First Servpro was opened in 1967 by Ted and Doris Isaacson from California. Today, with more than 1,900 franchise units, they are the leading company in the Cleaning and Restoration Industry. Every year, more and more new franchises from this brand are started. This franchising opportunity is popular among entrepreneurs because it is a relatively low-cost investment when we analyze how many high-pay services they offer.
This review aims to provide to the potential franchisees the Servpro franchise cost, fees, and expected profit. This company offers a broad range of services, so we will also mention what types of jobs can expect a future owner once the Franchise Agreement is closed.
How Much Does The Servpro Franchise Cost
The estimated total Servpro franchise cost is between $191,825 and $245,700; this financial calculation includes an Initial Licensing Fee of $70,000. The most significant starting expense will be for Equipment & Products Package, and it will cost $78,500.
Will be Servpro franchise starting cost on the low or on the high end will depend primarily on the expense related with the vehicle. Every new franchisee must have at least one working vehicle. New usually costs $35,000, so investors who have a limited starting budget can opt to lease a working van or use it own if it satisfies franchisor requirements.
Also, every franchisee has an obligation to equip a small office; this franchisor’s requirement regarding office is minimal, so there will not be a need to rent space that will have a high monthly cost. This is one of the benefits of owning the Servpro franchise; all work is done on the client’s site, so there will not be high bills for electricity, water, and rent which means that more profit will stay in the franchisee’s pocket.
Servpro Franchise cost list:
- Initial Franchise License Fee: $70,000
- Equipment & Products Package: $78,500
- Vehicle: $2,000 – $35,000
- Supplies: $3,850 – $8,500
- Insurance: $4,000- $5,750
- All other costs: $30,000 – $70,000
- Estimated Total Investing: $191,825 – $245,700
Applicants to this franchise must meet a financial requirement of owning $105,000 in Liquid Assets (non-borrowed money). For all starting costs, this franchisor offers assistance; Servpro offers in-house financing and has a connection with third-part-funding sources!
Servpro Franchise Fees
Every new Servpro franchisee will need to pay a one-time Initial Franchise Fee of $70,000, an ongoing monthly Royalty Fee that ranges from 3% to 10% of the Gross Sales, and Ad/Marketing Fund Fee that is 3%.
The monthly cost of the Royalty Fee will depend primarily on how much revenue that franchise unit makes; more income = lower fee. The franchise that makes monthly sales in the range from $0 to $5,999 will pay royalties that are 10%, and those that make $100,000+ will need to pay royalties of only 5% of the Gross Sales.
One of the advantages of the Servpro business concept is that more efficient units will have reduced costs of ongoing franchise fees. So, will be Royalty Fee percentage on the low or on the high end will depend primarily on the franchisee’s skill to make more sales throughout the month.
Also, many of the fees are related to the employer’s training; the owner’s initial training will be free, but all other training sessions must be paid; usually, it costs between $500 to $1500 per person per training.
Servpro has a wide range of excellent training courses, and franchisees that employ hard workers ready to learn new things will have possibilities to offer services that are not cheap, so their franchise unit will make more profit!
Servpro franchise list of fees:
- Initial Fee: $70,000 – one time cost
- Royalty Fee: 3% – 10% of monthly Gross sales – an ongoing cost
- Ad Fund Fee: 3% of monthly Gross Sales – an ongoing cost
- Fixed fee: $45-$115 per month – an ongoing cost
- Training Fees: $500 – $1500 per person depending on the type of training
Servpro Franchise Profit
Servpro franchise can deliver at least 15% of the Profit Margin to its owner; it all depends on the type of job/service that is charged. This percentage can be higher if employees get the necessary training and learn to do jobs with a good-paying hourly rate. Also, the service must be on the high level, because it is crucial to maintain the old and acquire new regular customers.
Servpro Franchise Disclosure Document does not include information about how much their units on the average make of yearly Gross Sales. In our review, we researched Servpro franchise profit potential by the type of service that these franchised businesses offer.
Servpro franchise list of services:
- Carpet cleaning
- Professional residential and commercial cleaning
- Fire, smoke, water, wind, and other damage cleanings
- Restoration, mitigation, reconstruction, and construction
- Mold remediation and bioremediation services
According to BusinessEcon, carpet cleaning is a high-margin business; these other listed services also are in high profitable niches. Franchising is not a rich quick scheme, so owners must be prepared to do hard work every day.
The franchisee and his employees will have available training for all the above services. The Servpro training package is one of the best on the market, and the franchisee’s task is to take advantage of that. This franchise will not bring millions of dollars to its owner, but it can bring secure income every month if the business is run correctly.
Servpro Review
Servpro started its business operations in 1967, and with today’s more than 1,900 franchise units, it has become a leader in the Cleaning and Restauration Industry. Every franchise applicant can expect a medium starting cost franchise that can deliver a good profit margin, which means that investors can predict a quick Return of Investment.
The Servpro franchises offer services in high demand, and there are not too many similar companies that operate in the same niche of business.
Not many entrepreneurs want to invest money in this type of business; they are more interested in the fast-food franchises whose cost is usually higher than Servpro franchising offers. This brand franchisee can expect low competition in a market with excellent profit margins, which is the most significant advantage of this franchising concept.
By buying the Servpro franchise, the owner gets the right to a specific territory, and usually, this granted territory is populated by 50,000 to 80,000 people. So, the franchisee will not have competition from other franchise units of this brand, and getting each new client will be a lot easier.
The owners of the existing businesses that operate in the cleaning and restoration niche can also apply to become a franchisee of this brand. So this franchising opportunity can also be a choice of business owners who have the necessary working equipment and need someone who knows how to get their business to the next level.
Summary
All investors who own Liquid Capital of $105,000 and wish to be an owner of the Servpro franchise have a good chance that their application will get franchisor approval. This franchisor doesn’t have any restrictions regarding past business experience, so this can be a good choice for people who want to start a career in the Cleaning & Restauration Industry.
But above all, the Servpro will be an ideal franchise opportunity for entrepreneurs who love working in the field and don’t afraid to make their hands dirty. If you have some investment funds and are a hard worker willing to start a business in this niche, then now is the right time to make the first step in that direction.