National brands that people can trust
Local Services has developed a successful formula for trade-based franchising that sees it on the verge of launching its third franchise network. The Franchisor talks to the group's Founder Steve Baker
"An ideal franchisee must have the ability to be a self starter," says Steve Baker, Chief Executive of the Local Services Group. "The franchisor provides a business in a box, but the franchisees are expected to run and operate it themselves. Our ethos is that we are here to support you, but you've got to be proactive - the system works but only if you follow it."
It is this emphasis on pursuing quality individuals to provide the service that brought Steve into franchising in the first place. After a career as a city stock broker, Steve returned to Essex to take over his father's electrical contracting business, and experienced the frustrations of dealing with a contracted workforce.
"Our company was one of the largest in the South of England employing over 200 people, but it was run not by the management, but by the unions," he reflects. "I left to start my own facilities management business, and then the unions were broken up and most tradesmen became self-employed. However, this comes with its own problems as the tradesmen cherry pick the best jobs and, because they know they are in demand, they don't treat you or your customers well."
Born of these frustrations was the idea to apply franchising to the business, an idea that has germinated as two trade-based franchise networks: PlumbLocal and ElecLocal. "I saw the success Dyno-Rod was achieving through franchising, and began to seriously look at the idea," Steve recalls. "While putting together a Business Format Franchise package, I started reading in the news about white collar workers leaving the city to re-train as plumbers, gas engineers, etc. It struck me that by putting the plumber into the businessman rather than the other way round I would be able to attract the calibre of person who would provide the right level of customer service and be committed to building up our brand. This has enabled us to transform the way the business is delivered, and we challenge any of our competitors to deliver such a consistently high level of customer satisfaction!"
Steve launched the PlumbLocal franchise in 2004 through The Franchise Magazine and generated immediate interest from prospective franchisees. "We were the first franchise in the UK to train and qualify its franchisees in plumbing to NVQ level, and it created a high level of response - we had around 1,500 enquiries in the first month," he reveals. "We were planning to start with five to 10 franchisees in our first year, but because we already had the infrastructure in place through our previous 10 years of supporting sub-contractors, we were able to recruit and support the launches of 38 franchisees in year one. The network is now up to 73 franchisees, and we are looking to achieve virtually full coverage with 150 franchisees in total by the end of next year."
In 2005 Steve launched a second franchise under the auspices of the newly formed parent company the Local Services Group. ElecLocal carried PlumbLocal's premise of bringing business builders into the franchise network and training them to the highest industry standards. "ElecLocal is the only electrical franchise to train franchisees as fully qualified electricians in order to comply with new government regulations," comments Steve.
"In fact, the same type of legislation now applies to plumbers as part of the government's drive to ensure building service providers are fully qualified. Local Services is committed to complying with all legislations and setting new standards in the building sector."
In year one ElecLocal launched 18 franchisees, and is currently operating 30. "Because the ElecLocal and PlumbLocal franchises are very synergistic, we are able to support both networks through the same bespoke online scheduling system and call centre, ensuring both networks get the same level of professional support," says Steve. "Our ultimate aim is to be the contractor network to the insurance industry, and as we win contracts for one franchise, a contract for the other follows quickly."
As the franchisee networks mature, Steve comments that some franchisees are realising the potential in their territories to expand by becoming management franchisees. "We still insist that franchisees become fully qualified plumbers or electricians, however we are supporting franchisees that are taking on staff to build their businesses. About 10 per cent of the network are management franchisees now, and 80 per cent want to be. We have already developed a large number of national contracts supplying the network with a large amount of lucrative work on a day-to-day basis and in some cases providing enough work to keep franchisees busy full time. There's also a major national contract we are completing a trial with at the moment that on its own should enable every franchisee to put one, or maybe even two, additional vans into their businesses."
Local Services is expanding on all fronts, with the launch of a third franchise opportunity in the pipeline. "By 2010 decorators will also need to have basic standards of training, and we are currently preparing to launch DecorateLocal, which will provide City & Guilds qualification to franchisees," Steve reveals. "The market for this service covers homes, businesses, insurance work and care homes. Programmes such as ITV's House of Horrors and BBC's Rogue Traders make people scared of going through the directories like Yellow Pages for a tradesman, so we're creating trusted national brands that people really can put their trust in.
"The decorating industry is uncharted territory, but the potential is limitless. The first pilot franchisee launched in the last quarter of 2006 and we're looking for more to help us roll out the concept."
With strong marketing facilities, support setup and franchising experience, Local Services is a multi-franchise company that has ambitions to extend its proven formula across the building services industry.
"We are currently developing apprenticeship schemes and working with the Ministry of Defence to provide new careers for ex-forces personnel in order to help our franchisees expand their businesses," reveals Steve. "We're very excited about the potential for DecorateLocal, and we will see more trade-based Local franchises launched in the future."