What good is a home inspection franchise?
Q: My husband and I have considered buying a home inspection franchise. The company requires an investment of $45,000, plus costs for materials and equipment. As franchisees, we must pay them a percentage of every home inspection fee. What is your opinion of home inspection franchises? Are they worth the investment or would we be better off spending the money for tuition at a home inspection school and for startup costs toward our own business?
A: The primary benefits of owning a franchise business are name recognition and mass marketing. For example, if you buy a McDonald's restaurant franchise, you enjoy immediate clientele because the reputation of the company is firmly established, national advertising is continuous, and the quality of the product is guaranteed to be consistent from one vendor to the next.
These benefits do not exist for those who buy a home inspection franchise.
Most people, if asked, could not name a home inspection franchise doing business in the U.S. Furthermore, product uniformity is not possible in the home inspection business. The thoroughness of a home inspection remains unique to each individual home inspector, regardless of the name of the company.
In return for your franchise investment, you will receive rudimentary training as an inspector, a system for writing reports, and the eternal obligation to pay a portion of your gross proceeds to the franchise corporation. Meanwhile, you will have to build your business from scratch, the same as every other new home inspector. You will not experience the immediate flow of business enjoyed by those who purchase a franchise from, say, Taco Bell or 7-Eleven. Instead, you will be starting business as an unknown practitioner in your marketplace.
Rather than gambling on a costly franchise, invest in your own efforts and abilities. Begin by enrolling in an established home inspection school such as Inspection Training Associates, become a member of a recognized home inspection association, purchase one of the many quality inspection report systems now available, and apply your savings toward the marketing of your new business.
The success and reputation you establish in your area will depend upon your skills as a home inspector and your ability to attract recommendations from real estate professionals. This process will take time, effort and money, and is something you will have to do for yourself, whether or not you purchase a home inspection franchise.
Q: We're selling our house and are worried about the upcoming home inspection. We have expansive soil that has caused some cracks in the foundation, and the cinder blocks at one corner of the building were dented by a backhoe a few years ago. If the buyer's home inspector notices these conditions, is the foundation liable to be reported as unstable?
A: A competent home inspector will notice exposed foundation damage and will make recommendations consistent with observable symptoms. The extent of the cracks and dents, therefore, will determine whether they are reported simply for disclosure purposes or as conditions that warrant further evaluation and repair. If the inspector considers these defects to be significant, review by a licensed structural engineer would be the appropriate recommendation. It is a decision that awaits the home inspector's judgment.
• To write to Barry Stone, visit him on the web at www.housedetective.com, or write AMG, 1776 Jami Lee Court, Suite 218, San Luis Obispo, CA 94301.
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