Anyone remember Victor Kiam? He made a fortune as the President and CEO of Remington Products, which he famously purchased in 1979 after his wife bought him his first electric shaver. His catchphrase, “I liked the shaver so much, I bought the company”, made him a household name around the world. With less fanfare, but similar intentions, four regional franchisees at Gas-elec have bought the company from its founder and Managing Director John Davidson. Between them they have 55 years invested in Gas-elec, and will continue to run the business from its head office in West Drayton.
For the uninitiated, franchising gives you the freedom of self-employment with the structure and convenience of a ready-made support system – and it’s thriving. According to the NatWest survey into the UK franchise market (published January 2016), franchising contributed £15.1 billion to the UK economy, an increase of 46% over the past 10 years and up 10% since the last survey in 2013. The number of franchisee-owned businesses has increased by 14% in two years, to 44,200. On average, those businesses are also becoming larger as the sector matures and a record 97% of them are profitable.
Speaking about the sale, Davidson said: “They say that imitation is the sincerest form of flattery, but I have to disagree. When your franchisees buy the brand you’ve created, that’s truly flattering. They know the business model is a successful one, and they have plenty of experience to grow the business still further and, who knows, diversify too. They’re incredibly focused and hard-working, and I’m looking forward to watching their progress.”
It’s clear the successful franchises are those which offer a service which make a competitive difference, but franchising wasn’t Belfast-born John Davidson’s first choice. He started Gas-elec in 1996, with the idea of offering a combined gas and electrical safety inspection service that could be performed by one engineer in a single visit, producing one report. This was revolutionary at the time and the business grew exponentially.
A year later, to supply increasing demand in the private rented sector, and in the belief that getting people to invest in their own futures would be an effective way to grow a business, Gas-elec became a franchise operation. For 20 years Davidson was Chief Executive of the franchise and, together with his 100-plus franchisees, serviced and maintained all the gas and electrical facilities in more than 80,000 landlord-owned properties.
In February 2017, when he sold the Gas-elec business, he could have retired, but that’s not how he’s wired. Instead he’s formed Eco-energi and has, with private investment companies Greenstone Finance and Aurium Capital Markets, been working on the development of the new Green Deal scheme which was launched at the beginning of the year.
His company, Eco-energi, is approved as a Green Deal Provider, Assessor and Installer and will be supporting homeowners to improve the thermal standards of their properties through energy efficiency loans. The ‘homeowner’ includes the private rented sector – a market Davidson knows well – and landlords must ensure all their properties have an EPC rating of E or above. Any property that fails to meet the government’s Minimum Energy Efficiency Standards (MEES) legislation by April 2018 cannot legally be rented to tenants. Where landlords need to upgrade their properties to comply, this work can be funded by Green Deal through Eco-energi. This alone presents an excellent business opportunity for installers but, given the parlous state of the UK’s housing stock overall, the Green Deal provides a long-term business opportunity too.
