This article was first published online by Franchise Times on July 28, 2021 and subsequently published in the August 2021 print edition.
“The ideal of happiness has always taken material form in the house, whether cottage or castle; it stands for permanence and separation from the world.”—Simone de Beauvoir.
Such axioms about houses, cottages and castles have taken on a new meaning over the past year. Whether entirely because of the pandemic or otherwise, home services continue to be in high demand, and franchise systems operating in that segment are experiencing growth domestically and internationally. The expectation is that there remains room for even further growth in the segment. In this month’s column we glean some insights from Justin DiBlassio, legal counsel at Authority Brands, on operating and expanding home services brands in the U.S. and beyond.
“With the prevailing view being that people will continue to spend more time at home, and spend more dollars in improving their homes for enhanced comfort and value, there is little doubt in my mind that the demand for home services will increase,” said DiBlassio.
This provides a great opportunity for home services brands, particularly multi-brand franchisors that operate more than one concept, to launch or continue expanding internationally. The international demand for home services, however, must be cast against the backdrop of ongoing international uncertainty. Some of those factors include fluctuating governmental regulations, disparate economic conditions, supply chain challenges and other destabilizing influences that may persist.
Understanding market nuances
The position is different for franchisors who already operate in international markets and who have had to navigate through the pandemic conditions over the past year. Their knowledge, experience and forced familiarity with uncertainty stands them in better stead to expand.
Authority Brands is comprised of 10 U.S.-based home services franchises, three of which also operate internationally. One key insight from Authority Brands’ international expansion experience is the importance of understanding not only the licensing requirements around a particular home service offering, but also the current public opinion and cultural sensitivities around the process and products used. Licensing requirements can and do vary from country to country. For example, in the case of America’s Swimming Pool Company, pool cleaning and maintenance services do not require a specific license in most jurisdictions, but pool construction often does.
“This is an important economic factor that we consider, the level of complexity and difficulty of obtaining the relevant licenses in a given jurisdiction. The barrier to entry—or lack thereof—provides us with valuable information about the viability and desirability of a potential expansion effort,” said DiBlassio.
Details of the licensing requirements and their related regime is something Authority Brands considers carefully and early on in expansion discussions.
When working with international brand Mosquito Squad, the question of whether the regulations are becoming more onerous or relaxed on the use of specific chemicals is an important inquiry that informs the decision-making process. “There are strategies that we have to address in either situation, but we consider the landscape carefully in the exploration phase,” said DiBlassio.
This is not a one-time exercise. Authority Brands consistently monitors how governmental regulations, as well as the surrounding political mood, wax and wane over time. This has significant relevance to positioning franchisees and their operations.
Asked if legal or regulatory issues deter Authority Brands from expanding internationally, DiBlassio said they typically do not. Instead, the team determines appropriate strategies and workarounds as required.
Adapting to address challenges
Switching gears to look at some of the challenges that Authority Brands has faced in its international franchising endeavours, DiBlassio said use of certain systems, such as those involving technology, can require modification and adaptation.
“That is part of the franchisor’s role, to adapt its systems to ensure that they foster franchisee success in the relevant jurisdiction. We experienced a situation of that kind with Homewatch Caregivers, our software system didn’t work ‘out of the box’ in certain jurisdictions, so our team had to develop something that was suitable for those jurisdictions,” said DiBlassio.
One of the moving pieces of the Authority Brands machine that works well, however, is its support teams. “From our perspective, one of the things that we are really proud of is how our marketing team works with international franchisees to develop tailored marketing programs both in launching and sustaining our brands in their market,” said DiBlassio. “Home services brands require robust marketing programs. Understanding the cultural temperature of a jurisdiction, how to effectively place and monitor marketing content—particularly what the internet presence and personality should look like—is crucial. Our marketing team does an amazing job of protecting the brand image internationally.”
The support team also provides what DiBlassio considers best in class training, which includes adapted content and delivery for international franchisees. Being accessible for different times zones, developing a solid understanding of the different systems that apply for franchisees in different jurisdictions and actively sharing information between franchisees are all part of the fabric of the support team.
Above all that, Authority Brands has a formidable level of quality at the leadership level. This was demonstrable in the way its brands navigated the pandemic. From increased contact with franchisees, as well as enhanced support and mentoring, to agility in adapting and pivoting, the leadership teams were able to steer many franchisees to a solid performance in 2020.