I signed up to the forum to get some useful technical help and am looking forward to that.
I did also sign up because I need some business help too. I run my own business and it is ok but over the course of the last few weeks I have been contacted by Mr Electric about buying a franchise. They have called me 3 or 4 times now and the man I spoke to was very nice and explained the franchise opportunity to me.
In short, you buy a franchise for a specific set of zip codes. In my case it would be approximately $30,000 or maybe more if I purchase a larger area. For that price I can obviously trade in that area but as part of the programme I get appropriate training for the business, which includes intensive training at their headquarters in Waco, Texas, ongoing support, job management system, my own area website, help with how to market the business, accounting software and advice as well as national accounts.
I have taken a look at this page http://www.leadingtheserviceindustry.com/Mr-Electric-LLC.aspx
and the company website http://www.leadingtheserviceindustry.com/Mr-Electric-LLC.aspx.
All of the above seems useful and could add value to my business, however I am not 100% sure it will work out exactly like I have been told. The man who I spoke to seems fair enough but he does have an answer for my questions so far!
Does anyone have any experience with Mr Electric, not just their technical skills but the business opportunity and the franchise?
Also, if anyone has any advice on what to ask them regarding the franchise I would really appreciate it too?
I know this may have been discussed in the past but up to date thoughts would be helpful.
There are two (2) Mr E guys that I am aware of in the areas that I am an inspector. I noticed one of them recently did not have the Mr. E logo'd van, and I have not noticed the van recently.
All the permits applied for are in the NJ Lic. Business Permit name, and not Mr. E. This is due to NJ regs.
I cannot say that I have heard anything great about any of the 'service groups', including Mr. E.
Buying 'zip codes' IMHO will not give you any exclusive 'rights', only to 'use' the franchise name.
What do they give you for $30K?? Do you have to buy the van, or wrap your own? Who pays for the ads??
Any dollar projections on the 'national accounts'?? Big national accounts look for very competitive low rates, and can be very demanding for service work. (Been there, done that)
Pick around the business threads and look at some of the threads from previous discussions.
BTW, welcome to ECN from one of the 'Jersey Guys'!!
This is a great line from the page via the link:
" Even if you have no industry experience, we may be able to help you launch your own electric service franchise."
Mr. Electr4ic is a reputable operation. They have a proven business model, and have partnered with some home centers for electrical work.
They do protect their franchises, referring customers by zip code. They also make an effort to police their ranks; I have seen this in action when one franchise started getting shabby. The parent company was most aggressive in getting things back on track.
On the 'down' side, you will be doing a lot of residential service work. This work isn't for everyone.
@HotLine1 so what you are saying is the franchise for Mr Electric is registered in another company name for licensing? That does not sound too professional to me?
For $30K you get all the advice and use of their systems like accounts, how to run the business, marketing help (but they don’t write the marketing plan for you). You have to buy the van and wrap it.
They are a little vague on the projections for national accounts. I guess that is because they can’t guarantee them in your area. So one franchisee may get lots while others do not.
I’ve been looking round the forums and there is some useful information on various forums including the British electrical and business forums, where I have found some very insightful information about Mr Electric In the UK. See this linkhttp://www.electriciansforums.co.uk/business-related/95425-mr-electric-franchise-2.html
@renosteinke thanks for your comments, I was starting to build up a similar opinion but I have since found this legal case, which certainly worries me.http://www.texapplaw.com/wp-content/uploads/2011/05/Transcript-of-Jeff-Myers-01527277.pdf
I'm can't tell the context of the testimony, and have no idea as to the actual issues before the court. I don't see even an allegation of anything improper, just some poor testimony in response to poor questions.
There isn't a franchise out there that has not been the subject of various lawsuits. It's pretty common for the parties to get into disagreements. That's why there are so many variations in franchise agreements.
Our licensing is local, and typically requires the license to be held by someone local. Or, at least, someone meeting local requirements. That's pretty much exactly what franchising is all about: many local, independent businesses working together. It's natural that some operations will prosper, while others will fail.
Colrey, it appears that you do not understand the difference between a franchise agreement, and simply being an employee based out of the local branch office.
The legal case is a lesson on what a lawyer can do when he tries to make room for his client's story inside of your story.
As to a franchise for electricians, you could get together with other electricians from other parts of the world and pool your resources to set up a web site. Would that be just a good? You could dress any way you want and advertise anywhere.
I like the idea of having customers call Mr Electric for a price. They actually have a financial disadvantage.
My experience with them is limited to following one of their electricians on a job when he couldn't get a 600 volt motor to run on 208 volts. It always comes down to who is doing the work and not the name of the company.
The way it is here in NJ, in a condensed version....
An individual is qualified as a NJ Licensed Electrician. That license number remains with that person forever.
In order to legally function as an Electrical Contractor, that individual must apply for a Business Permit, which is attached to his/her license number. One person, one BP.
One business name, company, individual, or whatever.
Any change to the business (name, type, etc.) results in a letter added after the BP #. Like 'Joe's Electric BP 1234' changing to 'Joe's Electric LLC BP 1234-A'.
BTW, I was not implying that Mr E is not a reputable organization, just voicing my opinions.
IMHO, 30K for what you said above, plus having to acquire/modify a vehicle, might be better spent on a good accountant and or a business consultant.
I had one national account that I acquired via word on the street. It was 100% service work (retail), with the chance to bid on renovation/fit-ups IF they called. Response was 48 hours, or 'less then 2 hrs for emergency'. Rates were on the tight side, and it was 60 days to see payment. It was OK, kept 1 guy busy; and involved a lot of mileage.
Contract renewal time resulted is them demanding travel charges eliminated and minimum service charge eliminated, and replaced with 1/4 hour billing. After laughing real hard, I submitted a response and withdrawal letter. BTW, I never got a call to bid on any work.
Without naming, this was a national group, with at least 8 various 'branded' stores, major regional malls, and some freestanding units. From the NJ state border, to southern Ocean County, river to ocean.
Have a safe holiday.....
One elder sage said to me a long time ago...
"A good electrician may not be a good businessman, and a good businessman may not be a good electrician"
We take our lumps, learn from the school of hard knocks, learn from 'some' others. A lot of us are 'self taught'!
I don't see any reason to describe Mr. Electric as anything but "you could get together with other electricians from other parts of the world and pool your resources to set up a web site."
Excuse me, but ... isn't your franchise agreement nothing more than the agreement you make with your fellow electricians, the other franchise holders?
So ... why re-invent the wheel?
As to the uniform / truck issue .... well, it comes down to the business model. The Mr. Electric plan places a premium on brand recognition and a professional presentation. It works.
It's not the only business model. In a very real way, the Union Hall resource available to member companies is part of THEIR business plan. Different plans, different markets.
Look to various fast food chains and certain mini-marts as examples of what a franchise makes possible. "Joe's Diner" might be a better place to eat, but McDonald's is a KNOWN quantity. Where are you going to stop?
Thank you so much to all who have posted so far, some very insightful comments!
In relation to the legal case I offered a link to, I was simply offering evidence of the potential implications of signing a franchise agreement and the negatives from a franchisee perspective.
In summary this case related to a franchisee who operated outside of his territory after a new franchise was sold in that area. Granted, you are not supposed to do that as part of the contract but if you read the link, it is more complex than that and highlights the franchise relationship.
The key points are as follows:
1. It shows how messy things can get between the 2 parties, the franchisor and franchise.
2. The franchisor logs conversations with franchisees. This is good but can be used to challenge the franchisee on their conduct and therefore applicable for use in court cases. They failed to detail phone calls asking the franchisee to stop advertising so I wouldn’t be very happy if I was the franchisee they were encroaching on.
3. 3 years of legal wrangling over this issue seems like a headache to me and the franchise had to keep working under the brand all through this time. Sounds ugly to me.
4. Imagine how you would feel if you spent $30k only to find out that another franchise was operating in your area, advertising and taking your customers? You would go crazy! The said franchisee would have to sit it out and wait while the franchisor legally challenges the other franchisee. A 3 year time period, all of which would not have occurred if I didn’t have a franchise.
Of course there are legal disputes in various parts of life, including franchising. I don’t see your point here? By highlighting the above case, I am simply saying, why would you increase your risk by becoming a franchisee? A franchise agreement clearly controls you but in the above case not one but 2 franchisees are controlled. One franchisee, the one who started in the area where advertising was taking place would have suffered tremendously and would not have factored this issue into the equation when buying the franchise. So this franchise was under the control of the franchisor for 3 years while they dealt with the legal challenges associated with the other franchisee. All of this adds up to excessive control over the new franchisee who did not deserve so many issues when trying to build their business.
In short, if franchising gets this complex, why not minimise the risk by setting up your own business. You may have other legal implications to manage as part of the business (unpaid invoices and the like) but you would have these as a franchise or not.
“Colrey, it appears that you do not understand the difference between a franchise agreement, and simply being an employee based out of the local branch office.”
I find this a little offensive, of course I know there is a difference between the two. A franchise agreement offers me the right to trade under a specific brand name and their said systems to operate my own business trading as the said franchise in a particular area. Of course this comes with certain rules but I have some degree of freedom to grow the business how I like with their support systems and structure.
Having said that, it has come to my attention following research that a franchise may inflict too may rules on the business owner, thus making it similar in many ways to an employment contract. Take McDonalds for example, I understand their franchisees are told who to buy from, how to cook the fries, employment practices and so on.
Your decision to buy a franchise comes down to your personal tolerance for rules. To what extent do you want to be told what to do when running your business?
So, I know the difference between employment and franchising, I’m just highlighting the decision making process and the balancing act you have to consider when choosing to franchise or not.
Fair point regarding working with other electricians and the freedom this may bring to buying a franchise. However as @renosteinke points out the franchise agreement is very much like this anyway. You are buying into a group of other companies throughout the country. They have the systems, procedures and websites built so you buy in and go for it. However, with this approach you lose the control you may gain by getting a group of independents to work together.
Logistically though, you would need an organisation to manage all those electricians and do the various tasks for them. How would you agree on things, who makes the decisions and what cut would the company who organises this make? Ultimately this type of structure would come back to a franchise system of sorts. Perhaps what you are really saying is one where there is more freedom and I do see the opportunity in that.
As regards the comment made by @renosteinke and reinventing the wheel, perhaps we are just discussing the alternatives and more efficient ways of delivering service and systems without the fees of Mr Electric. After doing my research Mr Electric has been in operation since 1994, so why are they not nationwide, like McDonald’s? Surely in that timeframe, they would have sufficiently promoted the business to every state and city and subsequently proven their operations and covered the country?
Regarding your comment about McDonald’s being a known quantity and you would choose them over "Joe's Diner", I would say you are right in most cases. We go to Mcdonalds because we know what we will get, however with Mr Electric I think you need to think a little differently. You go to McDonald’s because you know exactly what the burger and fries will taste like, my reservation is whether you will use Mr Electric because they will fit lights perfectly in a kitchen? McDonald’s offers something others can’t replicate easily, even Burger King have different burgers so they do different things as well.
Mr Electric might have good service but the difference with McDonald’s is that the independent electrical business owner may find it easier to replicate their way of doing business. In this way the business owner avoids the initial franchise fee and ongoing fees and is more than capable of competing with Mr Electric on price, service and more.
Basically, IMHO you do not need any franchise involvement to operate a business. You could have 'wrapped vehicles', have your staff wear white long sleeve shirts, blue work pants, and even a tie!!
An area HVAC/Plumb/Elec contractor does it. Has a large staff/operation and gets top dollar for services rendered.
No doubt, John. I never suggested otherwise.
Once you talk about associating your business with others in other locations ... well, that's pretty much the dictionary definition of "franchise."
A point not clear, it seems, to some.
After doing some more research I found some other legal cases that are worth considering.
This shows a trademark infringement and most likely involves a franchisee who is still using the branding, phone numbers and the like after ceasing to formally use the brand to trade under. In these instances the franchisor will demand that phone numbers and other communications are transferred to them, so they can pass them to a new franchisee. So if you fall out with the franchisor, they are well within their rights to ask you for this information. In short you may have built the business ok, got some customers and then you decide to leave but you must give them the phone numbers back.
Fairly obvious stuff within a contract I guess but we are no legal experts and we need to know what may come our way if things don't work.
Use of Logo & Copy Cat Marketing
This one shows what happens when you misuse the franchise branding. http://www.gpo.gov/fdsys/pkg/USCOURTS-ksd-2_06-cv-02414/pdf/USCOURTS-ksd-2_06-cv-02414-11.pdf
This franchisee setup a website without permission from the franchisor, they used parts of the Mr Electric logo to form their new company logo (following termination from Mr Electric )and used this in marketing for that new company. The franchisee subsequently continued to turn up in a Mr Electric van to do work and continued to use the telephone numbers from his defunct Mr Electric business to grow the new business. As such the Dwyer Group were within their rights to challenge this.
The point here is simple if you’re the type who thinks they can get away with naughty behaviour of this kind, think again! They clearly have the financial resource to challenge a franchisee legally and have proven they will act.
In summary, they know the law and you as an electrician may not know all the ins and outs. Furthermore, you may not have the financial means to challenge them legally if you have your own grievance against them.
Not to be thick, but ..... WHAT is the point of this thread?
Do we seek information about Mr. Electric? Is it simply an excuse to slur the operation? Is there a specific complaint to offer?
On the general topic of franchises, this site has numerous threads about certain other operations that clearly abuse their "members." Some appear to be little more than scams. Mr. Electric is clearly not in this category.
If the OP is trying to erect a soapbox from which to slam all "corporations," let him do it in Piccadilly Circus. I take offense at the assumption that the individual contractor is an angel and the parent organization the culprit. I would hope the parent company knew what it was doing, and had the resources to uphold their part of the deal.
Running a business is a trade, like any other. It takes time to learn, and you need a mentor. Franchise operations are one route to getting the guidance you need. If business profit is represented by a dollar bill, that bill has on it the motto of the franchise: E Pluribus Unum (Out of many, One).
Going back to the opening of this thread, my point was to say that franchise has advantages and pitfalls.
Various comments within this thread seem to support both.
My comments were not intended to 'slur' or badmouth Mr E.
A visit to the linked website (Mr E) lists all the other operations that are part of the parent co.
Is giving up self-determination to be part of a franchise is worthwhile?
In my opinion, if you do residential work, it might be worthwhile because the product is similar. For example, cleanliness and punctuality are good in every country. Customers will pay more for those things and will respond to that in advertising because they don't know an electrician. Paying to be part of that brand could be beneficial.
If you work in a barn, they don't care if you dress neatly or put booties over your work boots, and everyone stinks.
If you provide emergency service to industry, they will understand that you won't always be there at the appointed time because you might be somewhere else. What they want is for you to drop other work when their production line is broken.
In my case, I quit residential work because I can't be clean and punctual. I can only make an 8:00 appointment and I can never still be clean at the end of the day. When I gain a new customer, it's because the last electrician (or more) couldn't fix the problem or didn't like getting manure on his hands. How would you franchise this?
“What is the point of this thread?” I’m afraid you are probably not wired like me unfortunately and not especially compassionate, so I’ll explain.
When I consider a business decision, some are easy, others are more in depth. This one being the later. So it is of crucial importance that both opinion and fact are discussed on such subjects to support not just me but anyone considering this franchise or others. If you care about other people, you care about this thread. It’s helped me understand the opinion of others and to debate the concerns and the advantages.
If anyone has this thread at their disposal now, they can choose to use it however they like but the discussion, facts and opinion are very useful. It’s about details, links around the internet and more, not fluffy conjecture or broad statements about franchising.
By being a digger like me, you will find out information, analyse it and present it for others to comprehend. My initial thoughts were very positive on this franchise but after I got into full on digging mode, I found out that it is it not for me. This information and analysis is probably very good for someone who is not very analytical, who needs to fully understand the implications of their actions. Some people, while intelligent and thoroughly decent are not good at that so this thread offers such guidance.
In short, I care about whether someone could lose their house due to a bad business decision so this thread and others like it go some way to offering transparency where it is certainly required.
Mr Electric may not fall into the category of a scam, their branding is good, website not too bad and I’ve heard some other decent things but my research across multiple forums and other locations online has led me to think otherwise. They should be nationwide after being in business for 20 years but they are not and their systems to do not sufficiently mirror the strategy of other successful franchises (references online confirm this opinion). Similarly, the reviews on Glassdoor for the employees of the Dwyer Group are far from positive!
I reiterate the point for sharing the legal cases. WE ARE NOT LEGALLY AWARE, THEY ARE! Clearly and I say clearly again, if you have read the legal cases, they show how all sorts of avenues to distress could occur. This risk is not acceptable for me!
“If the OP is trying to erect a soapbox from which to slam all corporations,"
No, this is not the case at all, many corporations do a great job and provide wonderful services to us all. Many in the trade are no angels, you’re correct but to describe this as a soapbox is churlish. Information and transparency is essential and it is everywhere now. As such the corporation and the small business owner must respond with similar morality to such open dialogue. To be offended at assumptions is fair but there are no assumptions to be made if you have read the legal cases or bothered to do the research I have done. Evidence everywhere and simple conclusions to be made on the basis of fact.
This thread and others like it can be used to help people, simple as that!
Interestingly, last evening while looking for something to watch on TV.....channel surfing....
Undercover Boss! Well it's the lady that 'owns' the parent company (Dwyer) of which Mr E is a part.
The Mr E guy she took a 'ride' and tryout for an electrician job had an interesting view of some of the 'rules' that he signed on for. Booties, truck wrapped or signed, etc. that he told her (not knowing who he was talking to) he did not think were important.
As you spend time here, you will get to know renos demeanor.
@ HotLine1 yes I think I will, it seems he likes to win arguments on things but this forum and others is for helping people, simple as that!
I need to watch that Undercover Boss, should be a little enlightening.
ECN is here to share, vent, inquire, assist & talk the trade.
I'm still trying to figure out what's "wrong" with Mr. Electric.
Individual cases are only useful to a small degree, as there's not a firm in history that hasn't had a few stumbles. Now, if you were trying to show a pattern, that's another matter.
I'd look at least to appellate cases, AND their rulings, before drawing conclusions.
For example, at one point multiple franchise holders of Snap-On tools engaged in action against Snap-On, claiming that territories were falsely represented, etc. Such a claim goes right to the heart of the agreement, and is far more serious than if a single speculator simply wanted to back out of his agreement. (That suit was settled and terms sealed, so there's no telling what the real story was.)
Another example would be the many times various Midas Muffler franchises were convicted of fraud. While those shops happened to all have the same owner, it's interesting that the parent company never had the least objection to having this skunk represent their brand. In many instances, the parent company need only remove their sign and the franchise is out of business. I can't speak for others, but to me the idea that I would be associating with known crooks would be a deal breaker.
The McDonalds' franchises in northern Nevada were once all owned by Larry Mack. Around 2005 it was found that two of his employees were "mining" employment applications for identity theft and circumventing immigration fraud. While Larry was cleared of any wrongdoing (the franchise was fined), that didn't stop McDonalds from severing their relationship with him. From owning a dozen name-brand franchises, Larry had to start over by operating a single sports bar. Now THAT's protecting the brand!
There's no single way to set up franchises. Some arrangements have far more individual latitude than others. You don't like it, don't sign.
"National coverage" really means very little. Three of the nations' larges banks have very little (or no) presence in Arkansas or Tennessee. Yet, none can claim that Wells Fargo, Bank of America, or US Bank are 'failures.' That's the effect local rules can have.
Mr. Electric has attempted to partner with Home Depot in finding residential customers. This arrangement is handled differently by HD's main competitor (Lowes), and both arrangements have raised issues regarding contracting laws. It's very possible that no arrangement can exist that is allowed everywhere. What's 'required' in New York might very well be 'illegal' in New Jersey.
I don't see any problems with the Mr. Electric arrangement. Indeed, they seem positively angelic when compared to any number of "lead finding" or "Success Inc." operations that have appeared in this chat.
IMHO, I feel that comparing a 'fixed' business location (ie: McD; BK, etc) and a service business is akin to bananas and coffee beans.
Banks to my knowledge are all corporate owned, not a franchise.
The business regs here in NJ, and other states may vary widely, as to having multiple individuals using the same 'trade name' (Mr E.) That cannot be done here in NJ
As to the big boxes, there are many contractors that compete for the 'referrals' or whatever 'finders' options. I believe big orange says 'preferred independent contractor'.
The licensing issues would be the same in Florida. If you have a franchise, the license holder is still the individual even if they have a DBA.
We have similar business names, each under a NJ Electrical Contractor License number. One lic. number, one DBA, Inc., LLC, sole prop., etc.
The guys with Mr. E all use their BP which has to be lettered on the vehicles, letterheads, etc. When they apply for permits, it is under the BP with the issued pressure seal, not any franchise name.
The other trades like 'Roto Rooter', all have lic. master plumbers with BPs.
I have a link for the program somewhere will look for it.
this might be it http://www.moviesplanet.tv/undercov...ource=twitterfeed&utm_medium=twitter