The Differences Between Franchises and Sole Proprietorships

By
Home Inspector with Advantage Inspection Clear View

Once, not too long ago, when the real estate industry was young, the way business was conducted, (commission-split set up and no effective support/training for new agents) led to an office of unsupported, poorly trained low producing and low commissioned agents and high turn-over.  But Re/Max ( read history) changed that.

By changing the paradigm and offering maximum compensation, superior agent support and traditional Real Estate franchise services, Dave and Gail Liniger of Re/Max transformed the way business was done and changed an industry forever.  

The home inspection business is on the cusp of a similar transformation.  

Presently, it is mainly comprised of Mom and Pop organizations that because of their natural limitations, can offer only the talents of one individual and whatever extra resources and benefits he can offer. No matter how good he is, there's only so much one individual can do.

Advantage Inspection looked closely at the Re/Max model and since 1998 has been leveraging that model to offer unparallelled support and products for the use of their franchise owners and associate inspectors.

Advantage Inspection has focused on benefits to all participants of the real-estate transaction, creating WIN-WIN-WIN solutions for the homeowner, inspector and Realtor,

Advantage Inspection has created programs and products, like :

  1. the Listing Advantage .  Removing the traditional roadbumps caused by the typical order in which the real estate process is conducted and offering the only 'No Denied Claims' Home Warranty..
  2. Super Affiliates with client benefits like:

     3.     The Home Physical.  An inspection conducted for home owners not party to a real estate transaction, for the purpose of being aware of the maintenance and safety issues that may have developed over the years of living in that home.

     4.   Multi - Inspector Offices  Not only are Advantage Inspection Franchises required to have a physical office other than a spare bedroom, they are true multi-inspector firms which allow benefits to inspection associates as well as meet the demands for on-time reporting by having more associates to meet customer need.

          Also, the vetting process for new associates insures quality individuals who will be supported by additional in-house training above and beyond the yearly requirements for education that are State mandated.

     5.  Most advanced and exclusive report writing software, so good that Lowe's chose Advantage as its  preferred home inspection vendor partner.

Advantage Inspection International also saw the problems rife with the Home Warranty industry and created

This is a quick overview of the direction Advantage Inspection International is taking the home inspection industry. And though our territory is presently limited to the Southeastern United States, we are ready to expand nationwide and eventually world-wide. 

As we expand, we will be looking for qualified home inspectors who want the added value to offer their clients, so be sure to look for us !

 Member of Nachi

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Rainmaker
179,180
Jack Gilleland
Home Inspection and Investor Services, Clayton - Clayton, OH

And you missed my point completely about McDonalds.  I'm not going to waste my time going over it again.

It didn't escape me at all, a very good friend of mine owns 5 stores and the biggest problem she has is keeping quality up to par.

Would you have been so upset had I refered to non-franchise based home inspectors as 'independents' or 'sole proprietors' ?

Of course not, it hasn't the derogatory connotation of "Chuck in a truck". 

I'm not upset with your franchise, I can and do compete with 3 in my area now.  Although, I only consider 1 of them real competition, it isn't because of the franchise it is because of the people they chose to represent them.  I guess in their case the chuck is in the other truck.

Jun 05, 2008 03:14 PM #15
Rainer
126,205
Scott Patterson
Trace Home Inspections - Spring Hill, TN
Home Inspector, Middle TN

The franchise folks will come and go and have done so ever since I started inspecting back in 1995.  I have seen countless "National" franchise operations go by the wayside and they will continue to do the same.  I have seen a reemergence of the local speciality stores and a downturn on the Big Box stores.  Consumers want more customer service with a personalized touch.

We will always have the franchise operation and I have several good and close friends who own a home inspection franchise.  They all have one common complaint and that is they wish they could break away, but after a period of time and with the growth of the business it is almost impossible to do so.

The marketplace is large enough to handle both the franchise and the solo home inspection providers.  Some consumers want to deal with a national name and then some want to deal with the local company.  Personally, I support my local business even if it means paying a little more at times for  the same product I could get at a Big Box store.

Jun 05, 2008 03:51 PM #16
Rainer
50,912
David Holden
DRH Home Inspection Akron, Ohio Summit County Home Inspector - Akron, OH
DRH Home Inspection Akron, Ohio Summit

As a "newbie" in this business, and starting on my own in a tough market, I have a few observations about franchises.  I have noticed a "I'm better than you" attitude from franchise inspectors.  Here on AR as well as some other sites, it seems the MO is to "Discredit" other inspectors as "Inferior" or "not properly trained".  Basically, very abrasive folks most of the time, hence the "Chuck-in-a-Truck" title.

I agree with Scott, and very much value his insight into things about this industry.

I will have to agree with you on one thing though.  I would find it very valuable, and actualy an honor to spend some time and "ride along" with an experienced local inspector that has been in this industry for many years.  But I hesitate to ask because I am the competition and would probably be rejected.

Any business can be sold, even sole proprietor businesses.  Especially one with a great local reputation.

Jun 05, 2008 06:29 PM #17
Rainer
5,237
Philip Lamachio
Advantage Inspection Clear View - Winston-Salem, NC

I have revised the original blog as I said I would.  I hope everyone who took offense would re-read it and let me know if I have said anything untrue or unfair, because I am not trying to offend or put off anyone. 

Regarding quality Jack, I know the kind of folks Advantage chooses to represent them.  We have some great people.  And if you knew how particular Brian is regarding quality you would know that that is not an issue for our office.

Scott, Advantage has been around since 1992 in Greenville SC. and have been expanding for the last several years.   You may be right. They may not make it.  Time will tell.

I don't understand why your friends who own a franchise want to break away.  Their franchise must not be offering them any distinct benefits they could not come up with on their own.

Some of the new developments Advantage is working on just amazes me.  I am excited to see where we will be in 5 years.

 

 

Jun 05, 2008 06:35 PM #18
Rainer
5,237
Philip Lamachio
Advantage Inspection Clear View - Winston-Salem, NC

David,

As to whether our inspectors are better than others or not is not what I was getting at with the Chuck in a Truck description.  I was drawing a comparison between two different business models.

As you can see I have modified the origninal blog. The term was getting in the way of my intended message.

I do know some local inspectors who have gained quite a bit of noteriety for their impulsive and unprofessional conduct, and one was a past state pres. of ASHI.

It seems to me that having been in the industry for a long time can be both an asset and a liability.

It is an asset in the sense you really know the ropes after so many years, but a liability when a state goes from unliscenced to liscenced and the long-timers continue, by force of habit I suppose, to make comments that contradict the new state standards.

And I agree with the state standards here in NC, because in the cases I am thinking about it limits speculation and generally keeps the report to the facts.

For instance, some inspectors still comment on how much a certain repair is going to cost, when in fact, as anyone who has been in remodeling knows, the opinion of a home inspector is not going to influence your bid.  But the homeowner has been influenced by the opinion of the home inspector and it is unfair to the contractor and the homeowner.  I've been in the remodleing industry for a long time, but I don't know and would be reluctant to say what any particular thing might cost at any particular time. To say I did would be irresponsible.  

Or a story a realtor related:  The inspector looked at a second story deck and proclaimed with absoloute certainty that the deck would eventually fall with all the prospective home buyers family on it and kill someone.   A simple explaination that the deck was unsafe and required repair before use would have been enough.  Thats the alarmist that we keep hearing about which speculates way beyond the facts.

No one can say for certainty exactly what will happen, but to indicate that this is a trip hazard, or that is a maintinance issue is usually enough.

Corrections ?

 

Jun 05, 2008 06:52 PM #19
Rainer
23,098
Mark Reusch
A Major Inspection Service & Consulting - Simpsonville, SC

I have taken many inspectors on inspections with me. I have also gone on inspections with other inspectors. I have learned quite a bit while doing this. I am not worried about them being in competition with me. I feel there is enough business to go around and the industry fluctuates so much that many of the inspectors who got into it to mak the quick buck don't last that long. They are sued out of business or do such poor quality work that there reputations precedd them and no matter what price they drop to they fail because no one wants to use them. My biggest asset is the word of mouthadvertising I get from clients and Realtors alike.

 

I will give you credit for a lot of things if you deserve it. Like starting thi blog. Ihas been very well responded to so as to up your ranking in AR. That is a good thing LOL. No disrespect meant.

Jun 05, 2008 07:28 PM #20
Rainer
5,237
Philip Lamachio
Advantage Inspection Clear View - Winston-Salem, NC

Mark,

I don't get points for people responding to my blog.  But I've gotten a lot of grief.

Why don't you guys check out some of my other blogs ?

 

Jun 05, 2008 09:10 PM #21
Rainer
23,098
Mark Reusch
A Major Inspection Service & Consulting - Simpsonville, SC
Philip I did check out your other blogs. I have no problem with your blogs and have not said one bad word about you or your company on here as far as I can tell. If I have please enlighten me. As far as laying off you I am not picking on you I don't believe. I just responded to your intial blog heading because I was offended by it. I believe that is my right to respond to something. If you think I am picking on you I apologize as I said I respect all home inspectors for what we do. We are the most underpaid over critized group in a real estate transaction and get most of the blame for when things go bad. I firmly believe a true professional home inspector never kills the deal the deal gets killed by the house. P.S. you do receive points on AR for comments made on your blogs I believe. If I am wrong can someone explain the points system to me?
Jun 05, 2008 09:23 PM #22
Rainmaker
179,180
Jack Gilleland
Home Inspection and Investor Services, Clayton - Clayton, OH

Less inflamatory.

Philip,  I wish you the best in your endeavor.  It will (!) be interesting to see where we are in 5 years. 

Us "mom and pops" have a tendency to speak our minds. 

Jun 06, 2008 12:07 AM #23
Rainmaker
66,816
Kevin Corsa
H.I.S. Home Inspections (Summit, Stark Counties) - Canton, OH
H.I.S. Home Inspections, Stark & Summit County, OH Home Inspector

Philip,

You do get points added to your blog after so many comments. You get 200 for the initial blog, and then more are added. Check you statistics page and it will show you.

Thanks for revising your blog heading Philip. It appears much more pleasing now.

Blessings

Jun 06, 2008 12:22 AM #24
Rainer
5,237
Philip Lamachio
Advantage Inspection Clear View - Winston-Salem, NC

Didn't know that about the points Kevin, thanks. I certainly did'nt attempt to stir up controversy for the sake of a few measly points. It would never be worth it.

I do think Acive Rain is about the best thing since frozen water though.

This whole topic is coming from a place of my own personal jouney, since I operated a Restoration business as a Sole Proprietor for 15 yrs.  Why go with a franchise, esp. this franchise rather than start another sole proprietorship ?

For a long time I had made a good living and had a niche in the marketplace working in restorations. 

Then, floods of illegal labor poured into NC. Many legal unliscenced tradesmen began to suffer.  Impossible to compete. I made the choice not to hire ilegals whose backgrounds I could not check, and precisely because they were illegal, to go into the houses of my customers. I could say a lot about that, but not now.

In any case, I was planning to make a career move anyway because I was ready for a challange.

Becoming a liscenced home inspector was not my first choice, but after I looked around, it seemed a good one based on by work history and experience.  And the liscensing process might provide some protection from illegals ( but not likely, as they can get drivers liscences here as easy as anything else).

When I did get my liscence however I was really not excited about the prospect of all the marketing I would have to do to promote myself, and the cost in materials, mistakes, etc., much less having to 'learn on the job'.  ( No one knows everything)

Brian had just purchased Advantage franchise rights for Greensboro and was a friend of a friend of my wife's.  He came highly recommended.  So I met him at an introduction to Advantage that Sonja Skidmore led.  I was impressed with the products and the presentation. 

And with every thing it would take to get a new business venture started it was exciting to know I would get the support both locally and corporately.

Anyway, Brian is a details guy, I am a big picture guy and though at first I found it difficult to deal with his endless tangenting into every miniscule detail of construction, it soon became clear that both talents were needed to create a good business.

And thats another part of it. Has anyone ever read the E-Myth ?   It talks about the crisis all small proprietors face when they are faced with the desire to grow their business, but the increasing futility of trying to wear all the different hats it takes to do it well.

And I had lived that.  It was why I chose to keep my company small and focused on a niche.

(Has anyone read the book ' Who moved my Cheese?'  I think that's the title.  It addresses the fact of the changing marketplace and the need to be versatile when your previous source of work or income shifts and is no longer there. )

Advantage presented a good game plan, a lot of resources, specialized knowledge of the industry and some unique approaches.

Not only that, they were and are obviously a company that is dynamic and progressive, addressing existing problems with unique solutions.  It is a company that is going places.

Will they make it through all the difficulties of growth to achieve national branding recognition and still retain their committment to quality and excellence ?  Who knows ? But for now, it is very interesting to see what they are doing and to be a part of it.

Philip

 

 

Jun 06, 2008 05:54 AM #25
Rainmaker
66,816
Kevin Corsa
H.I.S. Home Inspections (Summit, Stark Counties) - Canton, OH
H.I.S. Home Inspections, Stark & Summit County, OH Home Inspector

Philip,

           I have read 'Who Moved My Cheese". It's a good analogy of the changing marketplace, and a reminder that there's no "safe havens" anymore.

Looks like you have turned a negative into a real positive. Congratualtions on being responsible, and responsive. That is what it takes to survive and be productive in today's marketplace.

Jun 06, 2008 06:44 AM #26
Rainer
639,033
Carl Winters
Canyon Lake, TX

Whew! Sure glad you got it all worked out. The industry is made up of independents (like myself) and franchise organizations all with one goal, and that goal is to make a living, pay your bills, and provide for your family. I encourage new people that come into our industry, they can learn from me and I can learn from them.

Here on AR we do a little bit of everything; we share home inspection information amongst ourself and hope that a consumer may read our information from time to time. We do exchange recipes, family photo's, celebrate Birthdays and write about happenings in our community. We welcome that everyone has a view, we blog, we discuss, we comment, and in the end we have all learned a little something from each other.  

 I'm sure glad that we have such a dynamic group of inspectors here on Active Rain and look forward to reading more of your blogs.

 

Jun 06, 2008 10:46 PM #27
Rainer
5,237
Philip Lamachio
Advantage Inspection Clear View - Winston-Salem, NC

Carl/Ceil,

Never intended to start such a ruckus.

And though I took my whuppin', I think some of the initial misreadings about whether we were affiliated with ReMax point to a sensitivity in regards to the Real Estate Industry that causes Inspectors to be a little knee-jerk on occasion. 

This is a problem because even though we may have cause to be suspicious because of historic friction, we can be blind to ways that we can try to engage a sister industry that we cannot help but frequently cross paths. 

I think a lot of hostility and misunderstanding on each side of the aisle could be lessened by an empathic approach to the issues each side has to deal with. 

I find that even some veteran agents do not know what our Standards of Practice here in NC actually require us to report on. 

For them, education is key. And in my experience, once they begin to understand our parameters, that begins to build a bridge towards trust.

We inspectors would likewise do well to understand what their requirements are, and the investment in time and money they have on the line.  While we are here to protect the homebuyer's interests first, and we should never overlook anything to facilitate a sale, we can be sensitive to the agents' vested interest and convey findings in a rational and non-emotional way.

Brian and I constantly compare notes on the exact language we should use in our reports, for the purpose of completeness, correctness and clarity.  The correct use of language in reporting is both a science and an art.

When we are careful in our use of language, willing to educate Realtors and Home Buyers as well as to underdstand and answer their concerns, misconceptions and questions, I think we do honor to our industry and a service to the public at large.

Philip

Jun 07, 2008 11:15 PM #28
Anonymous
Anonymous

I don't agree with any of this at all.  I don't like the idea of franchise home inspections.  In my opinion a franchise is set up not for the benefit of the customer but for the franchise owners to make more money.  I think Philip is just trying to sugarcoat the whole thing to make it sound like it's for the clients benefit.  When you speak of multi-inspector agencies, it tends to make me think these inspectors will be less educated and less professional.  Generally the case is that when you work for another's business you don't work as hard.  When it's your own "mom and pop" business it's on your shoulders whether it is successful or not, therefore making you work harder.  Honestly (and I don't want to offend any Remax realtors, because I don't know all of you) in my experience the Remax realtors have been the most unprofessional realtors I have come across.  They are lax in their work and rarely can you speak with one.  So really I don't think it would be beneficial to model your business after Remax.  Also Philip speaks of McDonalds, is that a name synonymous with quality?  I don't think so.

Jun 28, 2008 09:39 PM #29
Rainer
5,237
Philip Lamachio
Advantage Inspection Clear View - Winston-Salem, NC

You are reading my post with a filter on your brain. You read what you wanted to read.

I have addressed some of these questions before.......

First of all, the most egregious error is that you think that Advantage Inspection is affiliated with ReMax. 

Read it again !   We have no ties to Re/Max.  Do you get it ?   None whatsoever!  

Advantage only looked at the business model that Re/Max operated under and chose that to expand their buisness.

Just the business model.   Its a Franchise.  Like McDonalds. Like Chick-Fil-A.  Like oh, I don't know, pick any big name in almost any industry, and a large numer of them will be franchises.

Which is better than a Corporately owned entity which has no local owner with a vested interest in the day to day.  And by the way, the inspectors in this franchise system are all independent contractors, responsible for their own clients and their own reputations if they want to be sucessful.

They can't hide behind the franchises coat-tails if they screw up.  In fact, the umbrella of the franchise is an extra layer of insurance for quality.  If we're screwing up we will be addressed and will correct the problem or we won't be on the team long.

The McDonalds comparison was simply to say that what McDonalds has to offer is obviously valued or else they would have never been such a sucess.  Same as ReMax.

I am about fed up with inspectors who approach Realtors like adversaries.  So what if they are difficult to deal with ? Get over it and find win-win solutions that circumvent the vested interests and put you both on the same side, like the pre-listing inspection, which is also a win for the home seller.

Are you also going to make the arguement that real estate franchises are not as good as independent real estate officees ?  Some might not be, but its for sure that in the basic economy of scale a franchise can offer more to its realtors in terms of educational opportunities, and more to their clients, the homesellers in terms of accumulated experience and general benefits.

No one denies that the 'Mom and Pop' business works hard to earn their reputation.  But even if they come upon a winning approach, it will never be replicated or advanced.  It will die out with the specific inspector. 

And there is only so much one person can actually do.  Read the E-Myth to see what I'm talking about.

Before you fire off your next missle, try reading the whole thread.

 

Jun 29, 2008 06:35 PM #30
Rainer
23,098
Mark Reusch
A Major Inspection Service & Consulting - Simpsonville, SC

I think we have covered this enough and would encourage everyone to understand we each have an opinion and we all know what they say about those. Suffice it to say that each person is entitled to go about their business in their own way and to feel good about that decision. I say let's put this blog to bed and wish eachother good luck. We are in the same business and should be supporting eachother and trying to educate others as to our value as professionals rather than what has been happening here. I admit I am guilty of some of it because of the original post name. I have gotten over it and moved on. Pleas all lets support one another and do the right thing. Build our business's to be successfull in our own ways.

 

Well that' my rant for the night

 

Warmest Regards to all.

Mark

www.amajorhi.com

V.P. Upstate InterNACHI

Jun 30, 2008 10:03 PM #31
Rainer
5,237
Philip Lamachio
Advantage Inspection Clear View - Winston-Salem, NC

Thank you Mark for your gracious and level headed post.  I have tried to remedy and/or address any and all concerns and I'm about done as well.

Jul 01, 2008 06:03 AM #32
Anonymous
Anonymous

In my two cents worth...

Any inspector who directly solicits agents for work is implying that you will do your best for them (the agents). No? Do you really think there are inspectors who tell agents that they are the most thorough inspector in their area and do their very best to find all the defects in a home? No way! LOL..

Nov 06, 2008 01:54 PM #33
Anonymous
Philip

"Any inspector who directly solicits agents for work is implying that you will do your best for them (the agents). No? Do you really think there are inspectors who tell agents that they are the most thorough inspector in their area and do their very best to find all the defects in a home? No way! LOL"

I think that though there is the natural fear that an inspector might find something that will be a deal breaker, most agents are just as afraid of alarmists, and from the nightmare I have heard, there are a number of inspectors out there who fit this description.

We encourage all realtors to have a listing inspection to avoid last minute surprises. When the homeowners can finally be persuaded to part with a few bucks up front in order to save a lot at the closing, listing inspections will be the norm.

Listen, agents are in touch with sellers and buyers. It is a fact of life.

Nov 07, 2008 12:26 AM #34
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