More People at Home Means More Business for Neighborly Brands, Exec Says
“The home service space is doing better than most right now due to the essential nature of most of the services our franchise business owners provide,” said Brad Stevenson, chief development officer at Neighborly.
As many folks sheltering in place from COVID-19 continue to work from their living quarters, homes are being used more than ever. Home improvement projects have also been on the rise since the pandemic began. Bank of America polled more than 1,000 Americans recently and found more than 70 percent have decided to tackle projects to improve their homes, with spending from millennials outpacing other groups.
With this rise, Neighborly has seen a spike in services at its 25 franchised brands, such as repairing overused dishwashers as people are cooking at home more or solving plumbing issues.
Brad Stevenson, chief development officer at Neighborly, has some theories on why Neighborly brands have been so successful during the pandemic and why he expects a rise in franchise sales at the company.
First, Stevenson sees a group of homeowners that simply do not possess the skills to fix certain problems themselves.
“Not that long ago, you had shop class in high school where folks could learn how to fix things, and for the most part, a lot of that has been eliminated from the classroom,” Stevenson said. “So many folks are millennials now and they’re buying homes, and because they lack some maintenance experience, that will continue to provide opportunities" for Neighborly going forward.
A second group is homeowners that don’t want to fix things themselves and would prefer to leave it to the professionals, though they may know how to do it. Within that group, there are homeowners that will pay for convenience.
“If they have the financial wherewithal and ability, the ease of having someone come in and take care of it is so important,” Stevenson said. “Neighborly happens to be a one-stop-shop platform for taking care of their needs.”
From a franchising standpoint, Stevenson also added he thinks the home service industry is as essential and recession-resistant as a segment could be. Case in point: Neighborly franchise sales are up nearly 15 percent year to date through May.
“The home service space is doing better than most right now due to the essential nature of most of the services our franchise business owners provide,” Stevenson said. “If you think about it, to that point, people will invest where they spend their time. Now they’re spending more and more time in their homes, so they’ll want to make them as comfortable as possible, because it’s not only where they live, but also where a huge chunk of America is working from, as well.”
While oil consumption has decreased from less people on the road and global carbon emissions are down as a result of less travel and trade, home energy demand has increased, driving up utility bills.
Ordinarily, home electricity demand decreases each spring due to warmer weathers. But in 2020, daily demand increased 22 percent from March 10 to April 10 as many people are running their A/C all day long.
“People are using appliances more, cooking at home more…they’re also wanting to spend time in their backyards and get rid of bugs,” Stevenson said. “All of these services we provide, and people now are willing to invest in them while spending more time at home. When they weren’t at home, they wouldn’t have thought about it as much.”
With the rise in unemployment, now is also a key time to be recruiting potential franchisees, Stevenson added. In 2020, he anticipates selling more than 400 new franchise units.
“What we saw was potential candidates looking for their own business, and other organizations shut down some of their development side,” Stevenson said. “For us, it was a time to double down in development and help people find what they were going to go do next.”
Stevenson likens this to an unexpected extension of the New Year’s resolution season, where people have more time on their hands and are considering their current situations, life goals and steps moving forward.
“Luckily, the bet we made has paid off for us in regards to helping people navigate through these waters and many finding what they’re looking for with our franchises at Neighborly,” Stevenson said. “That’s really paying off for franchising right now.”
HouseMaster acquisition adds to appeal
Neighborly’s recent acquisition of HouseMaster, a professional home inspection franchise, only adds to the investment appeal, Stevenson said. HouseMaster is the 25th brand under the Neighborly umbrella and expands the organization to more than 4,000 franchise owners reaching more than 10 million customers.
“For us, it’s a wonderful opportunity to help fill in this strategy of owning the home,” Stevenson said. “Someone as successful as HouseMaster being added to the portfolio will only help benefit our businesses going forward, and we’re very excited to have them coming on board and have them a part of development going forward.”