Legacy Claims Services Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$67,900 - $137,900
Franchise Fee
$39,900
Min Cash Required
$10,000
Total US Locations
31
Business Summary
Legacy Claims Services operates an insurance appraisal business. Legacy Claims Services franchisees provide services that include inspections, appraisals, estimates, and investigations for personal property, auto, and real estate. Franchisees can run this business from either a home office or a dedicated commercial office space.
Corporate History
Legacy Franchise Company was organized as a Texas limited liability company on January 30, 2023. The company conducts business under its own name and also as Legacy Claims Services. Legacy Claims Services began offering franchises for its insurance appraisal business in April 2023. The franchisor has an affiliate, Legacy Claims Service, LLC, which has been operating a similar business offering inspections, appraisals, estimates, and investigation services for personal property and real estate since May 2021.
Financial Overview
Investment Range
$67,900 - $137,900
Franchise Fee (Low)
$39,900
Franchise Fee (High)
$49,900
Minimum Cash Required
$10,000
Royalty %
15%
Marketing %
2%
Equipment Costs (Low)
$2,800
Equipment Costs (High)
$50,500
Working Capital
$15,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Legacy Franchise Company's audited financial statements for the period ending December 31, 2023, show a net income of $23,419 and conclude that there is no significant doubt about the company's ability to continue as a going concern, citing a positive earnings and liquidity position. However, the FDD's "Special Risks to Consider" section specifically highlights that Legacy Franchise Company's financial condition, as reflected in its financial statements, calls into question the franchisor's financial ability to provide services and support to franchisees. The unaudited balance sheet as of April 30, 2024, shows a negative total equity of -$17,234.60 and a net loss of -$80,653.04 for the period, which could be the basis for the stated risk.
Financing Details
Legacy Franchise Company may offer direct financing to franchisees in its sole discretion if they are unable to secure third-party financing and meet credit standards. Legacy Franchise Company can finance up to 50% of the initial investment for a maximum of 24 months. Interest rates for this financing can range from 10.0% to 19.0%. The loan is repaid in up to 24 monthly installments of principal and interest, with the final payment covering all outstanding balances. Franchisees can prepay the loan without penalty. Defaulting on the loan can lead to immediate payment demand and franchise agreement termination. The financing may require a personal guarantee from the franchisee's owners and security in the collateral.
Performance Metrics
Total US Locations
31
Franchised Units
29
Corporate Units
1
Avg Square Footage
125
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Legacy Franchise Company has no litigation history to report. The FDD states that no litigation is required to be disclosed in Item 3.
Bankruptcy History
Legacy Franchise Company has no bankruptcy history to report. The FDD states that no bankruptcy information is required to be disclosed in Item 4.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew their Legacy Claims Services franchise, franchisees must have largely followed all terms of their Franchise Agreement throughout the initial term. They need to update and refurbish their service vehicle and equipment to meet current standards. All financial obligations owed to Legacy Franchise Company or its affiliates must be fully satisfied and paid on time. Franchisees must not be in default of any part of their agreement with Legacy Claims Services. They need to provide timely written notice of their intent to renew, sign Legacy Franchise Company's then-current Franchise Agreement (which may have different terms, including potentially higher royalty and marketing fees), meet current franchisee qualifications, complete any required training, and sign a general release.
Training & Support Program
Franchisor Assistance
Legacy Claims Services provides a range of assistance to its franchisees. Before opening, Legacy Claims Services makes available specifications for the business location, service vehicle, and necessary equipment. It also provides an initial training program for the franchisee and a designated manager, and a representative will help familiarize staff with techniques and offer general opening guidance. Franchisees receive a copy of the Confidential Operations Manual. After opening, Legacy Claims Services offers ongoing advice and guidance via phone, email, and newsletters during business hours. Franchisees receive updates to the Operations Manual and may attend periodic national or regional conferences. While franchisees generally set local rates, Legacy Claims Services reserves the right to set minimum or maximum pricing for advertising events and for national clients.
Initial Training Hours
21
Training Location
Birmingham, Alabama or another designated location
Ongoing Support
Legacy Claims Services provides ongoing support to its franchisees after they open. This includes providing advice and general guidance via telephone, email, and newsletters during normal business hours. The franchisor also provides updates and modifications to the Confidential Operations Manual. Franchisees and their managers or employees are required to attend periodic refresher training programs, which may incur a fee of $600-$1,500 per person per program, plus travel expenses. These programs will not exceed one session or three days per year. Legacy Claims Services may also hold mandatory national or regional conferences for franchisees, with a registration fee up to $1,500 per person. Additional operational assistance is available upon request or as deemed necessary, with a potential charge of $750 per day plus expenses.
Franchise Requirements
Ideal Candidate Profile
Legacy Claims Services seeks franchisees who are committed to the full-time, day-to-day supervision of their business. If a designated manager is appointed, that individual must also be an owner with at least a 5% equity interest in the franchise. The franchisor offers a discount to honorably discharged veterans with a minimum of three years of military service, indicating a value for such backgrounds. Depending on a candidate's existing industry experience, Legacy Claims Services may require them to obtain specific certifications, such as I-CAR or Independent Appraiser PATH Certification, to operate the business effectively.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
Yes
Operational Details
Location Type
Hybrid
Owner Participation
Full-Time
Territory Type
Non-Exclusive
Territory Size Requirements
Legacy Claims Services defines franchisee territories based on ZIP codes, political boundaries, geographic boundaries, roads, or Metropolitan Statistical Areas (MSAs). Each territory is mutually agreed upon and must have a minimum population of 100,000 people.
Staffing Notes
Legacy Claims Services requires the franchised business to always be under the direct, full-time supervision of the franchisee or a designated manager, who must devote at least 35 hours per week to the business. Franchisees are responsible for hiring and adequately training a competent and conscientious staff sufficient to provide prompt and proper customer service. This staff must include at least one manager or shift leader on duty whenever the business is open, overseeing daily operations and ensuring compliance with dress codes and customer service policies. Legacy Claims Services allows franchisees to hire employees from other Legacy Claims Services franchises, but if the employee attended franchisor training within the past year, the hiring franchisee must reimburse the original franchisee for the training costs. Franchisees are solely responsible for all employment decisions and ensuring compliance with labor laws.