Tuesday, November 24, 2020

Industry Experts Acknowledge Desperate Need for Skilled Construction Labor

America is dealing with an unprecedented shortage of skilled labor. The Department of Labor reports that while there are 7.6 million unfilled jobs, only 6.5 million people were looking for work. This is the same situation in Arizona.

The industries seeing the largest talent gap are construction, health care and personal care, followed by computer and mathematical occupation. Better than average employment and a shortage of employable workers may leave the Arizona economy in a tough spot.

Career and technical education (CTE) programs may be the answer. CTE program education gives students the academic, technical and employability skills needed for workplace success.

The skills gap in construction is well known. Baby boomers are reaching retirement age, leaving a large space for younger workers to step in. In fact, according to the 2019 Wells Fargo Construction Industry Forecast, the utmost cost concern of contractors was access to qualified workers.

CLICK HERE to read the entire AZBIGMedia article

Monday, November 23, 2020

OSHA Continues Handing Out Fines for Lack of Fall Protection

Construction is still running in high gear across the country and with the shortage of even the most unskilled labor for these projects and houses, many builders and General Contractors are taking shortcuts in order to get the job done.

But fear not, OSHA is still out there searching for the causes of accidents on the jobsite and handing out fines in the hundreds of thousands of dollars.

Protecting laborers from falling is one of the top construction areas that OSHA not only looks at after an accident, they are also actively looking at the builder’s Facebook and LinkedIn pages for violations blatantly posted of workers working on roofs and in trenches with total disregard to safety protocol.

Here are just a few of this year’s 3rd Quarter OSHA fines for non-compliance for fall protection. Not sure about you but I sure couldn’t take a $150,000+ fine simply because I didn’t spend 30 minutes training new hires about fall protection.

Here are just a few examples:

K & R Construction

Millersburg, Ohio

Total Proposed Fines: $217,127

Status: Violations Under Contest

In July, OSHA cited roofing contractor K & R Construction Ltd. for three serious and four willful violations, most of them related to fall protection, after inspecting one of the firm's projects in North Canton, Ohio. 

OSHA found that K & R:

  • Allowed portable ladders with side rails that extended less than 3 feet above the upper landing surface to be used without the proper safeguards.
  • Did not provide adequate fall protection for employees working at heights of 6 feet above lower levels.
  • Did not ensure that its employees use protection when exposed to eye or face hazards.
  • Failed to ensure employees used adequate head protection.
  • Did not adequately train employees about stairway and ladder hazards.
  • Failed to ensure that construction debris was kept clear from work areas, passageways and stairs.
  • Did not designate a competent person to regularly inspect the site.

Freddy Acevedo

Dundee, Florida

Total Proposed Fines: $165,788 

Status: Pending Abatement of Violations, Pending Penalty Payment

In January, according to OSHA, contractor Freddy Acevedo was working on a project in Davenport, Florida, when a building collapse killed one of his employees. Prior to the collapse, Acevedo's employee was installing roof trusses along a wall. When the trusses and wall collapsed, the employee sustained fatal injuries from the fall and from being struck by falling building materials. 

OSHA fined Acevedo with one willful and six serious violations, including failure to:

  • Initiate and maintain programs related to general safety.
  • Provide adequate head protection.
  • Ensure that each powered industrial truck operator is capable of operating the truck.
  • Protect workers from falling by providing guardrail systems, safety net systems or personal fall arrest systems.
  • Provide proper training to those employees who might be exposed to fall hazards.
  • Make sure employees safely use portable ladders to access upper landings.
  • Provide a workplace free from recognized hazards.

Jerry Turnbaugh

Dublin, Ohio

Total Proposed Fines: $148,430

Status: Pending Abatement of Violations, Pending Penalty Payment

OSHA issued five willful citations to roofing contractor Jerry Turnbaugh for failing to provide adequate fall protection on three construction sites in Pickerington, Ohio, in May and June of this year. 

Specifically, OSHA said that Turnbaugh did not:

  • Develop and maintain a safety and health program.
  • Failed to properly train employees about fall hazards.
  • Did not use fall protection systems to protect employees.
  • Failed to require and enforce the use of fall protection when employees were working at heights of more than 6 feet.

Swiss Construction

Brinkhaven, Ohio

Total Proposed Fines: $138,853

Status: Penalty Payment Plan in Place; Pending Abatement of Violations, Penalty Plan in Place

OSHA inspected two Swiss Construction project sites this summer — one in June and the other In August — and found the company had committed several infractions related to fall protection. As a result, the agency proposed total fines of $138,853. 

Swiss, according to OSHA, failed to:

  • Rig employees so that they would not fall more than 6 feet.
  • Provide a training program about recognizable hazards for employees who might be exposed to them.
  • Protect employees through the use of guardrail systems, a safety net system, a personal fall arrest system or alternative fall protection measures.
  • Initiate and maintain the necessary programs to protect the general safety and health of its employees.

Of the one repeat and three serious violation citations OSHA issued to Swiss, however, the agency deleted two of the serious citations and negotiated the total fines down to $34,005.

Thursday, November 19, 2020

An Interview with the President of Linked Equipment

Recently I found an Off-Site construction company in Arizona that does some unique things with containers.

Linked Equipment is that unique company and their President, Mark Pike, was recently interviewed by one of my newest contributors, Bobby Olander.

Here is the interview he had with Mark Pike, the Founder and President of Linked Equipment.

Mark Pike, President of Linked Equipment

Bobby Olander:  Let’s get started finding out a little about the modular building industry and how you got started in it. 

From Bussing to Buildings 

Mark Pike: I started a charter bus company in 1986 and ran it through 2009.   In 2004, we were fortunate enough to earn a contract with Fort Bliss a military base in El Paso, Texas. President Bush had just commanded bases to deploy troops for the war. We were contacted by them in 2004 and by 2009 our little 20 bus company grew to 60 buses running full time.  

The Colonel of the base didn't have the support for the fast growth the base was experiencing and contracted us to help build some modular buildings. We wanted to succeed in this endeavor so said “yes” and brought in refurbished units to serve as container restrooms, storage, offices, and living quarters.  We placed them in the field where the troops would have easy access to everything.  They were rugged as hell, went up quickly, and could serve as a temporary or permanent structure as needed.  The base was not as concerned about cost, but these were also the most cost-effective way to go as well.  We started building then and found we were good at it and enjoyed it.  That's how we got our start constructing modular buildings from ISBU containers.  

By 2010 our charter bus company had developed a lot of experience and background in modular building, especially utilizing shipping containers as the building blocks for modular facilities. In 2012, I started Linked Equipment.  We started out selling equipment because that's where my background was. We sold a lot of light towers, equipment, trucks, things of that nature when we got started.  Always on the side we were doing these modular buildings from shipping containers.  The sales from the equipment definitely helped us get the modular building business up and running.  

Eventually, the modular building business continued to grow, until we stopped selling individual equipment in favor of finished buildings.  During that period of time, we built a lot of storage containers. We also built restrooms, offices, mostly what we would consider simple builds. 

In 2015-2016, the cannabis industry started to emerge, and we were fortunate enough to get several contracts to build labs for vendors in the cannabis industry (mostly in Washington).  Once cannabis was made legal in California, business really took off.  To date we have more than 50 labs under our belt with labs in Washington, Oregon, California, Arizona, Michigan, Oklahoma, Missouri, Florida, Hawaii, and Jamaica.  We have been very fortunate that way. We have really expanded this past year.  We have gone from making a couple hundred thousand a year to being on track to close with $5 million in sales this year.  

Several Interesting Builds:

Bobby: Tell me about some of your more interesting or challenging builds over the years. 

Mark: Restrooms for a Ghost Town with no Electricity, 

There was one build where a gentleman came by our offices four years ago asking for information about off the grid restrooms.  He was considering buying a ghost town in Wickenburg, Arizona.  We talked and I didn't think too much of it until two years later when he came by again, and he said, “remember me. I actually bought the facility, and we'd like to move forward with the restroom.”  We designed the restroom as we did most of our restrooms and were finishing it up for delivery.  At this point he let us know that they had no power up there.  They were planning to bring a few generators to run the facility, but the restroom itself would have no power.  Then he asked us, “can you make this restroom work?” 

We accepted the challenge and were able to create something that was well built and could also operate without regular power.  We went with all DC, basically running off of batteries. So, we pulled in an engineer to help us with the design and were able to design the electrical panel, which was all DC (kind of similar to what you would use in an RV or boat) and we place that on the outside of the building. We ran all LED lights, and revisions to make it functional and sturdy.  

We went with tankless waterless urinals and added some pumps to feed water into two main tanks providing for the whole restaurant.  It actually worked out really well!  Then we hooked up a battery charger to the panel, and he had a row of batteries down below the panel.  

Before his events, he'd bring in a generator and put them on charge for seven to eight hours and they were ready to operate all day for visitors. 

Self-contained Restrooms for a Mining Company

We did another restroom that was all self-contained for a mining company up in Nevada.  That was a 40-foot building with 8 tanks (4 for freshwater and 4 for blackwater). They had pumps both black and fresh).  

So, they put this thing down there, way down at the bottom of the mine.  We added pumps for both fresh and blackwater tanks and ran a hose from a truck to their subterranean restroom weekly to pump in fresh water and extract the wastewater. They hooked up a generator to it, and that thing (as far as we know) is still running today. 

We love these custom builds because we could do prefab all day long. But people have these unique needs, and they need someone of our caliber to go make this happen. I mean, a DC or self-contained subterranean bathroom. I don't think most people could design, build, and deliver buildings that remain operational after years in challenging environments the way we do. Again, the industrial caliber equipment and building methods we use give us an edge.  

Oil Fields and Barges

We have shipped units everywhere.  We shipped a couple of them to an oil field.  After the workers were out in the oil fields all day, they wanted to clean up before they went home. They were able to come into the building where they each had their own lockers and could shower before going home.  We put another on a barge for the crew. Our container builds are tough making it possible to bring to bring basic comforts into harsh conditions.   

Parking Lot Stores and Restaurants in California.  

We are currently working on a fun project now for the city of Redondo Beach, California.  They have a parking lot where the city has allowed vendors to set up.  They are looking at three 20-foot converted containers to become a kitchen, a coffee shop, and a beer garden. In one building they plan to setup a self-contained kitchen (similar to the self-contained restroom that we just spoke about).  The second 20-foot container will be turned into a coffee shop. In the third 20-foot container they want a beer garden.  In the beer garden container, they will have a cold storage on one side and can serve out of the other side.   

Transitioning from Simple to Complex Builds

Bobby: After building 50 labs you must really know what you're doing!  They are highly combustible workspaces at best, but I read about them blowing up all the time! With every one of them needing to be perfect, was the learning curve back in the day difficult? I mean how do you do it perfectly starting with the first one?

Mark: Yes, there were some educational builds when we were getting started that were challenging at the time, but gave us the chops we use today.  

We looked at how hard it was going to be to make that transition from just doing storage and other simple builds to those very first labs. I mean, labs have all that safety equipment, and there need to be explosion proof everything and seemed like that would be a hell of a learning curve.  

It was a huge learning curve we had one particular job that kind of helped us hop the fence and get better at it.  We had a little 20-foot lab that had to be approved by the state of Washington. We actually had our engineers put together the plans and then got them approved by the state.  When we started the build, we had to go through subsequent inspections at each stage of the build while the building was happening.

The first inspection went fairly well. By the time, the second inspection happened, the state had changed their requirements and inspector.  The new state inspector traveled to Linked Equipment Headquarters in Phoenix, Arizona to inspect it. He basically threw the plans in the garbage and told us that the old building was not up to code. We had to start over from scratch and it was an expensive education. But at the end of the day, we learned a lot.  We pulled our electrical engineers onsite to help us for four or five months.  We wound up rebuilding the lab from start to finish and passed the more stringent inspection successfully.  After that trial by fire, our crews understood exactly what to do at every step. 50 builds later much of it seems obvious to us, but the initial learning curve for these builds is daunting and the results (if done incorrectly) can be lethal.  

There were some other important changes that we made during that time that made a big difference.  

We changed to a more specialized engineering firm that partners with construction companies throughout the United States.  They are specialized in this work and they have seen everything under the sun.  That experience is why we have them doing all of our engineering and design work.  So, it is perfect every time!  It was definitely difficult in the beginning.  

As we've gotten better, and more states are interested due to legalization.  It is moving forward across the nation, especially after this past election.  We look forward to doing more and more labs.

What Makes Linked Equipment Unique?

Bobby: Having seen other companies out there trying to do the same thing, are there other things that Linked equipment does differently or better?  I mean, certainly your experience in doing these complex builds like DC bathrooms and explosive labs, shows that you have the chops to do that where not everyone could. 

Mark: Oh, “Quality.” Quality is our differentiator.  We get calls frequently, and you know, sometimes we lose jobs because we're not the cheapest company on the block, we tend to use better materials and we don’t skip steps when it comes to safety.  For example, we use metal instead of wood, sheet rock and texture instead of panels.  When you walk into our buildings, it's like walking into a regular office that you would use in any complex. I'd like to think that our buildings are built the same, or better than, most of the commercial buildings we visit.

Bobby: Can you give me an example?

Mark: Sure, for instance, a lot of our competition is still stuck on the old-style barred HVAC systems where they are attached to the buildings. They just blow air through one area.  We've made the move to a split system in which the blowers inside the buildings are all computerized. They have sensors, and so they direct the heater or cold air to the parts of the room that need it rather than an HVAC system that just blows the air out.  I think the split systems are more efficient, they run better, I think you're going to get a longer life out of them. They're quieter and work better.  I can't think of any reason why somebody would want to go to that old style.  We would move up to these new splits now that they're available in the market and we pass that capability the customer. 

Bobby: There are a thousand things to consider (like HVAC) that go into a successful finished build.  Are you saying you put this much thought into everything? 

Mark: Of course! 

  • If we talk about sub-floors, when compared to plumbing in them, just like at your house there's no difference. I mean, we build these sub floors and put all the piping in there and insulate before we cover it up.  
  • If you look at plumbing, if you look at piping in packs, we like to use packs that are ideal for transporting the containers. It's not rigid. It's not as expensive as copper. I think they are nice things that we use in our buildings that other people wouldn’t think of. 
  • All the pecs are anchored down to each steel to buy form of building.  It's not going to go anywhere and will be there 30-40 years down the road.
  • Pretty much everything is industrial quality whether it be doors, steel studs, or tracking.  We don't use wood. 
  • We reinforced everything.  If we have anything that is wall hung whether it be a toilet, TV, a sink; those are always reinforced. We go back they're usually 2x4 and reinforced the steel studs that are packed there. That creates a lot of strength for whatever's hanging on the walls. 
  • We like to use tankless water heaters obviously; size is great importance with these containers. So, without having a big 50- or 60-gallon water heater there we use these tankless water heaters we hang them on the wall, and they don't take up any room and you know you're off to the races.
  • We use 5/8” sheetrock in fire rated buildings. 
  • If we get into a moisture area, whether it be a shower or something along those lines, we might use green board instead of sheetrock for mold.  On top of that, we put a FRP which is a plastic sheet that goes on the sheet rock, it can be wiped down, it's just, it's clean. It's easy to clean and can be used in hospitals kitchens, restrooms, so it's something we see a lot in our industrial buildings that takes a lot of extra effort, but is totally worth doing that way because of durability, usability, and a better end product for our customers.
  • In every restroom we build we do it just like you would in any industrial restroom, we use metal or plastic stalls and urinal screens, stuff of that nature. Colors can be chosen by the client. So the difference is the restroom you’d experience in a motor home compared to the standard restroom you’d experience in a commercial office complex. 
  • We use a lot of fiberglass showers, that are easier for us to install, plus they last a very long time.  You are not going to get the durability or comfort from other prefab bathrooms.  We done a lot of them for mining and military, and we have actually done lockers for gyms.  
  • In the showers you might have a row of showers and a row of lockers with a couple of benches included. They are more durable and better made because they expect more traffic and use.  Even if parts are a little more expensive this route, it is better for the new owner in the long run. 
  • We use industrial quality floors. We have static free floors have been great for the cannabis industry. Industrial rubber floors have been great in kitchens, restrooms, and stuff of that nature.
  • I think almost all of our lights anymore are LED.  
  • Our electrical panels are the same as you would use at your home or industrial building.
  • When we get into restrooms and showers, we can our attention we can put all ground-fault circuit interrupters (GFCI) through the building.  

Bobby: What's Are You Currently Working On? 

Mark: Due to easing of restrictions around backyard homes (aka ADUs) we have created a small, medium, large affordable home solution and are launching that to get information about these units in front of the right people There's a huge opportunity we believe, where next generation will be able to utilize these buildings for living quarters. And I don't think that a lot of people are concerned about sizes as much as they are about the homes or buildings working, working for them. I think that's going to be a huge opportunity for our company.  As time rolls on here, certainly something that we're working on. 

I think refrigeration units, we've just kind of played around with it a little bit but I think as we move forward, I think refrigeration is going to be a place where people are looking to store products and do it either in an explosion proof atmosphere and or just seeking certain degrees. 

  • You know, whether it be like the Pfizer medicine, I heard the other day is wants to be stored at 80 below.  
  • We've got the cannabis industry, they've made some demands on us in the past, where they'd like to see it 30 below. I know a lot of their machines that they do an extraction.  They're working down to 80 below. 

So those are some of the things that we are definitely going to be working towards and hopefully be able to offer to our plants here in the future. 

Bobby: What’s Next?

Mark: Well, another thing we are looking into is

  • Expandable/collapsible containers for easier shippingWe were talking a company in Las Vegas taking a 20’long building and making it collapsible so when they unfold it, it comes to be about 20 feet wide, ship it down the road, and unfold it. And then all of a sudden, you got a 20x 20-foot building. So those are things that are unique. And I could see in the future how, with proper engineering, you could actually compact these buildings and ship them off, and fold them up right into their full size. When you think about it, it's pretty, pretty cool that you can actually ship something that's smaller than once it gets there and expands within itself. And you know, it doesn't take any more shipping that get up there. So yeah, those are some clever ideas.  
  • We're going to be looking at bringing in outside advisors with experience in different industries that that can offer their expertise into, into our business from something that they've done. I think we're looking at bringing four people on as advisors to help us grow, make sure that the company goes in the right direction. 
  • Another thing happening right now is expansion of our facility in Phoenix, and/or buying a new facility and developing that not quite sure but those are things to get our guys the outdoors into a building where we can create some type of assembly line would be in the future.  
  • Segmenting building solutions by industry would help us have more meaningful conversations with customers in each industry in terms of their unique opportunities and challenges.  Deeper industry knowledge makes us a better vendor allowing us to see challenges and opportunities in each industry.  It means more clarification and accuracy in our messaging to each industry.  
  • We may build the same restrooms for customers in many different industries: defense, Fed, SLED, cannabis industry, healthcare, agriculture, and the rest.  The regulations and requirements for the same building may be very different across different industries.  
  • Our marketing capability to provide better information into each industry will get better and we'll be able to reach more people speaking their industry’s language and provide a more useful solution because we have the additional experience in that industry, and we took the time to learn their language and issues. 

We have buildings all up and down North America, two in Jamaica, even North Africa. We've recently done proposals for Panama, Peru. We're not restricted to any one place to sell these buildings, so there is a lot of interest. 

3D Printed Apartment Building Proof Europe is Fast Tracking Off-Site Construction

Construction has already begun in Wallenhausen, Bavaria, where the PERI Group, one of the world’s largest manufacturers and suppliers of formwork and scaffolding systems, is using COBOD’s BOD2 system to 3D print the walls of the structure. The 4,000 sq ft building will consist of five different apartments.

The news comes two months after PERI showcased the first 3D printed building in Germany, a two-floor structure, and several months after Kamp C, another COBOD customer, revealed Europe’s first 3D printed building with two floors in Belgium.

COBOD evolved out of the Building on Demand project from Denmark’s 3D Printhuset. PERI then went on to acquire a minority stake in the company, lending significant credence to the idea that additive construction was more than just hype. We have seen interest from an increasing number of established outfits, including the U.S. Army, GE, and Japanese construction leaders like Taisei and Taiheiyo Cement.

Gary Fleisher, the Modcoach, publishes Modcoach News and Modular Home Coach blogs for the modular industry professional and Modcoach Connects for construction consultants

email me at modcoach@modcoachconnects.com

Tuesday, November 17, 2020

Refilling the Dwindling Ranks of Custom Modular Home Builders is a Must

For years after the housing recession of 2008 the modular home building industry was stagnant. Then homebuilding began an upturn and houses once again began flowing off the production lines at factories across the US.

Economists, city planners, housing experts, Architects and the media began telling everyone that modular and prefab was the future of not only homebuilding but hotels, hospitals, affordable housing, ADU’s, highrise apartments and even housing for the homeless.

Then in March of 2020 COVID-19 hit the US housing market and many in the modular housing industry thought the bottom was going to fall out of market that that was finally starting real signs of life.

Guess what! Not only did the bottom not fall out, the modular industry begin eating Popeye's spinach and it's stronger today than anytime in the past decade.

Many wood based modular factories added commercial structures to their lineup and projects started sprouting up all across the US. Hotels discovered the cost and time savings of modular. Hospitals and assisted living facilities are now following their lead. Hundreds of projects are on the books for modular factories.

Modular hasn’t been this strong in quite some time. Of course there are those pesky problems that keep popping up like the skilled labor shortage, transportation restrictions and over zealous code officials but all things considered, it ain’t too bad!

However, there is one part of our industry that gets almost no attention and will not see any improvement in the near future and that is the “New to Modular” home builder.

I did a very stealth survey over the past couple of years asking factories from North to South, East to West and all points in between how many new builders they brought into their company and if they had a training program.

The results make me wonder if there will be a modular home builder anywhere in the country in 20 years.

I found only two factories that offer any training program when a builder joins them and not one that has an active “New to Modular” acquisition program. Let me make this clear. Having an advertisement asking a builder to visit your factory is NOT a recruitment program. Acquiring a builder from a competitor doesn’t count as an acquisition, it simply moves the same number of new homes around to another factory.

Asking factories how many ‘new’ builders they brought in over the past two years yielded about 4 per factory with most factories telling me that none of them are buying today. Zero for Four! Not a good statistic. Not at all!

Some factory owners told me they do not accept “New to Modular” builders simply because of that statistic and that don’t want to invest in a training program. They prefer to ‘acquire’ builders from their competitors.

A couple of factories have a training program but it revolves around how to work with the factory and who the builder should be talking with about different parts of the project. Very little or no training on how to become a successful modular home builder.

Since 2016 there have probably been less than 20 successful “New to Modular” builders joining the ranks of modular builders across the entire US. NOTE: a manufactured home dealer taking on modular homes does not count as a new builder and neither does a developer filling a community with homes or townhouses as they usually hire Project Managers familiar with modular construction.

Why aren’t people looking to become modular home builders? It’s not like becoming a site builder where you should work your way up the ladder before building your first home for a customer. No, an executive let go from a big corporation with a nice severance package really only has to know the fundamentals of construction to become successful as a modular home builder. 80% of the work is done by the modular home factory, the delivery and set crew, the excavation and foundation people and all that is left is the finish work which can be easily subbed out.

That executive probably knows marketing and possibly sales and I’m sure has taken accounting courses in college and might have had many people working under them at their last job. They know how to take charge. They like structure.

Lots of these recently laid off executives with big severance packages look to franchising to meet their needs for structure and training, neither of which is available in the modular housing industry.

Please don’t get me wrong. America’s modular housing industry is great. We produce some of the most energy and cost efficient modular homes in the world. Our degree of customization is unmatched anywhere. Our production workers are the best. Our factories are working at or near capacity trying to keep up with the new demands from the commercial side of our industry.

Our only downfall is a lack of acquisition and training to attract “New to Modular” people that don’t even know we exist when they begin looking at either changing careers or moving out of ‘site building”.  

Now let us take a look at Jim and Jane Smith, a young couple where one of them was laid off from their corporate job and they decided to look at franchising a Dairy Queen in their town. After inquiring and learning that a Berkshire Hathaway’s Dairy Queen (same people that own Clayton Homes) was appropriate for the town, they decided to jump in.

Neither of them had ever worked in a fast food or any type of service business so this would be a totally new experience.

The first thing they learned was the franchise fee for a Dairy Queen restaurant is $25,000 to $35,000. The total estimated investment ranges from $382,000 to $1.8 million, with liquid cash available of $400,000. A 4-5% royalty fee on gross monthly receipts is paid to the company.

The next part required Jim and Jane to go through an extensive training program.

There are currently four required components to initial training:
  1. The Management Training Readiness Assessment (MTRA)
  2. SERVSAFE certification
  3. The American Dairy Queen Corporation’s training program (three phases): Phase 1, Product and Equipment Training; Phase 2, Systems & Management Training; Phase 3, People, PRIDE and Profit Training.
  4. A cake decorating and certification course

The franchise’s designated manager and two assistant managers are required attendees for the first 3 components. Only one person is required to attend a cake decorating certification course. Prior to attending the franchiser's training program, the required attendees must pass the MTRA, which is administered at a location designated by the franchiser. The MTRA measures leadership, customer service, decision-making, prioritizing and business math, and may be modified by the franchiser at any time.

The franchise’s controlling owner (as defined in the franchise agreement) must, at the franchisee’s expense, attend all meetings the franchiser holds or sponsors in their area or region including all DMA or other marketing area meetings, and all meetings relating to new products or product preparation procedures, new DQ system programs, new operational procedures or programs, training, restaurant management, financial management, sales or sales promotion, or similar topics.

Here are the required expenses before the doors are opened for the first time:

  • Initial franchise Fee $35,000-$35,000
  • ALTA Survey $0-$5,000
  • Initial Training Fees and Costs $1,125-$11,825
  • Travel And Living Expenses for Training Programs $23,000-$38,500
  • Building Construction and Leasehold Improvements $550,000-$900,000
  • Construction Consultation Services $0-$7,500
  • Building Plans, Design Intent Plans and Architectural Seal $15,000-$45,000
  • Equipment (Including Signs and Point-of-Sale Systems) $390,000-$530,000
  • Training Inventory $5,000-$15,700
  • Opening Inventory $8,300-$38,900
  • Utility Deposits, Business Licenses and Government Charges $4,000-$17,000
  • Attorney's Fees $1,000-$8,000
  • Additional Funds (3 Months) $51,000-$198,000

ESTIMATED TOTAL $1,083,525-$1,850,425

But Here Is The REAL Bottom Line:

The average Dairy Queen Franchisee makes $70,000 a year!

Here is a better alternative!

Now let’s look at what Jim and Jane could have made if they had chosen to go with a modular home factory that offered a training program.

The average small builder makes $86,000 a year.

If Jim and Jane had invested $50,000 for training and assistance on marketing, selling and building their first modular home, they would have made an average of $16,000 more without all the hassle, fees and red tape of being a Franchisee of a major company like Dairy Queen, 7-11, Taco Bell or Jiify Lube.

Why doesn’t this happen in our industry? Until recently there hasn't been any way for someone, especially people without a lot of construction knowledge to enter the world of building modular houses. No path, no school, no training...nothing.

This morning I was able to sit down with Ken Semler, the owner of Impresa Modular Franchise and talked about the barriers our industry has put up to impede young people, retired executives, Realtors, Vets and many others from getting into the modular home building business.

I was absolutely blown away with what he and his franchise team have put together to help new franchise open and operate a successful new home business.

If being part of the great modular housing industry intrigues you and you don't know where to turn to for help, please take a few minutes to explore Impresa Modular Franchise.

The modular housing industry needs you!

Gary Fleisher, the Modcoach, publishes Modcoach News and Modular Home Coach blogs for the modular industry professional and Modcoach Connects for construction consultants

email me at modcoach@modcoachconnects.com

Sunday, November 15, 2020

British Modular Housing Market Suffers 20% Virus Hit

The productivity of modular housebuilding has been reduced during the pandemic, with reductions in contractor output much like those seen in conventional construction, according to a new report from analysts at AMA Research.

The firm has forecast that overall output among panelised modular building contractors will have fallen 20 per cent below 2019 levels by the end of this year. It added that the total market for this type of offsite construction was worth £753m in 2019, but that the impact of the virus meant the overall market value will drop 15 per cent to £636m in 2020.

However, the report also forecast that all types of offsite construction are likely to return to full output more quickly than conventional sites, arguing that factory settings are better suited to safety measures such as social distancing. It forecast that the panelized modular market would return to growth in 2021 and surpass £700m in value again in 2022.

CLICK HERE to read the entire Construction News article

Friday, November 13, 2020

Modular Construction Industry Needs to Answer These Urgent Wake-Up Calls!

With demand for all types of modular construction from single family residences to huge affordable housing projects, it looks like all sunshine and rainbows for everyone involved.

However all those good things happening today are already seeing urgent wake-up calls and red flags popping up and everyone is so busy trying to meet the current demand they aren't reacting to the warnings as they should.

I have been in the construction industry for over 35 years and writing my blogs for the last 14. In all those years I’ve seen many ups and downs in construction with scores of businesses forced to close shop one and reopen again when the next upturn happened. It is simply the nature of construction.

But this current situation is a cyclical bubble that isn’t going to burst but rather slowly implode from recent outside pressure that must be stopped by the very industry it’s hurting.

The total realization that it's time to “Wake-Up and Answer the Damn Phone” came just a short time ago when I received an email from a large East Coast modular home builder putting into words exactly what I knew our industry needed to hear.

His email clearly outlines the problems just one modular home builder is having with the industry in general. Here’s just part of his email:

Modular is just not quicker any longer. Time frame to get quotes, black lines aka sales drawings and forget about sealed plans. Cost of modular is through the roof. Takes 3 to 6 months to get a permit in my state. I cannot get a permit in October and be told my factory that they are sold out till March. Clients won't wait and can't. 

The backlog at these plants is nuts. Surcharges are out of control. I received a quote last month from a factory that the surcharge on the order actually exceeded the cost of the entire lumber drop as quoted stick built. Pardon the expression but truck and "f" is what this industry has come to. 

There is zero customer service and actual service on product is non existent. I was exclusively modular for decades and we are moving our business in another direction. We will not turn our back on the industry as there is a need for modular in our marketplace but we will no longer push people to modular construction. We have started to rebrand ourselves. It's quite sad that this industry has pushed a modular builder to stick framing. This is exactly why the industry has minimal success converting site built guys to modular. I wish I made the move sooner.

Looking back on articles I have written in just the past year I discovered that I missed a lot of opportunities to make the industry’s red flags a priority. That ends with this article!

I am going to begin pointing out the problem areas modular construction is facing and surprisingly very few are actually caused by the industry. A couple of big ones maybe, but most of the problems are being stuffed down the modular industry’s throat by outside forces bent on either trying to help or wanting to see us fail.

Soon I will be writing more detailed articles about the following Wake-Up Calls and Red Flags:

  • Rising labor costs and lack of skilled laborers for production is becoming harder to overlook.
  • The huge influx of investment money pouring into new modular projects and factories by investors who have little or no knowledge of modular construction’s unique business model.
  • New modular factories being built by developers who are relying more on West Coast Techies with idealistic goals than actual veterans that already know the industry.
  • Rising costs hurt all construction but it’s especially painful for the modular industry.
  • Delivering those modules to the job site in a necessity that is in need of government deregulation. 
  • Every day someone wants the modular industry to upgrade the way we build homes regardless of cost or proven results. 
  • Personal industry networking conferences have been replaced by impersonal Zoom meetings and on-line videos.
  • Modular factories built exclusively for large projects can quickly lose their momentum and fail if even one of those large projects scheduled to go to the line cancels, delays delivery or worse, runs out of money while the project is in production and there is nothing else ready to go into production.

Add in rising material costs and delayed product deliveries to the factory, service problems, a dwindling builder base, lack of training for new builders, lack of professional set crews, etc, and you will soon wonder why the modular construction industry still fights for survival.

The answer has always been, is now and will continue to be into the future, “Modular Construction is the Best Way to Build” but we need to get honest with ourselves and begin working together as an industry should and begin actually answering those wake-up calls.

There are only two national modular associations working to address some of these red flags, MBI for commercial modular and MHBA for residential modular. If you haven’t joined the one that fits your business model, what the hell is holding you back? You need to get into survival mode now.

Modcoach Note to the Industry:

If you would like to comment on any of the topics above, email me at modcoach@gmail.com or modcoach@modcoachconnects.com. I will use your thoughts as part of the appropriate article but will NOT mention your name or business!

Gary Fleisher, the Modcoach, publishes Modcoach News and Modular Home Coach blogs for the modular industry professional.