Bruce Forthofer
Bruce Forthofer

When HVAC Franchising is the Answer

July 12, 2017
There can be many misperceptions related to HVAC and plumbing franchising. The best franchise conversions occur when owners, employees and customers see the many benefits that come with the change.
Many existing HVAC and plumbing business owners feel that their businesses can do better. They’re working hard, but aren’t satisfied with their current lifestyle. They seek something bigger, and are curious about what franchising has to offer. The decision to convert an existing heating, air conditioning and ventilation or plumbing company to a national franchise is not made without first considering many important questions. Some of those questions often extend beyond anything related to the financial realities or expectations of franchising.
“HVAC service business owners sometimes associate franchising with loss of control, a loss of identity – especially for generational businesses — and a change that their employees won’t like or benefit from,” explains Nora Hawkins, MBA, field marketing manager of franchise development for the home services franchises operated by Clockwork, Inc., a member of the Direct Energy® group of companies — One Hour Heating & Air Conditioning®, Benjamin Franklin Plumbing®, and Mister Sparky® electric. “Yet, owners who have converted their companies to the One Hour, Benjamin Franklin, and Mister Sparky brands tell us that they have positive experiences in all three of these key areas of concern — control, identity and change,“ Hawkins says.Question of Control“Prospective franchisees’ concerns related to loss of control are real. However, it’s mostly there because of a misconception of what franchising is,” says Troy Latuff, vice president of franchise development for the brands. “When most people think of a franchise, they think of national chains, or those businesses where you just ‘fit into a box,’ and they’re very cookie cutter-like, with no personality,” Latuff explains. “We’re not like that. We leverage a franchisee’s brand and name along with ours. For example, if you own Terry’s Heating and Air Conditioning we would allow you to use that name; and we then follow a very methodical conversion process of going from your name, to using both our names and then fully converting it to the One-Hour brand over a period of time.”Latuff was himself a co-owner of a Benjamin Franklin franchise, which was a conversion from a 70-year-old company, O’Connor’s Plumbing and Heating.

He says the conversion process is helped along by telling prospects that they will always be full owners of their businesses. “We’re not interested in owning it,” Latuff says. 

The franchise conversion process involves gaining the acceptance of three groups that are related to the existing business: owners, employees, and customers. “It’s just human nature to fear change,” Latuff says. “They think that we’re going to come in and change all of the rules, and that’s just not true. That’s why we craft a message for owners, employees and customers. We describe to inquiring owners what we do, why we’re doing it, and what’s in it for them, so they can see the bigger picture. We try to alleviate their fear of losing identity by helping them see that long-established customers don’t mind what you call the business, as long as it’s you who answers the phone, a familiar voice.”The second group to reach are the employees: dispatchers, managers, field technicians, installers and sales-people. The message here is one of a beneficial collaboration that will not change what makes the company special.“We share that, though we’re changing the name a little bit, culturally nothing else changes,” Latuff says. “They have a culture in place, which is one of the reasons why we’re partnering with them. We’re interested in enhancing the culture, so they can become part of a much bigger ‘family.’ Now, a 10-person company becomes part of a network of 4,000 or 5,000 people. They can share ideas, learn from each other and compare best practices.They can see that they’re part of something very special and much bigger than themselves, but that we’re not taking anything away from them. We’re just giving them more,” Latuff explains.
The message to customers is always positive. If a customer asks about the new brand name, the employee explains: “here’s what we did, and why we did it, and here’s what’s in it for you. We’re now part of a national brand, with national training. We can get better products at a better price, and better warranties, to serve you better 24-hours a day,” Latuff says.“The big franchising picture illustrates how everyone wins. We’re not taking over, we’re just here to help. We’ve done this almost 800 times now, so we’re getting pretty good at it,” Latuff says. “It’s very rare that a franchise would lose an employee, and it’s even more rare that they would ever lose a customer because of it.”TV, radio and email are used to introduce the change. “Saying those words — that XYZ Heating and Air-Conditioning has joined forces with the nation’s largest brand, One-Hour Heating & Air-Conditioning — you kind of see it all come together. “The last thing we want to do is lose the power of the franchisee’s own brand. We want to maximize the power of both brands,” Latuff said.Conversion Team Stands ReadyFor each new franchise conversion, a multiple-person team is dispatched to provide extended, on-site instruction and mentoring for three to five months, depending on the size of the business and the amount of work required to get the new enterprise off the ground.The franchise brands provide competitive pricing, customized marketing materials featuring Mike Rowe, around-the-clock access to training, and integrated software for payroll, inventory and more — all of which are introduced and explained during the conversion timeframe. “We counsel their business and train their people. We provide vigorous coaching, and review marketing and every other phase of the business,” Latuff says. “Our Marketing Toolbox includes every single piece of material that’s necessary, from billboards to TV, to radio, postcards and social media. We set up a very individualized plan to put it all together.”Latuff adds that the team from each franchise is committed to ensuring that the franchise owners, managers and employees are firmly established, trained, and on board with the reasoning behind franchising and its benefits. For employees, he adds that the benefits to franchising include potential positive impact on their own career growth.“As long as they’re brought in, and they understand the plan, it’s much easier for employees, because you can paint a picture that they will have better training, and there will be more growth and greater opportunities for them, as supervisors, managers, or general managers,” Latuff said.System and Methods Bring SuccessDerek Cole is general manager of the One Hour Heating & Air Conditioning franchise in Laurinburg, N.C., 190 miles east of Charlotte. Derek’s father had worked for the business beginning in 1999, when it was known as Simmons Heating & Air Conditioning. He became a partner in 2000, and eventually bought the business. Derek Cole and his father decided to investigate franchising after they had received a series of direct mail pieces. They attended an informative meeting in Charlotte. “We saw what they were doing and offering, and found it to be of interest. The next step was a visit to the home office in Sarasota, Fla. After that meeting with the One Hour team we realized this is what we need to do. This is the formula we’ve been looking for, for business practices and systems. This is what we’ve been trying to do for years, and they had it figured out,” Cole said.After a thorough investigation, Cole says the only real concern was with changing the name. “We had been in this community since 1953, so we were not sure how it would play out, changing the name. We didn’t want to mess that up too much, but we believed so much in the One Hour brand and what it stood for and what we wanted to do into the future, the pros outweighed the cons.”Cole customers were, for the most part, very receptive to the changes.“One Hour has a few steps to follow to introduce the change to a customer base. I’m not saying we didn’t have any problems with it, however the problems weren’t something that couldn’t be overcome with a conversation. The literature and materials we sent to customers helped to make it a very smooth transition,” he said.Cole added that there was never a feeling that they were losing control of the business.“I never felt that way, because, with it being a franchise, I still feel like it’s the best of both worlds: we have the One Hour marketing, branding, and systems, but at the end of the day, I’m like any other contractor, I can either do it or not do it,” Cole said. “Obviously I have to follow the brand standards and use the logo, but ultimately, I can take on a vendor or not take on a vendor. Or, I can hire this person or not hire him. It’s still my decision as an independent owner. “But I know what the standards are. I know, if I want to follow the system, this is how I need to use their guides to shape my decision. It’s really up to me. They’re not telling me how to pay my employees, or how to pay myself. If I want to be in the system, I need to follow the guidelines. But it’s not handcuffed me by saying, ‘you have to do it this way.’”Methods that WorkCole appreciates the methods provided by the One Hour organization; for example, with pricing.“Methods are what we’re looking for. I don’t charge exactly what they want sometimes because we’re in Laurinburg, North Carolina, which is a slightly different market than Charlotte. So my prices don’t need to be that high,” he said. “But, I know where the margin should be, and I know where the profit should be, so those are the numbers that I’m more concerned with than the end price.”Cole agrees that the old adage of “working smarter, not harder,” is very true in a franchise: “There is [a greater amount of work] at the beginning, but it’s like the first time you start exercising: it’s difficult to begin with, but if you keep at it, it gets easier, and easier, and easier, and eventually you’re doing what you’re supposed to be doing. You’re just on that one-mile run and it’s not so tedious.”

“Now eight years into it we know the systems, we know the processes. It’s easier on that side than it was eight years ago, when you were trying to eat this big elephant. We just kept saying, “All right, it’s one bite at a time.”

Cole admitted there was some difficulty in getting all employees to accept the change.
“It was a change in expectations, and a change in culture,” he says. “It just wasn’t for some team members, and that’s fine. But you have to get the right team on board with your vision. For those who did stay, I felt like it has had more of an impact on them because they saw it from birth to where it is today; they don’t question our leadership because they know we’re capable of bringing them to a vision.”
Are they working harder? Cole said no.

“They’re working smarter and more efficiently,” he continued. “We have steps to running a service call, whereas before, we didn’t have a system. It involves them working more in a structure, a framework. They go on a call, but we have expectations, and training behind it, so we all know how it’s supposed to be done.”

Busy With Two Franchises
Bruce Forthofer owns a Benjamin Franklin Plumbing franchise in Kansas City, Mo., and, one year ago, he opened a One Hour Heating & Air Conditioning franchise.
Forthofer — a 25-year plumbing industry veteran — became a Benjamin Franklin Plumbing general manager in 2012, and later purchased it from its owner in 2015. The business tripled in size in two years.
His One Hour Heating & Air Conditioning franchise is clicking along, too. His technicians carry double-sided business cards, so one service person can promote the other to a customer before a call is completed.

Forthofer decided on franchising because he wanted dependable business management tools. “I needed some training and some guidance,” he admitted. “When I came in here I just got on the phone with corporate and said, ‘hey, what kind of help do you have for me? Because I was brand new. I just started talking to people and trying to get as much guidance as I could.

“The people that think that you’re going to lose control or ownership of your company, I can put them at ease. For good and bad, it’s my company. I own it. I reap the benefits and I have to overcome the problems.”

‘The people that think that you’re going to lose control or ownership of your company, I can put them at ease. For good and bad, it’s my company. I own it. I reap the
benefits and I have to overcome the problems.’ — Bruce Forthofer

Forthofer said a franchisee only has himself to blame for not taking advantage of the tools available from the home office.

“If I don’t reach out to somebody and ask for help, it’s my own fault, because there are people out there to help me. But I don’t have anybody saying to me, ‘hey, you need to do this today.’ They visit me twice a year, maybe a little more often, and we’ll go over numbers and whatnot, and they’ll give me recommendations on what they think we should do, but I’ve never had anybody say, ‘hey you need to do this or else.’

“I don’t have anybody in here running this company other than myself. I own the company,” Forthofer said.

Growth Management & Marketing
Forthofer noted that the marketing support and growth management advice he receives is one of the best franchising benefits. And for his plumbing business, he finds great value in national endorsements by Mike Rowe, host of the Discovery Channel series “Dirty Jobs,” founder of The Mike Rowe Foundation, and Benjamin Franklin spokesperson.

“Having Mike Rowe as a national sponsor is hands-down one of the best things I can hang my hat on,” Forthofer said. “We do a lot of marketing with Mike Rowe. I’ll put it on Facebook as much as I can. I’ve had guys apply for positions because they’re Mike Rowe fans; they’ve heard him mention Benjamin Franklin Plumbing in his podcast, and they come to us for a job interview. He’s a huge benefit, and that’s something that I couldn’t have done on my own.”

For both of his businesses, Forthofer finds marketing and recruitment to be the trickiest elements to master.

“Marketing is constantly an issue. It’s kind of a weird animal. Unfortunately, you don’t have a silver bullet no matter where you go. They provide help, but it’s a constant struggle. I would have to say marketing and finding skilled labor are the two biggest issues. And I’m sure those are issues whether you’re a franchise or not a franchise, it’s just in our industry it’s tough,” he shared. He and his managers have taken management classes offered by the Clockwork Home Services “Success Academy” and Benjamin Franklin Plumbing’s “Punctual Plumber” training, which is a step-by-step analysis of the ideal service call.

Forthofer believes franchising is a viable solution for some contractors. But all contractors, he says, regardless of the path they choose, must be aware of the many serious aspects of running an HVAC business, especially the importance of accurate pricing.

“I think we’re all out there trying to find ways to grow our businesses and make our businesses better. There are other afffinity groups that people could join if they don’t join a franchise,” he said. “But everybody needs to get as much help as they can, because it’s a tough business.

“There are a lot of contractors out there, from ‘Chuck in the truck’ to the high-end guys that charge the most. I think a guy needs to go out there and realize what he needs to charge for his services to make a good living. You shouldn’t sell yourself short in this industry. Especially with the demand out there.”

Forthofer, with his vast experience to rely on, has given much thought to the state of the HVAC and plumbing industries, and what lies ahead for the those trades.
“We need techs so badly, and for guys to go out there and undersell their services is really a shame,” he says. “They should value themselves better. They work their whole lives, and for what? And it’s quite unfortunate and kind of sad. I hate to see anybody do that.

“But franchising is a good, viable option and a way to grow your business, absolutely. I would recommend anybody to at least look into it. And I know the biggest thing is that people are afraid of losing control of their businesses, but that’s just false, it’s a fallacy.”

About the Author

Terry McIver | Content Director - CB

A career publishing professional, Terence 'Terry' McIver has served three diverse industry publications in varying degrees of responsibility since 1987, and worked in marketing communications for a major U.S. corporation.He joined the staff of Contracting Business magazine in April 2005.

As director of content for Contracting Business, he produces daily content and feature articles for CB's 38,000 print subscribers and many more Internet visitors. He has written hundreds, if not two or three, pieces of news, features and contractor profile articles for CB's audience of quality HVACR contractors. He can also be found covering HVACR industry events or visiting with manufacturers and contractors. He also has significant experience in trade show planning.