The Ideal Candidate Just like remodelers have to figure out for themselves if a franchise will work for them, so too does a franchisor have to know what kind of buyer is the right fit.
Remodeling is a difficult business to break into, so Owens Corning wants buyers who own existing remodeling companies. “We want to partner with people who have been through trial and been successful,” Sloan says. He says the ideal Owens Corning Basement Finishing franchise candidate runs a $1.5 million to $2 million company and employs a sales and a production manager.
Case is open to looking for buyers outside the industry. Case’s vice president of marketing & public relations, Joaquin Erazo, says in the beginning remodelers do well in the handyman business because of their construction experience. “That knowledge is very good for the first year. They start strong, but when they get to $1 million or $2 million in sales, they can’t see beyond that,” Erazo says. However, when entrepreneurs outside the industry reach that number, they start looking ahead to $3 million and $4 million in sales.
Pride Before the Fall Maile was guilty of one of the common pitfalls of new franchisees — the tendency to break the system. “I thought, I’m so smart, I’ll take little bits and pieces of this system and fit it into my existing system,” he says. “But then the new company starts looking like your old company.” He continued to use his estimating software, but that meant he lost out on the opportunity to benefit from tips and techniques from other DreamMaker franchisees. He also continued to use his sales process of visiting a client’s home and producing a proposal with allowances for products. DreamMaker recommends bringing clients to the showroom for the first meeting where they can peruse products for a more accurate estimate.
Maile now advises remodelers to follow the systems blindly — as if they had never run a company. “The same goes for training someone from your existing company to run the franchise division. If you bring someone over, you’re bringing over the same bad habits,” he says.
Many franchisors say the lack of spending on marketing — even with the marketing materials that are made available to them — is the No. 1 pitfall of franchisees. According to Sloan, franchisees forget they have to continually build the brand.
Doug Dwyer, president of the Dwyer Group, parent company of DreamMaker Bath & Kitchen, claims remodelers spend less than 1% on marketing their existing companies. When Dream-Maker asks them to spend 3% to 5%, there is some resistance. “It takes encouragement and coaching to get them on track,” he says.
Case emphasizes marketing by having potential franchisees speak to Erazo during the due diligence process. Erazo helps them choose a territory using sophisticated statistics and reports. But even after this conversation, he says, owners are reluctant to spend on marketing. “For the first one to three months, they have strong marketing, but at the three-month mark, they panic. They think they are spending too much money,” he says.
Stoltz didn’t follow Kitchen Tune-Up’s 12-week marketing plan and couldn’t figure out where to spend his marketing dollars. The franchisor helped him track his leads to discover where to spend money.