Franchise Deep Dive: MRCOOL Franchise Costs, Fees, Profit

REPORTED COST TO GET IN: $1,177,676 - $6,933,902

REPORTED ROI (Item 19): N/A (see below)

Franchise overview

MRCOOL is an HVAC franchise that specializes in providing energy-efficient heating and cooling solutions, including ductless mini-split systems and heat pumps, designed to meet the growing consumer demand for cost-saving, environmentally friendly, and smart home-compatible products.

Established in 2014, MRCOOL began franchising in 2023. Since the brand operates through a network of resellers and online dealers, there isn’t really a way of determining the number of physical locations. However, MRCOOL does provide a map of locations where MRCOOL products and services can be purchased.

MRCOOL franchises cater to a growing demand for energy-efficient HVAC solutions, driven by rising energy costs, climate change, the need for smart home integration, government incentives and urbanization. Key elements of the business model include:

• Energy-Efficient Products: MRCOOL specializes in energy-efficient HVAC products, including ductless mini-split systems and heat pumps, meeting the increasing consumer demand for cost-saving and environmentally friendly solutions.

• Smart Home Technology: MRCOOL products are compatible with smart home systems and the Internet of Things (IoT), catering to the modern consumer’s need for connected and remotely controllable HVAC systems.

• Government Incentives: MRCOOL franchises can take advantage of various government incentives, such as tax credits and rebates, which encourage the adoption of energy-efficient HVAC systems.

• Training and Support: Comprehensive training programs and ongoing support are provided to ensure franchisees are well-equipped to run their businesses effectively.

• Growing Market: The HVAC industry is experiencing growth due to factors such as energy efficiency demands, climate change, aging HVAC systems and urbanization. MRCOOL franchises are well-positioned to capitalize on these trends.

• Exclusivity: Franchisees receive exclusive territories, ensuring they have a defined market area to operate in without direct competition from other MRCOOL franchises.

According to MRCOOL’s 2023 Franchise Disclosure Document (FDD): “We do not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets.”

Initial investment costs

The initial investment required to open a MRCOOL franchise ranges from $1,177,676 to $6,933,902. These costs include:

• Initial Franchise Fee: $50,000

• Construction & Leasehold Improvements: $160,660 - $308,750

• Lease Deposits (3 Months): $28,125 - $90,000

• Furniture, Fixtures & Equipment: $60,698 - $123,117

• Signage: $5,875 - $12,740

• Computer, Software & Business Management System: $51,647 - $150,000

• Grand Opening Marketing: $2,000 - $5,000

• Initial Inventory: $673,485 - $5,877,119

• Utility Deposits: $1,274 - $1,912

• Insurance Deposits (3 Months): $5,625 - $12,375

• Travel for Initial Training: $740 - $3,600

• Professional Fees: $16,320 - $38,335

• Licenses and Permits: $829 - $43,865

• Warehouse Supplies: $12,366 - $16,135

• Printing, Stationery & Office Supplies: $976 - $2,145

• Additional Funds (3 Months): $107,056 - $199,809

The franchise fee is $50,000. Franchisees are also subject to a royalty fee (1% of previous monthly gross revenue, but waived for the first year after completion of training), a brand development fee (0.75% of monthly gross revenue) and a local marketing fee (2% of monthly gross revenue).

• Derek Richards — Chief Financial Officer

• Jarrod Greer — Director of Operations

• Nathan Rowton — President of Franchising Division

• Mia Huan Hu — Franchising Coordinator

• Darrow Orlandi — Franchising Warehouse Manager

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