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American Hose Pro (AHP) named “Best Franchise Alternative” by FranBest.Com

The following is an excerpt of an interview between Sean Kelly, a longtime proponent of alternatives to franchising, and Jim Lager, the pioneer of “Fairchising.”

SK: Congratulations on American Hose Pro being named FranBest Best Franchise Alternative for 2024!

In the past four decades, you achieved widespread recognition and considerable success as a franchisee of multiple national and international brands. With all the success you’ve enjoyed in franchising, why did you decide to offer American Hose Pro distributorships as an alternative to franchising?

JL: Thanks for the kind words. As you know, there are many paths to growing a business. In my case, I would not be a successful business owner if not for the lessons, the discipline and the respect for systems and training I received as a franchise owner in multiple franchise systems.

After serving overseas in the Army and receiving my business degree on the GI Bill, I still had no idea what I was going to do for my career. I took a sales position with a multi-billion dollar international tool company – having no firsthand knowledge of tools, franchising or running a small business. I excelled and was quickly offered the opportunity to become one of the company’s early franchisees. That provided the foundation for my growth as a top performing franchise owners of that and another international franchise brand.

SK: As a top franchisee performer of two different brands, you obviously paid your franchisors millions of dollars in franchise fees & royalties throughout the years. After developing and refining the successful prototype of American Hose Pro in the Dallas market, weren’t you tempted to just start selling franchises of the concept? Wouldn’t it be nice to be on the receiving end of those weekly bank transfers?

JL: Ha… you’re right. It would be nice. And as I developed and built up Texas Hose Pro as the dominant hydraulic service company in the Dallas market, it was always my plan to use it as the prototype, the foundation, that would enable me to empower others who, like me, had the potential to build their own successful businesses. I always had the potential within me to build successful businesses… and I did thanks to getting the right tools, guidance and opportunity from that first franchise company. I’ve always had the desire to provide the tools for success to those I meet who have that same potential.

But when I refined Texas Hose Pro to the point where I knew it could be replicated and become the dominant service provider in other markets nationwide, my decades as a franchisee led me to pioneer an alternative model to franchising that I call “Fairchising.”

One thing you quickly learn as a franchisee is that you can’t OWN a franchise. In fact, it sometimes feels like the franchise, and the franchisor, owns you. As a franchisee, you build the name recognition, the customer base and the goodwill in your local territory. But you don’t own the business name. You don’t own the logo or the website URL. And you don’t have the freedom to make key decisions, such as when or to whom to sell the business you built.

As a franchisee, you take all the risk and liabilities, and you receive a portion of the cash flow. When your agreement term ends, you may own equipment and inventory, but not the business.

I wanted to offer entrepreneurs a chance to build their own businesses… businesses they control and that they truly own.

SK: So American Hose Pro distributors operate under their own names? And build their own brands in their local markets?

JL: That’s right. They benefit from the credibility and recognition of being associated with the national American Hose Pro brand, but they own their business name, their website URL and the goodwill they’ve earned by serving their customers diligently and professionally. The reputation they build in their local market is a valuable asset that should grow in value. With a franchise, that goodwill belongs to the franchisor alone.

SK: So is it fair to say you’ve created the franchise-like structure you wish you’d had as a franchisee?

JL: Exactly. The American Hose Pro “Fairchise” provides all the elements one would expect from an excellent franchise program, like established systems with clear documentation. Training and support from top experts and technicians. Access to the highest quality hoses and fittings at exclusive, negotiated prices. And ongoing support and continuous improvements.

Unlike franchises, our distributors have the freedom to leave the system at any time… as they surely will if we stop providing value and service. That’s the way it should be. Franchisees, on the other hand, are held captive in contracts lasting 5, 10 or even 20 years. Imagine how bad service would be if you, as a customer, were not free to buy from a competitor if a seller stopped delivering what was promised. We see our Fairchisees as our valued customers, just as they must continue to provide value their hose customers if they wish to succeed.

SK: Most franchisors market their opportunities as “no experience necessary.” Their franchisee “requirements” tend to emphasize financial qualifications over personal qualities. Since you’re providing more autonomy and freedom of decision-making, are you looking for different qualities in prospective distributors?

JL: Absolutely. The American Hose Pro distributor program is geared for professionals who are independently minded, have experience and understanding of sales and business, and don’t need lots of hand-holding. They don’t need to have specific experience in the hose or hydraulics fields. They don’t need to be mechanics, technicians or engineers – God knows I’m none of the above. But they need to be able to hire and grow a team of hose pros, and provide a diverse group of clients in their area with responsive and diligent service.

Basically, we’re looking for personable, ambitious and sales-oriented leaders who can, with the right tools and guidance, develop a successful service organization in their market.

The tools, the product line and the ongoing expert guidance? That’s what American Hose Pro provides.