Aire Serv Franchise: Cost, Revenue, and Diligence (FDD 2026)
A diligence report of the Aire Serv HVAC franchise from the 2026 FDD: investment range, Item 19 Gross Sales, unit growth and churn, and more.
Aire Serv is a residential and commercial HVAC services franchise based in Waco, Texas, and part of the Neighborly platform of home-services brands now controlled by KKR. The 2026 FDD (covering calendar year 2025) reports 229 franchised outlets and no company-owned outlets at year-end 2025, up from 208 a year earlier. Item 19 reports 2025 Gross Sales for 172 franchised businesses that operated all year: average $1,561,361, median $944,801, and a range from $315 to $22,253,990. The weekly License Fee runs 5% to 7% of Gross Sales, higher at lower revenue, on top of a 2% marketing fee and required local marketing spending.
Aire Serv | Home Services | latest FDD 2026 | 229 outlets
Reviewer Highlights
About the franchisor
Aire Serv installs, maintains, and repairs residential and commercial heating, ventilation, air conditioning, and indoor air quality equipment, and the model is open to both startup owners and existing HVAC contractors who convert their business under the brand. The franchisor is Aire Serv SPV LLC, a Delaware limited liability company organized on November 13, 2020. Its predecessor and affiliate, Aire Serv LLC, has offered Aire Serv franchises since 1992, so the brand itself has roughly 34 years of franchising history even though the current franchisor entity is newer.
In a March 2021 securitization financing, all existing U.S. Aire Serv franchise agreements and the U.S. trademarks were transferred to Aire Serv SPV LLC, and Manager (Neighborly Company) took on providing support to franchisees and acting as the franchise sales agent in exchange for management fees.
Aire Serv SPV LLC is a wholly owned subsidiary of Neighborly Assetco LLC and sits within the Neighborly group of roughly 20 home-services brands (including Mr. Rooter, Molly Maid, Glass Doctor, Mr. Electric, and Mr. Appliance); ultimate control rests with investment funds affiliated with Kohlberg Kravis Roberts & Co. (KKR), which acquired the group in August 2021.
Leadership turned over recently and is closely tied to the parent organization. President Jario Jimenez has held the role since April 2026 and was previously CEO of ServiceMaster. CEO Michael Anthony Davis has served since November 2024 and is also CEO of Neighborly and the parent entities. SVP Corporate Controller Malia Gelfo joined in December 2024 and VP of Finance Heather Shipley in January 2026.
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Growth and system health
Item 20 reports a system that has been roughly flat-to-up over five years, with churn running underneath the headline. Franchised outlets went from 198 at the start of 2021 to 204 (2021), 207 (2022), 197 (2023), 208 (2024), and 229 at year-end 2025. There are no company-owned outlets in any year.
Annual openings were 22, 10, 18, 32, and 45, while terminations were 12, 7, 10, 11, and 15. The system also recorded non-renewals (3, 0, 4, 2, 5) and ceased operations (1, 0, 14, 8, 4), with the 14 ceased outlets in 2023 driving the only year of net decline (207 to 197). Across the 2021 through 2025 window, total openings were 127 against 55 terminations, 14 non-renewals, and 27 ceased operations, so 96 outlets left the system while the net count rose by 31.
Looking forward, the 2026 FDD reports 32 franchise agreements signed but not yet open and 33 projected new franchised outlets in the next fiscal year, and zero company-owned in both.
| Year | Opened | Terminations | Non-renewals | Reacquired | Ceased | Outlets (end) |
|---|---|---|---|---|---|---|
| 2021 | 22 | 12 | 3 | 0 | 1 | 204 |
| 2022 | 10 | 7 | 0 | 0 | 0 | 207 |
| 2023 | 18 | 10 | 4 | 0 | 14 | 197 |
| 2024 | 32 | 11 | 2 | 0 | 8 | 208 |
| 2025 | 45 | 15 | 5 | 0 | 4 | 229 |
Item 20 Table 2 reports outlet transfers from franchisees to new owners across 2023 through 2025, spread across states including Alabama, Georgia, Texas, Florida, Virginia, and others. Item 19 separately notes that 11 outlets underwent a transfer during 2025 and were therefore excluded from the financial cohort. A transfer is an existing franchisee selling its outlet to a new owner; it is distinct from a termination or a non-renewal.
There are no company-owned Aire Serv outlets in any of the disclosed years; the entire U.S. system is franchised. That means there is no franchisor-operated benchmark book of stores for a prospective franchisee to compare against, and all of the Item 19 figures come from franchisee-reported Gross Sales.
Item 20 Table 5 reports 32 franchise agreements signed but not yet open as of December 31, 2025 and 33 projected new franchised outlets in the next fiscal year, with zero company-owned projected. The signed-not-opened figure rose from 17 (2024 FDD) to 15 (2025 FDD) to 32 (2026 FDD).
What it costs to get in
The 2026 FDD puts the total initial investment for a single Aire Serv territory at $113,808.50 to $271,708.50. The largest line items are the Vehicle ($6,500 to $60,000, reflecting whether a franchisee already owns a suitable truck), Advertising, Marketing and Promotional Spending ($30,000 to $60,000, which lines up with the first-year marketing spend requirement), Additional Funds for the first 3 months ($15,000 to $45,000), and the flat $45,000 Initial Franchise Fee for a territory of up to 100,000 in population. Equipment, supplies and inventory run $5,100 to $25,000. The estimate is for one territory; buying additional adjacent territory adds $450 per 1,000 in population above the minimum. Compared with the 2024 FDD ($107,295 to $208,095), the high end rose to $271,708.50, a $63,613 increase, mostly from the Advertising line moving up to $30,000 to $60,000 and the Deposits, Permits and Licenses line moving from $0 to $1,400 up to $500 to $10,000; the 2025 and 2026 FDDs carry the same total range.
| Category | 2024 | 2025 | 2026 |
|---|---|---|---|
| Initial Franchise Fee | $45,000 | $45,000 | $45,000 |
| Vehicle | $6,500 to $60,000 | $6,500 to $60,000 | $6,500 to $60,000 |
| Advertising, Marketing and Promotional Spending | $24,000 to $50,000 | $30,000 to $60,000 | $30,000 to $60,000 |
| Additional Funds - 3 Months | $15,000 to $45,000 | $15,000 to $45,000 | $15,000 to $45,000 |
| Equipment, Supplies & Inventory | $5,100 to $25,000 | $5,100 to $25,000 | $5,100 to $25,000 |
| Deposits, Permits & Licenses | $0 to $1,400 | $500 to $10,000 | $500 to $10,000 |
| Training, Travel, Lodging & Food | $4,000 to $8,000 | $4,000 to $8,000 | $4,000 to $8,000 |
| Insurance | $3,000 to $6,000 | $3,000 to $6,000 | $3,000 to $6,000 |
| Real Estate | $3,000 to $6,000 | $3,000 to $6,000 | $3,000 to $6,000 |
| Professional Fees | $0 to $5,000 | $0 to $5,000 | $0 to $5,000 |
| Start-up package | $1,695 | $1,708.50 | $1,708.50 |
| TOTAL | $107,295 to $208,095 | $113,808.50 to $271,708.50 | $113,808.50 to $271,708.50 |
Ongoing fees
The royalty here is called a License Fee and runs 5% to 7% of Gross Sales, paid weekly, with the rate set inversely to revenue: a franchisee under $1,000,000 in prior-year sales pays 7%, while one above $2,000,000 pays 5%. On top of that sit the 2% MAP fee and a Local Marketing Group contribution of up to 3%, so percentage fees on Gross Sales can reach about 12%.
Separately, the Minimum Local Marketing Spending requires spending the greater of $50,000 or 8% of prior-year Gross Sales on approved local marketing (with $60,000 in year 1 and $75,000 in year 2), which is the franchisee's own marketing budget rather than a fee to the franchisor but is still a mandated cash outlay. Because these are charged on Gross Sales and on prior-year sales, they are owed regardless of whether a given week or month is profitable.
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| Fee | Amount |
|---|---|
| Initial franchise fee | $45k |
| Brand / ad fund | 2.0% of Gross Sales (reported and paid weekly) |
| License Fee (royalty) | 5% to 7% of weekly Gross Sales, tiered by prior-year annual Gross Sales: 7% below $1,000,000, 6% from $1,000,000 to $1,999,999, and 5% at $2,000,000 and above. Minimum License Fees of $350 to $1,000 per week apply after the opening period. |
| MAP Fee | 2% of Gross Sales, paid weekly, for marketing, advertising, and promotion. |
| Local Marketing Groups | Up to 3% of Gross Sales where designated; currently up to 2% may be directed to Neighborly brand initiatives. |
| Minimum Local Marketing Spending | After the initial period, the greater of $50,000 or 8% of prior-year Gross Sales. Initial Marketing Spend Requirement is $60,000 in year 1 and $75,000 in year 2. |
| Software System Monthly Fees | $189.95 per month for the Technology Package, plus ServiceTitan at $151 to $241 per service-professional user per month (billed by ServiceTitan), plus optional QuickBooks Online ($30 to $220 per month). |
| Call Center Program Fees | $349.99 to $449.99 per month plus $25 per booked appointment, paid to affiliate Neighborly Service Solutions. |
| HelpDesk Plus Fee (optional) | $400 per month for 6 hours of QuickBooks support from affiliate BackOffice; additional hours at $75 per hour. |
| Annual Reunion Fee | Up to $1,000 per person plus travel and expenses; attendance is mandatory. Up to $2,000 may be charged for failing to attend, pro-rated by days missed. |
| Transfer Fee | The greater of $7,500 or 5% of the gross sale price of the Business, due before transfer; may be waived for a transfer to a controlled entity or immediate family. |
| Training Fee on transfer (Buyer Commitment Agreement) | $14,900 if the transferee buyer attends training before closing, in addition to the transfer fee. |
| Renewal Fee | $5,000 on renewal. |
| Key Accounts / Management Fee | Up to 5% of Gross Sales tied to Key Account work, if the franchisor establishes a Key Accounts program and the franchisee participates. |
| Interest on overdue amounts | 12% per annum on unpaid balances, collectible on demand. |
| Audit cost and noncompliance fee | Cost of audit plus the understated amount, interest, and late fees if an audit finds a 2% or greater understatement; plus $500 per document not made available (up to $2,500 per audit). |
Reported financial performance (Item 19)
Item 19 of the 2026 FDD reports 2025 Gross Sales for 172 franchised businesses that operated and reported for the full calendar year, drawn from franchisee software data. For that group the average was $1,561,361 and the median $944,801, with a reported high of $22,253,990 and a low of $315; only 57 of the 172 outlets (33%) reached or exceeded the average.
The franchisor breaks the cohort into quartiles: the 1st quartile (43 outlets) averaged $4,093,185, the 2nd quartile $1,414,426, the 3rd quartile $576,772, and the 4th quartile $161,062, so the top-quartile average is about 25 times the bottom-quartile average. The top 10% (17 outlets) averaged $6,548,443 and the bottom 10% (17 outlets) averaged $64,112. The 172 reporting outlets are 75% of the 229 franchised outlets at year-end 2025; the franchisor excludes 45 outlets that opened during or after January 2025, 11 that transferred, 1 that did not report, and the 24 that closed during the year.
Across the last three filings the reported median moved from $1,019,414 (2023) to $1,084,793 (2024) to $944,801 (2025), but the cohort changes each year, so this is not a same-store trend. Item 19 reports Gross Sales, which is revenue, not profit; the FDD discloses no franchisee cost data, so a return on investment or payback period cannot be calculated from Item 19 alone.
Personal risk and the exit
The term is 10 years, with one 10-year renewal that requires 180 to 240 days' notice, a $5,000 renewal fee, a general release, current training, meeting Minimum Performance Standards, and signing the then-current Franchise Agreement, whose terms and fees may differ materially from the original.
The franchisor cannot terminate without cause, but the list of non-curable defaults is broad and includes a second default of any type within a 12-month period even after the first was cured.
Selling requires franchisor approval, a transfer fee of the greater of $7,500 or 5% of the sale price, and a right of first refusal in the franchisor's favor; an additional $14,900 buyer training fee applies if the buyer trains before closing.
The personal guarantee (Schedule C) and the post-term non-compete (2 years within the territory plus a 25-mile radius, extending to owners, guarantors, and an individual franchisee's immediate family) mean exit is constrained by the contract, and the franchisor's Item 3 litigation shows it enforces these covenants. Most disputes go to mediation and then litigation in McLennan County, Texas under Texas law, with arbitration used only if a court invalidates the jury or class-action waiver.
Litigation
Item 3 of the 2026 FDD discloses a resolved 2017 administrative matter involving an affiliate, not the franchisor: a California Consent Order against FOR Franchising LLC (a Window Genie predecessor) and Richard Nonelle over a failure to submit franchise advertisements to the Commissioner, resolved without admitting liability for a $5,000 penalty plus remedial education.
It also discloses franchisor-initiated litigation against franchisees: in fiscal 2025 the franchisor filed Aire Serv SPV LLC v. Waldstein HVAC, LLC and Travis Kyle Waldstein (Case No. 2025-2995-4, 170th Judicial District Court, McLennan County, Texas) to enforce dispute resolution procedures, and Aire Serv SPV LLC v. GMAN Air, Inc., Grady Irwin Stewart, Jr., and Anastasia A. Stewart (Case No. 2024-2244-3, 74th Judicial District Court, McLennan County, Texas) to enforce a covenant not to compete remains pending.
The structured filing history across the 2024 and 2025 FDDs shows additional franchisor suits against current or former franchisees to enforce non-competes or collect amounts owed, most filed in McLennan County, Texas. Item 4 (Bankruptcy) discloses a Chapter 11 filing by Marelli Holdings, a KKR portfolio company, not involving the franchisor.
The franchisor's financials (Item 21)
Item 21 attaches the audited combined financial statements of Neighborly Assetco LLC, the franchisor's direct parent, for the years ended December 31, 2023, 2024, and 2025,.
Neighborly Assetco LLC guarantees the franchisor's performance under the Franchise Agreement (parent guaranty in Exhibit D). The franchisee signs with Aire Serv SPV LLC, but no standalone audited statements for that entity are provided; the relevant solvency picture is the parent's combined statements plus the guaranty. The franchisor sits inside a 2021 whole-business securitization structure controlled by KKR-affiliated funds. Review Exhibit C and the Exhibit D guaranty with a qualified advisor.
Changes since the prior FDD
Across the 2024, 2025, and 2026 FDDs: franchised outlets grew from 197 (end of 2023) to 208 (end of 2024) to 229 (end of 2025), with terminations of 10, 11, and 15.
The Item 7 total initial investment rose from $107,295 to $208,095 (2024 FDD) to $113,808.50 to $271,708.50 (2025 and 2026 FDDs), driven by the Advertising line and the Deposits, Permits and Licenses line.
The average initial franchise fee actually paid in 2025 was about $68,685 (range $39,325 to $115,379), reflecting larger territories and discounts. Leadership turned over: a new CEO (November 2024), SVP Corporate Controller (December 2024), VP of Finance (January 2026), and President (April 2026).
Item 19 average Gross Sales moved from $1,499,969 (2023) to $1,638,144 (2024) to $1,561,361 (2025), and the median from $1,019,414 to $1,084,793 to $944,801.
Franchise agreements signed but not yet open rose from 17 to 15 to 32.
The franchisor continued to file suits against franchisees to enforce non-competes and collect amounts owed.
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Understand the disclosures
Related FDD items
- Item 1 - The Franchisor and Any Parents, Predecessors, and Affiliates
- Item 2 - Business Experience
- Item 3 - Litigation
- Item 6 - Other Fees
- Item 7 - Estimated Initial Investment
- Item 17 - Renewal, Termination, Transfer, and Dispute Resolution
- Item 19 - Financial Performance Representations
- Item 20 - Outlets and Franchisee Information
- Item 21 - Financial Statements
Questions worth asking
Item 19 shows 2025 Gross Sales running from $315 to $22,253,990, with a 1st-quartile average of $4,093,185 against a 4th-quartile average of $161,062 and a bottom 10% averaging $64,112. On a 5% to 7% License Fee plus a 2% MAP fee, plus a Minimum Local Marketing Spend of the greater of $50,000 or 8% of prior-year sales, a 4th-quartile outlet is carrying a heavy fixed and percentage load against modest revenue. What separates the top quartile from the bottom, how much of the spread is territory or tenure versus operator, and how should you size your own expectations before signing?
Item 19 reports Gross Sales, not profit, and discloses no franchisee cost structure, while the total investment is now $113,808.50 to $271,708.50 and recurring fees on Gross Sales can reach about 12%. How do you go from a revenue figure to an actual owner's profit and a payback period, and what would you need to see from current franchisees, given that some have signed confidentiality clauses that limit what they can tell you?
Item 3 shows the franchisor repeatedly suing current and former franchisees to enforce non-competes and collect money, and Item 17 imposes a 2-year post-term non-compete within the territory plus 25 miles, a personal guarantee, and a 10% holdover License Fee. Taken together, how hard and how expensive is it to exit this agreement if the business underperforms, and what is your realistic worst case if you need to walk away before the 10-year term is up?
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It is important to note that nothing on this site is investment or legal advice. This site does not constitute full diligence in any way. You should reference the FDD(s) of any brand you are looking at. Franchise Signal may make mistakes. If you are actively considering investing in a franchise you should consult with a franchise attorney.
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