Franchisers Offer Option in Turbulent Times
by Peter Powell
January 22, 2010
In these turbulent economic times for HVACR contractors, promoters of franchising are contending that their approach could be a bit of a safe harbor. They maintain that they offer marketing skills to find customers; tools to educate those customers on investing in retrofit upgrades as well as preventive maintenance; proven accounting methods to tighten the bottom line and boost profit margins; and, in the most basic sense, “ways to work smarter.”
The current economy “means a smaller opportunity in both dollars and customers for the small mom and pop contractor,” said Mark Liston, vice president of sales and marketing for Clockwork Home Services. “We offer that contractor an opportunity to remain independent while getting the benefit of better costs, advertising, training, financing, direction, and understanding.”
LOOKING OUT FOR MOM AND POP
Clockwork Home Services, which includes One Hour Air Conditioning & Heating among its three brand names, was started in 2003 and current has close to 700 franchisees.
“Consumer financing has been our biggest challenge,” said Liston. “But we have actually seen our customer call count growing as the homeowner becomes more familiar with our brands and services.”
To adjust to the changing economy, he said, “We have been able to use our North American buying power to substantially decrease prices of equipment, parts, and services and negotiated a proprietary consumer financing program. Plus, recognizing greater challenges in the economy, we have enhanced our online training programs, our Internet interactivity, and search engine optimization, plus started a management development program.
The future can prove especially challenging for the so-called mom and pop companies, he said. “I perceive there will be very few companies serving the residential retail market. Those who do not affiliate with a company like ours will have to become a ‘super regional’ contractor or will continue to shrink in size and profitability and fight for a much smaller piece of the pie. In some North American markets today (Toronto, Indianapolis, Las Vegas, and others), four large companies or utilities now dominate over 60 percent of the market. Ten years ago, these same markets had no company with over 5 percent share. That means a smaller opportunity in both dollars and customers for the small mom and pop contractor.” Liston said it is a situation that can be addressed by franchisers.
“Our industry is changing and has already changed; most are not even aware as to why it is so much more difficult today. It really is not the economy, it is the changed level of market expertise that companies like One Hour Air Conditioning brings to its franchisees.”
Peter Powell
