Honest Abe Roofing Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$185,025 - $466,341
Franchise Fee
$29,750
Total US Locations
20
Business Summary
Honest Abe Roofing operates businesses that offer customers roof repair services, new roof installation, gutter installation, and siding installation. The primary focus of these businesses is new roof installation.
Corporate History
Honest Abe Roofing Franchise, Inc. was organized as an Indiana corporation in June 2017 and began offering franchises in October 2017. While the franchisor itself has not operated a business similar to the franchise offered, its affiliates have owned and operated one or more similar roofing outlets since 2007. One of these affiliates, Forever Roof, Inc., operates as Metal Supply Depot and supplies metal roofing materials to franchisees.
Financial Overview
Investment Range
$185,025 - $466,341
Franchise Fee (Low)
$29,750
Franchise Fee (High)
$70,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$30,000
Equipment Costs (High)
$170,000
Working Capital
$67,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
While Honest Abe Roofing Franchise, Inc. has shown increased net income in 2023, its cash and cash equivalents significantly decreased from $1,273,357 in 2022 to $291,648 in 2023. This decrease is largely attributed to a substantial shareholder distribution of $841,095 in 2023, leading to a significant net cash outflow from financing activities. Despite these cash flow changes, the independent auditor has provided an unqualified opinion on the financial statements, indicating they are presented fairly in all material respects.
Financing Details
Honest Abe Roofing Franchise, Inc. does not offer any direct or indirect financing to its franchisees. Franchisees are also not guaranteed any notes, leases, or obligations by Honest Abe Roofing Franchise, Inc., meaning they will need to secure their own funding for the business.
Performance Metrics
Total US Locations
20
Franchised Units
15
Corporate Units
5
Avg Square Footage
3,750
Franchising Since
2017
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Honest Abe Roofing Franchise, Inc. has disclosed two litigation cases. One is a pending action filed in July 2023, where Honest Abe Roofing Franchise, Inc. sued a former franchisee and its principal owners for breach of their franchise agreement and personal guarantees after the franchisee abandoned and terminated its business. The former franchisee then filed a counterclaim alleging fraud and unjust enrichment related to the sale of their franchise, which Honest Abe Roofing Franchise, Inc. denies. The case is ongoing in the Central District of Illinois. The other case was a concluded action filed in August 2022, where a former franchisee sued Honest Abe Roofing Franchise, Inc. for alleged misrepresentation of buildout costs and breach of an agreement to refund the initial franchise fee. That case was dismissed with prejudice in February 2023 after mediation and a confidential settlement agreement, which included mutual termination of the franchise agreement and compliance with post-termination obligations.
Bankruptcy History
Honest Abe Roofing Franchise, Inc. has no bankruptcy history to report for itself or its key personnel.
Agreement Terms
Initial Term
7 years
Renewal Term
7 years
Renewal Conditions
To renew their franchise agreement for one of two additional seven-year terms, Honest Abe Roofing franchisees must be in good standing, operating their business in compliance with the Operations Manual and franchise agreement. They need to meet the franchisor's then-current financial requirements for new franchisees, including submitting certified financial statements. Franchisees must also secure the right to maintain an approved business location for the renewal term, pay a $5,000 renewal fee, and complete any necessary capital expenditures for remodeling and renovation to meet current system standards. They are required to satisfy all monetary obligations owed to Honest Abe Roofing Franchise, Inc., provide timely written notice of their intent to renew, agree to sign the then-current franchise agreement (which may have different terms), comply with updated training and certification requirements, and sign a general release.
Training & Support Program
Franchisor Assistance
Before opening, Honest Abe Roofing Franchise, Inc. assists with site selection and approval, provides generic construction plans for adaptation by the franchisee, loans a copy of the Operations Manual, and furnishes lists of approved suppliers and products. The franchisor reviews promotional materials and offers pre-training materials. It conducts a comprehensive initial training program, totaling 167 hours, for the franchisee, a Franchisee Designate, and one manager. This training includes approximately 60 hours online, 35 hours in-person in Terre Haute, Indiana, and 72 hours of on-the-job training at the franchisee's location. This program covers topics such as sales, customer service, staff recruiting and training, CRM software usage, scheduling, and installation procedures. After opening, Honest Abe Roofing Franchise, Inc. provides ongoing on-the-job training, manages the Brand Development Fund (to which franchisees contribute 2% of monthly gross sales), and approves all promotional materials and quarterly Marketing Plans. The franchisor performs periodic on-site inspections for compliance, may require participation in a System Performance Review Program, and organizes franchisee meetings. It also provides updated lists of approved suppliers and supplies.
Initial Training Hours
167
Training Location
Online; Terre Haute, Indiana; and Franchisee's Location
Ongoing Support
After opening, Honest Abe Roofing Franchise, Inc. provides ongoing on-the-job training. It maintains and administers the Brand Development Fund (to which franchisees contribute 2% of monthly gross sales), directing national and regional advertising programs. The franchisor approves all promotional materials and requires franchisees to submit quarterly Marketing Plans for review. Honest Abe Roofing Franchise, Inc. conducts periodic on-site visits to franchisees' businesses for consultation, inspections, and guidance, providing written reports with suggested improvements or identifying defaults. It may also implement a System Performance Review Program which franchisees must participate in. The franchisor organizes national or regional franchisee meetings, such as annual conventions, conference calls, webinars, and webcasts, which franchisees and their managers are required to attend. Additionally, Honest Abe Roofing Franchise, Inc. periodically provides updated lists of approved suppliers and products.
Franchise Requirements
Ideal Candidate Profile
Honest Abe Roofing Franchise, Inc. seeks individuals or entities who meet its qualifications and are committed to being productive members of its system. While the franchisee is not required to personally participate in the direct operation of the business, they must designate an individual, known as the Franchisee Designate, to directly supervise the business on-premises. This Franchisee Designate must be approved by Honest Abe Roofing Franchise, Inc., successfully complete their training program, be approved annually, and not have any business relationships with competitors. The franchisee, along with their Control Person, Franchisee Designate, and other managerial personnel, are expected to dedicate their full-time attention and best efforts to the development, construction, management, operation, supervision, and promotion of the Franchised Business.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
commercial
Owner Participation
supervisory
Territory Type
exclusive
Territory Size Requirements
Honest Abe Roofing Franchise, Inc. defines its territories as a Metropolitan Statistical Area (MSA) or a part of an MSA, based on specific zip codes. MSAs are categorized into primary (ranked 21-50 in population size), secondary (ranked 51-100), or tertiary (ranked over 101) by the United States Census Bureau and Bureau of Labor Statistics. An MSA is characterized as a core urbanized area with at least 50,000 inhabitants, expanded by adjacent communities that are socially and economically linked. Honest Abe Roofing Franchise, Inc. assigns zip codes to individual franchisees and does not sell entire Mega-Market MSAs (ranked 1-20).
Staffing Notes
Honest Abe Roofing Franchise, Inc. requires franchisees to maintain a fully-trained and certified team, including a Franchisee Designate and at least one certified manager, who must be eligible to work in the Franchised Business at all times. The training program for these key personnel also includes instruction on how to train other employees for roles such as field technicians (focused on roof installation and crew supervision), roofing advisors (handling customer interactions and sales), and inside sales trainers (preparing roofing proposals using estimating software). Franchisees are solely responsible for the cost and expense of training any management employees hired after the initial opening. Additionally, franchisees must conduct criminal background checks on all employees and independent contractors who provide services to customers.