The Maids FDD Item 19 is the section of the Franchise Disclosure Document where the franchisor may provide financial performance representations, giving prospective franchisees data about how existing locations have performed financially. For a residential cleaning franchise with an initial investment of $74,780 to $168,300, Item 19 is often the section buyers turn to first because it seems to answer the most fundamental question: how much money will I make? At Lopes Law LLC, we routinely caution prospective The Maids franchisees that Item 19 data requires careful, skeptical analysis because the numbers as presented rarely tell the complete story.

This guide explains what The Maids discloses in Item 19, why average revenue figures are misleading in the cleaning franchise context, how to build a realistic profitability model, and what questions to ask during your validation process.

What Is FDD Item 19 and Why Does It Matter for The Maids?

Item 19 of any Franchise Disclosure Document is titled “Financial Performance Representations.” The FTC Franchise Rule (16 C.F.R. Part 436) permits, but does not require, franchisors to include financial performance data in the FDD. When a franchisor chooses to include Item 19 data, it must have a reasonable basis for the representations and must include certain disclosures and assumptions. If a franchisor does not include Item 19, it cannot make financial performance claims to prospective franchisees outside of the FDD.

For The Maids, Item 19 matters because residential cleaning is a volume-based business where profitability depends on the interplay between revenue, labor costs, and operating expenses. Unlike franchises with higher average ticket sizes where a few large transactions can make a year, cleaning franchises depend on hundreds or thousands of individual cleaning appointments per year, each generating a modest revenue contribution. Small variations in average ticket size, labor efficiency, or customer retention compound into significant revenue differences across locations.

The franchise industry has abundant cautionary examples of what happens when financial performance data is not properly analyzed. Dickey’s Barbecue Pit accumulated 27 SBA loan defaults, with many franchisees citing a gap between expected and actual financial performance. Patrice & Associates reported a 31% failure rate, demonstrating that even when financial data is available, buyers who do not analyze it critically can make expensive mistakes.

What Financial Data Does The Maids Include in Item 19?

The specific data The Maids provides in Item 19 varies by FDD year and may include some or all of the following categories:

• Gross revenue data: Average, median, or range of gross revenues for existing franchise locations, potentially segmented by years in operation, geographic region, or number of cleaning teams.
• Revenue breakdowns: Revenue from recurring cleaning contracts versus one-time or occasional cleanings, which indicates the stability and predictability of the revenue base.
• Expense categories: Some franchisors provide cost data including labor costs as a percentage of revenue, supply costs, vehicle expenses, and overhead, though this is less common than revenue-only disclosures.
• Performance distribution: Data showing what percentage of franchisees achieved or exceeded certain performance thresholds, which helps contextualize average figures.

The critical point is what Item 19 typically does not include: owner income, net profit, or a complete profitability picture. Revenue data alone is insufficient for investment decision-making because a franchise that generates $500,000 in gross revenue but consumes $470,000 in operating costs provides only $30,000 in owner income, a 6% margin that makes the business fragile and the investment questionable.

Why Is Average Revenue Misleading for The Maids Franchises?

Average revenue is the most commonly cited but least useful metric in franchise financial analysis. For The Maids and residential cleaning franchises generally, averages are misleading for several specific reasons:

The Established Franchise Skew

A franchise system that includes locations ranging from one year old to twenty years old will report an average that is heavily influenced by mature, established locations with large customer bases. A 15-year-old The Maids franchise with six cleaning teams and a customer base built over a decade-plus will generate dramatically more revenue than a two-year-old franchise with two teams still building its market. If the average includes both, it creates a misleading picture for someone evaluating the business as a new entry.

The Multi-Team Effect

Revenue in a team-based cleaning franchise scales with the number of cleaning teams deployed. A franchise with four teams generates roughly twice the revenue of a franchise with two teams. If the average includes franchises with two, three, four, and six teams without segmenting by team count, the average is meaningless for someone planning to start with two teams and grow to four over three years.

Territory and Market Variation

A franchise in an affluent suburban market with high household incomes and strong demand for residential cleaning generates fundamentally different revenue than a franchise in a market with lower incomes, higher competition, or different demographic profiles. The average blends these distinct market realities into a single number that applies to neither.

Survivorship Bias

Item 19 data typically reflects locations that are currently operating. Franchises that failed and closed are often excluded from the data set. This survivorship bias inflates the averages because the worst-performing locations are no longer counted. The remaining locations appear to perform better than the actual full-population average would suggest.

How Should You Analyze The Maids Financial Performance Data?

A rigorous analysis of Item 19 data follows a structured approach that moves from the reported data to a personalized profitability projection:

Step 1: Segment the Data

If The Maids provides segmented data, analyze each segment separately. Focus on the segment most comparable to your planned entry: new franchises in their first three years, franchises in similar market types, or franchises with the number of cleaning teams you plan to operate. If the data is not segmented, this is itself an important finding because unsegmented data is harder to use for reliable projections.

Step 2: Look at Median, Not Average

The median is the revenue figure where half of franchises perform above and half below. The median is more representative than the average because a few very high-performing franchises can pull the average up dramatically. If the median is significantly lower than the average, it means a relatively small number of top performers are inflating the average, and most franchisees perform below the stated average figure.

Step 3: Build the Expense Model

Revenue is only one side of the equation. Build a complete expense model using data from multiple sources:

Expense Category	$350K Revenue Scenario	$500K Revenue Scenario	$700K Revenue Scenario
Labor (50% of revenue)	$175,000	$250,000	$350,000
Royalty (avg. ~5.5%)	$19,250	$27,500	$38,500
Advertising (2%)	$7,000	$10,000	$14,000
Vehicle Costs	$18,000	$24,000	$30,000
Cleaning Supplies	$10,500	$15,000	$21,000
Insurance	$12,000	$14,000	$16,000
Technology / Software	$6,000	$6,000	$6,000
Office / Admin Overhead	$18,000	$22,000	$26,000
Local Marketing	$8,000	$12,000	$15,000
Total Expenses	$273,750	$380,500	$516,500
Est. Owner Income	$76,250	$119,500	$183,500
Operating Margin	21.8%	23.9%	26.2%

Note: These are illustrative estimates only and do not represent actual The Maids financial performance data. Actual expenses vary significantly by market, territory, labor conditions, and operational efficiency. The table demonstrates the analytical framework, not specific financial outcomes.

Step 4: Stress-Test the Model

Apply realistic stress scenarios to your financial model to understand the downside risk:

• Revenue shortfall: What happens if revenue comes in 20% below your projection for the first two years? Can you sustain operations and cover debt service?
• Labor cost increase: What if labor costs rise to 55% or 58% of revenue due to minimum wage increases, higher workers’ compensation premiums, or difficulty retaining cleaning staff?
• Customer churn increase: What if customer retention drops from 80% to 65% due to competition or service quality issues? How much additional marketing spend is needed to maintain revenue?
• Team shortage: What if you cannot maintain full cleaning teams due to labor market tightness? What happens to revenue when you operate with three teams instead of four?

What Role Does Labor Play in The Maids Financial Performance?

Labor is the single largest expense in a residential cleaning franchise and the factor that most significantly determines profitability. The Maids team-based W-2 employee model means franchisees are full employers with all the costs and responsibilities that entails.

Why W-2 Employees Affect the Financial Model

Unlike cleaning businesses that use independent contractors, The Maids model requires franchisees to hire cleaners as W-2 employees. This means the franchisee pays:

• Wages: Base hourly pay for cleaning staff, typically at or above local market rates to attract and retain workers.
• Payroll taxes: Employer’s share of Social Security (6.2%), Medicare (1.45%), federal unemployment tax (FUTA), and state unemployment tax (SUTA).
• Workers’ compensation insurance: Residential cleaning is physical work with injury risks. Workers’ compensation premiums can be significant, particularly in states with high rates.
• Benefits: Depending on the number of employees and applicable laws, the franchisee may need to offer health insurance or other benefits.
• Training costs: New employees must be trained in The Maids cleaning system, during which time they are being paid but not generating revenue at full productivity.
• Turnover costs: Cleaning staff turnover is high in the industry, typically 100% to 200% annually. Each replacement requires recruiting, screening, hiring, and training, all of which cost money and reduce productivity during the transition period.

The Labor Cost Threshold

When labor costs exceed approximately 55% of gross revenue, the franchise’s ability to generate meaningful owner income becomes severely constrained. With royalties of 3.9% to 6.9%, advertising of 2%, and other operating costs consuming another 20% to 25% of revenue, labor costs above 55% leave a margin of less than 10% for owner income. At $400,000 in revenue with a 7% margin, owner income is $28,000, barely above minimum wage for a full-time business owner who is also responsible for management, sales, and administration.

What Questions Should You Ask During Franchise Validation?

The validation process, where prospective franchisees contact existing franchisees listed in the FDD, is your best source of real-world financial data beyond what Item 19 provides. For The Maids specifically, these questions yield the most useful information:

• What was your revenue in years one, two, and three? This trajectory matters more than current revenue because it reflects the growth curve you should expect.
• What percentage of revenue goes to labor costs? The specific percentage matters enormously in a cleaning franchise. Ask multiple franchisees to identify the range.
• What is your customer retention rate? Recurring revenue depends on customer retention. A 90% retention rate versus a 70% retention rate changes the entire financial model.
• How many cleaning teams do you operate? Revenue per team is a more useful metric than total franchise revenue for planning purposes.
• What is your biggest unexpected expense? This surfaces costs not immediately apparent from the FDD, such as vehicle maintenance, damage claims, or employee-related costs.
• If you could do it over, would you invest in this franchise? The answer, and the reasoning behind it, provides the most honest assessment of whether the investment delivers acceptable returns.

Common Mistakes When Analyzing The Maids Financial Data

Prospective franchisees consistently make predictable errors when interpreting Item 19 data. Avoiding these mistakes requires discipline and healthy skepticism:

• Using gross revenue as a proxy for income: Revenue is not income. A franchise generating $500,000 in revenue may provide $60,000 in owner income, or $120,000, or a loss, depending on expenses. Always build the complete picture.
• Assuming you will perform at the average: Most new franchises perform below the system average for their first three to five years. Plan for below-average performance initially and build reserves accordingly.
• Ignoring the opportunity cost: If you invest $150,000 and your time to generate $60,000 in annual owner income, compare that to what you would earn and what your capital would return in the alternative. The franchise must deliver risk-adjusted returns that exceed your alternatives.
• Underestimating labor volatility: Labor costs are not fixed. Minimum wage increases, labor market tightness, and workers’ compensation rate changes can shift your labor costs by 5% to 10% of revenue with little warning.
• Not accounting for owner time: Many cleaning franchise owners work 50 to 60 hours per week, particularly in the first three years. If you calculate your effective hourly rate at those hours and that income level, the franchise may pay less per hour than the career you left.

Client Scenario: Building a Realistic Financial Model

A prospective buyer contacted Lopes Law LLC before investing in a The Maids franchise in a southeastern suburban market. The buyer had reviewed the Item 19 data, which showed an average revenue figure that appeared attractive. The buyer’s initial business plan projected this average revenue in year two with a 15% profit margin.

Our analysis identified several issues with this projection. First, the average included franchises operating for more than ten years with five or more cleaning teams. Our client planned to start with two teams and grow to three by year two. Adjusting for team count reduced the realistic year-two revenue projection by approximately 40% from the stated average.

Second, the buyer had estimated labor costs at 42% of revenue based on industry articles about cleaning businesses. Our review of The Maids-specific data and validation call results indicated that The Maids’ team-based model, with its W-2 employment requirements and four-person team structure, typically ran labor costs of 48% to 54% of revenue. This 6 to 12 percentage point difference changed the profitability model from a $75,000 projected income to a range of $30,000 to $50,000 in year two.

Third, the buyer had not accounted for the ramp-up period. Most cleaning franchises take 12 to 18 months to build a customer base sufficient to support full team utilization. During this period, the franchisee pays for cleaning teams that are not fully booked, creating a labor cost percentage that may temporarily exceed 60% of revenue.

The client used our revised financial model to adjust their expectations, secure appropriate financing, and ensure they had sufficient reserves to weather the startup period.

For franchisees already operating and experiencing financial challenges, our franchise exit audit can evaluate whether your current financial situation warrants exploring alternative paths forward.

Frequently Asked Questions About The Maids FDD Item 19

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Last updated: March 11, 2026