Risk Score
Pending analysis
Investment Range
$42,500 - $49,400
Franchise Fee
$17,450
Total US Locations
50
Business Summary
Groutsmith operates a grout and tile restoration and maintenance business for residential and commercial customers. Franchisees can run the business out of an SUV, truck, or van, requiring minimal expense for tools, equipment, and products.
Corporate History
Groutsmith Franchising, Inc. was incorporated in Nevada in September 2010 and has been offering franchises since then. The Groutsmith concept was originally founded in 1992 by J. Arthur Smith, Inc., which is an affiliate and predecessor to the franchisor and currently operates a Groutsmith business and a product division.
Financial Overview
Investment Range
$42,500 - $49,400
Franchise Fee (Low)
$17,450
Franchise Fee (High)
$34,900
Equipment Costs (High)
$300
Working Capital
$1,900
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Groutsmith's financial statements have received an unqualified opinion from their independent auditors, indicating that the financial position, results of operations, and cash flows are presented fairly in all material respects. The company reported healthy net incomes of $374,868 in 2023, $338,616 in 2022, and $385,405 in 2021. As of December 31, 2023, Groutsmith had cash balances of $334,947 and retained earnings of $378,618. It is noted that Groutsmith has no fixed assets to support the franchise system.
Financing Details
Groutsmith does not offer any direct financing to its franchisees and does not guarantee any notes, leases, or other obligations. While the company states it may offer financing sources, no specific details about these sources are provided.
Performance Metrics
Total US Locations
50
Franchised Units
49
Corporate Units
1
Franchising Since
2010
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Groutsmith has no litigation cases to report. The company has no history of legal disputes that are required to be disclosed in this document.
Bankruptcy History
Groutsmith has no bankruptcy history to disclose for itself, its predecessors, parents, or affiliates, nor for any of its executive officers or directors.
Agreement Terms
Initial Term
15 years
Renewal Term
15 years
Renewal Conditions
To renew their franchise agreement, Groutsmith franchisees must not be in default of their agreement, pay a renewal fee of $500, and sign a new franchise agreement. The new agreement may contain materially different terms and conditions than the previous one, although the territory boundaries will remain the same, and the continuing royalty on renewal will not exceed what is imposed on similarly situated renewing franchisees at that time.
Training & Support Program
Franchisor Assistance
Before opening, Groutsmith helps franchisees configure their territory, provides initial training, furnishes a complete start-up package, offers electronic access to a confidential operations manual, and delivers an advertising and marketing program with ready-to-use ads. After opening, Groutsmith may provide an optional Call Center for message retrieval and distribution, make its training program available to franchisee employees for a fee, and conduct telephone conferences for advisory services on promotional efforts, business problems, and analysis of sales data. Franchisees also get access to an optional customized Jobber cloud-based Business Management and Scheduling Software program and receive 100% of the profit as credit for product purchases made by customers in their territory through the Groutsmith website.
Initial Training Hours
80
Training Location
Sarasota, Florida
Ongoing Support
After opening, Groutsmith offers several ongoing support services. These include providing access to an optional Call Center for message retrieval and distribution, offering training programs to franchisee employees and associates for a fee, and conducting telephone conferences as needed for advisory services on promotional efforts, business problems, and analysis of sales, marketing, and financial data. Franchisees also have access to an optional cloud-based Jobber Business Management and Scheduling Software program and receive 100% of the profit from product purchases made by customers in their territory through the Groutsmith website as a credit toward future product purchases.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
exclusive
Territory Size Requirements
Each Groutsmith franchise territory is negotiable and based on the number of owner-occupied households, with a target of 125,000 owner-occupied households. The territory will be designated by a map outlining the specific area.
Staffing Notes
Groutsmith requires franchisees to hire and supervise efficient, competent, sober, drug-free, and courteous operators and employees for the business. Franchisees are responsible for setting and paying their staff's wages, commissions, and incentives. All employees must sign confidentiality and non-competition agreements in the form prescribed by Groutsmith, and copies of these signed agreements must be provided to the franchisor.