DreamMaker Remodeling Franchise Review: Systems Helped a Big 50 Remodeler Survive Recession and Rebound

“I think the Lord told me personally, this is what you need to do,” Tracy Moore says of the remodeling franchise.

Erik Anderson, left, and Tracy Moore were already on Remodeling Magazine's Big50 list when they decided to buy a DreamMaker Bath & Kitchen franchise. Tracy credits DreamMaker with helping them get through the Great Recession.

Erik Anderson, left, and Tracy Moore were already on Remodeling Magazine’s Big50 list when they decided to buy a DreamMaker Bath & Kitchen franchise. Tracy credits DreamMaker with helping them get through the Great Recession.

Tracy Moore and Erik Anderson, who own DreamMaker Bath & Kitchen in Winston-Salem, N.C., became fast friends after meeting at N.C. State during the first week of their freshman year, but it was years before they became business partners. Erik earned an MBA and worked on re-engineering landfills, while Tracy started remodeling homes. The two stayed in touch, though, and decided to invest in homes to remodel and sell. As Tracy got busier and needed help, Erik joined his company, which became Anderson-Moore Builders. Then DreamMaker came calling, and the pair had to decide whether to join someone else’s firm or stick with their own.

This is Tracy’s story:

What were you doing before DreamMaker?
After college I started working for Railroad Express here in Winston-Salem. They transferred me to Fayetteville, N.C., and I was there about a year but didn’t like it. I wanted to do something different, and I wanted to be outside, so I came back home to Winston-Salem and started working with a general contractor who did a lot of work with other builders. I was a carpenter for him and also picked up side jobs on nights and weekends. I worked in the industry for two years before we incorporated Anderson-Moore Builders in 1996.

One of the things that sets DreamMaker Bath & Kitchen apart from competitors is that our designs are not cookie cutter. We listen carefully to our customers and create custom designs meant to bring their dreams to life — as these two kitchens designed by Erik Anderson and Tracy Moore demonstrate.

One of the things that sets DreamMaker Bath & Kitchen apart from competitors is that our designs are not cookie cutter. We listen carefully to our customers and create custom designs meant to bring their dreams to life — as these two kitchens designed by Erik Anderson and Tracy Moore demonstrate.

How did you find out about DreamMaker?
It was a cold call by DreamMaker to us. We made Remodeling magazine’s Big 50 list, and they called Erik. In a weekly meeting, Erik mentioned them to me and said he thought it was worth talking to them, and I was like, “Are you crazy?!?” We were doing $3 million a year in projects, including a lot of glamour projects where you would gut an entire house and restore it — $200,000-$500,000 projects. We had a few that were over $1 million. We’d farm out the kitchen and bath work but realized that we were giving away the opportunity to earn margins on the cabinets as well as the labor. We’d be doing a project for eight months, and the kitchen and bath guys would be in and out in two weeks, and they were getting a great margin! At the same time we were trying to figure out how to enter that realm, DreamMaker called us.

Every time we talked, we realized how similar we were in our thought processes and ethics. What convinced us to join DreamMaker were the people and the Code of Values. When they emailed us the Code of Values, it was a huge “wow.” Erik and I have always said, you need to do the right thing even when people aren’t looking, and DreamMaker expressed that in such an eloquent way. And they lived those values — everything from doing what they said they would do during the investigation process (if you were supposed to get a call at 2 o’clock, at 2 o’clock the phone would ring) to the way that even as we interviewed them to see if it was the right fit, we could tell they were interviewing us, too, to the way they asked at the end of every meeting how we felt and if we wanted to continue. It was never pushy. It was people talking about something they felt would be mutually beneficial.

Do you still do a lot of Anderson-Moore work?
We still do remodeling projects outside of kitchens and baths under the Anderson-Moore name, but we mainly do DreamMaker. We don’t really market Anderson-Moore anymore, so that’s just referral business from past customers. As we’ve gotten older, it’s nice to focus on kitchens and baths. You don’t have to worry about weather, and the work is easier and simpler than a lot of remodeling jobs. We used to tackle anything for the glory of doing it. And we can still do anything inside the home. That’s one of the benefits of DreamMaker — they are getting into closets and other whole house renovation items, so there are many opportunities within the system. You can make it as simple or complex as you want.

What do you like about DreamMaker?
I like that I no longer have to be outside when it’s cold or really hot. And I like that the business is flexible. If you want to target just a certain size bathroom for your projects, you can do that. If you want a wide range of bathrooms, you can do that. You can tackle design/build projects, and you can also do pull-and-replace remodels. The types of jobs you are targeting can be controlled through marketing, and I like the marketing help DreamMaker provides.

I also like the Next Level Groups. (Next Level Groups pair together franchise owners to discuss each other’s businesses and even do site visits and critiques, so there is a lot of feedback, accountability and opportunity to learn.) I like being able to pick up the phone and ask someone if they’ve ever had the same issue I’m having. And all these people — at least every one I’ve met — are as ethically strong as we are in their business and in their lives. Most of the people here have a strong religious background. I think it’s a very strong group of people who have their heads on straight and do a lot of giving back to the industry, their communities, families and each other.

Who inspires you?
Just about everyone here! I don’t know how people have time to do what they do. Dale Ressler (who owns the DreamMaker in Bainbridge, PA, and also drag races), I’m not sure how he has time to do what he does. Even my business partner, Erik, he’s been on the board of directors for the state home builders for many, many years. There are so many examples of people giving back to their communities and giving back to each other.

How do the Next Level groups work?
We help one another. For instance, Erik and I have a strong understanding of finances. We understand every number in the business, and a huge part of DreamMaker’s system is to make sure people understand these things. When we visit another DreamMaker franchise, which we do with about a half-dozen other franchisees, we’re going to dissect their operations and see where they need help and ask them, what do you want out of this? It’s a way to dig down deep in your company, figure out what you are doing right and what you are doing wrong. DreamMaker gives you a lot of tools, and we make sure everyone is using those tools to their fullest potential. Then, 60, 90, 120 days later, we go check and see how the franchise we visited is doing.

The visits have helped us, too. We were doing marketing before, but we didn’t have it down the way DreamMaker does: how much marketing to do as a startup, how much to do once the business is established, which strategies to use. For instance, we had never done a magazine ad. Well, we put something in a magazine and got an immediate call from a new customer.

I have to ask — with $3 million in annual revenue, why did you need DreamMaker?
We weren’t doing bad by any means, but we wanted to do a lot better. And what we were doing was taking every waking hour we had. Without help in this industry, you will be working 60 hours a week — at best. We wanted a way to be profitable and not have to work 80 hours a week. And we also wanted to get cabinets into what we were doing. It blossomed from there. For myself, I think the Lord told me personally, this is what you need to do. And the timing was very fortuitous. I felt something coming — we all felt something coming, and when the recession hit, our revenue faucet basically turned off in September 2008. We started our DreamMaker in January 2009. We went from having 19 employees to having five, and if not for DreamMaker, I don’t believe we would have made it. We had people to bounce ideas off of and to provide mentoring, and that’s why we’re still in business.

What sets DreamMaker apart?
Everything. The way we do business, the whole process, it’s all different. It’s not anything close to how most remodelers operate. We don’t bid projects. We invite customers to talk with us and interview us to see if they want to work with us, and we’re interviewing them to see if it’s a good fit. I’ve turned down a lot of jobs because it wasn’t the right fit — the customer didn’t share our values like being considerate and respectful, and there are more people out there I wanted to work for. I only want to work people I enjoy working with. DreamMaker teaches you how to find the right customers. The sales process is a huge part of it.

How has franchise ownership changed the way you live and work?
Our situation may be a little unique — our hours were ratcheted down by economy! Our focus was to take a $3 million company and make it fit $1.5 million in revenue, and I’m not sure we could have done that without DreamMaker’s help. We might have run out of money before we figured it out. We knew going into this that we wanted to bring home more money and work fewer hours. Looking back, the amount of money we wasted on things, and not knowing what we needed to do to be more profitable, cost us a lot of opportunity; 95% of making more money comes from what’s going on between your ears. For instance, people will undercharge, or keep their rates flat forever, and will say you can’t raise prices in this market. Well, you can. We’ve been slowly raising prices for 15 years to keep pace with inflation. DreamMaker has also given us better focus on the kind of work we’re best at, where our niche is, how to be more profitable, even on a smaller revenue stream. We want a profitable $1.5 million company, and we’re making as much profit now as we did before on half the revenue.

What does DreamMaker mean for your family?
My wife, Julie, works in the business as our office manager. DreamMaker gives us flexibility. We have two daughters, Hannah and Sarah, and we are constantly at sporting events or performances. Hannah plays softball, volleyball and basketball, and Sarah plays soccer and also acts and play piano. I love having more time to spend with my girls. We recently went to a Miami-Wake Forest women’s volleyball game — it was the first college volleyball I’ve ever seen, and it was quite impressive. They were fast and they were good! I’m also a big golfer, and it’s nice to find time to do that.

How has DreamMaker made you more profitable?
They help us keep track of the gross profit margin we have on cabinets, the gross profit margin on subcontracts. It’s broken down into categories of profit, and we can see when we start to have slippage. Did we miss something when estimating the job? Also, since we can compare our operations with other DreamMaker’s, it’s much easier to compare overhead expenses. If you’re paying this much for phone service, why am I paying three times that amount? We’ve reduced overhead tremendously thanks to coaching and Next Level visits. There are a lot of little things you can do to improve your bottom line.

The marketing help was also a huge benefit, especially with the launch of the new consumer website, and each franchisee having an individualized website. It’s also great seeing what other people have done successfully with their marketing, and borrowing those ideas for your market. You don’t have to reinvent the wheel. We get some of our best ideas from Deb Witte (in Colorado Springs, CO), who is in our Next Level group, and Patty Gray (in Bakersfield, CA). I just hope I can do something someday to repay them.

You are joining a family when you buy a franchise, so what is this family like?
That’s right! You better like them, and they better like you, because you can only fake it so long… The biggest reason we are DreamMaker owners is because of the people we talked to. In one of the initial meetings we had with a franchisee to get their perspective, he was mad with corporate about a particular issue, but he said he was just mad, he didn’t love anybody less — he was very honest and told me there are other people involved, so you can’t just do whatever you want and go out on your own. You have to be part of the system. The people are great.

How has having a franchise coach benefited you?
Mine is Greg Friebel. We have a monthly meeting, and if we need to meet more than that, we can. During the recession, for a while, it was once every two weeks. He asks what we want to talk about — lead flow, financials, marketing. Is something out of line? Are our estimates off? Lately, a lot of our issues have been the lead flow, and we’ve been talking about our mix of design/build jobs vs. production remodels. We’re always looking for leads, because it takes a while to take a person into a signed contract. They may sign a design retainer, but it takes a while to get it to production. Greg suggested we make a bigger push on production jobs to fill the gaps between the start of the design/build jobs, and he talked to us about how to go about directing marketing to get these things.

How has the research and development of new products and group buying power benefited you?
I’m on the vendor task force. There are five of us, including Doug. We are always looking at new vendors to bring to the table for DreamMaker as a franchise, or if anyone has problems with a vendor, we work to get them resolved or look for new sources. We knew nothing about kitchen cabinets before we got involved with DreamMaker, and having a reliable source of qualified vendors meant we didn’t have to figure out by trial and error who are good cabinet makers and who are not. The task force brings the cream of the crop to franchisees. And we’re able to buy at wholesale prices, which most remodelers can’t do, and that allows us to have much higher margins on cabinets, so we can generate a profit on more than just labor.

Would you recommend a DreamMaker franchise to someone else?
I would definitely recommend them. I was just talking to a gentleman who was considering it in D.C. area. He had been in business 12 or 13 years and was just keeping his head above water. If you are a remodeler looking for an easy out, it’s not going to be easier initially — you’ll need to learn a whole new system. Does it get easier? It gets better. I’ve always loved what I do, and I enjoy it better now that I’m with DreamMaker. The product is top notch, and the process is top-notch.

Learn more about DreamMaker

DreamMaker Bath & Kitchen helps franchise partners stand out by offering savvy, proven marketing plans and tools, excellent systems for operating your business, and a wealth of support to help you grow. To learn more about the remodeling industry, and why we are excited about the growth potential for our franchisees, visit our research pages. To learn even more, fill out a form to download our free franchise report and start a conversation. We look forward to talking with you!

 

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