Franchising?

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If you get the right deal it seems like a good way to go. A friend is doing some HVAC work at a NC military base where the contract originated in Tex (I thnk) and was subbed out twice by the time it got the company he works for. Seems like a lot of responsiblity and liability on the originator, trusting the following companies are going to do the work, etc. But I guess it's all in the wording of each contract to do the work. At least, that's my take on it. I'm just trying to figure how much an original bid is that it can be profitable to sub out 2-3 times, or more. Talk about your mark up.:rolleyes:
 
360Youth said:
I'm just trying to figure how much an original bid is that it can be profitable to sub out 2-3 times, or more. Talk about your mark up.:rolleyes:
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The original bid could be quite accurate ....then subbed out to someone who is clueless and is charging less than contracting prices - like the many stories we have read about here and on "other" forums.
 
360Youth said:
If you get the right deal it seems like a good way to go. A friend is doing some HVAC work at a NC military base where the contract originated in Tex (I thnk) and was subbed out twice up.:rolleyes:
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This does not sound like a franchise. This seems like standard issue sub contractiing.

From what I hear, and this is mostly second hand info, if you like to run a business and give a bunch of the profits to some corporate yahoos than franchising is for you.

I don't see that there is ANY major name recognition in the electrical biz that would make it worth it. When you think of electrical franchises who jumps to mind???
When you think of fast food franchises, immediately McDonalds, Burger King, Wendy's etc....thats where franchising makes sense I would think.
 
The idea of franchising is they hand you a blueprint on how to run a business. 80% of all small businesses fail in the first year and 80% of the rest fail in the first 5 years due to lack of business knowledge. The #'s are a lot more favorable with franchises. If you are just looking to buy a van and jump in it in the morning and go hang lights for Marge and change Jim's service and not have employees than you may or may not want to get involved with a franchise. Than again you may. I have not involved myself with a franchise in the field of electrical contracting, but am certainly open to the idea for other businesses. The book EMyth discusses why businesses fail and that you should set up your business as if it is a turn key business that can be franchised if you want it to be in the future. We are curently trying to incorporate policies & procedures in our business at this time. This would have been all handed to us had we been a franchise. It is also the basis of trade associations like nexstar and Mr. Sparky
 
if you want to spend money but save time learning the things you need to run a successful business, join a franchise or a contractors group (nexstar/esi)

if you know everything and feel there is no more to learn, do not join.

if you have time to find out all the information yourself, don't join.
 
emahler said:
congratulations
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On????

Your post way oversimplifies things. I do not know everything nor do you. This does not mean I should go sell my soul to a franchise. I do not think there is a whole lot of value that they bring to our industry right now. I know of people that have worked for Mr Electric and I know how it works. In my opinion it is a ripoff.
You work just as hard to make less money. I say keep it for yourself.


Do you have anythng to add in support of franchising. I am seriously interested to hear.

I suspect that the lack of interest in this post coincides with the lack of interest in franchising.
 
electricmanscott said:
I do not know everything nor do you.
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Great point!!!

electricmanscott said:
I know of people that have worked for Mr Electric and I know how it works. In my opinion it is a ripoff.
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I'll second that.

Boy are you opening a can of worms here. He is know for degrading, be careful here, walk gingerly.

To each his own.
 
If you have the money to put down to buy the franchise rights for your area. You might want to invest in yourself by taking a few business classes instead. Most franchises I have dealt with have very strict guidelines. Plus the % paid to them for really not much. In the long run all your hard work is what makes the business a success or not. The repeat customers will be calling you not the franchise. You’re the one that has built the relationship.
Good luck!
 
electricmanscott said:
On????

Your post way oversimplifies things. I do not know everything nor do you. This does not mean I should go sell my soul to a franchise. I do not think there is a whole lot of value that they bring to our industry right now. I know of people that have worked for Mr Electric and I know how it works. In my opinion it is a ripoff.
You work just as hard to make less money. I say keep it for yourself.


Do you have anythng to add in support of franchising. I am seriously interested to hear.

I suspect that the lack of interest in this post coincides with the lack of interest in franchising.
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My point is, there is no magic bullet. whether you franchise, sign on with a contractors group, or do it on your own, you can end up in the same place.

there is, however, a ton of information out there. You can sign on with a franchise like Mr. Electric or Mr. Sparky, you can join ESI or Nexstar, or you can hire someone to teach it to you like Maurice Maio or Al Levi. If you go this route, you are paying money for the information, to save time.

the other option is to figure it all out yourself. You'll save $, but you will spend a ton of time.

I can tell you that the money you spend with a franchise or contractors group, will usually be less than the money you would spend on your own to come up with a full marketing plan (logo, advertising, etc). You definitely have economies of scale for everything from yellow page advertising to television commercials.

If you are a commercial/industrial contractor, with no desire to perform residential service, there are better ways to spend your money.

If you want to be a larger residential service company, look into them. Look in your local yellow pages. See who the larger residential/light commercial service companies are. Then see who is a franchise (easy to tell), who belongs to Nexstar or ESI, or who hires consultants like Al Levi, Maurice Maio or Ellen Rohr. I think the results will surprise you.

My point was this, many people have signed on with a group (franchise or contractors group) only to think that they know better. They don't follow the information they purchased, and try to run it the way they always have - just with a different name. If you are going to sign on with a group, understand why. You are doing it because they have information that you want. Simple as that.

Do you know who makes the best McDonald's Franchisees?

Farmers. They are used to following systems. Next on the list is former military.

Are their systems perfect? not at all. But is it better to have 150 contractors make 1 mistake each, and quickly learn 150 lessons? or for 1 contractor to make 150 mistakes?

It really is a simple thing.

Oh, and Dnk, i only dislike you. everyone else I'm quite civil to.
 
27hillcrest said:
If you have the money to put down to buy the franchise rights for your area. You might want to invest in yourself by taking a few business classes instead. Most franchises I have dealt with have very strict guidelines. Plus the % paid to them for really not much. In the long run all your hard work is what makes the business a success or not. The repeat customers will be calling you not the franchise. You?re the one that has built the relationship.
Good luck!
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hillcrest,

part of that is correct. many franchisees of Mr. Electric and Mr. Sparky are very large and successful commercial/industrial contractors. They want to diversify within the industry. So a franchise system is perfect for them. They do not have to be hands on, someone else can teach their managers, CSR's, etc how to operate it.

The other benefit to a franchise is that theoretically it is saleable. (sp?) The primary idea is that the relationships are with the company as a whole and not just you the owner. if you can get this to operate correctly, then while you still own the company, you do not have to be available 24/7 for the customers. Since their relationship is with the company (maybe a manager, maybe a technician, maybe the girl in the office), but primarily they want that company to do the work. Since, theoretically, if run properly, it doesn't matter who goes out to do the work, it will be done consitantly (sp?).

when you want to sell the company, now you are selling a business that someone can step into and make money from day 1. They don't have to worry about customers leaving because of new ownership. Since the managers, CSR's, etc will still be there. And the customers relationship is with the company, not the owner.

When the owner is the company, you work 24/7 and at the end of the day, what is your company worth? your equipment.

Your personal relationships are not worth much to someone else.
 
Who is this Mr. sparky ?

I have never heard of him or a franchise but then I don't get out much lol

I buddie told me of a deal he was pitched - it worked like this -
A man goes out and gets interested customers and then lets you bid the work and give him 20%
of that bid - sound good to you ?
sounds like a someone trying to make money for nothing - Let them starve
 
From the Mister Sparky site.

When was the last time you opened your front door to an electrician, plumber or any other service contractor who was clean-cut, freshly shaven and wearing precision-creased charcoal gray pants topped by a starched white shirt?

No More Waiting
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What is the pay like for this GQ electrician?

Do they get a decent hourly wage or do they just get a set amount for a certain task no matter how bad it might go?
 
What is the pay like for this GQ electrician?

Do they get a decent hourly wage or do they just get a set amount for a certain task no matter how bad it might go?
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I have no idea.
I guess that's the kind of information you get when you buy into the franchise.
I would assume they're well compensated if they perform well.
 
bob,

the answer to your question is "it depends"

there is no set way to do it. There are several options : hourly, salary, salary +commission, hourly +commission, straight commission. The choice is up to the owner of each location.

For us, our residential techs get a base pay per week, plus commission. They average about $1200 week in the pocket. Or about $30/hr. On top of that they get the benefits (health, truck, cell phone, uniforms, training, etc)

There is one outfit local to us who is a Nexstar company. They pay flat hourly of around $20/hr. Don't ask me how they do it or how they convince the guys to do it for that money.
 
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