man in red re-bath shirt

A 5-Year Plan for Selling Your Remodeling Business

man in red re-bath shirt

Use Re-Bath to grow revenue, grow margins, implement systems, leverage a brand name – and ultimately boost resale value.

For a successful independent remodeler, the idea of joining a franchise can seem insane. After all, if you’ve been a successful remodeler, why pay a 5% royalty to be a part of someone else’s brand?

Here’s why, especially if you are considering selling your remodeling business: You can improve your gross profit margins, increase your sales volumes, and implement systems and support that can be leveraged by the person who will eventually buy your business.

Many remodelers, when they are ready to sell, realize too late that all of the systems for running the business live inside their own head, and the only sellable assets are their work truck and tools.

Rather than selling their business for multiples of net income, they wind up selling for a fraction.

Here’s how to escape that fate:

woman opening door in office

A Re-Bath support team member greets visitors to our headquarters in Phoenix, AZ.

Step 1: Join Re-Bath

Joining Re-Bath is a big decision. We created this website to help you understand if it’s the right decision for you. Feel free to explore to learn about our competitive advantages, investment requirements, and our process for awarding franchises. If you apply, we’ll want to hear about your goals and make sure you’re equipped for success within the brand. Assuming that’s the case, we’ll work with you side-by-side to help you achieve your goals.

Step 2: Implement systems

These will be important to the person who buys your business, because it means they will have a roadmap to sustain and continue the success you have built. As a franchise, your business will also have extensive support from marketing, customer support, research and development, and leadership teams. These resources are helpful even for experienced and successful remodelers; they are invaluable to potential buyers who want assurances they can continue to build on your success.

Step 3: Grow sales and margins

The resale price of your business will largely be determined by its profitability — net income after the cost of goods and operations. Businesses typically sell for a multiple of the net income they provide to the owner. Businesses with strong systems in place and solid record-keeping tend to sell at higher multiples, which is why Step 2 is so important. But to really maximize the resale value of your business, you need to increase your business’ net income by increasing topline sales and gross profit margins.

Re-Bath is built to be easy to scale, and our business model makes it easier for franchisees to achieve very strong gross profit margins. For franchisees whose territories have a population between 500,000 and 1,249,999, the average revenue in 2017 was $1,729,913 and average gross profit margins were 47.9% (Re-Bath Franchise Disclosure Document, April 2018). Meanwhile the average remodeling company generates a 28.9% margin (National Association of Home Builders 2017 survey).

That 19 basis point difference to the bottom line can have a dramatic impact on resale value. It puts the 5% royalty payment in perspective.

bathroom remodel

At top: The “before” image of a bathroom that Re-Bath remodeled for an older couple. At bottom: The “after” image. The shower is now a walk in, with a small lip on the shower basin that makes it easy to use for people with mobility issues.

Step 4: Maximize your benefit

Once you have transitioned to Re-Bath’s systems, we advise you to push for 2-3 years to really grow your sales and maximize your bottom line. You’ll probably be working almost as hard as you worked when you first started your business. It’s worth it. The goal is twofold: Maximize your bottom line, and demonstrate a track record of strong growth. When potential buyers examine your business, a strong growth trajectory will be an attention grabber.

Step 5: Sell

Congratulations. You’ve tackled the challenge of growing your business, and it’s time to enjoy the rewards. You should be ready to capture the most value from all of your hard work over the years.

Learn more about the opportunity

To learn more about Re-Bath’s business model and discuss how it might fit with your business goals, fill out this form. One of our Business Development Specialists will be in touch within 24 hours to share details about the opportunity and answer your questions.

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