ServiceMaster Restore

The $72,500 franchise fee is on the higher end for a home-based service franchise, but ServiceMaster includes meaningful value: AOS training for two people ($6,310/person value each), accounting software setup ($600), and Restore 365 Plus initial setup ($3,500). Discounts exist but you can only take one: 20% for military ($14,500 off, to $58,000), 15% for conversion businesses or ServiceMaster affiliate employees ($10,875 off), and 5% for industry experience ($3,625 off).

The total investment range of $266,600-$442,890 is driven by equipment ($85,000-$150,000 — you need a full truck-mount, air movers, dehumidifiers, and remediation gear) and working capital ($70,000-$125,000 for the first three months). The truck line item reflects a deposit and first payment on a $40,000-$80,000 box truck recommendation, not the full purchase price.

Ongoing: ServiceMaster's royalty structure is tiered by cumulative annual 'Royalty Group Sales' (meaning all locations owned by the same ownership group aggregate together). You start at 10% on the first $500,000, dropping gradually to 5.95% above $4.5M. The tiers reset to 10% on January 1 each year.

For context, that 10% starting royalty compares unfavorably to PuroClean (10% to $249K then 9%) and Servpro (10% below $12,849/month gross volume). ServiceMaster's reset is annual; Servpro's is monthly — that's an important distinction favoring ServiceMaster if you have a strong sales period.

The advertising structure caps combined ad fund and local advertising commitment at 4% of gross service sales. Currently: 2% to the national fund plus a 2% local advertising commitment. The local requirement increases to 3.5% above $7.5M annually. Technology runs $650/month for Restore 365 Plus plus $158/month for XactWare plus per-job costs ($6.25-$37.80 per estimate upload).

ServiceMaster Restore discloses Item 19 data covering 128 single-franchise Ownership Groups (FOGs) and 454 multi-franchise FOGs for full-year 2024.

For single-location operators (the relevant benchmark for a new franchisee): average gross service sales of $945,058, median of $525,191. Only 31% of single-location operators met or exceeded the average — the classic skewed distribution.

By quartile for single operators: top 25% averaged $2,585,329 (bottom of this range: $1,194,252). Second quartile: $770,306. Third quartile: $346,893. Bottom quartile: $77,706.

The multi-FOG data paints a different picture of what scale looks like: operators with multiple locations average $2,826,896 across their combined licenses, with the top quartile averaging $8,151,999. The top single operator hit $73,939,218 in combined gross sales — clearly an institutional-scale operator.

At the median of $525,191 in gross service sales: 10% royalty = $52,519 (approximated with tier math), 2% ad fund = $10,504, 2% local advertising = $10,504, plus ~$9,700/year in tech fees. That's roughly $83,000 in brand obligations on $525,000 in revenue — about 15.8% of the top line. ServiceMaster does not disclose net income or profit margins in Item 19.

ServiceMaster Restore's unit trajectory is a concern. The system held 2,166 franchised licenses at the start of 2022, fell to 2,078 by year end (97 closures, 9 new openings), then dropped further to 1,959 in 2023 (164 closures, 45 openings). In 2024, the system partially stabilized: 47 new openings against 67 closures, ending at 1,939.

Three straight years of net decline totaling 227 units is a serious flag. This is a meaningful indicator that existing franchisees are finding the business challenging, choosing not to renew, or being terminated. The specific causes matter: are these older operators retiring without successors? Are there market oversaturation issues? Or are profitability pressures making renewal economically unattractive?

For contrast, Servpro (also restoration) grew from 2,114 to 2,286 units over the same period with minimal closures. The divergence between Servpro and ServiceMaster Restore's unit trajectories suggests a brand-specific issue worth understanding before investing.

The brand does benefit from the ServiceMaster parent's national account relationships and insurance industry connections — those lead networks have real value in a category where relationships with adjusters and property managers drive significant job flow.

The untimely renewal penalty is significant: miss your renewal deadline and your royalty rate increases by 2.5% until the renewal process is complete. A franchisee at the 10% tier who lets their renewal slip pays 12.5% royalty during that period.

The non-compliance fee structure ($1,000-$2,000 per violation per day) gives ServiceMaster substantial enforcement leverage. In an operations-intensive restoration business with many standards touchpoints, staying in compliance requires systematic management.

The Additional Operator Specialist (AOS) training fee for replacement personnel ($6,310 per person, up to $8,110) means every time you need a new trained operator, you're paying a meaningful fee. High turnover in restoration businesses — where technicians get certified and then command higher wages — creates recurring training costs that don't appear in the initial investment range.

The Lead Fee ($10,000 payable when ServiceMaster refers a franchise sale lead to an existing franchisee) is an unusual clause. It's not a cost to you as an existing franchisee unless you participated in a lead generation program — but it reflects how the brand views its referral relationships.

The system's shrinkage trend is the most important due diligence issue. Request the complete Item 20 outlet tables and the contact list of franchisees who left the system. Ask specifically why the 2022 and 2023 non-renewal and closure rates were so high.