Top 5 National Handyman FranchisesA Side-By-Side Comparison Report
According to the United States Census Bureau, there are now over 126 million housing units in the United States, and of that number over 95 million were built before 1990. Today, these homes are nearing 20 years and are needing the necessary repair and maintenance to maintain their value. Roofs, kitchens and baths wear out or become outdated in a 15-20 year cycle. This means that these homeowners are going to need the type of help Handyman Matters can provide.
We live in a world where the average family has 16 hours of leisure time in a week. Most will agree that our time is better spent with our friends and familynot devoting each weekend to home improvements. The demand for a reputable and reasonable home repair service has never been higher. As the population rises, demand for services will follow.
The purpose of this report is to give you comparison information from the 5 main home repair/handyman franchises. We gathered all of this information out of the legally required Franchise Disclosure Documents (FDD) from each of the franchisors. To get these documents for yourself, you either need to qualify with each franchisor or buy them for $220 each ($1,100 total). We have completed the research for yousaving you time and money.
How To Understand The Charts Included in This ReportThere are two charts included in this report. One is a Summary Comparison Chart (pg. 15-16), which is a simpler version of the Detailed Comparison Chart and utilizes color-coding to make the comparisons easier to visualize. The assumptions used to determine the scoring on the Summary Comparison Chart are listed below with the descriptions of each factor. The second is the Detailed Comparison Chart (pg. 17-18) that has all the details and numbers from each FDD.
Use these charts to get an overview of how each franchise scores on each factor by looking at the summary chart, and then refer to the detailed chart for the actual numbers the summary chart was based upon.
On the Summary Comparison Chart, the franchises that score best on a factor are colored GREEN, those in the middle are YELLOW and BLUE, and the worst are colored RED. Youll have to decide for yourself which factors are important to you. Weve included a description of each factor and why it is important within the industry.
Note that this report is not intended to take the place of doing your own due diligence; its just giving you a good place to start.
Detailed Comparison Chart
HandyPro TruBlue Handyman
Handyman Matters Handyman Connection Mr. Handyman
The Franchises Discussed In This Report Are:
Territory SizeOne of the first things to consider is your territory size. Territory sizes range from 50,000 300,000 plus. Another factor to consider is not only territory size, but if a territory is "protected". A protected territory means no other franchisee can work within your specific geographic territory.
On the Summary Comparison Chart we define a territory of 62,000 households or more as an A, a territory from 50,000 61,999 as a B, a territory from 30,000 49,999 as a C and 29,999 or under as an F. Regardless of size, if you are notprovided a "protected" territory, an "F" will be given.
Franchise FeeThe franchise fee is not the only cost of getting your business started, albeit a major one. Franchise fees range from $25K to over $54K. Since the territory sizes vary so greatly, weve listed both the franchise fees and also the equivalent fee for a 62,500-population territory.
We have included all fees you are required to pay to own the territory. Fees may be listed as franchise fees, territory fees, training fees, start-up markering fees, technology or software package fees, etc.
Can You Sell In Unoccupied Territories?This is not as important a factor as the preceding two, but weve indicated if the franchisor will allow you to service customers in a territory next to yours while its still unoccupied. Some will and some wont about a 50/50 split. If they allow you to sell in adjoining, unsold territories, it is a good indication that the franchisor is looking out for your business interest and the best service for local customers.
Other FeesOther fees can range greatly, but need to be considered in your total start up costs for your business. There is a major difference between a franchisor that requires you to have a commercial location plus several vans painted with their logo and a franchisor that allows you to start out from your home with no additional overhead expense. The Summary Comparison Chart coding is an A for $0 - 240 per year, B for $241 - $500 per year of extra fees, C for $501 - $1000 per year extra fees,
and an F for more than $1000 per year of extra fees. To see what the additional fees are included, refer to the Detailed Comparison Chart and item six of their FDD.
Royalty PercentageAll franchisors charge you a royalty on sales as a way to provide the funds to give you ongoing support and to make a profit themselves. Weve coded those at a 5% royalty as an A, 6% as a B, 7% as a C and 8% or more as an F.
Minimum Royalty ChargeSome franchisors have a minimum royalty payment that is required regardless of your sales. The fee increases your costs of getting your business off the ground so we have included these charges in the Detailed Comparison Chart for you to review.
Advertising Fund ChargeYou pay this charge as a percentage of your sales to provide the funds for national advertising which benefits all franchisees. Some franchisors require you to spend a certain amount on local advertising instead of charging this fee. Make sure to look at both the advertising fund charge and the advertising minimum requirements on the Detailed Comparison Chart. On the Summary Chart we have graded them as A = 0-2%, B=3%, C=4% and F=5% or more.
Home Office Allowed?For the most part, the franchisors listed were questioned about allowing a franchisee to work from a home office. Being able to start in your home is a definite advantage and lowers your start-up costs. The systems that allow you to start in your home get a green coding and those that dont get a red.
The ideal franchisor is one who is both a
substantial size and who is also profitable.
Term of AgreementThe Term of Agreement is important because a short-term agreement can change the rules when you renew. The franchisor could shrink your territory, raise the fees, or change anything they choose in your franchise agreement. If you have spent five years getting your business underway, it would be an unpleasant surprise to find the rules changing upon renewal. Ten years or longer gets an A, seven years gets a B, five years gets a "C", and four years or less gets an F .
Cost To Sell Your FranchiseThis is something most buyers dont initially consider. Think about what would happen if you wanted to sell your businesswhat are the restrictions and costs for doing so? The costs can range from minimal to exorbitant fees that are the equivalent of buying an entirely new franchise. You may not intend to sell, but unforeseen circumstances can always happen, so this area is worth a look.
Most franchisors charge you less if you sell to a fellow franchisee in the system. This makes sense because less support is necessary from the franchisor. All franchisors require that they approve the sale because it is important to the system as a whole to have quality franchisees.
We give an A to those who charge $7,500 or less to sell your franchise. The Bs charge $7,501 - $10,000. Cs charge $10,001 - $13,000 and $13,001 or more or an unknown based on sales price gets an "F".
System StabilityThis is one of the most important factors on the entire list and heres why: what is your franchise going to be worth if the franchisor goes out of business or doesnt have the financial capability to live up to their part of your franchise agreement? You could end up out of business through no fault of your own.
There are two factors used to grade each franchise on financial stability. The first is size. The total number of franchises is an important factor because it tells you the success of their business model and is an indication of their ability to support you.
Look at the Detailed Comparison Chart to see the actual number of franchisees each franchise system has. Size alone is not all that matters. An additional point of due diligence we suggest is to review item 20 of each FDD to determine how the number of units has fluctuated in the past 3 years. Is the franchise growing steadily? Or is the franchise losing units every year?
Those franchisors with revenues over $1 million and have at least 100 units get an A. We gave those who are smaller; between $500,000 and $1 million with 75 units, a B. The C was given to those between $500,000 and $1 million with less than 74 units and F was given to those with sales under $500,000 or less than 25 units.
Advertising Fund Home Office Term of Agreement Cost to Sell System Stability
Heres a recap of items you need to consider before purchasing a handyman franchise:
Territory Size Franchise Fee Unoccupied Territories Other Fees Royalties
Due Diligence: Step TwoBe Sure To Consider Critical Factors That May Not Be Included In An FDD
There are other questions you should ask to evaluate each franchise. Since the answers to these are not in the FDD legal documents, you will have to ask each individual franchise under consideration.
At Handyman Matters, we have the best model. You can determine why with