Qualified Remodeler

Top 500 Profile: Brand Building

No. 6 Re-Bath modifies its business model to help consolidate franchise operations and create a better customer experience.

authors Kyle Clapham 

Re-Bath started as a dealer network for liners and acrylic wall systems, but in 2016 the company adopted a new business approach. In-house research showed homeowners look for a remodeling service that delivers a consistent experience, so Re-Bath converted to a true franchise model and unified its brand nationwide. Since then, the company has grown about 8 percent year over year, says CEO Brad Hillier.

“The remodeling industry is very fragmented, with 97,000 people in the space all sort of doing it their own way with their own views on what customers are looking for,” he adds. “When you go to remodel, there is no consistency in the experience that you’re going to get; the consistency [depends on whomever] you hire. We think a franchise brand is the best way to go.”

The new business model has given Re-Bath more control over its franchisees, who benefit from the additional support of the corporate office. Previously, the franchisees selected their own product offering and ran ads that contained their own messaging. Now, the company provides them with the systems and processes to ensure consumers receive the best remodeling experience possible.

“Instead of 120 guys having to create 120 different TV commercials, why don’t we [produce] one at the corporate office and then we can all use it? That seems to be more efficient,” Hillier says. “We’ve also tried to identify the things that our franchisees were spending time on but were not necessarily [adding value] to the business, and get those off their plate to make it simpler to run.”

Most franchisees accepted the transition and have even expressed appreciation for the assistance with improving their business, Hillier notes. Some of them took longer to buy into the new setup, and others left the network because they wanted to continue operating independently. The switch has been challenging for those who remain as Re-Bath rolls out new procedures rapidly, but training and support have helped.

“If we’re going to be a true franchise brand that measures the customer experience, then we need one centralized system so that we can share benchmark data,” Hillier explains. “While that seems relatively simple, the fact is most of our franchisees had to learn a new CRM program as part of the transition. That [requires] a lot of effort. It’s a huge change to how they run their business, but it can have a huge payoff.”

The company manages 100 franchisees, who pay 3 to 5 percent of their revenues monthly to the corporate office, Hillier says. Re-Bath has actually grown more like 10 to 11 percent year-over-year on a same-store sales basis when excluding the dealers who opted not to join the franchise, he adds. In fact, the top 20 to 25 franchisees have grown in excess of 25 percent year over year.

“We were a 1.1-star-rated company on Consumer Affairs in the middle of 2015. Now we’re 4.6 [or] 4.7,” Hillier says. “Back in 2015 I went to a Kitchen & Bath Industry Show, and we weren’t really known much in the market. Now we increasingly get calls from large branded companies wanting to know how they can partner with us [and] how we could work better together.”

Re-Bath still manufactures acrylic products and installs liners for people who desire a quick and painless cover-up for their tub or shower. But many customers elect to remove the tub or shower base completely and replace it with a new one. As a result, the company has expanded into product offerings such as natural stone slabs, and full-bathroom renovations now account for nearly half of its business.

“We talk to them about the benefits of removing and replacing, as opposed to putting in a linear. That creates a bigger ticket,” Hillier explains. “Not only have we moved from being a dealer-based business to a franchise business, but we’ve [also] moved from being a product-centric company to a customer-centric company. We’re more interested in the consumer experience.” | QR

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