The pool and spa business is one of the few industries left in America that’s still dominated by small- to medium-sized companies.
While enormous consolidation has occurred in the manufacturing and
distribution sectors, pool construction, service and retail remain
There are many good reasons for this. First of all, pool and spa
construction is vastly different across regions. This holds true
for site conditions as well as consumer tastes — most of us
can tell a Texas pool from a Florida one in a single glance.
Then there’s the challenge of overseeing offices from many
miles away. How do you know that your brand is being properly
maintained if you’re not even in the same region?
Finally, there’s the motivation factor. I’ve chatted
with a number of really good builders who, at least until the
recession hit, were happy to stay in their areas running profitable
businesses with a minimum of hassle. Then when things got tough
economically, the last thing on their minds was expansion.
But now I’m starting to wonder if that’s going to
change. One of our cover stories this issue is about California Pools’ plans to aggressively
expand the licensing of its brand. Taken alone, this is not a
big deal — the company certainly isn’t new to
licensing. But when looked at as part of a small but growing
movement among builders who are actively pursuing this business
model, it starts to seem as if we may be seeing the beginning of a change.
Personally, I’m of two minds about a pool and spa landscape
where the construction, service and retail space are
“owned” by a handful of large players. On one hand,
I’m a huge supporter of local businesses. Not only do I
believe they’re good for the collective American psyche, but
I’m also a big fan of the diversity that comes when an
individual put his or her unique stamp on a company. Sure, I like
the Subway next to my office, but I prefer Genki Grill down the
block, a delicious quick-lunch place owned by one entrepreneurial
guy and his mom. She does the cooking from her own recipes, and he
handles the front counter.
To me, one of the core ideals that has made this country great is
that almost anyone can say “Hey, I want to build pools”
and be able to make that happen without hugely challenging barriers to entry.
But the problem with that mind-set can clearly be seen in our other
cover story about a pool builder who’s been jailed for deceptive business practices. The
article stands as a perfect example of why a large, reputable pool
company can be a welcome addition to any region it enters.
Sadly, there are a lot of homeowners who probably don’t think
much of our industry after dealing with Thomas Hodak, the builder
we covered. But if he had been a licensee of a firm such as
California Pools (not that they ever would have of approved him),
the company would have cleaned up his messes because, as a
well-known, multiregional brand, they have a lot of skin in the
game. When strong, ethical companies gain market share, it often
forces lesser players to either get better or get out, and
that’s good for all of us.
No one knows the future of licensee business model in our industry,
but I, for one, will be watching with interest.