Though most remodelers do not own construction-related franchises, 33% of our respondents have considered purchasing one. Of the owners that purchased a franchise, 70% still own their original company and 67% manage both companies themselves. Those who invested in a franchise cite the desire to diversify for a more steady income as the No. 1 reason for purchase. Other reasons include increasing profitability and volume of work.
Is the franchise treated as a totally separate entity or as part or a division of your company? Totally separate entity 40%
Part/division of company 40%
If you own a franchise, what convinced you to purchase it? “Managing franchise operations for others in years past led to this logical decision to own one myself. I have my own business but am not in it alone.”
Richard Booher, Artisan, Roseville, Calif.
“Exponential growth potential. Retirement plan.”
Jeffrey Brooks, The Brooks Group, Renton, Wash.
“It was a corporate decision to open up franchises in our area simultaneously. So we started at the same time, attended training together, and shared marketing expenses.”
Steven Fletcher, Fletcher Custom Homes, Mariemount, Ohio
If you considered buying a franchise but didn't, what stopped you from purchasing it? “The costs of advertising and management support were too high given the margins and controls exerted over our firm.”
Alan Hanbury, House of Hanbury, Newington, Conn.
“We started signing up a lot of jobs and fell behind. I had to stop exploring other options and concentrate on what was in front of me.”
Scott Dornbusch, A&K Construction, North Branch, Minn.
“I think that it would be a better return on my money to take whatever the franchise fees are and put that money into marketing. If I'm successful, then perhaps I could sell franchises!”
Steve Klucharich, KCE Construction, Berkeley, Calif.
How does/did the franchise not meet your expectations? “The exclusivity worked against us. It meant we had to advertise much more, which drove up cost, along with the manufacturer driving up cost because they assumed they had a captive audience.”
Darius Grimes, Ventilated Awnings, Pensacola, Fla.
“It can be frustrating to be limited to a territory. It's a Catch 22, if you will, because that same protected territory can't be taken away from us (unless, of course, we don't meet sales requirements).”
Monica Nunez, Ultimate Living Spaces, Brattleboro, Vt.