Mr. Electric franchise startup costs run $113K–$294K — a Neighborly residential and commercial electrical services concept with low physical overhead, recurring maintenance and repair demand, and SBA Franchise Directory listing.
Mr Electric franchise costs at a glance
Total investment
$113,000–$294,000
Franchise fee
$42,500
Royalty
6%
Ad / marketing fee
2%
Source: Mr Electric Franchise Disclosure Document (FDD) · as of 2026-07-29. Figures vary by market and site; verify against the current FDD before signing.
Key takeaways
Total estimated startup cost: $113K–$294K (residential and commercial electrical services)
Franchise fee: $42,500
Ongoing royalty: 6% of gross sales
Advertising fund: 2% of gross sales
SBA Franchise Directory listed — qualifies for SBA 7(a) financing
Part of Neighborly — the largest home services franchise platform
Mr. Electric franchisees run service dispatch operations — hiring licensed electricians, managing service vehicles, and dispatching to residential and commercial job sites within a defined territory. The Neighborly platform provides marketing infrastructure, call center support, and cross-referral opportunities from other Neighborly brands operating in the same territory (Aire Serv, Mr. Rooter, Rainbow Restoration, and others). The residential electrical services market benefits from recurring demand driven by aging housing stock, EV adoption requiring Level 2 charger installation, and increasing home automation and smart home upgrades.
2 Total startup investment (FDD via FTC 16 CFR Part 436)
Per Mr. Electric's current Franchise Disclosure Document (FDD), required under the FTC Franchise Rule (16 CFR Part 436), total estimated initial investment runs $113K–$294K. The low end of the range reflects a home-based or small-office startup with minimal service vehicles; the high end reflects a multi-vehicle operation with dedicated office space. Major cost categories include:
Franchise fee: $42,500
Service vehicle(s) purchase or lease and upfitting: $20K–$100K
Tools, equipment, and test instruments: $15K–$40K
Office setup or home-office infrastructure: $2K–$15K
Technology systems (dispatch software, CRM, scheduling): $5K–$12K
Uniforms, branded apparel, and vehicle graphics: $3K–$8K
Pre-opening training (travel and expenses): $5K–$10K
Insurance, bonds, permits, and licenses: $8K–$20K
Grand opening marketing: $5K–$15K
Working capital reserve: $10K–$40K
3 Ongoing fees
Mr. Electric charges a royalty of 6% of gross sales plus a 2% advertising fund contribution, for a total ongoing fee load of 8%. The 2% advertising fund supports Neighborly's national marketing infrastructure, which drives inbound service requests across all Neighborly brands in a market. The cross-referral model — where other Neighborly franchisees in the same territory refer clients to each other — provides incremental lead volume on top of the advertising fund spend. The 6% royalty is standard for a residential services franchise with dispatch infrastructure support.
4 Financing options
Mr. Electric is listed on the SBA Franchise Directory, qualifying franchisees for expedited SBA loan eligibility. The $113K–$294K investment range accommodates SBA 7(a) financing across the full range. Common financing paths include:
SBA 7(a) loan: Covers franchise fee, vehicle purchase, equipment, and working capital — the primary path for most Mr. Electric startups.
Equipment financing: Tools and service vehicle packages can be structured as standalone equipment loans, often with shorter terms and lower down payments than SBA.
Vehicle financing: Commercial vehicle loans for service truck acquisition separate from the franchise startup loan.
Working capital line of credit: Revolving facility to bridge payroll and materials costs before a consistent service call volume is established.
ROBS (Rollover for Business Startups): Qualified franchisees may fund equity requirements with retirement savings under IRS ROBS guidelines — consult a ROBS specialist.
5 ROI timeline
Mr. Electric franchisees benefit from recurring demand in the residential electrical services market — aging housing stock, EV charger installations, smart home upgrades, and code-compliance work create a consistent service call pipeline. The asset-light model (no storefront, home-based or small-office operation viable) keeps fixed costs low relative to retail franchise concepts at similar investment levels. Operators who prioritize hiring licensed electricians quickly and building commercial account relationships alongside residential service calls typically model 12–24 months to operating breakeven. The Neighborly cross-referral network accelerates lead volume in established Neighborly territories.
6 Who's a good fit
Mr. Electric is a strong fit for operators with a background in skilled trades, construction management, or home services operations. The franchisee does not need to be a licensed electrician — the model is built around recruiting and managing licensed electricians — but trades industry familiarity accelerates hiring and quality control. The $113K investment floor is one of the lowest in the skilled trades service franchise category, making this accessible to operators with $40K–$60K in liquid capital using SBA financing. The Neighborly platform is a meaningful advantage in markets where multiple Neighborly brands are already operating.
7 What lenders look for in a Mr. Electric franchise application
SBA lenders underwriting Mr. Electric applications under SBA SOP 50 10 8 evaluate five primary factors:
Non-discretionary electrical demand as DSCR support: Electrical repair, panel upgrades, and code-compliance work are non-discretionary — homeowners and commercial tenants cannot defer safety-critical electrical failures. Lenders view this demand stability favorably when evaluating DSCR projections. Supplement the DSCR pro forma with local housing stock age data (median US home is 40+ years old, per the American Housing Survey) and EV charger installation demand in the service territory.
Service vehicles as primary collateral: Mr. Electric's $113K–$294K investment is heavily weighted toward service vehicles, tools, and the franchise fee. Service vehicles are the strongest collateral asset — commercial vans have active secondary markets. Structure the financing to use vehicle financing separately from the SBA 7(a) loan to maximize vehicle collateral weight and minimize the unsecured working capital component of the SBA request.
Licensed electrician payroll documentation: Lenders evaluate labor availability in the proposed market. Document that licensed electricians are recruitable in the territory at projectable wage rates — a letter of intent from a licensed electrician hire, or local wage data from BLS Occupational Employment Statistics, strengthens the underwriting package.
Neighborly territory agreement as lender signal: The Neighborly franchise agreement includes a defined protected territory and platform cross-referral infrastructure. Lenders view the Neighborly territory agreement and SBA Franchise Directory listing as risk mitigants — they reduce the speculative nature of the revenue ramp assumption compared to an independent electrical startup.
Equity injection 10–15%: The $113K–$294K investment range requires 10–15% equity injection under SBA SOP 50 10 8 — approximately $11K–$44K from liquid borrower assets. The lower investment floor makes this one of the most accessible SBA equity injection requirements in the home services franchise category. ROBS (Rollover for Business Startups) is a qualifying equity source for franchisees with retirement savings.
ClearValue Lending works with home services and skilled trades franchise operators at the startup and multi-unit expansion stage. Start at small business financing or apply at Find my match. Your file routes to the funding partners best matched to your file. Compare other franchise financing guides.
Sources
Mr. Electric is listed on the SBA Franchise Directory, qualifying franchisees for expedited SBA loan eligibility. — SBA Franchise Directory
SBA 7(a) loans can finance franchise startup costs including franchise fees, vehicles, equipment, and working capital. — SBA 7(a) Loan Program
The 2026 Fed Small Business Credit Survey finds bank loans and SBA-guaranteed financing remain the primary credit sources home services small employer firms use to fund startup and build-out costs at this investment tier. — Federal Reserve — 2026 Report on Employer Firms
Frequently asked questions
How much does a Mr. Electric franchise cost in 2026?
Per the current FDD, total estimated initial investment runs $113K–$294K. The low end reflects a home-based or small-office startup with minimal service vehicles; the high end reflects a multi-vehicle operation with dedicated office space.
Do I need to be a licensed electrician to own a Mr. Electric franchise?
No. Mr. Electric franchisees are business operators who hire and manage licensed electricians. Trades industry familiarity is helpful for hiring and quality control, but the franchise model is built around business management, not performing the electrical work personally.
What is Neighborly and how does it benefit Mr. Electric franchisees?
Neighborly is the parent franchise platform that owns Mr. Electric along with other home services brands including Aire Serv, Mr. Rooter, Rainbow Restoration, and others. Franchisees benefit from a cross-referral network where other Neighborly brands operating in the same territory refer clients — a meaningful lead-volume advantage in established Neighborly markets.
What are Mr. Electric's ongoing fees?
Mr. Electric charges a 6% royalty on gross sales plus a 2% advertising fund contribution, for a total ongoing fee load of 8%. The 2% advertising fund supports Neighborly's national marketing infrastructure and cross-referral system.
What DSCR do SBA lenders require for a Mr. Electric franchise SBA loan?
SBA lenders require a minimum DSCR of 1.25× at stabilized service volume under SBA SOP 50 10 8. For a home services dispatch business like Mr. Electric, stabilized DSCR is typically modeled at the revenue run rate achievable after 12–18 months of service territory development. The non-discretionary nature of electrical repair and code-compliance demand supports a lower-risk revenue ramp assumption compared to discretionary service concepts. Supplement your DSCR pro forma with local housing stock age data and EV charger installation market demand in your service territory.
How much equity injection is needed for a Mr. Electric franchise SBA loan?
SBA 7(a) financing for the $113K–$294K Mr. Electric investment range requires 10–15% equity injection under SBA SOP 50 10 8 — approximately $11K–$44K in liquid borrower assets depending on total project cost. The full range fits within SBA Express (up to $500K) for faster approval. ROBS (Rollover for Business Startups) is a qualifying equity source for franchisees with retirement savings. Service vehicles financed separately reduce the main SBA loan amount and the associated equity injection requirement.
Summary:
Mr. Electric franchise startup costs run $113K–$294K — a Neighborly residential and commercial electrical services concept with low physical overhead, recurring maintenance and repair demand, and SBA Franchise Directory listing.
This article is for educational purposes and is not financial, legal, or tax advice. Rates,
fees, qualification requirements, and product availability are illustrative ranges that vary
by lender, market conditions, and individual business profile. ClearValue Lending is a
funding platform; all financing is subject to lender partner approval and terms. Always read
your contract end-to-end and verify specific numbers before signing.
