2005 Copyright Property Services North West
Limited
Why
you don't need a national franchise to do your plumbing repairs.
Most national franchise chains that carry drain clearing equipment have to buy equipment big enough to clear industrial drains (12" - 15") on the basis that they may occasionally be called on to use it. The equipment costs around £10,000. Domestic drains are rarely bigger than 4". You are paying for the larger equipment when you will never benefit from it.
National firms are VAT registered because of their size. Although the local branch or franchise may not need to be VAT registered because they do not turnover enough , they will be required to be VAT registered by their head office. Therefore you will pay VAT on their work.
Franchises have to pay their head office a royalty. These royalties are in the region of 15-27.5%. You are paying this.
This means that for a small local firm to make £50 for a job, they charge you £50. For a local franchise to make £50, they will charge you £73.44 (assuming a royalty fee of 20%).
Most national franchise chains that carry drain clearing equipment have to buy equipment big enough to clear industrial drains (12" - 15") on the basis that they may occasionally be called on to use it. The equipment costs around £10,000. Domestic drains are rarely bigger than 4". You are paying for the larger equipment when you will never benefit from it.
National firms are VAT registered because of their size. Although the local branch or franchise may not need to be VAT registered because they do not turnover enough , they will be required to be VAT registered by their head office. Therefore you will pay VAT on their work.
Franchises have to pay their head office a royalty. These royalties are in the region of 15-27.5%. You are paying this.
This means that for a small local firm to make £50 for a job, they charge you £50. For a local franchise to make £50, they will charge you £73.44 (assuming a royalty fee of 20%).