Top 5 National - PDF document

Top 5 National Handyman Franchises A Side-By-Side Comparison Report According to the United States Census Bureau , there are now over 126 million housing units in the United States, and of that number over 95 million were built before 1990. Today, these homes are nearing 20 years and are needing the necessary repair and maintenance to maintain their value. Roofs, kitchens and baths wear out or become outdated in a 15-20 year cycle. This means that these homeowners are going to need the type of help Handyman Matters can provide. We live in a world where the average family has 16 hours of leisure time in a week. Most will agree that our time is better spent with our friends and family—not devoting each weekend to home improvements. The demand for a reputable and reasonable home repair service has never been higher. As the population rises, demand for services will follow. The purpose of this report is to give you comparison information from the 5 main home repair/handyman franchises. We gathered all of this information out of the legally required Franchise Disclosure Documents (FDD) from each of the franchisors. To get these documents for yourself, you either need to qualify with each franchisor or buy them for $220 each ($1,320 total). We have completed the research for you—saving you time and money. 1 1 COMPARISON REPORT 2 How To Understand The Charts Included in This Report There are two charts included in this report. One is the Detailed Comparison Chart (pg. 17-18) that has all the details and numbers from each FDD. The second chart is a Summary Comparison Chart (pg. 15-16), which is a simpler version of the Detailed Comparison Chart and utilizes color-coding to make the comparisons easier to visualize. The assumptions used to determine the scoring on the Summary Comparison Chart are listed below with the descriptions of each factor. Use these charts to get an overview of how each franchise scores on each factor by looking at the summary chart, and then refer to the detailed chart for the actual numbers the summary chart was based upon. On the Summary Comparison Chart, the franchises that score best on a factor are colored GREEN, those in the middle are YELLOW, and the worst are colored RED. You’ll have to decide for yourself which factors are important to you. We’ve included a description of each factor and why it is important within the industry. Note that this report is not intended to take the place of doing your own due diligence; it’s just giving you a good place to start. Detailed Comparison Chart • HaldwPpm (Yellow Van Handyman) • Haldwkal Marrcps • Haldwkal Amllcargml • Mp, Haldwkal The Franchises Discussed In This Report Are: 3 Territory Size One of the rst things to consider is your territory size. Territory sizes range from 7,500 – 100,000 plus. The franchisors that oer the largest territories are Handyman Connection, Handyman Matters, and Andy On Call. Note that when you get actual FDD documents, territories can be described in terms of population or by households. To allow equal comparisons, we calculated the number of households using the US Census data of 2.4 people per household. On the Summary Comparison Chart we dene a territory of 62,000 households or more as an “A”, a territory from 50,000 – 61,999 as a “B”, a territory from 30,000 – 49,999 as a “C” and 29,999 or under as an “F”. Franchise Fee The franchise fee is not the only cost of getting your business started, albeit a major one. Franchise fees range from $25K to over $54K. Since the territory sizes vary so greatly, we’ve listed both the franchise fees and also the equivalent fee for a 62,500-population territory. We have included all fees you are required to pay to own the territory. Fees may be listed as franchise fees, territory fees, training fees, start-up fees, etc. The measure we’ve used on the Summary Comparison Chart is the franchise fee per household. An “A” is dened as 20 cents or less, a “B” as 21 – 25 cents, a “C” as 26 – 35 cents, and an “F” for 36 cents or more per household. Can You Sell In Unoccupied Territories? This is not as important a factor as the preceding two, but we’ve indicated if the franchisor will allow you to service customers in a territory next to yours while it’s still unoccupied. Some will and some won’t – about a 50/50 split. If they allow you to sell in adjoining, unsold territories, it is a good indication that the franchisor is looking out for your business interest and the best service for local customers. Other Fees Other fees can range greatly, but need to be considered in your total start up costs for your business. There is a major dierence between a franchisor that requires you to have a commercial location plus several vans painted with their logo and a franchisor that allows you to start out from your home with no additional overhead expense. The Summary Comparison Chart coding is an “A” for $0 - 240 per year, “B” for $241 - $500 per year of extra fees, “C” for $501 - $1000 per year extra fees, COMPARISON REPORT 4 and an “F” for more than $1000 per year of extra fees. To see what the additional fees are for, refer to the “Detailed Comparison Chart” and item six of their FDD. Royalty Percentage All franchisors charge you a royal ty on sales as a way to provide the funds to give you ongoing support and to make a prot themselves. We’ve coded those at a 5% royalty as an “A”, 6% as a “B”, 7% as a “C” and 8% or more as an “F”. Minimum Royalty Charge Some franchisors have a minimum royalty payment that is required regardless of your sales. The fee increases your costs of getting your business o the ground so we have included these charges and graded them as: “A” is none, “B” is up to $200/month, “C” is $201 - $500 per month and “F” is over $500/month. Advertising Fund Charge You pay this charge as a percentage of your sales to provide the funds for national advertising which benets all franchisees. Some franchisors require you to spend a certain amount on local advertising instead of charging this fee. Make sure to look at both the advertising fund charge and the advertising minimum requirements on the Detailed Comparison Chart. Home Ofce Allowed? For the most part, the franchisors here listed a simple “yes” or “no” when questioned about working from a home oce. One is ranked as a “maybe” because they may allow you to use a home oce. You must get the franchisor’s approval rst. Being able to start in your home is a denite advantage and lowers your start-up costs. The systems that allow you to start in your home get a green coding and those that don’t get a red. The franchisor that is a “maybe” we gave a yellow code. COMPARISON REPORT 5 “The ideal franchisor is one who is both a substantial size and who is also protable.” Term of Agreement The Term of Agreement is important because a short-term agreement can change the rules when you renew. The franchisor could shrink your territory, raise the fees, or change anything they choose in your franchise agreement. If you have spent ve years getting your business underway, it would be an unpleasant surprise to nd the rules changing upon renewal. Seven years or longer gets an “A”, ve–six years gets a “B”, and four years or less gets a “C”. Cost To Sell Your Franchise This is something most buyers don’t initially consider. Think about what would happen if you wanted to sell your business—what are the restrictions and costs for doing so? The costs can range from minimal to exorbitant fees that are the equivalent of buying an entirely new franchise. You may not intend to sell, but unforeseen circumstances can always happen, so this area is worth a look. Most franchisors charge you less if you sell to a fellow franchisee in the system. This makes sense because less support is necessary from the franchisor. All franchisors require that they approve the sale because it is important to the system as a whole to have quality franchisees. We give an “A” to those who charge $3,000 or less to sell to existing franchisees and $10,000 or less to outsiders. The “B”s charge $3,000 - $5,000 to existing franchisees and $10,000 - $15,000 to outsiders. “C’s charge $5,000 - $10,000 to existing owners and $15,000 - $20,000 to others. If a franchisor charges more than the “C” group, they get an “F”. System Stability This is one of the most important factors on the entire list and here’s why: what is your franchise going to be worth if the franchisor goes out of business or doesn’t have the nancial capability to live up to their part of your franchise agreement? You could end up out of business through no fault of your own. There are two factors used to grade each franchise on nancial stability. The rst is size. The total number of franchises is an important factor because it tells you the success of their business model and is an indication of their ability to support you. 6 Look at the Detailed Comparison Chart to see the actual number of franchisees each franchise system has. Size alone is not all that matters. An additional point of due diligence we suggest is to review item 20 of each FDD to determine how the number of units has uctuated in the past 3 years. Is the franchise growing steadily? Or is the franchise losing units every year? Those franchisors with revenues over $1 million and have at least 100 units get an “A”. We gave those who are smaller; between $500,000 and $1 million with 75 units, a “B”. The “C” was given to those between $500,000 and $1 million with less than 74 units and “F” was given to those with sales under $500,000 or less than 25 units. • ?dtcprgsgle Fsld • Hmkc O�ac • Tcpk md ?epcckclr • Amsr rm Scll • Swsrck Srabglgrw Here’s a recap of items you need to consider before purchasing a handyman franchise: • Tcppgrmpw Sgzc • Fpalafgsc Fcc • Ulmaasngcd Tcppgrmpgcs • Orfcp Fccs • Pmwalrgcs 7 Due Diligence: Step Two Be Sure to Consider Critical Factors That May Not Be Included In A FDD There are other questions you should ask to evaluate each franchise. Since the answers to these are not in the FDD legal documents, you will have to ask each individual franchise under consideration. At Handyman Matters, we have the best model. You can determine why with the factors that follow—for this section we have exclusively included our information. Make sure to ask any franchisor you are considering the questions listed in each section below. When you are buying a franchise, you are primarily buying the right to use documented processes and systems that operate under a national brand. The desirability of a nationally recognized brand is obvious as are the advantages to working with an established franchisor. One caution is that systems are invisible. You may have no idea of how they do what they do or how it compares from one franchise to another. In the following section, we will describe the Handyman Matters system in several critical areas. We will include the questions necessary to evaluate any franchisor’s systems. COMPARISON REPORT 8 Systems Make The Difference Between Buying a Business And Buying A Job Businesses without processes and systems become expensive jobs for their owners. The owners end up working long hours and making less than expected (and hoped). As the business grows, the problems worsen because there are only 24 hours in a day and one person cannot do everything. When you buy a business with processes and systems, you manage the business and train people to use the systems so you can have a life outside the oce. You should expect an excellent return on the time you put into your business, but also an additional return on the capital you put in it. We strongly encourage you to read Michael Gerber’s E-Myth Revisited , as it deals with this exact issue. The key systems any business needs and the systems you get from us are: 1) How to get customers. 2) How to keep customers and get them to buy more and more often. 3) How to do the work that your customers are hiring you to do. 4) How to hire, train & motivate employees so you can grow. 5) Operating systems that help you run the business and let you know when something is out of balance. 6) Systems to train you, the owner, to manage the business so you can work less and less, not more and more. The ideal goal is to have all parts of your business running so well that you could leave for one year and come back to a business that is stronger and more protable than it was when you left. 9 Systems to Get Customers Most franchisors will give you ads, brochures and other marketing pieces and tell you to spend a certain amount of money to promote your business. They may not really know how well each ad is working. There is an old saying that applies to almost all businesses: “I know half of my advertising is working, I just don’t know which half.” Handyman Matters is dierent. We use a 21-step marketing system that develops, tests and renes everything we do. We measure the results of everything you spend money on. The end result—you do not have to spend as much with us because we know what is working. Your automated Web-based scheduling system, WebScheduler, captures the source of every customer and the results of every ad/promotion you do electronically—providing you with reports that show the return on investment (ROI) for every ad, mailing or promotion you run with the click of a mouse. Knowing the ROI of all your marketing eorts gives you an advantage because your results are accessible, concise and reliable. COMPARISON REPORT Question to ask: Ask anyone you are investigating to show you his or her auto matically produced reports showing you the ROI of each ad you run as an individual franchisee. 10 “Fish In A Bigger Pond” All home improvement companies are competing exclusively in their own niches. Handyman Matters also has specic marketing programs to bring you business dpmk 12 addgrgmlal aarcempgcs gl rfc Wcllmu Paecs—asgdc dpmk Haldwkal Services. Our founding principles include restoring public condence in the handyman industry, giving back to the communities we live and work in, providing superior customer service, treating our customers and ourselves with respect, and being ethical in all our business practices. And that’s not all. Unlike most other handyman franchises, we have marketing programs targeting specic customers. Your business starts with established relationships with commercial accounts and over 83 national companies whose names you will recognize already established for you. Questions to ask: Ask anyone you’re evaluating these three questions and watch them squirm: /) Wfar gs wmsp “USP” dmp pcsgdclrgal assrmkcps? 2) What is your commercial marketing program? 3) How many national commercial accounts do you have that I will be able to take advantage of from day one? Building Customer Loyalty New customers are obtained through marketing, by use of continuity programs, referral programs and incentives and oers. Maintaining your customer is dependent on their experience with you. By experience, we include everything our brand oers… summed up in our promise to insure our customers receive our highest quality workmanship with the dedication, integrity and courtesy deserved. Handyman Matters, because quality matters— we expect our customers to have a positive experience every time they call us. In 2005 Handyman Matters introduced systemized and automated quantiable ways to measure customer satisfaction leading to referrals. The customer satisfaction index measures all aspects of a customer’s experience, including an appointment reminder call the night before, professionally dressed and background screened craftspeople, the safety of working with a bonded and insured company, and follow-up to assure customer satisfaction. This measurement system includes our exclusive WebScheduler software. It allows you to measure your progress as a business and reward the performance of each craftsperson who is generating referrals for you. A business that continually strives to only get new customers is going to nd trouble. If the average customer brings us four more customers, the value of the rst time customer is ve times greater than another company not receiving referrals. In addition, our cost to acquire those customers is one-fth what the others pay! 11 Question to ask: Ask anyone you talk to what their “system” is to bring you referrals and whether they have a quantiable way to measure both customer satisfaction and the likelihood of getting a referral from each customer you serve. COMPARISON REPORT 12 Systems To Do The Work Training—at Handyman Matters you receive two weeks of training at our corporate headquarters in Lakewood, Colorado, one week of on-site training 90 days after your opening, and continuing visits from our eld consultant team on a regular basis. We also oer Advanced Training Sessions. Additionally, we provide continuing education for all franchisees and the craftsmen they employ. Our collaboration with a construction certication program allows owners and employees of the system access to this 40–hour course that is broken down into 212 sections covering everything between a home’s foundation and its roof. We want to make sure everyone is staying current on basic and advanced home repair techniques. Additionally we provide an automated way to determine your customer satisfaction rating. Based on a study by Harvard Business School, we utilize the simplest of customer satisfaction surveys that determines the most detailed results. We ask our customers one question, and from their response we gauge the areas where franchisees are excelling and the areas needing improvement. Systems To Hire, Train And Motivate Employees As a top performing and protable business, you must hire the best people. The key to this is to create the best work environment—make your company the best place to work. Hire and train craftspersons with potential while oering benets that attract and appeal to tradesmen already successfully working on their own. Handyman Matters has employee screening, testing, and evaluation systems to help you recruit and hire the best people for each job. We have dened the ideal characteristics for someone in each position and provide you with this information to make the best hiring decisions. We also have a national account used to run employment screenings for felons or sex oender charges. Using this system will ensure your employees meet our standards. Statistically seven out of ten applicants fail our robust screening process. “If you want a top performing and protable business, you need to hire the best people.” 13 Operating Systems To Run Your Business Most, if not all, companies have purchased “o-the-shelf” software for you to use to operate your business -- some of them even charge for use. Handyman Matters has spent $2.3 million over the last 10 years to develop and improve a highly sophisticated, Web-based, scheduling, estimating, and dispatching system. This system was developed specically for the handyman business and was not adapted from any other industry. Handyman Matters knows of no other similar system being used in the handyman industry today. Web-based technology lets you operate your business from anywhere, allows the corporate oce to implement and install monthly upgrades for you, and collects both the marketing and operations data from our entire system on a daily basis to increase the eciency and eectiveness of your business. The use of this high-tech system and the monthly updates are completely free for you as part of our system. Collecting data is not all our software does. It also provides you with management reporting necessary to manage your business. As you grow the systems, a general manager can use this system to run your business for you. Systems to Recruit and Train— You Build a Business, Not an 80–Hour Per Week Job The test for this is if you can leave your business for a year and have it run so well without you that it’s stronger and more protable when you come back. That’s the ideal goal. Although you will not accomplish that immediately you can work toward it. We have developed hiring systems for all levels of the craftspersons you will need, from the beginning “helper” to the advanced craftsperson. We’ve also developed programs to hire and retain your oce sta, from your customer service representative to your general manager. Our hiring systems outline where to search for candidates, what message to send, and the necessary steps to turn candidates into employees. Once employees are on board, we have specic programs in place to retain them. From raes and drawings to bonus incentives, we know how to keep our employees happy and performing at their best. If you are hiring and retaining the best employees you will benet by knowing your business is running just the way you want it. It’s about building an investment—not investing in a job. COMPARISON REPORT 14 Extended Support Regardless of what industry you’re coming from, everyone can use help in establishing, driving, growing, and maintaining a thriving business. Handyman Matters understands the diversity in the backgrounds of our owners and has made resources available to the system that will help them grow personally and professionally while achieving their personal and professional goals. Additionally, we provide personality assessment support and resources that allow our owners to determine what characteristics to look for in dierent positions. Pcmnlc gl msp swsrck ilmu cvaarlw ufar rwnc md ncpsmlalgrw �rs ucll as a apadrsncpsml, customer service representative, general manager and more! Do You Qualify? As you have seen, we have systems for everything, and that includes selecting people to be franchisees. We know the proles of people who will succeed in our system, so we screen all applicants to make sure they have the right characteristics to be a top performer. We are selective about who we bring into our system. This selectivity benets our current franchisees and future ones. We want the best people. We know our systems work. We are searching for the right people—those who will use our tested systems to become successful. Our discovery process is designed to let you learn more about us, and us to learn more about you to determine if there is a mutual t. Not every business is right for everyone and we want to make sure our opportunity is right for you. To start this process, call Handyman Matters at 866-808-8401. You can also visit us online at www.HandymanMattersFranchising.com. 15 Territory size (1) Franchise fee per household (2) Sell in unoccupied territories adjacent to yours? Royalty Percentage (3) Other fees (5) Term of agreement (6) Cost to sell your franchise (7) System Ability (8) A YES A A B A A YES A A NO A B F B B (1) A = 62,00 or more; B= 50,000-61,999; C=30,000-49,999; F=less than 29,999 (2) A=20 cents or less; B=21-25 cents; C=26-35 cents; F=over 36 cents (3) A=5% or less; B=6%; C=7%; F=8% or more (4) A=up to 2%; B=3%; C=4%; F=5% or more month Summary Comparison Chart A F A COMPARISON REPORT Handyman Connection Handyman Matters B YES F A B B YES F C A F NO F A A F YES F F N/A A N/A A Yes F F F N/A F Mr. Handyman HandyPro Hometask Handyman Yellow Van Handyman (6) A=10 years; B=7 years; C=5 years; F=4 years or less (7) A=$3,000 or less to franchisees & under $10,000 to outsid - ers; B=$301-$5000 to existing & $10,000-$15,000 to others; C=$5,001-$10,000 to existing & $15,000-$20,000 to others; F=more than C (8) A=over $1 million and over 100 units; B=$500,000-$999,999 and 75-99 units; C=$250,000-$499,999 and 50-75 units; F=less than $249,999 or 49 units with sales under $500,000 or less than 25 units. 16 Handyman Connection Franchise Fee Territory Size Franchise Fee/house Franchise Fee (same size territory for all - 62.5K households) Sell in unoccupied territories adjacent to yours? Other fees Royalty % Minimum royalty charge Advertising fund charge Advertising requirement Term of agreement Transfer fee to existing Transfer fee to anyone else # Franchisees Franchisor sales revenue FDD Publication Dates $50,000 100,000 $0.50 $31,250 No 5% monthly yr 3-5 $11,250 yr 6-10 $17,500 3% monthly No 10 years $5,000 or 10% of sale price $5,000 or 10% of sale price 98 Not listed separately $250/year and $5,000 software plus $75/month 12% year 1 9% all others 03/2012 03/2012 04/2012 Detailed Comparison Chart ** All initial fees. Handyman Matters $42,500 62,500 $42,500 Yes $50 monthly 6% semi-monthly 2% 10% of sales Yes $3,500 $8,000 119 $1,763,472 Hometask Handyman Yellow Van Handyman $18,000- $20,000* non-exclusive - - n/a none Yes 10 years 40 $464,681 Vehicle plus insurance none $7,500 or current fee $7,500 or current fee 04/2012 03/2012 Mr. Handyman $60,400** 55,000 $1.10 $68,750 Yes $180 internet, $100/mo server, $22k-25k /Van, Auto Insurance, $.12/minute for toll free number, $.73 per minute call center, $275 per person per convention meeting 7% weekly, plus 3.5% on materials 13-24 mo $140 weekly 25-36 mo $210 weekly 37-48 mo $280 weekly 1.25% Weekly No 10 years $2,000 $9,900 ($17,000 for Broker) 232 $3,318,903 $3,000 HandyPro $50,500* 60,000 $0.84 $52,500 Yes 6% monthly None 1% monthly Yes 10 years $8,500 12 $204,638 $7000 1st 90 days then 5% per year $8,500 $19.95/mo email, $50/ month technology fee, $300/ person convention fee, $1500 opening marketing package, $3k-$19k / Van, Auto insurance,2% sales 4-12 mo $375 13-24 mo $630 25+ mo $870 10 years $0.20 Ready to start your new future? Contact Our Development Department Today: 866-808-8401 12567 West Cedar Dr. Suite 150 Lakewood, CO 80228 email: sales@handymanmatters.com visit us online: www.HandymanMattersFranchising.com