Philadelphia Weekly

REAL ESTATE

A homebuilding model that defies recessions

How franchising gives small builders the best of both worlds

By Inman News Feed

Add Comment | Comments: 0 | Posted Oct. 7, 2011

After 19 years as small contractor in the Selma-Kingsburg area south of Fresno, Calif., Jeff Kreiter decided to become a franchisee with GJ Gardner Homes. That was six years ago. He has never looked back.

Asked why he made the jump to be a franchisee, Kreiter said: "When you are on your own, you wear a lot of hats. You just can't do everything as well as if you had a team. I was getting tired of designing houses, being the bill collector, running all the jobs and being totally involved from beginning to end. I was also worried about the bigger companies coming in."

He added, "GJ Gardner came along and I realized you can be part of a bigger company and still be an individual builder in your local area. That's what appealed to me."

The recession has hit the Central Valley of California extremely hard and Kreiter admits to some tough years when his output was just two homes, but he said he has come back more quickly than some.

As a small contractor, before he joined GJ Gardner, Kreiter's business usually accomplished the construction of three to four homes a year. These days he's building 15 to 20 homes a year, which is a major number for his rural area.

"The local guys aren't doing anything," he said. "We are pretty much the dominant builder in the area."

Kreiter said the marketing, including television advertising, software programs, technical assistance and pricing, all gives him an advantage in the marketplace. However, the associated social factors are just as important, he noted.

One of the more recent GJ Gardner offices to open is in Sacramento, about three hours to the north of Kreiter's venues. The offices have already referred clients back and forth.

"When you are on your own as a contractor, you can't call the other contractors to ask, 'What are you paying for this or that?' They aren't going to give you those numbers," Kreiter said. "Now, as a franchisee, I can call the other franchisees; we can help one another. It's a huge benefit."

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.