Homeownership comes with a lot of responsibilities, and oftentimes it turns out to be more than the owner bargained for. It can be an overwhelming feeling, especially for those that do not have the skills necessary to make repairs or perform maintenance. That’s where handyman services come in.
Finding a reputable handyman service can be just as daunting as facing the tasks that need to be done around the house. With so many services out there looking to take advantage of homeowners who don’t know any better, it can be hard to trust that what they say is actually true and necessary.Recognizing this, Sears developed their own handyman service to bring repair and maintenance solutions to homeowners across the country from a name that they can trust.
Sears Handyman Solutions provides all kinds of home maintenance and repair services to keep homes in optimum condition. Having been in business for over 125 years, they know they have a solid reputation with the public. Customers can also feel comfortable going with a company whose name they know and trust.
Sears is selling franchise licenses to bring their Handyman Solutions services to more and more people across the country. Bringing trustworthy, affordable services to as many homeowners as possible boosts their reputation, as well as provides the opportunity for entrepreneurs to be a part of the Sears system.
Reimagining the Solution
Sears has been a household name for over a century in this country. Their name and reputation attached to a handyman service is a dream come true for many homeowners. Because of their commitment to integrity and service, they have gained the trust of many people and have opened up their client pool for these services.
Sears began offering their Handyman Solutions in 1992. Because they already offered a quality line of tools and home improvement products, their shift toward these services was not a big leap. They soon became a popular source of home maintenance solutions in the country and found their demand growing.
In 2014, they began selling franchise licenses for their Handyman Solutions, allowing more people to capitalize on the opportunity at hand.
The franchise provides small home repair and maintenance services to homeowners. They will perform minor plumbing and electrical work, drywall repair, appliance repair, or nearly any other light maintenance or repair.
Using their stature as a recognizable name in the country, Sears has been able to gain the trust of the public and insert themselves near the top of the list for handyman services.
In the four years during which they have been franchising, they have experienced a slow start. This may be due in part to the uneasiness that comes with franchising such a recognizable name. Consumers know and trust the Sears name from a corporate standpoint, but they know nothing about the franchisees who are doing business under their name.
When selling a big name through franchising, it’s important that each customer feel as comfortable with the franchisee as they do with the franchisor. Failure to have cohesion between the two parties can result in a disconnect that alienates customers. If they begin to see a lower level of services through the franchisee, they will associate that with a decline in status of the franchisor, resulting in lower sales for both.
Many franchisees may be hesitant to do business with a powerhouse as large as Sears. The competition at that level is fierce, but there are also some very high standards to live up to. Competing with the corporate owned Handyman Solutions locations puts the franchisee at a disadvantage, as the corporate stores generally have more experience.
Franchisees who choose to partner with Sears will have to compete with these factors throughout the entirety of the license period.
Partnering with Sears
The road to franchising with Sears Handyman Solutions is actually pretty straightforward. The interested party will fill out and submit the inquiry form on the website. That will prompt the franchise development team to contact the applicant and begin the conversation.
The franchise development team is looking for some specific qualifications in their franchisees and they will use the initial conversation to weed out those who do not meet them. The first qualification is a successful past with business ownership, or, at the very least, management. Having the skills to run a business are important because Sears is, essentially, turning over a portion of their company to the franchisee, and they want to be sure that that portion will be run efficiently.
After business experience, Sears likes to see financial strength in their franchisees. The process of launching a new business, even a franchise, is very expensive, and it is important that they verify that the applicants they choose to become franchisees can afford the costs. It’s bad for business if franchised locations get abandoned mid-process due to the lack of available funds.
The franchise license for a Sears Handyman Solutions location will range in cost from $35,000 to $70,000. Sears provides these figures first-hand, but they do not specify what the difference in price is for. Based on information provided on their website, it appears that the cost varies based upon the commitment the franchisee makes to Sears. The cost goes up or down, depending on how many locations the franchisee commits to opening, as well as how large of a territory they are looking to serve.
On top of the franchise license fee, there are additional start up costs that the franchisee will be responsible for covering. These are estimated to range between $12,000 and $100,000, depending on the size of the location and the extent of the services that will be offered.
Each location will need physical space to house the business, equipment, vehicles, and staff in order to serve the clients. These will all be factored in to the estimated investment costs.
The applicant will be asked about their ability to afford these costs on the initial application. When Sears receives the application, they will review the answers and make a determination based off of the information received. The applicants that pass this stage will be sent a copy of the franchise disclosure document.
Once they receive this document, the applicant will spend several days reading it thoroughly. It will document the details of the franchise agreement, so it is incredibly important that the applicant understands each facet of it. Anything that is unclear, or that makes them uncomfortable, should be addressed before the conversation regarding purchasing the license continues.
The applicant will also be required to sign a nondisclosure agreement at this stage. Because the franchise disclosure document contains proprietary information, the franchisor will require the agreement to be signed to ensure the contents stays private.
Applicants that agree to the guidelines in the franchise disclosure document will be invited to the next phase of the process, where they will apply for funding and sign the letter of intent. The application for funding is only necessary for those applicants who do not have the liquid cash to fund the franchise. The letter of intent commits the applicant to purchasing the license and opening their location, should they pass all of the stages of the application process.
With the letter of intent signed, the applicant will need to participate in a webinar wherein they will learn all about what it takes to be involved with the Sears brand. The guidelines for sustaining a healthy franchisee relationship will be gone over through the webinar.
After the webinar, the applicant will be invited to headquarters in Ohio for a Discovery Day event. At this event, the applicant will attend face to face interviews and get to know the franchise development team. This in-person interaction will allow both parties to get to know each other better and cement the relationship.
Then, the final application will be submitted and the franchise agreement will be signed. Once the franchise license fee is paid, the applicant will officially be a Sears franchisee.
The Perks of Belonging to the Sears Family
The relationship between Sears and their franchisees is important. Keeping that relationship in good standing is for the benefit of both parties and takes hard work on either side. The franchisee is responsible for remaining in compliance with the rules and regulations set forth by Sears. This will help to ensure that each location is providing the highest level of service to their clients.
The franchisee is also responsible for paying all of their fees to the franchisor as stated in the franchise agreement. Sears charges 8 percent of gross total sales for their royalty charges, which is 2 percent higher than the national average. While it sounds like a small amount, over the life of a franchise license, 2 percent of total sales can add up to quite a large sum. The applicant must ask themselves if this higher cost of ownership is worth the value of the franchise.
Sears Handyman Solutions also charges advertising fees to help cover the cost of the advertising and marketing that they do. Sears’ rate for this fee is in line with the national average of 2 percent. While it doesn’t add to the higher rates that they charge, it also doesn’t help to make up for those higher rates either.
Sears, on the other hand, also has expectations to live up to in the agreement. When the agreement is signed, Sears commits to providing certain levels of support and help to each franchisee to assist them on their way to success. These benefits are part of what makes purchasing a franchise license so attractive.
Each franchisee will have access to comprehensive training both before and after the location is opened. These trainings help to ensure that each franchisee is well-prepared to provide a level of customer service that is up to Sears’ standards. Initial trainings teach them how to run the business, and the ongoing webinars allow them to stay up to date with new technologies and procedures.
These areas of support are the factors that make purchasing a franchise license appealing to investors. For the royalty and advertising rates that they pay to these franchisors, franchisees are looking to receive guidance in return. It’s the reward they get for paying a percentage of their revenue to a parent company and abiding by all of their rules, instead of running the business the way they want to. It’s what makes buying a franchise a viable option over a stand alone business.
Sticking to the Sears Trend
It’s been no secret that the entire Sears brand has been in somewhat of a tailspin for the last several years. They have experienced mass closures and even filed for bankruptcy. Their Handyman Solutions sector seems to be feeling those same effects.
As of the time of this review, less than 25 Handyman Solutions franchises exist in the United States. Even accounting for their slow start, this is a low figure to be working with after four years of franchising. Sears has always had a good reputation when it comes to tools and home appliances, but their financial troubles seem to be weighing them down and preventing them from really capitalizing on the service market.
With an uncertain future for the entire brand, it’s hard to recommend a franchise license purchase with Sears at this time. It’s a big investment, which equates to a big risk when dealing with a company that has recently filed for chapter 11 bankruptcy. Sears has been able to hang on throughout the years, often facing troubles but managing to weather the storm for a little longer. That may happen this time, as well, and they may come out on top again, but it’s not likely.
Those who are looking for a franchise to invest in should keep looking. The risk factor with this one is just too great at this time. With the closure of over 140 Sears retail stores in recent weeks and the impending future, it’s uncertain where the company will be this time next year.
The concept behind Sears Handyman Solutions is brilliant. Homeowners will always need the assistance of professionals to complete odd jobs around the house, and it’s nice to have a recognizable name to call on. Unfortunately, that name is tied to some trouble right now and appears to be sinking like a stone.