Welcome to Franchise Talk with Emery Orosz, industry specialist in buying and selling franchises presented by Morgan & Westfield, a nationwide leader in business sales and appraisals. Here’s your host, Emery Orosz with today’s special guest.
Emery: Good morning, Gary. I’m Emery Orosz with Morgan & Westfield. How are you this morning?
Gary: Good morning, Emery. I’m doing great. How are you doing?
Emery: I’m doing well. And welcome to Franchise Talk. I know it’s a little bit early, but I know we’ve both had our coffee; at least I have, have you?
Gary: I had a workout. My endorphins are playing leapfrogs.
Emery: Okay. So, again, welcome to the show. Everybody, we’re talking with Gary Landon this morning, Franchise Developer for Mr. Appliance. And, Gary, before we get into the serious questions, tell us a little bit about yourself and how long you’ve been working for The Dwyer Group, maybe a little bit about Mr. Appliance.
Gary: Okay, very good. I’m 51 years of age. We’re based here in Texas and I have been based here in Texas all my life. I’ve travelled throughout the United States and Canada meeting with business owners. And also, my wife and I owned a mom-and-pop business, if you’ll allow me to use that expression, many moons ago. And then later in life, I was fortunate enough to be a partner in ownership of a franchise and it makes a world of difference when you don’t have to start from dirt building a business. You’ve got actually a model. And then, about ten years ago, The Dwyer Group recruited me, to come to work for them, and I’ve been with Mr. Appliance in The Dwyer Group brands for now ten years.
Emery: Congratulations. So your tenth anniversary is coming up very shortly then.
Gary: It just happened.
Emery: Oh, congratulations then. So Gary has some serious career highlights. I know he doesn’t like to brag about himself, so I will. Back in 2006, Gary was the Franchise Director Rookie of the Year for The Dwyer Group, so congratulations for that even though that happened a little while ago. And then in ’08, he was the Franchise Developer of the Year. So again, congratulations on a good career start, ten years. So, today we wanted to talk about Mr. Appliance. And Gary, to start off with, tell us about some of the services that Mr. Appliance offers, please.
Gary: Absolutely. Mr. Appliance, our bread and butter, is really the appliance repair side of things. And the average customer today has six to eight appliances in their home. So on average, Mr. Appliance business works on one appliance per customer per year. Unfortunately, for you and I as consumers, Emery, they don’t make things like they used to.
Emery: That’s true.
Gary: That’s more than a cliché, and so appliances are breaking down more often. They’re a little more expensive than they were in the past, and breaking down. So people are repairing those appliances on an ongoing basis. And so appliance repair is our bread and butter, but the other side of our business and equally as important is dryer vent cleaning. And as you probably know, a dirty dryer vent is the number one cause of fires in the United States. And so we focused on both of those areas; and whenever our technician goes out to a home to repair whatever appliance they’re repairing, they do offer free dryer vent inspection just to make sure for the safety of the residents, whether it would be a home or apartment, condominium, etc., because it’s a dangerous situation and a very flammable substance in the lint that gathers in the back of the dryer and the dryer vent.
On average, Mr. Appliance business works on one appliance per customer per year.
Emery: I see. So how often is this service recommended for normal use? The normal householder, maybe they use their dryer, I don’t know, two-three times a week, maybe? So how often do you recommend this kind of service on the dryer vent?
Gary: The experts express that for a household of four people, you want to do a dryer vent cleaning one to two times a year. And then, of course, for businesses, especially if they wash a lot of towels, dry a lot of towels, and there’s quite a few businesses, generally over 100 types of businesses in any market place that is in need of dryer vent services on an ongoing basis, sometimes those need to be cleaned up to once a quarter, four times a year.
Emery: So as you mentioned, when we started talking about this, if I called and I had a problem with my washing machine, I would still get the free dryer vent inspection?
Gary: Yes, they would inspect it and see if indeed there’s lint in the dryer. By the way, that’s the greatest tragedy, and it is a tragedy if the clogged dryer vent causes a fire. There are lesser ills that can occur. And if a customer is having to go more than one cycle to get their clothes dried and it used to, it didn’t take that much, then there could be a clogged dryer vent. And then also the dryer uses the second most electricity in the home, the HVAC system is first, the dryer is second. And so, of course, that lint buildup in the dryer, in the dryer vent, can cause a pull on the electricity and add to the monthly electric bill.
Emery: So it sounds to me like this is a critical service that people really need to be concerned about.
Gary: Absolutely. I mean, the dryer vent as well as appliance repair, because appliances aren’t just a want, they are a need. And when the washing machine breaks down, the homeowner is generally not going to go to the laundromat. They’re going to get their washing machines fixed and their refrigerator, the major appliances are what we focus on, and those are all very much-needed items.
Emery: And so when I was researching Mr. Appliance and reading some of the trade publications, I kept seeing Mr. Appliance mentioned. And it’s received many, many accolades in these industry franchise trade publications. So can you tell us a little bit more about that, Gary?
Gary: Well, one of the main trade periodicals out there is the top 500 franchises in the world. And all of The Dwyer Group brands are listed in that, but especially Mr. Appliance. With the Mr. Appliance business model, a couple of things, an owner of a Mr. Appliance does not necessarily have to have a commercial location. And that keeps the investment, the monthly expense, I should say, lower. We provide three websites, so, really, they’ve got a virtual office to run their business and that can run it from their home office. And really, what customer calls a service company and says, “Hey, I want to come look at the part you’re going to repair my refrigerator with.” That’s crazy, people don’t do that, so it’s, “Hey, I got a broken refrigerator; can you get out here and repair it?” And so everything, the exposure is in the customer’s home or in their business, not necessarily in a show room or a commercial building setting though.
Emery: Okay, so let me make sure I understand you right, Gary. So you’re saying that this can be a home-based business as well as having a store front location?
Gary: You don’t have to have a store front. Now, at some point as the business blossoms, we are a very scalable business model, it may not be practical to meet with ten technicians around the dining room table.
The exposure is in the customer’s home or in their business, not necessarily in a show room or a commercial building setting though.
Emery: Sure, coffee’s on.
Gary: Yeah, I know my wife would probably be pretty upset about that, anyway. But depending on the owner, many of them like the technicians take the vehicles home and then dispatch them using our 60 seconds, very high-tech software to route the technicians to where they’re going, to keep them in the homes more, and off the streets.
Emery: So scalability is really the key here, depending on where you want to take this business? Is that safe to say?
Gary: Absolutely. And you know, we’ve got owners who have all kinds of goals. I mean, some want to get to, “I’m going to call a comfortable level.” And some want to get to an extreme level and be award-winners with Mr. Appliance, and far beyond anyone else. And we have all of the above.
Emery: Okay. But one thing, Gary, people always ask me, they’re concerned about the timing, whether they’re going to buy into a franchise, that a year from now, there won’t be a demand for it. So why is right now, or, rather, what is the best time, to be a Mr. Appliance franchisee?
Gary: Well, the Dwyer Group has been around 33 years. And all of our companies are service-related, and we’ve seen steady growth because the servicing industry today in the USA is a needed and a repetitive service. You can’t outsource this overseas. It’s got to be done right here by us. And so, that’s very important. Again, things are breaking down more than they used to, everything from cars to appliances. We all see that. And so the service industry is in high demand. And again, the customer has six to eight appliances, and really what’s happening is the more computerized that appliances that come and such, the more service they require. And so, it’s interesting how that is going hand in hand with the need for repair. And then, with the state of the industry, there’s a lot of doors opening to the Mr. Appliance business owners for opportunities to either do the appliance repair and also the dryer vent cleaning, because a lot of companies don’t do dryer vent cleaning, and that is critical to the homeowner.
Emery: Right. And let’s just take a scenario, Gary. Let’s just say I decided to get out from behind my desk, my comfortable chair, and let’s say I decided to buy a Mr. Appliance franchise. Let’s say I was approved, and I don’t know a whole lot about repairing appliances, so what kind of training could I expect to get?
Gary: Well, ours is an executive business model. We definitely want to help whomever, the types of Mr. Appliance owner, to work on the business, not necessarily in the business. Now, if you want kind of a mix, we have 70% 0f our owners that come from more of a corporate environment, if I may use that expression. There are bankers, from technology, the computer industry, engineers, etc. And they’re just hired to corporate world, so to speak. And so they want to do their own thing. They want to own their own business, control their own destiny. And so about 70% of our owners fall into that category, and then, the other 30% are people from within the appliance repair industry. So 70% had zero appliance repair in their background. And 30% had appliance repair, but regardless of where they came from in their past, we want to get them to again, work on the business, not just in the business.
We have a recruiting system that helps them to recruit technicians. And also, with technology, I mentioned the three back office websites and that type of things, so the owners can run it with the virtual office. We have even the owners that have zero mechanical savvy can understand the appliance repair from, say, a 10,000-foot level with our technology; one of the pieces is called “Hire Logic” within the website, and they can get a glimpse of how it works. There are repair manuals, there are even videos out there that would show the owner, “Okay, brand number X, model number ABC, this is what it looks like to repair this specific problem.” And then we have basically an inventory of every time a make and model broke down and was repaired from all of our 200 locations with Mr. Appliance locations, so that literally, the owner, the technician, anyone in the Mr. Appliance business can do a “pre-diagnosis” based on what has happened throughout the US; because if a product is breaking down in Florida or Texas, or California for example, then if it’s had the same problem in any other state, generally it’s the same issue and the same repair.
Emery: So that puts my audience at ease because I deal with a lot of executives that are just, as you said, they’re tired of corporate America. They want to own their own business. So you mentioned that 70% figure. 70% come out of that type of environment. So you don’t need to know how to fix a refrigerator, but your technicians will be taught that with all the videos that you mentioned, all the training that’s ongoing. So, it’s a great opportunity for any of those, especially corporate America executive types that can run the business, not necessarily go out and fix a refrigerator. So I think that’s stated pretty simply. Would you agree, Gary?
Gary: Absolutely. And there’s ongoing ways for the owner to keep their staff on the cutting edge, and for themselves to get just a nominal knowledge, so they can oversee the appliance repair, because we help them to work with the manufacturers; and generally the manufacturers are at the supply houses and we have 150 preferred vendors in their area. In areas throughout the US, we have the supply houses that will have day sessions where they bring in the brand name manufacturers and the manufacturers will go through a training session with the owner, with the technician. And so that happens all the time. I was just talking to one of our owners earlier this week. And they had a training session. They’re local on Monday. So it’s all day for himself and his technicians.
So again, just going the extra mile to show that we respect the homeowners and the home.
Emery: Okay, so the training, quite extensive. But I wanted to just switch gears a little bit and talk about the process for the customer. Let’s say I’m the customer. I have a problem with my refrigerator. Let’s say my ice maker stops working, so I call Mr. Appliance, so how does the process work from the time that I make that initial phone call?
Gary: Good question. We position ourselves above any of the other competition out there. And quite frankly, there’s only one national franchise, and that’s Mr. Appliance. And so, there’s not a whole lot of competition for us head-to-head. And so, what we do is you can either call the local number on the individual Mr. Appliance owner’s website, because we provide them a very high-tech, robust website with the local phone number, and also what we call SOS. That’s “Service on your Schedule” is what we call that. So you can call the number and book the appointment or just simply go online and this separates you from 99% of our competitors out there. Book online, and when you book the appointment either way, call by phone or Internet, then it goes into the Mr. Appliance proprietary software, and literally you will get an e-mail that has a picture of the technician that’s going to be at your home. And it confirms the appointment, when it’s going to happen.
Then, about 20 minutes before the appointment is coming up or really when the technician is on the way, you will get a text message letting you know that the technician is on the way, which is very convenient, if you’re at a person’s office, or they’re out running errands or whatnot, and they’re pretty close to home, they get that text, then they know that, “Okay, great. I can literally take care of the duties of life today up until I get that text.” And then head back to the house to meet the technician to repair the appliance. The technician will come to the door. He will be professionally dressed. He will put down the Mr. Appliance mat. He will wipe his feet. He will cover his shoes with the carpet or “floor protectors” as we call them, and enter the home. We want to show the customer that we respect them and we respect their home. And as we come into the home, we also put down a tool mat on the floor. We don’t put anything on the cabinet where there may be damage to the cabinet or potential damage as some companies do out there. So again, just going the extra mile to show that we respect the homeowners and the home.
We do not charge by the hour, because some companies in the service industry, not just appliance, but just in general, they will drag it out to get that second hour included. And so, ours is by the job, not by the hour. So it really gives them a better value for their dollar. And we have them approve the price of the repair before any repairs take place. So the diagnosis happens and then they approve, “Yes, I do want that repair.” And then, at the end, obviously everything is designed to be paperless, where the customer signs off on the work done, renders their form of payment, credit card, check, etc., and then they will get an e-mail receipt. And then for the business owner, for Mr. Appliance, it uploads the invoice simultaneously so the goal is zero data entries after hours, because we’ve made our system very streamlined.
Emery: Sure. It sounds like a great process. And it doesn’t sound at all like the old days. I remember years ago I had to get my stove fixed. So I called some outfit and some young teenage girl says, “Oh yeah, he’ll be out there between 1 and 6.” It’s like, 1 and 6? So my whole afternoon was shot waiting for this guy. And then, he shows up around 5 o’clock, dirty t-shirt and just walks into the house. And it’s like, am I even sure this is the appliance guy? He starts working on the appliance and didn’t give me an estimate, and just forgot what the problem was, but he fixed it. And I started writing him a check, and “Oh, we only take cash.” It’s like, “Oh my goodness. What have I gotten myself into?” So the Mr. Appliance process, I mean, it sounds too good to be true, but that’s what you guys do. It’s all about the customer.
Gary: Yeah, it’s a very simple business model for the owners and a very world-class experience, as we call it, for the customer. There’s no surprises, a customer in crisis. They want consistency, and they don’t want any surprises. And so our whole business model, and it’s step-by-step, play-by-play, everything from answering the phone correctly to appeal to the customer, to when the technician is exiting the home and we have performed to the extent that we’ve created a lifetime customer. And that’s the goal with the Mr. Appliance Business model, it’s to help the Mr. Appliance owner to create lifetime customers.
Emery: Yeah, and that to me, Gary, is the reason the way that you treat your customers, the professionalism, that’s the reason that Mr. Appliance has received so many accolades, so many good things being said about Mr. Appliance in these trade publications. So there’s a reason that these good things are being said about Mr. Appliance, and now we know the reason. It’s all about the customer.
Gary: I will totally agree, and I’m not going to mention the name of the company, it probably would be prudent if I did, but there’s a national company, if I mention today, had six managers that I met with last year at a conference, and they came to me and they said, “Gary, there’s an abundance of appliance repair, it doesn’t matter what market it is, in the US. There’s an abundance of appliance repair, but not an abundance of quality appliance repair companies. We need more Mr. Appliances to represent us.” Of course, they wanted to be represented well as a name brand. We would all recognize it if I said it, and they want the customer to be treated with respect, integrity, and based on our code of values, which is the foundation of all of our brands here at The Dwyer Group.
Well, that’s a good question. We want to be an open book
Emery: So taking everything we said, Gary, in a nutshell, can you just briefly summarize some of the reasons why a person would want to invest in a Mr. Appliance franchise?
Gary: Well, I think going back to the statement we discussed earlier, it is a very simple business model, number one. Number two, it’s a needed service; this is not a luxury service, when an appliance breaks down, people are going to get that problem taken care of. And then last but not least, it is a repetitive service that people are going to use Mr. Appliance again and again, and again, whether it would be for appliance repair or for dryer vent cleaning. And so, simplicity, needed service, repetitive service, those are the three keys as I see it, to being a successful business right now in the USA.
Emery: Well, it sounds like an excellent business model. It’s needed. The timing is correct. As you said, it’s a simple model, and folks, if you’re listening to this, I would seriously look into the Mr. Appliance, and call me, all my contact info will be on this podcast that you’re listening to, with the accompanying e-mail. But, Gary, one more question. And a lot of people ask me when they’re inquiring about a business, about the FDD, the franchise disclosure document, is that generally available for people to review? At what point in the process does the potential buyer get to see the FDD?
Gary: Well, that’s a good question. We want to be an open book, and the FTC obviously wants the customer to have the franchiser disclosure document. We want them to have it in the process, so we can go through the details, because anyone that’s going to join the Mr. Appliance team, we want them to be a 110% comfortable with us, and we want to be 110% comfortable with them, because we’re going to be on the same team, and quite frankly, the better they do, the better we do. So we’re their big fans. So this document is a document that we want to get to them at the appropriate place in the process, in our process. Again, we want to be an open book. We want to allow the Mr. Appliance, or the potential Mr. Appliance owner to talk to business owners. We want to meet with them for a day so they can see who we are. Make sure they feel comfortable doing business with us. All of this is in the process of being an open book to the potential Mr. Appliance owner. That’s the way we’ve done business for 33 years, and it’s been very successful.
Emery: Well, Gary, I know you have a busy day ahead of you, but I appreciate the time you were able to take out of your busy schedule to be with us this morning. And, I may come up with more questions, would you be willing to do another one of these podcasts to answer, maybe drill down a little bit deeper on some of these things we’ve talked about today?
Gary: Absolutely. Any time.
Emery: Excellent. Well, again, Gary Landon, everybody. And, Gary, thanks so much for your time, and we will talk to you next time on Franchise Talk.
Gary: Okay, as we say here at Mr. Appliance, “Have a world-class day.”
Emery: Thank you, Gary. Take care.
You’ve been listening to Franchise Talk with Emery Orosz, Morgan & Westfield’s expert in buying and selling franchises. If you’d like more information about selling or buying a business franchise, call Emery at Morgan & Westfield at (928) 793-3000, or send him an e-mail to firstname.lastname@example.org.
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If you would like additional information on Mr. Appliance, please call Emery Orosz at 928-793-3000.