The Grounds Guys Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$74,570 - $224,770
Franchise Fee
$14,000
Total US Locations
228
Business Summary
The Grounds Guys franchisees provide commercial, residential, and municipal property maintenance, landscaping, and hardscaping services. They also offer snow and ice maintenance, trash and debris removal, arboriculture, lawn renovation, turf care, irrigation maintenance, installation and repair, and landscape lighting services. The Grounds Guys does not provide mosquito or flying pest control services.
Corporate History
The Grounds Guys SPV LLC was organized in Delaware in November 2020. However, the business concept originated with its predecessor, The Grounds Guys LLC, which was formed in Texas in February 2010 and began offering franchises that same year. In March 2021, as part of a securitization financing transaction, all existing U.S. franchise agreements and related intellectual property for The Grounds Guys brand were transferred to The Grounds Guys SPV LLC, which then became the franchisor. In August 2021, Nest Bidco Inc., controlled by investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (KKR), became the indirect parent company.
Financial Overview
Investment Range
$74,570 - $224,770
Franchise Fee (Low)
$14,000
Franchise Fee (High)
$175,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$28,000
Equipment Costs (High)
$140,000
Working Capital
$17,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Neighborly Assetco LLC, the direct parent company of The Grounds Guys SPV LLC and its guarantor, maintains a positive financial position. For the year ended December 31, 2024, the company reported $159.4 million in net income and total member's equity of over $3 billion. Its working capital (current assets minus current liabilities) was approximately $33.5 million in 2024, indicating sufficient short-term liquidity. The independent auditors issued an unqualified opinion on Neighborly Assetco LLC's combined financial statements for 2024 and 2023, without any going concern qualifications. The company's financial health appears strong, which is relevant given its role in guaranteeing The Grounds Guys' performance.
Financing Details
The Grounds Guys may offer financing for a portion of the initial franchise fee, but is not obligated to do so. The decision to provide financing depends on the prospective franchisee's creditworthiness, available collateral, and current financing policies, and is not available if brokers are involved. The amount financed is typically limited to less than 50% of the franchisee's total financial obligations, with a standard offer covering up to 70% of the initial franchise fee, and potentially up to 80% if certain requirements are met. Interest rates vary based on credit score, ranging from 12% for scores under 600 down to 9% for scores of 700 or more. Franchisees must sign a promissory note and make a down payment at signing, with the balance paid in monthly installments via automatic bank draft, starting approximately two months after completing Phase I Training. Repayment terms generally range from up to 5 years for loans under $45,000 to up to 9 years for loans over $150,000. The Grounds Guys requires a security interest in the business assets and may require a personal guarantee from the franchisee's owners and spouse. Franchisees can prepay notes without penalty. If The Grounds Guys sells or assigns the promissory note to a third party, it will not affect its obligations to the franchisee. The Grounds Guys may also finance a portion of any renewal fee at a 12% interest rate for qualified franchisees. The Grounds Guys does not currently earn income from referring franchisees to third-party lenders.
Performance Metrics
Total US Locations
228
Franchised Units
228
Corporate Units
0
Avg Square Footage
2,000
Franchising Since
2010
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
5
Litigation Summary
The Grounds Guys has been involved in five litigation cases within the last few years. Three of these cases involve The Grounds Guys suing former franchisees in Texas for breach of contract, to which the franchisees counterclaimed alleging fraud and negligent misrepresentation. These counterclaims specifically allege that The Grounds Guys intentionally concealed information about prior failed California franchises and provided fraudulent financial statements. Trial dates for these cases are set for June 2025. Additionally, The Grounds Guys was a plaintiff in a 2017 lawsuit against existing franchisees for breach of non-compete obligations and unpaid fees; in June 2024, a judgment of $983,861 was issued against the defendants, who are now in the appeals process. Most recently, in December 2024, The Grounds Guys initiated a lawsuit against a franchisee to collect outstanding monies owed.
Bankruptcy History
The Grounds Guys SPV LLC itself has no bankruptcy history. However, Item 4 discloses bankruptcy proceedings for several portfolio companies that are indirectly controlled by Kohlberg Kravis Roberts & Co. L.P. (KKR), which is an indirect parent company of The Grounds Guys. These KKR-controlled portfolio companies include The Collected Group LLC, Envision Healthcare Corporation, Genesis Care Pty Limited, IPI Legacy Liquidation Co., and Café Coffee Day, all of which filed for Chapter 11 reorganization or insolvency resolution between 2021 and 2024. These proceedings are explicitly stated as not involving The Grounds Guys SPV LLC directly.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, The Grounds Guys franchisees must meet several conditions. They cannot be in default of their current franchise agreement or any related agreements, must have met all financial and other significant obligations on time, and must be in good standing, having received no more than two written notices of default during the term. Additionally, franchisees must not have failed to meet the Minimum Performance Standards (Gross Sales and Customer Satisfaction) for any two calendar years or measurement periods during the term. Franchisees are required to provide written notice of their intent to renew between 180 and 240 days before the current term expires. As part of the renewal, the franchisee and their guarantors must sign a general release of claims. A renewal fee of $5,000 is also required. Furthermore, franchisees must complete any then-current training requirements and sign the current version of The Grounds Guys' franchise agreement, which may have terms, conditions, and fees that are significantly different from their original agreement.
Training & Support Program
Franchisor Assistance
The Grounds Guys provides extensive assistance to its franchisees. Before opening, the franchisor offers site selection guidelines, lists of approved supplies and suppliers, copies of its Operations Manual, and initial training programs. The Grounds Guys also provides opening support for new businesses. Ongoing assistance includes maintaining the Marketing, Advertising and Promotion Fund (MAP Fund), administering a Call Center Program for customer inquiries and scheduling, and providing updates to approved suppliers and new products/services. The Grounds Guys conducts periodic visits to franchisees for consultation and guidance and offers refresher training courses, regional meetings, and annual conventions (which franchisees are required to attend and may be charged a fee for). The franchisor also provides ongoing communication and support, along with updates to the Operations Manual. Additionally, The Grounds Guys may offer suggestions on pricing policies and has the right to negotiate Key Account arrangements, including pricing, for the benefit of the system.
Initial Training Hours
110
Training Location
Initial training involves a combination of online/virtual webinars, in-person training at The Grounds Guys' offices in Waco, Texas (or other designated locations), and field training at a selected existing franchised business (which may also be virtual).
Ongoing Support
After opening, The Grounds Guys provides ongoing support to its franchisees in several ways. This includes maintaining the Marketing, Advertising and Promotion Fund, which helps with brand and system success. The franchisor also administers a Call Center Program to handle customer requests, schedule appointments, and refer service requests. Franchisees receive updates to approved supplies and suppliers, and The Grounds Guys continues to research and develop new products and services. The franchisor conducts periodic visits to franchise businesses to offer consultation and guidance. Franchisees are required to attend annual conventions (Reunion) and other designated training, regional meetings, or conferences, for which fees may apply. The Grounds Guys also provides continuous communication, support, and updates to the Operations Manual. Optional 'on-demand' Continuing Education is available through a Learning Management System, and optional in-person Technical Training Programs are offered for service verticals like irrigation repair, landscape lighting, and snow management.
Franchise Requirements
Ideal Candidate Profile
The Grounds Guys seeks individuals who are capable of either directly performing or actively supervising the day-to-day operation of their business, unless specific consent is given for a designated manager to oversee operations. Candidates must meet the franchisor's credit standards and financial qualifications. The franchise is suitable for both new entrepreneurs looking to start a business and existing business owners in related fields who wish to convert their current operations into a Grounds Guys franchise. Franchisees are expected to comply with the brand's system and operational standards, demonstrate leadership ability and team development, maintain financial stability, and have the capacity to expand their business.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
The Grounds Guys typically defines its franchise territories by population. A standard territory generally has a minimum population of at least 100,000 people and a maximum population of no more than 500,000 people. However, larger populations may be allowed under certain circumstances, such as in densely populated urban areas or if a significant percentage of the prospective territory is economically disadvantaged. The population figures are generally based on estimates from the U.S. Census Bureau, though The Grounds Guys reserves the right to use other sources for this information.
Staffing Notes
The Grounds Guys requires franchisees to employ a sufficient number of competent and trained employees to provide efficient service to customers. Franchisees are solely responsible for ensuring that all employees or subcontractors entering a customer's home have passed the required background checks. The franchisee is the sole employer of their workers and is responsible for all employment decisions and actions, including ensuring adequate training. The Grounds Guys does not shift any employee-related responsibility to itself.