FDD Talk 2021: Mr. Handyman Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Mr. Handyman franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Mr. Handyman franchise, based on Item 7 of the company’s 2021 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Mr. Handyman franchise, based on Items 5 and 6 of the company’s 2021 FDD

• Section IV – Number of franchised and company-owned Mr. Handyman outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Mr. Handyman’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 average, median, highest, and lowest gross sales per targeted household for the top 10%, 1st quartile, 2nd quartile, 3rd quartile, 4th quartile, bottom 10%, and all 208 franchised Mr. Handyman businesses that were in operation and reported sales for all 12 months of the fiscal year 2020 (the “Reporting Period”)

• 2020 average, median, highest, and lowest jobs per targeted household (100x) for the top 10%, 1st quartile, 2nd quartile, 3rd quartile, 4th quartile, bottom 10%, and all 208 franchised Mr. Handyman businesses that were in operation and reported sales for all 12 months of the fiscal year 2020

• 2020 average, median, highest, and lowest gross sales per job for the top 10%, 1st quartile, 2nd quartile, 3rd quartile, 4th quartile, bottom 10%, and all 242 franchised Mr. Handyman businesses that reported gross sales during any part of the Reporting Period and were in operation at the end of the Reporting Period

• 2020 average and median percentage of jobs for recurring and occasional/new customers for the 208 franchised Mr. Handyman businesses that were in operation and reported sales for all 12 months of the fiscal year 2020

Section I – Background Information

16 Things You Need to Know About the Mr. Handyman Franchise

Gifted Power Tools to 10 Random Winners During 2020 Holiday Season

1.  In early December 2020, Mr. Handyman announced that it was giving away 10 Milwaukee power tools to random winners for its first-ever Ultimate Holiday Tool Giveaway. Tools are necessary for home improvement and Mr. Handyman can help cross some items off wish lists. Whether home improvement aficionados choose to keep the power tool for themselves or gift it, there is an opportunity to win: a cordless drill, multi-tool, random orbit sander, impact driver, reciprocating saw, jigsaw, angle grinder, circular saw, air compressor, or table saw.

2.  To enter the Ultimate Holiday Tool Giveaway, participants could visit Mr. Handyman’s official entry page on Facebook and submit their names into the drawing as early as Tuesday, November 17, 2020. Starting Monday, December 14, 2020 through Friday, December 18, 2020, winners were chosen twice a day for five days.

3.  J.B. Sassano, president of Mr. Handyman, said, “We work hard year-round to bring joy and comfort to homeowners through our assistance with home improvement projects. Power tools play a vital role in that and we want to be a part of giving the gift of these top-of-the-line power tools.”

Parent Company Appoints New Chief Strategy and Marketing Officer

4.  In early March 2021, Neighborly, the parent company of Mr. Handyman and several other home service brands, appointed Roger Chacko as its new chief strategy and marketing officer. Chacko brings over 25 years of global brand building, corporate strategy, and growth catalyst experiences. He has held various marketing, commercial, and strategy roles with global companies including Carlson Hotel Group, Bloomin’ Brands, USAA, Kellogg’s, and more.

5.  Immediately prior to joining Neighborly, Chacko served global fitness chain Planet Fitness as its chief commercial officer. Chacko earned his doctorate degree in management from Oklahoma State University and his master’s degree in management from the Massachusetts Institute of Technology.

6.  Mike Bidwell, president and CEO at Neighborly, said, “To help build further on the growth momentum we have at Neighborly, I am delighted to welcome Roger Chacko to lead the marketing and strategy of our organization. Chacko has a proven track record of developing and delivering segment-defining marketing and sales programs across several business segments and geographies. The intersection between brands and consumers is narrowing through consumer experiences, and Chacko’s global experience and transformational marketing and strategy work at this intersection of consumers and brands will prove invaluable in Neighborly’s journey to creating and delivering exceptional home service experiences to our consumers and franchise partners.”

7.  As chief strategy and marketing officer for Neighborly, Chacko is responsible for all of the company’s marketing and strategy divisions. Neighborly currently employs a significant number of associates in various marketing and strategy roles, and Chacko’s direction will be a driving force behind the continued growth of the organization in the coming years.

8.  Chacko said, “Neighborly has the potential to become an iconic global brand that delivers exceptional home service experiences to communities around the world, and I am committed to making this vision a reality. Achieving Neighborly’s ultimate vision of ‘Owning the Home’ through its family of home service brands will require strategy, innovation and marketing, and I look forward to working with Neighborly’s executive leadership and global marketing teams to make that happen.”

Launches Fifth Annual ‘My Pet Peeves’ Photo Contest for National Pet Month

9.  In early May 2021, Mr. Handyman launched its annual “My Pet Peeves” photo contest for the fifth year in a row. The annual photo contest shows owners they are not alone by rewarding the top photos of a pet’s bad behavior that encapsulates humor and mayhem. To enter the “My Pet Peeves” photo contest, interested participants could submit a photo of their own pet chaos on Mr. Handyman’s website.

10.  Ideas included – but were not limited to – a pet’s yard damage, annihilated shoes, in-home destruction, getting into the snack drawer, or just their cute face. Dogs, cats, horses, hamsters, reptiles, bunnies, turtles, and more are welcome. Mr. Handyman rewarded five random winners with a $250 PetSmart gift card to show that even though pets can drive us crazy at times, we still love them no matter what!

11.  J.B. Sassano, president of Mr. Handyman, said, “Our pets are members of our family, and in many cases, were emotional support as we navigated the various challenges of this past year. As much as we love them, though, sometimes they can wreak havoc inside our homes. Our professional Mr. Handyman technicians understand the importance of pets and the role they play in many peoples’ lives, and have helped homeowners nationwide install pet doors, repair floors, and replace trim and screens to ease the stress and long-term maintenance that comes with owning both a pet and home.”

12.  Additionally, Mr. Handyman offered the following tips to assist pet owners with common pet problems:

• Repair Chewed Drywall: To fix drywall that may have been gnawed on by a puppy or anxious dog, scrape loose debris from holes or dents and cover with fast-drying spackle. Let dry for at least 24 hours and conceal repairs with a bit of touch-up paint. While small bite holes are easy to camouflage, years of covering damage can eventually lead to uneven drywall.

• Protect the Floors: Pets can damage hardwood flooring simply by walking on it. Protect your hardwood flooring by maintaining claw length and keeping area rugs around the house for pets to lie on. Fix minor scratches with floor cleaner and protective finish. Clean the scratch with a damp cloth, scrub the cleaner over the scratch, and repeat with a clean cloth to rinse away hardwood cleaner.

• Safeguard Wood: Wood is often a target for pets who chew or scratch. The easiest protection plan is to add plastic sheeting or PVC tubing around table and chair legs to prevent claw and bite marks. Save doors by adding clear, plastic sheeting.

13.  Sassano added, “We’re thrilled to roll out this photo contest for the fifth time during National Pet Month. We take pride in allowing participants to bask in the collective pet owner humor by sharing photos and entertaining each other through our pets’ wild escapades.”

Company History

14.  Mr. Handyman was founded in 1996 by David Lavalle in Chelmsford, Massachusetts. The company provides high quality home repair services from experienced technicians and skilled craftsmen. After a few years of running Mr. Handyman himself, Lavalle sold the company to Service Brands International, a Michigan-based franchisor in 2000. That same year, Service Brands International began franchising the Mr. Handyman concept. Under the new leadership, Mr. Handyman expanded around the United States over the next decade.

15.  In 2015, The Dwyer Group acquired Service Brands International and its affiliated franchise brands, including Mr. Handyman. The Dwyer Group owns and operates its home services brand under Neighborly. Today, there are Mr. Handyman locations all across the U.S., Canada, China, Ireland, and the United Kingdom.

Entrepreneur’s Franchise 500

16.  Mr. Handyman ranked No. 318 on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Mr. Handyman franchise costs, based on Item 7 of the company’s 2021 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Mr. Handyman’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  203
• Outlets at the End of the Year:  215
• Net Change:  +12

2019

• Outlets at the Start of the Year:  215
• Outlets at the End of the Year:  234
• Net Change:  +19

2020

• Outlets at the Start of the Year:  234
• Outlets at the End of the Year:  257
• Net Change:  +23

Company-Owned

2018

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2020

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

• As of December 31, 2020, there were 257 Mr. Handyman businesses in operation in the United States, all of which were franchised businesses. Parts 1, 2, and 4 of this Item 19 include data for 208 franchised businesses that were in operation and reported sales for all 12 months of the fiscal year 2020 (the “Reporting Period”).

• Parts 1, 2, and 4 do not include data for (a) 38 franchised businesses that opened in 2020 and therefore did not report data for the entire Reporting Period and (b) 11 franchised businesses that did not report reliable data for the Reporting Period.

• Part 3 includes data for 242 franchised businesses that reported Gross Sales during any part of the Reporting Period and were in operation at the end of the Reporting Period; Part 3 excludes data for 15 franchised businesses that opened in the latter part of the Reporting Period and thus were in operation for too short of a time period during the Reporting Period to report reliable data.

• Fifteen franchised businesses that closed during the Reporting Period (and therefore did not report data for the entire Reporting Period) were excluded from this Item 19; of these 15 businesses that closed during the Reporting Period, no business closed after being open for less than 12 months.

• In the early months of 2020, the COVID-19 pandemic impacted local, regional, and national economies. New laws, rules, and governmental orders were issued in response to the virus outbreak. The Mr. Handyman businesses were generally deemed essential businesses under such governmental orders and were therefore generally able to continue operating.

• Thirty-one Mr. Handyman businesses closed temporarily during the pandemic, and all but three of such businesses have since resumed full operations. One of the three Mr. Handyman businesses that permanently closed in 2020 closed due to the impact of the pandemic.

• As of the date of the current Disclosure Document, Mr. Handyman does not intend to make any changes to its business model as a result of the COVID-19 pandemic.

• The following tables are a historic financial performance representation and are not a forecast of your future financial performance.

• Neither the franchisor, its predecessor, nor its independent certified public accountants have audited or verified any of the sales figures reported. Franchisees are not required to use generally accepted accounting principles when reporting these figures.

• For purposes of the representations below, “Gross Sales” means the total revenues and receipts from whatever source (whether in the form of cash, credit, agreement to pay, barter, trade, or other consideration) that arise, directly or indirectly, from the operation of, or in connection with, a Mr. Handyman Business, whether under any of the Marks or otherwise.

• Gross Sales exclude sales taxes collected from customers and paid to the appropriate taxing authority and any other bona fide refunds, rebates, or discounts that Mr. Handyman authorizes in writing. Gross Sales also exclude sales from any Excluded Services (as defined in a mutually executed Excluded Services Addendum).

Part 1 – Statement of 2020 Average and Median Gross Sales Per Targeted Household

• The following table provides the average and median annual 2020 Gross Sales Per Targeted Household information for 208 franchised businesses for which Gross Sales were reported for all 12 months of the Reporting Period (“Reporting Businesses”).

Top 10%

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