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#167421 - 08/12/07 07:11 AM Franchising
PE&Master Offline
Member

Registered: 02/25/06
Posts: 138
Loc: TX, USA
I'm looking down the road as to what the next challenge is and thinking about franchising as a service company.

We've been in business for over five years in same location and do the majority of our sales in residential and commercial service.

I know there's alot of resistance to the existing franchise operations but not everyone can start a business from scratch.

Any thoughts?

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Business, Office, Estimating, Legal:
#167433 - 08/12/07 10:28 AM Re: Franchising [Re: PE&Master]
LK Offline

Member

Registered: 01/21/03
Posts: 1721
Loc: New Jersey
Franchise operations work only if the company offering them, has a strong presence in the market, and prmotes on going agressive marketing, and in contact management assistance. IMO anything less is not a franchise, some of the offerings out there today in the electrical markets, are not for the long run, the build is not a shared benifit, for the operators, but more of a cash cow for the company making the offering, a good franchise, will cost more then some of the present offerings, all the support to make a national program work, is costly.

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#167435 - 08/12/07 10:45 AM Re: Franchising [Re: PE&Master]
renosteinke Offline
Cat Servant
Member

Registered: 01/22/05
Posts: 5299
Loc: Blue Collar Country
"Franchise" covers a lot of ground. Just for the sake of discussion, let's look at a few.

"McDonalds" is at one end of the scale .... the franchise agreement requires nearly everything to be supplied by, or bought from, the parent corporation. McDonalds' supplies the building, and the franchise gets food, napkins, uniforms, advertising through them.

"Midas" is at the other extreme. Corporate is quite happy to just sit back and let franchise fees roll in. This lack of concern has been cited as one reason their franchises are involved in an unusually large number of consumer fraud complaints ..... it is said that Corporate's unwillingness to take down the sign has allowed shady operators to continue in operation.

As for starting a business from scratch ... there's not a franchise out there that does not require all the money you'd need to open your own place, plus more! None of them are going to finance you. They may provide the building, and the advertising ... but they all are claiming that a successful business will become even more successful once they join the team.

The one asset a franchise has is "Name" or "Brand" recognition. Their advertising is well placed to get exactly the business they want. After all, when you want fried chicken, you don't think "McDonalds." That is no accident.

IF your business model is aimed at the general public, relying upon a constant stream of new, non-repeat customers, you have the most to gain from franchising.

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#167450 - 08/12/07 02:13 PM Re: Franchising [Re: renosteinke]
mahlere Offline
Member

Registered: 11/17/05
Posts: 514
Loc: New Jersey
franchising in the service industry can work...ie RotoRooter, Stanley Steemer, Mr. Handyman, etc.

Just no one has figured out a truly effective system for electrical or HVAC...plumbing has it pretty well down pat (Mr. Rooter, Benjamin Franklin) While Roto Rooter was almost a pure franchise deal at one time, the parent company Chem-Ed has been buying back the franchises for the past several years.

In addition to the franchises, you have groups like Nexstar and ESI (affiliated with the parent company of Benjamin Franklin) that offer the ability to remain independent, yet build the business systems of a franchise.

Wanna see a franchise to be in it's early stages? Go here

Franchises are about 3 things...

1) Systems...you need to have systems in place to replicate something that is already succesful...next time you walk into a fast food restaurant, pay attention to all the systems that are in place...

2) Branding....how many of you remember the Roto Rooter jingle...when was the last time they ran a national ad campaign...that's branding.

3) Support and Networking...got problems? they should have the answers. They should offer you seminars like Matt Smith at a discount. For those of you who don't know Matt Smith, I ain't telling....Let's just say that he is better than Tech Daddy....If you don't know Tech Daddy, you either don't do resi/lt comm service work...or you got a lot to bulk up on before you are ready for them.

Some of the best knowledge and advice you will ever receive will be from fellow franchisees. Imagine this board...but only with everyone on the same team and no worries about competing against eachother. It's a treasure trove of knowledge and education...

If you can find a way to offer those 3 items, you can offer a successful franchise. If you are looking to buy an existing franchise concept, look for those 3 things.

Oh, buy a Dunkin' Donuts franchise instead...they make more money...

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#167453 - 08/12/07 02:53 PM Re: Franchising [Re: mahlere]
LK Offline

Member

Registered: 01/21/03
Posts: 1721
Loc: New Jersey
Don't forget a good company will select your location for sucess, they do the real numbers.

If the electrical market would be willing to pay the high cost of national marketing, then you may have something, Roto Rooter pays big bucks for the coverage.

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#167587 - 08/15/07 07:53 PM Re: Franchising [Re: LK]
PE&Master Offline
Member

Registered: 02/25/06
Posts: 138
Loc: TX, USA
Thanks for the ideas.

A franchise forum website is something I hadn't considered.

I'm starting with a book 'Franchising for Dummies'. Sounds corny but is written by Dave (Wendy's). Lots of interesting reading.

From what I've read, starting with a branch office may be the first step. Trying to keep tabs on a office you're not at everyday will help find a lot of holes in my systems.

We have been tracking all calls to see which of the 7 phone books in the immediate area are working for us.
One thought for the readers is to put a code in each phone book ad and ask the caller for that code. It needs to be in the same spot in each ad (like the lower left corner) and have the year of the book as well. For example use 'SB07' for the SouthWestern Bell 2007 book. Make business decisions based on facts, not gut feelings.

I googled Matt Smith but didn't seem to find anybody that had relevance to business dealings. Now Tech Daddy is always good viewing for a half hour with a new employee.

Keep in mind, liars figure but figures don't lie.

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#167651 - 08/16/07 07:56 PM Re: Franchising [Re: PE&Master]
cookcc Offline
Member

Registered: 05/26/07
Posts: 28
Loc: California ,Long Beach
I looked into a electrical franchise oppertunity a couple of years back, the company offered to fly me and the wife back east for innitial tranning, the start up fee was about $20,000 if I remember correctly. Here is the link: http://franchise.org/Mr_Electric_franchise.aspx?source=yahoocompany
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COOKCC

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