CRITERIUM ENGINEERS Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$76,380 - $174,160
Franchise Fee
$54,500
Total US Locations
32
Business Summary
CRITERIUM ENGINEERS operates a consulting engineering service business that specializes in providing reports, inspections, consultations, investigations, and litigation support services. These services focus on the structural and mechanical aspects, design, maintenance, and construction of residential, commercial, and light industrial buildings. CRITERIUM ENGINEERS offers these services to prospective purchasers, building and community management firms, real estate brokers, and other clients.
Corporate History
The company's origins trace back to 1957 when Arthur Tauscher founded an engineering services business providing home inspections. This business was formally organized as Coast to Coast Inspection Services, Inc. in 1971. In 1989, Coast to Coast Engineering Services, Inc., doing business as CRITERIUM ENGINEERS, was incorporated in Maine as the successor by merger to Coast to Coast Inspection Services, Inc. CRITERIUM ENGINEERS began offering franchises for its consulting engineering business in 1989. Over time, 95% of the original 'Home Inspection Consultants' offices from the predecessor company voluntarily converted to the CRITERIUM® System. The brand has evolved, with H. Alan Mooney, P.E. serving as Founding President until 2019, and David Leopold taking over as President in 2018. CRITERIUM ENGINEERS has also operated and later sold several company-owned offices in various locations over the years, including San Diego, Richmond, Boston, Tampa Bay, Phoenix, Las Vegas, and Seattle.
Financial Overview
Investment Range
$76,380 - $174,160
Franchise Fee (Low)
$54,500
Franchise Fee (High)
$84,500
Royalty %
6%
Marketing %
1%
Equipment Costs (Low)
$500
Equipment Costs (High)
$5,000
Working Capital
$30,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
CRITERIUM ENGINEERS' financial statements, audited by The Swanson Group LLC, present an unqualified opinion, indicating that the financial position is fairly presented. In 2024, CRITERIUM ENGINEERS' net income decreased to $327,226 from $470,683 in 2023, despite total revenues increasing to $8,437,019 from $7,473,678. Cash and cash equivalents also saw a decrease from $934,671 to $651,148 in 2024. A notable event in 2024 was the purchase of minority shares for $282,686, which was charged against retained earnings, and a subsequent recapitalization where the company reissued 1,000 shares to its 100% owner. The company also disclosed a customer concentration risk, with two unrelated clients accounting for 32% of contract and project revenues in both 2023 and 2024, and one client's outstanding accounts receivable representing 21% of total contracts and projects accounts receivable at the end of 2024.
Financing Details
CRITERIUM ENGINEERS may offer financing for a portion of the initial franchise fee. Specifically, it may finance up to 25% of the minimum $54,500 franchise fee (which is $13,625), plus 100% of any franchise fee amount exceeding this minimum. This financing is provided through an unsecured promissory note. The note carries an interest rate of up to 15% per year and is repaid in 24 equal monthly installments of principal and interest. If the franchisee is a corporation, its officers and shareholders must personally guarantee the note. Franchisees can prepay the note at any time without extra fees. CRITERIUM ENGINEERS does not receive payments for arranging third-party financing, and generally does not offer other direct or indirect financing.
Performance Metrics
Total US Locations
32
Franchised Units
31
Corporate Units
1
Avg Square Footage
300
Franchising Since
1989
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
CRITERIUM ENGINEERS has no litigation history to report. The FDD states that no litigation is required to be disclosed in Item 3.
Bankruptcy History
CRITERIUM ENGINEERS has no bankruptcy history to report. Item 4 of the FDD states that no bankruptcy information is required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, CRITERIUM ENGINEERS franchisees must not be in default of their agreement. They must provide the required notice of their intent to renew, sign the then-current franchise agreement, meet CRITERIUM ENGINEERS' current qualifications and training requirements, and sign a general legal release. The terms of the new agreement may differ from the previous one, including potentially different royalty and marketing fees, but franchisees will not be required to pay the initial franchise fee again.
Training & Support Program
Franchisor Assistance
Before opening, CRITERIUM ENGINEERS assists franchisees with site selection approval and provides a mandatory 90-hour initial training program, which can be virtual or at the franchisor's offices or the franchisee's location. The franchisor also reviews and approves pre-opening promotional materials, supplies initial printed and promotional items, and guides franchisees in setting up a bookkeeping system. After opening, CRITERIUM ENGINEERS offers ongoing support through verbal and written guidance, including electronic communications, intranet access, and newsletters. They conduct periodic visits for consultation and guidance, communicate System improvements, and offer additional ongoing training, including mandatory attendance at annual enterprise events (for which franchisees cover travel and living expenses). Fee-based on-site assistance is available upon request. Franchisees also receive continuing advisory services on promotional, business, and operational problems, technical support (basic support is free, more extensive project work is at a reduced rate), newsletters, and peer review programs.
Initial Training Hours
90
Training Location
Virtually or at CRITERIUM ENGINEERS' offices in Freeport, ME, or at the franchised location
Ongoing Support
After opening, CRITERIUM ENGINEERS franchisees receive continuous advice and guidance through various methods like phone calls, emails, newsletters, and the 'myCriterium' intranet. The franchisor conducts periodic visits for consultation and assistance and communicates any improvements to the CRITERIUM® System. Franchisees are encouraged to attend regional meetings and are required to attend all annual enterprise events, covering their own registration, travel, and living expenses. Additional on-site assistance can be provided by the franchisor for a daily fee plus expenses. CRITERIUM ENGINEERS also offers a continuing advisory service that includes consultation on promotional, business, and operational issues, along with analysis of sales, marketing, and financial data. Technical support is provided, with basic support being free and more extensive project-specific support available at a reduced rate. Franchisees also have access to seminars, newsletters, bulletins, and peer review programs. Insurance providers may require franchisees to complete at least 6 hours of continuing education annually, which can be fulfilled through CRITERIUM ENGINEERS-sponsored or approved programs.
Franchise Requirements
Ideal Candidate Profile
CRITERIUM ENGINEERS seeks franchisees who are either qualified and licensed professional engineers or architects in good standing within the jurisdiction where the business will operate. In states where permitted, this individual must hold the specific ownership and/or management position required for engineering firms. The ideal candidate will be a licensed professional engineer or senior business executive who is expected to devote their full-time attention and best efforts to the operation of the CRITERIUM ENGINEERS franchised business, unless prior written approval for lesser involvement is granted. This individual is also responsible for overseeing comprehensive employee training.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
Yes
Operational Details
Location Type
Hybrid
Owner Participation
Full-Time
Territory Type
Protected
Territory Size Requirements
CRITERIUM ENGINEERS grants franchisees an area of primary responsibility that typically covers a metropolitan area with a population ranging from 500,000 to 1,500,000 people. The specific geographic boundaries of each territory are negotiated between the parties before the Franchise Agreement is signed and are then detailed on a map attached to the agreement. The initial franchise fee is based on this population, starting at $54,500 for territories with up to 1.5 million people, with an additional $10,000 for every 0.5 million population up to a maximum of 3 million.
Staffing Notes
CRITERIUM ENGINEERS requires that the franchised consulting engineering business always be staffed and managed by a sufficient number of competent employees. All consulting engineering services must be provided by licensed professional engineers. The franchisee is solely responsible for recruiting, hiring, and training their employees, as well as managing their wages, taxes, benefits, safety, and work schedules. The owner or a designated manager must devote their full-time attention and best efforts to the business, unless CRITERIUM ENGINEERS grants prior written approval for a different arrangement. The initial operations can begin from a home office, but after 120 days from the Franchise Agreement date, the business must operate from a physical office address outside the home. The franchisor's estimates for initial investment suggest that while a sole proprietor can start from a home office, a more aggressive promotional effort and the immediate addition of office staff and rental space are factored into the maximum expense level.