Every business has fees. In franchising, the franchise costs are more streamlined, which makes it easier to understand the complete investment to start the business, as well as plan for regular costs (e.g., franchise royalty fees) to maintain and grow the customer base.
What Are Franchise Fees?
Here is an explanation of some of the more common franchise fees that are often included in the estimated initial investment for a franchise. Most franchises cover the startup fees in Item 7 of the franchise disclosure document: the estimated initial investment.
1. Initial Franchise Fee
This is the upfront fee paid by the franchisee to use the brand trademark, operating manuals, proprietary materials, and computer software of the franchise. At Merry Maids, the fee varies based on the size of the territory of qualified households. In addition, our initial franchise fee covers the following:
- Initial 10-day training program for one person
- National seminar fee for one person
- Six months of license fees for the mobile application of proprietary software
- An opening package of inventory, equipment, and cleaning supplies
2. Technology and Software
Most franchises employ technology to streamline operations. There is an upfront fee to register your business to use this technology, and usually annual licensing renewal fees, as you would experience with any business.
Merry Maids has proprietary MM360 software and service mobility software that helps franchisees automate the management of jobs and the dispatching of information.
3. Training
Merry Maids has a 10-day initial training program; and includes this for one person as part of the franchise fee. Training for other employees, such as a manager, is offered for an additional fee. Each franchise will have different requirements for the number of people they require to be trained. Merry Maids training allows for the owner and manager to learn the system and then train the employees they onboard into the business. This helps us to offer a low-cost franchise opportunity.
4. Marketing
To ensure a successful startup, franchises should have an initial marketing fee to generate leads and awareness for your business. Merry Maids created an online marketing fund deposit where the franchisee and the franchisor both contribute a sum of money toward marketing.
5. Real Estate and Improvements
If your franchise requires an office location, you will have real estate fees and improvements. Some are strict about the space you must have, while others, including Merry Maids, offer flexibility. The Merry Maids office space requirement is 450 to 1,800 square feet.
6. Opening Inventory
While Merry Maids includes an opening inventory package as part of its franchise fee, other franchises may not, so this can be an additional expense you should anticipate.
7. Professional Fees
You should consult with an attorney to ensure you fully understand the franchise system and what your commitment is in signing the franchise agreement.
8. Additional Funds
Though not a type of franchise fee, most franchises include a line item for additional funds to cover expenses incurred to start and run the business for a period of time. Merry Maids includes three months of wages, uniforms, axes, licenses, phone and utility bills, vehicle payments, bank charges, and other common startup business expenses in this category.
Royalties and Advertising
Franchise owners pay ongoing fees that contribute to the support and promotion of their business. These are categorized as franchise royalty rates and advertising or marketing fees. They are commonly provided as a percentage of gross sales.
9. Royalty Fees
A royalty fee is an ongoing fee paid by the franchisee for continued use of the franchisor's brand and to benefit from ongoing support and updates. The Merry Maids royalty is 7% of gross sales, paid weekly.
10. Advertising and Marketing
Merry Maids has an advertising fund to drive business to franchise owners, who contribute 1.3% of gross sales toward it. A marketing contribution is one of the average franchise fees to anticipate, and if there isn’t one, be sure you know how the franchise is marketing the business on your behalf.
Explore the Merry Maids Opportunity
The total initial investment for a Merry Maids franchise ranges from $94,480 to $144,425, depending on the qualified territory size you choose. For that investment, you are immediately part of one of the largest home cleaning franchises in the United States. When you’re ready to leverage your skills to build a business for yourself, and you want a professional, highly regarded brand to back you, Merry Maids is a business that is worth exploring. Residential cleaning service franchises are a $1.2 billion industry with a positive growth prediction. This could be your opportunity.
Complete our online form to start the conversation with our franchise development team.