Mosquito Joe Franchise

Financing Details

Mosquito Joe SPV LLC may offer direct financing for a portion of the initial franchise fee to qualified prospective franchisees. The amount financed is capped at less than 50% of the total financial support for the business. Typically, Mosquito Joe can finance up to 70% of the initial franchise fee, and potentially up to 80% if a franchisee meets specific requirements. Interest rates are determined by the franchisee's credit score: 12% for scores under 600, 11% for 600-649, 10% for 650-699, and 9% for 700 or more. Franchisees must sign a promissory note and a security agreement, granting Mosquito Joe a security interest in all business assets. Monthly payments typically begin two months after completing the initial training program, with repayment terms ranging from up to 5 years for loans under $45,000 to 9 years for loans over $150,000. Prepayment is allowed without penalty, but defaulting on the note or the Franchise Agreement can accelerate the entire balance due. Personal guarantees from shareholders, members, partners, owners, and potentially spouses may be required. Mosquito Joe SPV LLC may also sell or assign these promissory notes. Additionally, Mosquito Joe may, in limited circumstances, finance a portion of any renewal fee for qualified franchisees at a 12% interest rate.

Litigation Summary

Mosquito Joe SPV LLC has been involved in one direct litigation with a former franchisee, Jim Drew Bailey Jr. and Eld 2.0 Inc., along with Taide Martina Bailey. Mosquito Joe SPV LLC filed a lawsuit in Texas in December 2022, seeking damages for the former franchisees' failure to pay amounts owed under their direct marketing program. In response, the former franchisees filed a related lawsuit in Wisconsin in January 2023, alleging fraudulent inducement and breach of contract related to the direct marketing program. In September 2023, the Texas court ruled in favor of Mosquito Joe SPV LLC for the amounts owed, with judgment entered in October 2023. The former franchisees appealed the Texas decision in October 2023. The Wisconsin case was dismissed in January 2024. The appeal for the Texas action is currently pending. Additionally, there are two administrative orders involving affiliates: In November 2017, For Franchising LLC (a predecessor to the affiliate Window Genie) and its then-president entered a Consent Order with the California Commissioner of Business Oversight for failing to submit advertising copies in 2013, resulting in a $5,000 penalty and remedial training. In November 2010, Molly Maid, Inc. (an affiliate predecessor) entered a Consent Judgment with the State of Kansas regarding alleged Kansas Consumer Protection Act violations due to a franchisee's inability to document background checks and the sale of gift certificates after termination. Molly Maid, Inc. denied wrongdoing but paid a $25,000 civil penalty and reimbursed $25,175 for investigation costs, with the matter satisfied in April 2011.

Renewal Conditions

To renew their franchise agreement, Mosquito Joe franchisees must provide written notice of their intent to renew between 180 and 240 days before the current term expires. Franchisees must be in good standing, meaning they are not in default of their Franchise Agreement or any related agreements, have fulfilled all monetary and other material obligations on time, and have received no more than two written default notices during the term. They must also have consistently met the Minimum Performance Standards for their business for any two calendar years or two measurement periods. As part of the renewal process, franchisees and their guarantors are required to sign a general release of claims. They must also complete any updated training requirements and sign the current version of the franchise agreement, which may contain different terms, conditions, and fees. A renewal fee of $5,000 is also payable.

Staffing Notes

Mosquito Joe requires franchisees to employ a sufficient number of competent and trained employees to ensure efficient customer service. Franchisees are solely responsible for all employment-related decisions, including hiring, discharging, tax withholdings, and setting wages and benefits. It is also the franchisee's responsibility to ensure that all employees or subcontractors who perform services for customers have passed required background checks. Any training provided by Mosquito Joe focuses on delivering approved services to clients in line with system standards, without shifting employee responsibility from the franchisee. In certain jurisdictions, either the franchisee or an employee must possess specific pesticide application experience (1 to 3 years) and licensing to qualify for a business license; if the franchisee lacks this, they must hire or partner with a qualified individual. Additionally, all employees involved in pesticide application must be trained and tested as required by various jurisdictions.