Franchisees Discuss Concerns

February 25, 2008
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Aire Serv franchisees gathered to discuss some business concerns during their spring meeting in Lake Tahoe. The group included (from left) Tim Funke, Dave Samuel, Larry Speakman, Mike Anderson, and Gary Williams.

LAKE TAHOE, Nev. - When HVAC contractors get together to discuss business concerns, there is one topic that always seems to be at the top of their list - finding and retaining good employees. But that topic was given little attention when a group of Aire Serv Heating & Air Conditioning franchise owners got together in a roundtable setting with The NEWS during their annual meeting in Lake Tahoe.

In fact, several other topics were more important to these business owners, including the increase in competition from unlicensed people who undercut prices and don’t perform quality work. “People are not standing behind their work,” said Dave Samuel, an Aire Serv franchisee from Missouri. Tim Funke, also a Missouri franchisee, added, “We are seeing a lot of local competition who are unlicensed and they are giving us a black eye.”

Mike Anderson from Colorado added that these people could afford to under price because they “basically have no overhead.”

Other topics discussed included the influx of immigrant workers and their impact on the HVAC trade. Gary Williams from Virginia said, “People are working illegally and contractor employers can underbid us because they don’t pay health care costs for them. In fact, some contractors don’t pay health care for any of their employees.

“I’d hire more Hispanics because the ones that I have are very hard workers and have good ethics. But the problem is that they can’t communicate with customers because of the language barrier.”

Williams also introduced another topic that raised some eyebrows - the Internet. He said his customers are becoming more educated because of the Internet and they often know more about a product than some of his own people. “My customers are educating me,” he laughed. He also complained that some of the HVAC products are priced lower on the Internet than what he can buy them for.

Funke noted, “The manufacturer’s pricing structure allows Internet pricing to happen in the first place.”

The conversation turned to the current economy and one contractor, Larry Speakman of Illinois, was at a loss to explain why business was so good in one of his locations yet so slow in the other.

“I am in different markets,” he said. “One is very good and well-established and the other is very competitive. But that isn’t the reason why business is so different. I just can’t explain it.”

Most roundtable members agreed that the general media was putting a lot of fear into consumers. Anderson said, “If people are scared or concerned and believe the economy is poor, they will pull back on their spending.”

Funke said his market is pretty stable because homeowners are staying in their homes longer and choosing to upgrade. Samuel works in a rural market and joked, “As long as people are eating chicken, we are doing OK.”

The higher fuel prices don’t seem to have an impact on these contractors either. Speakman said the higher costs are more of a nuisance than a problem. Samuel said, “It is a small part of our P&L statement. I just don’t have the guts to tack on an extra dollar for gas to the rates. But my bills are higher than some because of the distance my techs have to drive from their homes.”



EMPLOYEES STILL A TOPIC

Speakman said he is a union shop and doesn’t have any problem finding help. In fact, he said that employees come to him asking for work. Funke said he has established a good reputation in his market and has become an employer of choice.

Samuel said his key to success has been hiring older workers, including those in their 50s and 60s. “They have stability in their lives and they have brought stability to our office, too,” he said.

Williams knows that in order to be the employer of choice in his market, it is important to offer benefits and raises. If not, workers will walk. “There are as many HVAC contractors as car dealers in our market,” he said. “Six of them are within walking distance of me. Competition is tough. If you don’t offer a raise, they will go to someone else right away.”

“The benefit issue is getting bigger and bigger,” said Funke. “We need to offer better health care benefits.”



WHY AIRE SERV?

One of the things that all roundtable participants agreed on is the need for organizations like Aire Serv to bring more professionalism to the HVAC trade, which includes licensing requirements and higher ethical standards.

Funke said, “I am a technician by trade and I eventually hit a ceiling. I felt I needed business support and that was the main reason I became an Aire Serv franchisee.”

Anderson said he had worked for York before Johnson Controls bought it and he decided to look for something new to do. “Aire Serv has a good infrastructure,” he said. “If you follow procedures, you can be very successful.”

Speakman said he is a salesperson by trade but noticed that his business was going downhill and didn’t know how to stop the slide, which threatened to put him out of business. He said he needed business training and added, “Treating customers right was just not enough. I needed to know how to run a business.”

Samuel had a different take on the topic of why he joined Aire Serv. “I took over a family business,” he said. “I had a good work ethic but I was working myself to death. And I was constantly competing on price. Without focusing on price, we can focus on value and taking care of customers. We address the customer’s needs. It may cost us more, but it is a positive way of doing business. We treat customers with respect, and as a result get consistently high evaluations of our techs by our customers.”

Publication Date: 02/25/2008

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