ReactFast Plumbing Franchise Fee

A: We started franchising in 2005, however the company was established in 2001, and the ‘system’ has been operating since 1998. Our annual turnover continues to grow and is anticipated to be in the region of £15 million for 2008. We have 100 employees, of whom around 60 are plumbers and gas central heating engineers. We also pass work to several hundred independent sub-contractors.

A: Of course. On request you may take a set away with you.

A: Yes. We were accepted as a Provisional Member in 2005, and intend to progress right through to Full Membership eventually.

A: Basic plumbing and drain cleaning: principally emergency-response services to the domestic market.

A: No. ReactFast will put every successful franchisee through an nine-week intensive training programme at our own Training Centre in Birmingham, covering pretty well everything you’ll need to know to be able to do the work we pass you in basic plumbing and drain clearing.

A: On successful completion of the course by way of an examination (two multiple choice
examinations and one visual assessment set by the BPEC - the British Plumbing Employers’ Council) you will be certified with the Water Supply and Water Fittings Regulations 1999. In addition, the approved City & Guilds 6022 Copper Tube Advice and Installation Award and the C & G 6032 Sanitation, Installation, Design and Maintenance Award can provide units towards further study (for example NVQ levels 2 and 3). You will also obtain certification as a trained Triton Shower Installer.

A: Details will be set out separately in the Business Plan but for further information online, view Franchise Fee.

A: We have negotiated bank funding packages with four major banks. These are available to anyone who has £14,500 of their own that they can invest in their business. We will introduce you to our nominated bank contacts, where you should be able to obtain financing far more easily, and on better terms, than if you were to attempt this on your own. The banks are able to loan up to 70% of the total costs. Banks will usually require security for their business loans. If you own a house, normally this can be put up as security for the loan - and then released again once the loan is repaid at the end of five years.

A: If you rent rather than own, and do not have any other assets to put up as collateral (security), there are other ways: there is a Small Firms Business Loan Scheme for just this situation. Your bank will discuss this with you if it is appropriate for you, when you go along for your meeting. At least one of the banks is often prepared to lend up to £15,000 without requiring security.

A: We will introduce you to a representative of a reputable Independent Financial Adviser that we have had dealings with. This is a specialist financial consultancy company and broker, that can normally find more creative ways for people to raise the money required, even if they don’t have a cash stake, and therefore need to borrow more than the banks would agree to. This firm is able to help people who, for example, cannot point to a history of earnings, or have no security, or need their loan spread out over a longer period, or have the ability to repay but no cash to start off with. Contact details available on request.

A: You are not obliged to but we strongly recommend that you do. ReactFast receives a constant stream of enquiries and jobs from the extensive directory advertising it carries out. However we encourage our franchisees to develop their own businesses by not relying solely on the work we pass them. By simply making themselves known, putting themselves about, a bit of leafleting or local advertising, and principally referrals from satisfied customers, franchisees will be able to generate far greater income for themselves. In the end it’s down to the individual franchisee: if he chooses to wait at home for ReactFast to pass him work that has come from Yellow Page ads, that’s his decision. And of course we have no way of knowing whether the volume of business in a given territory that comes in without the franchisee doing any marketing activity, will be sufficient for his needs or not. There’s no doubt, the smart franchisees will spend time developing their own businesses and ultimately employing their own plumbing staff - it’s in their best financial interests to do so. It’s not difficult: everyone wants to know where to find a good plumber when they next need one.

A: Nobody can answer that question for you. Making your own business successful is down to many things: volume of business, customers, your ability to trade up, the quality of the service you give, how often people want you back, how hard you work, how efficiently you work, the hours you put in - and so on. In other words, most of it is in your hands. In the Business Plan we have given some illustrations of the levels of income you ought to be able to generate, based on varying levels of business activity. From our experience, we believe there is very good money to be made.

A: There is no “one type” of person we are looking for. You will need to be sufficiently physically active and able to undertake the work that a plumber does. You must be reasonably competent with your hands and of a practical turn of mind. You must have the self-motivation to get up in the morning and start work without somebody telling you to do it and looking over your shoulder. You should be able to work on your own. You should have a good “customer service” attitude and a great manner when dealing with customers. A ReactFast franchisee should be hard working, practical and honest. You should be prepared to take advice and act on it, and be willing and able to follow a proven business system. We also want franchisees who have 100% support from their partner or family.

We will not accept as franchisees people who we do not think exhibit the traits we believe necessary for success. Currently we turn down over a third of applicants which is in their best interests as well as our own.

A: An experienced and supportive corporate team ensures that in the early days especially you will have access to all the expertise and business tools to get your Franchise on a sound footing. This includes Operations, Technical, Health and Safety, Finance and Administration, Telesales and Marketing. A full and concise Marketing Plan plus ongoing marketing support also helps you to fully exploit your territory.

A: Yes. We feel that to optimise the potential in your territory, full time and attention is necessary to reap the available rewards.

A: Yes. Every franchise will have a territory that, whilst not exclusive to him, he certainly has first rights in. You will be able to build up your own business and client base within your territory, and thereby build up the value of your business for the day when you want to sell it. (Refer the section on “Territory” in the Business Plan).

A: Certainly not to start with. This is initially a one-person franchise. However we envisage that a large number of our franchisees will grow their businesses by adding vans and employees within their territory, or buying second and third territories, and putting a van and an employee in each, and building up their own multi-van business.

A: No. The length of training required for that is far too long to contemplate at this point. Further training is however available in areas such as unvented cylinders, specialist showers etc.

A: We are considering adding other service-based franchise opportunities for franchisees to develop into, once they have proved they can do a good job with the plumbing franchise.

A: The first Agreement lasts for five years, and of course you can then renew it when it expires. There is no further Initial Fee (a.k.a. Franchise Fee) to pay on renewal.

A: No.

A: Yes. ReactFast will take care of Directory entries, advise you on layout, finalise artwork, and negotiate spread over payment terms. The costs will be reflected in your business and cash flow planning.

A: 18%.

A: Our first Training Course started in January in 2005, with our pilot franchisee starting to trade in March 2005.

A: Yes.

A: Yes, you may sit and read it in our offices at any stage, but you will not obtain your own copy until you are on training.

A: No. Your first payment is a non-refundable deposit of £2,000 towards your Franchise Fee.
This secures your territory and reserves you a place on the training course. The balance is payable three weeks before training starts.

A: Yes, a blank (i.e. unpersonalised) version will be given to you to take away and study at your leisure, and discuss with a solicitor.