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Mr. Electric Franchise ProfileHome Services Franchises > HVAC Services |
What Are the Initial Investment Requirements for a Mr. Electric Franchise?
To open a Mr. Electric franchise, you should be prepared for a significant initial investment ranging from $152,000 to $331,500. This includes a franchise fee of $42,500. Additionally, you’ll need to have cash on hand between $152,000 and $314,500 and a net worth of $300,000 to $1,000,000. Understanding these financial commitments is crucial for aspiring franchisees to ensure they are adequately prepared for ownership.
What Are the Ongoing Fees Associated with a Mr. Electric Franchise?
Mr. Electric franchisees are required to pay a royalty fee of 6% on their gross sales, along with a marketing fee of 2%. These ongoing fees are essential for maintaining brand presence and ensuring continuous support from the franchisor. It's important to factor these costs into your financial planning, as they will impact your overall profitability.
What Is the Average Revenue Potential for a Mr. Electric Franchise?
The average annual revenue for a Mr. Electric franchise unit is approximately $495,862, with a median revenue of $332,746. However, revenues can vary significantly, with the lowest reported at $15,546 and the highest reaching an impressive $13,142,040. This wide range highlights the potential for growth and profitability, depending on factors such as location, management, and market demand.
How Quickly Can You Expect to Break Even with a Mr. Electric Franchise?
Franchisees can anticipate breaking even within about 12 months of operation. The investment payback period is estimated at 19 months, making Mr. Electric a relatively quick-return opportunity in the franchise space. This timeline is an attractive feature for potential investors looking for a solid return on their initial investment while establishing a foothold in the electrical services market.
Mr. Electric Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Mr. Electric Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 158 | 170 | 180 |
| Net Change YoY | 12 | 10 | |
| Franchised Units | 158 | 170 | 180 |
| Net Change YoY | 12 | 10 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Investment Overview
Mr. Electric offers a low initial investment range of $152,000 to $331,500, making it accessible for aspiring entrepreneurs. The franchise fee is set at $42,500, with ongoing royalties of 6% and a marketing fee of 2%. This structure allows franchisees to allocate resources effectively while benefiting from the brand's established reputation.
Financial Performance
The average annual revenue per Mr. Electric unit is approximately $495,862, with a median revenue of $332,746. This indicates a strong potential for profitability, as the highest recorded revenue reaches $13,142,040. Franchisees can expect a breakeven time of around 12 months and an investment payback period of 19 months, highlighting the financial viability of the franchise.
Franchise Growth
Mr. Electric has shown consistent growth in its franchised units, increasing from 158 in 2021 to 180 in 2023. This upward trend demonstrates the brand's resilience and appeal in the market, providing potential franchisees with confidence in joining a growing network. The absence of corporate-owned units emphasizes the focus on franchisee success and support.
Operational Costs
The average operating expenses for a Mr. Electric franchise amount to $209,420 annually, which represents approximately 42.23% of total revenue. Key expenses include selling, general and administrative costs, and advertising. Understanding these costs is crucial for franchisees to maintain profitability and manage their financial health effectively.
Profitability Insights
Mr. Electric franchises enjoy a gross profit margin of 77.16%, translating to an average gross profit of $383,127 per unit. With a net income of $166,470, or 33.54% of revenue, franchisees can achieve substantial financial returns. This profitability is a key selling point for potential investors looking for a lucrative business opportunity.
Support and Training
Franchisees benefit from comprehensive support and training provided by Mr. Electric. This includes initial training programs, ongoing operational assistance, and marketing support to ensure franchisees can effectively run their businesses. The commitment to franchisee success is evident in the resources available to help navigate challenges and optimize performance.
Frequently Asked Questions
The initial investment for a Mr. Electric franchise ranges from $152,000 to $331,500, which includes the initial franchise fee of $42,500 and other startup costs.