Chem-Dry is one of the largest cleaning companies in the U.S, and that is primarily because this franchise offers a good franchise package with a low operating cost. This company was founded in 1977 by Robert Harris, a carpet cleaner from California.
This brand offers a wide range of cleaning services, and they are one of the pioneers of the Cleaning Industry. The success of the Chem-Dry franchise came primarily because their ongoing fees are very affordable, and they do not burden franchisees with unnecessary costs.
Today more than 4000 franchises in the U.S and abroad work under the Chem-Dry Trademarks, which means that investors have recognized this company as a trustworthy business partner. For all those investors interested in starting the Chem-Dry franchise, we will outline this business opportunity’s cost, fees, and profit.
How Much Does The Chem-Dry Franchise Cost
The estimated starting cost of a Chem-Dry franchise is between $67,600 and $191,000. This financial prediction includes an initial license fee of $23,500 that franchisee must pay within six months after closing the franchise agreement.
The highest Chem-Dry franchise cost will be buying cleaning equipment and a cargo van necessary for transporting cleaning equipment to the working location. The investor who already owns a van can expect lower starting costs than an investor who will need to buy or lease a new cleaning van.
At least one cargo van is required for running this type of business operation, and buying a new one will cost approximately $35,000. This is the most significant cost that all investors that are considering starting the Chem-Dry cleaning franchise must be aware of.
One of the advantages of the Chem-Dry franchise is that it is not necessary to rent property to fulfill the franchisor’s requirements. The franchisee can run this business from a home garage and save a lot of money on leasing.
The Chem-Dry offers in-house financing for the cost of the Initial Licensing Fee and cleaning equipment; all other expenses are financed from third-party sources with whom the franchisor has relationships.
Chem-Dry franchise cost list:
- Licensing Fee: $23,500
- Cleaning Equipment: $20,000 – $ 50,000
- Cargo Van: 0 – $35,000
- Equipment Instalation: $1,000 – $6,000
- Telephone and Business license: $400 – $4,000
- Training: $1,250 – $3,000
- Insurance: $600 – $7,000
- Computer System: $800 – $2,000
- Advertising (first three months): $5,000 – $ 10,000
Chem-Dry Franchise Fee
Chem-Dry franchise fees are a one-time Initial Licensing Fee of $23,500 and an ongoing Monthly Franchise Fee(Royalties), which costs $408,60 per month per one unit. Also, every new franchise unit in the first eight months after starting must reinvest 25% of the gross revenue in the marketing; this cost is called Initial Monthly Marketing Fee.
The purpose of the Initial Monthly Marketing Fee is that the new Chem-Dry franchise invests more money in the first eight months on marketing to acquire more new clients. This is a wise business model, and in this way, the franchisor obligates the franchisee to spread awareness about his business among potential clients.
Eight months after starting, the franchisee only has a cost of a monthly royalty franchise fee of $408,60; this is one of the lowest royalty fees in the cleaning business. In most others cleaning franchising concepts, the franchisee is obligated to pay the franchisor 10 % to 25% of the monthly gross revenue, and that high ongoing fee can burden business profitability in the long run.
Also, the franchisee is obligated to buy directly from Chem-Dry the supplies(detergents and other cleaning fluids) in the amount of $3,000 per year. This requirement will not cause any damage to the business profitability because supplies that are bought directly from the franchisor have a realistic price, so this will not make an unnecessary cost to the franchise unit.
Chem-Dry franchise fee list:
- Monthly Royalty Franchise Fee: $408,60
- Customer Service Management Fee: $70 – $120 per month
- Initial Monthly Marketing Fee: 25% of the gross revenue – paid for first eight months
- Brand Marketing Contribution Fee: $100 – $300
- New Buyer Training Fee: $50 per day per attendee
- Franchise Agreement Renewal Fee: $1,000 – Paid once in the five years
Chem-Dry Franchise Profit
The Chem-Dry franchise owner can expect a net income of 20% of the monthly gross revenue that the unit produces. One hour of cleaning service cost in the U.S ranges between $30 to $50 per hour for one cleaning worker. So, the owner can expect to make $6 to $10 profit per one work hour of an employee.
One working hour of the employee will cost the Chem-Dry franchise owner $13 to 20$, and the franchisee will spend some chunk of profits on cleaning supplies and a tax. The main advantage of this type of business is that there is no electricity and water cost because all the work is done on the client’s site.
For all-rookie entrepreneurs who are considering starting this franchise, it will be wise to be a manager and employee in the first few months; this will reduce salary costs and boost Chem-Dry franchise profit. As the business grows, the owner can start hiring employees, and that will result in more significant franchise profit.
Chem-Dry is a well-known cleaning brand on the market, so it is possible to get very lucrative cleaning contracts, and that good conditions would be impossible to get as the ”no name” company. Also, this franchisor has a low royalty fee that is always the same no matter how much the franchisee makes monthly revenue.
The Chem-Dry franchise owner’s main goal should be to establish his business reputation and connect with people who need cleaning services. The cleaning industry will grow even more in the future, so investing in this type of business can be a lucrative franchise opportunity.
The investor who wants to be a Chem-Dry franchise owner will need to own a minimum of $40,000 in liquid assets(non-borrowed money). This is a relatively low-cost franchise opportunity, so it can be started even if an investor doesn’t possess a high startup fund.
The Chem-Dry franchise profit is excellent, and the business failure risk rate is very low, so this franchise can be a good choice for hard workers who don’t dare to start a business from scratch.
The investor who wants to save money can buy refurbished cleaning equipment, which will reduce starting costs below $100,000 in the total. Chem-Dry offers in-house financing for some of the starting expenses, which is also one of the advantages of this franchising concept that we must outline in this review.
Also, we must mention that the investor is obligated in the first eight months 25% of the gross revenue reinvest in the marketing of his Chem-Dry unit. A good marketing campaign and setting competitive cleaning prices will attract more clients.
Chem-Dry Monthly Royalty Fee is only $408,60; for this fee, the franchisee will get support in all business segments, which will be especially helpful for inexperienced entrepreneurs.
This franchise opportunity can be ideal even for retired persons who want to start a low-risk business venture that can be operated without previous experience. Overall this is one of the best franchises on the cleaning market, and it can be an excellent new career for people who want to change their current job and want to be their own boss.
Chem-Dry will be the ideal franchise opportunity for people who want to start a cleaning business. The franchisor will provide each franchisee a good foundation for profit, and the task of the franchisee is to use the full potential of this business opportunity.
If you want to own a successful Chem-Dry franchise, you will have to roll up your sleeves and start working hard from day one.