Mr. Appliance Franchise in 2024: Costs, Fee & FDD

Mr. Appliance, founded in 1996, is part of the Neighborly family of home service brands, which is a significant player in the home and building services industry. Over the years, Mr. Appliance has established itself as a leader in the appliance repair and maintenance industry, with a reputation for delivering professional, reliable services to homeowners and businesses across North America.

Mr. Appliance offers a range of core services focused on the repair and maintenance of household appliances, including refrigerators, ovens, dishwashers, and washing machines. In addition to these main services, they also provide maintenance plans and guidance for keeping appliances running smoothly. Their core customers include homeowners, rental property owners, and even commercial clients needing appliance repair solutions. With a focus on punctuality, expert technicians, and transparent pricing, Mr. Appliance caters to those looking for dependable, hassle-free repair services.

Today, Mr. Appliance has grown to over 300 franchise locations across the United States and Canada, making it a well-established brand in the home services sector. The franchise serves thousands of customers every day, helping maintain and repair appliances in homes and commercial establishments alike. Their presence in multiple countries underscores their broad appeal and the demand for their professional and courteous service.

Franchisees benefit from a comprehensive support system, which includes training programs that cover both the technical aspects of appliance repair and the business skills needed to run a successful franchise. Training takes place at the Neighborly headquarters and is designed to help new franchisees hit the ground running. Additionally, Mr. Appliance provides ongoing support through marketing assistance, technology tools, and a network of fellow franchisees, all of which ensure that franchise owners feel equipped to grow their businesses effectively.

Mr. Appliance Franchise Insights

1. Mr. Appliance has a total of 325 franchised units in the U.S., indicating a strong national presence with no corporate-owned units, ensuring a focus on franchisee success.
2. The franchise investment range is between $114,000 and $204,000.
3. The royalty fee is set at 6%, and there is an additional 2% marketing fee, which supports brand promotion and franchise growth.
4. Mr. Appliance is part of the Neighborly group, which consists of over 30 home service brands, giving franchisees access to a wide network and substantial brand recognition.
5. Founded in 1996, Mr. Appliance has over 25 years of experience in the appliance repair industry, providing a stable and well-established foundation for franchisees.

Mr. Appliance Franchise Key indicators

How much does it cost to open a Mr. Appliance franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a Mr. Appliance franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.

Min & Max Investment

Opening a Mr. Appliance franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Mr. Appliance below from the most recent Item 7 below:

Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.

Required Capital

To open a Mr. Appliance franchise, the required capital involves both the initial investment costs and a net worth requirement set by Mr. Appliance. Let’s take a closer look below:

• Initial Investment The estimated initial investment range for Mr. Appliance is between $114,000 and $204,000, which includes the franchise fee, initial setup costs, training, and working capital. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
• Liquid Assets Requirement Mr. Appliance requires a minimum of $27,280 in liquid assets to ensure the franchisee has sufficient cash flow for operational needs. This is a typical requirement in the industry, often covering working capital for the first few months.
• Net Worth Requirement Although the specific net worth requirement isn’t provided in the data, for similar franchises in the home services industry, a net worth of $100,000 to $300,000 is often required. This estimate helps assess the overall financial stability of potential franchisees.

How much does a Mr. Appliance franchise owner make?

Calculating the salary of a Mr. Appliance franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Mr. Appliance franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.

Mr. Appliance Revenue & Gross Sales

Mr. Appliance does not provide recent figures for median gross sales, but historically, the franchise has demonstrated strong revenue potential. Franchisees have benefited from a growing demand for appliance repair services, driven by increasing homeownership and the need to maintain and extend the lifespan of household appliances. This consistent demand has helped Mr. Appliance franchises achieve stable growth, particularly as part of the well-established Neighborly network, which brings valuable brand recognition and cross-marketing opportunities.

Which key factors impact the average revenue performance of Mr. Appliance franchisees?

The performance of U.S. franchisee median gross sales for Mr. Appliance in recent years is likely influenced by a few key factors. First, the overall demand for appliance repair services has been steadily increasing, as more homeowners choose to repair rather than replace due to rising appliance costs and supply chain delays. Additionally, the franchise’s strong emphasis on customer service, transparent pricing, and punctuality has likely contributed to customer retention and positive word-of-mouth. Inflation may also have played a role, with increased repair costs contributing to higher revenues. Finally, as part of the Neighborly brand, franchisees benefit from cross-brand referrals, further boosting their sales performance over the previous year.

Mr. Appliance Franchise Operational Costs

If you were to open a Mr. Appliance franchise, the key primary ongoing operational costs to consider would include:

• Labor Costs Wages for skilled appliance repair technicians, administrative staff, and any additional personnel you may hire as your business grows.
• Vehicle and Fuel Expenses Since technicians travel to customers’ homes, maintaining company vehicles and covering fuel costs will be significant operational expenses.
• Replacement Parts and Tools Ongoing costs for stocking parts and maintaining tools necessary for repairs, as well as any upgrades to equipment.
• Office and Administrative Costs Rent for office space (if applicable), utilities, and software or systems needed for managing bookings, invoices, and customer service.
• Insurance and Liability Coverage Adequate coverage for the business, vehicles, and employees is necessary to protect against potential risks or accidents.

These are essential costs to account for in your budget when operating a Mr. Appliance franchise.

Mr. Appliance Franchise Fees

Based on the provided data, here is an overview of some ongoing fees for the Mr. Appliance franchise that are important to consider:

• License Fee Franchisees are required to pay a license fee ranging from 5% to 7% of gross sales, excluding “roll-in” sales. This fee is due every Tuesday and covers the continued use of the Mr. Appliance brand and operating systems.
• MAP Fee There is also a 2% marketing and advertising (MAP) fee based on gross sales (excluding “roll-in” sales). This fee is also due every Tuesday and is used to support brand-wide marketing initiatives that help generate customer leads.
• Additional Fees It is important to note that there may be additional fees, such as minimum license and MAP fees, depending on the terms outlined in the franchise agreement.

These ongoing fees help support both the franchisee’s business growth and the overall Mr. Appliance brand.

Mr. Appliance Franchise Earnings

While Mr. Appliance does not currently provide exact figures for median gross sales, it is reasonable to estimate franchise earnings based on industry averages and historical performance. Owner-operators of home service franchises like Mr. Appliance typically see a strong return on investment due to the recurring demand for appliance repair and the low overhead compared to other industries. Gross sales can vary significantly depending on factors like location, customer demand, and the owner’s involvement.

For an owner-operator, the potential earnings can be positively influenced by reduced labor costs and hands-on management. By actively participating in daily operations, owners can improve efficiency, manage customer relationships more effectively, and ultimately enhance profitability. Overall, Mr. Appliance franchisees have shown consistent growth, backed by the Neighborly brand and an ever-growing demand for reliable appliance repair services.

How to Open a Mr. Appliance Franchise

To become a Mr. Appliance franchisee, you will go through several key steps:

1. Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
2. Initial Consultation You will be contacted by a franchise representative for an initial consultation. During this conversation, you’ll discuss your goals, qualifications, and have the opportunity to ask questions about the franchise model.
3. Validation and Due Diligence Speak with existing franchisees to get firsthand insights into the day-to-day operations, financial expectations, and overall experience of owning a Mr. Appliance franchise. This is an important step in understanding the franchise system’s potential.
4. Discovery Day You’ll be invited to attend a Discovery Day at the Neighborly headquarters in Waco, Texas. During Discovery Day, you’ll meet the support team, learn more about training, and understand the culture of the company.
5. Franchise Agreement Signing Once you’re confident in your decision, you’ll sign the franchise agreement and pay the initial franchise fee. This is a formal commitment to becoming a franchisee.
6. Training and Pre-Opening Preparation You will participate in both classroom and hands-on training at the Neighborly headquarters. This training covers appliance repair, business operations, marketing, and customer service. You will also start preparing your local marketing plan, securing a business location, and hiring staff.
7. Grand Opening and Start of Operations After completing training and final preparations, you’ll officially open your Mr. Appliance franchise. The franchisor will assist with marketing initiatives to help ensure a successful launch and ongoing support as you begin operations.

Pros & Cons

Pros

Established Brand: Mr. Appliance is part of the Neighborly group, which has a solid reputation and well-established brand recognition, increasing credibility from day one.

Low Overhead: The business model does not require a physical storefront, which helps to keep overhead costs lower compared to traditional brick-and-mortar franchises.

Recurring Revenue Potential: Appliance repair services tend to generate recurring revenue, especially with maintenance plans and repeat customers, which can lead to more stable income streams.

Flexible Operations: The business model allows for flexible work hours, making it ideal for owner-operators who want a manageable work-life balance.

Cons

Seasonal Fluctuations: Appliance repair demand can fluctuate seasonally, which may lead to slower months, particularly during times of lower demand for heating or cooling services.

Initial Investment Cost: The total investment range ($114,000 – $204,000) may still be substantial for some, especially given the need for vehicles, tools, and working capital.

Competitive Market: The home repair market is highly competitive, with both independent repair technicians and larger competitors, which means franchisees must excel in customer service to stand out.

Hands-On Commitment: If you plan to be an owner-operator, this type of business can require significant hands-on involvement in managing technicians, customer relations, and daily operations.