
| Interactive Voice Response | $600 to $3,000 per year. |
| Marriott Environmental Sustainability Hub (MESH) | $305 per year. |
| Brand Standards Audit (BSA) and Re-audit | $1,350 to $1,750 ($2,750 to $3,250 for JW Marriott Hotels) per audit and re-audit (excluding one annual BSA). |
| Red Zone | $2,750 for Red Zone 2 under the franchisor’s quality assurance program. And each increase in Red Zone status after Red Zone 2. There may be an additional charge of $2,500 at Red Zone 3. If it’s for an in-person meeting at the hotel if the franchisor deems it necessary or desirable. |
| BSA/GSS Improvement Program | $20,000 |
| Guest Satisfaction Survey Data Manipulation Charge | Up to $5,000 per quarter. |
| Food Safety Re-Inspection | $500 per re-inspection. |
| Fire Protection and Life Safety Re-Inspection (BSA-related) | $500 per re-inspection. |
| Property Improvement Plan (PIP) | $20,000. Or $25,000 if the franchisee requests an expedited PIP to be completed within four weeks. |
| PIP Additional Site Visit | $4,000 per visit. |
| Design & Construction Review Services | $20,000 |
| Interior Design Firm Screening and Coordination | $2,500 per screen of interior design firm. In addition, $30,000 to $50,000, if franchisees retain a non-recommended interior design firm. |
| PIP Non-Compliance Re-Inspection | $10,000 per re-inspection. |
| Renovation Non-Compliance and Re-Inspection | $5,000 per non-compliant renovation, $10,000 per re-inspection. |
| Advisory Services | Varies. |
| Lender Comfort Letter Processing Fee | $2,500 |
| Prospectus Review | Varies. |
| Additional Design/Construction Review Services | Varies. |
| Fire Protection and Life Safety Inspection and Testing, and Compliance Audits | Approximately $500 to $19,500. This is based on the services rendered. Plus, the time needed for the testing and inspection, the size of the hotel, and the complexity of its design. |
| Post-Opening Authorization to Open (ATO) Work Inspection | $910 per day per inspector. |
| Expansion | $400 per guestroom. |
| Expansion Opening Authorization | $3,500 |
| Post-Approval Owner Background Check | $300 per entity/$100 per person. If additional enhanced due diligence is required, the cost ranges from approximately $400 to $5,600 per background check. It depends on the country involved and whether an entity or person is being checked. Expedited turnaround is available at an additional cost. |
| Operator Screen | $7,500 |
| Temporary Closure and Re-Opening Support Services | $3,000 to $25,000 depending on the size and location of the hotel and the length of time the hotel is closed. |
| Destination and Resort Fees | Application fee of $1,500. Plus, $550 per year if the application to charge destination or resort fees is approved. |
| Training | Varies. |
| Transfer | The greater of $150,000 or $500 per guestroom. |
| Liquidated Damages | Varies, based on a formula. |
| Indemnification | Varies. |
| Removal of Hotel from System | $25,000 |
| Construction/Conversion Extension | $10,000 |
| Other Company Brand Conversion Authorization | Varies. |
| Global Recipe Database Support | $1.00 per guestroom per year but not exceeding $800 per year. |
| Best Rate Guarantee Non-Compliance | $50 to $500 per violation based on the number of violations each month. |
| Customer Issue Resolution | $55 per customer complaint or other customer service issue handled by the franchisor. And reimbursement of all costs incurred by the franchisor to resolve a matter. This also includes compensation paid by the franchisor to a guest. |
| Accounting Audit | The amount of the underpayment plus interest if an audit reveals an underpayment. |
| Interest on Overdue Amounts | Lesser of 18% per year or maximum interest rate permitted by law. |
| Costs and Attorneys’ Fees | Varies. |
| mCredit Customer Credit Reference Reports | $12 per report. |
| American Hotel and Lodging Association (AH&LA) | $3.75 per guestroom per year. Meanwhile, it s $4.00 per guestroom per year for JW Marriott hotels. |
| Franchisee Associate Job Postings | $135 per Marriott.com job posting, or $145 per CareerBuilder.com job posting. |
| Brand Magazine (JWM Magazine) | $0.50 – $0.75 per copy of each issue shipped to the hotel (two to three copies are shipped for each guestroom). |
| GM Awards | $300 to $1,500 per hotel per year. |
| Franchise Operations Support Resources | Varies; approximately $400 to $1,500 per day per employee. It depends on the experience and area of expertise of the employee. |
| Pure Grey Licensing and Consulting Services | Approximately $25,000 to $75,000 per year. |
Did You Know?
- The initial franchise term for a Marriott franchise is 20 years. Usually, it’s the 20th anniversary of the opening date. In addition, franchisees should remember that the franchise agreement is non-renewable.
- Credit support may be available for franchisees in need. Marriott offers two possibilities. The first is a third-party lent contingent guaranty of a portion of a loan. The other one is a mezzanine loan.
- The Marriott franchise is committed to sustainability initiatives. For example, they reduced water and carbon intensity in 2018. Furthermore, they no longer use plastic straws and stirrers.
- Marriott International, Inc. ensures that all of its brands can stay on top because of its Revenue Generation Engines model. Moreover, they have a loyalty program called Marriott Bonvoy to make sure that returning guests become regulars in all of their hotels.
- They help franchisees in operations, sales and marketing, revenue management, and among others. As the franchisor, they assist in the pre-opening, opening, and post-opening.
How to Start a Marriott Franchise?
Now that you know the Marriott franchise cost and other details, here’s how you can start your franchising journey with the hotel chain.
The first step is to go to the Hotel Development Website. From here, you can click on the Let’s Talk button. Then, you need to fill out and submit a form to show your interest in developing a new Marriott hotel brand in your location. After that, a Marriott associate will contact you for more details.
Are you ready to make it big by owning a Marriott franchise? Armed with the knowledge of the Marriott franchise cost and other details, consider the Marriott chain as one of your options for franchising.
Get more franchise information here at Franchise How!
Are you gearing up for a new business in 2024? Forget the next big tech start-up -the latest trend in town might be a perfectly toasted baguette. Take Paris Banh Mi Cafe and Bakery, for instance. This Vietnamese sandwich shop is rapidly growing, with locations popping up from coast to coast, from California to Florida.
But what’s the secret behind their success? Explore why the Paris Banh Mi franchise has snowballed in the last two years and be inspired to start your own business .
About Paris Banh Mi
The French baguette was introduced in Vietnam in the mid-19th century when the country was still a part of French Indochina. In the 1950s, Saigon saw the birth of a unique Vietnamese sandwich, “bánh mì,” which quickly became a favorite food of a large part of the population.
The story of Paris Banh Mi started in Orlando, Florida, at 1021 E Colonial Drive in 2019. Hien Tran and Doan Nguyen, a married couple passionate about food, opened the first Paris Banh Mi location. Their concept was simple: bring the delicious flavors of Vietnamese banh mi sandwiches, traditionally baguettes filled with savory meats and pickled vegetables, to a broader audience.
The customers quickly fell in love with the fresh ingredients, bold flavors, and convenient fast-casual setting. Now, Paris Banh Mi Cafe and Bakery promises to bring their customers the best “Baguette Banh Mi” taste.
In just two years, the laid-back cafe and bakery in Florida multiplied into a chain of stores in the county. Today, Paris Banh Mi is serving customers in 46 locations all across the USA. The company plans to expand to 100+ locations by 2026.
Each Paris Banh Mi Cafe and Bakery has a clean and spacious dining area, fast service, friendly staff, and a selection of delicious food and pastries. Take a peek at some of their mouth-watering baguette sandwiches filled with authentic Vietnamese ingredients.
Source: Paris Banh Mi website
For those craving something sweet, the bakery indulges you with a variety of French pastries. Check out their sandwiches, pastries, and beverages on the Paris Banh Mi Cafe and Bakery menu page.
Source: Paris Banh Mi website
Why Own a Paris Banh Mi Franchise
Paris Banh Mi is a franchised quick-service restaurant offering exciting opportunities for aspiring business owners. Many nail salon owners and aspiring entrepreneurs are switching to buying a Paris Banh Mi franchise. The main reasons why they love Paris are:
- It opens a great opportunity and is more profitable.
- Seamless franchising process and fewer things to worry about
- Required low capital to open
- Higher end-of-year profits
The benefits extend beyond operational efficiency. Paris Banh Mi boasts a surprisingly low-cost entry point compared to other franchises.
The initial franchise fee is manageable at $60,000. The total investment for opening a Paris Banh Mi can range from $200,000 to $500,000. This amount reflects the option to acquire a pre-existing, equipped location (second generation) for a lower investment cost or a complete build-out from scratch option.
Regardless of the chosen route, the investment is significantly lower than that of building a business from the ground up, making Paris Banh Mi an attractive option for many entrepreneurs.
Licensing Information
Owning a Paris Banh Mi franchise is not just about delicious food! The company is looking for dedicated individuals who can run their restaurant full-time. They will provide a multi-day training program for new franchisees. In addition, Paris Banh Mi offers ongoing support for franchisees, guiding them to make informed decisions and thrive in this exciting industry.
You’re a good fit for a Paris Banh Mi Cafe Bakery franchise if you are:
- Passionate about food, especially fresh baguettes and pastries
- A self-starter with a proven track record in business
- Financially responsible with a focus on results
- Ready to fully commit to building the Paris Banh Mi brand
If you have what it takes, don’t hesitate to contact them through the franchise hotlines on their franchise opportunities page.
Conclusion
Buying a restaurant franchise is one of the most attractive routes in the world of franchising. Paris Banh Mi makes owning your own business a lot easier. Forget the high costs and headaches of starting from scratch. Their low investment and comprehensive training program mean you can be your own boss with a delicious product. If you are ready to take a bite out of success, contact Paris Banh Mi today!
Buying a franchise from Chick-fil-A is an excellent money-making and healthy option. The fast-food chain has been serving hungry consumers the most delicious chicken sandwiches unmatched by other fast-food restaurants. Buying a Chick-fil-A franchise means investing in a good business and your future. It also lets you continue the culture behind the popular food chain. Here are Chick-fil-A franchising opportunities that will give you entrepreneurial freedom in 2024.
Company Overview
Founded in 1946 by Truett Cathy, Chick-fil-A is deemed one of the longest-running chicken sandwich chains in the United States. The founder opened his first chain in Hapeville, Georgia, and has become a favorite soul food for many. Truett had worked in restaurants seven times a week and knew the importance of rest. That’s why he vowed to close Chick-fil-A every Sunday. He values rest and worship, so he sets aside one day of the week for his employees—a practice that Chick-fil-A still upholds today.
Chick-fil-A also selects franchisees that uphold their values and passion. The company takes great care in selecting who they do business with, which includes getting to know candidates through a lengthy and intensive selection process. The founder’s vision is to influence the people and communities they serve. Chick-fil-A also seeks franchise candidates in Puerto Rico, Canada, and the United States.
Chick-Fil-A candidates are required to show personal financial integrity and stewardship. They also need to have proven experience in leadership and a strong business acumen. Chick-fil-A ensures that candidates showcase entrepreneurial spirit, a strong character, and a growth mindset. This is to uphold the vision and values that Truett started in 1946.
Franchise Training Details
- The initial on-site training programs last three to four weeks. However, the duration and actual location of the training will vary.
- The training program primarily covers operational aspects, such as food preparation, service, customer relations, accounting, communications, purchasing, planning, maintenance, policies, management styles, and marketing.
- The franchisor may require franchisees to attend various conferences and seminars occasionally. This is on top of the initial training program.
- The franchisor may also offer various programs that operators can use in advertising products or hiring staff, which aren’t stipulated in the Franchise Agreement.
Franchise Territory
- The franchisor will grant franchisees one Chick-fil-A restaurant at the franchisor’s designated location.
- Franchisees will not get exclusive or protected territory, so they may face competition from other operators.
Franchise Obligations and Conditions
- Franchisees must devote their time and effort 100% to operating their Chick-fil-A restaurant.
- The franchisor only allows franchisees to sell products approved by Chick-fil-A. This also applies to franchisees with a Chick-fil-A-associated food truck.
Franchise Term and Renewal
The franchise term expires on early December 31, the year the agreement is signed or whatever the lease expiration is. Franchisees may apply for one-year extensions unless written notice is given 30 days before the franchise term expires.
Financial Assistance
- The franchisor designates locations, leases, and subleases the store’s premises to franchisees. The lease and sublease terms will vary depending on the type of Chick-fil-A restaurant and location.
- The franchisor also engages in concession agreements that oversee the utilization of non-traditional satellite unit locations with the proprietors or administrators of said satellite unit spaces.
- The franchisor offers extended payment periods for specific pre-opening costs stipulated in the Franchise Agreement. Additionally, the franchisor leases equipment to operators, charging a monthly rental fee based on the fair market rental value established by Chick-fil-A using its singular and exclusive business judgment. It’s important to note that neither the franchisor nor any affiliated entities provide any financing arrangements to operators, either directly or indirectly.
Did You Know?
Here are some fun facts about Chick-fil-A you need to know!
- Did you know that Chick-fil-A only uses peanut oil for frying? That’s what makes the chicken its unique flavor! Chick-fil-A is also the single most significant purchaser of peanut oil in the United States. They also believe peanut oil is a healthier option.
- The best Chick-fil-A promotional gig was the “First 100,” where the first 100 customers inside a new Chick-fil-A restaurant would get free chicken for a year.
- Did you know that the founder, Truett Cathy, invented the chicken sandwich? He worked for a restaurant in Atlanta, and the newly delivered chicken breasts were too big to serve as airline food. He turned this into a meal for the staff.
- You can get a free ice cream cone by walking up to the counter and trading your toy when ordering the kid’s meal.
Franchise Cost
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $10,000 | $10,000 |
| Opening Inventory | $13,500 | $140,000 |
| First Month’s Rental of Equipment | $750 | $5,000 |
| First Month’s Lease/Sublease of Premises | $2,550 | $85,500 |
| First Month’s Insurance Expense | $240 | $12,000 |
| Additional Funds | $491,345 | $2,550,935 |
| ESTIMATED TOTAL | $518,385 | $2,803,435 |
Other Fees
| Type of Fee | Amount |
|---|---|
| Advertising | May vary (a) between 0% to 3.25%, to be determined by Chick-fil-A, as a percentage of gross receipts or (b) by vote of operators in local or regional areas. |
| Advertising Support and Services Fee | Advertising support and services fees incurred, if any, will vary based upon the support and services offered by the franchisor, and selected and received by the operator; the current in-house blended hourly rate for services is $100; Operator will pay any additional fees, costs and expenses as applicable. |
| Additional Franchise Fee | $5,000 for each additional Chick-fil-A restaurant business. |
| Business Services Fee | $300 (monthly). |
| Rent (Traditional Restaurant) | $2,550 to $85,500 (including where applicable, percentage rent). |
| Occupancy Charge (Satellite Unit) | Determined under the concession agreement attached as an exhibit to the concession sublicense agreement; currently estimated to range between 4% and 30% of gross receipts. |
| Food Truck Usage Fee (Food Truck) | Currently $2,100 to $3,100, plus additional fees, costs and expenses. |
| Food Truck Insurance Fee (Food Truck) | Currently $250 to $450 (monthly). |
| Insurance | $240 to $12,000 (monthly). |
| Equipment Rental | Currently $750 to $5,000 (monthly). |
| Hardware and Software Support; High-Speed Internet Access | $9,500 to $20,000 (annually). |
| Fines – Minimum Standards and Procedures | Will vary under the circumstances. |
| Indemnification | Will vary under the circumstances. |
| Operating Service Charges | Determined by formula. |
| Credit Cards Fees and Related Processing Fees | Will vary. |
| Highway Signage | Will vary under circumstances. |
| Interest on Late Payments | The maximum rate permitted by law, or if none, 1.25% per month. |
| Cash Handling System Services | $85 to $450 (monthly) |
| Reimbursement of Cost of Performance | Costs and expenses of performance. |
| Holdover Liquidated Damages | Double the base rent and percentage rent. |
Here are the Chick-fil-A franchise costs:
If you’re looking for another investment opportunity, visit Franchise How’s website for more information.
Taking care of your home’s plumbing system is an essential part of being a homeowner. However, not everyone has the skill and patience to do it, and so franchises such as Zoom Sewer and Drain Cleaning are some of the most lucrative. Here’s what you need to know if you’re thinking of getting it:
Franchise Description
Zoom Sewer and Drain Cleaning provides drain cleaning, maintenance, sewer inspections, repair and replacement services for residential and commercial customers. The business began in 1995 and had been franchising since 2013. They have their headquarters in Norristown, Pennsylvania, and Zoom Franchise Company, LLC is the franchisor.
Training
Training for the franchisee’s principal owner and personnel will be provided by the franchisor or its representatives and agents. Before starting your franchise, Zoom Sewer and Drain Cleaning will require you to complete their training program. It comes in two phases:
- Phase 1: 2 to 3 days training at the Franchise Business
- Phase2: 2 to 3 days in Norristown, PA
The franchisor may also require you to attend additional training during the length of your term agreement. The franchisor is planning to hold a 2 to 3-day national Zoom Fest yearly. This will be held in Norristown, PA, or any location it designates. They will require franchisees to attend, but their managers will be welcome.
Territory
The franchisor will designate a protected territory where the franchisees will operate their business. Before signing any Franchise Agreement, both the franchisor and the franchisee will agree on a geographic territory.
The franchisor will base the protected territory on contiguous zip codes that will consist of approximately 500,000 individuals. This will be based on the most recent U.S. Census data at the time of signing the franchise agreement. This means that as long as the deal is taking effect, the franchisor or its affiliates will not locate, operate, or grant a franchise for another Zoom Sewer and Drain Cleaning business within the protected territory.
Obligations
The franchisor requires the franchisee or its principal owner to exert every effort to take responsibility for the management of the business. They will do this on a daily basis unless they agree on an alternate arrangement. With the franchisor’s discretion, the franchisee can hire a manager to handle the operations of the business.
Franchisors will also require you to sell products and services that have their approval. On the other hand, franchisees aren’t allowed to sell unauthorized products or services in compliance with the franchise agreement. Franchisees are also not allowed to solicit business outside of the protected territory. They are, however, permitted to serve customers outside of the protected territory as written in the FDD.
Term of Agreement
The initial franchise will take ten years after the signing of the agreement. You can renew the contract for another ten years, for four times, if you continue to meet the requirements.
Financial Assistance
Zoom Sewer and Drain Cleaning doesn’t offer direct or indirect financial assistance to its franchisees. In addition, they will not guarantee a franchisee’s note, lease, or obligation.
Did You Know?
Get to know more about Zoom Sewer and Drain Cleaning before you get that franchise. Here are some facts about the business:
- They have very little competition in the niche. Most of their competitors are independent plumbers and contractors
- According to the company’s co-founder and COO, Ellen Rohr, this is a recession-resistant business, and the Covid-19 pandemic has proven this
- They have a reported $12 million in revenue with 53 employees and 15 franchisees
Your Investment
The table below shows the estimated cost of a Zoom Sewer and Drain Cleaning franchise. Take note that these numbers may change without any prior notice.
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $35,000 | $35,000 |
| Lease | $3,000 | $9,000 |
| Leasehold Improvement | $2,000 | $40,000 |
| Furniture, Fixtures and Computer System | $7,500 | $13,000 |
| Vehicles | $7,000 | $9,500 |
| Vehicle Wrap and Design | $4,500 | $5,500 |
| Initial Equipment and Inventory of Supplies | $40,000 | $50,000 |
| Business Licenses and Permits; Deposits and Pre-Paid Expenses | $0 | $5,000 |
| Professional Fees | $500 | $3,000 |
| Insurance – Quarterly | $4,000 | $6,000 |
| Initial Training Expenses | $500 | $3,000 |
| Initial Marketing Expenses | $45,000 | $60,000 |
| Additional Funds – 6 months | $50,000 | $100,000 |
| ESTIMATED TOTAL | $199,000 | $341,000 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty Fee | 5% of Net Sales. |
| Marketing Fee | Up to 2% of Net Sales. Currently, the franchisor does not charge this fee. |
| Call Center Fee | Up to $25 per scheduled appointment. Currently, the franchisor does not operate the Call Center or charge a Call Center Fee. |
| Technology Fee | The then-current Technology Fee; currently $500 per month. |
| Webpage Development and Optimization Fee | The then-current fee charged by the franchisor’s designated website SEO provider; currently $695 per month. |
| Additional Location Fee | The then-current Additional Location Fee; currently $2,000. |
| Transfer Fee | Up to 50% of the then-current Initial Franchise Fee. |
| Renewal Fee | Up to 25% of the then-current Initial Franchise Fee. |
| Additional Training and Assistance | Fee and all expenses. Currently $1,000 per day plus travel expenses. |
| National Conference | Reasonable fees and all expenses. |
| Testing for Supplier Approval | Reasonable fee. |
| Interest on Late Payments | Lesser of 1.5% per month or maximum legal rate. |
| Audit Fee | Cost of audit. |
| Taxes | Actual cost. |
| Indemnification | Will vary under circumstances. |
| Costs and Attorneys’ Fees | Will vary under circumstances. |
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