Mr. Electric Franchise

Financing Details

Mr. Electric may offer financing for a portion of the initial franchise fee to qualified prospective franchisees. The amount financed is typically up to 70% of the initial franchise fee, or up to 80% for certain qualified candidates. This financing is capped at less than 50% of the total financial support for the business. Interest rates are determined by the franchisee's credit score, ranging from 9% for scores of 700 or more, up to 12% for scores under 600. Repayment terms vary from up to 5 years for loans less than $45,000, extending to up to 9 years for loans over $150,000. Franchisees are required to sign a promissory note and grant Mr. Electric a security interest in all business assets. Personal guarantees from owners and potentially their spouses are also required. Mr. Electric does not provide financing when brokers are involved and does not guarantee franchisee obligations to third-party lenders. In limited cases, Mr. Electric may also finance a portion of the renewal fee at a 12% interest rate for qualified franchisees.

Litigation Summary

Mr. Electric itself has no litigation to report. However, its affiliates have been involved in two past administrative orders. In one case, a predecessor to an affiliate, FOR Franchising LLC (Window Genie), along with its then-president, entered a Consent Order in November 2017 after California regulators alleged violations for failing to submit advertising materials before distribution. Without admitting wrongdoing, FOR paid a $5,000 penalty and completed remedial education. In another case, Molly Maid, Inc., a predecessor to an affiliate, entered a Consent Judgment in November 2010 with the State of Kansas. The District Attorney alleged violations of the Kansas Consumer Protection Act, partly because a Molly Maid franchisee could not document employee background checks and sold gift certificates after termination. Molly Maid denied wrongdoing but paid a $25,000 civil penalty and $25,175 in investigation costs, and the judgment was satisfied in April 2011.

Renewal Conditions

To renew, Mr. Electric franchisees must provide written notice between 180 and 240 days before their current agreement expires. They must be in good standing, meaning they are not in default of their current franchise agreement or any related agreements, and have satisfied all monetary and other material obligations on time. Franchisees must also have not failed to meet the Minimum Performance Standards for more than two calendar years or measurement periods during the term. Additionally, franchisees and their guarantors are required to sign a general release, pay a $5,000 renewal fee, complete Mr. Electric's then-current training requirements, and sign the current version of the franchise agreement, which may contain materially different terms, conditions, and fees compared to their original agreement.

Staffing Notes

Mr. Electric franchisees must employ enough competent and trained employees to provide efficient customer service. They are solely responsible for ensuring that all employees and subcontractors pass required background checks before entering a customer's home. Mr. Electric explicitly states that franchisees are the sole employers of their staff and hold full responsibility for all employment decisions, including hiring, firing, tax withholdings, and setting wages and benefits. The franchisor maintains no power, responsibility, or liability regarding these employment matters.