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Hilton Hotels & Resorts’ True Franchise Cost Breakdown
It was in 1962 when the Hilton Hotels & Resorts started its operations. It wasn’t until in 1965 that they opened the company for franchisees. Presently, its headquarters is in McLean Virginia, and it has around 585 units worldwide. So, if you want to know the estimated Hilton Hotels & Resorts Franchise Cost, this post can help.
Franchise Description
The franchisor for the world-renowned property is Hilton Franchise Holding LLC while its corporate parent is the Hilton Worldwide Holdings, Inc. Aside from the Hilton Hotels & Resorts, they also own, handle, and manage several brands listed below.
- Canopy
- Curio Collection
- Conrad Hotels and Resorts
- Doubletree
- Embassy Suites
- Hampton Inn
- Hampton Inn & Suites
- Hilton Garden Inn
- Hilton Grand Vacations Company
- Homewood Suites
- Home2 Suites
- LXR Hotels and Resorts
- Motto
- Signia Hilton
- Tapestry Collection by Hilton
- Tempo
- Tru
- Waldorf Astoria Hotels and Resorts
The great thing about franchising the brand is that they have their own Hilton System. It includes all necessary operational tools such as the reservation service, marketing and advertising programs. Not to mention, you can access other training materials and construction standards as well.
Franchisee Training
The franchisor requires the franchisee to undergo multiple training programs. It’s how they can get a certification. In doing so, the designated employees or replacement must also take the necessary training required by the franchisor.
There are 13 training programs excluding the new owner orientation and workshops. Virtual or online sessions can be considered classroom training also. The franchisor or its third-party vendors could provide the training courses. Furthermore, web-based courses are self-paced and can be taken anytime and anywhere.
Meanwhile, in the annual brand or regional conference, the participation of the general manager and the director of sales is required.
Whenever necessary, the franchisor will recommend and provide additional training or courses.
Territory
The franchisee will have a non-exclusive license to use the system to operate a hotel at the specified location based on the Franchise Agreement (FA). Furthermore, they will not receive an exclusive territory and may have competition with other franchisees or brands. However, the franchisor might give its franchisees certain territorial restrictions that are specified in the agreement.
Franchisee Obligations
The franchisees must delegate highly qualified management to operate the property. If there’s a third-party management company, the franchisor must approve it first. It’s important to note that in no case that any other person could operate the hotel.
Upon reviewing the financial information of the franchisee, the franchisor will determine the guaranty requirements. Besides, the guarantor must agree that they will assume and agree to discharge certain franchisee’s obligations indicated in the FA.
The franchisee must also agree and comply with the requirements in terms of services, amenities, and products that will be used in the hotel. The property should operate 24 hours a day, except on rare occasions allowed by the franchisor. If the hotel runs an eforea spa, it must also follow the minimum hours required to operate as set by the franchisor.
Term of Agreement
The initial term of the agreement is 23 years after the opening date. On the other hand, the term for conversions is from 10 to 20 years from the opening date. If there will be a change of ownership, the franchise term follows the remaining term of the original and existing agreement.
Take note that the franchisees do not have the right to renew or extend. This will be at the discretion of the franchisor. Then, a new term will be provided and signed.
Financial Assistance
Since we’re talking about large-scale operations, we must expect that the Hilton Hotels & Resorts franchise cost could be high as well. However, the franchisor may provide incentives for new hotels. This means they could offer contributions to the hotel’s development. To be clear, this is not a loan but a contingent liability.
The franchisor doesn’t offer direct or indirect financing for its franchisees as well. But, they could provide other types of financing like a mezzanine loan.
Did You Know?
Here are some interesting facts you might want to know about the property aside from the Hilton Hotels & Resorts franchise cost.
Hilton’s Loyalty Scheme
In 2015, the company added six million new members in its loyalty program. It shows how the brand is still dominating the market.
Innovative Products
Hilton Hotels & Resorts remain as the global leader in providing innovative industry solutions. Not to mention, they’re the first hotel to earn LEED and Green Seal environmental certifications.
New Job Opportunities
The hotel was able to create 20,000 jobs due to its established properties. Because of high demand, the number could grow in the succeeding years.
John Lennon’s Imagine
It was 1971 when John Lennon stayed in one of Hilton’s properties when he was able to brainstorm one of his greatest hits – Imagine. In fact, the word ‘Imagine’ was written on a piece of the hotel’s stationery.
Hilton Hotels & Resorts Franchise Cost
Check out the tables below to see the estimated Hilton Hotels & Resorts franchise cost for a 300-room property.
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Franchise Application Fee | $95,000 | $95,000 |
| Product Improvement Plan | $0 | $7,500 |
| Market Study | Varies | |
| Environmental Assessment | Varies | |
| Real Property | Varies | |
| Construction and Leasehold Improvements | $16,000,000 | $86,000,000 |
| Designer and Engineering Fees | $700,000 | $4,000,000 |
| Furniture, Fixtures and Equipment | $8,000,000 | $15,400,000 |
| Inventory and Operating Equipment | $1,500,000 | $3,150,000 |
| Signage | $50,000 | $150,000 |
| Computer Hardware and Software | $151,095 | $376,395 |
| Guest Internet Access Program | $136,500 | $223,500 |
| Delphi Sales and Events System | $2,500 | $41,000 |
| Required Pre-Opening Training | $5,000 | $20,000 |
| ADA Consultant Fee | $2,500 | $15,000 |
| Construction or Renovation Extension Fee | $0 | $10,000 |
| Insurance | Varies | |
| Organizational Expense | $75,000 | $245,920 |
| Permits and Licenses | $240,000 | $1,300,000 |
| Miscellaneous Pre-Opening and Project Management Expenses | $1,000,000 | $3,200,000 |
| Contingencies | $1,600,000 | $8,600,000 |
| Additional Funds (working capital for 3 months) | $1,000,000 | $1,600,000 |
| Eforea Spa Initial Fee | $25,000 | $25,000 |
| Additional Funds for eforea Spa Implementation | $0 | $4,500,000 |
| Other Required Preopening Services Fees | $23,510 | $27,780 |
| ESTIMATED TOTAL | $30,581,105 | $128,987,095 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Monthly Royalty Fee | 5% of gross rooms revenue. |
| Monthly Food and Beverage Fee | 3% of gross food and beverage revenue. |
| Monthly Spa Royalty Fee | 2% of gross spa revenue. |
| Program Fee (per month) | 4% of gross rooms revenue. |
| Room Addition Fee | $400 per guest room or suite. It’s then multiplied by the number of additional guest rooms. |
| OnQ Fees Fee Based Pricing Program (FBPP) Fee | 0.35% to 0.45% of gross rooms revenue for REIT hotels. On the other hand, it’s 0.45% to 0.75% of gross rooms revenue for non-REIT hotels. |
| OnQ Fees Additional Rooms Fee | $120 per additional guest room/suite. |
| OnQ Connectivity Fees | There is no separate fee charged for brand hotels. |
| OnQ Interface Fees | $1,000 per additional interface. |
| OnQ Maintenance Support Fees – REIT Hotels | $1,500 to $5,600 per month. |
| OnQ Email Fees | $7.92 per user per month for email. And $12.50 per month for delivery to mobile devices. |
| Delphi Sales and Events System | $798 per user per year. |
| Guest Assistance Program: Customer Satisfaction Guarantee | $300 per handled transaction for Hilton Honors Diamond members. It’s $250 per handled transaction for Hilton Honors Gold members. Meanwhile, it’s $200 per handled transaction for all other guests. |
| Guest Assistance Program: Price Match Guarantee | Hotels must honor a 25% discount off the lower rate on all approved claims. |
| Guest Assistance Program: First Contact Resolution | $15 administrative fee. |
| Guest Assistance Program: Online Complaints | $25 per complaint administrative fee. |
| Guest Assistance Program: Brand Operations Tech Fee | $323 per year. |
| Quality Assurance Re-evaluation Fee | $480 to $3,000 per re-evaluation visit. |
| Quality Assurance Special Re-evaluation Fee | $3,000 per re-evaluation visit. |
| Brand Conference | $2,800 per attendee. |
| General Manager Training | $1,550 per attendee. |
| Commercial Leader Training | $1,550 per attendee. |
| Hilton Learning Certification | the cost is $500 per attendee. |
| Training Programs and Training Materials | $0 to $5,000 per program per attendee. |
| AAA/CAA Discounts & Rewards Program | $0.30 per available room. |
| AAA/CAA Discounts & Rewards Program: Member Direct | 10% commission. |
| AARP Program | $0.30 per available room. |
| AARP Program Commission | 10% commission. |
| Hilton Advance Program | 1.35% of eligible Digital Direct Revenue. Not exceeding $30 per stay. |
| FastPay (Centralized Group Meeting Payment Program) | Up to $1.40 per transaction, plus commission. |
| Group Preferred Partnership Program | $1.50 per transaction, plus the applicable commission. If the franchisor increases this fee, it will not exceed $2.50 per transaction, plus commission. |
| Frequent Traveler/Guest Reward Program | 4.3% of total eligible guest folio. This fee is waived for stays in which the guest is enrolled on-property in Hilton Honors. |
| Hilton Honors Event Planner Bonus Program | $0.0025 to $0.0050 per Hilton Honors bonus point awarded. |
| Third-Party Reservation Charges | $5.45 per stay. |
| Travel Planner Centralized Payment Program (TPCP) | Up to 10% commission and $0.18 per transaction processing charge. |
| Unlimited Rewards Travel Counselor Incentive and Loyalty Program | Weekday stay (Monday -Thursday nights) = $0.71; Weekend stay (1 Fri/Sat/Sun night) = $1.42; Weekend stay (2 Fri/Sat/ Sun nights) = $2.13. Double Dollars, amounts increase to $1.42, $2.63, and $3.84 respectively. |
| Change of Ownership Application Fee | $125,000. |
| Permitted Transfer Processing Fee | $5,500. A discount of $500 will apply if all parties use the franchisor’s preferred method of electronic signature |
| Re-licensing Application Fee | $75,000. |
| Lender Comfort Letter Processing Fee | $3,500 for Lender Comfort Letters and $1,500 for Lender Comfort Letter Assignments. A discount of $500 will apply if all parties use the franchisor’s preferred method of electronic signature. |
| Public Offering or Private Placement Processing Fee | $5,000. |
| Management Fees | Fees will be established by mutual agreement. |
| Actual Damages Under Special Circumstances | Varies. |
| Audit | Actual amount of deficiency plus interest. |
| Default Remedies | Actual expenses. |
| Indemnification | Actual amount paid by the franchise or its affiliates. It could be due to any claim, demand, tax, penalty, or judicial or administrative investigation or proceeding. This may have arisen from any claimed occurrence at the franchisee’s hotel. |
| Insurance | Actual amount. |
| Liquidated Damages for Unauthorized Opening | $5,000 per day that the hotel is open without authorization. |
| Liquidated Damages for Pre-Opening Premature Termination | The system’s average monthly royalty fees multiplied by 60. |
| Liquidated Damages for Post-Opening Termination ¹ | The greater of: (a) the hotel’s average monthly royalty fees multiplied by 60. Or (b) the system’s average monthly royalty fees multiplied by 60. |
| Liquidated Damages for Post-Opening Termination ² | The hotel’s average monthly royalty fees multiplied by 60. |
| Liquidated Damages for Post-Opening Termination ³ | The hotel’s average monthly royalty fees multiplied by the number of months remaining in the term. |
| Service Charges for Overdue Payments | 1.5% per month or highest percentage permissible by law. Whichever is less. |
| Taxes | Actual amount. |
| Identity, Sales, and Distribution Non-Compliance Fee | $500 per instance. |
| FA Non-Compliance Fee | 1% of gross rooms revenue. |
| Group Distribution Administrative Fee | $500 to $3,000 per instance. |
| Consultation and Service Fees | Set by the franchisor on a project basis. |
| Consortia Program | $2.70 for each consumed night booked under the consortia “parity” rate, plus applicable commission. |
| TMC Pay-On-AII-Pay-For Performance Program | $1.03 plus up to 10% commission or fee. It’s wherever applicable, for each consumed night booked by a TMC travel agency. If the franchisor increases this fee, it will not exceed $1.15, plus commission. |
| FedRooms Program | 1.75% of room revenue for each consumed stay booked under the Program SRP. |
| CWTSato Travel Program | $2.30 for each consumed night booked under the program SRP. And standard travel agency commissions ranging from 8% to 10%. |
| DOD Preferred Program | 1.75% of room revenue for each consumed stay booked under the program SRP. |
| Omega World Travel Government/ Consortia Programs | $2.30 for each consumed night booked under the program SRPs. And standard travel agency commission ranging from 8% to 10%. |
| ADTRAV Government Pay for Performance Fee | $2.30 for each consumed night booked under the program SRP. And the standard travel agency commission ranging from 8% to 10%. |
| ResMax Program | 5.15% to 5.65% of consumed revenue from ResMax booking. The rate varies due to type of booking, length of stay, and other factors. |
| Revenue Management Consolidated Center (RMCC) | One-Time Service Models, $699 to $1,499 (Category 1). Full Support Models (per month), $3,710 to $6,250 (Category 2). Monthly Reports Only Models, $1,055 to $1,595 (Category 3). Monthly Lead Management Service Models, $1,060 to $1,440 (Category 4) |
| Procurement and Service Fees | 4% to 10% of product cost. |
¹ Payable if the franchisor terminates the FA on or after the Opening Date. But before the 2nd anniversary of the Opening Date.
² Payable if the franchisor terminates after the 2nd anniversary of the Opening Date. But, before the last 60 calendar months of the Term.
³ Payable if the franchisor terminates the FA within the last 60 months of the Term.
For more franchising information, check out our guides and resources 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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