"We looked at other organizations and associations and discovered EAI through a mutual acquaintance," he said.

"We brought EAI to Waco so we could learn more about their organization and to talk to them about our business strategy. Then we visited Cincinnati to learn more about them. Relationships are important to us, and we feel EAI's beliefs and values fit right in line with ours. What we found is that EAI is a pool of some of the leading industry experts. And they have a lot of room for growth. They have positioned their company to grow."

James said that Aire Serv has taken no ownership in EAI but has provided them with capital for the ability to access some of the EAI programs. Aire Serv will also attend EAI meetings and provide information to members who need a greater level of support, and are considering the additional benefits of an Aire Serv franchise.

He added that by participating in EAI's buying group, Aire Serv gives them more buying power with their vendor allies.

"We see the franchise as a bigger commitment than membership in EAI," James said.

"But franchising may not be a good fit for a lot of their members, i.e., territories where an Aire Serv franchise exists or that the EAI member is so large that it wouldn't make sense to be a part of a franchise organization."

James noted that Aire Serv provides key benefits for franchisees. "First, we offer branding and an exclusive territory," he said. "Second, we have specific systems with a step-by-step operation for every company function. The business model is laid out very specifically."

If owning a franchise isn't a good fit for some people, then a membership in EAI would be a suggested alternative, according to James.

Creating Synergy

Don Schmitt, CEO of EAI, discussed the synergy between the two groups. "We [EAI] are now attracting more of the smaller contractors who need help, i.e., the $500,000 to $3 million contractor," he stated. "That's where the typical Aire Serv contractor is, too.

"They do a good job of marketing to potential franchisees. It is a very interesting approach. They close the sale on about 50 percent of the people who visit with them. The other 50 percent are potential members of EAI because of our similar member profiles.

"These people are still looking for help, but they may not want to go through becoming a franchisee. There is an advantage to us because of people who don't want to make the long-term financial commitment as a franchisee but still need help with their business."

Schmitt felt that there is a certain percentage of EAI members who would be interested in becoming Aire Serv franchisees, too.

"This is a mutual deal as far as providing members," he said.

Another mutual benefit includes access to EAI ally agreements for Aire Serv franchisees, leading to rebates on purchases for franchisees. "Extending the ally agreements to the Aire Serv franchises creates a lot of additional opportunities for our strategic allies," said Schmitt.

Mutual Respect

Schmitt is also impressed with the Aire Serv staff and the many good franchises under the umbrella of the Dwyer Group Inc. "They have a high-level staff, something that the companies individually would not be able to have."

Is this an unusual relationship? Sure, said Schmitt. "It sounds a little strange since it is often franchisee versus independent contractor. But really, these people [Aire Serv franchisees] are still independent. They are small contractors who use their common name and use the services of Aire Serv.

"This new relationship is truly a win-win for everyone involved - Aire Serv, their franchisees, EAI, and our members and strategic allies. We're all very excited about our future together."

EAI member Larry Cook of TDIndustries, Dallas, agreed. "I think it can be a win-win for the two groups," he said.

"Aire Serv can bring a number of new contractors to EAI, and that should enhance our ability as members to earn larger incentives on our purchases from the key vendor partners of EAI. EAI still has a great group of contractors and the networking is still a very valuable part of this membership. It looks exciting, and is a little out-of-the-box thinking for both groups."

Publication date: 05/31/2004