America Leak Detection is a big company that finds leaks without destroying things. If you’re looking for a good business chance, American Leak Detection Franchise could be a great choice for you.
It is one of the 10 Best Home Inspection Franchise Of 2023 that you must own.
In this article, we will talk about things like money, fees, and other costs of this business. Let’s get started.
About American Leak Detection
American Leak Detection started in 1974. The goal was to create a lasting fix for rusty pipes. They began offering franchises in 1985, and now there are more than 175 places. They help both businesses and homes.
ALD is a good choice for business people who want to invest. It is not too expensive, and it helps with training, advertising, and other support. They also help with money from other sources and give discounts on the fee to start the franchise. You can run ALD from home, but you can’t do it part-time or with other start-ups.
American Leak Detection Franchise Model
| Item | Details |
|---|---|
| Initial Investment | $76,755-$259,550 |
| Franchise-Fee | $15,675-$20,900 |
| Liquidity | $70,000 |
| Royalty-Fee | 6-10% |
| Area Requirement | N/A |
| Venture Discount | $5000 Off on Franchise Fee |
| Third-Party Finance | Available |
| Total Units | 175 |
Training & Support
American Leak Detection has a special training program for new franchise owners. They charge $3000-$4000 for this training. Everyone knew must take part, and others, like spouses or employees, can join for free. There are many parts to the training, and it happens in different places. You must finish the training to make the company happy. There is also more training every three years.
- Training Fee: $3000-$4000
- Additional Training: Annual Convention
- Period Of Initial Training: 320 Hours
Term & Renewal Of Agreement
The first franchise agreement lasts for ten years. You can renew for another ten years if you follow the rules. If you don’t follow the rules, you can’t renew.
American Leak Detection Franchise Profit & Revenue
American Leak Detection is good at finding leaks. They work everywhere. There is a big need for this service, and not many companies offer it. The money you can make depends on where you are.
Sadly, we don’t know the exact money you can make with American Leak Detection. But the company made $8.8 million in 2022, so it might be a good business.
Payback Period Of American Leak Detection
With an investment of $259,550 and an estimated 15% profit on the average net revenue, the yearly profit would be $1,320,000.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Investment / Yearly Profit = $259,550 / $1,320,000= 0.196 years
Based on these figures, it will take approximately 2 years to pay back the initial investment for American Leak Detection. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
American Leak Detection Failure Rate
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 125 | 125 | 0 |
| 2021 | 125 | 119 | -6 |
| 2022 | 119 | 105 | +14 |
For the Franchised outlets:
- In 2020, the failure rate was (0)/125×100≈0.00%
- In 2021, the failure rate was (6)/125×100≈4.80%
- In 2022, the growth rate was (14)/119×100≈11.76%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 24 | 24 | 0 |
| 2021 | 24 | 30 | +6 |
| 2022 | 30 | 41 | +11 |
For the Company-Owned outlets:
- In 2020, the failure rate was (0)/24×100≈0.00%
- In 2021, the growth rate was (6)/24×100≈25%
- In 2022, the growth rate was (11)/30×100≈36.6%
Total Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 149 | 146 | 0 |
| 2021 | 149 | 149 | 0 |
| 2022 | 149 | 146 | -3 |
- In 2020, the failure rate was (0)/149×100≈0.00%
- In 2021, the failure rate was (0)/149×100≈0.00%
- In 2022, the failure rate was (3)/149×100≈2.01%
According to the above-mentioned data, we can see that the franchised outlets for American Leak Detection declined from 2020-2021, showing a failure rate between 0.00% and 4.80%. The company later experienced increase in the number of outlets in 2022, showing a growth rate of 11.76%.
On the other hand, for company-owned outlets, the growth rate of American Leak Detection was lying in the range between 25% and 36.6% for the same period of time.
Overall, when we combine the data of franchise and company-owned outlets, we can see that the American Leak Detection franchise has declined in the years 2020-202, showing a total failure rate between 0.00% and 2.01%.
For those looking to open a franchise in the home inspection industry, possibilities include National Property Inspection, BrickKicker Franchise, The Inspection Boys, Pillar To Post, and Inspect-It 1st.
American Leak Detection Comparison
| Company | American Leak Detection | HouseMaster |
| Founded In | 1974 | 1987 |
| Initial Investment | $76,755-$259,550 | $61,100 – $107,650 |
| Franchise-Fee | $15,675-$20,900 | $42,500 |
| Total Outlets | 175 | 272 |
| Annual Revenue | $8.8 Million | $30 Million |
Frequently Asked Questions
How many American Leak Detection franchises are there?
There are more than 175 American Leak Detection franchise locations in North America.
Do American Leak Detection support third-party finance?
Yes, American Leak Detection supports third-party finance.
Is American Leak Detection a franchise?
Yes, American Leak Detection is a franchise that offers opportunities to entrepreneurs to start their own businesses.
How much does an American Leak Detection franchise cost?
Starting an American Leak Detection franchise requires an initial investment of $76,755-$259,550, with a franchise fee of $15,675-$20,900.
Where is the headquarters of American Leak Detection?
American Leak Detection is headquartered in Palm Springs, California.
Who owns American Leak Detection?
The parent organization of American Leak Detection is Water Intelligence. This means that Water Intelligence owns American Lead Detection.
Who founded American Leak Detection?
American Leak Detection was founded by Richard B. Rennick in 1974. He understood the need for reliable and efficient leak detection services.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.