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Description
Investment Icon

What Are the Initial Investment Costs for a Mr. Appliance Franchise?

To start a Mr. Appliance franchise, you'll need to budget for an initial investment that ranges from $113,750 to $204,350. This includes a franchise fee of $63,750, along with additional costs for equipment, inventory, and other startup expenses. It's important to have cash available within this range, as well as a net worth between $100,000 and $500,000 to qualify for ownership. Understanding these financial requirements is crucial to ensure you’re prepared for the journey ahead.

Fees Icon

What Are the Ongoing Fees and Royalties for Mr. Appliance Franchisees?

Franchisees of Mr. Appliance are required to pay a royalty fee that typically falls between 5% and 7% of their gross sales. Additionally, there is a marketing fee of 2% to help promote the brand and support local marketing efforts. These ongoing fees are essential for maintaining brand standards and accessing the collective resources of the franchise network, so it’s vital to factor them into your financial planning.

Revenue Icon

What Is the Average Revenue Potential for a Mr. Appliance Franchise?

On average, a Mr. Appliance franchise generates annual revenue of approximately $613,664, with a median revenue of $252,000. The revenue can vary significantly, with some units earning as low as $195,000 and others reaching as high as $1,250,000. This potential for earnings can be influenced by factors such as location, market demand, and operational efficiency, making it important for franchisees to actively manage their business for optimal performance.

Breakeven Icon

What Is the Financial Outlook for Mr. Appliance Franchisees?

Franchisees can expect a breakeven period of around 18 months, with an investment payback period of approximately 24 months. The average EBITDA stands at about $139,987, which represents 25.45% of revenue. With operating expenses averaging $254,378, careful management of both revenue and costs is critical to achieving profitability. Understanding these financial metrics can help you make informed decisions as you navigate the franchise landscape.

Mr. Appliance 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.

Net Worth Required icon The minimum total assets (minus liabilities) you must possess.

i Net Worth Required:

$100,000 - $500,000
Investment Payback icon The estimated period to recoup your total investment.

i Investment Payback:

24 Months
Franchise Fee icon The initial fee paid to join the franchise system.

i Franchise Fee:

$63,750
Royalty Fee icon Ongoing percentage of revenue paid to the franchisor.

i Royalty Fee:

5% - 7%
Marketing Fee icon Regular contribution toward the franchise’s advertising fund.

i Marketing Fee:

2%
Breakeven Time icon The estimated timeframe to recover your initial costs.

i Breakeven Time:

18 Months
Initial Investment icon The total amount required to launch the franchise.

i Initial Investment:

$113,750 - $204,350
Cash Required icon The minimum liquid capital you must have on hand.

i Cash Required:

$113,750 - $204,350
Average Revenue icon The typical yearly revenue generated per franchise location.

i Average Revenue:

$613,664
Median Revenue icon The middle value of yearly revenue among franchise locations.

i Median Revenue:

$252,000
Highest Revenue icon The largest reported annual revenue among franchisees.

i Highest Revenue:

$1,250,000
Lowest Revenue icon The smallest reported annual revenue among franchisees.

i Lowest Revenue:

$195,000
Industry icon A broad sector defining similar types of franchise businesses.

i Industry:

Home Based Franchises
Category icon A more specific division within the broader industry.

i Category:

Home Repair Services
Leadership icon The key individuals guiding the franchise’s strategy and growth.

i Leadership:

Mike Bidwell
Corporate Address icon The official business address of the franchisor’s headquarters.

i Corporate Address:

1010 N. University Parks Dr. Waco, TX 76707
Funding Year icon Available financing options to help start the franchise.

i Funding Year:

2011
Parent Company icon The main organization that owns the franchise brand.

i Parent Company:

Neighborly

Mr. Appliance Franchise Unit Growth Summary

A breakdown of corporate, franchised, and total units, with yearly net changes.

The overall number of operating franchise locations.

Total Units i

325
The number of locations owned by independent franchisees.

Franchised Units i

325
The number of locations owned and run by the franchisor.

Corporate Units i

0
Units 2021 2022 2023
Total Units 288 315 325
Net Change YoY 27 10
Franchised Units 288 315 325
Net Change YoY 27 10
Corporate Units 0 0 0
Net Change YoY 0 0
Investment About

Initial Investment

The Mr. Appliance franchise requires a low initial investment of $113,750 and a high initial investment of $204,350. The franchise fee is set at $63,750, with a cash requirement in the same range. This investment structure allows aspiring franchisees to enter the home appliance repair industry with a manageable financial commitment.

Potential About

Revenue Potential

Franchisees can expect an average annual revenue of $549,180, with a median revenue of $252,000 per unit. The revenue range varies significantly, with the lowest annual revenue reported at $195,000 and the highest at $1,250,000. This potential for high earnings makes Mr. Appliance an attractive option for those looking to invest in a service-based franchise.

Metrics About

Royalty and Marketing Fees

Mr. Appliance charges a royalty fee of 5% to 7% of gross sales, along with a marketing fee of 2%. These fees contribute to the overall support and resources provided by the franchise, ensuring that franchisees benefit from a strong brand presence and marketing initiatives.

Fees About

Breakeven and Payback Period

The average breakeven time for a Mr. Appliance franchise is approximately 18 months, with an investment payback period of around 24 months. This relatively quick return on investment is appealing for new franchisees, allowing them to see financial results sooner than in many other business models.

Breakeven About

Franchise Growth

Mr. Appliance has shown consistent growth, increasing from 288 franchised units in 2021 to 325 in 2023. This upward trend indicates a strong brand reputation and market demand, providing potential franchisees with confidence in the franchise's stability and future expansion opportunities.

Units About

Operational Insights

Average operating expenses for a Mr. Appliance franchise are around $254,378 annually, which is about 46.24% of revenue. With a gross profit margin of 71.82%, franchisees can maintain a healthy EBITDA of approximately $139,987, showcasing the franchise's financial viability and operational efficiency.

Frequently Asked Questions

The initial investment for a Mr. Appliance franchise ranges from $113,750 to $204,350, which includes the franchise fee and other startup costs.