Sears (Home Services) Review ~ The Inside Stories

Sears (Home Services) Review



Don't Miss Our "Franchising In The New Economy" Video
Use Expert Franchise Information From Extremely Experienced Owners
Including Their Inside Numbers & Formula To Select The Right Businesses

Sears (Home Services) Review
Posted by Karl Keller
Business Owner & Franchise Wisdom Editor

 

Three home services franchise business models are available: Carpet & Upholstery Cleaning (includes tile & grout cleaning and water extraction); Air Duct Cleaning (includes clothes dryer vent cleaning & indoor air quality products such as furnace filters and air purifiers) and Garage Solutions (includes garage door sales & repairs, openers, flooring and organization/storage products).  Sears started these franchise models in 1999.

In addition, two retail franchise business models are available: Sears Home Appliance Showrooms and Sears Hardware Stores. Sears started this franchise model in 2009.

Complete training, marketing expertise, use of Sears credit card system and ongoing support are some of the advantages associated with these franchise.




FRANCHISE UNITS (from Entrepreneur.com)

YEAR

U.S.

CANADA

INT'L

FRANCHISOR

2011

252

0

0

12

2010

269

0

0

13

2009

145

0

0

3

2008

143

0

0

3



Startup Costs, Ongoing Fees and Financing

Total Investment:  $25,960 - $191,550 (these are the Home Services franchises)
Franchise Fee:  $3,375 - $94,500
Ongoing Royalty Fee: 8 - 10%
Term of Franchise Agreement: 10 years, renewable

Financial Requirements
Net Worth: $75,000 - $600,000
Liquid Cash Available: $50,000 - $350,000

Operations
- Number of employees needed to run franchised unit:  3 - 10
- Absentee ownership of franchise IS Allowed
- 35% of all Franchisees own more than one unit
- Over 95% of current Franchisees are owner/operators
- Training is available at Headquarters (1 week) and on-site (as needed

 

This is one of the more unusual reviews in that under the umbrella of Sears franchises, there are really five different franchises; three under Sears Home Services (Carpet & Upholstery, Air Duct Cleaning, and Garage Solutions)  and two retail ones (Appliance and Hardware stores). There are other franchises out there that offer multiple different franchises, ServiceMaster comes to mind, but in their case they all surround janitorial or disaster restoration cleanings.  These Sears franchises are much more diversified in their offerings.  Add on top of that the fact that you still have Sears department stores (don't forget about KMart either) out there that compete indirectly, if not directly, with the two retail franchises and you definitely have a unique set of franchises here.

While Sears is one of the most iconic names in the United States and has been around since 1893, the franchises listed here are much more recent. Regardless, a Franchisee that owns any of these franchises starts off with world-class Branding.  I will admit it's a little tarnished over the past 10 years, especially since the merger with KMart, but it's still great branding no matter how you look at it.


With the Home Services franchises, which by the way are MUCH more affordable than their retail store siblings are... by a long shot.  In addition all three of them can have financing arrangements for qualified individuals (which basically means it's up to Sears as to how much, if any, financing you get) for up to 80% of the purchase price of the franchise territory.  Additionally, Sears provides their Franchisees with other benefits that I consider to be real pluses:
- Sears internet website to inform consumers and drive leads
- Furnished advertising (to include TV & radio commercials, print ads, brochures, direct mail, etc.)
- Internet Yellow Pages listing
- National group rates for various direct-to-consumer advertising vehicles (i.e. direct mail and Yellow Pages directories)
- Access to Sears database for the Franchisee's market
- Use of the Sears credit card system & special financing offers (a real biggie in my book)


Sears markets their Carpet & Upholstery and Air Duct cleaning under the same website even though they are two different franchises.  In some ways that helps drive additional customer through the cross-traffic when somebody is looking for one of the services and they see the other one at the same time. From their website there are eight different services that are offered but what the site really is just lead generation and when someone selects a particular service they (the Lead) are directed to the appropriate franchise.  Rather clean (pun intended) way of generating a customer and it's seamless.
  The third franchise, the Sears Garage Solutions, has similar pluses going for it but they are on their own dedicated website which clearly differentiates them from the other two franchises.

So far, so good.  Now the things that concern me.  First of all, Sears isn't the world-class giant they once were.  They've been beaten down by brick-and-morter companies like Walmart and internet companies like Amazon.  While these two don't offer Carpet or Duct Cleaning services, it's mother Sears that's backing the Franchisee and providing their support like the credit card and financing and they're the one that's taking the beating.  Unless they can find a way to shore up there market share (merging with KMart didn't do anything to help that problem and in some ways made them weaker) they may be in for a rough ride. So go Sears and most likely so goes their franchises.  Just something to be very aware of.  Secondly, with the good comes the not so good.  Do a little research on the internet and you'll find complaints about shoddy work and less-than-competent Franchisees.  Where I'm going with this is that sometimes the barrier to entry needs to be high enough to weed out those that aren't up to the standards of the rest.  If the entry standards are too low, then quality has a tendency to suffer.  By Sears offering such high financing (up to 80%) while a great thing for the truly needy individual I think it also has the negative effect of bringing the less-than-committed in.  Sometimes you need to have skin in the game (i.e. a financial stake or committment) to create the focus, drive, effort, and committment necessary to succeed.  Some may disagree, but that's my opinion and since I'm writing this I guess I get to voice (or in this case write) it.

The other two franchises are retail ones and they do require that skin in the game I mentioned.  Their requirements include up to $600,000 net worth and $350,000 liquid assets to be considered . The Sears Home Appliance Showroom investment is between $282,500 - $1,013,000 and Sears Appliance & Hardware Store is $112,000 - $1,885,000.  Again they both have the same things going for them as the Home Services franchises. They also have the first negative against them but not the second as the significant financial investment I believe really shrinks the applicant pool.  Also, the Home Services franchises come to the homeowner while these two franchises are the opposite- the homeowner comes to them.

Both the Sears Home Appliance Showrooms and Appliance & Hardware Stores were developed to serve customers in modern shopping districts and lifestyle centers along side other major retailers. Currently, there are more than 70 Sears Home Appliance Showrooms throughout the United States. The Home Appliance Showrooms cater to upper-middle and upper-income customers and are Sears attempt at a full-service showroom concept. The downside is that there is the potential for none/some/alot of lost sales depending on
is how close the franchise is to a traditional Sears department store.  Since they don't offer the full selection of products that a Sears offers, when a sale comes along, even though the franchise may be offering the same terms, the customer may very well go to Sears to take advantage of all the other options (clothing, home & garden, etc) that the Franchisee can't offer.

The Home Appliance Showroom Franchisee don't have to deal with inventory selection, financing, or transportation logistics. Sears provides the inventory at no cost to the Franchisee while Sears trucks and installers deliver the product to the customer. The average Home Appliance Showroom is typically 4,500 to 5,000 square feet employs five to eight people and carry brands like Kenmore, Maytag®, Whirlpool®, LG®, Samsung®, GE®, KitchenAid®. While they provide up to 70% financing (again to certain qualified applicant), the Franchisee is still going to need to bring significantly more to the table to get started than any of the three Homes Services franchises would need. The graphic to the right of this section shows the areas that currently have franchise opportunties.

The second retail franchise, Sears Appliance & Hardware Store is basically very similar to the Home Appliance Showroom franchise but on steroids. The stores are generally 20,000 square feet and employ between 25 and 30 people and they offer brands like Kenmore®, Craftsman®, Diehard®, Husqvarna®, Dewalt®, Black & Decker®, Maytag®, Whirlpool®, LG®, Samsung®, GE®, KitchenAid®. All the same benefits and negative previously mentioned. The graphic to the right of this section shows the areas that currently have franchise opportunties.

So, to sum up this rather complex review:
- Great branding
- Outstanding support
- Questionable long-term health of parent company
- A need for a tighter applicant selection process
- Potential cannibalization of sales on the retail franchises

I think all of the different franchises would be a good choice for a potential Franchisee with the understanding of the issues listed above. I personally would wait and see how the economy goes and what impact it has on Sears/KMart because as I said earlier, as goes Sears, so go the franchises (espeically the Retail franchises).  If you still feel like now is the time to jump, then you have two options.  If one of these franchises makes your mouth water, do your market analysis, put together a business plan, and start the applicant process. There's no guarantee that you'll get the 70% or 80% financing but youll need to apply to find out. The second, and in my opinion, probably the more prudent path to take right now is to look at other franchises that are more traditional in nature or go outside the franchise model and look for other business opportunties.  They're out there, you just need to do some research and analysis.  Heck, there's even one to the right of this review.  Take a moment, fill out the form, hit the submit button, and who knows, this might turn out to be the opportunity you've been looking for.

No matter what you decide, please do your Due Diligence so you can make the most informed decision.  It is YOUR money, after all.

 

Key "Pros" Of This Business


World Class Brand
High Demand Service
Compact/Ease of operation
Training Confidence


Key Headaches ("Cons") To Consider


Buying A Very Expensive Job
High Ongoing Royalty Bite
R.O.I.
Owner Operator Hours





 

 

It's a great job, but very expensive to buy and continues costly a labor only income stream.

Compare your Options... Risk Less ~ Earn More With the Businesses At The Center Of The New Economy.


 

Be Sure & Don't Miss

Comparing

The #1 Top Rated

Business for 2012

With The Highest

Return On Investment


THE #1 BUSINESS ROI TODAY

 

Sign In Here & Discover
The #1 Ranked Business

Producing The Highest
Return On Investment
In Today's Market

Please send me exclusive business tips and special offers, no more than 2 per week.

You'll only recevie our exclusive top business index,
limited to a maximum of 2 reports per week.
Your information is never shared under any circumstances
 

 

   

 

             

          

 

 

Access Top R.O.I. Rankings
Fill Out The Form Below To Quality For Our Top Ranked Opportunities Of The 2012 Economy. These Are The Unequaled R.O.I. Leaders Contolling The New Economy. Get Quality Answers About Financing, Support, Training, Locations, Cost, & Profit Potential From A Certified Franchise Wisdom Representative.
Name *

Email Address *

Phone Number *
Skype Name

Country
State
My Available capital to invest is
My Current Occupation is
My preferred date & time for contact is
Please share any further information
Includes: THE #1 FACTOR
$27.50 COMPLIMENTARY COPY
 
arrow
 
INCLUDES: THE #1 FACTOR
$27.50
COMPLIMENTARY COPY
 
           ENJOY OUR FIERCELY STRICT POLICY
         OF NO MORE THAT 2 EMAILS PER WEEK!

THE #1 FACTOR
$550K of Expert Franchising Experience
Dominating The New Economy
Complimentary Copy ~ Instant Download