owning a franchise

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emahler

Senior Member
brantmacga said:
i've charged $400 to change a few light bulbs without blinking.




that is the perfect question. telling the customer "that's the price the franchise set" is not the correct answer, either.
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no...one of the down sides to actually learning your costs, and reflecting them in your pricing, is that you will inevitably lose customers who have used you when you were cheaper. Unless, you can now justify your higher pricing to them.

But in the example of the plumber, if you've been clearing a drain for this guy, every year, for 5 yrs for $150...then suddenly you become a franchise/Nexstar/Etc company, and realize you should be charging $300 for this service...how do you justify the additional cost for the same service to the same customer?
 
George Stolz

George Stolz

Moderator
Staff member
Location
Windsor, CO NEC: 2017
Occupation
Service Manager
emahler said:
...how do you justify the additional cost for the same service to the same customer?
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"...and the truth shall set you free."

"Hey Bobby, that drain under the Men's Room sink is clogged again."
"Right on schedule, ey, Bill?"
"Apparently so!"
"Okay, I've got time this afternoon. One thing you should know is we recently had a rate increase across the boards, so it's going to be a little more expensive than last time."
"Why's that?"
"Well, we realized that our previous rates didn't cover our overall increases in expenses over time, so we had to increase our rates to match, to stay in business. Unfortunately, it took us a while to notice the problem, so there has been a perceptible increase to our customers, so that's why I'm giving you a heads up."
"How much?"
"Well, I've got a boat payment coming up, so how about 200%?"
"What?!?"
"Sorry, you broke up. It'll be around $300 today. On the bright side, we've got this thing timed to every five years, so in the grand scheme of things that's not too bad."
 
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emahler

Senior Member
George Stolz said:
"...and the truth shall set you free."

"Hey Bobby, that drain under the Men's Room sink is clogged again."
"Right on schedule, ey, Bill?"
"Apparently so!"
"Okay, I've got time this afternoon. One thing you should know is we recently had a rate increase across the boards, so it's going to be a little more expensive than last time."
"Why's that?"
"Well, we realized that our previous rates didn't cover our overall increases in expenses over time, so we had to increase our rates to match, to stay in business. Unfortunately, it took us a while to notice the problem, so there has been a perceptible increase to our customers, so that's why I'm giving you a heads up."
"How much?"
"Well, I've got a boat payment coming up, so how about 200%?"
"What?!?"
"Sorry, you broke up. It'll be around $300 today. On the bright side, we've got this thing timed to every five years, so in the grand scheme of things that's not too bad."
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"Oh, so now you're gonna jack up your prices so you can afford to live like a rich man?"
 
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ohm

Senior Member
Location
Birmingham, AL
ceb58 said:
I have seen one disadvantage to the franchise side. One of my regular customer told me he had been using the same guy for all his plumbing needs for years and was happy. The plumber has now bought into a franchise. His last call to the customer was to replace a float in a toilet he was there 15 min. plus parts and sent him a bill for $483.00 when he questioned the bill he was told that was the rate the franchise company had set. He told him to enjoy the money because it would be the last he would see from him.
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Sounds like a fair price to repair a toilet...on the space station.
 
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electricguy

Senior Member
Location
British Columbia Canada
I have watched a Nexstar plumbing Company grow and grow in this town. I never see their trucks parked. They advertise on the Radio,May have a morning dialogue with the local radio personality . I always wondered how i always seen thier trucks working.
Now for Electrical Contractors for the last 2 years I have seen their trucks parked not working.
I didnt know this plumbing contractor was a nexstar member until I looked at nexstar's website and saw they were a member.

Another thing I see in town is 2 companies with the name " low Cost Plumbing" and another called "Budget Plumbing " I sort of get a snicker when I see the rusty old vans.

I got to notice this all when I was running all over town installing satellite dishes.
 
peter d

peter d

Senior Member
Location
New England
electricalperson said:
483 dollars for that plumbing repair seems pretty high. how much are those toilet repair kits anyway? they must have very high hourly wage and markup
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It doesn't seem that high to me. Once you start adding up the costs of running a business, those numbers start to sound a lot more reasonable.
 
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ohm

Senior Member
Location
Birmingham, AL
peter d said:
It doesn't seem that high to me. Once you start adding up the costs of running a business, those numbers start to sound a lot more reasonable.
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Let's see Peter, if the kit cost $50 that leaves $433 for 15 min.

So is it safe to say you charge $13,856 per day for your time and overhead?
 
bradleyelectric

bradleyelectric

Senior Member
Location
forest hill, md
ohm said:
Let's see Peter, if the kit cost $50 that leaves $433 for 15 min.

So is it safe to say you charge $13,856 per day for your time and overhead?
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Yeah Peter. It only takes 15 minutes to get the job assigned, make sure you have the parts or get the parts, check fluids in the truck, drive to the job, get gas on the way, do the introductions including exchange of company information and get the customer comfortable with you and your company so they like you and your company approach and you have a chance of them remembering you so you'll get the next call when they need service, diagnose the problem, fix the problem, return tools and debris to truck, wipe everything down and otherwise clean, walk the job to make sure everything is put away and cleaned up, write invoice, receive payment, return to truck to be prepared for next assignment.

You are surely able to repeat this 32 times a day. I'm just wandering why this takes 15 minutes and not 60 seconds like the last job we were talking about. You must have ate a peanut butter and jelly sandwich somewhere during the time you were loafing through this job.
 
bradleyelectric

bradleyelectric

Senior Member
Location
forest hill, md
mivey said:
Maybe it's time for a new truck.:D
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maybe it is. Truth is you should check it. Maybe not for oil everyday, hopefully not every stop, but there should be a regular time to do a truck check, like maybe Monday first thing. Every morning we do a quick truck clean and empty trash. Occasionally things need to be wiped up ect. every morning there is time to be spent on the "check fliuds" style prep work. It all takes away from billable time.
 
mivey

mivey

Senior Member
bradleyelectric said:
maybe it is. Truth is you should check it. Maybe not for oil everyday, hopefully not every stop, but there should be a regular time to do a truck check, like maybe Monday first thing. Every morning we do a quick truck clean and empty trash. Occasionally things need to be wiped up ect. every morning there is time to be spent on the "check fliuds" style prep work. It all takes away from billable time.
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Truck check (oil, lights, etc) every morning before employee meeting. Clean-up on Friday afternoon or early Monday.
 
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