I must confess,I've been talking to Servpro...

[Guest]

Am I crazy?
I have alot to consider.

Pros
1- Moving to a new state(NC) where nobody knows me. Their brand is strong.
2- National accounts(you know who) for restoration work.
3- Marketing and legal dept. included.
4- plug and play business software etc.
5- National accounts(you know who) for restoration work.


Cons
1- territory restrictions (alien concept to me)
2- Smoke & fire - very labor intensive
3- Trauma clean up. (until now,that meant dog shit on white carpet)
4- Being part of an organization. humm...
5- 20k down,35k operating capitol.


What do you think?
Besides the bravado bullshit,what do you really think?
If you could afford it,would you do it?

20k down = 37k franchise fee + 50k equip pkg.87,000 total(67k financed)
35k operating cap also required.

 

[Desk Jockey]

You dirty low life! :wink:

Years ago I would have thought it was a bad idea, but now I think if you want restoration work it might not be too bad of an idea. :?:

The green truck would really suck , but you'd get over it when the green grows in your pocket.

Franchises get a steady stream of work handed to them, as long as you can live with mother franchise skimming a percent off the top.

Software would be nice to get you going down the road. Brand recognition...depends how they are seen in area, could be good or they could have a sour taste from the last franchisee.

They also have national rate agreements, so you're fine as long as you're lean and mean, but you'll need to watch your numbers or you'll just end up a franchise slave.

What's in the equipment package for $50,000.00 a green Butler? Cool! A green portable and a ULV fogger...rip off! Is it flexable? I'd be picky as to what they sell me. Talk with other established Greenies and see if the needed everything in the package.

Hard to say, I like the instant business, hate paying for it. LOL

But I guess you never hear a McDonald's owner complaining about how much he pays back to the Franchise! :wink:

Think it through, it would take you a while to do the same on your own. but then you wouldn't owe a franchise fee, and you'd have complete control. Plus no Green van!

 

[steve g]

what kind of royalty are they wanting, as I understand it the royalty especially for water damage work is pretty high, couple this with the ass kissing discounts that the insurance companies want by being one of their vendors, and your profit margin automatically goes down before other expenses are added in to about 65-70% of what an independent would be getting.

 

[rhyde]

i do work for one of the local sp franchises the guy that owns it seems happy and does really well there's something to be said for walking into an established business with brand recognition ...but the green vans might give me a head ache to drive

 

[clean one]

Where in NC Steve, i have a friend of mine that started the franchise in Wilson, seems to be doing good with, i can give you his number if would like to talk to him

 

[alazo1]

I would talk to other sp franchises close to the service area that you are thinking.

Albert

 

[Numero Uno]

It is a simple choice...

Ralph Pastorelli and Ed Prevost who live in upper NY...

Were doing very ,very well by themselves...

But since one went Service Master and the other Serv Pro...

There biz has skyrocketed...

So if you choose to take it to the franchise level...

All your foundations and systems are in place...

It is up to you at that point...

Those are the only 2 franchises worth the royalty fees...

Yes, You have to pay more,but you should gross way more also...

I never liked franchises originally,but if I was to start again...YES...

 

[Steve Toburen]

One other factor I would consider carefully is what is my time line on cashing out? A good franchise organization will help their franchisee easily sell their business (usually to other franchisees). This can be a huge advantage.

On the other hand, remember the down side. and it isn't all about money either. Many entrepreneurs chafe under the restrictions that a franchise will put them under.

Good advice on finding and talking with all the franchise owners in the area, not just the ones the central office wants you to talk with.

I don't know how they are on restoration national accounts but I have been impressed with the quality of people in the Rainbow organization over the last few years. A number of our SFS members are Rainbow franchisees and they seem to be very pleased. (At Strategies we "co-exist" with and complement any franchise.) You might put Rainbow International on your short list to at least check out.

Steve Toburen CR
Director of Training
Jon-Don's Strategies for Success

PS A good point on ready made systems. However, ahem ... honesty compels me to mention there are alternatives out there that give systems and support equal to most franchises and they don't charge a royalty to belong to either. Now what was the name of that seminar ...?

 

[Desk Jockey]

Dang... what shameless promoting of SFS! :wink:

See you there next week!

 

[Greenie]

If you got the scratch, a restoration franchise can be very good.

I was kinda shocked when I was talking with a newbie Rainbow guy, he was in about $100,000 with his total cleaning and restoration package before he first opened the door, that's a good sized monthly payment for a guy who had never even cleaned a carpet before.

 

[Desk Jockey]

I would agree that's a chunk of change, but you have to weigh it with the average ticket on a water loss.

One average water loss would make that payment.

 

[Johnny]

It's about more than the money to me. Would rather start off slower and do it my way. Why pay to be under the thumb of someone else?

 

[danpauselius]

I'm a bit confused. I thought I had read that Servpro franschises were roughly $186,000. Were they talking about total with vans, equipment, etc.?

 

[ServiceMasterRalph]

Caesar,

We both are ServiceMaster, I know my business has more then doubled ib the year and a half I been ServiceMaster, I credit the growth to disaster restoration, and im yet to be on the programs for 3 big insurance companies.

Emagin what growth I will have then. Its well worth the 10% im paying .

 

[Askal]

I wonder how the franchisees in Colorado feel about preferred vendor program now. I think the change is in the wind and I plan on helping along with that change.
Al

 

[danpauselius]

The law change in Colorado only made it illegal to mandate a restoration company, not recommend one. So basically, Colorado is now like NY and getting water work from insurance companies here is no cake walk.

 

[Fred Geyen]

Before you buy a new ServPro look into buying an already existing one.
You can most likely get an SBA loan with the owner doing some financing and have an income the first month. Going the start-up route can be very hard and not be that much cheaper in the end.

You can always find a ServPro or ServiceMaster existing area for sale. Remember the guy/gal selling you a new one gets a commission so they are not going to be overly interested in revealing areas that are for sale by owner.

Fred Geyen
Former owner of 3 ServiceMaster locations.
Also former head of ServiceMasters National Disaster Restoration group.
Note: only put this in so you might believe and look into the advise.