Mr. Rooter FDD Item 6 is the section of the Franchise Disclosure Document that lists every ongoing fee a franchisee will pay after the initial $42,500 franchise fee. Mr. Rooter is part of Neighborly, formerly known as the Dwyer Group, which is owned by private equity firm KKR and operates one of the largest home services franchise platforms in the world. For prospective Mr. Rooter franchisees, Item 6 reveals not only the standard royalty and advertising obligations but also the platform-level fees and requirements that come with being part of the broader Neighborly ecosystem. At Lopes Law LLC, we review home services franchise FDDs regularly, and the Neighborly platform creates a fee structure that is more complex than many standalone franchise systems.

This guide breaks down exactly what Mr. Rooter discloses in Item 6, explains how the Neighborly platform creates additional cost layers, and walks through the specific line items that every prospective plumbing franchisee needs to understand before committing the $76,600 to $185,700 total investment required to launch a Mr. Rooter franchise.

What Is FDD Item 6 and Why Does It Matter for Mr. Rooter?

Item 6 of any Franchise Disclosure Document is titled “Other Fees.” It is required by the FTC Franchise Rule (16 C.F.R. Part 436) and must disclose every recurring fee the franchisee will owe during the term of the franchise agreement. For Mr. Rooter specifically, Item 6 is critical because the franchise operates within Neighborly’s multi-brand platform, which adds technology, marketing, and cross-brand infrastructure costs that standalone plumbing businesses do not face.

Understanding every line item in Item 6 is essential. The 7% royalty that Mr. Rooter charges is just the starting point. When you add the national advertising fund contribution, technology platform fees, branded vehicle requirements, local advertising minimums, and other obligations, the total ongoing cost of operating a Mr. Rooter franchise is materially higher than the royalty alone suggests. Franchises with opaque or underestimated cost structures have historically created problems for operators. Dickey’s Barbecue Pit had 27 SBA loan defaults in a single year, and Patrice & Associates reported a 31% failure rate, often when cumulative fees exceeded what the business could sustain.

What Fees Does Mr. Rooter FDD Item 6 Disclose?

Mr. Rooter’s Item 6 covers the full range of ongoing obligations. Here is a breakdown of the major fee categories:

Fee Category	Typical Amount	When Paid
Royalty	7% of gross sales	Monthly
National Advertising Fund	2% of gross sales	Monthly
Local Advertising	Required minimum spend (varies)	Monthly
Technology / Neighborly Platform	Monthly platform fees	Monthly
Branded Vehicles	Wrap and maintenance per vehicle	As required
Uniforms	Required branded uniforms	As required
Insurance	Required minimums (varies by state)	Annually
Training	At franchisee’s expense	Ongoing
Transfer Fee	As disclosed in FDD	Upon transfer
Renewal Fee	As disclosed in FDD	Upon renewal

The Royalty: 7% of Gross Sales

Mr. Rooter charges a 7% royalty on gross sales, which is within the standard range for home services franchises. For a Mr. Rooter location generating $800,000 in annual gross sales, the royalty equals $56,000 per year. This fee is calculated on gross sales, not net profit. Whether the business has a strong month or a slow one, the royalty is owed on every dollar of revenue.

The 7% rate is comparable to many competing plumbing franchises but higher than some independent operators might pay to a service organization or buying group that provides similar marketing and operational support without the franchise structure.

National Advertising Fund: 2% of Gross Sales

Mr. Rooter requires a 2% contribution to the national advertising fund managed by Neighborly. For an $800,000 location, this is $16,000 per year. The national fund supports brand-level advertising, the Neighborly website and digital marketing infrastructure, and cross-brand promotion across Neighborly’s portfolio of home services brands.

Franchisees have limited control over how national advertising dollars are spent. The fund is managed at the Neighborly corporate level, and spending decisions reflect the interests of the broader multi-brand platform rather than any individual franchisee’s local market needs.

Neighborly Technology Platform Fees

As part of the Neighborly ecosystem, Mr. Rooter franchisees are required to use the Neighborly technology platform, which includes CRM systems, scheduling and dispatch software, call center services, online booking, and digital marketing tools. These platform fees are separate from the royalty and advertising fund and represent a meaningful addition to the monthly cost structure.

The Neighborly platform provides genuine operational value, including centralized call handling, lead routing, and cross-brand referral opportunities. However, the fees are not optional, and franchisees cannot substitute their own technology solutions even if they prefer different tools or find lower-cost alternatives.

How Do Item 6 Fees Add Up for a Typical Mr. Rooter Location?

To illustrate the real financial impact of Item 6 fees, let us model a Mr. Rooter location generating $800,000 in annual gross sales, which represents a mid-range performance level for a plumbing franchise with a few service vehicles and technicians.

Fee	Calculation	Annual Cost
Royalty	7% of $800,000	$56,000
National Advertising	2% of $800,000	$16,000
Local Advertising	Required minimum	$8,000 – $16,000
Technology / Platform	Monthly fees	$6,000 – $12,000
Branded Vehicles (3)	Wraps + maintenance	$6,000 – $9,000
Uniforms	Branded uniforms for crew	$2,000 – $4,000
Insurance	Required minimums	$8,000 – $15,000
Total Item 6 Fees		$102,000 – $128,000

That is approximately 12.8% to 16% of gross sales going to franchise-related fees before the franchisee pays for technician labor, parts and materials, vehicle operating costs, rent, or any other operating expense. In a plumbing business where parts and labor typically consume 40% to 55% of revenue, the remaining margin for the owner is narrower than many prospective franchisees expect.

How Does the Neighborly Platform Affect Mr. Rooter’s Cost Structure?

Neighborly operates over 30 home services brands including Mr. Rooter, Mr. Electric, Aire Serv, Mosquito Joe, Glass Doctor, and others. The platform creates a shared infrastructure that provides economies of scale in marketing, technology, and operations. For Mr. Rooter franchisees, the Neighborly connection offers cross-brand referrals, a national call center, digital marketing support, and brand recognition.

However, the platform also creates costs that standalone plumbing businesses or smaller franchise systems do not bear. The technology platform fees, the national advertising fund contribution, and the branded vehicle and uniform requirements all add to the ongoing cost structure. Additionally, Neighborly’s ownership by KKR, one of the world’s largest private equity firms, means the platform is managed with private equity return expectations, which can influence fee structures and operational requirements.

For prospective franchisees, the question is whether the Neighborly platform’s benefits, including lead generation, brand recognition, and operational tools, justify the additional costs compared to an independent plumbing business or a smaller franchise system. The answer depends on your market, your ability to generate leads independently, and your operational preferences. For context on how to evaluate this trade-off, see our franchise exit audit page, which helps existing franchisees assess whether their system’s costs are justified by the benefits received.

What Should Prospective Mr. Rooter Franchisees Look for in Item 6?

When reviewing Mr. Rooter’s FDD Item 6, focus on these specific areas:

• Technology fee escalation: Check whether Neighborly platform fees are fixed or subject to increase. Technology costs across the franchise industry have been rising, and platform-dependent systems like Neighborly may increase fees as they add features or expand services.
• Local advertising requirements: Determine the minimum local advertising spend and whether it is in addition to the 2% national fund contribution. Calculate the total marketing cost as a percentage of projected revenue.
• Vehicle requirements: Understand the branded vehicle requirements, including the number of vehicles, wrap specifications, and replacement schedule. Vehicle costs are substantial in a plumbing franchise that relies on service calls.
• Insurance minimums: Confirm the required coverage types and limits. Plumbing businesses typically need general liability, commercial auto, workers’ compensation, and professional liability coverage, which can cost $8,000 to $15,000 or more annually.
• Cross-brand fees: Determine whether there are any fees associated with the Neighborly cross-brand referral program or whether referrals are included in the standard platform fee.
• Renewal and transfer fees: Understand the costs triggered by renewal or transfer, as these affect your long-term financial planning and exit strategy.

How Does Mr. Rooter Compare to Other Plumbing Franchises?

Mr. Rooter’s 7% royalty plus 2% advertising fund totals 9% of gross sales in base franchise fees, which is within the range of competing plumbing franchises like Roto-Rooter, Benjamin Franklin Plumbing (also a Neighborly brand), and Zoom Drain. However, the total cost comparison must include technology fees, branding requirements, and local advertising mandates.

The Neighborly platform differentiates Mr. Rooter from standalone plumbing franchises by providing cross-brand infrastructure and lead generation tools. For franchisees in markets where Neighborly has strong brand recognition and an active cross-referral network, the platform can provide meaningful value. In markets where Neighborly has less penetration, the platform fees represent a cost that may not be fully offset by the benefits received.

Why Legal Review of Item 6 Is Not Optional

The fees in Mr. Rooter’s Item 6 represent contractual obligations for the full franchise term, typically 10 years. At Lopes Law LLC, we review home services franchise FDDs regularly and help prospective franchisees model the total fee burden against realistic revenue projections. Our flat-fee FDD validation review is $3,000 and covers all 23 items, with particular attention to the fee structure in Item 6 and the financial performance data in Item 19. For more on our process, see what to expect from an FDD review.

Frequently Asked Questions About Mr. Rooter FDD Item 6

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Last updated: March 11, 2026