Is a plumbing franchise right for you?
There are many appealing features of a franchised business model for plumbing, HVAC and electrical contractors. To some, the appeal of a business system, brand recognition, buying power, marketing systems, software, training, and the perception of having a mother-ship to turn to may be worth the huge upfront costs and ongoing royalties to buy the franchise territory. Others realize that most of these things are readily available to you through PlumbAmatic™ without the cost.
Franchise systems do work, but they are not right for everyone. Let’s look at some of the pros and cons.
Pros of a plumbing business franchise
- Written business model
- Some level of brand recognition
- Marketing programs
- Some have software
- Vendor alliances (buying power)
- Exclusive territory
Cons of a plumbing business franchise
- Huge upfront costs before you even open the doors (some are hundreds of thousands of dollars)
- Ongoing royalties, usually 4-10% of gross revenue (on a million dollars of business that’s 100K and $100,000 is a lot of money every year for the duration of the agreement)
- Franchise agreements are long term- typically 10 years
- You own the business, assume the risk, but are told how you must operate it
- Want to expand? Great! Now you get to pay the franchisor for another territory
- You still have to hire all your employees
- You still have to manage your own business
- You are still the one training your team
- You still need to set up your trucks
- Franchise websites are terrible for SEO and internet marketing
- Only a small percentage of franchisors in the plumbing, HVAC, and electrical business actually have brand recognition
- Some perspective clients will not call a franchise just because it’s a franchise
- You may be paying more for “exclusive private labeled product” through franchise vendors- (there is usually a kick-back deal between the franchisor and vendor that as the franchisee you pay for)
- Just because you buy a franchise doesn’t mean your business will be successful
- What happens if you want out of the franchise... You loose everything
If you are considering buying a plumbing, HVAC, or electrical franchise or converting your existing business to a franchise, let’s talk. During our conversation we may discover a franchise is right for you, or expose a different perspective that is more appealing to you based on your long term goals.
What do you have to lose?