Franchise Opportunity for Small Contractors
Daflure grew out of the David F. McClure Co., a residential and commercial contracting business in central Pennsylvania, which has been in the business for 26 years. The David F. McClure Co. is now a Daflure affiliate, both sharing the same ownership.
Several years ago, Justin and Jared McClure, who operate both the David F. McClure Co. and now Daflure, started looking at ways in which they could have a greater presence in the industry. Basically they wanted to spearhead industry growth and innovation through a network of individual dealers, but they knew they did not want to become consultants. Acquiring other contracting firms didn't appeal to them either, so after much thought and research, they decided to start a franchise.
Their new franchising venture, called Daflure, is aimed at smaller contractors - those who typically have two to three employees and maybe just one or two trucks on the road. Daflure became official this past June, and Justin, who is Daflure's president and CEO, is looking forward to talking with contractors about this new opportunity.
FRANCHISING DIFFERENCESIt is important to note that, from a legal standpoint, David F. McClure Co. and Daflure are considered to be two separate entities. However, David F. McClure Co. recently became a franchise of Daflure, and its official business name is A David F. McClure Co., Daflure Heating and Air Conditioning.
In addition, the sales manager, controller, and service manager at David F. McClure Co. also work for Daflure and provide guidance and training to contractors who are buying a franchise from Daflure. It is this relationship that makes their franchise unique in the industry, said Justin.
"We're actually in the contracting business, which makes us different from others out there who are offering franchise opportunities," said Justin. "There are a lot of people who will tell you how to do the business, but why aren't they in it in the first place? We've been in the business for 26 years, and we have a lot of business systems in place that have made us successful."
Justin didn't know much about franchises when he started researching them two years ago, but he was intrigued by the statistics concerning small businesses. He noted that small businesses often fail within 3 years, but those companies that purchase a franchise have a 90 percent better chance of being in business three years down the road.
If he could help some of these small contracting firms become more profitable and stay in business for the long haul, that would be a worthy goal, thought Justin. "My brother and I wanted to go to these markets and simply show these individuals how to get the confidence to raise their prices - basically show them the value of their service - then we would be able to really touch the industry outside of just our region."
To that end, Daflure is looking to sign up contractors that have less than $1 million in gross sales, as Justin sees these companies as having the most potential for growth. Many of the companies that are currently considering purchasing a Daflure franchise have annual sales in the range of $250,000 and $500,000 and are usually a two- to three-man operation.
"Contractors are buying into the value of being in a franchise relationship," said Justin. "Why own a Subway when everyone knows how to make a sub sandwich? It's brand recognition that hopefully gets the customer in the door, and then it's the consistency of the brand. The sandwich is the same in Pennsylvania as it is in Arizona."
WHAT YOU GET FOR THE MONEYContractors interested in becoming a Daflure franchise usually initiate the process by phone. Once the phone conversation takes place, and there's interest on both sides, the contractor must fill out a questionnaire. If Daflure is interested in the contractor based on the questionnaire, the contractor visits Daflure's corporate facility to take a tour and ask any questions.
If both parties want to move forward from there, legal counsel gets involved, a contract is signed, and the contractor pays the nonrefundable franchise fee of $19,950. "What's good about our franchise is that even though the contractor won't get the initial fee back, he can walk away from the agreement within two years with no strings attached," said Justin. "That's uncommon in franchising, because most want people to sign up for the long haul."
In addition to the franchise fee, contractors who become franchisees must pay a monthly royalty fee (approximately 3 percent of net revenue) and a marketing fee. After the franchise fee is paid, contractors receive a six-day training session at the Daflure facility, and they also are given "DASI," a proprietary software program that Daflure developed. A 340-page operations manual details how their franchise is supposed to work and includes information on the company's flat rate sales and service systems.
Franchisees are also required to send financial information on a monthly basis, including cash-flow statements, income statements, and balance sheets. Daflure's software will help put these systems into place if the contractor does not currently prepare this type of information.
"We plan to visit each contractor on a monthly basis and support them however we can," said Justin. "This includes unlimited free support by phone, as well as networking capabilities, buying discounts, and access to lawyers and accountants. David F. McClure's sales manager, controller, and service manager are available to help them over the phone for whatever situation arises."
Justin added that another benefit to becoming a franchisee is the ability for a contractor to be able to buy health insurance at an affordable rate for himself and his employees. In addition, there's the personal service that each contractor will receive.
"We want to have a personal relationship with each franchisee that we sign up," said Justin. "We don't want contractors to fail. Any relationship that we enter into, we're entering into it believing we're going to be together for the long haul."
For more information, visit www.mydaflure.com or call 888-MY-DAFLURE.
Publication date: 09/04/2006