Jim Hunter, CEO of home repair and remodeling franchise House Doctors, sees so much potential in his industry, he decided that just running the company wasn’t enough.
He was brought in to lead Milford-based House Doctors in 2007, by company founder Paul Spires Jr. A month ago, Hunter purchased the company.
“I think I saw more of an opportunity than the owner did,” said Hunter, who wouldn’t disclose the purchase price. “It’s like Ray Kroc, who saw something more than the McDonald’s brothers did.”
House Doctors’ services range from building a deck to installing exhaust fans and light fixtures.
Home improvement in the U.S. is a more than $100 billion industry, according to Harvard University. And Hunter thinks it’s going to grow.
What he sees is an aging population that is deciding to stay in their current homes, an opportunity for plenty of upgrades, repairs and renovations. With each boomer that becomes a senior, Hunter sees a chance to build ramps, widen doorways and fit grab bars in bathrooms to make staying in their current home easier.
House Doctors has 46 franchisees operating in 70 territories across 26 states, mostly in the eastern U.S. Hunter plans to increase that number to 200 within the next five years. A franchise costs $50,000, plus $50,000 of working capital for the initial ramp-up, as well as a 5.5 percent annual royalty and 2 percent national marketing fee.
Franchise revenue growing at 10 percent clip
In the past, House Doctors looked for handymen to become franchisees. But Hunter is changing that. He’s now looking for franchisees who want to own and run a business.
“Today, we have more sophisticated owners, someone who would not be swinging the hammer,” said Hunter, who started his own franchise consulting business before he was tapped to run House Doctors.
So far, so good. In the last three years, House Doctors saw the fastest sales growth among new franchisees.
Hunter said the total revenue for all franchisees was about $10 million. Revenue, both for his franchisees and the parent company, increased about 10 percent year over year, he said.
To accommodate its growth, House Doctors moved in September into a new office, located at 400 TechneCenter Drive. The larger office has room for additional employees – it currently has five – as more franchisees are added.
It’s important that homeowners trust the remodelers they work with, said Andrew Glasgow, president of the Ohio Valley Chapter of the National Association of the Remodeling Industry. Being part of a larger franchise can help when a business is just getting started, but established businesses might not see the same benefits.
Glasgow, who’s also vice president at H. Glasgow Construction/CinciRemodelers, said about 85 percent of his company’s work comes from referrals.
Remodeling in Greater Cincinnati has been on the rise. In Northern Kentucky, the number of remodeling permits filed is up 5.5 percent, to nearly 950 through September, according to data provided by the Home Builders Association of Northern Kentucky. In addition, the average value of renovations this year, $24,634, is more than 42 percent higher than it was a year ago.
“The remodeling boom is still going well,” said Brian Miller, executive director of the association.
Independent real estate research and analytical firm Hanley Wood Market Intelligence expects 10.5 million “pro worthy” remodeling projects in the U.S. next year, a 3.7 percent increase over 2012.
The Home Builders Association of Greater Cincinnati doesn’t track remodeling permits, but Executive Director Dan Dressman said his 50 remodeling members are seeing more work this year.
“The prognosis is definitely good,” Dressman said.