Franchises in the plumbing sector

 

BY JEFF YOUNG,

contributing writer

 

Remember eating your first hamburger or eating your first ice cream cone? That first experience may have been provided by a franchise business. Many of the legendary franchised restaurant chains — from Burger King to Dairy Queen — have been a part of our lives longer than we realize. Today, franchise businesses have expanded beyond restaurants and can be found for almost any product or service, including plumbing services.

 

According to John Sembower, president of Mr. Waterheater, joining a franchise is like joining a family. “A Mr. Waterheater franchise owner becomes part of our family. We are committed to making our owners successful because our success is tied to their success.” Franchise prospects are invited to participate in a Discovery Day at Mr. Waterheater headquarters in Pittsburgh where they will meet their support team prior to making a decision on joining the franchise. “It’s important that a franchise owner fits our culture and wants to be part of the team,” said Sembower.

 

Before joining a franchise system, there is a process of mutual evaluation. Potential franchise owners must complete their due diligence of learning about the franchise, reviewing the Franchise Disclosure Documents and talking to franchise owners currently in the system to determine if the franchise is a good fit. The franchisor will also evaluate the candidate during their due diligence phase to also determine if there is a fit. Once there is a match and both parties have signed an agreement, a franchise territory is awarded, training is completed and the franchise is launched.

 

The largest franchise in the plumbing sector is Mr. Rooter, part of the Dwyer Group of franchises. Mary Kennedy Thompson is in her third year as president of Mr. Rooter and has no hesitation about leading a franchise company in an industry that has predominantly male franchise owners. “Since the Mr. Rooter customer is most often female, I can relate to them and understand the importance of providing great service and minimizing disruption in the home,” said Thompson. As a former franchise owner Thompson understands the concerns of franchise owners and has instant credibility with her franchise owners having owned a franchise business.

 

For the franchise business model to be successful, everybody needs to win. Consumers win with a consistent product or service. The franchisor wins through rapid expansion using the talent and finances of a local owner. The franchisee wins by owning a profitable equity-building business and having the benefits of a franchise system. “The Mr. Rooter model is to think nationally but act locally. This is our time tested formula for franchise success,” stated Thompson.

 

Franchising relies on the cookie cutter approach. Once a successful mold is built, then it’s just a matter of replicating that success in other markets. Franchising may appeal to the independent business owner, but is not right for everyone. The initial franchise investment can be expensive so it takes money to make money. Then you have ongoing royalties that you pay. That’s how the franchisor makes their money.

 

A franchise can provide an exit strategy that is financially rewarding. When an owner decides to retire, the franchise can be sold through a business broker or through the franchise system. According to Thompson, owners can be handsomely rewarded when they sell their franchise. “How much you get for your franchise is directly tied to the sales and profits you have achieved in your business. There’s no simple formula, and it’s like selling a home, the price you can get for selling your franchise depends on what the buyer is willing to pay. We do find that when our franchise owners follow the system, have strong ebita, cash flow, and good customer base, then they have a more marketable business to sell,” said Thompson.

 

Franchising has become an important part of the economy and is not going away. Joining a franchise system is an important business decision that should begin with a look at your existing business and an understanding of your goals then finding a franchise that can help you achieve them.       

 

Jeff Young has more than 20 years experience in the franchise industry and former editor of franchisehelp online newsletter. Contact franchise young@comcast.net.