Willing to Learn
For aspiring business owners, the attraction of a franchise is twofold: they’re in charge, and they have the chance to make a lot of money. To succeed, they need determination, business skills, and investment capital. “The ones who flourish are entrepreneurial marketers,” Allen says. Successful Four Seasons dealers “know how to generate leads.”
But, in addition, those aspiring to own a sunroom franchise usually have some level of construction skills. “They come from a home improvement or construction background of some sort,” Allen says. “Even architecture or engineering. They’re people who understand three-dimensional structures.”
For other franchise organizations, the ability to market, sell, and manage a business supercedes construction knowledge. Willingness alone is all it takes. But it takes a lot of willingness. Martin says that he doesn’t want franchise owners out there wielding a paintbrush. He wants them at the Chamber of Commerce meeting, wielding a BlackBerry. Building up the web of contacts and connections that in turn generate a steady stream of new business is the most difficult thing for new owners of a Fresh Coat franchise to learn. If they’re willing to learn it, they can be successful, no matter what kind of background they come from. “We have cops as well as people who owned a business before,” Martin says. “Right now we’re seeing some folks from the automotive industry. Bottom line is … they want to make a lot of money.”
And they can do that, he argues, because a franchise puts marketing, selling, and production systems in place that might take an independent startup years to establish and perfect, if it ever masters them at all. “Our business systems are geared to rapid launch,” Martin says. That means four to six weeks after signing the franchise agreement.
Onboard When the Economy Turns
Remodeling businesses are notoriously short-lived, in part because barriers to entry are so low. A consequence is that many remodeling company owners never master the financial, marketing, or selling aspects of the business and soon find themselves overwhelmed and out of business. It’s for that reason, Richardson says, that franchises are more likely to succeed at making a profit and sticking around. “The thing people have to think about, right now when so many businesses are struggling, is: How does the failure rate of a franchise compare to a non-franchise? And from what I can see, the franchise failure rate is much [lower] than [the failure rate] for non-franchised businesses because franchises are not out there by themselves.”
Some franchise executives say that although it is currently far more difficult to get the money to buy and operate a new franchise, they’re seeing as many interested parties as they ever did. Dave Adams, vice president of marketing for Concrete Raising, a concrete repair franchise based in Wisconsin, says that interest in the company is high. With unemployment approaching double digits, many middle-aged middle managers who suddenly find themselves without jobs are casting around for a business that will provide them with an income and a level of control they wouldn’t enjoy if they were working for someone else. “But the financial and credit lending institutions have tightened the strings so much that it’s difficult to put a franchisee into place,” Adams says.
Where to From Here
For companies such as Four Seasons Sunrooms or ABC Seamless, the trick is finding ways to help existing franchises stay healthy and profitable through the downturn. And both have elected a similar strategy: giving those franchisees new products to sell.
For Four Seasons, it is patio covers, pergolas, and a new line of windows custom-manufactured with a different glass package for local climate conditions. For ABC Seamless dealers, it’s a new line of horizontal metal roofing, made on the jobsite, the way the company produces its siding jobs. That, points out founder and CEO Gerald Beyers, will enable ABC Seamless, always strong in the Upper Midwest, to increase sales without having to add franchise dealers. “We have to utilize the marketing base we’ve already established,” he says.
Dwyer says he believes that in spite of their woes, franchising organizations may be doing better than independent remodelers “because we have a marketing and selling system. But when things get cut as hard as they have or foreclosure rates are as high as they are, everybody’s going to be feeling it.” That said, he believes that the worst may be over for franchising organizations. “I think the loss rate should be slowing down for most companies.”
—Jim Cory is editor of REPLACEMENT CONTRACTOR , a sister publication of REMODELING .
