stralian energy efficiency franchise Allsafe Energy Efficient Products is set to expand to the US, after signing a joint venture agreement with US franchise brand manager United Franchise Group to eventually set up 280 to 310 stores.
Chief executive Sean Cochrane says he will move from Townsville to the US in early 2011 to set up the company’s first store, to be located in Palm Beach, Florida, which is expected to open in March.
Cochrane says the US home energy efficiency market is well behind that of Australia, but rising energy prices and awareness of sustainability issues means demand is growing.
“Their energy bills have jumped 30-40% in the last few years, and their income has dropped by as much a 40%,” Cochrane says.
“They can’t afford their oil, they can’t afford their petrol. With the GFC really kicking Americans in the guts, they need to go green.”
Cochrane said AllSafe had planned to open in the US slowly, but interest from United Franchise Group, which has 1,400 franchisees across the United States under brands including Sign A Rama, convinced him to move faster.
To test the market, United Franchise Group recently sent letters to 23 excising franchises in an area of Southern California, asking if they were interested in buying an AllSafe franchise. Cochrane says 13 of the 23 returned expressions of interest.
“They know how to turn keys, open doors, train people and they are going to help us rapidly open stores.”
The US brand will be known as SuperGreen Solutions, as a safe company already has the AllSafe brand. The joint venture will concentrate on the area known as the Sun Belt, stretching across the bottom half of the country from Florida to California.
Another positive for AllSafe is the fact that the Obama Administration has recently introduced new energy efficiency incentives and subsidies.
But while Cochrane welcomes the regulatory changes, he is a little wary of the potential for creating a sort of boom-and-bust mentality in the sector, as occurred in Australia when the Rudd Government heavily subsidised insulation.
“These days I can’t sell a bat for love nor money,” he says.
In Australia, Cochrane says AllSafe expansion is on track to open its 11th store in the past 18 months. The eventual goal is to have 52 stores around Australia.
Cochrane also says he has been watching a flood of US franchisors heading to Australia in the last few months – including Marble Slab Creamy, which appointed a master franchise for Australia last week – and it is nice to see a local business go the other way.
“It sort of grates me that everything that is good that is Australian disappears overseas or we import the latest thinking or products from overseas, so this is giving me a bit of a buzz.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
