Franchisees Balk at National Accounts

Franchisees of Mr. Handyman are balking at a national account sales program that the chain wants to roll out. Todd Recknagel, Mr. Handy'man’s president, told the Wall Street Journal that the new program could yield some $2 - $3 million in the first year alone from firms wanting nationally discounted prices. Franchisees would win these accounts automatically.

So what’s the problem?

"There's a lot of questions," said Neils Brooks, co-chairman of the Mr. Handyman Franchise Advisory Council and a franchisee in Newport News, Va. For starters, individual franchisees worry they would have little say in what they could charge, since headquarters would set rates with the national-accounts clients. And some are concerned that if they refuse a job, the franchiser might give the assignment to a subcontractor who could tarnish the brand.

The company has revised the addendum's language several times to assuage franchisees. "The biggest thing franchisees want to be comfortable with is pricing," said Todd Recknagel, Mr. Handyman's president and chief executive, who added that the company understands the concerns and will contribute $2,500 for the legal review. That process could take several months, he said. "It's natural for franchisees to say, 'Hey, wait a second. What's being taken away from me? What am I losing?' We understand that," Mr. Recknagel said.