Franchising the Smart Home Industry

Franchising the Smart Home Industry

Dec 18, 2023

DENVER — Dec. 4, 2023 —  From CE Pro December 2023 Edition, by Zachary Comeau – Read the original article here

Colorado-based custom integration firm SaaviHome wants to spread the reach of its simple, but efficient business model to provide a consistent and reliable experience for customers.

Gavin Lantzy has been an entrepreneur since college when he started his own house painting company to support himself while he earned a degree.

The company was doing well, and Lantzy launched a quasi-franchise business model in which he copied the training systems’ support structure, taught classmates how to run their own house painting business, and guided them on how to market, hire painters, and run small territories of the company.

“It was wildly successful all through college and 10 years thereafter,” Lantzy says.

In doing so, he learned the ins and outs of business operations and running a successful franchise model.

“All throughout that journey was learning what a franchise was, what the business models entailed, how a partnership can work between a franchisor and franchisees, and how to make that successful,” Lantzy says.

Now, as the president and CEO of Colorado-based home technology integration firm SaaviHome, Lantzy is taking another stab at franchising his business … in an industry where previous such attempts have met little success.

Roots as a Family Business

SaaviHome is a family business — it was founded by Lantzy’s father in 2004 in the Denver area. The company was started as “sort of a Hi-Fi, two-channel, home theater company,” as he describes it. Since then, the integrator has expanded to offer a full suite of smart home solutions, including blinds and shades, security, lighting control, whole-home control, and, of course, audio/visual systems.

The elder Lantzy, Joseph, was an entrepreneur, having founded several companies, including a startup that trained people in basic computer skills for businesses at the dawn of the computing era in the 1980s. After selling that firm, he became a consultant and volunteer before founding SaaviHome.

Sadly, Joseph “Tyler” Lantzy was killed in a drunk driving accident in 2021, thrusting Gavin into taking over the company’s reins.

Joseph’s death came as the company was preparing to launch the franchise system, a rare move in the custom home technology integration industry and a way to expose the business and industry to more customers. The initiative was put on hold, until now, as the company is plowing ahead with a new franchise business model designed to give entrepreneurs entry into this unique and somewhat obscure industry.

“The last two years have really been a whirlwind,” says the younger Lantzy.

According to Lantzy, the company is seeing nearly 300% growth since 2020 from servicing the Denver region, and SaaviHome wants to continue its growth while offering others a chance to enter the market. “A lot of it has to do with living in my dad’s legacy,” Lantzy says. “He was my mentor forever … and I really have now focused the rest of my life on making him proud and doing that through growing out the family business.”

That mentorship has paid off, as SaaviHome has been flourishing, according to Lantzy, who says the company has grown 300% since 2020 due to simply running a good business on solid foundation.

Lantzy explains that the company narrows its product portfolio down to products the company is familiar with and delivers “simple package solutions” that are easier to troubleshoot.

“That systemizing the business and having our team engaged on that vision on why we’re doing what we’re doing has allowed us to be much more efficient on job sites and more effective in our sales and marketing processes,” Lantzy says. “Everything has a playbook to follow, and that allows our team to execute at a much higher level without using as much brainpower.”

As an example, Lantzy offers up the company’s inventory management and receiving processes, which in an industry that relies upon tiny components and adapters to make systems work can be extremely difficult. Then, there are the well-documented shipping and logistical issues in the industry that can derail any project.

To alleviate those issues, the company has built an internal system that allows them
to manage inventory more accurately and efficiently as soon as the warehouse receives shipments. A simple yet meticulously organized system in the warehouse makes it clear which boxes are going to which job sites. The company has replicated that model of simplicity throughout the business, including in sales, marketing, purchasing, engineering, and billing, Lantzy states. “Everyone is working together on the same projects, but is in charge of their specific responsibilities,” Lantzy says. “It’s worked out.”

What Does a Franchise Model Look Like?

Now, the company wants to open its knowledge to others in a franchise model and expand the SaaviHome brand to new areas outside of the Denver area, including Utah, Arizona, Nevada, and parts of Western Colorado.

The company is currently taking applications for franchisee candidates, with Lantzy focused on finding entrepreneurs interested in the home technology space.

“We get to play with some of the coolest toys and we get to do some of the coolest stuff on job sites versus being a drywall contractor,” Lantzy says. “There is a good segment of the population that has a passion for home technology, so here’s [a franchise opportunity] to give people the opportunity to do something they love every day.”

According to the company, the franchise program will combine the company’s expertise in the industry with its business processes, giving franchisees the tools needed to launch a successful SaaviHome business that includes five key components: corporate marketing assistance, a vendor purchasing program for increased profits, accounting services, a customer technical support center, and multiple revenue streams from projects and recurring revenue.

On the “high end,” Lantzy says the company can successfully prop up 100 franchise locations. Similar to restaurant chains, a customer’s experience with SaaviHome will be consistent across locations. Franchisees will offer the same products, services and support and experiences as their co-franchisees.

“When you walk into a McDonald’s in France or in Idaho, you’re going to get the same French fry,” Lantzy says. “That’s just not the case with the 10,000 integrator companies out there in our space.”

Franchisees will have to pay an initial investment of between $160,100 to $284,100, which is based on projections that include franchise fees, support systems and other costs to start a business.

According to Lantzy, the SaaviHome franchise program offers potential franchisees a digital-heavy corporate marketing program to help drive leads, an industry vendor program to help save costs on exclusive products, accounting services and a 24/7 customer service center with on recurring monthly revenue model.

Outside of the Mountain West region and states bordering Colorado, Lantzy next eyes Texas, Southeastern U.S. and elsewhere on the East Coast before circling back through the Midwest and eventually to the West Coast.

To help franchisees hire and train employees, the company is looking to industry groups like PrepTECH and others to provide resources to new franchise locations. Additionally, the corporate side of the business will give franchisees a recruiting playbook on how to set the right culture and values and coach them on what kind of skills to look for.

“Outside of that, we have a full-on tech training program that we’re going to teach them how to install our products, how to terminate a Cat-5 wire, how to install the speaker in the ceiling, and how to deliver our product portfolio,” Lantzy says.

In addition to hiring and recruiting, the industry struggles with marketing, as the layperson doesn’t know what an AV integrator or custom home electronics installer does. However, with big tech firms like Google and Amazon becoming more entrenched in the smart home space, awareness of the more high-end solutions that integrators provide is rising.

Bullish Outlook on Smart Home Industry

Consumer awareness of smart home solutions is increasing, Lantzy says, and research backs him up enough to support this new venture.

According to consumer technology research firm Parks Associates, 30% of U.S. homes now have at least three smart home devices, and the average home with at least one smart home device has an average of seven devices overall.

In addition, Parks Associates’ Smart Home Buyer Journey report shows that more than 40% of U.S. Internet households own a smart home device, 62% own a smart TV, and 87% subscribe to a video streaming service.

With the potential to reach thousands of new smart home-curious clients via the franchise model, Lantzy says SaaviHome can be that reliable, experienced advisor to guide homeowners on their smart home journey.

“That’s why I think we have a powerful message, because a SaaviHome franchise model can solve that consistency across many markets and solve the unknown of what solutions will work with other products across many markets,” Lantzy says. “We can be that reliable voice.”

That messaging will also be consistent across SaaviHome franchises, he notes. The smart home market is plenty big enough for 100 franchise locations, Lantzy comments, especially with new and emerging technologies coming into the space like AI, which he calls the “Fourth Industrial Revolution.”

With ChatGPT-like tools continually emerging out of Big Tech companies, AI is well established in the business world. However, it is also now spilling into the consumer space., Amazon, Google and Apple all leverage AI and voice assistants in their smart home platforms, and home automation is literally powered by AI.

“Then it comes down to, ‘What about my house?’ How do I feel safe and secure with my data, networks, and privacy and all of those different things that are really intimidating to people? Not to mention, how do I throw great parties? How can I relax and really make my home a sanctuary by having technology that I’m in charge of and control my house? We see that as a big opportunity,” Lantzy states.

The franchise program was announced in August, and the company has received “quite a bit of interest” from potential franchisees, including private equity firms and other AV companies, Lantzy says.

Some AV firms are looking to move states and become part of the SaaviHome brand rather than starting from scratch, Lantzy tells CE Pro from the company’s booth at the CEDIA Expo 2023 in September.
The announcement made in the weeks leading up to the big industry tradeshow helped generate some interest, including a “tremendous” response from the company’s manufacturer partners to help solidify the vendor program for franchisees.

Starting a franchise business is a lengthy process, with mandated holding periods and a significant amount of regulatory paperwork that will prevent the company from officially signing a franchisee until the end of 2023.

In fact, scaling up the franchise model now takes up most of Lantzy’s time.

“I am in deep discussions with many candidates at this stage identifying if they are the right fit for our culture,” he says. “It is currently my full-time job.”