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Kiwi Home Renovation Company Now One of the World's Largest

Thursday 4 July 2024, 6:17PM

By Impact PR

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A New Zealand home renovation company, established by building industry consultants to address systemic inefficiencies in the sector, has grown to become one of the largest of its kind in the world. 

The Auckland-based company has over 170 franchised operations in North America, England, Scotland, Australia as well as New Zealand. The combined global group of franchise operators now generates over $100 million in revenue annually. 

Jon Bridge, Refresh Renovations founder and director, says latest industry data suggests the firm is one of the largest full-service home renovation companies in the world.

He says they are aiming to reach over $1bn in annual sales within the coming decade - increasing the proportion of revenue from exports from 20% to 80% over this time.

Bridge says the company was formed in 2009 following an analysis of the building industry value chain in New Zealand and globally.

“At the time our business strategy firm Traffic was consulting to the largest suppliers in the construction sector. 

“Our research showed that while many commercial and new home builders were well organised and operating at scale, no one had successfully consolidated the home renovation market. 

“The industry was combative, fragmented and price-focused. There was no focus on process or delivering a better customer experience or outcome.

“The renovation market is roughly the same size as the new home market but incredibly fragmented and characterised by thousands of small trade-based builders, with the vast majority lacking a value proposition, but more crucially, the required business skills, processes, marketing or technology infrastructure. 

“This resulted in poor business outcomes and a generally distressing renovation experience for consumers. The same fragmented industry structure exists in every country that we operate in.

“While renovations should be the highest margin segment, as owners want to improve their homes, traditional trade-based builders were competing on price. Homeowners were just getting bounced around, time was being wasted and building suppliers were not getting their value-added products in.

“We highlighted this to several of our clients and recommended they establish a presence in this space, however, it was seen as creating a channel conflict for them. They were supportive of the concept though as it would bring structure to the industry. Some of our major customers at the time provided us with the funding necessary to establish Refresh,” he says.

Bridge says due to the very local nature of home renovations the company was established as a franchise model. 

He says as they are focused on bringing systems and processes into the market, most franchisees come from a business background - rather than being former builders. 

Bridge says the trade skills are there and in the market, however, what was missing was the business model.

He says they aim to secure a 3-5% share of the renovation market. 

Bridge says under their model, individual franchisees have significantly fewer projects resulting in disputes than the industry average. 

“What we recognised quite early on is that trade-based builders were bringing a specific mindset and if we wanted to change the way the industry operated we needed to attract business people who were more process and customer-focused. 

“Builders and other trades all know what to do technically, but what was missing was an overarching process and business model to drive efficiencies and better outcomes for consumers.

“Research shows that 30% of money spent on renovations is wasted, as most trade-based builders don't follow a structured process, don't communicate effectively, and don't plan properly.

“Across the market, about 20-30% of renovations end in some form of dispute. In contrast, our complaint rate is well under 1%, at 0.33%. While we’re not perfect, and no business ever can be, statistically, our results in terms of customer experience are 60 to 100 times better than the industry average, which is pretty staggering.

“This speaks volumes about the need for improved process management within the industry. Running a renovation business is not about trade skills, it’s about having a consumer focus backed by the right business model and infrastructure.

“We have identified different niches within the existing residential homes market and established businesses that specialise in meeting the needs of these segments.

“The group operates multiple franchise brands, including Refresh Renovations, Zones Landscaping, Oncore Services and We Sort It. It will soon launch a new franchise system named Planfirst, which is a franchise system for architects, architectural designers and other specialists such as kitchen, bathroom and landscaping designers.

“We’ve been operating in Australia since 2016. The UK and the US are newer markets for us. In the UK we have developed an expanded model, where in addition to the existing brands, we’ve also established a property and tenant management service called Let Correct. 

“In the US our national head office is based in Pensacola, Florida and we have franchisees in  Portland, Miami, Denver, Houston and Dallas.

“We’ve taken it slowly and have been testing the model in the US and making minor adjustments as required. We see the majority of our future growth coming from the US and are particularly focused on forming relationships with large players in the US value chain. 

“We believe Refresh and our other brands offer a significant, very unique and hard to replicate point of difference to upstream players who want to offer a value-added experience to their customers. We’re partnership-oriented and focused on value creation, not cost, which is always a slippery slope for everyone involved.

“With a regulatory framework that is most comparable to New Zealand in allowing anyone to own a building company as long as they use licensed tradespeople on projects, our focus is on Texas where we currently have three franchises. Houston alone has a larger population than New Zealand. Texas has a larger population than Australia,” he says.

Bridge says while the New Zealand renovation market is around $9bn per year, the US market is closer to $570bn - presenting a significant export opportunity for New Zealand.

He says the company is investing heavily in IT and has established a fully owned subsidiary in India, to focus on the development of systems.

“After working with multiple third-party IT vendors over the years, we worked out that there was no software on the market designed for renovations with process built in and so we have now built our own IT system that helps our franchisees scale and manage renovation projects, and which is patent pending due to certain innovations in process and documentation control. 

“We currently have a team of 12 developers and intend to hire more as we grow. They have built this world-first software called Control that provides business management, reporting and benchmarking, HR, marketing and CRM, project scoping, costing pricing, delivery and financials, as well as customer and supplier portals. 

“It’s fully integrated end-to-end and is focused on ensuring communication is clear and eliminating project scoping and contractual risk for all parties, which is the main thing that goes wrong with renovations, and all complex projects. It’s all about transparency and ensuring there are no gaps in the process that things can fall through and create issues.

“We have a strong focus on embedding AI into the system and there are a number of areas where this will drive huge value and efficiencies,” he says.