As I’ve said before, there are several ways to start a profitable handyman business.
And while starting your business from scratch is typically the most profitable route, I’d be doing my readers and listeners a disservice if I didn’t explore the idea of handyman franchises.
That’s why when a representative of Ace Handyman Services asked if I’d like to interview Colette Bell – VP of franchise development for Ace Handyman Services, I jumped at the opportunity.
I immediately saw it as a chance to dig deeper into the costs, benefits, and profitability of becoming a franchisee.
Then, when the interview finally came, I was not disappointed. Colette was very generous with her knowledge and time. She was also transparent, even sharing details about how much Ace Handyman Services franchise owners make in profit.
And beyond the franchise information, Colette shares some best practices and strategies for any handyman business.
So, even if you have zero interest in investing in a handyman franchise, I know you’ll find this interview insightful and motivating. I highly recommend giving it a listen.
HS038 – Colette Bell of Ace Handyman Services: The Costs, Benefits, and Expected Profit of Investing in a Handyman Franchise
About Colette Bell
Colette is the VP of Franchise Development for Ace Handyman Services, a nationwide handyman franchise.
Colette has over 20 years of experience in the handyman business. For 18 years, she was the chairman and co-owner of Handyman Matters (a large handyman franchise) and grew that business from scratch with her husband, Andy Bell.
In 2019, Handyman Matters was acquired by Ace Hardware and rebranded as Ace Handyman Services, which (at the time of recording this interview) has 378 territories in 46 states.
Colette is a wealth of knowledge about the handyman business, and I’m excited to have her on the show.
What are the benefits of an Ace Handyman Services franchise?
One of my focuses for this interview was to better understand what a handyman franchise can bring to the table.
Here is a summary of what Colette mentioned in the interview (which you can listen to toward the top of this page).
- Consolidation of Power – Having 378 franchises can bring some negotiation firepower because of the volume. She gave the example of getting better prices on software, but I can see how this could be helpful in many other areas.
- Consolidation of Knowledge – Colette explained that one of the franchise’s job is to continue improving systems and roll them out to the territories. While doing this, they benefit from learning from all of their franchisees. So instead of only learning from one business’s mistakes and successes, they can learn from hundreds of businesses to help them make better decisions.
- Keeping operating expenses low while expanding – Colette explained that one of the challenges of scaling a handyman business is that operating costs can balloon as well, but with Ace Handyman Services systems and software, these costs are limited – allowing a business to scale with lower costs.
- Emotional Support – Running a business can be lonely. With Ace Handyman Services, you have access to a dedicated business coach you can reach out to for counseling and advice. There are also regional groups where business owners get to meet with each other and discuss problems and opportunities.
- A Large women owners group – This can be a big plus for women looking to get into the home repair industry.
- A large group of Vets – Colette mentioned that many veterans get involved with the franchise.
How much does an ace handyman services owner make?
One of the main things I was interested in during the interview was how much an Ace Handyman Services owner can expect to make.
And as you may expect, the answer to that is more complicated than just giving a number. The region someone operates in, how many territories a franchisee owns, how long a territory has been operating, and the effectiveness of the franchise owner are just some of the factors that can influence the bottom line.
But Collete was able to provide some numbers. She mentioned that the top 20 franchisees average roughly $852,000 in revenue and operate at about 22% profit. Once you remove about 6% of that profit for the franchise royalty fee and an additional 2% for the national marketing fund, a franchisee can expect profit to be 14% of total revenue.
So, if we multiply $852,000 by 14%, you get $119,280. So, the top twenty Ace Handyman Franchise owners generate an average profit of about $120K. To put that into further context, some of these franchisees also collect a paycheck so that profit is in addition to what they pay themselves. Also, some of these franchisees have multiple territories, further complicating things.
While this still doesn’t fully answer how much you can expect to make, it provides insight into the upside of becoming a handyman franchisee. Ultimately, further research and analysis will be necessary to estimate profit for the territory you live in.
How much does it cost to buy an Ace Handyman Services franchise territory?
The benefits that come with investing in a franchise are not free.
Colette (VP of Franchising Development) mentioned that the initial cost to start an Ace Handyman Franchise is usually around $128,000 to $204,000, which covers the franchise fees, startup costs, and the first three months’ operating costs. That includes the franchise fee, photo shoots, website setup, in-person training, rent for a physical office (required), necessary computer and office equipment, business licensing, and other costs.
However, there are more costs. There are also franchise royalties (where the franchise takes a percentage of the total revenue), the national marketing fund (which adds to the franchises marketing budget), a $499 monthly fee for software and website management, and of course, the monthly fixed and variable costs that come with running any local business.
Here’s a quick summary of franchise costs:
- $70K franchise fee – Covers first ten-year contract for a single territory. After ten years, it’s $5,500 for ten more years.
- 6% of revenue for franchise royalties.
- 2% of revenue for the national marketing fund – to invest in marketing for the franchise to further brand recognition.
- $499 per month for website and software
These costs do not include the other costs of starting a handyman business. Also, depending on the time you read this article, this may not be a comprehensive list of costs.
What requirements must you meet to become an Ace Handyman Services franchisee?
The financial requirements are that you have at least $75,000 liquid and your net worth is at least $250,000.
But those are just financial requirements. To be a good fit for the company, Colette mentioned that candidates are what she calls “servant leaders,” meaning they operate from a position of service to their employees and the craftsman they hire. She mentioned that if it’s just about the money for someone, then they should “go somewhere else.”
And that makes sense because, from my analysis, if you wanted to start a handyman business and optimize for profit, you’d be better off starting from scratch and doing it without the burden of franchise fees and royalties. However, if you prioritize the benefits of the franchise over pure profit, then I don’t see anything wrong with taking that hit on profit.
How can you learn more about starting an Ace Handyman Franchise?
Colette mentioned that for those interested, the best place to start is to head over to AceHandymanFranchising.com – where you can learn more, contact the franchise, and see if your territory is available.
While there are 378 territories taken, Colette mentioned there are nearly 1,800 territories in the United States. So there are plenty still available.
What do you think of handyman franchises?
I’m curious to hear your thoughts on Ace Handyman Services and other franchises to help provide further insight to people considering this investment.
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