Franchising offers framework for success
When Lenny Siers retired from active military duty in 1995, he decided to open his own residential home services company in Niceville, Florida. Siers’ background was heavy in air conditioning and heating and he saw an opportunity; however he had no experience as a businessman.
“I spent the first six years in business trying to figure out how to run a business,” Siers says. “I did everything wrong — it was all trial and error.”
Everything changed when Siers was invited to a one-day seminar about how to run an a/c company presented by Clockwork Home Services. Siers liked what he saw and immediately joined the best practices group AirTime to start learning how to run a residential home services company. In 2005, he purchased his first franchise, One Hour Heating & Air Conditioning.
“From 2005 to 2010, I grew from $1.5 million in sales to $6.5 million using the systems the franchise taught me,” he says. “In 2010, I started a plumbing franchise and bought Benjamin Franklin Plumbing. We started from scratch and went from no trucks on the road to doing about $7 million in sales in just a few years.”
The two businesses combined netted a little less than $27 million last year in three locations, Siers notes.
Joining a franchise also taught Vinnie Sposari, owner of Mr. Rooter Plumbing of Seattle, how to become a better businessman. Sposari’s Plumbing was founded in 1989 with Sposari going door-to-door, offering his services to anyone who would give him a chance. After several years, he was looking for new ways to grow his company when he heard the Mr. Rooter Plumbing Service franchise was coming to town.
“I was quite young at the time and didn’t really understand what a franchise was about,” Sposari says. “I went down to Waco, Texas, and checked them out. A few years later, I purchased the rights to one of the franchises. That was 27 years ago. What I didn’t realize at the time was that I was a plumber and I need to learn how to become a businessman. And the franchise was going to do that — they were going to give me the tools to be a business owner and not just a plumber out there trying to run his own business.”
Sposari now owns all the franchise territory throughout Western Washington, servicing customers from Olympia to Everett.
“Here’s the big picture: I was a one-truck operation doing about $400,000 a year,” Sposari says. “Now, I have 65 employees, 35 trucks on the road, and this year, we’ll do more than $10 million in sales. I was your typical plumber who would call all my competitors and try and figure out what they charged per hour. Mr. Rooter taught me how to price properly, how to market my services, how to grow, when to add a truck, when to add a new technician and more. They’ve really done a good job of turning me into a business owner.”
System and processes
Mr. Rooter will celebrate its 50th anniversary next year, according to Doyle James, president of the franchise organization.
“That’s 50 years of experience we have in branding and refining our systems,” James says. “Every company knows how they want customer interactions to go to produce the results they want. Our systems and processes are designed to produce a high quality result, including a consistent customer experience. What I mean is that our franchisees fix not only the issue the customer has today, but they work to become trusted advisors on things like additional products, services or enhancements and the options they have. Our system has step-by-step processes on what to say and do to create this experience and result.”
Another advantage to joining a franchise like Mr. Rooter, James notes, is the network.
“We have over 230 franchisees in North America and many of them have been around for a couple of decades,” he says. “Since our franchisees work together to help each other, the nature of our relationships between them is more of a family, not like what you might have if you were in a group community where everyone was a competitor. There is a bigger desire to share knowledge and best practices to raise the level of the entire group.”
Troy Latuff, vice president of franchise and business development, Benjamin Franklin Plumbing Franchising and One Hour Heating and Air Conditioning Franchising, notes that becoming part of a franchise model gives plumbing companies the tools and the toolbox they need to run their businesses effectively.
“The main components of that are to help with people, process and profitability,” Latuff says. “The people part is the hardest part of running a business. Hiring the right people, training, motivating and retaining them is hard because over the last few decades we’ve seen less people are entering trade fields — especially plumbing. We’ve got tons of resources and schools to help our franchisees find new people, train them and help them grow.
“Most plumbers who start their own companies have no plan — they kind of just wing it,” he continues. “However, we’ve got a playbook — it’s a process called Operational Excellence — and it has every single component to running a successful contracting business from the moment you start your company. It includes what color to paint your trucks, what uniforms to buy, how to answer the phone, how to run the call, how to follow up and ask for referrals, how to do bookkeeping and more. The A to Z of how to be a successful contractor is part of our process.”
Latuff notes that being an independent plumbing company today is not easy and cites Direct Energy’s annual growth study as an incentive to join the brand.
“We do an annual study and the numbers come out of IBISWorld,” he says. “Independent plumbing businesses have grown on average 13% over the past five years, which isn’t horrible — it’s pretty good. However, our Benjamin Franklin franchisees have grown 35% over the past five years. And that’s been pretty consistent. We started in early 2001, so we haven’t been around that long, but we’re growing at a rapid pace. It’s all due to the success of our franchisees — they’re adapting to the systems and using them very successfully to grow at four times the industry average.”
Ellen Rohr, member/franchise operations manager, Zoom Franchise Co., is proud of the systems the company has created for its franchisee members.
“Our franchise is drain and sewer only,” Rohr says. “We’ve found this particular niche, especially the way we approach it, can be scalable and profitable.”
Rohr notes the better the systems, the better the franchise.
“We all know we should have written processes and procedures,” Rohr says. “But the problem with that is it’s boring, mundane work. One of the reasons to get involved in a franchise is you want to adopt those systems so you don’t have to create your own. Our team members access their operations manuals electronically and then can edit and maintain these manuals so they stay vibrant, current and in use.”
Rohr notes that Zoom Drain provides systems for recruiting and hiring, orienting and training, marketing and sales, planning and operations, budgeting and pricing, truck stock and warehouse inventory along with ongoing support and training opportunities.
Zoom Drain’s mantra is: “We are better together,” according to Rohr.
“If you were going to navigate the waters of online marketing all by yourself, that’s a brutal, complicated road,” she says. “How do you keep up with social media, online marketing, pay-per-click, SEO and your website? And everything is changing all the time. You can waste a lot of time, energy and money and feel like you got bamboozled. We believe that if we partner up, and tackle all these things together, that would be a good use of franchise fees. Because essentially, a good franchise is going to help you fly your flag, create a brand identity that’s going to help leverage every marketing dollar you spend and provide the systems and procedures to help you solve the problems you may not be able to do on your own. Essentially, we focus on creating the calls, growing the team, and making great money…systematically. As our partner Al Levi says, ‘More success and less stress.’”
Another advantage to joining a franchise is to strengthen previously weak areas, notes Thomas Dougherty, president of bluefrog Plumbing + Drain.
“For someone who’s an entrepreneur, they can be in business for themselves, but not by themselves,” Dougherty says. “If I was not president of a plumbing franchise, that would make the most sense because I would know that I have significant strengths – especially on sales and marketing side, but I may need to surround myself with people, systems and processes that make me stronger in areas where I might be weak. And that’s what a franchise does. It allows you to bring your strengths to the table and be surrounded by a corporate team to help you become strong.”
Starting up a business can be the most difficult phase, so buying into a company that’s already branded in multiple markets across the U.S., and being taught systems and processes that are already proven to work are huge advantages, Dougherty says.
“You’re not starting with a trial by fire — you’re taught systems and processes that are already producing the desired results in the field,” he adds.
Dougherty notes that money can be made in franchising in two ways: By selling a franchise to someone and through royalties.
“We prefer to make our money on the back end with royalties, and part of the reason is because if all our money is made up front on the sale, what’s our incentive to make sure those locations are growing and profitable?” he says. “We make our money when our franchisees make money, which means we’re committed to helping them grow. If they lose, we lose; if they win, we win. That’s a true partnership.”
Keys to success
When Ray Gremaux added a Zoom Drain franchise to his existing business, Bohemia, New York-based Ray the Plumber, he brought on his friend, Jason Kim, to help run the second business. The two businesses started out in separate locations, but over time, have merged together so they’re run as one company with two different divisions.
“It has definitely increased our growth opportunity — we have a much higher revenue potential within the organization, says Kim, who serves as co-owner and service manager of the Zoom Drain operation as well as general manager for the plumbing business. “Most importantly, it opened our eyes to the type of structure, processes and operating manuals available within a company like Zoom Drain. They have a manual for every position. We have ultimately adopted those into the plumbing company as a best practice.”
Kim says the opportunity to be part of something larger has many opportunities.
“It has some long-term exit strategies – not that we’re interested in any of those short-term, but we have the opportunity to capitalize on those where it would be harder if we were a single company in our own market,” he says. “Being part of something bigger long-term has some real potential.”
Eric Carter, owner of bluefrog Plumbing + Drain of San Antonio, relocated from his family plumbing company in the Dallas, Fort Worth area in 2015 to open a bluefrog franchise.
“It was a new franchise, so it was enticing for us to be able to come on board and grow with them,” Carter says. “The biggest benefits have been the brand for one — everybody loves the frog — and the structure as far as marketing to software to help with financials. Essentially, all the pieces we were missing before. We were able to step into a company with a game plan and open our doors within six weeks of our move to San Antonio. We were able to concentrate on getting employees hired, getting the trucks wrapped, and as soon as we were ready, we were able to just flip the switch as far as our marketing went. The phones started ringing instantly. We were busy right off the bat. Having that system together was our biggest benefit.”
A good, solid franchise will help franchisees figure out direction and long-term planning, but it also takes hard work, Carter notes.
“What has made us successful is we really follow the system and we communicate,” he says. “I talk to the corporate office two to three times a week and have daily communication via email. Working hard and staying connected — just the basics of what you see successful people do.”
Sposari agrees that following the systems already in place are key.
“What you buy when you purchase a franchise is a system,” he says. “You don’t go buy a McDonald’s and try to sell hotdogs. The successful franchisees are the ones who take the system and follow it. They don’t pick and choose parts they like and don’t like. They take the system and follow it 100%.”