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Mr. Rooter Franchise ProfileHome Services Franchises > Plumbing |
What Are the Initial Investment Requirements for a Mr. Rooter Franchise?
To open a Mr. Rooter franchise, you'll need to prepare for a total initial investment ranging from $122,303 to $280,800. This includes a franchise fee of $42,500. Additionally, potential franchisees must have cash readily available, between $122,303 and $263,800, and a net worth of $500,000 to $1,000,000. Understanding these financial commitments is crucial for aspiring owners to ensure they meet the necessary criteria before proceeding.
What Are the Ongoing Fees Associated with a Mr. Rooter Franchise?
Owning a Mr. Rooter franchise involves ongoing financial obligations, including a royalty fee of 6% of gross sales and a marketing fee of 2%. These fees contribute to the overall support provided by the franchise, including national marketing campaigns and operational guidance. Being aware of these ongoing costs is vital for effective financial planning and maintaining profitability.
What Is the Average Revenue Potential for a Mr. Rooter Franchise?
Mr. Rooter franchises have a promising revenue potential, with average annual revenue per unit reported at $1,758,402. The median annual revenue stands at $1,276,237, while the lowest annual revenue recorded is $250,000, and the highest reaches up to $10,430,913. This range highlights the earning potential and variability in performance based on location and management effectiveness.
How Quickly Can You Expect to Break Even with a Mr. Rooter Franchise?
Franchisees can anticipate a breakeven period of approximately 12 months, which is also the expected time frame for investment payback. This quick return on investment can be attractive to potential franchisees, as it indicates a relatively fast path to profitability. Understanding the breakeven timeline can help franchisees set realistic financial goals and expectations for their business.
Mr. Rooter 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. Rooter 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 | 207 | 212 | 218 |
| Net Change YoY | 5 | 6 | |
| Franchised Units | 205 | 209 | 215 |
| Net Change YoY | 4 | 6 | |
| Corporate Units | 2 | 3 | 3 |
| Net Change YoY | 1 | 0 |
Initial Investment
The Mr. Rooter franchise offers a range of initial investment costs, with a low of $122,303 and a high of $280,800. The franchise fee is set at $42,500, while potential franchisees should be prepared for ongoing royalty fees of 6% and a marketing fee of 2%. To start, franchisees will need to have cash on hand ranging from $122,303 to $263,800, along with a net worth requirement between $500,000 and $1,000,000.
Revenue Potential
Mr. Rooter franchises demonstrate strong revenue potential, with average annual revenue per unit reaching $1,758,402. The median annual revenue is reported at $1,276,237, while the revenue range varies significantly, with the lowest annual revenue at $250,000 and the highest at $10,430,913. This wide range indicates that location, market conditions, and operational efficiency can greatly influence financial performance.
Breakeven and Payback
Franchisees can expect to reach breakeven within just 12 months of operation, which is an attractive feature for potential investors. Additionally, the investment payback period is also set at 12 months, allowing franchisees to recover their initial investment relatively quickly. This rapid return on investment can be a key factor in the decision-making process for aspiring entrepreneurs.
Franchise Growth
Mr. Rooter has shown steady growth in its franchise network, increasing from 205 franchised units in 2021 to 215 in 2023. This growth reflects the brand's expanding market presence and the increasing demand for plumbing services. The number of corporate units has remained stable at three since 2022, indicating a focus on franchise development rather than corporate expansion.
Financial Performance
The average annual revenue for a Mr. Rooter unit stands at $451,879, with a gross profit margin of 84.8%. Operating expenses average $179,870, which represents 39.8% of revenue. The EBITDA of $166,470 indicates healthy profitability, with franchisees able to benefit from a strong financial framework that supports operational success.
Company Overview
Mr. Rooter is a well-established plumbing franchise that has been serving customers across North America for years. The brand is recognized for its commitment to customer satisfaction, offering a wide range of plumbing services. With a focus on quality and reliability, Mr. Rooter aims to build long-term relationships with clients, making it a trusted name in the plumbing industry.
Frequently Asked Questions
The initial investment for a Mr. Rooter franchise ranges from $122,303 to $280,800. This includes the initial franchise fee of $42,500 and other startup costs.