BUSINESS AND TRAINING
"I do
agree that
franchising –
done well in
our industry
at a value-
for-money
cost – can be a
massive game-
changer.”
(approximately 14 outlets) and Drainmen (about nine) – are
registered with IOPSA, though Amandla Plumbing is listed
as an intermediate member of the Franchising Association
SA, and a number of others list themselves online. On
Tap, Waterways and Cape Plumbing and Bathrooms are
franchises in the retail space.
In South Africa, franchising is still identified with fast food
businesses, retail and fixed-location businesses such as
KFC, Battery Centre and McDonald’s, rather than work-from-
home businesses like plumbing. Many plumbing franchises
internationally enable a single plumber to be branded and
leverage on the brand-building of the franchisor. At the same
time, plumbing businesses have recognised the need to
become more professional and business orientated, evolving
to more modern business practices.
Marketing, branding, technology, web presence and overall
business practices all have to be components of a modern
business – even a one-man plumbing operation. A modern
plumbing business requires the owner-manager to not only
be a licensed plumber, but the business models also require
someone with communication skills at the helm. This can
be a difficult element of the plumbing space in that many of
the experienced personnel in the plumbing market are not
necessarily good at communicating with others.
Favouring franchising is the sharp increase in specialisation
of services. This focus on market segments allows for better,
more effective businesses within the subcategories of solar,
heat pumps, leak detection and more, as consumers always
choose to work with specialists as opposed to generalists.
The cost to invest in a franchise will vary based on market
demographics, the size and scope of your existing business
size, and individual start-up requirements, including: size of
the territory you purchase, discounts you qualify for, number
of service vehicles you currently have in operation and tools
and equipment you already own.
There was a spike in franchise businesses in South Africa
related to solar water heating systems and established
on the back of the Eskom rebate programme. There were
approximately 145 such businesses established at the height of
the rebate programme in 2009/10, many being franchises, but
80% of them closed once the rebate scheme ended, and today
there are only four or five major players left, and not franchised.
IOPSA’s view
“I don’t think the market is mature enough,” says Brendan
Reynolds, executive director of IOPSA. “The one-man
plumber must see the value in a franchise – otherwise what
is he paying his fee for? In the past, we have seen efforts at
franchising in plumbing, and in some cases, we’ve seen the
franchisor try to make excessive profit, charging as much as
23
– Brendan Reynolds,
executive director of
IOPSA.
Brendan Reynolds, executive director of IOPSA.
20% royalties while offering very little in return. You’ve got to
add real value to the small plumber, not just a brand name,
but for instance: a manual on how to run the business; lines
of credit with suppliers; technical support as and when
needed; branding; advertising; business know-how; forms
and documents; and assistance with admin. These are the
things that take up the time of a one-man plumber and
prevent him from producing revenue.
“With those things there’s real value in it – provided the
franchisor isn’t also charging a fortune for it. There isn’t
20% margin in this business to pay in royalties. I don’t
think anyone’s got the model right (even though others will
disagree) and the market isn’t ready for it yet. However, I do
agree that franchising – done well in our industry at a value-
for-money cost – can be a massive game-changer.
In comparison, in Australia, the UK and some states in the
US, franchising is widespread. That is because the plumber
is a tradesperson, who wants to spend his time working with
his hands, not doing admin and advertising and marketing
and branding. That’s not his strength.”
Local franchises
Drain Surgeon has been a franchised plumbing business for
more than 40 years, and has grown to 14 branches, three of
which are wholly-owned, and the remainder franchised. CFO
Drain Surgeon operations room and despatch.
April 2020 Volume 26 I Number 02
www.plumbingafrica.co.za