Some six years after selling its first franchise, Case Handyman Services has expanded rapidly, with 66 partners nationwide. Now, its sister company, Case Design/Remodeling, a Bethesda, Md.–based firm that served the Washington, D.C. metropolitan area to the tune of $40 million in 2004, hopes to match that success by franchising full-service remodeling.
If it works, it will mark the first time a full-service remodeling operation has succeeded under a franchise model.
While there are stand-alone Case handyman franchises, many are owned by remodelers who already had full-service operations and are now running both, separately. To illustrate the business model with which the local operation has been successful, Case president Mark Richardson (a REMODELING columnist) compares the full-service company to a wheel and the handyman division — with its large client list — to a motor that helps accelerate that wheel. “If that wheel is out of whack,” Richardson says, “we've created an additional problem” when adding a handyman franchise. That is, if the full-service arm isn't working smoothly and efficiently, both businesses fail to live up to their potential, with the company owner's attention torn in two different directions.
That's exactly what was happening to a handful of Case handyman franchise owners who came to Richardson, asking if he could share some of the secrets that have led to Case's success. Case then decided to start a full-service remodeling forum as a pilot program, eventually developing formal training processes. The planned announcement (as of press time, information had not been formally made public) to roll out a full-service remodeling franchise was prompted in part by the experiences of a handful of handyman franchisees that have been doing larger remodeling projects under the Case umbrella for the past few years.
The formula is based on the idea that a homeowner who calls a handyman to fix a leaky faucet will eventually want their windows replaced, then their bathroom redone, and then maybe a room addition or whole-house remodel. A handyman naturally develops a large client base. The simplicity of clients dialing one phone number for large and small jobs will drive business growth. “In a two- to five-year period, we can grow a business to a size that would otherwise take a generation to reach,” Richardson says.
Jerry Harris, of Case Handyman and Remodeling, in Tidewater, Va., can attest to that. As one of the remodelers who has been doing larger projects under the Case Handyman name, Harris increased his combined volume from $2.5 million in 1999 to nearly $6 million last year. And with a client list of 5,000, “we're making money,” says Harris, “but nothing compared to what we're going to be making in five years.”
Changing Times The impact of this announcement by Case is largely contingent on its ultimate success, but experts are touting it as a step toward consolidation — something many think the industry sorely needs. “If this industry is going to survive, it needs to find a way to grow its scale,” says Kermit Baker, director of the Remodeling Futures program at the Joint Center for Housing Studies at Harvard University. “The small remodeling company is being niched away by installed sales at retailers and specialty firms.”
Long-time industry consultant and REMODELING columnist Walt Stoeppelwerth agrees. “Within three years, The Home Depot and Lowe's are going to offer installation on nearly every product they sell,” he predicts. “No longer will you be able to make money selling product, only selling service. We badly need bigger companies.”
The franchise model has worked within the remodeling industry in areas outside of handyman. Replacement contractors, insurance restoration firms, and deck and sunroom contractors, among others, have all seen franchising in their market segments take off in recent years. And Texas-based DreamMaker has had success franchising with bigger, more kitchen and bath arena.
The 1980s saw the establishment and eventual failure of Mr. Build, which was started by one of the founders of the real estate chain Century 21. The conventional wisdom is that the venture didn't succeed because of a lack of experience and understanding of the remodeling industry. That shouldn't be a problem for Case, which has been in business since 1961.
Learning to Adapt While the business model certainly worked in Case's home market and the company has had success franchising handyman, this undertaking isn't without its challenges. Case will be converting existing businesses, so the franchising process will have to provide for the existing structure of a company, rather than starting with a clean slate like they would when opening a new handyman office. And because large remodeling projects are so customized, it would seem to be more difficult to nail down and teach systemized processes.
But the biggest obstacle may be the one that no one, as of yet, has been able to overcome when it comes to full-service remodeling. “The stumbling block has been ‘I can do what I'm doing well, but I don't know how to do it in a new market,'” Baker says. Case, among others, figured it out on the handyman side. Time will tell if they've nailed it for full-service remodeling.