MR. APPLIANCE

System health shows contraction from 325 locations in 2023 to 310 in 2024—a 5% decline—despite projections for 18 new units (Item 20). Terminations hit 8, non-renewals 1, but transfers reached 19, suggesting some owners are exiting via sales rather than closures. Franchising since 1996 under Neighborly Assetco provides brand support, but litigation in Item 3 flags franchisor disputes with ex-franchisees over breach of agreements, promissory notes, and counterclaims of fraud and misrepresentation under Illinois law. Fees add pressure: $63,750 franchise fee, 5-7% royalty (listed as 6%), 2% ad fund, plus $274/month software and $85/tech/month, and $350-450/month call center—potentially eroding margins in a field with $295K average gross revenue and $286K median (Item 19).

Economics demand scrutiny: initial investment spans $116,500-$214,850 (Item 7), accessible for service brands but paired with 137 SBA loans averaging $186,419 and a steep 20.4% default rate—far above industry norms, signaling cash flow strains. Gross sales figures imply potential after fees and ops costs, but without disclosed profits, buyers must model conservatively; median lags average, hinting at top performers skewing data. For hands-on operators converting existing businesses, the model offers upside in recurring repairs and vent cleaning, yet contraction and defaults flag caution—strong track record meets modern headwinds.