How does Precision Door Service define a 'PE Owner' in the context of franchise expansion?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a PE Owner, we will view any investment by you or your affiliate in a business that competes with our business or the business of any of our affiliates or any business operating under any franchise system owned by any of our affiliates that operate in the same Neighborly segment as us (i.e., the Neighborly "repair" segment) as grounds to not permit any further expansion by you or your affiliates within the Precision Garage Door Service® system or any other franchise system operated by any of our affiliates (excluding 5% or less holdings in a publicly traded company).
If you are a PE Owner and you and your affiliates are in good standing under all Franchise Agreements with us, your and your affiliates' franchised businesses' trailing 12 months' Gross Sales per SFHUD (single family housing unit detached) exceed our systemwide average Gross Sales per SFHUD,
your and your affiliates' average Net Promoter Score (NPS) is at or above systemwide average for the prior 12 months, and you notify us that you wish to acquire additional franchised businesses that would make you an owner of multiple Precision Garage Door Service® businesses that collectively generate, on a pro forma basis, up to 10% of our systemwide Gross Sales, we will use commercially reasonable efforts to facilitate the acquisition so long as you meet all of our financial and other qualifications for expansion. If you are a PE Owner and you wish to acquire additional franchised businesses that would make you an owner of multiple Precision Garage Door Service® businesses that collectively generate, on a pro forma basis, more than 10% and up to 15% of our systemwide Gross Sales, in addition to meeting the above-listed conditions, your and your affiliates' franchised businesses' training 12 months' Gross Sales per SFHUD must exceed the average Gross Sales per SFHUD for the top quartile of our system, and you otherwise must meet all of our financial and other qualifications for expansion. These 10% and 15% limits on PE Owner's ownership will not apply to the development and opening of new Precision Garage Door Service® businesses so long as you meet our then-current qualifications for expansion, you and your affiliates are in good standing under all Franchise Agreements, your and your affiliates' trailing 12 months' Gross Sales per SFHUD exceed systemwide average, and your and your affiliates' average NPS is at or above systemwide average for the prior 12 months.
Source: Item 12 — Territory (FDD pages 63–68)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, a 'PE Owner' is defined within the context of territory and expansion rights, particularly concerning investments in competing businesses. If a franchisee or their affiliate, classified as a PE Owner, invests in a business that competes with Precision Door Service, its affiliates, or any franchise system within the Neighborly "repair" segment, Precision Door Service may restrict further expansion within the Precision Garage Door Service system or any other franchise system operated by its affiliates. This restriction excludes holdings of 5% or less in a publicly traded company. This definition is crucial for prospective franchisees who may have existing investments or affiliations with other businesses, as it could impact their ability to grow within the Precision Door Service franchise network.
For PE Owners seeking to expand their Precision Door Service holdings, several conditions apply. If a PE Owner and their affiliates are in good standing, and their franchised businesses' trailing 12 months' Gross Sales per SFHUD (single family housing unit detached) exceed the systemwide average, and their average Net Promoter Score (NPS) is at or above the systemwide average for the prior 12 months, Precision Door Service will facilitate the acquisition of additional franchised businesses. This facilitation applies if the acquisitions would result in the PE Owner controlling businesses that collectively generate up to 10% of Precision Door Service's systemwide Gross Sales, provided they meet all financial and other qualifications for expansion.
If a PE Owner wishes to acquire additional franchised businesses that would result in their businesses generating more than 10% and up to 15% of systemwide Gross Sales, they must meet additional criteria. Their franchised businesses' trailing 12 months' Gross Sales per SFHUD must exceed the average Gross Sales per SFHUD for the top quartile of the Precision Door Service system. These limits on PE Owner ownership (10% and 15%) do not apply to the development and opening of new Precision Garage Door Service businesses, provided the PE Owner meets the then-current qualifications for expansion, is in good standing, and their Gross Sales per SFHUD and NPS meet or exceed the systemwide averages.
This policy aims to balance the interests of Precision Door Service in maintaining a competitive advantage and preventing conflicts of interest, while also allowing for the growth of successful franchisees. Prospective franchisees who are PE Owners should carefully consider these restrictions and expansion criteria to understand the potential limitations and opportunities within the Precision Door Service franchise system.