The Clock Is Ticking
Abrams, co-founder of AirTime 500 and director of Planning and Strategic Development for parent company Contractor Services, recently announced the launch of One Hour Air Conditioning®, a national franchise organization that is funded by parent company VenVest Inc.
Several franchisees opened for business under the One Hour Air Conditioning banner on May 1. If everything goes as planned, One Hour will become a publicly held consolidated company in the second or third quarter of 2004.
“We are absolutely convinced that he who gets there first with a brand name that means something in the HVAC retail business wins,” said Abrams. “By wins, I mean that contractors can attract a large amount of customers in a different fashion than has been done in the past.
“A classic example is Domino’s Pizza in Detroit, where Tom Monahan kept getting the message out to the public about who to call if they wanted pizza delivered in 30 minutes or less.
“Dominos built a multi-billion dollar business through franchising and a single concept — 30 minutes or less delivery.”
The PlanAbrams said the new concept of One Hour Air Conditioning is designed around a “cultural plan.”
“Our big selling proposition is, ‘on time, every time or you don’t pay a dime,’ and it is a registered trademark,” he noted. “We hope to drive this concept into the mind of every consumer that when they want service on time, they will think of One Hour Air Conditioning.”
One contractor who embraced this new concept is John McCarthy of McCarthy — Heating & Air Conditioning in Omaha, Neb. McCarthy, a member of AirTime 500, renamed his business One Hour Air Conditioning and began operations as part of the new franchise on May 1.
“This is a contractor who has a 30-year history in the community and overnight changed his name to One Hour Air Conditioning,” said Abrams. “He has a lot of faith in the concept, as do many other contractors.”
One Hour recently closed on a deal with a $22 million HVACR contractor that had been formerly owned by a utility company. “The CEO and COO of the company bought into the new franchise,” said Terry Nicholson, president of AirTime 500. “This is even more evidence that One Hour is moving toward consolidation.”
Abrams outlined five scenarios for the future of HVACR contracting businesses:
1. They won’t survive and will soon be out of business.
2. They have the desire to remain totally independent and will not ask for help from anyone else.
3. They are independent and want to keep their own name but want the best tools, systems, procedures, group buying capabilities, etc.
4. They believe that branding is going to win and want to get on board right now — the franchisee.
5. They want to sell their business.
Companies that fit the fourth and fifth scenarios are the focus of One Hour, said Abrams.
Putting The System In PlaceContrary to how some of the major consolidators started out — through acquisition — One Hour is lining up contractors who have “bought into” the system, including operating procedures and company philosophies.
“On the back end, we have operating systems and procedures that we have identified and have tested,” said Abrams. “Our service is technologically tied to products such as home monitoring, which identifies a problem in the customer’s home before they are even aware of it. We also have the Talking Thermostat®, which tells a customer when it is time to call for service — before they have to wait for a phone call or a direct mail piece.
“Every franchise owner will share the same software, the same systems, processes, and procedures prior to consolidation.”
Abrams contrasted this approach with that of several other recent consolidating companies. “I believe the others didn’t make it because there was no focus except on earnings, so they bought a number of different businesses with no common link. Operationally they were not very sound, with leaders from outside of the industry.
“They had virtually no internal mechanism for training. We already have the New Millennium Academy in place to be able to teach the skill sets necessary. The [former consolidators] faced licensing problems in certain municipalities when ownerships changed. Lastly, the consolidators never branded their name to the point where it meant something to the consumer.”
Abrams said he expects to move very quickly in signing up franchise owners. He has hired Alan Mintz, a former executive with Blue Dot Services, as president of One Hour Air Conditioning.
“I’ve joined this group because they answered all of the questions and doubts that I have [about franchising],” Mintz stated. “I am re-energized and looking forward to bringing this concept to fruition.
“There are a lot of mechanical and new construction contractors out there who want to get into the retail market as a possible hedge against what they are already doing. This could be a good start-up for them.”
Abrams has scheduled a series of meetings with AirTime 500 members who wish to become new franchisees. He eventually will offer franchises to the non-AirTime 500 members, too.
“Our anticipation is that we will see at least 50 franchises before the end of the year and possibly as many as 150 across the U.S.,” Abrams said. “Initially we plan to have $20 million in company-owned operations under the One Hour banner within the first week. It is our intent that by year-end we will have $50 million in sales.”
Abrams said that some HVACR contractors who have $3 to $4 million in annual sales have expressed interest in converting to One Hour, and that the average One Hour contractor currently lists $1 million in annual sales.
“We want to have eight model centers across the U.S. (two on the East Coast, two in the central region, two in Texas, and two in California), which allow prospective franchisees to come in and see the operation,” Abrams added. “We will also start a consumer advertising campaign.
“Almost overnight everyone is going to know that we exist.”
Publication date: 06/16/2003