Mr Electric Franchise

[Joe Swaley]

Hi

I am wondering about the relevance of franchising and appropriate benefits. I have been contacted by Mr Electric about becoming a franchisee and wondered whether it was worth it or not. I've added a thread on some electricians forums but wanted to get a more business perspective to see whether it was worth buying a franchise.

I'm currently working for myself as an electrician but I am unsure which route to take, Franchise or not?

I contacted Mr Electric to see what they have to offer and it seems good. I’ve spoken to them 5 times now and for an £18,000 fee I seem to get a lot including help with starting my business and lots of training. Basically lots of help with things I am bad at.

It seems good but I’m not ready to take the plunge just yet as I like to get advice from various places before committing to a decision.

Could anyone provide information on the Mr Electric franchise and perhaps franchising in general to help me make my mind up?

Thanks

 

[Simon.P]

hi joe,
what exactly do you get for £18K?

 

[Joe Swaley]

For £18k you get training to operate the franchise, ongoing support to run the business for things like marketing and accounting, access to national accounts, a local website, manuals to run the business. In short a business in a box, lots of things I don't know.

Ongoing costs are outside of the £18k and include supplies, employing sparkys and other employees as the business grows, marketing costs, van, tools. So for £18k you get the resources to help you run the business but it is your responsibility to pay for the things associated with that advice if that makes sense.

 

[Simon.P]

I see. So what do they do in the form of leads for you? For example, if you hand over a couple of K to BSM and lease a car from them, they send you leads of people in your area who want to learn to drive. Do they supply you a list of people wanting electrical work in your area?

 

[Joe Swaley]

No they do not provide a list of people who need electrical work, however they have some national accounts that provide some work so I am told. I am expected to learn their way of doing business and put things into action by marketing correctly and so on.

 

[Simon.P]

so its basically help to get you on your feet starting your business.

 

[Joe Swaley]

They give you the tools, you use them. For example job deployment system, accounting, approaches to marketing (but you create the marketing plan), branding, you use the logo and have access to their documentation to run the business. A system to so they call it for running the business.

 

[Simon.P]

Sounds like you have made your mind up Joe. Good luck with it, let us know how you get on.

 

[Joe Swaley]

No i haven't made my mind up, I'm looking for more detailed advice from people experienced with franchising and whether it is worth it.

 

[Ian J]

I have already commented on another forum before spotting this thread and I will re-iterate that £18,000 is a lot of money for a self employed electrician to learn how to run an electrician's business.

How well are you doing on your own?

 

[Joe Swaley]

I am doing OK but want to move to the next level so the question comes down to whether the £18k is of sufficient value? I want more vans on the road and have the right systems in my business.

 

[beasty]

For £18k you get training to operate the franchise

Training?

They are not training sparkys so what are they training you on specifically?

ongoing support

Support? What will they ACTUALLY DO,
each day
each week
each money

Beyond taking some of your earnings

to run the business for things like marketing and accounting

Marketing, is generating awareness from potential customers, can be done for buttons

Accounting, 20 quid a month and you can DIY

, access to national accounts

Guaranteed work or not?
What does that actually mean to your day, week, month?

, a local website

Easy sorted

manuals to run the business
MANUALS?

Telling you what?


In short a business in a box
In short a lot of lovely phrasing and nice terms, manuals, and ongoing support (Sounds delicious)

, lots of things I don't know.
You know how to buy a job? Then pay some of your earnings to someone?

Ongoing costs are outside of the £18k and include supplies, employing sparkys and other employees as the business grows, marketing costs, van, tools.

So for £18k you get the resources to help you run the business
Not worth 18k or close to it, of course if they are GUARANTEEING work from the national accounts, there is value, but generally sounds like fluff talk, ongoing support a training guide, marketing by email phone etc,

sounds over priced and I would be looking for references of happy franchisees, with proof of income and also ask them, how much they earn from national accounts, what exactly does this franchise do that i could not do myself.


but it is your responsibility to pay for the things associated with that advice if that makes sense.

They give you the tools, you use them. For example job deployment system
DIARY

, accounting
Many options, 20 quid a month

approaches to marketing
Marketing book 30quid
as you have to create the plan!
(but you create the marketing plan),
branding, you use the logo and have access to their documentation to run the business
So you can keep paying them money for your work having paid them to let you begin working for them to begin with.

A system to so they call it for running the business.[/QUOTE

If you buy a MacDonalds Franchise, you buy the reputation, they run the marketing and you will get customers because of the name in this case if i opened a burger restaraunt i would have almost no chance without their name behind me.

Do people give 2 shits about MR ELECTRIC? i have never heard of them and just because you were a franchisee would not make me more inclined to use you.

How much do yo uhave to pay them?

Send me 5k i will set the lot up for you and guarantee you 50 REAL leads in your area, could get it done by Monday

It is a rip off

 

[Simon.P]

guarantee you 50 REAL leads in your area

do you mind me asking where these leads will come from Beasty?

 

[KM-Tiger]

What you have described doesn't seem worth £18K + the ongoing fees.

The real acid test of a franchise comes in these two questions:

Does it give me a competitive advantage that I cannot obtain any other way?
Does it put me in a position that I could not get to any other way?

 

[Paul Kelly ICHYB]

'I am doing OK'.

If you spent that £18k on those things to grow your business, would you be better off.

BTW, at the moment, who does your accounts, marketing etc?

 

[Chris Ashdown]

Have you tried your local enterprise company , they specialise mainly in start-ups but also offer free advice to people wanting to expand their business.

With all franchise companies the only real check is to ask for the names of say 10 people who have already joined the franchise and have a talk with them, if the company is good they will tell you if the company wont tell you the names ask yourself Why Wont They.

Could you join up with another local who might also have some of the skills you miss and reduce your own risk of getting things wrong

As in all companies its the sales that keep a company going along with Cash-flow and a book will teach you how to manage cash-flow but not help much in sales

 

[Joe Swaley]

@beasty Sounds like you have run a franchise before and know the pitfalls? As for your comments they seem reasonable but I am looking to develop a multi van operation not a one man band who cuts every corner and pays very little for cheap alternatives.

I’m not sure the use of a diary is a good place to start for job deployment. I want efficiency so my business works while I am not there one day. Without that the business will not run smoothly enough.

As for buying a marketing book for £30 quid that doesn’t solve growing a business fast doing it a specific way. There are lots of ways to market a business these days and lots of pitfalls so a systematic approach from Mr Electric would have been useful. You can’t make something like that sound so simple. The customers don’t just fall out of the sky.

Regarding other points contacting franchises, I am onto that. The value of the £18k of course I am questioning that. McDonalds point fair enough but it’s not just about their name, they have supply chains, materials and processes for running the business that are water tight so they make more money. Granted you open a maceys and people walk in but there is a lot more to McDonalds than just reputation. That’s why I question Mr Electric and their potential.

@KM-Tiger
Good points, the competitive advantage I see is growing the business faster by using their knowledge instead of taking lots of time to find it out for myself. Their service system does sound good and a platform for keeping and retaining customers. Service is not something electricians are good at so I could really differentiate there.

As for the above, I could try to do it myself and use the £18k to do so. Obviously this is in my train of thought. I would just need to ensure I had the right support around me to do so.

@Chris Ashdown what do you mean by local enterprise company, never heard of this? Are they like a networking group?

I am in process with talking to franchisees, however having read other forum posts the franchisees are often guided in what they should say and often incentivised to say the right thing by the franchisor.

I have thought about joining up with other sparkeys and this is on my radar, thank you.

You’re right sales is the one you need to master as I believe it is the key to business success, anyone can get the technical skills but the right sales approach is what makes the difference.

As regards my decision I will keep researching and report back.

 

[Simon.P]

Joe - it sounds like you have made some growth plans for the future and you would rather work on the business than in it (on the tools). I guess one drawback of a franchise is that you will have to do everything the way they want it, not what you want to do and guess this is the division between self employment (being a free ranger) and having a job where you have to do what you are told.

 

[The Byre]

For £18,000 you could easily hire a part-time office organiser and bookkeeper for a couple of years!

I have never heard of Mr Electric or the company behind them. They are liquid and have assets, but £18k is a hellavalot for a franchise that I have never seen buying advertising anywhere!

All the benefits you list can be had for a great deal less elsewhere.

 

[Chris Ashdown]

Most town halls have a enterprise company which is set up to offer free help to people wanting to go freelance or set up a company and offer either courses or assistance and also offer free assistance to small companies wanting to grow

Normally run by experienced businessmen acting a mentors on a part time basis

As others have said never heard of your franchise so advertising is definitely not there strong point and i do feel you are over thinking the office side of things not much more than you are doing now and easily handled by a part time office manager, your accountant should be able to advice on software that would simplify most office duties and your professional body the software regarding quotes and professionalism in your field.

The Federation of small business (FSB) offer many services and legal representation for a very small sum so worth looking into

 

[Joe Swaley]

@H_Martin

Yes you are right I want to get off the tools to some degree but keep my hand in when required so I keep up with regulations but knowing the trade now I can get a business to grow using those skills in combination with the right business skills and processes which I am seeking.

You’re right with a franchise I may find that they will tell me what to do and in some instances I may not like it. My thought process is a balancing act. Is the franchise of sufficient value to warrant putting up with being told what to do and is it easier than finding out all the information for myself, which may in some instances not be accurate even though it appears to be! For example, the information on this forum maybe fine but some might be total rubbish.

@The Byre

Thanks good point, an office person is certainly part of the agenda and that is part of the Mr Electric system too. I am looking for a combination of systems for hiring the right people with the right computer systems etc. If I nail this in my industry I will fly, given the regulations in place.

You are probably right I could get a lot of the benefits for a lot less elsewhere. Buying a franchise is very much about getting those benefits but in a highly efficient way. If I pay that money I should expect exceptional fluidity in their operations and support to grow my business. It is that efficiency and procedural approach that should deliver the pace of business growth I need.

Having said all that, regarding your point on Mr Electric being liquid, I have since found out that they are not. The Mr Electric brand is owned by the Dwyer Group, who are owned by a banking organisation in the states and their UK operation is called Dwyer UK Franchising Limited (this company must be associated with them as it is listed at the bottom of Mr Electric’s website). I did a search for this company on endole and Dwyer UK Franchising Limited has been operating for 3 years and 3 months with a net worth of £-583,677.

Obviously, this has put me off entirely but I will question them on it during my next phone call with them to see what they say.

@Chris Ashdown

Thanks for the help with the enterprise company, I will look into that.

As for the advertising of Mr Electric, you are right this does seem weak. I have done some google searches for electrician in various towns and they do not appear on the search engines. I will question them very strongly about this on my next call to see what their answer is. Mind you after what I found out about their company it won’t be going further anyway.

As regards the office side of things, I have to strongly disagree. I’m not sure what your business is but with electrical contracting the regulations are extensive and will continue to develop. The paper work is therefore extensive and can be done by an office manager but a successful business should think very carefully about the efficiency of this employee. Are they writing out invoices and electrical certificates or are they more aware of project management systems, linking accounts to electrical contracting software etc.

So, what I am saying is that an office worker could be full time doing all the admin or if they are put to work in a highly efficient way they could be part time admin, part time marketing for this business. So my thought process with buying a franchise was whether they could provide this level of efficiency through their so called tried and tested systems. Coming back to McDonalds on this one, that’s what they do when looking from the outside. They have systems galore, with efficiency and processes to make things more profitable. Furthermore they have very good buying power and a solid supply chain.

Overall, I am now not going to proceed with this franchise given the responses from people here and elsewhere but overall I can’t be confident with a company who have such bad accounts.

 

[The Byre]

[I did a search for this company on endole and Dwyer UK Franchising Limited has been operating for 3 years and 3 months with a net worth of £-583,677.

Our net assets are showing an even larger minus figure and will double some time this year. It is usually just a sign of investing.

Despite this, I had a look at their entries on Glassdoor and it seems to have been a very short-sighted company in difficulties that is now having the whip cracked. The UK team was replaced a few months ago with all-American management, after the UK operation just seems to have spent the past three years drifting sideways and getting nowhere.

It may be worth having a look at, but I would negotiate on the fee (they are desperate to get something off the ground, so they might be open to a massive reduction here!) AND get some WRITTEN agreement or conformation about marketing spend in your area.

But without a large ad spend, my 30 cents worth is to stay away!

 

[Simon.P]

Joe - finances and work load permitting. Why not recruit a sparks which would allow you to concentrate on working on the business and take it from there?

 

[Noridc]

I've just checked Mr. Electric reputation and it looks good repdigger(dot)com/reviews/mr-electric-franchise, except for a single Yelp review.

 

[beasty]

Get the references from Franchisees, until you have that contact you should do nothing

Some businesses are not right for franchising and make their money simply selling franchises

Step 1, get references, then go from there.

 

[Joe Swaley]

The Byre interesting comment regarding information on glassdoor, I located some reviews from US employees regarding their employment opinions but where did you get information related to this comment:

“The UK team was replaced a few months ago with all-American management, after the UK operation just seems to have spent the past three years drifting sideways and getting nowhere.”

It would be good to know for future reference so I can check it out and do the same for other company checks.

H_Martin Good point, of course this is in my train of thought also and this would not doubt be part of the franchise if I bought in.

Noridc There is no significant evidence of good reviews on repdigger for Mr. Electric’s reputation. Instead it may refer very vaguely to US or Canadian operations but nor hard facts.

beasty of course I am researching with current franchisees but as I have found out through my research current franchisees maybe incentivised to say the right thing and it is in their benefit to promote the franchise so the coverage of the franchise is broader across the UK.

As regards other information I have found, here is a legal case from the US (This is just for guidance so people on this forum have a wider understanding of what may happen, if indeed you did not already know):

Go to texa pplaw usual domain ending forward slash "cases" and scroll down to Mr. Electric v. Brian Clark and then on Transcript of Jeff Myers.

Of course this is in America, where as we know they have a bigger suing culture but I’m sure the UK operation will operate in a similar fashion.

In summary this case related to a franchisee who operated outside of his territory after a new franchise was sold in that area. Granted, you are not supposed to do that as part of the contract but if you read the link, it is more complex than that and highlights the relationship between franchisee and the franchisor (the one who owns the brand, in this case the Dwyer Group).

The key points are as follows:

1. It shows how messy things can get between the 2 parties if their requirements are not met or contracts are used to leverage a result for either party. Sounds like a risky situation to me.

2. They don’t write the marketing plan for the franchise but expect them to the work with their guidance instead. I would have thought this should be prescribed for the franchisee, so not happy with this approach.

3. The franchisor keeps a detailed log of conversations with franchisees. This sounds good and logical but can be used to challenge the franchisee on their conduct and therefore applicable for use in court cases. They recorded the content of phone calls to the franchisee but failed to detail phone calls asking the franchisee to stop advertising in the area he was not permitted to do so. I wouldn’t be very happy if I was the franchisee they were encroaching on that they failed to log the right information.

4. So much time was spent compiling a case against this franchisee with numerous individuals involved and so much data collection for what looks like approximately 3 years. Wow, a lot of effort.

5. The new franchisee, not involved in the case bought a franchise, only to discover that another franchisee was actively marketing in their area. I would not be happy if I spent £18,000 only to find out that another franchise was operating in my area, advertising and taking my customers.

6. The franchisee in question who operated out of territory was operating another electrical business alongside Mr Electric and so the accounting of these companies needed to be separate. I did not like this, in short the franchise only pays so much to the franchisor, so if that is the case and other franchisees do that, no money gets back to the franchisor. How are they supposed to market Mr Electric without money from franchisees?

 

[DesignerNick]

Never heard of them, sounds like a silly account of money for not much in return. For 18k spent wisely you could be in a much better position.

Using mr electric over swaley electrics as a name won't swing more business.

You seem very defensive of them and set on using them.

 

[The Byre]

where did you get information related to this comment:

“The UK team was replaced a few months ago with all-American management, after the UK operation just seems to have spent the past three years drifting sideways and getting nowhere.”

TO past and present and nationality of officers and date of appointment are public knowledge and available from a variety of sources, such as duedil and companies house.

But as the man said, £18,000 is silly money for a franchise that nobody has heard of and invests nothing in advertising and does not seem to have any great number of franchisees.

As Beasty said, get references before you do anything else.

 

[Joe Swaley]

@DesignerNick Point taken the consensus of thought is that the money is far too much for what you get. I’m with you on that.

I’m not defensive in the slightest, I feel it is right to discuss and debate the options by using facts and opinions together. In that way this thread is not just useful to me but to others considering not just Mr Electric but franchising in general.

I’m not sure how I am being defensive when I post a link to a court case, which highlights the pitfalls of franchising. I’d argue I’m going down the opposite road.

@The Byre Yes I was aware of duedil and have just checked this out. It does seem to be littered with American Directors.

One of them, with a very unique name did not come up on a LinkedIn search. Very strange for someone who is a the director of a company?

Another Director, Jeff Meyers is MD Rainbow International Germany, so it all sounds very confusing to me. Granted you could be a director of more than one company but it looks like a merry go round of director in an outs.

 

[garyk]

Yep I'm with the others, you are not getting nowhere near enough for your 18K.

The value of a franchise is in the brand, or if that doesn't exist some sort of guaranteed lead generation. This provides neither. Sure, you have identified you need help 'systemising' the business as well as accountancy and marketing but 18K would buy you alot of all this anyway and more importantly, it would still be *your* business. The business generation part will be the hardest part and they give you no help with this!

The fact is you probably won't have territory exclusivity and would be bound by other rules and regulations.

The problem with franchising is that it is self-regulated (never a good idea!) and disgruntled ex-franchisee's are gagged so you never get to hear the truth most of the time.

 

[The Byre]

One of them, with a very unique name did not come up on a LinkedIn search. Very strange for someone who is a the director of a company?

I am also a company director as well as being part-owner and I too am not on LinkedIn, or any other of these dufus sites filled with desperate and impecunious insurance salesmen.

 

[Jazz master]

I was seriously considering this franchise but having seen this - no more! Go to companieshouse and search for Mr Electric

 

[RLlewellyn]

God how I'd love to be in the business of ripping people off and getting away with it.

18k for a "business in a box" - that is what I detest about these people. Their website will be awful, you can get a good one for £500-£1500. I'd probably put £12,000~ into AdWords and the remaining £4,500 into getting an accountant (extremely cheap for a small business) and into your pick of networking groups. Seeing as you have £4,500 left I'd probably go with BNI (if there's a good chapter near you), Introbiz, 4N or any other good networking groups around you that don't have a sparky.

Took me around 90 seconds to write that, I'd be willing to make a legitimate bet with you that you'd be better off following my 90 seconds of blurb than a business and marketing strategy/plan by a company called "Mr Electric".

Sorry if I've come across as patronising, but these people are literally making money from people who are looking for work. I've worked with three leccy's in the last 12 months, one was a family friend, they were considering the same thing as you are but for different companies (I'm based near Cardiff) - if they did I guarantee they wouldn't have grown or would have been filing bankruptcy by now.

At the end of the day the decision is yours, but from one internet person to another, for your sake don't do it.