Building a National Remodeler

Prevailing wisdom says creating a national remodeling company like the national builders that dominate the new-home industry is not possible, but the times are changing.

November 30, 2003
Kim Sweet

Remodeling is a local business. Each job is different. Each home is different. Each homeowner is different. Creating a national remodeling company like the national builders that dominate the new-home industry is not possible. People have tried and failed.

That is the prevailing wisdom, but the times are changing.

We already have national retailers, from Sears to Lowe's to The Home Depot, that have been doing installed sales for years. While most remodelers I've talked to don't yet see retailers as competition for jobs involving multiple trades, they acknowledge that that day will come.

Specialty remodelers definitely have succeeded in spreading to multiple locations and across state lines, often as franchisers. Amazing Siding comes to mind, as does Archadeck. Insurance work (Paul Davis Restoration) and handyman (Case Handyman) also have proved to be popular franchise niches, and now basements (Owens Corning) can be added to the list.

Consumer research continues to show kitchens and baths as the most popular residential remodeling jobs, and retailers and franchisers (Kitchen Tune-Up, Re-Bath) both have been going after this market.

What's the appeal to consumers of a national remodeler? Brand, for one. Having a recognizable brand wins business. The fall 2003 study from the American Affluence Research Center found that households with a minimum net worth of $750,000 name The Home Depot (along with Costco, Target, Nordstrom and Wal-Mart) as one of the five retail outlets that offer "the best combination of quality products, product selection, fair prices and responsive service." In our highly mobile society, consumers like to know that the brand they trust in Alabama also can be found in Alaska.

Price appeals, too. While retailers and franchises aren't cheap when it comes to labor and markup, their buying power allows them to pass product and material savings on to consumers.

The franchise model seems to work well for independent remodeling contractors. Besides providing the power of a national brand and group buying strength, franchisers pool royalty and marketing fees to purchase sophisticated computer networks, software, television advertising and other business tools that often have too high of a price tag for an individual remodeling firm. In addition, franchises offer a built-in group of peer companies with which to share ideas and information without worrying about compromising your business.

At the same time, the franchise model allows for local knowledge of construction codes, communication styles, housing stock and design preferences. And because no buyout or merger is involved, there's still an owner's desire to satisfy customers and produce profitable projects.

Our Remodeler of the Year is just such a company: DreamMaker Bath & Kitchen by Worldwide. Although it specializes in kitchens and baths, the company does full-service remodeling on a national basis. Demographic analysis and focus groups help DreamMaker target the right consumers. Sales and production systems ensure customer satisfaction. Estimating and accounting systems ensure strong remodeler profits. The company offers ongoing business training and national supplier relationships and next year will add an integrated software program to manage jobs from beginning to end.

Most U.S. industries are consolidating, and soon remodeling won't be an exception. "National remodeler" is no longer an oxymoron.

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