Cleaning Franchise: JAN PRO Master Review (2021 FDD)
Written by: Patrick Findaro
This article is based on its 2021 FDD.
Keep reading or watch the video originally recorded on Vetted Biz YouTube Channel
JAN-PRO offers regional master franchises that have the ability to start unit franchises within their territory. JAN-PRO sells and supports unit franchises that will operate janitorial and building maintenance service businesses. It was incorporated in Massachusetts in 1995 and started selling franchises in 2005.
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Russell Reynolds has been the President and Chief Executive Officer since October 2018. From July 2001 to October 2018, Russ was the Chief Executive Officer of Batteries Plus, L.L.C. and was a member of its Operating Committee from February 2000 to October 2018.
JAN-PRO currently has 96 Master Franchises, and no company owned locations.
Initial Franchise Fee Is a fee that franchisees pay to franchisors when signing an agreement, for establishing a franchise relationship, and getting some initial services. It is…
$50,000 – $600,000
Listed above is the standard initial franchise A franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business… fee paid to JAN-PRO, and it varies on a couple of factors:
- The population and density of the territory granted
- Whether the territory is sold to an existing franchisee
- If you are a veteran, you can apply to get 10% off your initial franchise fee
- Varying Incentives can lower the initial franchise fee
For Example:
In the fiscal year ending September 30, 2019, they sold 4 Franchises and the initial franchise fee ranged from $25,000 to $64,000. The initial franchise fee is not refundable.
JAN-PRO Master Franchise Cost:
The total investment ranges from $127,500 to $768,000
Additional Cost Breakdown:
- Initial Franchise Fee: $50,000 – $600,000
- Real Estate: $1,500 – $5,000
- Initial Supplies: $1,500 – $2,000
- Equipment and Office Furniture: $10,000 – $25,000
- Business Licenses & Permits, Deposits and Other Prepaid Expenses: $1,000 – $3,000
- Insurance: $1,000 – $3,000
- Training: $3,000 – $5,000
- Legal Fees and Registration Expenses: $1,500 – $10,000
- Computer Hardware and Software Licensing: $5,000 – $10,000
- Initial Advertising Expenses: $3,000 – $5,000
- Additional Funds AFN = Projected increase in assets spontaneous increase in liabilities any increase in retained earnings Known as AFN or additional funds needed It is… (3 months): $50,000 – $100,000
Ongoing Franchise Costs and Fees:
Contract Services Royalty: 4% of Gross Monthly Revenue
Sales The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. Royalty Fee: 10% of initial franchise feesThe initial franchise fee is a fee that the franchisor charges you so you have the right to use its logo, brand name, products, and… for unit franchises
Advertising Fee: .2% of Gross Monthly Revenue
License Fee: ~$820 per month for software, email, web hosting
JAN-PRO Master Franchise It’s a type of franchise where there the main franchise gives a territory or franchise license to another enterprise to allow them to be… Sales The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue.:
included sales figures for 71 master franchises and excluded 15 franchisees because either they had not had a continuous operation, did not submit financial data, or were transferred in that reporting year.
The below table provides certain results for the 71 master franchises in the sample
| Category | Annual Average | Percentage Of Master Franchises In Sample That Achieved This Result | Number of Master Franchises In Sample That Achieve This Result | Lowest | Highest | Median |
|---|---|---|---|---|---|---|
| Gross Profit The profit a business makes after deducting the costs involved in making, providing, and selling the goods and services. In an income statement, it… | $1,455,074 | 45% | 32 | $101,969 | $4,425,336 | $1,274,682 |
Sales Figures Key Insights:
Shown above is the Gross Profit of franchisees in the reporting group. Note that the Gross Profit presented still includes the fees needed to pay the Franchisor (Royalty and Sales fee).
The annual average gross profit is a healthy number at $1,455,074 considering it is more than double the high-end franchise A franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business… cost to start the business ($768,000).
JAN-PRO International Franchising LLC Income Statement One of the major financial statements focused on a business’s revenues and expenses in a particular period. It is also known as the profit… Highlights:
JAN-PRO posted a Net Income Income, also known as earnings or profits, is money that a person or a business receives in return for working, providing a product or… of around 8 million in 2019, which is 4.5 million lowers than 2018 which reported at around 12.5 million. This change in net income was due to changes in credit for income taxes.
A net income of around 8 million is a healthy number that represents the company should have the ability to pay off any future debt or obligations.
Competition:
The market for commercial janitorial service franchises is well-developed and competitive. Unit Franchisees also must compete with national and local businesses offering the services that are the same as or similar to the Services. Other competing janitorial services include Coverall, Vanguard Cleaning Systems, and Anago.
Conclusion:
JAN-PRO is a well-established A business that has been running for at least ten years business and has been providing master franchise locations for over 14 years. They have over 90 franchise units and provide a very recession proof business model and especially sought after right now during the COVID-19 Pandemic.
While this may be the business for you, make sure to also check out other businesses offered on Vetted Having put someone or something through a careful examination. At Vetted Biz, we put franchises and businesses through a careful examination and benchmarking of… Biz and in the Cleaning and Maintenance Industry.
Analysis Provided by: Brooks Gammill Vetted Biz Intern
