Alair uses thriving, transparent Canadian construction model to build new momentum in the U.S.
Knocking down walls comes with the territory in the home building industry, but Alair is hammering through one particularly significant wall: the one that separates homeowners and contractors. The custom home building and major remodeling franchise has thrived in its native Canada thanks to a commitment to client transparency and top-notch service. Now, after growing from one to 81 units across Canada and early stage markets in the U.S.in less than four years, Alair is poised for rapid expansion throughout the U.S.
After breaking into the market nearly three years ago, Alair’s first foray into the U.S. has already been a resounding success. With the help of inaugural franchisee and regional developer David Letourneau, Alair grew to five units throughout Phoenix and Scottsdale, Arizona—sparking the beginning of development throughout the country. As Letourneau’s franchises continued to thrive, so too did Alair’s aspirations to expand. Now, the company is targeting the rest of the U.S.—one territory at a time. From commercial properties to residential homes, the number of potential Alair clients throughout the U.S. stretches into the millions.
“Twenty-fifteen marked a major shift for Alair, as we began firmly planting roots in the U.S.,” said Blair McDaniel, the founder and CEO of Alair Homes. “We saw rapid success in Arizona and it reaffirmed that we’re on the right path. Because of the solid foundation we’ve built and our commitment to client transparency and top-of-the-line service, our momentum continues increasing as our trajectory across North America grows.”
Since 2007, Alair has distinguished itself as the market leader in custom home building and renovations in Canada and in 2012 the company made the shift to a franchise model. What sets Alair apart from other companies is its focus on transparency throughout the home building and renovation process, a concept that McDaniel knows well. McDaniel spent evenings and weekends working on construction sites in high school. After graduating from The University of British Columbia, McDaniel accepted a commercial construction opportunity that sent him to the far Western edges of Canada. Though he enjoyed spending his days on construction sites, McDaniel continued to pursue his true passion.
Enamored with residential home building since he was a teen, McDaniel turned his fascination into a career by founding Alair Homes in late 2007. Despite a slowing economy, he was confident that his business would thrive.
“We were in this environment where taking risks was simply not an option,” he said. “The model that we started with was much more marketing savvy than that of the typical contractor. We focused on transparency, which is a cornerstone of our business today, and took it to an insanely high level. Our proprietary software system creates transparency for the clients and operating efficiency for the business. It’s a true win-win for our franchisees.”
The cornerstone of Alair’s client relationship model is Client Control™. Traditionally, contractors have resorted to one of two ways to conduct business: operating under a fixed price, or charging cost-plus, a pricing model with variable costs added to a flat fee. Client Control™ builds a transparent partnership between the contractor and client, allowing the homeowner to maximize involvement in the home building and renovation process, from breaking ground to turning the key.
“Shoddy workmanship, construction costs that inexplicably skyrocket, a contractor who tears up the kitchen and then disappears for weeks—these are all customer laments that have plagued other companies. But Alair is different—we go in and do a complete design-estimation process,” McDaniel said. “We work with the client well before we talk about a construction agreement. We want to define their project. We get quotes from everyone with whom we work. It’s all about being transparent with the client—before they sign a construction agreement, they know everything.”
In addition to the company’s candidness, Alair has also differentiated itself through its unique 100 percent client-funded home building model, which leaves franchisee capital untouched by construction costs and keeps business investment low. Franchisees also have Alair’s successful corporate infrastructure and marketing avenues at their disposal.
Alair’s unique business structure affords franchisees unprecedented income opportunities. Contrary to the typical contractor structure, regional developers can still generate income without completing jobs. Known as Regional Partners at Alair, these owners are able to earn royalty income from all units in their territory, a matchless opportunity in the rebuilding market. This managerial approach to home building and renovations has helped distinguish Alair as both a culturally and financially innovative construction management franchise.
With the National Association of Realtors estimating home sales in the U.S. to increase this year by nine percent and housing starts expected to grow 14 percent in 2016, Alair is now aggressively building on the country’s rebounding housing market. And so far, the brand is already thriving. In 2015, the company added regional offices in Ohio and Indiana to its growing roster. That growth helped the brand nearly double its size during 2015 to 72 total partner contractors across North America. Today, Alair is operating in seven states throughout the U.S., with imminent openings scheduled in California, Virginia, Georgia and Washington.
“Nearly 80 percent of our projected growth in the coming year is expected to happen in the United States. So far this year, , we tapped into new markets like Southwest Florida, Charleston, South Carolina, St. Louis and Charlotte, North Carolina—and all of those territories are thriving. It’s no longer a question of whether or not Alair’s model will work in the U.S. The only question that remains is where to build next.”