Mr. Rooter Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Mr. Rooter is a home-services franchise providing residential and commercial plumbing, drain and sewer cleaning, and water-heater and septic services. Franchisees run a dispatch-and-technician operation handling service calls in a territory.
FranchiseVerdict summary · 2026
A Mr. Rooter franchise requires a total initial investment of $153K – $299K, including a $43K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $2.1M[2]. SBA 7(a) loans show a 9.3% charge-off rate across 97 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $153K – $299K
- 61st pct Home Services
- Avg gross sales
- $2.1M
- 31st pct Home Services
- Royalty
- 6.0%
- 15th pct Home Services
- Units
- 240
- 78th pct Home Services
- SBA charge-off
- 9.3%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Home Services · color = vs category peers
Green = favorable by >10% vs Home Services avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $153K – $299K including a $43K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $2.1M/year (median $1.3M).
- RISKVerdict A (Strongest tier), verdict score 85/100 (higher is better). SBA loan charge-off rate of 9.3% across 97 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Mr. Rooter SPV LLC
- Parent company
- Neighborly Assetco LLC
- Ultimate parent
- Neighborly (Dwyer Franchising LLC d/b/a Neighborly), controlled by KKR-affiliated investment funds
- Predecessor
- Mr. Rooter LLC
- Prior franchisor entity
- CEO title
- Chief Executive Officer
- Michael Anthony Davis
- Incorporated in
- Delaware
- HQ
- 1010 North University Parks Drive, Waco, Texas 76707
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $480.8M
- vs $461.7M prior year
Overview
About
- CEO
- Michael Anthony Davis
- Headquarters
- Texas
- Founded
- 1993
- FDD year
- 2026
- States available
- 43
Can you afford it, and what does the money buy?
Entry cost is about average for a home services franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $43K | $43K |
| Working capital (3–6 mo) | $20K | $45K |
| Equipment, build-out, other | $90K | $211K |
| Total initial investment | $153K | $299K |
Source: Mr. Rooter 2026 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $153K – $299K
- Middle of category vs category
- Liquid capital req'd
- $20K – $45K
- Middle of category vs category
- Franchise fee
- $43K – $43K
- Top 40% of category vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $176 |
| Transfer fee | $15K |
| Renewal fee | $5K |
| Inventory (initial) | $25K – $40K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 69% above the home services norm.
Source: FDD 2026 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$230K
11.0% margin
Unlevered ROIC
89%
EBITDA / total invested capital
Payback
13 mo
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Mr. Rooter unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
89%
Above the 30–60% band. Verify revenue is per-unit average
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Mr. Rooter units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.7M
on $8.4M purchase
Total debt
$6.7M
SBA $4.2M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
- Avg gross sales
- $2.1M
- Per unit, per year
- Median gross sales
- $1.3M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Gross Sales report by percentile cohort (franchised businesses open and reporting full 52 weeks in the Reporting Period)
- Sample size
- 193 outlets
- vs category median 32 · large
- Range (low → high)
- $633→$20.3M
- Cohort dispersion (min → max)
- Quartile band
- $288K→$5.2M
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 321 Home Services brands
Revenue is 9.3x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $2.1M/year in gross sales. Median is $1.3M — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 9.3x.
Fee burden
Total ongoing fee load of 8.0% (near the Home Services average).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 10.7% CAGR over 3 years across 240 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Home Services averages
How Mr. Rooter Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 240
- Opened
- 23
- Last reporting year
- Closed
- 1
- Terminated
- 11
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 5.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 99%
- vs corporate-owned
- Net growth (3-yr)
- +10.7%
- Net unit change over 3 years
- 3-yr CAGR
- +10.7%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 23
- Closed (3yr)
- 1
- Terminated (3yr)
- 11
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 15
- Reacquired (3yr)
- 1
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 42 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 97
- Loan volume
- $29.9M
- Median loan
- $150K
- 50th percentile
- Charge-off rate
- 9.3%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 90.7%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 44
- Defaults
- 9
- Typical loan rate
- 7.8%
- avg rate to borrowers
- Franchised industry avg
- 20.0%
- brand beats franchise avg ↓
- Jobs supported
- 743
- 2.5 per loan
- Lender concentration
- 24%
- top lender's share
Borrower mix: 79% went to startups / new businesses, 21% to established operators
Franchise vs independent — in plumbing, heating, and air-conditioning contract, franchised businesses charge off at 20.0% vs 14.5% for independents — franchising is associated with 38% higher SBA default risk in this category.
Vintage analysis
Mr. Rooter charge-off rate by loan vintage
Top lenders financing Mr. Rooter franchisees
Showing 3 of 44 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Mr. Rooter's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 29-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
What could kill this investment?
SBA loans charge off at 9.3% — 42% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Mr. Rooter presents moderate-to-elevated risk due to missing profitability data, litigation history, slow growth trajectory, and high capital requirements without clear net income benchmarks.
Litigation (Item 3)
Predecessor was sued for trademark misuse/non-compete violation (settled, franchisee paid $400,000) and for trademark dilution by a third party (settled for $125,000 paid by predecessor); franchisor initiated one FY2025 suit to collect monies owed from a terminated franchisee.
Largest disclosed settlement: $400,000
Bankruptcy (Item 4)
Disclosed in last 7 years
Disclosed bankruptcies involve KKR-portfolio companies unrelated to the Franchisor (Marelli Holdings, The Collected Group, Envision Healthcare, Genesis Care, IPI Legacy Liquidation, Café Coffee Day) - none involve Mr. Rooter SPV LLC, its officers, or predecessor.
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 85 / 100 verdict
- 01MEDNo Item 19 (Average Net Income) disclosed — cannot validate profitability claims or ROI timeline
- 02MINORSlow unit growth (2.9% YoY) suggests market saturation or franchisee satisfaction issues in a mature 218-unit system
- 03HIGHTwo trademark/IP litigation cases settled in recent history indicate brand protection vulnerabilities and competitive pressure
- 04MINOR10-year term is longer than industry standard (5–7 years), locking franchisees into aging brand IP and limiting exit optionality
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory population | 100,000 |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | No |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Arbitration location | McLennan County, Texas |
| Jury trial waiver | Yes |
| Governing law | Texas |
| Litigation count | 3 |
View Item 3 litigation summary
Predecessor was sued for trademark misuse/non-compete violation (settled, franchisee paid $400,000) and for trademark dilution by a third party (settled for $125,000 paid by predecessor); franchisor initiated one FY2025 suit to collect monies owed from a terminated franchisee.
Items 10, 11
Training & Operations
- Classroom training
- 57 hrs
- On-the-job training
- 8 hrs
- Training location
- Waco, Texas (in-person) and webinar/video-conference
- Ongoing training
- Required
- Field support
- 8 hrs/yr
- On-site visits per year
- Time to open
- 6 mo
- From signing to launch
- Site selection
- franchisee, with franchisor-provided guidelines and approval
- Franchisor financing
- Offered
- Item 10
- POS system
- ServiceTitan
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: ServiceTitan
Item 20 · call current owners
Franchisee Contacts
207 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Mr. Rooter · FDD (2026) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Mr. Rooter franchise?
The total investment to open a Mr. Rooter franchise ranges from $153K – $299K, with an initial franchise fee of $43K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Mr. Rooter franchise owners earn?
According to Item 19 of the Mr. Rooter FDD, the average gross sales per unit is $2.1M. The median is $1.3M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Mr. Rooter FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Mr. Rooter FDD and qualifies whose outlets they describe.
What is Mr. Rooter's franchise failure rate?
Based on SBA 7(a) loan data, Mr. Rooter has a charge-off rate of 9.3% across 97 loans, meaning 9.3% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Mr. Rooter franchise locations are there?
As of their most recent FDD filing, Mr. Rooter has 240 total units in the United States, including 238 franchised units and 2 company-owned units. 23 new units were opened in the latest reporting year.
Is Mr. Rooter a good franchise to buy?
FranchiseVerdict rates Mr. Rooter as a A-grade franchise with a verdict score of 85 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Mr. Rooter, you can request corrections or provide updated information.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.