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Sherlock "Homes"

Solve the case of "The Mystery House" for buyers.
August 1, 2000
URL: http://www.entrepreneur.com/article/30780

Imagine the shock of purchasing a home and, one month later, learning the roof is about to collapse. This happened to one of my associate's clients. The home was a foreclosure, and the client, eager to "steal" the property on what appeared to be favorable terms, signed a series of releases and closed without inspecting the attic. Had he done so, he would have noticed that almost all the timbers in the roof were rotten after years of slow leaks. Now our client has a home of lesser value and perhaps an unpromising legal action. If only he had been more careful.

Pillar to Post Inc., a franchisor of professional home-inspection services, targets home buyers who want to avoid just such situations. Franchisees, armed with a proprietary computer program, review a home and give the home buyer the information he or she needs to make an informed decision.

With about 186 locations in the United States and 89 in Canada, this system has blossomed since its inception in 1994, when Pillar to Post was started by chairperson Michael Brewer and president William Norris. The pair created a unique business model that emphasizes marketing to real estate and banking professionals rather than consumer-driven marketing. Using a contact-manager program, the franchisees develop rapports that lead to referrals.

Pillar to Post doesn't want absentee owners and finds the more successful franchisees have middle-management (rather than home-construction) backgrounds. A new franchisee's initial investment is anestimated $24,950 to $41,750-lower than some other home-inspection franchises, because you can run your office from home and don't have to use a vehicle with the company logo. The initial franchise fee varies with territory size; territories of 100,000 or more in population cost $23,900, while the smaller ones cost $13,900.

Operating a business like this has certain limitations. For instance, if you can't imagine yourself pawing about like a reptile through a crawl space, perhaps this isn't the franchise for you. And during the winter, lack of daylight and reduced real estate sales will probably cap the number of inspections you can perform.

According to Russell Abram, a franchisee in Pueblo, Colorado, inspection charges vary with the size of the home and its geographic location, but you could plan on an average cost of $200 to $250. So, hypothetically, a one-person operation could gross sales of $450 per day during the winter; in the summer, three inspections per day would be manageable. About 75 percent of sales take place between March and September, so forget about long summer vacations once you ink this deal. When your business matures, you might hire an employee to increase efficiency.

Finally, expect your franchise to be only as strong as your sales skills and customer-service attitude. If you have those attributes, you may just find yourself in the right place at the right time (unlike my associate's client), because the youth of this chain means national name recognition is still forthcoming.


Todd D. Maddocks is a franchise attorney and small-business consultant who is presently the CEO of The Worldlink Group LLC. He can be reached at TMaddocks@aol.com.