Franchises and Business Ideas · franchise

Should I open or buy a Mr. Electric franchise in 2027?

👁 0 views📖 2,815 words⏱ 13 min read📅 Published Jun 6, 2026

Direct Answer

Yes — open or buy a Mr. Electric franchise in 2027 if you bring $160K-$360K total capital, $65K liquid, a licensed master electrician on payroll (or you are one), and a 2027 service-area with $120K+ median household income and 20%+ housing stock built before 1985.

Expect $488K median revenue and $796K average revenue per the 2026 FDD Item 19, breakeven by month 14-22, and conservative Year-1 owner cash flow of $35K-$70K after the 6% royalty + 2% marketing fee. Probably not if you cannot recruit licensed electricians at $35-$48/hour in your market, if you expect absentee ownership in Year 1, or if your territory has fewer than 35,000 owner-occupied homes.

The Real Numbers

Mr. Electric's 2026 Franchise Disclosure Document (filed April 2026, current through the 2027 selling season) shows the following economics. Numbers below combine Item 5 (initial fees), Item 6 (ongoing royalties), Item 7 (initial investment), and Item 19 (financial performance representations) with Neighborly's corporate-level disclosures and independent benchmarks from IBISWorld and Franchise Business Review.

Line Item	Low	High	Notes
Initial Franchise Fee	$42,500	$42,500	Item 5; covers 100,000 population. +$425 per 1,000 population over 100K.
Vehicle (wrap, racks, lease deposit)	$8,500	$42,000	One service van minimum; most owners run 2-3 by month 18.
Equipment, tools, inventory	$14,200	$48,500	Meters, conduit benders, generators, branded uniforms, iPad/CRM hardware.
Office build-out / lease	$4,000	$35,000	Home-office permitted in 38 states; most owners take a 1,200-1,800 sq ft warehouse by Year 2.
Training & travel	$6,500	$11,000	Mandatory 2-week Waco, TX training at Neighborly HQ.
Insurance, licensing, permits	$7,800	$18,500	General liability $1M, commercial auto, workers comp, state electrical contractor bond.
Working capital (90 days)	$35,000	$115,000	Payroll for 2 electricians + 1 CSR before AR catches up.
Technology & marketing launch	$5,000	$22,425	ServiceTitan or RazorSync seat, Google LSA deposit, truck wraps.
TOTAL INITIAL INVESTMENT (Item 7)	$159,500	$357,425	Per 2026 FDD Item 7. Most owners land at $215K-$260K.
Royalty (Item 6)	6.0%	6.0%	Of gross sales, excluding "roll-in" specialty services.
Marketing fee (Item 6)	2.0%	2.0%	National brand fund.
Tech fee	$300/mo	$650/mo	Required Neighborly tech stack.
Average gross revenue (Item 19)	$796,000	—	2026 FDD; 168 reporting franchisees.
Median gross revenue (Item 19)	$488,000	—	More predictive than the mean for new owners.
Top-quartile revenue (Item 19)	$1,420,000	—	42 franchisees above this line.
EBITDA margin (mature, Year 3+)	8%	17%	Industry benchmark; FBR survey.
Year-1 owner draw (conservative)	$35,000	$70,000	Owner-operator who pulls permits.
Payback period	14 months	36 months	Median 22 months per FBR 2026 franchisee survey.
3-year failure rate	19%	—	Per Vetted Biz analysis of FDD Item 20.

The $308K spread between median ($488K) and average ($796K) revenue tells the real story: this is a bimodal business. Owner-operators who personally pull permits and ride trucks the first 18 months cluster around the median. The owners who break $1M+ have 3+ service vans, a dispatched CSR, and a dedicated commercial-account hunter by month 24.

flowchart TD A[Initial Capital $215K-$260K typical] --> B[Month 0-3 Launch] B --> C[1 van, owner + 1 electrician, $18K-$32K monthly revenue] C --> D{Month 6 checkpoint} D -->|Hit $40K monthly| E[Add 2nd van + apprentice] D -->|Below $25K monthly| F[Marketing pivot: LSA + commercial cold-calls] E --> G[Month 12: $60K-$90K monthly revenue] F --> G G --> H{Month 18 checkpoint} H -->|3+ vans, $85K+ monthly| I[Recover initial investment by month 22] H -->|Still 1-2 vans| J[Breakeven by month 30, EBITDA 6-9%] I --> K[Year 3: $750K-$1.2M revenue, 12-17% EBITDA] J --> K

Who Wins With This Business

The winners are licensed master electricians who already ran a small unbranded shop and bought into Mr. Electric for the Neighborly call-center, LSA budget, and ServiceTitan-equivalent CRM. They convert their existing $200K-$400K residential book to the franchise on day one and use the brand to push commission-based commercial maintenance contracts with property managers, REITs, and municipal accounts.

The second winner profile is the executive operator: a former GC, ops director, or facilities VP with $300K+ in liquid net worth who hires a licensed qualifying agent (the "QA" — the master electrician of record for the contractor license) at $95K-$130K base + 5% revenue share.

This owner runs the P&L, marketing, and recruiting while the QA owns the truck rolls. The profile works in metros like Phoenix, Charlotte, Tampa, Nashville, Dallas-Fort Worth, Raleigh-Durham, and Boise where housing stock is aging into rewire territory and EV-charger demand is compounding.

The third winner is the multi-unit Neighborly franchisee who already owns a Mr. Rooter, Aire Serv, or Mr. Handyman territory and bolts Mr. Electric onto the same back office. Shared CSR, shared dispatcher, shared truck bay, shared bookkeeper — incremental EBITDA on the second brand typically hits 22-28% because the overhead is sunk.

The economic moat is the licensed-contractor barrier. Unlike a Subway or a Great Clips, you cannot open a Mr. Electric in 90 days. The state licensing path — journeyman to master electrician — takes 6,000-10,000 supervised hours depending on the state.

38 states require the franchise owner or a named employee to hold a master electrician license to pull permits. That gate keeps competitors out and keeps 2027 effective hourly billing rates between $145-$215.

Who Loses With This Business

Absentee investors lose. This is not a passive ownership. The 19% three-year failure rate in Item 20 of the 2026 FDD concentrates among owners who hired a general manager on day one and never learned to read a daily dispatch report. Mr.

Electric's call-center hand-off model means the franchisee owns the close rate. When the close rate sags below 38% on Neighborly-routed leads, the unit economics collapse within 9 months.

Owners in markets with weak electrician labor pools lose. If your metro pays $28-$32/hour for a journeyman and the next metro over pays $42, your electricians will leave for the higher wage within 12 months. Markets where the non-residential construction backlog (per the ABC Construction Backlog Indicator) sits above 9.5 months are especially brutal — commercial GCs poach your techs with overtime guarantees you cannot match on residential service tickets.

Buyers of distressed resale units lose unless they negotiate hard. Mr. Electric resales come to market for three reasons: owner retirement (healthy), owner burnout (yellow flag), or technician walk-out (red flag).

A unit that lost 2+ licensed electricians in the prior 12 months is worth 0.4x trailing twelve-month revenue, not the 0.8x-1.1x sellers ask for. Always pull the workers-comp mod factor and the trailing 24-month tech-turnover log before signing.

Anyone expecting Neighborly to drive your sales loses. The corporate Local Services Ads budget gets spread across 211 U.S. Mr. Electric units.

Per-unit national-spend allocation runs $1,800-$3,200 per month depending on territory. That is not enough to feed three vans. Owners who hit the average $796K revenue spend another $4,500-$8,500 per month on local Google LSAs, Nextdoor, direct mail to homes 25+ years old, and commercial-account development.

2027 Market Conditions

Five forces shape the 2027 buy decision:

1. EV charger demand is the single biggest tailwind. The Inflation Reduction Act 30C tax credit (extended through 2032) plus state-level rebates in California (CALeVIP), New York (NYSERDA), Colorado, and Massachusetts are driving Level 2 home-charger installs from 1.4M in 2024 to a projected 3.1M in 2027 per the Edison Electric Institute.

Average ticket: $1,650-$3,400 installed. Mr. Electric corporate launched an EV-Certified program in Q3 2026.

2. Aging housing stock is the second tailwind. 41% of U.S. Owner-occupied homes were built before 1980 (Census ACS 2024).

These homes need panel upgrades from 100-amp to 200-amp service ($2,200-$4,800 ticket), aluminum-wiring remediation ($3,500-$12,000 ticket), and knob-and-tube replacement ($8,000-$28,000 ticket). Insurance carriers like State Farm, Allstate, and USAA now refuse to renew policies on homes with un-remediated aluminum branch wiring as of 2026 renewals, forcing homeowner action.

3. Residential construction is a headwind. Per IBISWorld's June 2026 Electricians report (NAICS 23821), U.S. Electricians industry revenue is $347.5B in 2026 with residential new-construction down for the fourth consecutive year on elevated mortgage rates.

Mr. Electric is a service-and-repair brand, not new-construction, so this hurts less — but it does compress your commercial-developer pipeline.

4. Licensed-electrician shortage is structural. BLS Occupational Outlook 2024-2034 projects 84,300 average annual openings against a graduating apprentice pool roughly 30% short. Owners winning in 2027 are running in-house apprentice programs registered with the **U.S.

Department of Labor's Office of Apprenticeship — the franchisee gets a WOTC tax credit up to $9,600 per veteran apprentice** plus state-level reimbursements.

5. Private equity overhang on Neighborly is a wild card. KKR acquired Neighborly from Harvest Partners in 2021 at a reported $1.4B enterprise value. A 2027-2028 sale or IPO is the consensus expectation among franchise-industry analysts.

Existing franchisees report rising tech fees and tighter brand standards under PE ownership — the Franchise Business Review 2026 survey still places Mr. Electric in the Top 200, but franchisee net promoter dropped from 71 in 2022 to 58 in 2026.

The 90-Day Decision Tree

Days 1-10 — Verify licensing path. Pull your state's electrical contractor licensing requirements (NASCLA reciprocity covers 16 states). Confirm whether you can be the qualifying agent or whether you must hire one. If hiring, post the role at $95K-$130K base on Indeed and ZipRecruiter. No qualified applicants in 14 days = abort.

Days 11-25 — Territory diligence. Request the available-territories list from Neighborly franchise development. Pull Esri Business Analyst or Claritas PRIZM data for the target ZIPs. Minimum thresholds: 35,000 owner-occupied homes, 20%+ pre-1985 housing, $95K+ median household income, and fewer than 3 incumbent franchised electrical brands (Mister Sparky, Hour Glass Electric, Mr. Electric resale, Sears Home Services).

Days 26-40 — Validate with 8+ existing franchisees. Neighborly will send you the Item 20 contact list. Call at least 8 owners outside your target metro and ask: (a) actual Year-1 revenue, (b) ramp to breakeven, (c) what Neighborly does well, (d) what Neighborly does poorly, (e) would you buy again at today's fees.

Days 41-55 — Build the pro-forma. Use the median $488K Year-1 revenue (not the average). Plug in your local journeyman wage (BLS QCEW data by MSA). Model royalty + marketing fee + tech fee + LSA spend. If projected Year-1 owner draw is below $35K, the territory or the fee structure does not work for you.

Days 56-70 — Lender + legal. SBA 7(a) preferred lenders for Neighborly include Live Oak Bank, Huntington, and Byline Bank. Mr. Electric is on the SBA Franchise Directory (SBA Form 2462 on file). Engage a franchise attorney (IFA-affiliated; budget $4,500-$8,500) to review the FDD red-line by Day 70.

Days 71-82 — Discovery Day in Waco, TX. Mandatory site visit at Neighborly HQ. Bring the 8-franchisee call notes and ask the development team to reconcile any discrepancies between the FDD Item 19 medians and what owners told you.

Days 83-90 — Decision gate. Sign or walk. The franchise agreement is a 10-year term with one 10-year renewal. The territory exclusivity clause has been weakened in the 2026 FDD — read Section 3.2 carefully: Neighborly retains the right to fulfill calls from your protected ZIP codes through other Neighborly brands. Negotiate a written carve-out if your model depends on adjacent-brand referrals.

flowchart LR A[Day 1: Licensing check] --> B[Day 25: Territory data] B --> C[Day 40: 8 owner calls] C --> D[Day 55: Pro-forma at median revenue] D --> E[Day 70: SBA prequal + attorney red-line] E --> F[Day 82: Waco discovery day] F --> G{Day 90 decision} G -->|Numbers + culture fit| H[Sign FA, fund SBA, 60-day buildout] G -->|Either gate fails| I[Walk: keep $42.5K fee + $215K capital]

Alternative Plays

If you want the electrical-services exposure without Mr. Electric's specific fee load, consider these alternatives. Each has trade-offs.

Mister Sparky (Authority Brands) — Direct competitor. Investment $140K-$320K, royalty 6%, marketing 2%. Stronger residential-only positioning; weaker commercial book. Authority Brands also owns Benjamin Franklin Plumbing and One Hour Heating & Air, so bundled HVAC + plumbing + electrical multi-unit ownership is the obvious play.
Hour Glass Electric (HomeServe Pro) — Smaller system, ~40 units, royalty 5%. Higher founder support but weaker national LSA fund.
Independent unbranded shop — Avoid $42.5K franchise fee + 8% combined royalty/marketing by going solo. Trade-off: no national call center, no ServiceTitan-equivalent CRM negotiated rates, no Neighborly cross-referrals. Independent residential electrical contractors in IBISWorld NAICS 23821 report 9-14% EBITDA vs. 8-17% franchise EBITDA — net wash on a single-unit basis, franchise wins at 2+ units.
Buy an existing Mr. Electric resale — Often cheaper than greenfield if the seller is a healthy retirement. Look for units with 3+ year trailing revenue above $850K, tech turnover below 18%, and WC mod factor below 1.05. Asking multiples in 2026-2027 are 0.6x-0.9x TTM revenue plus tangible assets.
HVAC adjacency (One Hour Heating, Aire Serv) — Larger ticket sizes ($8K-$22K installs), bigger working-capital requirement ($250K+), but cleaner labor pool (HVAC techs less mobile than master electricians).

FAQ

How much does a Mr. Electric franchise actually cost in 2027?

The 2026 FDD Item 7 lists $159,500 to $357,425 total initial investment. Most owners in the 2026 Franchise Business Review survey reported actual all-in spend of $215,000 to $265,000, including the $42,500 franchise fee, one wrapped van, a 90-day working capital cushion, and pre-opening marketing.

Add $45K-$85K per additional van as you scale. SBA 7(a) financing covers up to 75% of the project cost for qualified borrowers.

What is the realistic Year-1 income for a Mr. Electric owner-operator?

Plan for $35,000 to $70,000 in owner draw in Year 1 assuming you hit the $488K median revenue. The math: $488K revenue, minus $260K labor and materials (53%), minus $39K combined royalty and marketing fees (8%), minus $85K overhead (LSA, insurance, vehicles, software), leaves roughly $104K available — most of which flows to working-capital replenishment, not the owner's pocket, in Year 1.

Do I need to be a licensed electrician to own a Mr. Electric franchise?

Not personally, but someone on your team does. 38 states require a master electrician of record on the contractor license. You can be the qualifying agent yourself (cheapest, fastest), hire a master electrician as your QA at $95K-$130K base plus revenue share, or buy an existing unit and inherit the qualifying agent.

Texas, Florida, California, New York, and Illinois have the strictest QA requirements — verify with the state board before signing the franchise agreement.

What is the failure rate for Mr. Electric franchises?

The most recent calculated three-year failure rate is approximately 19% based on FDD Item 20 transfer, termination, and non-renewal data. This is slightly above the home-services franchise median of 14% per Vetted Biz analytics. Failures cluster in markets with weak licensed-electrician labor pools and among absentee owners who never personally rode trucks.

Owner-operators who personally pull permits show a sub-8% three-year failure rate.

How does Mr. Electric compare to Mister Sparky in 2027?

**Mr. Electric has more units (211 U.S. Vs.

Roughly 150 for Mister Sparky), deeper Neighborly cross-referral network across 19 sister brands, and slightly lower minimum investment. Mister Sparky has stronger residential-only branding and Authority Brands' tighter HVAC-plumbing-electrical bundle. Royalty and marketing fees are nearly identical at 6% + 2%**.

Pick Mr. Electric if you want multi-brand Neighborly ownership; pick Mister Sparky if you want pure residential focus in a metro where Mr. Electric is already saturated.

Bottom Line

Mr. Electric in 2027 is a legitimate franchise for the right operator — a licensed master electrician or an executive operator with a hired QA, $215K-$260K in capital, and a target metro with aging housing stock and EV-charger demand. Expect breakeven by month 18-22, median revenue of $488K, and 8-17% EBITDA at maturity.

The 19% three-year failure rate is real and concentrates among absentee owners and labor-starved metros. The PE-ownership overhang at Neighborly is the biggest non-quantified risk — model your pro-forma with tech fees rising 10% annually to be safe. Walk away if you cannot answer "who is my qualifying agent" with a name and a signed offer letter by Day 25 of diligence.

Sources

Mr. Electric 2026 Franchise Disclosure Document, Items 5, 6, 7, 19, 20
Neighborly Company, "Mr. Electric Franchise Investment Page," 2026
Franchise Business Review, "Mr. Electric Owner Satisfaction Report 2026"
Vetted Biz, "Mr. Electric Franchise Insights: FDD, Costs & Fees," 2026
Franchise Chatter, "Mr. Electric Franchise Review 2025: Costs, Fees, News, Average Revenues," August 2025
IBISWorld Industry Report 23821, "Electricians in the US," June 2026
U.S. Bureau of Labor Statistics, "Electricians" Occupational Outlook Handbook, 2024-2034
Edison Electric Institute, "EV Quarterly Sales and Charging Infrastructure Report," Q4 2026
U.S. Census Bureau, American Community Survey 5-Year Estimates, 2024
Associated Builders and Contractors, "Construction Backlog Indicator," 2026
U.S. Small Business Administration Franchise Directory (SBA Form 2462), 2026
International Franchise Association, "Franchise Economic Outlook Report," 2027

Keep reading

## Direct Answer

**Yes — open or buy a Mr. Electric franchise in 2027 if** you bring **$160K-$360K total capital**, **$65K liquid**, a **licensed master electrician on payroll** (or you are one), and a **2027 service-area** with **$120K+ median household income** and **20%+ housing stock built before 1985**. Expect **$488K median revenue** and **$796K average revenue** per the 2026 FDD Item 19, **breakeven by month 14-22**, and **conservative Year-1 owner cash flow of $35K-$70K** after the **6% royalty + 2% marketing fee**. **Probably not** if you cannot recruit licensed electricians at $35-$48/hour in your market, if you expect absentee ownership in Year 1, or if your territory has fewer than **35,000 owner-occupied homes**.

## The Real Numbers

Mr. Electric's **2026 Franchise Disclosure Document** (filed April 2026, current through the 2027 selling season) shows the following economics. Numbers below combine **Item 5** (initial fees), **Item 6** (ongoing royalties), **Item 7** (initial investment), and **Item 19** (financial performance representations) with **Neighborly's** corporate-level disclosures and independent benchmarks from **IBISWorld** and **Franchise Business Review**.

| Line Item | Low | High | Notes |
|---|---|---|---|
| **Initial Franchise Fee** | $42,500 | $42,500 | Item 5; covers 100,000 population. **+$425 per 1,000** population over 100K. |
| **Vehicle (wrap, racks, lease deposit)** | $8,500 | $42,000 | One service van minimum; most owners run 2-3 by month 18. |
| **Equipment, tools, inventory** | $14,200 | $48,500 | Meters, conduit benders, generators, branded uniforms, iPad/CRM hardware. |
| **Office build-out / lease** | $4,000 | $35,000 | Home-office permitted in 38 states; most owners take a 1,200-1,800 sq ft warehouse by Year 2. |
| **Training & travel** | $6,500 | $11,000 | Mandatory 2-week Waco, TX training at Neighborly HQ. |
| **Insurance, licensing, permits** | $7,800 | $18,500 | General liability $1M, commercial auto, workers comp, state electrical contractor bond. |
| **Working capital (90 days)** | $35,000 | $115,000 | Payroll for 2 electricians + 1 CSR before AR catches up. |
| **Technology & marketing launch** | $5,000 | $22,425 | ServiceTitan or RazorSync seat, Google LSA deposit, truck wraps. |
| **TOTAL INITIAL INVESTMENT (Item 7)** | **$159,500** | **$357,425** | Per 2026 FDD Item 7. Most owners land at **$215K-$260K**. |
| **Royalty (Item 6)** | 6.0% | 6.0% | Of gross sales, excluding "roll-in" specialty services. |
| **Marketing fee (Item 6)** | 2.0% | 2.0% | National brand fund. |
| **Tech fee** | $300/mo | $650/mo | Required Neighborly tech stack. |
| **Average gross revenue (Item 19)** | $796,000 | — | 2026 FDD; 168 reporting franchisees. |
| **Median gross revenue (Item 19)** | $488,000 | — | More predictive than the mean for new owners. |
| **Top-quartile revenue (Item 19)** | $1,420,000 | — | 42 franchisees above this line. |
| **EBITDA margin (mature, Year 3+)** | 8% | 17% | Industry benchmark; FBR survey. |
| **Year-1 owner draw (conservative)** | $35,000 | $70,000 | Owner-operator who pulls permits. |
| **Payback period** | 14 months | 36 months | Median **22 months** per FBR 2026 franchisee survey. |
| **3-year failure rate** | 19% | — | Per Vetted Biz analysis of FDD Item 20. |

The **$308K spread** between median ($488K) and average ($796K) revenue tells the real story: this is a **bimodal business**. Owner-operators who personally pull permits and ride trucks the first 18 months cluster around the median. The owners who break $1M+ have **3+ service vans**, a **dispatched CSR**, and a **dedicated commercial-account hunter** by month 24.

```mermaid
flowchart TD
    A[Initial Capital $215K-$260K typical] --> B[Month 0-3 Launch]
    B --> C[1 van, owner + 1 electrician, $18K-$32K monthly revenue]
    C --> D{Month 6 checkpoint}
    D -->|Hit $40K monthly| E[Add 2nd van + apprentice]
    D -->|Below $25K monthly| F[Marketing pivot: LSA + commercial cold-calls]
    E --> G[Month 12: $60K-$90K monthly revenue]
    F --> G
    G --> H{Month 18 checkpoint}
    H -->|3+ vans, $85K+ monthly| I[Recover initial investment by month 22]
    H -->|Still 1-2 vans| J[Breakeven by month 30, EBITDA 6-9%]
    I --> K[Year 3: $750K-$1.2M revenue, 12-17% EBITDA]
    J --> K
```

## Who Wins With This Business

The **winners are licensed master electricians** who already ran a small unbranded shop and **bought into Mr. Electric for the Neighborly call-center, LSA budget, and ServiceTitan-equivalent CRM**. They convert their existing $200K-$400K residential book to the franchise on day one and use the brand to push commission-based commercial maintenance contracts with property managers, REITs, and municipal accounts.

The **second winner profile is the executive operator**: a former GC, ops director, or facilities VP with **$300K+ in liquid net worth** who hires a **licensed qualifying agent** (the "QA" — the master electrician of record for the contractor license) at **$95K-$130K base + 5% revenue share**. This owner runs the **P&L, marketing, and recruiting** while the QA owns the truck rolls. The profile works in metros like **Phoenix, Charlotte, Tampa, Nashville, Dallas-Fort Worth, Raleigh-Durham, and Boise** where housing stock is aging into rewire territory and EV-charger demand is compounding.

The **third winner is the multi-unit Neighborly franchisee** who already owns a **Mr. Rooter, Aire Serv, or Mr. Handyman territory** and bolts Mr. Electric onto the same back office. Shared CSR, shared dispatcher, shared truck bay, shared bookkeeper — incremental EBITDA on the second brand typically hits **22-28%** because the overhead is sunk.

**The economic moat is the licensed-contractor barrier.** Unlike a Subway or a Great Clips, you cannot open a Mr. Electric in 90 days. The state licensing path — **journeyman to master electrician** — takes **6,000-10,000 supervised hours** depending on the state. **38 states** require the franchise owner or a named employee to hold a **master electrician license** to pull permits. That gate keeps competitors out and keeps **2027 effective hourly billing rates between $145-$215**.

## Who Loses With This Business

**Absentee investors lose.** This is not a passive ownership. The 19% three-year failure rate in Item 20 of the 2026 FDD concentrates among owners who hired a general manager on day one and never learned to read a daily dispatch report. Mr. Electric's call-center hand-off model means **the franchisee owns the close rate**. When the close rate sags below 38% on Neighborly-routed leads, the unit economics collapse within 9 months.

**Owners in markets with weak electrician labor pools lose.** If your metro pays **$28-$32/hour** for a journeyman and the next metro over pays $42, your electricians will leave for the higher wage within 12 months. Markets where the **non-residential construction backlog** (per the **ABC Construction Backlog Indicator**) sits above 9.5 months are especially brutal — commercial GCs poach your techs with overtime guarantees you cannot match on residential service tickets.

**Buyers of distressed resale units lose** unless they negotiate hard. Mr. Electric resales come to market for three reasons: owner retirement (healthy), owner burnout (yellow flag), or **technician walk-out** (red flag). A unit that lost 2+ licensed electricians in the prior 12 months is worth **0.4x trailing twelve-month revenue**, not the 0.8x-1.1x sellers ask for. **Always pull the workers-comp mod factor and the trailing 24-month tech-turnover log before signing.**

**Anyone expecting Neighborly to drive your sales loses.** The corporate Local Services Ads budget gets spread across **211 U.S. Mr. Electric units**. Per-unit national-spend allocation runs **$1,800-$3,200 per month** depending on territory. That is **not enough to feed three vans**. Owners who hit the average $796K revenue spend **another $4,500-$8,500 per month** on local Google LSAs, Nextdoor, direct mail to homes 25+ years old, and commercial-account development.

## 2027 Market Conditions

Five forces shape the 2027 buy decision:

**1. EV charger demand is the single biggest tailwind.** The **Inflation Reduction Act 30C tax credit** (extended through 2032) plus state-level rebates in **California (CALeVIP), New York (NYSERDA), Colorado, and Massachusetts** are driving **Level 2 home-charger installs from 1.4M in 2024 to a projected 3.1M in 2027** per the **Edison Electric Institute**. Average ticket: **$1,650-$3,400** installed. Mr. Electric corporate launched an **EV-Certified program** in Q3 2026.

**2. Aging housing stock is the second tailwind.** **41% of U.S. Owner-occupied homes** were built before 1980 (Census ACS 2024). These homes need **panel upgrades from 100-amp to 200-amp service** ($2,200-$4,800 ticket), **aluminum-wiring remediation** ($3,500-$12,000 ticket), and **knob-and-tube replacement** ($8,000-$28,000 ticket). Insurance carriers like **State Farm, Allstate, and USAA** now refuse to renew policies on homes with un-remediated aluminum branch wiring as of 2026 renewals, forcing homeowner action.

**3. Residential construction is a headwind.** Per **IBISWorld's June 2026 Electricians report (NAICS 23821)**, U.S. Electricians industry revenue is $347.5B in 2026 with residential new-construction down for the fourth consecutive year on elevated mortgage rates. Mr. Electric is a **service-and-repair brand, not new-construction**, so this hurts less — but it does compress your commercial-developer pipeline.

**4. Licensed-electrician shortage is structural.** **BLS Occupational Outlook 2024-2034** projects **84,300 average annual openings** against a graduating apprentice pool roughly **30% short**. Owners winning in 2027 are running **in-house apprentice programs** registered with the **U.S. Department of Labor's Office of Apprenticeship** — the franchisee gets a **WOTC tax credit up to $9,600 per veteran apprentice** plus state-level reimbursements.

**5. Private equity overhang on Neighborly is a wild card.** **KKR acquired Neighborly from Harvest Partners in 2021** at a reported **$1.4B enterprise value**. A 2027-2028 sale or IPO is the consensus expectation among franchise-industry analysts. Existing franchisees report rising tech fees and tighter brand standards under PE ownership — the **Franchise Business Review 2026 survey** still places Mr. Electric in the Top 200, but franchisee net promoter dropped from 71 in 2022 to 58 in 2026.

## The 90-Day Decision Tree

1. **Days 1-10 — Verify licensing path.** Pull your state's **electrical contractor licensing requirements** (NASCLA reciprocity covers 16 states). Confirm whether **you** can be the qualifying agent or whether you must hire one. If hiring, post the role at **$95K-$130K base** on Indeed and ZipRecruiter. **No qualified applicants in 14 days = abort.**

2. **Days 11-25 — Territory diligence.** Request the **available-territories list** from Neighborly franchise development. Pull **Esri Business Analyst** or **Claritas PRIZM** data for the target ZIPs. Minimum thresholds: **35,000 owner-occupied homes**, **20%+ pre-1985 housing**, **$95K+ median household income**, and **fewer than 3 incumbent franchised electrical brands** (Mister Sparky, Hour Glass Electric, Mr. Electric resale, Sears Home Services). 

3. **Days 26-40 — Validate with 8+ existing franchisees.** Neighborly will send you the Item 20 contact list. Call **at least 8 owners outside your target metro** and ask: (a) actual Year-1 revenue, (b) ramp to breakeven, (c) what Neighborly does well, (d) what Neighborly does poorly, (e) would you buy again at today's fees.

4. **Days 41-55 — Build the pro-forma.** Use the **median $488K Year-1 revenue** (not the average). Plug in your local **journeyman wage** (BLS QCEW data by MSA). Model royalty + marketing fee + tech fee + LSA spend. **If projected Year-1 owner draw is below $35K, the territory or the fee structure does not work for you.**

5. **Days 56-70 — Lender + legal.** **SBA 7(a) preferred lenders for Neighborly** include **Live Oak Bank, Huntington, and Byline Bank**. Mr. Electric is on the **SBA Franchise Directory** (SBA Form 2462 on file). Engage a **franchise attorney** (IFA-affiliated; budget $4,500-$8,500) to review the FDD red-line by Day 70.

6. **Days 71-82 — Discovery Day in Waco, TX.** Mandatory site visit at Neighborly HQ. Bring the **8-franchisee call notes** and ask the development team to reconcile any discrepancies between the FDD Item 19 medians and what owners told you.

7. **Days 83-90 — Decision gate.** Sign or walk. **The franchise agreement is a 10-year term with one 10-year renewal**. The territory exclusivity clause has been weakened in the 2026 FDD — read **Section 3.2 carefully**: Neighborly retains the right to fulfill calls from your protected ZIP codes through other Neighborly brands. Negotiate a written carve-out if your model depends on adjacent-brand referrals.

```mermaid
flowchart LR
    A[Day 1: Licensing check] --> B[Day 25: Territory data]
    B --> C[Day 40: 8 owner calls]
    C --> D[Day 55: Pro-forma at median revenue]
    D --> E[Day 70: SBA prequal + attorney red-line]
    E --> F[Day 82: Waco discovery day]
    F --> G{Day 90 decision}
    G -->|Numbers + culture fit| H[Sign FA, fund SBA, 60-day buildout]
    G -->|Either gate fails| I[Walk: keep $42.5K fee + $215K capital]
```

## Alternative Plays

**If you want the electrical-services exposure without Mr. Electric's specific fee load**, consider these alternatives. Each has trade-offs.

- **Mister Sparky (Authority Brands)** — Direct competitor. Investment **$140K-$320K**, royalty **6%**, marketing **2%**. Stronger residential-only positioning; weaker commercial book. Authority Brands also owns Benjamin Franklin Plumbing and One Hour Heating & Air, so bundled HVAC + plumbing + electrical multi-unit ownership is the obvious play.
- **Hour Glass Electric (HomeServe Pro)** — Smaller system, **~40 units**, royalty **5%**. Higher founder support but weaker national LSA fund.
- **Independent unbranded shop** — Avoid **$42.5K franchise fee + 8% combined royalty/marketing** by going solo. Trade-off: no national call center, no ServiceTitan-equivalent CRM negotiated rates, no Neighborly cross-referrals. Independent residential electrical contractors in **IBISWorld NAICS 23821** report **9-14% EBITDA** vs. **8-17% franchise EBITDA** — net wash on a single-unit basis, franchise wins at 2+ units.
- **Buy an existing Mr. Electric resale** — Often **cheaper than greenfield** if the seller is a healthy retirement. Look for units with **3+ year trailing revenue above $850K**, **tech turnover below 18%**, and **WC mod factor below 1.05**. Asking multiples in 2026-2027 are **0.6x-0.9x TTM revenue** plus tangible assets.
- **HVAC adjacency (One Hour Heating, Aire Serv)** — Larger ticket sizes ($8K-$22K installs), bigger working-capital requirement ($250K+), but cleaner labor pool (HVAC techs less mobile than master electricians).

## FAQ

### How much does a Mr. Electric franchise actually cost in 2027?

**The 2026 FDD Item 7 lists $159,500 to $357,425** total initial investment. Most owners in the **2026 Franchise Business Review survey reported actual all-in spend of $215,000 to $265,000**, including the **$42,500 franchise fee**, one wrapped van, a 90-day working capital cushion, and pre-opening marketing. Add **$45K-$85K per additional van** as you scale. SBA 7(a) financing covers up to **75% of the project cost** for qualified borrowers.

### What is the realistic Year-1 income for a Mr. Electric owner-operator?

**Plan for $35,000 to $70,000 in owner draw** in Year 1 assuming you hit the **$488K median revenue**. The math: $488K revenue, minus $260K labor and materials (53%), minus $39K combined royalty and marketing fees (8%), minus $85K overhead (LSA, insurance, vehicles, software), leaves roughly $104K available — most of which flows to **working-capital replenishment**, not the owner's pocket, in Year 1.

### Do I need to be a licensed electrician to own a Mr. Electric franchise?

**Not personally, but someone on your team does.** **38 states require a master electrician** of record on the contractor license. You can be the qualifying agent yourself (cheapest, fastest), hire a master electrician as your QA at **$95K-$130K base** plus revenue share, or buy an existing unit and inherit the qualifying agent. **Texas, Florida, California, New York, and Illinois have the strictest QA requirements** — verify with the state board before signing the franchise agreement.

### What is the failure rate for Mr. Electric franchises?

**The most recent calculated three-year failure rate is approximately 19%** based on FDD Item 20 transfer, termination, and non-renewal data. This is **slightly above the home-services franchise median of 14%** per Vetted Biz analytics. Failures cluster in markets with weak licensed-electrician labor pools and among absentee owners who never personally rode trucks. **Owner-operators who personally pull permits show a sub-8% three-year failure rate.**

### How does Mr. Electric compare to Mister Sparky in 2027?

**Mr. Electric has more units (211 U.S. Vs. Roughly 150 for Mister Sparky)**, deeper Neighborly cross-referral network across 19 sister brands, and slightly lower minimum investment. **Mister Sparky has stronger residential-only branding** and Authority Brands' tighter HVAC-plumbing-electrical bundle. Royalty and marketing fees are nearly identical at **6% + 2%**. Pick Mr. Electric if you want **multi-brand Neighborly ownership**; pick Mister Sparky if you want **pure residential focus** in a metro where Mr. Electric is already saturated.

## Bottom Line

Mr. Electric in 2027 is a **legitimate franchise for the right operator** — a **licensed master electrician** or an **executive operator** with a hired QA, **$215K-$260K in capital**, and a **target metro with aging housing stock and EV-charger demand**. Expect **breakeven by month 18-22**, **median revenue of $488K**, and **8-17% EBITDA at maturity**. The **19% three-year failure rate** is real and concentrates among **absentee owners** and **labor-starved metros**. The **PE-ownership overhang** at Neighborly is the biggest non-quantified risk — model your pro-forma with **tech fees rising 10% annually** to be safe. Walk away if you cannot answer "who is my qualifying agent" with a name and a signed offer letter by Day 25 of diligence.

## Sources

- Mr. Electric 2026 Franchise Disclosure Document, Items 5, 6, 7, 19, 20
- Neighborly Company, "Mr. Electric Franchise Investment Page," 2026
- Franchise Business Review, "Mr. Electric Owner Satisfaction Report 2026"
- Vetted Biz, "Mr. Electric Franchise Insights: FDD, Costs & Fees," 2026
- Franchise Chatter, "Mr. Electric Franchise Review 2025: Costs, Fees, News, Average Revenues," August 2025
- IBISWorld Industry Report 23821, "Electricians in the US," June 2026
- U.S. Bureau of Labor Statistics, "Electricians" Occupational Outlook Handbook, 2024-2034
- Edison Electric Institute, "EV Quarterly Sales and Charging Infrastructure Report," Q4 2026
- U.S. Census Bureau, American Community Survey 5-Year Estimates, 2024
- Associated Builders and Contractors, "Construction Backlog Indicator," 2026
- U.S. Small Business Administration Franchise Directory (SBA Form 2462), 2026
- International Franchise Association, "Franchise Economic Outlook Report," 2027

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