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 highly diversified.
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.