California contractor survives economic downturn and propels a small startup operation into a major player in manhole rehabilitation.
Horacio Franco was ready to control his own destiny. He’d worked six years in the plumbing industry and had earned his master plumber license when he decided to open H&R Plumbing & Drain Cleaning in 2004. Within a few years it grew to eight service vans with a full staff serving a 50-mile radius around the metropolitan area of Oakland and Berkeley, Calif.
Even in those early years, Franco was eager to expand the business and set himself apart from the competition.
“Basically, I wanted to make it a company where I would be able to see the results of my own business decisions,” he says. “I wanted to not only increase the services but go beyond the immediate region and secure the customer base.”
Ironically it was the financial crisis in 2008-2009 that prompted Franco to look for new services that would keep the doors open. He began checking out the various trade shows, including the Pumper & Cleaner Environmental Expo International, where he had the opportunity to chart a new course for his company.
While the plumbing operation shrunk from eight service vans to just three during this period, trenchless line replacement became a strength. H&R had been hiring subcontractors to handle pipe bursting projects, but Franco eventually purchased his own system from TRIC Tools, and that segment of the business began to grow. His crews regularly replace 4- to 6-inch lateral lines with SDR 17.
Franco also recognized the growing interest among municipalities in manhole rehabilitation. These technologies, including relining, became the target of his interest.
In 2009, while attending the Expo in Louisville, Ky., Franco purchased his 2002 Vactor, along with the equipment and materials for manhole rehabilitation from Madewell Products Corporation. His big break came when the nearby City of Richmond, with a population close to 110,000, gave him a chance to repair three manholes as a demonstration project. After an anxious six-month wait, the company secured a significant contract for a portion of the city’s manhole rehab work. They tackled the work with a Madewell trailer specifically suited for the job.
“It was a small job for Richmond, but a big job for us,” Franco says.
The quality of their work began to pay off, and in due course there were other municipal opportunities throughout the northern portion of the state. Franco says that 80 percent of the time they work as a subcontractor on these jobs and have had projects in Sacramento and Fresno, and other major cities up to 200 miles from El Sobrante. They’ve even ventured into Oregon. He estimates that 60 percent of his total business is now in manhole rehabilitation, and 65 percent of that is outside the local area.
“We are getting these jobs even though some of the cities have their own equipment, but they are calling on us for this service,” he says, adding that they have preventive maintenance contracts with some municipalities.
H&R was a subcontractor in the City of San Rafael for the Sewer Main Rehabilitation 2013 project with the Las Gallinas Valley Sanitary District. They rehabbed 42 manholes ranging in depth from 5 to 20 feet, with I&I and H2S deterioration problems. They also relined five laterals on that job.
These jobs often last as long as a month and require a crew of four to seven people. They stay in hotels and return home for the weekends. Franco says every time they go out and take on one of these jobs, they gain name recognition, which helps expand the customer base and add to the bottom line.
Working on the road also brings challenges. Equipment breakdowns are inevitable, so the crew needs to be prepared with the knowledge and necessary parts to take care of problems. “My guys can fix anything,” Franco says. “They have a sense of ownership. They own and love this equipment.”
Franco continues to create opportunities for the business through regular PowerPoint presentations he gives to municipal decision-makers. He notes that Madewell representative Steve Hallam will sometimes fly in to participate in these promotional efforts. As a very hands-on manager who spends a lot of time in the field, Franco says he might be giving a presentation one day and out repairing a manhole the next.
“Our work with these municipalities also includes repair of lift stations, clarifiers, wet-well mounted pump stations, all using products from Madewell,” he says.
In 2011, Franco purchased Perma-Liner equipment and added relining to his menu of services. Today, the company relines pipes on a daily basis. In some situations, during the course of municipal mainline inspections, H&R will provide patch repairs, but they more typically work on laterals and manholes.
Projects often begin with CCTV inspection, another critical component of their rehabilitation services. They use Aries Industries camera equipment, and also have cameras from RIDGID and Vivax-Metrotech.
“This tells us the condition of the pipe and what repair is needed,” Franco says. “Whether we suggest pipe bursting, relining or spot repair depends on what we find. It may be the pipe is not a candidate for relining. Sometimes that is not an option, but pipe bursting would be a good solution. I educate the customer about the choices, and we also work in compliance with the cities – always searching for the best approach.
“The most common sewer lines we see in the state are clay – very often cracked or crushed and with root intrusion and I&I issues. With manholes, hydrogen sulfide has been eating away at the concrete, and if they are not repaired they will simply turn into a hole in the street. This is the same problem with lift stations and other installations we service.”
While outreach to the municipalities is ongoing, Franco hasn’t neglected the immediate neighborhood and his residential and commercial customers, for whom he regularly works on lateral lines.
In most cases the property owner is responsible for the lateral line from the house to the main. Some cities don’t allow lateral relining, while pipe bursting is acceptable. For H&R, having the ability to provide both services, and to dig and replace where necessary, means they can always offer a suitable solution.
The company operates out of a half-acre site with 1,100 square feet of office and warehouse space, which provides plenty of room to park its equipment since plumbers take their service vans home at the end of each day.
The fleet also includes a 2002 Vactor on an International chassis, with a 2,500 psi/40 gpm pump, 500-gallon water tank, 3-yard debris tank and 500 feet of hose. Their pipe bursting vehicle is a 2002 Chevrolet box truck, with a 30-ton TRIC Tools system enclosed in an 8- by 10-foot Pace American trailer. Another Chevrolet box truck is loaded with Perma-Liner equipment for lining. The CCTV truck is a 2005 Dodge Sprinter outfitted with an Aries Pathfinder portable unit and software from Pipe Tech.
A 2003 Ford Super Duty truck, a 2002 Ford-650 dump truck, which hauls a Caterpillar mini-excavator, and a 1995 Ford dump truck round out the fleet.
Franco has great faith in his crew, as many have been with him for six or seven years. His wife, Alejandra, is office manager and oversees the plumbing operation, and her brother, Juan Carlos Ramirez, is one of three master plumbers. There are seven technicians who handle most of the pipe bursting, relining, jetting and televising work, but the master plumbers are also cross trained in those duties.
“My plumbers, because they are exposed to everything we offer, are able to educate the customer and explain the options available to fix a sewer line,” Franco says. “Basically they become our on-the-road sales people. In their work they see the various conditions in lines, and they know the processes. This is an important benefit for our company.”
As for himself, he says he begins each day with a laundry list of concerns on his agenda.
“It’s, ‘Who will I be calling today? For what jobs will I be preparing an estimate? Who do I need to call first?’ I am the job supervisor. I wear a lot of hats. When I talk to my guys in the field, I know what they are going through because I’ve done it myself. So yes, I am a hands-on kind of manager. There are a lot of things you deal with each day. I have to prioritize, but I can picture what my crew is doing.
“In the beginning, I was the guy out knocking on the doors, and I guess I’m still doing that in a way,” Franco says. “But I never imagined the growth we have experienced, or the importance we have seen in our local community and the other areas we have serviced. I’m very proud of the work we are equipped to do and what my employees accomplish.”
Aries Industries - 800/234-7205 - www.ariesindustries.com
Madewell Products Corp. - 800/741-8199 - www.madewell.net
Pace American - 877/475-5665 - www.paceamerican.com
Perma-Liner Industries, LLC - 866/336-2568 - www.perma-liner.com
Pipe Tech - 800/262-7817 - www.pipetech.tv
RIDGID - 800/769-7743 - www.ridgid.com
TRIC Tools, Inc. - 888/883-8742 - www.trictools.com
Vactor Manufacturing - 800/627-3171 - www.vactor.com
Vivax-Metrotech Corp. - 800/446-3392 - www.vivax-metrotech.com