CertaPro Painters® multi-unit franchisee Paul Guenette breaks down the benefits of buying a resale
By Joelle Kidd
Resales—when a prospective franchisee buys an existing franchise from the outgoing business owner rather than from the franchisor—have benefits for franchisees who want to take on an existing business rather than building from the ground up. But, a healthy resale program is also beneficial to a franchise system as a whole.
“Succession and a strong resale program ensure the right entrepreneur is running the business at the right time,” says David Barron, general manager of M&A and resale for CertaPro Painters®. For the North American painting franchise, resales help ensure the sustainability of the brand. It helps struggling franchisees find a good exit, while successful franchisees are motivated to invest even more in their business to increase its resale value. Not to mention, new franchisees see the prospect of selling at a future gain as a big draw. “It supports the brand,” says Barron. “Good people in and good people out!”
Franchise Canada spoke with franchisee Paul Guenette, who has owned the London, Ontario location of CertaPro Painters® since 2011, and recently purchased a second location in Waterloo through a resale. “If I had to do it all over again, I’d buy a resale, every time,” says Guenette.
An unexpected road to success
Prior to becoming a CertaPro franchisee, Guenette’s career took him in a totally different direction.
“I’m not going to say I laid in bed at night dreaming about being a painting contractor,” he recalls. “It was not on my radar at all.” Instead, Guenette was working in finance. He spent 23 years at one of North America’s largest banks, including 10 years in an executive role. But he always had the entrepreneurial itch.
“I knew I’d always wanted to run my own business at some point,” he says. He made the decision to strike out on his own and worked with a franchise broker to find the right fit for him. CertaPro was among the many businesses the broker showed him. “He said, ‘This one I think is perfect for you,’ and I dismissed it,” Guenette remembers. “I said, ‘Are you serious? Painting things?’”
The broker explained that it wasn’t about having an interest in painting; it was about managing and finding a franchise system with the right culture and support. When Guenette looked closely at CertaPro, he found just that.
“I landed on CertaPro for three reasons. For one, its values were really closely aligned with mine, and that was important to me. Secondly, I just saw a tremendous opportunity in the painting space,” Guenette recalls, noting that though the London area had plenty of independent painting businesses, none had the reach and customer service expertise that CertaPro boasted. “And the third reason was, I could see the commitment to strong support from the corporate group. There was a tremendous two-year development program, and it was just a culture I wanted to be a part of.”
What makes CertaPro Painters® distinct is the commitment to customer service, Guenette says. “As I always say to my team, we’re not just looking for ‘satisfactory.’ We’re not looking just for ‘good,’ but for a truly extraordinary experience—and not some of the time, not most of the time, but each and every time. That’s really hard to do, but that’s what we’re quite obsessed with.”
This extraordinary experience follows from the initial contact with the customer—through the brand’s website or call centre—through to the estimating process, service, and invoicing. As the largest painting contractor brand in North America—the Philadelphia-based franchise system has more than 480 locations in Canada and the U.S.—CertaPro has access to great vendor rates, cutting-edge technology, comprehensive operational support, and an integrated multi-channel marketing program, Guenette says. These benefits have made him glad he took the leap from the banking boardroom to the painting biz.
Resale revolution
A decade after building his first location from the ground up, Guenette had the opportunity to buy the Waterloo territory from the owners through a resale. While much of the due diligence process was the same, Guenette says he discovered the ease of purchasing an existing business.
“The beauty of a resale is you’re not starting from scratch […] It has everything, from premises to equipment to relationships with customers to staff, website, phone lines. All the stuff you need to set up when you’re first starting, it’s already there,” he says. “The brand has already been established, and the other great part is, you already have ongoing recurring revenue from existing relationships. So from a cash flow perspective, it’s much easier to start with a resale.”
Even with a resale, he notes, it’s important for a prospective franchisee to still do their due diligence to decide whether the business is the right fit for them. The franchisor also still needs to approve the potential buyer. A resale can also be slightly more complicated in the purchasing process, he adds, since the prospective franchisee is negotiating with an existing business owner rather than purchasing from the corporate entity.
“With a start-up, you’re buying a concept, and [the franchisor] provides you with all kinds of data about other start-ups and how the organization in general does, lots of averages and everything else. But it’s really a bit of a leap of faith,” Guenette points out. With a resale, on the other hand, “you have a track record of financials, and you can see how that concept has worked in the market.”
That said, it’s important for prospective franchisees to consider what skills and experience they will bring to that specific business. Guenette suggests asking: “Do I think I have the same skill set as the existing owners? Do I think I’m better, or different, than the existing owners? Do I have a gap that I need to fill through a hire?”
The tradeoff for all these benefits is that purchasing a resale often costs more than buying a new location, Guenette says. For someone just starting out in the industry who wants to gain experience, the hands-on aspect of a start-up can also be a great way to build skills, even if the road to profitability is longer than with a resale.
“While the price of admission is higher for a resale than a virgin territory, if I had to do it all over again, I would have absolutely chosen the [resale] route,” says Guenette. “It’s that ability to hit the ground running, and bring your skills to the table to take that business to the next level, vs. the slow growth trajectory which is pretty typical in a start-up.”
The role of support
When he first started his CertaPro business in 2011, Guenette was a one-man operation, which he says gave him the opportunity to learn the business from the ground up. Now he has a full staff at that location and the second territory in Waterloo. Having moved into more of a management role, he splits his time equally between the locations.
“I’m blessed to have an extraordinarily capable leadership team who really oversee the functional areas of the business on a daily basis, and I support them and guide them the best I can,” he says.
One of the best things about owning a CertaPro franchise is the support from the franchisor, Guenette says. “CertaPro is very good at providing the support you need, when you need it. They drive the brand marketing, they develop the appropriate systems, relationships with great vendors.” Despite this, he says, the corporate team is “relatively hands-off,” giving him the day-to-day freedom to run his business. “The support is tailored to each franchisee’s needs.”
Guenette also serves on the CertaPro Painters® Franchise Owners Association, which is a franchisee advisory board. “We spend a lot of time thinking through issues and challenges together. I think CertaPro absolutely recognizes that they won’t be successful unless the franchise body is successful. So it’s a very collaborative and collegial relationship.”
Other franchisees have also been a great source of support. “There were always lots of people I could call who might walk me through things on the phone, or I could go visit them, or they might come visit me. I think everybody recognizes [that] if we work together, the organization itself will grow and improve.”
Overall, a healthy resale program in a franchise system benefits both prospective franchisees and the overall brand. Resales provide opportunities for aspiring entrepreneurs to take over existing businesses with established infrastructure and customer relationships, while also ensuring the sustainability and growth of the franchise.
