Replacement Contractor: What is Guier Fence?
Lea Bailes: We're one of the largest fence companies in the U.S. We do both residential and commercial jobs. We have been able to capture a lot of business in Kansas City by taking care of customers, so we are looking to build the same kind of business nationwide through franchising. The franchise is based on that residential model. We are the only nationwide fence franchise.
RC: Do you only do fence installations?
LB: Yes, fence is our business. We are a $10 million-plus company, founded in 1979, with three locations in the Kansas City area.
RC: How much do fence jobs generally go for?
LB: Our average sale in a residential job — and this has been pretty steady — is about $3,500. And Kansas City tends to be right about in the middle of the market. It's going to depend a lot on where you are and how big the yard is. In New England they have small yards but higher prices. In Texas there are bigger yards but the prices are less.
RC: How long does it take to install a fence?
LB: It's about a day and a half to two days, with a one-man crew. We try to do small jobs in one day. The thing about fencing is that there are so many styles that to be a good fencing contractor you have to carry all the styles and kinds of materials. What we see the most of are wooden fences — both picket and privacy — ornamental metal fencing and aluminum. After that you get into vinyl, which, like wood, is either picket or privacy. Then there are the chain link fences of the world, which is becoming a smaller part of our business. Historically [chain link] was considered the least expensive type of fence. Nationwide the majority of fence jobs are wood, and that's driven by code. So we focus on 6-foot privacy fences and 4-foot picket fences in wood, vinyl, steel, and aluminum.
RC: Are composites a factor?
LB: There are composites but they're expensive and don't last as long as vinyl. You can put up three or four wood fences for the cost of a composite fence.
Getting Into Fencing RC: Why should home improvement companies enter the fence market?
LB: The need for it is everywhere. People want to keep out, or keep in, dogs and kids. They want to protect pools and screen crazy neighbors. And fences are already everywhere and at some point they fall down and have to be replaced. We're seeing much more tear-out and replacement fencing in the last few years, although we still get new fences. You have people moving into older homes or just deciding to stay in the home they have and they want something that looks better. Maybe a new fence that goes with new landscaping.
RC: How is the installation process different?
LB: After you sell the fence a lot of cities require a fence permit. Then you have to get a "locate" to show what's underground: cable, electric lines, phone, gas. Once that's done you can legally start digging.
RC: How do you generate leads?
LB: A lot of it is Internet-based advertising. We do some radio advertising that works well. We also use signage. That's some of the best advertising we have. And we have an in-house marketing director so we're getting into some of the newer forms of social media. But the bulk of our work comes from referrals, signage, and previous customers.
RC: What would it cost a home improvement contractor to purchase your franchise?
LB: Our franchise fee is $25,000. We charge a 4% annual royalty on sales, a half a percent call-center fee, and a 1% national advertising fee.
RC: What would they get for that franchise fee?
LB: We help them get set up with materials suppliers to get favorable pricing nationwide. We help them create and execute a marketing plan. All the calls come here and we distribute the leads. As far as training goes, we provide a month's worth of training in marketing, sales, installation, and business set-up. We also help them hire subcontractor crews. After that they should be able to start.
RC: Who are you looking for as a franchisor?
LB: Deck and landscaping guys, people who are already outside on the ground. We also look for remodelers and handymen. A lot of fence companies do decking and vice versa. But you also have a lot of companies that only do decks and only do fence. Decks sometimes involve design work. Fence is a little different.
RC: Is fence a hard sell compared with windows or siding?
LB: I think it's easy in the sense that you are invited to the home. People need the product. You're still in a situation where the homeowner is going to get several bids. So most of the time you have some competition.