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When British-based energy conglomerate Centrica sought to expand stateside, it choose Clockwork Home Services — a genuine homegrown Sarasota-Bradenton success story that grew from startup to $200 million in annual sales in a decade.
The Brits made the right move.
Centrica, through its affiliate, Houston-based Direct Energy, paid $183 million for Clockwork in July 2010. Founded in 1998 by Sarasota entrepreneur Jim Abrams, Clockwork is the parent franchise firm for three home service brands: Benjamin Franklin plumbers; One Hour Heating & Air Conditioning; and Mister Sparky electrician services. The company had $194.5 million in revenues in 2009.
Direct Energy wanted Clockwork's brands and customer base, more than 1 million people in 47 states. It also wanted an entry into an industry, home repair services, executives believe is ripe for a Starbucks-like firm to dominate. That overarching goal occupies the bulk of Direct Energy Services President Scott Boose's time and strategy conversations.
“The industry is still very fragmented,” says Boose. “We think we have an opportunity to break into new markets and cut through the clutter.”
The break-through effort has gone well, and 2014 looks like a year where the momentum can shift even greater. The firm has several new products, combined with an investment in training, software and branding that cost $15 million and lasted 18 months. The Direct Energy Services model is to sign up franchisees already operating in the industry, not launch new businesses.
Total locations of the three home services brands under Direct Energy Services' domain recently surpassed 600, which includes 120 or so brought on over the past two years. Most of the locations are run by franchisees, with a small amount company-owned. All locations combined had $890 million in annual revenues last year, up 7% over 2012, and profits, according to public filings, increased 11.7%, from $51 million in 2012 to $57 million in 2013. Company officials project at least $1 billion in 2014 revenues. The company, in all locations, has more than 7,000 employees.
The support network for the franchisees is in downtown Sarasota, in the same office from the Clockwork days. Around 130 employees work there, including Boose and other top executives. That's also where the firm develops new products and services. Some of the more recent ones include:
A hot water heater rental service, now with 80,000 customers;
A warranty protection plan, under the name Home Warranty of America, which covers air conditioning, plumbing and electrical services. It's an insurance product, where field technicians from any of the brands can sell it to clients. The firm sold 82,000 plans last year and expects to sell another 250,000 plans this year and 2 million by 2016. “We are able to handle a large amount of liability spread over a big piece,” says Boose;
An air-conditioning leasing program run through One Hour Heating and Air. Launched in June, the program is a lease-to-own with no down payment required. The leases, which Boose says are designed on a low-monthly payment model, last 10 years. Says Boose: “We think it's a differentiator for us.”
Boose says Direct Energy Services hopes to announce more programs to separate the firm, and its franchise network, from competitors by the end of the year. “We are 100% vested in their success,” says Boose, about the franchisees. “If they don't grow, it doesn't make sense for us to bring them on.”
Follow Mark Gordon on Twitter @markigordon.
At A Glance
Direct Energy Services
President: Scott Boose
Main office: Sarasota
Brands: Benjamin Franklin plumbers; One Hour Heating & Air Conditioning; and Mister Sparky electric services.
Locations: More than 600.
Employees: 7,000, includes employees for franchise locations and company-owned locations.
2013 revenues: $890 million. Projects at least $1 billion in 2014.
Parent company: Direct Energy Services is a unit of Houston-based Direct Energy, which provides electricity, natural gas and other energy services to more 13 million homes and small business in North America. Direct Energy is a subsidiary of Windsor, England-based Centrica, a global energy conglomerate.
Source: Direct Energy
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