In the industry we’ve seen franchises being offered from the likes of 0800 Repair as well as Indesit and a few others.
Our take, avoid repair franchises like the plague!
Franchise operations have been tried in the appliance industry time and time again beginning in the nineties with Electrolux sort of offering franchises to their Service Force agents. At the time, one of the largest service operations in the UK. That failed.
It set a tone.
Franchised Appliance Repairs Cannot Work
Sadly, it is true. Franchises and the appliance repair industry don’t work. They never have and are very unlikely to ever work.
The reason is actually very simple, lots of people think that there is a tremendous amount of money to be made in the repair industry either due to the failure to see that there are actually costs in providing service to appliances or, they think that the volume of repairs will make it worth the while.
Neither is true.
The margin on appliance repairs is ludicrously low in actuality, lots of people fail comprehensively to understand that simple fact. At best, you’ll make a few pounds per job but that’s it, you need to do a lot of jobs right (first time) to make any sort of decent living.
So, there’s not enough in it to pay the franchise fees. Epic fail.
Next we move onto volume.
If you aren’t making enough money on a few calls then getting volume only serves to lose you more money faster.
Again, epic fail.
Now here’s where a number of repairers have been suckered into taking on a franchise to repair appliances and been done over in large part.
You have the manager or bright spark that comes up with this genius plan to franchise out repairs, why do you think that they did that?
Of course, it wasn’t to pay more than they were already. No, it was to save money, not cost the company more money. And, guess who’s the one getting to take the brunt of this cost cutting exercise?
Or, perhaps the company can’t afford to pay the salaries to employ the engineers that they would like to have in the field. This is a cheap way to do that and distance themselves from the responsibility of actually employing people, racking up the associated costs in the process.
Maybe the company just doesn’t want the hassle of employees, the costs, the liabilities, the holiday pay, sickness pay and so on.
Essentially, cheap employees with no responsibilities.
Whatever the motive, you can bet your shirt it isn’t to suit the franchisee. We strongly urge you to carefully consider this, why is this a franchise?
Appliance Repair Franchise Guarantees
A lot of franchises come with guarantees of workloads, revenue and so on and if you are intending to pay out hard cash or put yourself in a position that you could lose anything more than a small amount we urge you to investigate this.
Any we seen in this industry come with no guarantee at all.
In other words, you could get done over at any point and have no recourse.
We won’t name names but, there have been occasions where the “franchisees” have not had work or noticed a considerable drop in workload because the employed engineer/s in the same area or adjacent areas needed work. Of course there is little proof to back this up as you would expect but if you’re tied into a one company deal you want to know that you get all the work, not just the work that is suitable to pass.
If you don’t the business could fall over. Quickly.
Make sure that you have assurances in this before even considering parting with any cash or quitting your current employment.
Legally Speaking About Franchises
We strongly advise you to take legal advice before signing any franchise contract.
Trust us, it’s worth it and could save you thousands and thousands of pounds as well as a whole heap of heartache and grief.
Some franchise agreements we’ve seen aren’t worth the paper that they are printed on and a few of people that offer “franchises” know this, they just hope that you’re just naive and will sign it without actually fully understanding what you are actually signing up to. In our experience at least, within the appliance industry.
The sad thing is, a lot of guys do sign up unwittingly and then get shafted. Often for thousands of pounds.
The legal fees to make sure everything is on the up and up, in comparison, aren’t a bad investment by any stretch.
The person trying to sell you the idea of a franchise is, trying to sell you a franchise.
It’s like someone trying to sell you a timeshare or a holiday villa at a knockdown price, there will be a catch and it’s up to you to find it.
Invariably the company offering these deals either stands to save money or make money through their franchises, they aren’t doing it for nothing. That’s it. That’s the reality.
But in the end, it’s up to you to decide what’s right for you.
It isn’t for us to tell you what to do.