College Pro Painters is a North American painting company founded and run by college students for the last 37 years. It was created in 1971 as a business plan of a college student, and has evolved over time into what it is today. This company since its very inception has been run and maintained by full-time college student managers, who on average each summer paint over 30,000 homes. It has been a franchise since its inception, as it allows the company to meet its mission. The mission being, "To provide exceptional management and leadership training to young entrepreneurs through real-world business experiences." Today, College Pro Painters operates in 29 states and 7 Canadian provinces, and every year they recruit, select, and train franchise managers to deliver a quality service, run their own business, and keep the promises of the parent company.
This is a huge advantage to College Pro Painters as they are able to mold the highest quality of student they can find into someone who can effectively run their own painting business, and make a profit for everyone. The main thing they ask of their franchisees is to give their commitment to all aspects of the business and to maintain a core set of values. The values College Pro instills in all its managers are Deliver what you promise, Respect the individual, Have pride in what you do, To be open minded to possibilities, and Our core purpose is truly aspirational. However, this does lead to some difficulties as a company as in rare cases the wrong individual is chosen and this reflects badly on the company as a whole. In the end through all the training offered and help available along the way, as it is needed, some people are just cut out to manage or run an effective business.
Marketing plays a huge role in the aspect of franchising as it is the Franchisees responsibility, through College Pro's established marketing methods and their own intuition, to obtain leads and book jobs. A Franchisee, due to their marketing effort and College Pro's overall brand, can typically receive an average of 5-10 leads a week. These leads must then be estimated by the Franchisee, so the prospective customer can decide whether or not they want to have their exterior painting done by the company. The average success rate for a new franchisee is that they will obtain 15% success rate (booking rate) for all the estimates they do. So, this means leads are everything for a Franchisee, they more they get the more business they can run, as the more prospective customers they have and are competing for. The way the Franchisee obtains these leads is as follows. First of all a franchise will not be put in an area that doesn't have enough of College Pro's target market (homeowner with an annual income of $100,000.00 or more). Since Franchisees are assigned turfs (zip codes, cities, general areas) in which to operate in, there must be at least 10,000 people fitting into the companies target market in order for a Franchisee to even be assigned to the area. Once this happens the Franchisee is giving the tools to generate leads. One of College Pro's main tactics is the use of what they call cold calling or what is more commonly known as door-to-door marketing. The Franchisee receives as part of their business kit (supplied by Franchisor) hundreds of door hangers offering free estimates on exterior painting. These hangers have all the information a customer could possibly need to set up an estimate with the franchisee. By offering the free estimate this allows the managers to get a chance to sell the service and all that it offers, while providing the customer with a no-obligation cost of proposed work to be done.
As they say, "To have your home painted by College Pro Painters - to be a part of College Pro Painters - is to be exposed to a level of commitment, hard work, discipline, energy, and fun that exists in very few companies of any kind." The franchise managers know this and sell this, as there are few contractors that really take the time out to get to know there customer and use this knowledge to give the highest level of satisfaction possible. This is how College Pro sells paint jobs, along with offering a competitive price, a 2-year warranty on all work done, $1,000,000 liability insurance for each job, workers compensation for all painters, their years of experience in painting houses, and the ability of homeowners to help struggling college students pay their bills. Another form of marketing is that once a job is being produced or as agreed upon with the customer (discount) before production starts, lawn signs are placed in the front of the home to show that College Pro is doing the work and to give contact information. These signs are left around as long as possible and can also be placed along medians of roadways (much like political lawn signs). Flyering of the area also occurs. Another form of advertising, which is optional for the Franchisee to participate in, is the direct mailing of the entire target market in a turf. Provided through the Franchisor for an additional cost, this is a great way a manager can obtain additional leads. Another method of marketing is the required participation of the Franchisee in a community service activity of painting a home for a family who can not afford such a thing.
This is used as an opportunity to train painters as well as get local media coverage and is done as early in the production season as possible. Also, the company uses it brand awareness and recognition among a customer base it has had for its 37 years of operation. This strong company image can only help the Franchisee. Payment for the Franchisee in marketing is as follows. The Franchisee is required to pay a marketing fee that ranges in $500.00 - $1,500.00(periodic charges) that is used to "defer the costs of producing the merchandising, advertising, and promotional campaigns conducted by College Pro." In addition to this the Franchisee is also required to order a Franchisee Business Kit which contains the tools the Franchisee will be using in order to obtain leads (flyers, door hangers, lawn signs, lead tracking forms), conduct estimates(estimating guides and forms, proposal forms), and produce work (binders, painter applications, painter brochures, training guides). The cost of this is $800.00 and is paid in weekly installments. The cost incurred on marketing makes sense as the franchisees are provided with high quality methods/items that are able to be mass produced by the Franchisor. This lowers the cost of how much the Franchisee would pay for such services if the had to obtain these things alone. It also is of benefit to the Franchisor as it provides uniformity in its service. The Franchisee is not obligated to honor any nationally sponsored programs as the only direct marketing cost is guaranteed to be the one mentioned above.
In order to operate the business effectively and procure supplies, the Franchisor gives the Franchisee the means of obtaining materials. As mentioned before the Franchisee buys a business kit, he also buys access to an online software that provides information on all the Franchisees operations/financials/payroll/training videos/etc..., additionally the Franchisee must also purchase the following through the Franchisor; liability and workers compensation insurance coverage, telephone answering service (1% of Gross Sales with $975.00 minimum, the service runs the national 1-800 number featured on all advertisements and any other forms of contact directly with the company). In order to get paint supplies a $1,000.00 line of credit is established with College Pros certified paint supplier, Sherwin Williams Paint. The Franchisee is responsible for getting there own ladders and other necessary painting equipment, vehicle, and computer. The total estimated cost ($18,000.00, $6,000.00 paid directly to Franchisor) of equipment, goods, and services purchased represents 65%-80% of the Franchisees total purchases in the connection of the establishment of the business and approximately 15% of the total operating expenses. College Pro states, that "on behalf of its franchisees, College Pro seeks to negotiate favorable terms from its approved suppliers."
In order to set up a franchise, the Franchisee must first go through a rigorous selection process and have multiple interviews. Once selected College Pro asks for your full commitment of available time, and does not charge any initial franchise fee. Furthermore, the Franchisee never pays for anything out of their pocket, as the Franchisee books a job they take a 15% deposit check and that is how the initial funds are obtained. So if a Franchisee booked a $15,000.00 job, they collect $2,250.00 in the form of a deposit. About 75% is sent to College Pro, to pay for various investments and the franchisee holds on to the remaining 25% as working capital. Capital which come production season will be spent on obtaining painting supplies (like ladders). Nothing comes out of the franchisees pocket. A royalty of 21% on all profits is also obtained by College Pro, once a breakeven occurs. However, this can be rebated 5% for the Franchisee if they achieve performance levels that College Pro sets that maintain a certain level of sales and quality standards. For instance if the Franchisee achieved their sales target, provided College Pro with job rating cards signed by all customers, etc... The breakeven point for a typical College Pro business is $35,000.00 in business.
Throughout the course of being a Franchisee there are many training sessions and the ability to consult with a person experienced with College Pro. Training covers Paint Systems and Failures, Painting Production, Painter Recruitment, Marketing, Sales Techniques, Estimating, Safety, Financial Management, and Business Administration. This training is of great advantage to the Franchisee because they are a college student who probably has no experience painting and running a business. This training enables the Franchisee to learn the business inside and out. While a disadvantage would be that this destroys creativity and new ideas that is not true for College Pro. As a company founded by college students ideas and run by college students, they are always open to new ideas and discuss them in-depth. In the end it's the Franchisee who decides what part of the training to follow, they are only required to uphold College Pros standards and policies, not the way in which they ultimately run their business.
In order to staff the Franchisees operations the Franchisee must employ crews consisting of one Job Site Manager and 2-3 painters. Depending on the size of production the Franchisee may employ 5-6 of these crews all operating on different jobs. The Franchisee is required to pay their painters minimum wage, however, bonuses are involved that ensure motivation of the workforce. It is possible for painters to receive up to $20.00 an hour. On average they make $10.00-$12.00 per hour (if they finish the job early while still maintaining quality). This bonus money is not more money out of the Franchisees pocket as the painters were always getting paid the same amount(for the estimated amount of work); they just get increases per hour depending on how fast they work. The Franchisee is also responsible to maintain workers compensation coverage for all their workers.
Should the franchise agreement be terminated at any time prior to its expiration, then the Franchisee must pay damages suffered by College Pro and up to $4,000. This could include possibly training an individual to take over your business, plane expenses, anything the company has spent on the franchise. It's up to their discretion. While this is rare in it happening and College Pro will do everything it can to help you with your problems (besides directly giving you financing), however, termination still does occur from time to time. This is because it is for the best interest of both the Franchisor and Franchisee to maintain their relationship. Also, since the franchise agreements are done on a yearly basis, it is easy to continue until the agreement expires, and not incur these termination costs. It is very easy to exit this business as if don't want to continue into the next production season you simply do not enter into another franchise agreement with College Pro Painters.
Source: www.CollegeProPainters.com
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