To franchise or not to franchise?

electricboogal00

New User
Location
California
Occupation
Employed
Have seen this posted a bunch in the past but was curious about folks' opinions today...

1. What is the value in joining a franchise system (Mr Sparky/Mr Electric)

2. For those who have considered it but didn't go through with it, what made you say no? Any regrets?

3. For those who considered it and did go through with it, what swayed you? How do you feel about that decision today and what are the benefits you feel? Were there any struggles you had before that the franchisers helped you overcome? How valuable was the brand, in your opinion?

4. What kind of person does better with a franchise vs. going at it alone?

Thanks in advance for the wisdom!
 

roger

Moderator
Staff member
Location
Fl
Occupation
Electrician
I worked for two companies that fell for the sales pitches and both regretted it. As I remember it was a pain getting out

Roger
 

Buck Parrish

Senior Member
Location
NC & IN
Perhaps you could start a poll. To franchise or not to.
I'm a not to.
Because I haven't needed any bodies help.
I think their form of advertising would be help full to some. But IMO I don't really like that type of customer.
I feel the same way about Angie. Do I really want a customer that needs a third party to help them make a decision? No I don't.
 

brantmacga

Señor Member
Location
Georgia
Occupation
Electrical Monke
We’ve been out of MRE for going on 10 years. I leaned a lot, honestly, about the business of service calls.

But, at the end, they stopped providing any tech sales training support. They slashed the shared advertising budget also, but wanted more money. By slashed I mean they basically contributed $0 to advertising.

They also moved to a cloud CRM platform where they wanted control over all of your customer data. They wanted complete ownership of your business; phone number, website, etc. They wanted you to just work for them. There were also different rules for larger franchisees; the guys in bigger cities with higher revenues could do pretty much whatever they wanted. Specifically they were taking calls in territories they didn’t own, especially on the national accounts. That work was supposed to go to whoever owned the territory or was closest to it. I’d see guys from Atlanta (3/hrs away) in my area supply houses down here working.

They had it set up where they would auto draft their 10% cut + base monthly charge out of your checking account, and then changed it to where they would handle all of your payments and then cut you a check of your share.

They also decided to allow multiple franchisees in small territories. We had two; one with a population of 100k people and another with 300k. I could >maybe< understand the 300k population area being split, but splitting my hometown with 100k people is unacceptable.

I think the year we left they lost over 100 franchisees. I’m in South Georgia, and someone in Atlanta has since bought my hometown territory. They have a single van, and most days I see it parked right outside their office. Someone from Mr Electric called me earlier this year asking if I’d be interested in opening a competing franchise in my town. That alone tells me they still have zero interest in the success of their franchisees.

I have no idea what the business model is now, but I doubt it’s in your favor. You’re better off to do some 3rd party sales training a buy yourself a flat rate program.


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brantmacga

Señor Member
Location
Georgia
Occupation
Electrical Monke
I worked for two companies that fell for the sales pitches and both regretted it. As I remember it was a pain getting out

Roger

You don’t get out for free. It was basically go to court or pay a small fortune to walk away.


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Fred B

Senior Member
Location
Upstate, NY
Occupation
Electrician
I've been head hunted for most part of a year now by one of those companies. Thet claim they are looking to expand. I've seen no advantage to switch my business model to become a franchisee. They have zero name recognition around here to get me more business. Unwilling to share their pricing model. More than willing to share their minimum franchise fees being based on per thousand of population, but no real data of costs. They don't seem to have any idea how they will overcome the handiman hack underpricing we have around here. Or their pricing to me for the "tire thumpers" that are more than prevalent around here that places like Angie's and Home Advisor is so good at getting me, (don't use them anymore either for that reason). So overall I say no thank you.
I've even told them no, and they are still reaching out to try to sell me. Sounds desperate, but they're not talking cutting a deal that gives me a greater share of the profits or lower franchise fees though.
 

brantmacga

Señor Member
Location
Georgia
Occupation
Electrical Monke
I've been head hunted for most part of a year now by one of those companies. Thet claim they are looking to expand. I've seen no advantage to switch my business model to become a franchisee. They have zero name recognition around here to get me more business. Unwilling to share their pricing model. More than willing to share their minimum franchise fees being based on per thousand of population, but no real data of costs. They don't seem to have any idea how they will overcome the handiman hack underpricing we have around here. Or their pricing to me for the "tire thumpers" that are more than prevalent around here that places like Angie's and Home Advisor is so good at getting me, (don't use them anymore either for that reason). So overall I say no thank you.
I've even told them no, and they are still reaching out to try to sell me. Sounds desperate, but they're not talking cutting a deal that gives me a greater share of the profits or lower franchise fees though.

Some thoughts.....And this isn't advocating for franchising, but I was part of one so sharing my experience.

They won't have much name recognition anywhere the franchise doesn't already exist; that was the point of the large advertising budget when you sign on, to build that recognition.

Again, I don't know the business model today, but when I was involved the pricing was set by the franchisee, with the guidance of the franchise of course. But they would help you figure out a profitable hourly rate and apply it to their flat-rate pricing assemblies.

Those who will hire handymen to do electrical work are not your customer base, franchising or not. There is a customer base out there that is willing to pay a premium for quality work and also for someone that can "just handle it"; that's who you should be advertising to. It took awhile to get to this point, but all of my customers are repeat and don't shop.

I wouldn't expect them to make any deals to get you onboarded; they're going to tell you not to negotiate price with customers, why would they do it with you?

The franchises don't have any secrets you can't learn on your own.
 

petersonra

Senior Member
Location
Northern illinois
Occupation
engineer
my personal opinion on franchises is that they are often really good at getting someone started in a business, and if they support the name with advertising, it can be a really big draw. Many new customers are more comfortable with a name they have heard before than some guy they have never heard of.

the model certainly works very well for many people in other industries so I don't see any reason it would not work in the EC field.

the thing is though, as another poster mentioned, is they have no secrets you cannot learn on your own. but for you to learn them on your own it will likely be pretty painful, since most people do not learn any other way.

down the road you may feel like you are not getting your money's worth, but it is often hard to get out of the franchise agreement.

i would want an exclusive territory. having another franchisee in the same area is almost like competing with yourself.

PLEASE, if you even consider going this way, pay a good business lawyer a few thousand dollars for advice before getting into this kind of arrangement.
 
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