New to HVAC - seriously considering opening as a franchisee

[RamiRustom]

I have some questions for any HVAC owner (or HVAC owner/operator) interested in helping out a newb. I don't know the first thing about HVAC (besides what I've learned while talking to a couple of HVAC franchisors).

Some people here think "where there is a will, there is a way." I share their attitude. But I need more than just a great attitude. What advice would you give to somebody like me? Specifically, advice about what I should learn, what I should do in general, to maximize my chances of success as a franchisee owner of an HVAC franchise (specifically TemperaturePro, assuming you know anything about them, or any other franchisor)?

Like what books would you recommend that I read?

What discussion groups (besides this one) would you recommend that I join?

What questions do you think I should be considering (and getting answers to)?

PS. I'm also willing to get my HVAC license (or at least learn what's needed to get it). I got my Physics degree 20 years ago and it was very easy for me (got a 3.8/4 GPA and barely studied). I still remember most of what I learned -- I tutored high school students in Physics/Chemistry/Biology/Math up until 2 years ago and I also homeschool my kids in these subjects. So I expect that learning HVAC stuff would be very easy for me (also fun, because it'll help me understand my own house better).

PPS. Since college I've been owning/operating businesses. So that's 22 years of business experience. What I'm best at is attracting the best people (and of course retention), and helping my employees make decisions more like me (so that I don't have to make decisions for them -- actually in many cases make decisions better than I do because they know more about their jobs than I do).

[STEVEusaPA]

Don’t do a franchise!
If you’re good at business, find a partner who’s good at HVAC, and maybe not good at business and needs some help getting rolling.
Each get an attorney to get an all encompassing partnership agreement, put up the dough.
As a franchisee you’ll be beholden to the franchisor, and they’ll take a huge slice for all the things you claim you already know how to do...

I know right now private equity firms are starting to gobble up med-lg full service hvac companies to create large companies to dominate and obliterate an entire area.
Then they’ll package them with other newly created large companies to sell to even larger private equity firms.
They’re starting to do this with other trades and businesses in general

[ammoniadog]

Not sure how you'll start a HVAC company when you don't know anything about HVAC. Sure you can rent an office and answer the phone, but who are you going to send out to the service or install calls?

Good HVAC techs and installers are expensive, and they like to be busy. Do you have a plan on how to find good HVAC techs/installers and how to keep them working? There's a pretty decent shortage of skilled trades people right now, so this part might be harder than you think.

[pageyjim]

When you buy a McDonalds' franchise people will come as soon as the doors are open. I wouldn't expect many to come to you just because it is the franchise you are looking at.

The HVACR business is very much a local style business and does not translate well to a national franchised business in most cases. Many have failed and the ones that do OK tend to be VERY sales oriented and do not have great reputations. I am speaking mainly about residential companies.

One of the most important traits in this business is to understand people, homeowners and employees. You stated to a bunch of tradespeople that because you are educated it should be easy to learn their trade that they work a lifetime to master. Then proceed to ask for their help. Even with that you received good advice.

My advice would be to use your education and business background as a consultant in some fashion.

Good luck.

[503 Hvac]

Buy a local company. The good customers my company has are all grandfathered in via company aqusitions. You couldn't get them unless you bought the company that's been coming to the house for 20 years. Google leads are bottom of the barrel trash, don't think you can build a good business without aquring a good customer base, which is hard to do online. Not sure how a franchise gets you good customers?

Go work for gensco and then buy a HVAC company after you've figured that out. See that trend with many HVAC owners in my area.


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[RamiRustom]

Don’t do a franchise!
If you’re good at business, find a partner who’s good at HVAC, and maybe not good at business and needs some help getting rolling.
Each get an attorney to get an all encompassing partnership agreement, put up the dough.
As a franchisee you’ll be beholden to the franchisor, and they’ll take a huge slice for all the things you claim you already know how to do...

A few things about your advice:

(1) I don't already know how to run an HVAC company. Sure general business knowledge is necessary to do well, but the specifics needed for any particular type of company still need to be learned. And that might take years to learn. The idea of joining a franchise is for the purpose of fastforwarding that process.

(2) Re "beholden to the franchisor". What's the problem exactly? I know that some franchisees (in any industry, not HVAC in particular) complain about not being able to run their business as they see fit, because their franchisor restricts them from doing various things. So I intend to make sure that the franchisor I choose is compatible with my business philosophy/methodology (which includes using a lawyer to help me understand the franchise contract).

(3) Re the franchisor taking a "huge slice". Their knowledge and help might be worth that "huge slice". Consider that a typical franchisor charges a royalty fee of 6% and an ad design fee of 1%. So that's 7%. Also consider that in the franchise model you get some better prices on equipment (dunno how much savings). Then compare profit and loss projections for independent vs franchise. I guesstimate that I'd need 20% extra sales in the franchise model in order to make as much net profit as the independent model.

Thoughts?

[RamiRustom]

Not sure how you'll start a HVAC company when you don't know anything about HVAC. Sure you can rent an office and answer the phone, but who are you going to send out to the service or install calls?

Good HVAC techs and installers are expensive, and they like to be busy. Do you have a plan on how to find good HVAC techs/installers and how to keep them working? There's a pretty decent shortage of skilled trades people right now, so this part might be harder than you think.

(1) The franchisor I'm talking to finds and vets HVAC techs and Ops manager. I'll also do some vetting.

(2) Re how to get sales. Marketing. Also, acquiring other HVAC companies (which might include absorbing their techs too).

(3) the shortage of skilled trades thing you mentioned is not just "right now". It's a many decades long phenomenon (which is not going away anytime soon).

[RamiRustom]

When you buy a McDonalds' franchise people will come as soon as the doors are open. I wouldn't expect many to come to you just because it is the franchise you are looking at.

agreed

The HVACR business is very much a local style business and does not translate well to a national franchised business in most cases. Many have failed and the ones that do OK tend to be VERY sales oriented and do not have great reputations. I am speaking mainly about residential companies.

Tons fail, I'm sure. Which is true in all industries.

One of the most important traits in this business is to understand people, homeowners and employees. You stated to a bunch of tradespeople that because you are educated it should be easy to learn their trade that they work a lifetime to master. Then proceed to ask for their help. Even with that you received good advice.

What do you mean "even"? It seems like you think I made a mistake but you don't explain what the mistake is or why it's a mistake. It seems that you think what I said is offensive to tradespeople. I did not mean to offend anyone. I can see how ppl could get offended by what I said. Note that just because someone is offended by what I said does not imply that I did anything wrong (it could be that the person that got offended by what I said was wrong to be offended).

In any case, I was asking for help from HVAC business owners (whether they are tradespeople or not, and I know some are not).

My advice would be to use your education and business background as a consultant in some fashion.

Consultant's generally don't make much money per hour of effort. I could make way more money per hour of effort by running my own business.

[RamiRustom]

Buy a local company. The good customers my company has are all grandfathered in via company aqusitions. You couldn't get them unless you bought the company that's been coming to the house for 20 years. Google leads are bottom of the barrel trash, don't think you can build a good business without aquring a good customer base, which is hard to do online. Not sure how a franchise gets you good customers?

The franchise I've been speaking with says that some of their franchisees start out by acquiring a company, and they grow by acquiring more companies.

[oldguy1949]

(1) The franchisor I'm talking to finds and vets HVAC techs and Ops manager. I'll also do some vetting.

(2) Re how to get sales. Marketing. Also, acquiring other HVAC companies (which might include absorbing their techs too).

(3) the shortage of skilled trades thing you mentioned is not just "right now". It's a many decades long phenomenon (which is not going away anytime soon).

The big problem is WHO has the license to actually be a hvac service provider in your location. That person will have your " family jewels " in a vice ready to squeeze when you the owner does things he/she doesn't like. How are you going to deal with this ? I can see every time your bottom line goes up a demand for more money/benefits/perks will be forth comeing. In my state if you open a 2nd location , needs an additional license holder unless it's just a work center with no public access. Just Another problem when you do all this growing you are convinced you can do.
I will make you deal to use my license if in Texas. I can start Monday for $100k a year salary,new company truck of my choosing, access to company airplane , use of company houses in Aspen & Maui, 8 weeks paid vacation, and expense account.

[RamiRustom]

The big problem is WHO has the license to actually be a hvac service provider in your location. That person will have your " family jewels " in a vice ready to squeeze when you the owner does things he/she doesn't like. How are you going to deal with this ? I can see every time your bottom line goes up a demand for more money/benefits/perks will be forth comeing. In my state if you open a 2nd location , needs an additional license holder unless it's just a work center with no public access. Just Another problem when you do all this growing you are convinced you can do.

I don't do things that my employee's don't like. When we disagree on things, I want to come to agreement with them. This logic and the methodology that comes with it occupies like 90% of my employee manual. I have no problems with employees wanting to screw me or even wanting to leave (it doesn't happen). I intend to pay my employees very well, including paying them in shares of my company for working for many years with me (so that they share in the profits).

[pageyjim]

I don't do things that my employee's don't like. When we disagree on things, I want to come to agreement with them. This logic and the methodology that comes with it occupies like 90% of my employee manual. I have no problems with employees wanting to screw me or even wanting to leave. I intend to pay my employees very well, including paying them in shares of my company for working for many years with me (so that they share in the profits).

This company of yours looks like it will be making tons of money. You will be making plenty I am sure. You will be compensating your employees well as you say here. You will be paying the franchise fees. Paying somebody who owns the license and knows what they are doing to run the company on a day to day basis. Many expenses that others do not have. Sounds like a good plan to me. How are the customers getting treated with all of this? I love it when there is plenty of money for everybody.

[RamiRustom]

This company of yours looks like it will be making tons of money. You will be making plenty I am sure. You will be compensating your employees well as you say here. You will be paying the franchise fees. Paying somebody who owns the license and knows what they are doing to run the company on a day to day basis. Many expenses that others do not have. Sounds like a good plan to me. How are the customers getting treated with all of this? I love it when there is plenty of money for everybody.

customers get treated in the same way employees do. with respect and honesty. the goal is for everyone involved to be happy with their interactions with the company and everybody involved with the company.

there is plenty of money for everyone when the volume is large enough.

[pageyjim]

customers get treated in the same way employees do. with respect and honesty. the goal is for everyone involved to be happy with their interactions with the company and everybody involved with the company.

there is plenty of money for everyone when the volume is large enough.

$39 clean and checks should get you thousands of customers. If that doesn't work $29 clean and checks might work. Massive direct mail program an overpriced flat rate book. Plenty of incentives to turn eager new graduates from tech school into smiling thieves wearing booties with promises of owning a share of the company. Don't forget to tell their families to put in good ratings online to keep them up.

[RamiRustom]

$39 clean and checks should get you thousands of customers. If that doesn't work $29 clean and checks might work. Massive direct mail program an overpriced flat rate book. Plenty of incentives to turn eager new graduates from tech school into smiling thieves wearing booties with promises of owning a share of the company. Don't forget to tell their families to put in good ratings online to keep them up.

customers that seek the lowest price are not good customers. I want good customers -- the ones that want good quality and are willing to pay a premium for it.

fake reviews are not necessary (and can be harmful). real reviews are all that I need.

[crotherm]

Hi RamiRustom,

I admire your entrepreneurial spirit. Both your knowledge of physics and running a business will serve you well for an HVAC business. You'll just need to understand more about the type of work and the equipment. From the physics side you'll understand the states of matter, temperature, pressures, volumes, electrical circuits, air flow, measurements, etc. Learn these topics as the relate to this specific trade.

RE: Like what books would you recommend that I read? Refrigeration & Air Conditioning Technology, International Mechanical Code, and International Fuel Gas Code.


I see pros and cons of going with a franchise. You can buy a business model instead of doing it trial and error by yourself. The con would be some possible restrictions and the franchise fee. I'm neutral as I don't know much about this and have seen neither success nor failure from it.

I'd also get familiar with sizing. Can you do load calcs and equipment sizing (Manual J, Manual D) or at the very least understand the physics behind the work. I'm sure it will be easy for you.

Get your hands on some of the materials. Can you braze copper? Can you thread pipe? Can you follow a wiring schematic, crimp connectors, etc? Can you work with sheet metal?

Get familiar with the electrical circuit. Be able to draw the low and high voltage wiring diagram for a basic a/c and heating system.

Get familiar with the refrigeration circuit. High Side, Low Side, subcooled, superheated vapor, etc.

How are your sales skills? There are a lot of resources available on selling.

I have a friend who once had an HVAC tech that was a former physics guy like yourself. Really smart, however he was not highly skilled in HVAC and a focused tech with a GED could run circles around him because he had specialized training and experience in the field. Don't get me wrong, the physics experience will be helpful but you need to take the pure science and know how to apply it to this specific trade.

Lastly, know your way around the equipment. Be able to disassemble an entire residential split system and be able to identify each component and explain the purpose of that component in the system.

Good luck!

-CCR

[crotherm]

Also, check out your local trade school. My local technical college has a good program, but book/class learning is not enough. Experience matters

[btuhack]

Sounds more like we're the ones getting valuable advice here. Thanks a million!

[thatguy]

What drives you to want an HVAC company when you don’t know anything about the trade and apparently have no previous mechanical interests?


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[RamiRustom]

What drives you to want an HVAC company when you don’t know anything about the trade and apparently have no previous mechanical interests?

I need a new business (need a new income) and I've been working with a franchise consultant (also been working with business brokers). I've looked at lots of industries and I think HVAC might be the best pick. Why do you ask?