FDD Talk 2019: Pillar to Post Home Inspectors Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

In this FDD Talk post, youll learn the following:

• Section I Background information on the Pillar to Post Home Inspectors franchise opportunity, including relevant news updates

• Section II Estimated initial investment for aPillar to Post Home Inspectors franchise, based on Item 7 of the companys 2019 FDD

• Section III Initial franchise fee, royalty fee, marketing fee, and other fees for aPillar to Post Home Inspectors franchise, based on Items 5 and 6 of the companys 2019 FDD

• Section IV Number of franchised and company-owned Pillar to Post Home Inspectors outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the companys 2019 FDD

• Section V Presentation and analysis of Pillar to Post Home Inspectors financial performance representations, based on Item 19 of the companys 2019 FDD, including information on the:

• 2018, 2017, 2016, 2015, and 2014 average and median gross revenues (and percentage changes from prior year) for the 365, 328, 326, 309, and 265 franchisee-owned Pillar to Post Home Inspectors units that were open during the entire calendar years 2018, 2017, 2016, 2015, and 2014, respectively

• 2018, 2017, 2016, 2015, and 2014 average job size (and percentage changes from prior year) for the 365, 328, 326, 309, and 265 franchisee-owned Pillar to Post Home Inspectors units that were open during the entire calendar years 2018, 2017, 2016, 2015, and 2014, respectively

• 2018, 2017, 2016, 2015, and 2014 average, median, highest, and lowest gross revenue, by quartile, for the 365, 328, 326, 309, and 265 franchisee-owned Pillar to Post Home Inspectors units that were open during the entire calendar years 2018, 2017, 2016, 2015, and 2014, respectively

Section I Background Information

20 Things You Need to Know About the Pillar to Post Home Inspectors Franchise

Partners with the Salvation Army

1. In early September 2019, Pillar to Post Home Inspectors formed a new partnership with The Salvation Army to encourage homebuyers and sellers to donate unwanted goods to the charitable organization, with the proceeds from the donations going toward The Salvation Armys innovative Real Estate for Rehabilitation program.

2. As the No. 1 home inspection company in North America, Pillar to Post Home Inspectors has an ongoing commitment to ensure confident home ownership and enrich the lives of the people and communities we serve, said Stephanie Bowling, the companys director of marketing. Bowling continued, The program is very simple. If a homebuyer or seller has unwanted goods that they dont want to move, they simply contact The Salvation Army and they will send a truck to pick up the goods.

3. The Salvation Armys Real Estate for Rehabilitation program will use all of the proceeds from the donation to help fund 139 Adult Rehabilitation Centers across the United States that offer free drug and alcohol rehabilitation programs. In 2017, more than 145,000 people were served by the programs, which boast a success rate that is three times higher than traditional rehabilitation programs.

4. A professional evaluation both inside and outside the home is at the core of Pillar to Post Home Inspectors service. Pillar to Post Home Inspectors input data and digital photos into a computerized report that is printed and presented on site. All information is provided to clients in a customized binder for easy reference, allowing homebuyers or sellers to make confident, informed decisions.

5. A one-page informational insert highlighting the Pillar to Post Home Inspectors/The Salvation Army program will be included in every report and the alliance will also be featured on the Pillar to Post Home Inspectors website.

6. Bowling added, We hope this program will serve as another way to differentiate ourselves as a company that is dedicated to making a difference in the communities we serve.

Announces Partnership with EXIT Realty Corp.

7. Near the end of March 2019, Pillar to Post Home Inspectors was named the Premier Home Inspection Partner of EXIT Realty Corp. International, a full-service real estate franchisor with hundreds of offices and thousands of agents across the U.S. and Canada that is at the forefront of a new paradigm that has changed the landscape of the real estate industry.

8. The partnership was formally announced at EXIT Southeasts Spring Training event in Nashville in April. The program was initially launched in the Southeast and is set to expand across North America at a later date.

9. Dan Steward, president and CEO of Pillar to Post, said, Were honored to be in a partnership with such a highly respected company. We expect great synergy between our 800 home inspectors and the real estate agents of EXIT. Our franchisees are the people who have helped us rank Number One in the home inspection category on Entrepreneur Magazines Franchise 500 list for 19 years in a row. Its a great fit.

10. Tami Bonnell, CEO of EXIT Realty Corp. International, added, EXIT is expanding rapidly, focused on providing solutions for its regional owners, franchise owners, agents in the field and the consumers who trust EXIT with their real estate transactions. Partnering with an industry leader such as Pillar to Post is one such way EXIT provides outstanding services to its associates and the general public alike.

Ranked No. 1 in Category in Entrepreneur Magazines Franchise 500 for 19th Consecutive Year

11. At the beginning of 2019, Pillar to Post Home Inspectors announced that it had been ranked the No. 1 franchise opportunity in its category in Entrepreneur Magazines Franchise 500 January 2019 edition.

12. According to Dan Steward, president and CEO of Pillar To Post Home Inspectors, Were thrilled to once again be recognized as the leader in our category for the nineteenth year in a row. This accomplishment is a testament to the strength of the brand, our franchisees, support team, and the Pillar to Post franchise opportunity. 2018 marked another record year for the company, including the signing of more than 90 new franchise agreements.

13. About 30% of those agreements were made through the companys VetFran program to members of the military. Pillar to Post Home Inspectors takes great pride in their 5-Star Status in the International Franchise Associations VetFran program.

14. Steward added, We are also seeing many new franchisees from home-related industries such as realtors, former mortgage brokers, construction experts and independent home inspectors who want the power of a national brand behind them.

15. In addition to being No. 1 in its category, Pillar to Post was also included in the following Entrepreneur Magazine rankings:

• Top Franchises for Veterans
• Top Franchises for Any Budget
• Top Brands
• Top Global Franchises
• Fastest-Growing Franchises

16. Jason Feifer, editor-in-chief of Entrepreneur Magazine, said, As we celebrate 40 years of producing the Franchise 500, its a good opportunity to step back and look at how much has changed since that first ranking in 1980. While the franchise business model has changed little, the strongest franchise brands are constantly evolving and innovating to keep up with changing trends and technology.

Company History

17. Pillar to Post Home Inspectors was founded in 1993 by Mike Brewer, an entrepreneur with experience in the automotive glass replacement franchise industry. Although he did not have experience in the home inspection industry, Brewer felt that the home inspection he had just before starting Pillar to Post was badly deficient in serving his needs. Brewer began researching the industry and found that it lacked any deliberate technical training, business training, or standards by which an inspection was conducted.

18. Brewer began franchising the Pillar to Post Home Inspectors concept immediately and by 2000, the company had become the largest home inspection company in North America. A few years later, in 2003, Brewer sold Pillar to Post to The Franchise Company and left the business.

19. In 2004, Dan Steward joined the company as president and has now served as CEO since 2009. Today, there are Pillar to Post Home Inspectors franchises across the United States and Canada.

Entrepreneurs Franchise 500

20. Pillar to Post Home Inspectors ranked No. 98 on Entrepreneurs 2019 Franchise 500 list.

Section II Estimated Costs

• Please click here for detailed estimates of Pillar to Post Home Inspectors franchise costs, based on Item 7 of the companys 2019 FDD.

Section III Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Pillar to Post Home Inspectors initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the companys 2019 FDD.

Section IV Number of Franchised and Company-Owned Outlets

Franchised

2016

• Outlets at the Start of the Year: 407
• Outlets at the End of the Year: 442
• Net Change: +35

2017

• Outlets at the Start of the Year: 442
• Outlets at the End of the Year: 483
• Net Change: +41

2018

• Outlets at the Start of the Year: 483
• Outlets at the End of the Year: 486
• Net Change: +3

Company-Owned

2016

• Outlets at the Start of the Year: 0
• Outlets at the End of the Year: 0
• Net Change: 0

2017

• Outlets at the Start of the Year: 0
• Outlets at the End of the Year: 0
• Net Change: 0

2018

• Outlets at the Start of the Year: 0
• Outlets at the End of the Year: 0
• Net Change: 0

Section V Financial Performance Representations (Item 19, 2019 FDD) and Analysis

• The statements of Average and Median Gross Revenues per Unit, Average Job Size, and Average and Median Gross Revenues by Quartile consist of the averages and medians of the reported gross revenues of the 365, 328, 326, 309, and 265 franchisee-owned units that were open during the entire calendar years 2018, 2017, 2016, 2015, and 2014, respectively.

• The statements of Average and Median Gross Revenues per Unit, Average Job Size, and Average and Median Gross Revenues by Quartile exclude the results from 121, 152, 96, 97, and 113 franchisee-owned units that were either not open during the entire calendar years 2018, 2017, 2016, 2015, and 2014, respectively, or did not report gross revenues for each period of those calendar years.

• The financial performance representation does not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue figures to obtain your net income or profit.

• You should conduct an independent investigation of the costs and expenses you will incur in operating your franchised business. Franchisees or former franchisees listed in the disclosure document may be one source of this information.

• Some franchises have earned these amounts. Your individual results may differ. There is no assurance that you will earn as much.

• A new franchisees financial results are likely to differ from the results stated in the financial performance representation.

Part 1 Statement of Average and Median Gross Revenues (Sales) of Pillar to Post Franchises for Years Ending December 31, 2014, December 31, 2015, December 31, 2016, December 31, 2017, and December 31, 2018

2018

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