"Handyman" Franchises Ride The Housing Boom

(Monday, December 15, 2003) - Two years ago, a leaky dishwasher pushed the owners of Maintenance Made Simple to the edge. They waited four hours for a repairman to show at their Phoenix-area home and paid nearly $200 for a quick service call to replace an inexpensive gasket. But they thought there might be a business opportunity in their grumbling. Why not offer consumers a home-repair service in which the contractor arrives at an agreed-upon time and the customer pays only for time and materials?

They spent the next year working with a franchise consultant to see if his business model could be profitable. Satisfied that their idea could work, they launched Maintenance Made Simple, trained his first batch of franchisees in October 2003 and joined one of the fastest-growing franchise categories in the U.S.: home repair and improvement.

The home-repair or "handyman" franchise category has exploded in recent years, fueled by a booming residential real-estate market and time-constrained homeowners eager to remodel and repair their nests. Homeownership in the U.S. is at a record 68.4%, with low mortgage rates spurring frenetic home-buying activity. And many of these homeowners are investing in their properties - for the year ended in September, homeowner expenditures on remodeling rose by an estimated 6.6% over the prior year, with spending totaling $125.2 billion, according to Harvard University's Joint Center for Housing Studies.

But there's another factor helping home-repair franchises: consumer experiences with repairmen who are unreliable, take advantage of homeowners or are so busy that it's impossible to get them to return phone calls, let alone complete a job. In a 2003 survey by the National Association of Consumer Agency Administrators and the Consumer Federation of America, home-improvement contractors were the No. 2 source of consumer complaints filed with state and local consumer-protection agencies in 2002 (after car sales). These companies also were the fastest-growing complaint category.

"The biggest complaint that you find for anyone who comes in to do anything in your home is the lack of reliability -- showing up when they're scheduled to show up and doing what they said they would do at a price they promised to do it at," says Don DeBolt, president of the International Franchise Association in Washington, D.C. "Franchising is imposing a discipline that will bring about greater customer satisfaction. If you have Don DeBolt's repair service come to your home and he doesn't even call to say he won't be coming, whom do you call to complain?" says Mr. DeBolt.

...In fact, home-repair franchises are capitalizing on consumer concerns about hiring the independent "guy with a truck." These mom-and-pop operators are home-repair franchises' biggest competitors, and most franchises are eager to differentiate themselves from them. The franchises tout their stringent hiring standards, which often include criminal-background checks, skills assessments and, in some cases, a minimum of 10 years' experience in home-improvement or construction. Knowing that their reputation will make or break their business, most franchises typically guarantee their work and will return to a customer's home to address complaints or redo a project if necessary....

...(Maintenance Made Simple Owners) "Butwe was getting very frustrated dealing with multiple contractors and repairmen coming to my home, and 15 minutes of work was costing me hundreds of dollars." They used their IT background to develop the company's proprietary database system and centralized call center in Scottsdale, Ariz., and he hopes to add 25 new franchisees in 2004.

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