In two previous columns — Restoration Frustration and Restoration Revisited — I wrote about the obstacles and opportunities faced by remodelers looking to the insurance restoration industry as an avenue for growth … or survival. Today, I revisit the subject. In talking about why he wanted to add insurance restoration to his framing business, Nick Berger described the economic crash as “kind of like a wildfire. Things were burned up, but new seeds dropped. Adding a restoration company has helped.”
They chose to purchase a franchise from a national restoration company, Rainbow International Restoration & Cleaning, based in Waco, Texas. Even though the Midwest didn’t suffer as much as other areas around the country, after the economic crash Nick’s business was significantly affected by the slowdown. He heard about Rainbow from a fellow contractor and after meeting with a number of existing franchisees at a Top 20 mixer hosted by the company, he was so impressed with their professionalism and willingness to help that he and his parents decided to become franchisees.
Franchise Location Opening
This past April, Nick and his parents opened their Rainbow franchise in Lawrence, Kan., after completing three weeks of training. Their training provided them with certifications in fire and smoke damage, water damage, and odor control. Once a franchisee has the water damage certification, they’re eligible for the structural drying and mold removal certifications, which can be acquired from third-party sources. These certifications, issued by the IICRC, a certification and standard-setting organization, are all a remodeler needs to start in the restoration business.
Just a few weeks ago they sold their first job — water mitigation of 13 rooms on three floors of a hotel. The lead came from another franchisee that they had done work for in the past, and because Nick wasn’t yet fully staffed on the restoration side, he was able to call yet another franchisee from 90 miles away to help him complete the job. For day-to-day challenges, Nick says, “I can call any franchisee in the network and receive a good quality answer.”
Rainbow’s president, Rob White, describes four features that differentiate Rainbow from the competition: its code of values, consistency, its accountability system, and claims severity reduction (practices that demonstrably reduce the cost of fulfilling a claim). The franchise’s code of values is organized by respect, integrity, and customer focus, and is expressed in 14 statements such as:
“making only agreements we are willing, able, and intend to keep”; and
“making our best efforts to understand and appreciate the customer's needs in every situation.”
The values are read aloud at every meeting of three or more employees. It was this emphasis on ethics that convinced a very skeptical Paige Sirois and her husband to open a Rainbow franchise in north central Florida.
For 10 years prior to that, Sirois and her husband had run a remodeling company that specialized in apartment rehabs and home additions, and they were reluctant to give up their independence. But after learning about the quality of Rainbow’s training, its family atmosphere, and especially its values, she realized that joining a franchise system would allow her company to leverage its existing operations into new markets.
Since adding the franchise in July 2011, Sirois and her husband have become preferred contractors with three of the six national programs run by insurance carriers in Florida. The vice president of construction from their remodeling business has taken on the duties of estimating and marketing for the restoration side of the business. The estimating software he uses is complex, but Rainbow provides training and ongoing support to help franchisees through the learning curve.
The VP’s marketing responsibilities include soliciting business from hotels, schools, and other commercial property owners that would have need for ongoing, as well as emergency, restoration services. They’ve signed up an apartment community for regular carpet cleaning, which Sirois says “pays the bills.”
Marketing also involves developing relationships with insurance adjusters, and Rainbow’s White acknowledges that it is difficult; which is why the company requires franchisees to have a person dedicated to daily marketing activity. “Realistically, it takes eight months to a year to break in and start seeing steady referrals,” White says.
Sirois says that the insurance restoration business is a “twenty-four/seven job — you can get calls any time of the night.” She advises contractors to keep the overhead low in the beginning because the work comes in waves. And to anyone considering joining a franchise system, she says, “Investigate. Make sure it’s a good company.”
—Rick Provost has more than 20 years experience helping to build the country’s largest design/build franchise network specializing in exterior home improvement. Formerly the president and CEO of Archadeck, Rick is now a principal in SMI Safety, a safety consulting and staffing business that specializes in industrial construction. Rick also consults with emerging franchise companies to help them develop growth strategies and business systems. He can be reached at email@example.com.