Is Chick-fil-A entering home services… and what does that mean for contractors?
At first glance, it sounds like a joke — but it’s real. A Chick-fil-A–backed venture has launched a home service brand focused on handyman work, and it raises a much bigger question:
Who’s coming for the home service industry next?
In this episode, John Wilson is joined by Jack Carr (CEO of Rapid HVAC) to break down what this move actually signals — from venture capital entering the trades to the long-term impact of consolidation.
They also unpack a core issue most operators misunderstand: why handyman businesses are incredibly hard to scale, despite looking simple on the surface.
From scope creep and pricing pressure to labor challenges and customer expectations, this conversation gets into the realities behind “easy” service models — and where the real opportunities are.
In this episode, we discuss:
- Why Chick-fil-A’s move into home services isn’t as crazy as it sounds
- The hidden challenges of running and scaling a handyman business
- How “small jobs” turn into complex operations
- Why the word “handyman” can hurt your pricing power
- The rise of venture capital and institutional buyers in home services
- What consolidation means for contractors over the next decade
- How distribution (Home Depot, Costco, etc.) could reshape the industry
If you’re building, buying, or scaling a home service business — this episode will give you a clearer view of where the industry is heading next.
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Host: John Wilson https://x.com/WilsonCompanies
Guest: Jack Carr (Rapid HVAC) https://x.com/thehvacjack
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John Wilson, CEO of Wilson Companies
Jack Carr, CEO of Rapid HVAC
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Chick-fil-A is entering home services and they're focusing on home maintenance and handyman services. Ugh, too funny. If I ever got bored and did handyman again, I would limit it to like 10 or 15 things. Yeah, that scope creep was the problem. Definitely issues unless they're able to really box in what exactly they're doing.
The word handyman is a devalued word. Yep. How many more institutional buyers are the move going to end up moving into this direction? So the first wave was like the COVID I. The next one is ai. The third one is venture capital comes into home service. So to be able to change that in the next few years would be like, I think the big uphill battle for them.
Definitely. I think that it might be weird in the next 10 years. Yeah. But in the next four or five, like
Welcome back to owned and Operated. I'm your host, John Wilson. I run a plumbing, HVAC, and electric business in Ohio and Indiana. And for fun, I run a podcast where we talk about the home service industry and how to grow businesses inside of it. Today I'm rejoined by my good friend Jack Carr. Jack Carr is the CEO of Rapid down in Nashville, Tennessee.
What's going on? And we're talking, uh, dude, we're, we're talking. We're talking Chick-fil-A today. I. Jack Carr. I run a hvac, plumbing and electrical company in Nashville, Tennessee. Yeah. Significantly smaller than John's, but still, I don't think significant. I don't think significant. Significant significantly is like apex to both of us.
Typical, uh, we're just a couple. We're just a couple. He's a couple of guys trying to make it running. Just a couple services, couple produced a couple of plumbers. Uh, so today we're talking, uh, something kind of odd. Chick-fil-A is entering home services. I thought this was a joke when someone sent this to me.
I actually thought this was a joke when I was handed this prep paperwork. I was like, what? Yeah. I was like, uh, not, not April Fools yet. Is this like an internal joke from like the industry? What's going on? Yeah. No real. Yeah, this is real. It's already started. Okay. Like where? Uh, Atlanta. Atlanta Hot Atlanta.
Is it already launched or launching? Yeah. Oh my God. Okay. Alright, so, so, okay. Let's talk about, let's talk about it. Okay. So Chick-fil-A, I feel like I'm delivering news how now? Ronco. Good morning, San Diego. Good. It's me, Ron Burgundy. Alright, so Chick-fil-A has launched a home service brand, or is it Chick-fil-A or is it No.
So Chick-fil-A owns, uh, red Wagon Ventures. Okay. Red Wagon Ventures is an a venture arm of. Chick, the Chick-fil-A operator, so I don't think it's Chick-fil-A launching. So a venture arm of the people who own Chick-fil-A launch a home service. Correct. This is literally back to our last episode, so still super weird from the sense of like, why is a venture arm doing this?
It's the venture. I don't, well venture. That's a good question. Yeah. I mean, so this literally was our last episode. Yeah. Where we were talking about, hey, I thi, so the first wave was like the COVID kind and everyone's looking for businesses that are essential and safe from COVID. So multiple spiked. The next one is ai.
Everyone's looking for businesses that are safe from that, and like my theory was, the third one is venture capital comes into home service and to, to build like. If Uber's a technology company, then so am I. Right? Yeah. And uh, okay, so Red Wagon Ventures a VC arm. Chick-fil-A has launched a home service brand.
So I don't think it's of Chick-fil-A. I could be wrong here. Okay. I think it's of the own, the owners own both, so like, I don't, I don't Classic rich guy story. Yeah. I mean it's, it's like I just don't want to, I just don't wanna come off as like, Hey, this is Chick-fil-A being the main entity. Yeah. Yeah. And then Red Wagon Ventures, and then what's the Chick-fil-A?
My pleasure. Or something like that. Y that's what they say. Yeah. Okay. Okay. Yeah. Which is funny. I've actually never been to a Chick-fil-A in my life, but, but the interesting part is like the way that they've. So first off, I don't wanna write this off as a joke, just because like, I remember the start of Chick-fil-A and Chick-fil-A was written off as a joke.
Like, you can't sell chick chicken sandwiches at this price with this menu. Like, I don't, nobody thought it gonna work. Don't, I mean, I think that like what's the, what's their face? The, uh, handyman ace. Like, yeah, ACE has roughly done this now, I think. I don't know how big their, how big is Ace Hardware's home service arm?
Because, because they've begun consolidating. Mm-hmm. I think it's kind of a big platform. It is. They've bought, they paid quite a few multiples. I mean, that, that's public and like they're. Actively paying for businesses and platforms across the nation. That's really interesting. So, so me, no, I, I take this seriously.
I mean, it makes sense. You're approaching it with a ton of funding, but like, ACE makes sense because Right. If Home Depot, ACE makes Total Sense, did the same thing like Home Depot subs out its Yeah. HVAC work. Yeah. Two vendors. But Ace was like, okay, you need this. You come into our store, you say you need this.
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Slash owned, you'll get a free seven day trial plus 20% off your first six months. Okay. Alright. So Ace Hardware's 2024. Most recent data is $126 million of revenue. So, so I'm assuming it went more million ebitda? Yeah. I'm assuming they did more in, um, in, uh, 2025. Mm-hmm. Because they've been really inquisitive.
Yeah. I know they have a big situation going on in, um, Dayton, Cincinnati area. Yeah. But yeah, so no, to, to me, I take this seriously. I think that it makes sense. I think that, uh, venture is finding its way into home service. There is that one guy, and I don't remember his name, but I think the name of the fund is like Pipe drive or Pipe Dream, or, yeah, yeah, yeah.
Something. And he, and that is a venture be like he used VC money to, with this thesis, Hey, I'm gonna go create a tech enabled. Plumbing company, which like the, the joke is, yeah, no shit. We all are. It was, it was the next door guy. Yeah, but like we're, we're all tech, like Yeah. All of us exclusively run on technology now.
Like, it's not like this is 2010 and, uh, so like all he did was probably like put ServiceTitan into place, you know? Yeah. Hey, we're vc. Hey. Yeah, we got data now, but hey, you can, multiples of revenue instead of ebitda. What I find interesting about this though is this, this actually, the, the, the placement which makes this interesting for me is I feel like the.
What's forgotten a lot about the home service industry is that we are service, we're a service company. Uh, I like to draw parallels to like the hospitality industry. Sure. And so that's what they did at Chick-fil-A. Right. They, they said, Hey, we're gonna charge a premium price, but we're gonna provide a premium service with great hospitality.
Chick-fil-A is a premium price. Yeah. They're definitely, at least they used to be a premium price. I don't know, with all this inflation, if they've increased to match premium pricing. Okay. But like they originally were, they're filling up your water cups for you. They're saying, my pleasure. Like the, the premium status that they're providing was there.
Interesting. Um, and so coming into the home service industry, like that same hospitality industry. Uh, aspect or wrap Yeah. Is gonna be interesting to see how they change the market. 'cause historically it's been pushed by like best practices groups, like, here's how you do these things and these processes.
But moving forward, are they going to defer from like traditional best practices and come up with their own? Um, 'cause like no one else at any McDonald's or Wendy's says, my pleasure. Like that's a specifically Yeah. Uh, Chick-fil-A thing. Okay. So inter it's gonna be interesting, man. I'm, I'm really pumped for it.
I think so too. Uh, 'cause I think that the market has the ability to do it. It's just, um, the, my downside's gonna be different, but, uh, it's, let's see. Yeah. Okay. Alright. So it's called a crew, which, I mean, I feel like that's. Pulling from Chick-fil-A, a crew Chick-fil-A. Okay. Oh, I mean, I feel like that's like them being like, yeah, we're the same.
Yeah, I, I guess that's how I'm reading that. So, and they're focusing on home maintenance and handyman services. So not really plumbing, hvac, but like maybe a little bit of plumbing handyman tends to like touch a, you know, change some outlets, maybe replace a toilet. Yeah. They're launching in metro Atlanta first.
Any reason like, is Atlanta Chick-fil-A's headquarters or, yes. Yes it is. Apparently John says, yes it is. Yeah. So the things they offer, they offer drywall, patching, leaks and clogs. Fixed trim and wood repair, fence and deck repair, tv, mounting fixtures, installs home. Yep. Smart home setup, furniture, assembly and pressure washing.
A crews targeting. I like this sentence. So this is actually, okay, this is kind of funny. I have a funny story about this. A crews targeting small home service jobs that most companies ignore. Yeah. Did, did I ever tell you that I built a handyman business? I think you did. No, no. So in 2019, I had, like, this sentence cracks me up because this is the exact same sentence that I used as my thesis.
So I, I built, um, I, I had like a bunch of different names for it. I was gonna call it like Handy or whatever, but like, somebody bought it, so, I dunno. But, uh, I, I ended up, it was just like Wilson Home Repair and, um. It was, uh, kind of surprising numbers off the rip. Mm-hmm. And I, and I did it on the back of Wilson, so we just like told people like, Hey, we have a handyman division now.
Yeah. Like, do you, do you want something done? And, uh, I don't even know if we did LSA, maybe we did a little bit of pc. Like, I don't, I don't really think we did much. Um, but it did like 15, 20 grand in the first month. And leak back in 2019. So that's like pretty good. Yeah. And uh, we did I wanna say 300 or three 50 or something like that in, in the first 12 months, which again.
Felt pretty good. Like Wilson was only like a three some million dollar operation. So yeah, that, that was a kind of a meaningful part of what we were doing. And it was the same thesis like, Hey, can we fix drywall? Can we do tile repair? Yeah. Can we do some fencing? Random bullshit? Can we fix some decks? And uh, it did work.
Yeah, it worked. And like I bet it would work way better. I bet if we did it today, it would explode because we know how to drive leads way better. Mm-hmm. But we ended up shutting it down a year in. And I'm curious how AC Crew solves for this problem because, uh, we ended up shutting it down a year in, 'cause the problem that we, uh, found was it, it's very like Handyman's general as hell.
Yep. And, um, they get into everything. Mm-hmm. Like, they'll get into toilet repairs, they'll be asked about. Can you side my house? Like they will, they will have to do anything. Can you? Bathroom model. Yeah. And it was really challenging to uh, to do that well. Yeah. And um, like the talent pool was kind of tough, like.
The, and I talked to mm-hmm. I, I made friends with a bunch of people that ran Mr. Handyman franchises and I would ask him, and like a big franchise for Mr. Handyman. There's one in, uh, south Bend, and he was like four or $5 million and that was like, holy shit. He's like one of the biggest in the space. And um, he had like three tile guys.
Three drywall guys. Yep. So it was kind of hard to start and maybe like, maybe they'll get past that. 'cause it's funded differently than I was funded, uh, where I only had two guys. But they, they were able to. They had like specific people to do specific tasks, and that was our biggest challenge. Uh, and ultimately why we shut it down is, hey, this worked.
It was profitable. It was a 50% gross profit handyman business. Like we did well with it. Uh, the challenge that we had was. It's really hard to scale on the back of like all these very hyper specialist things. And what happens if there's a callback on tile, you know, what happens if there's a callback on drywall?
And how do you hire an expert in each one of those things? Do you remember our conversation about me trying to buy a handyman business? No, I don't. So three years ago we ran into the same thing. You actually, yeah. Or two years. And you told me this because we, we found a 1.5 million top line handyman business.
I think it was like 400 SD or something like that. Okay. Yeah. Um. And that was it. It was like they had two guys who did siding and wood and carpentry. Totally. One guy. And my thesis at the time was, Hey, if they don't have hvac, 'cause like it's extremely specialized. So we mix handyman with HVAC and like now we, oh, was this in Nashville?
Mm-hmm. Oh, okay. So this would've been like an add-on? It would've been an add-on. Oh yeah. The problem that we ran into with it, and the specific issue was that the reason that they were able to grow so big wasn't that they were doing lead gen. The issue that they were, or the, the reason that they were able to get so big was that they were working with property management companies and we didn't wanna become an hvac.
Property management group. Yeah. Um, but yeah, it, it was interesting the amount of labor they had and the different specialties of each person. Yeah. And then the amount of subs that they brought in to be able to handle kind of the auxiliary work. Well, well, you end up, it's a, you end up, up having to build market, uh, construction business.
Yeah. And so we started with the same idea that that sentence starts with, which like, Hey, we're gonna be like the honey do list. We're gonna do a bunch of random things. Mm-hmm. Like, I remember our f. In the first week or something, one of the first jobs that we did was we hung, we hung picture frames. Yep.
And it was like a $2,000 job of hanging picture frames. And that was one of the first jobs we did. And I was like, holy shit. All money. Yeah. Yeah. And it's, I mean, I think it was like fancy frames and like, you know, it was deserving of a contractor. Yeah. But talk about margin, I mean like, oh yeah, it's time.
Oh, and I think that might, it was either the first or like Yeah, second Jo. And that was very memorable. Um, but we wanted it to be small jobs, but the, the more we sort of like got into it, the more we kept doing mm-hmm. Bathroom models like it, it became a construction business, which I think like if that's what you're signing up for, that's great.
Honestly, for Wilson today, that would probably be a very profitable arm. 'cause we have restoration, so we could do the build back. Mm-hmm. We have plumbing, hvac, and electric, so we could do a lot of it. I think's fine. Yeah. It's so messy. Yeah. So messy. Then the line is messy. The line of like where kinda specialty falls?
Yeah, like the box of where does, where does TV mounting turn or Yeah. Where does TV mounting turn into? Oh, also I'm doing low voltage wiring. Electrical. Totally. And where does leak and clog fix turn into? Hey, now I'm doing full blow. Blown plumbing. Yep. And so those, those lines are really difficult and I, there's a easy way to get outta that box really quickly and then shoot yourself in the foot.
Yeah. Um, that being said, again, they have a lot of, if they're able to staff up with a tile guy, a good carpenter, um, some good just overall handyman that are able to do odds and ends, some light electrical knowledge on the team, like there's a way that you could build the team pretty quickly. Um, I think you could hit most of the house.
Yeah. What there's, what their, their business model here, this is kind of interesting. I have a few friends that have tried to build this, um, and it's like a managed home. So that's the idea. So like, yeah, I don't have a ton of time and I have more money than time, so I'm going to go hire this, uh, firm that I pay $5,000 a year and they just deal with all my shit and 400 bucks a month.
Like you've. Figure it the fuck out. Like if something's broken, go fix it. Charge me if there's more, I guess. Um, I don't personally have that, but honestly, the more I talk about it, the more I'm like, yeah, that would be sick. Uh, but I have a friend in Chicago that built this. Yeah. Um, I have, I've just, over the years I've talked to people on Twitter that have done this and it was like an app base, you know.
Home maintenance. Yeah. Subscription. Because there, there's other versions like in Tahoe where I've seen this as well, where they, it's essentially a house manager. Yeah. And so it's less about a handyman side, it's more of a house manager. Yes. Who just handles the subs internally. Yeah. And you pay the fee.
Um, I don't think that sounds what you guys are, but definitely see the value to that. Actually now I gotta remember, there's a friend here locally that has this, and he told me it was five grand a year and I don't know why I didn't hire him. 'cause that is a great deal. Like, I'm thinking about this because we're trying to find someone to do my landscaping, and this is, this is so aggravating.
We're, we are trying to, um, this is like embarrassing to admit on the podcast, but I'm already too deep. We're trying to like, upgrade our landscaping and we're trying, we're trying to, uh, do, I think we spent like $10,000 a year or something? Mm-hmm. Unlike lawn care or snow removal, like spring cleanup, fall clean.
I don't know if that's good or bad. That's currently what we spend. And we, we want to add like a flower, like, Hey, can you deal with the flower gardens? 'cause I really don't wanna weed anymore. I'm like a little tired of it. And can you like plant seasonal shit? So like, it'll probably go from like 10 to 20.
Yeah. And I'm having a really tough time. Like we've called like five landscaping companies in my mind. Like $20,000 for a fucking house a year is kind of a lot of money. Yeah. Um. We're not having, uh, like people are just like, no, like we can't add you to the route. So I'm like, okay, now I'm back to, maybe we should buy a bunch of landscaping companies because why would you say no to that?
I don't. Yeah. I don't know. It's kind of wild. Dude. There's a, there's a guy up in, um, Virginia, Ian Smith. He was on the, the Jack Acquisitions the other day. Okay. Like, that's what they do. And they have like a. High-end version and a low end version. Yeah. 'cause they buy different ones and they have a whole irrigation department.
Yeah, totally. Like it's a great business. It's a great business. It's a great business and, and the ones that we've called are literally doing exactly what we want. Yeah. At our neighbor's house. So we're just like. I'm pretty sure you could add us to your route there. There's, uh, this one company that's called Lewis Landscaping, and they own the neighborhood.
So, and there's some people, which is, this is kind of funny. There's a guy down the street from me and he's the CFO of Smucker's, which is like a food, uh, you know, peanut, they make peanut butter. Butter jelly sauce. Jelly, yeah, yeah, yeah. So, CFO of Smucker's, this is my neighbor and he. They're at his house every single day.
Yeah. And I'm like, literal. No one really can't get you into the room literal five days. And we're like, are you serious? Well, that's, that's because gimme one of those days I was talking to Ian and he's like, some of these contracts are like $200,000 a year contracts in some of these big I know states.
Yeah. I mean, and talk about labor, like locking up. For 200,000 is, yeah. I mean, this guy locks up a crew. Yeah. Every day for two hours a day. Yeah. Like, it's crazy. 8:00 AM to 10:00 AM every day. I drive by it every freaking day and I'm like, oh, you can't have me, you can't say one guy. There's no animosity here down the right.
Yeah. You know, come on, Tucker. Yeah. Um, yeah. So, but okay, so subscription, like sort of a house manager thing. Um, I, I think I'm into that, like, as a consumer, like I want that, I'm, I need stuff done. Yeah. Well, and then that, that's usually like, that's why it's called a honey Do. Honey do or honey do? Honey do list?
Yeah. Honey do list is, 'cause there's usually a list. And so like if you could send someone over there or team over the handyman, knock it out every time it was like five items on that invoice. Yeah. It was never like one thing that, so that was what the company said too, is like I was gonna buy, it's like there is a bunch of stuff on each one of these rentals that needs to be done every single time.
Yep. And it just becomes kind. A reoccurring list of items. So I can imagine that the, that the actual average ticket tends to climb. Yeah. Just because there's like, Hey, even though this is a $200 Yeah. Re touchup paint job, there's also six other jobs. Yeah. Paying pictures, move furniture, build a bed. You know, you start to add up these things really quickly and it gets to two, 3000 bucks for four hours of work.
Yeah. Yeah. Um, but I could definitely see it working and then on the back end, right. They're, they're coming in with that. Again, top of the line experience. Yeah. Customer experience, which that's where I'm gonna be really interested to see if we can pull anything for the hvac, plumbing, electrical industries.
Yeah. As they're not like, like what are they delivering different? Yeah. How are they delivering the difference? That actually makes a. The home service experience better? Yeah, because that's gonna be interesting for me. Here's an uncomfortable truth. Growth breaks the moment that your team can't keep up. I know that finding good people fast is really hard, especially in home services positions like hr, accounting, marketing call center.
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Um, the downside is like. I'm, I'm gonna, I'm gonna be very interested to see how they're right because I'm, I'm glad they went into this space as well. Not like a high trade high, I should say high licensed trade as well, because again, I think that their specialty is in, I mean, bluntly like a Chick-fil-A.
You're getting served by, again, high school kids who are getting paid decently well, who come, you know, from whatever. That's really hard to create in a home service industry, especially with licensing. Yeah, like your pool of talent is just so, it's just so restricted that trying to find like the same level of service is going to be fun.
Fun for them, but the fact that they're not doing licensed work allows that pool to be bigger. Yeah. Yeah. I think so. And I think maybe if they get more and more specific, if, uh, if it's like skew specific. 'cause I think that was our big challenge and like we've learned that over the years just in our core services.
Yeah. But hey, if, if we, if I ever got bored and did handyman again, I would limit it to like 10 or 15 things. Yeah. Because I think that scope creep was the problem. Mm-hmm. In handyman where it can be. Anything. And that messes with everything, right? Like, I mean, you've seen that with capacity planning. Yeah.
There's, yeah. Capacity's weird. Sales is weird. Pricing's weird materials is weird. Well, I just like, like, you can't like go get a great relationship with anybody 'cause it's always just gonna be Home Depot. Yep. And yeah, it, it's a, it was a, it was a strange business. And how do you provide top level service?
I'm assuming that there's some level of, hey, we are gonna be at your house at this specific time, on this specific date. When the honey to-do list. I'm gonna keep calling it that on accident. The honey do list. Yeah. Keeps growing while you're there on site. And are you able, you're gonna burn that customer or you're gonna burn the next one?
Yeah. So the definitely issues, unless they're able to really box in what exactly they're doing. Yeah. And how much of it before they get on site. Yeah. This will be, this will be really interesting. So do we know how I'm, I'm assuming they're attempting to go national. Is it, is it privately owned or is it a franchise brand?
I think it's privately owned. Huh. I mean, at least I've not seen any franchise opened up or franchise opportunities from what? Researching. So maybe the concept starts. Yeah, I mean mostly, almost all franchises start as a singular location. Yeah. Yeah. And then they, you know, company owned anyway, figure it out.
So maybe they go franchise just like Chick-fil-A. I mean, they have the model, right? Yeah. So they have the model. Okay. Um. But that being said, it'll be interesting 'cause like you said, it's an extremely fragmented market, right? Handyman mm-hmm. Is probably one of the most fragmented market because how do you classify exactly what they're doing at any point in time?
I mean, they touch everything. They touch all, they touch everything. Yeah. Or they have the ability to touch everything at least. Yeah. And then you have like the ones that are out there, Chuck and trucks, single guys. Yeah. A lot of 'em are aging just like the rest of the industry. Yeah. It's, it's good guys who, who know how to do tile and woodwork and drywall and electrical and plumbing.
They're 70, they're 60. Yeah. They've been handy manning for the last 20 years. My father-in-law does it. He just travels around handy Manning for RV sites. Yeah. Um, yeah, I have like five friends whose dad's retired and then launched a handyman business. Yeah, exactly. That's, he does it just for fun. FIEs.
Yeah, because it's like, it's very extra cash on the site. It's very easy to get like booked out. You're just like, Hey, I launched handyman business. Boom. Full. Yeah. I mean, and I, I like it for them. Like, Hey, that's great. But from a business standpoint, like running a handyman business does create like this downward pressure on pricing.
Yeah. Because again, no overhead for Yeah. Joe Schmo to go, you know. Do a bathtub, do a toilet. Yeah. We see it in, in our core business as well all the time that the handyman can drive down pricing. Um, well, the handyman pricing gets driven down. And I think that's one of the dangerous things about this, uh, industry is the word handyman is a devalued word.
Yep. And like I have friends that actively run handyman businesses and they just, they cannot get. What a contractor could get. Yeah. For the same thing. And when they ask why, it's like, well, you're a handyman. It's like, well, I'm a handyman with 20 guys. Like we are a contractor business and like we're doing full bathroom models, but like, this guy's getting a premium because he doesn't have handyman in the name.
Yeah. So I do think it's kind of a dangerous word. Yeah. Which is interesting. I mean, a does a, does their logo say that? Does this say handyman anywhere on it? I just saw I had the badge earlier. Yeah. I'm wondering if they're, they're pushing handyman services as Yeah. What they do. Or is if just home service Yeah.
Help. So do, so do you think this is the start of like, you know, you brought up Home Depot a a hardware is interesting, uh, Walmart, um, Lowe's, like. So Home Depot. So we're a retail partner with Home Depot. It's been a good experience. They used to control more of the process. Uh, and then in, I, I don't know when it changed, I wanna say it was the late 20 teens.
They, like, they used to control the equipment. It used to be their salespeople. Mm-hmm. So they actually used to have it. Yeah. And then they. Went and found partners to like deal with it all. Yeah. I mean, you've run an, they almost went the opposite way, how difficult it is. Yeah, totally. So, so, so they went the opposite way, which I think is kind of like mm-hmm.
Breaks the theory. I mean, maybe they decide to, you know, go backwards, but it doesn't feel likely. Yeah. I mean, it's a, it's a big lift to get that up and running. Hands down, huge lift. I mean, trying, well, I think a good example is Geek Squad with uh, best Buy. Best Buy, because I feel like that would tell us, Hey, on the retail business, how much does the services provide?
The interesting part will be, there's a lot of op, so it comes back to that distribution question. Like you have to have distribution first, right? Yeah. Home Depot has distribution, ACE has distribution, but what's will be interesting to see is there's lots of companies that have this distribution that are kind of hiding in the shadows.
So a great couple great examples are Costco. Costco sells. Costco could really do it. Yeah, they could do it. Yeah. One point something billion. Yeah. God, that's a lot. That's a big business. We're like 4% of Co. And then you go, what? What's the actual number? Ah, that's a billion dollar revenue company. That's a lot.
Yeah. But that's what I'm saying is like as a percentage of total revenue and maybe why Home Depot moved away. Well, and I bet margins worth it. I bet margins are higher too, because like what's the contribution? Yeah, on services probably a lot higher than product. Yeah, that's really interesting. I think also electronics have higher margins in terms of, um, electronic, electronic sales to installation process.
Yeah. Um, but yeah, man, like I, I think that that's a, there's a huge value there. I don't think that, that, so most of our, most of the big box, whether it's Ace or Home Depot or Lowe's, or uh, even like big flooring places, I don't think they tend to install too. They usually like. Sub that out. But maybe that'll change in the coming years as, and to me that does make sense.
Like if you're a flooring company, like a big flooring company. Yeah. Like there's a hu there's one here locally. It's uh, north something. I, I don't even know. Yeah. And um, it's freaking huge, like the square footage wise. And the business seems to be like large. If they added installation, they would probably double, I would imagine.
'cause it's like the. In someone's cogs, in their cost of goods. Like the flooring is only 20% probably. So the other 80% is in the services side. Yep. So it, yeah, it feels like a big opportunity. Yeah. It just, it's just a big lift, right? Like it's a big lift Home Depot to focus on doing what Home Depot Depot does best versus like, Hey, now we're running a multinational Yeah.
HVAC and plumbing company. Like that's a big, well what, what is kind of funny is Home Depot counts your revenue as their revenue. Hey, yo. So, so they uh, they sort of do still get the revenue. Yeah. So they still get the valuation from it. Yeah. Because the, they count, they get to count, um, all of your sales towards their budget for their store.
Yeah. So they're, yeah. They're still repping it. There you go. Yeah. I mean, so I mean, the big question becomes. How many more institutional buyers are move going to end up moving into this direction? Whether it's like Chick-fil-A or the Chick-fil-A owners group? Yeah. Whether it's a diversification move, whether it's trying to grab, I mean like our last distribution, what if Home Depot bought Apex billion?
What if Home Depot bought Apex? I mean's distribution? Because they actually probably could. And like that would make a ton of sense. And then, I mean, honestly, they could consolidate the craziest part of that. And I know we're just talking like wild left field things. Yeah, yeah. But. They could consolidate all that buying power straight into Home Depot.
Oh yeah. It'd be humongous. It'd be humongous. 'cause I mean, we spend a million plus a year and like we're a small company. Yeah, yeah, yeah. Like I can't imagine Apex is what, 500 million in ebitda? Yeah, in ebitda, which means that at 10% they do, uh, what was it? Five. I'm sure there're 20. I'm sure there're 20.
Let's say two and a half billion in revenue. Yeah. Two and a half billion in revenue at 25 to 30%. Yeah. So like a half a billion of parts. Ugh. Yeah. Like that's wild. To be able to increase if Home Depot buys that, you increase your internal sales by of Home Depot. Yeah. Parts and equipment by billions. Yeah.
So service experts has, um, I think it's service experts. They have. It was some egregious, it was like 500 Home Depot stores or a thousand Home Depot stores. Like they have the retail relationship for that. Mm-hmm. And, um, I mean Home, home Depot hasn't bought them yet, but that feels like, that makes sense.
'cause they're already in the system. Uh, but yeah, I mean, I feel like that makes a ton of sense. Yeah. I do think, you know, I was talking to my, this is like a 10-year-old conversation with my attorney, but it was memorable. Um, and I, I think consolidation had just started and the biggest company in our market was sold to Heartland.
And I was just like a little like, okay, what does this mean? I was really scared of private equity at the time, and I think that's even recorded on this show of just like me being like, I don't know what's gonna happen. And we know now, um, but. His, his comment was, industries that get consolidated don't get unconsolidated.
Yeah. Which to me makes sense. Yeah. Um, and like I think we can point to a lot of different examples of that, but yeah, industry, like we are a industry that's been consolidated, uh, and we're at the tail end of it. Um, and it's probably not gonna un consolidate. And I think we're just gonna see more and more big, big, uh, brands, which I think for the next couple years is probably good for the contractor.
Finitely. I think that it might be weird in the next 10 years. Yeah. But in the next four or five, like as if Home Depot bought Apex or if Lowe's bought whatever. That would probably be good because that gives everyone a public company that's a buyer. It's, it's exactly what's happened with pest control.
Yeah. Where there's Orkin and Terminex and like there's a public buyer for your business at some point. And, and I don't think it actually goes away. We've seen it, I mean, I used to work for Pepsi, Frito-Lay and like Frito-Lay still doesn't do r and d. Unless they started in the last few years. But they don't do RD.
They don't start up a new chip brand. They go to market and see who did well, who's doing well, doing what? Kind of just buy it and just buy it. Yeah. It's much easier for them to buy a drink. Yeah. Brand or buy a chip brand. Or a snack brand. Well, so, so and just, you are now part of Pepsi. So Ferguson and actually Ferguson would be an interesting one.
I wonder if they would go down market and buy up. 'cause that feels like, that makes sense too. Uh, of like, they could, you know, get high on their own supply, uh, and like go buy a big consolidator. But they grew like three to 5% last year and they did eight acquisitions. I don't know how big those acquisitions were.
I don't know if they were like absolutely tiny. Yeah. Or absolutely gigantic. But they grew three to 5% and they did eight acquisitions. So I think yeah, the, the bigger the, the bigger the end buyer. Like the more they need the incremental growth that m and a provides, because three to 3% is, is probably a good year for a, you know, $40 billion business.
That's a lot. I think the hard part becomes, um, the biggest hard part is changing consumer. Habits. Right? Like obviously, you know, consumers are changing their habits. They're not going directly to contractors. They are going through Home Depot that you are put in front of customers. But I think on the, the mass, most customers go direct to their hvac.
Yeah. Um, person they go to their plumbing person they go. And so to be able to change that in the next few years would be like, I think the big uphill battle for them is it's where the VC money comes in. How do I get Yeah, the average person to not go to Google and say, Hey, Google, how do you know, contractor near me, plumber near me, and go straight to Google and say, Hey, home Depot service department.
Yeah. So I don't think it's outta the question though, like that, that's gonna be interesting to see if more. Outta the box contractors move in to, or excuse me, outta the or who ends up buying the big 'cause? That's always been the question mark for the PE backed consolidators. Yeah. Is who's the buyer at the end?
My, I mean, wasn't, wasn't S'S buyer or, uh, one of the other buyers like Morgan Stanley though? Yeah, but that's just an investment bank in between. Them and their next buyer, like they're still an end buyer. Yeah. No, that's good. 'cause like Morgan Stanley or Goldman I think was Cila. Like they're just gonna grow it and then what are they gonna do with it?
They're gonna sell it. Or they're gonna take, take it public. Yeah, but which is still selling it. Yeah. So they're either selling it to the public or selling it to, you know, someone privately. Your Google business profiles are either printing money or they're losing it, and that's where a big reputation comes in.
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Yeah. Uh, decision based on like, you know, data. Data? Or is it just like, I mean, you and I both know plenty of operators who are just squirrely. Oh, like, you're just squirrely. Someone was like, bro, I got an idea six months ago. We're like, John, should you buy a magic, the gathering business? I, and the answer was yes.
The answer was yes. The answer was I deeply regret not it completely squirrely operators who cannot decide on one single thing. Yeah. And that's like one of the traits of any operator. Yeah. Who I've ever met is like, and even myself, I run multiple businesses. You run multiple businesses. Like we just get this itchy squirrels.
And so I just, I wish I was in the room when he is like, he's like, hey. Buddy, I got an idea. Yeah, I've idea. Here's what we're gonna, here's what we're gonna do. We live in Atlanta. I cannot get a home service guy to patch my drywall. Oh yeah. In my giant mansion. Yeah. Um, let's just make a company man. Let's do it like zero data.
Like Chick-fil-A, a crew, we, we'll call it the A crew 'cause they're the number one, a crew. And they're not gonna work Sundays. And they're gonna say, they're always gonna say, my pleasure, my pleasure. Um, like hilarious. But like that's, I honestly, there's probably some level of chance that that's exactly how it happened.
Oh yeah. Like I believe it, so it's good. It's just like, why are these guys on the internet putting way too much into this? It is just me not having service like you. I wanna go start up a landscape company 'cause I can't get landscaping at my home. That's our next vertical. Yeah. To me it's like clearly like, hey, we're intentionally constraining our growth.
Why does they hire another crew? This is crazy. Oh, too funny. Yeah. This, uh, this was hilarious. Uh, if you know why Chick-fil-A has launched into home services, comment below, I would love to hear it. That sounds hilarious. If you know of anybody else that's getting into home service, that's kinda left field also less.
No, that would be, that'd be equally funny. Yeah. Besides that like and sub like, and sub like and sub.
