HOUSEMASTER

Item 7 outlines an accessible entry with total investment of $68,878-$112,728, including a $42,500 franchise fee, making it lower than many service brands requiring six figures upfront. Ongoing fees include a tiered royalty dropping from 7.5% to 5% of gross sales, paired with a marketing fund from 2.5% to 2%, plus fixed costs like $104/month tech fee, $30-$200/month QuickBooks, and optional $350-$450/month call center. Item 19 discloses average gross revenue of $127,197 and median $96,619 across franchised units, offering a realistic benchmark without implied profits—top performers likely push boundaries, but medians suggest disciplined operators hit six figures. Backed by Neighborly (KKR-owned), support targets startups or conversions in residential/commercial inspections.

System metrics reveal contraction from 242 locations in 2023 to 235 in 2024 (-3%), with 10 terminations, 15 non-renewals, 5 transfers, and 14 projected new units signaling cautious expansion. SBA data flags 28 loans averaging $156,725 but a 14.3% default rate, higher than some peers and warranting scrutiny on operator success factors. No major litigation stands out, and the 1979 franchising start plus conversion model provide stability, but declining units amid home services growth elsewhere question scalability. For risk-tolerant investors with inspection experience, the low entry and revenue transparency make it viable; otherwise, the contraction trend demands deeper FDD review.