Mr. Handyman Franchise in 2024: Costs, Fee & FDD
Uncover why Mr. Handyman stands out as a leading investment in the home services sector. Learn about franchise costs, growth potential, and the advantages of being part of Neighborly’s trusted network. Is it the right fit for you?
Table of Contents:
Mr. Handyman is a prominent franchise in the home and building services industry, founded in 1996 with a mission to provide reliable, professional handyman services. As part of Neighborly, one of the largest service-based franchise groups, Mr. Handyman stands out for its dedication to quality, convenience, and customer satisfaction. Since its inception, it has built a strong reputation for providing both residential and commercial property owners with a one-stop solution for maintenance and repair needs, establishing itself as a trusted name in the home improvement market.
The franchise primarily offers a wide range of handyman services, including minor repairs, maintenance tasks, and home improvement projects—essentially everything from fixing drywall to installing doors and windows. They also provide seasonal services, like gutter cleaning and deck maintenance. Their core customer base includes busy homeowners, landlords, and even small businesses that need quick and professional fixes. The versatility of Mr. Handyman’s services allows them to serve a diverse range of customers, making them an appealing choice for those who value quality and convenience.
Today, Mr. Handyman has expanded to over 300 locations across the United States and Canada, making it one of the largest handyman franchises in North America. This widespread presence allows it to serve thousands of customers daily, providing consistent, professional services with a localized approach. The franchise’s scale and strong brand recognition give it a competitive advantage in the fragmented home services market.
Mr. Handyman offers extensive support for franchisees, including an initial training program that covers technical skills, business operations, and marketing strategies. Ongoing support includes access to a network of fellow franchisees, marketing materials, and a dedicated support team to help navigate challenges and seize growth opportunities. This comprehensive support system, combined with the well-established brand and flexible business model, makes Mr. Handyman an attractive option for those looking to enter the home services industry.
Mr. Handyman Franchise Insights
- Mr. Handyman has 329 franchised units across the U.S., with no corporate-owned units, reflecting its franchise-focused growth model.
- The franchise total initial investment ranges from $123,000 to $160,000, making it a relatively affordable option in the home services industry.
- The royalty fee is 8%, while the marketing fee is 2%, ensuring a balanced cost structure for ongoing support and brand promotion.
- As part of Neighborly, a group with over 30 home service brands, Mr. Handyman benefits from cross-brand support, leading to a more integrated customer experience and additional growth opportunities.
- Founded in 2000, the company started offering franchises that same year, showing a commitment to expansion from early on.
Mr. Handyman Franchise Key indicators
Growth YOY (%)
7%
vs industry 4%
Total U.S. Franchised Units
329
3-Year Failure Rate
7%
vs industry 13%
Sales-to-Investment ratio
5.7:1
How much does it cost to open a Mr. Handyman franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Mr. Handyman 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. Handyman 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. Handyman below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Licensing Fee | $65,000 | $65,000 |
| Initial Package Fee | $5,500 | $5,500 |
| Vehicle Expenses - 3 months | $2,350 | $4,300 |
| Computer Hardware Package | $3,500 | $6,000 |
| Real Estate and Utility Deposit – 3 months | $750 | $3,000 |
| Furniture, Fixtures and Office Equipment | $0 | $1,500 |
| Tools and Equipment to Equip One Van | $1,000 | $2,000 |
| Permits & Licenses | $100 | $1,000 |
| Initial opening equipment, uniforms, marketing materials | $5,500 | $5,500 |
| Prepaid Insurance Premiums - 3 months | $1,800 | $2,800 |
| Training Expenses: Travel, Food and Lodging | $3,000 | $4,000 |
| Professional Fees | $0 | $5,000 |
| Additional Funds - 3 months | $34,500 | $54,000 |
| Total Estimated Initial Investment | $123,000 | $159,600 |
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. Handyman franchise, the required capital involves both the initial investment costs and a net worth requirement set by Mr. Handyman. Let’s take a closer look below:
- Initial Investment For Mr. Handyman, the investment range is between $123,000 and $160,000, covering costs like franchise fees, initial marketing, equipment, and other startup expenses. 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 The minimum cash required, or liquid capital, is listed as $26,430 for Mr. Handyman. This aligns with the industry standard for a service-based franchise, which typically requires liquid assets between $20,000 and $50,000, depending on the size of the operation and market.
- Net Worth While specific net worth requirements aren’t provided for Mr. Handyman, franchises in the home services sector generally look for a minimum net worth between $100,000 and $250,000. This is an estimate based on similar franchises, ensuring franchisees have the financial backing to cover both the initial investment and any operating capital needs during the early stages.
How much does a Mr. Handyman franchise owner make?
Calculating the salary of a Mr. Handyman 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. Handyman 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. Handyman Revenue & Gross Sales
Based on most recent analysis, Mr. Handyman franchises achieved a median gross sales of $801,113. This strong financial performance underscores the brand’s robust consumer demand and potential for significant revenue generation.
Which key factors impact the average revenue performance of Mr. Handyman franchisees?
The performance of U.S. franchisee median gross sales for Mr. Handyman in recent years may have been influenced by several key factors. The ongoing demand for home improvement and repair services, fueled by the aging housing stock and increased remote work, has driven more homeowners to prioritize maintenance projects. Additionally, rising awareness of professional handyman services and the convenience they offer has led to greater customer adoption. Inflationary pressures could also have resulted in increased service pricing, contributing positively to gross sales. Moreover, the support from Neighborly’s extensive marketing network and enhanced brand visibility likely helped franchisees capture a larger share of the market, boosting their sales performance.
Mr. Handyman Franchise Operational Costs
When opening a Mr. Handyman franchise, some of the key ongoing operational costs to consider include:
- Labor Costs The largest ongoing expense will likely be paying skilled technicians and support staff. Ensuring a qualified team is critical for maintaining quality service and customer satisfaction.
- Vehicle Costs You’ll need to maintain and operate branded service vehicles, which involves fuel, insurance, regular maintenance, and, if necessary, lease payments.
- Marketing and Advertising Local advertising campaigns, digital marketing, and community engagement are crucial for customer acquisition. This is separate from the national ad fund.
- Office and Storage If required, leasing office space or storage units for tools and equipment can be a recurring expense, particularly in urban areas.
- Tools and Equipment Maintenance Ongoing replacement and upkeep of tools, safety gear, and other equipment used in day-to-day services must also be accounted for.
- Technology and Software Subscription fees for scheduling, customer relationship management (CRM) software, and other operational tools will also add to ongoing costs.
Careful planning and budgeting for these operational costs are crucial for the financial health and success of your Mr. Handyman franchise.
Mr. Handyman Franchise Fees
- License Fee A fee of 7% of Gross Sales, except for specific categories like material revenue and subcontractor revenue, which are charged at 3.5%. This fee is for the use of marks, system, territory, and manuals.
- MAP Fee A 2% of Gross Sales fee, which supports national marketing efforts to promote the brand to consumers. This ensures increased visibility and support for local franchisees.
- Additional Fees There might be other fees associated with training, additional services, or local requirements that can vary depending on the territory.
Understanding these ongoing fees is crucial for managing cash flow and ensuring financial preparedness as a franchise owner.
Mr. Handyman Franchise Earnings
Based on the most recent data, the median gross sales for a Mr. Handyman franchise were approximately $801,113. For an owner-operator, the estimated earnings from these gross sales were around $120,167 based on operating profits for the industry. These figures provide an encouraging picture of profitability, showcasing the potential return that can be achieved when operating a franchise in this industry.
These earnings indicate that, with effective management and dedication, franchisees have a solid opportunity to achieve a stable income while benefiting from the support and brand recognition of a well-established company. This financial stability, combined with ongoing training and marketing support, makes Mr. Handyman an appealing choice for those looking to invest in the home services sector.
How to Open a Mr. Handyman Franchise
Here’s an overview of the steps involved in becoming a Mr. Handyman franchisee:
- 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).
- Preliminary Application Complete a franchise application form to demonstrate your interest and provide basic information about your background and finances. This helps determine if you’re a good match for the franchise.
- Discovery Day Attend a Discovery Day at Mr. Handyman’s headquarters or a virtual meeting. This is your chance to meet the team, ask questions, and get a closer look at how the business operates.
- Approval Process Once both you and the franchisor decide to move forward, you’ll undergo a financial review and be vetted for final approval. If successful, you’ll receive a formal franchise agreement.
- Franchise Agreement Signing Sign the franchise agreement and pay the initial franchise fee. This officially secures your rights to operate a Mr. Handyman franchise in a specific territory.
- Training Participate in the initial training program, which typically includes both classroom and hands-on training. You’ll learn about business operations, marketing strategies, and service delivery to prepare you for managing your franchise.
- Site Selection and Setup Secure a suitable office location (if necessary) and acquire vehicles and tools needed for service delivery. The franchisor may provide guidelines to help set up your operations.
- Pre-Opening Marketing Begin marketing your business locally with support from the franchisor, which often includes digital and community outreach to generate leads before opening day.
- Grand Opening and Start of Operations Launch your franchise with a grand opening event, then begin providing services. The franchisor continues to offer support as you start operations to help ensure a successful beginning.
Pros & Cons
Pros
Established Brand: Mr. Handyman is part of the Neighborly family, which provides strong brand recognition and cross-marketing opportunities.
Growing Demand: With an aging housing stock and increasing demand for home improvement services, there’s a steady market for quality handyman services, which can lead to consistent revenue.
Scalable Business Model: The franchise can be managed semi-absentee, making it a viable option for investors looking to scale or diversify their portfolio.
Wide Range of Services: The versatility of Mr. Handyman’s offerings means franchisees can attract a diverse customer base, including homeowners, landlords, and businesses.
Cons
Competition: The home services market is highly fragmented, with many small, independent competitors, which may make customer acquisition more challenging.
Ongoing Operational Costs: Running a fleet of branded vehicles and hiring skilled technicians adds ongoing costs that need careful management to maintain profitability.
Royalty and Marketing Fees: The 7% royalty fee and 2% marketing fee reduce the portion of revenue that franchisees can keep, which may impact overall profitability.
Dependence on Skilled Labor: The success of the franchise depends heavily on having reliable, skilled technicians, which can be challenging given labor shortages in the industry.
