DUCTZ Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$68,104 - $227,974
Franchise Fee
$14,900
Total US Locations
65
Business Summary
DUCTZ International, LLC grants franchises for businesses offering HVAC cleaning and restoration services for residential and commercial dwellings and buildings. DUCTZ Businesses utilize a proprietary business system and operate under distinctive formats, methods, and procedures. Franchisees identify their DUCTZ Business by displaying the brand's marks on marketing materials, vehicles, uniforms, and business supplies. The services focus on HVAC cleaning and restoration, including indoor air pollution control and remediation for residential and commercial clients.
Corporate History
DUCTZ International, LLC (DUCTZ) was formed on March 30, 2004, as a Michigan Limited Liability Company. It began offering franchises in March 2004. DUCTZ was initially owned by Service Brands International until July 24, 2007, when it was acquired by BELFOR Franchise Group, LLC (BFG), which currently serves as its parent company. BFG is a wholly owned subsidiary of BELFOR (USA) Group, Inc., a company specializing in property and electronic restoration, which in turn is fully owned by ASP BF Intermediate Sub, LLC. An affiliate, DUCTZ North America, LLC (DZNA), operates 5 company-owned DUCTZ Businesses.
Financial Overview
Investment Range
$68,104 - $227,974
Franchise Fee (Low)
$14,900
Franchise Fee (High)
$74,900
Royalty %
10%
Equipment Costs (Low)
$19,950
Equipment Costs (High)
$110,910
Working Capital
$14,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
BFG Holdco, Inc., the affiliate guaranteeing DUCTZ International, LLC's obligations, has reported consolidated net losses for the years ended December 31, 2022, 2023, and 2024. Specifically, net losses were $6,330 thousand in 2022, $44,277 thousand in 2023, and $11,108 thousand in 2024. The company also recognized significant goodwill impairment losses of $45,537 thousand in 2023 and $10,519 thousand in 2024. These impairments were attributed to deteriorating economic conditions and strategic shifts, including efforts to reduce the overall size of its franchise network due to noncompliance issues. Despite these financial challenges, the independent auditor issued an unqualified opinion on the consolidated financial statements for the year ended December 31, 2024, and did not express a going concern qualification.
Financing Details
DUCTZ International, LLC may offer financing for a portion of the Initial Franchise Fee to qualified franchisees. For a standard franchise, up to 50% of the Initial Franchise Fee can be financed, requiring a 50% down payment. For a conversion franchise, up to 75% of the Initial Franchise Fee can be financed, requiring a 25% down payment. This financing is structured as a promissory note with a 9% annual percentage rate (APR) for a term of up to 36 months. Repayments are made in equal monthly installments via Electronic Funds Transfer (EFT). The note is personally guaranteed by the franchisee, all owners, and their respective spouses. Failure to make timely payments can result in late fees, immediate acceleration of the outstanding balance, and potential termination of the franchise agreement. DUCTZ International, LLC also assists with processing Small Business Administration (SBA) loans by providing information and guidance. The franchisor does not currently sell, assign, or discount these financing arrangements to third parties, nor does it receive consideration for placing financing, and it does not guarantee other notes, leases, or obligations.
Performance Metrics
Total US Locations
65
Franchised Units
60
Corporate Units
5
Franchising Since
2004
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
DUCTZ International, LLC has no litigation history to report. Item 3 of the FDD states that no litigation is required to be disclosed for the franchisor, its predecessors, or its affiliates.
Bankruptcy History
DUCTZ International, LLC has no bankruptcy history to report. Item 4 of the FDD states that no bankruptcy is required to be disclosed for the franchisor, its predecessors, or its affiliates.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, DUCTZ International, LLC franchisees must be in substantial compliance with their existing Franchise Agreement and any ancillary agreements. This includes not having received three or more written notices of default within the last 30 months, not failing to make timely payments more than three times in the last 24 months, and consistently servicing customers according to System Standards without more than three failures in 24 months. Franchisees must provide written notice of their intent to renew between nine and six months before the current agreement expires. They will then be required to sign the franchisor's then-current form of franchise agreement, which may contain materially different terms, including royalty rates or territory definitions. Franchisees must also upgrade and remodel their DUCTZ Business as necessary to conform to the then-current System Standards, meet current net-worth and financial qualifications for new franchisees, achieve the Minimum Gross Sales requirement for an 11th year of operation, sign a general release of claims against the franchisor and its affiliates, and pay the franchisor's then-current renewal fee.
Training & Support Program
Franchisor Assistance
DUCTZ International, LLC provides pre-opening assistance, including designating the franchise territory. The franchisor provides an Initial Package containing equipment, tools, supplies, marketing materials, and training, along with a list of approved suppliers. Franchisees also receive Kick-Start Marketing Services, which include ongoing digital marketing support, website development, website analytics tracking, online call-tracking, search engine optimization (SEO) setup, approximately four months of proactive SEO and online advertising, one year of review tracking, local listings setup and support, online directory optimization, and optional chat support. The franchisor loans copyrighted Manuals, approves business forms, stationery, cards, and advertising materials, specifies minimum insurance policy limits, and provides both Jumpstart Initial Training and Business Manager and Technical Operations Training. A business phone number is also provided. After opening, DUCTZ International, LLC offers ongoing guidance on new products, services, methods, purchasing, marketing, and financial/daily operations. Franchisees receive support for the franchise software management system, access to a 24-hour contact telephone number, periodic Manual updates, and periodic refresher training courses and conferences.
Initial Training Hours
39
Training Location
Ann Arbor, Michigan, and virtually
Ongoing Support
After opening, DUCTZ International, LLC provides ongoing guidance on new products, services, methods, purchasing and use of supplies, and marketing and promotional programs. It also offers advice on the financial and daily operation of the DUCTZ Business, including accounting and record-keeping. Franchisees receive support for the franchise software management system and have access to a 24-hour contact telephone number. The franchisor issues periodic modifications to the Operations Manual to reflect changes in System standards. Managing Owners or Designated Managers are required to attend the DUCTZ Convention at least once every two years, and periodic refresher training courses and conferences, which may incur fees, but not more than once a year. DUCTZ International, LLC also offers a service to forward calls from its toll-free number to franchisees, though this service is subject to modification or termination. Franchisees are required to participate in any System-wide computer network or intranet system and maintain a high-speed internet connection and an approved email account.
Franchise Requirements
Ideal Candidate Profile
DUCTZ International, LLC seeks franchisees who, as Managing Owners, are committed to operating the DUCTZ Business full-time and year-round, exerting their best efforts. Franchisees must successfully complete the required training programs, including Jumpstart Initial Training and Business Manager and Technical Operations Training, and obtain ASCS/VSMR certification within 30 days of completing training. If required by their state or local government, franchisees must secure and maintain licenses for HVAC cleaning and restoration. The franchisor offers discounts on the Initial Franchise Fee for veterans of the U.S. Armed Forces and first responders, indicating a preference for individuals from these backgrounds.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Full-Time
Territory Type
Protected
Staff Count
1
Territory Size Requirements
DUCTZ International, LLC defines its territories by zip codes. Each Designated Office Territory (DOT) generally includes up to 200,000 households, with a maximum of 300,000 households, and a minimum of 100 potential Protected Partners. The Regional Service Area (RSA) is a geographical area defined by zip codes within a 30-mile radius from the DOT.
Staffing Notes
DUCTZ International, LLC requires that each franchisee employs at least one person who has completed the Business Manager and Technical Operations Training. Before opening, the franchisee must also hire one Service Technician who is responsible for performing and overseeing HVAC cleaning and restoration services. The Managing Owner is permitted to serve as the Service Technician. Franchisees are responsible for training their Service Technicians to the franchisor's specifications. All Service Technicians, Designated Managers, and sales/account management employees are required to sign non-disclosure and confidentiality agreements that prohibit the disclosure of trade secrets and customer lists, and restrict servicing or soliciting customers after their employment ends.