What do you do when you run a company but see an unmet need in a completely unrelated market? If you're Colton Paulhus, you get together with your family, start your own company, and, a year later, start the franchise.
Starting
In 2019, Paulhus was running a marketing company when he had an idea. “I saw an ad Facebook about the tiny houses being built in the country,” he says. He turned to his father Scott, a 30-year-old and BuIldINg industry veteran and asked a few questions, trying to figure out if his idea was feasible. Colton then posted his ad on Facebook for tiny houses, curious to see the response. “Within three days we had 300 interested people and I'm thinking, There is a market here.”
Soon Colton, his brother Austin and Scott were in business building tiny homes on wheels Small moored houses. But it wasn't long before the company shifted its focus from tiny homes to more regulation-friendly ADUs (Accessory Dwelling Units).
“We went back to late 2020 when the law became more favorable in the state of California for ADU use,” says Austin Paulhus, COO of Anchored. “Now we specialize in just doing ADUs because the market is so big.”
Tiny house or ADU?
There are similarities between small houses and ADUs, and most people wouldn't notice much of a difference. The difference – and therefore, the trouble – is mainly in the classification.
A tiny house is a small, often mobile dwelling that prioritizes space-saving design. They are usually under 400 square feet and can be on wheels (mobile) or a permanent foundation. Consequently, in many countries, small houses are classified as mobile homes, even when built on a permanent foundation.
An ADU is a secondary dwelling unit with its own independent living quarters (such as a kitchen, bathroom and sleeping area). They are usually located on the same property as a main residence and can come in the form of a basement apartment, apartment over a garage or, in this case, a freestanding, non-movable structure on the property.
How a municipality classifies these similar types of structures can — and should — matter a lot franchisees.
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The decision to franchise
Anchored Tiny Homes started the franchise in 2020. Three years later, the team has no regrets. “We haven't looked back,” says Colton, who is the company's CEO. “We did $16.7 million in sales our first full year and then last year we did $49 million, so we're going to grow quite significantly this year.”
There is also a unique aspect to this construction based franchise: “You don't need to have construction experience,” says Colton. “We have several franchises that have been sold and are getting ready to launch in Austin, Texas, Jacksonville, Florida, Salt Lake City, Utah, a few different places, and none of (the franchisees) have construction experience.”
Attention: Regulations may vary by municipality
Despite the widespread popularity of tiny houses and ADUs, thanks in part to shows like Little home nationsome states are friendlier — less regulated — than others, making legally owning a tiny house relatively simple.
“Most of the time, it depends on the local jurisdiction, and every city and county is different,” says Colton. “There are some states that ADUs are approved statewide.” Right now it's California, Florida, Rhode Island, Washington, Oregon, Connecticut and Vermont, all with different restrictions and clauses.
On the other side, New York always has presented a challenge to those interested in tiny house living. The state has historically banned the use of tiny mobile homes for permanent living arrangements, limiting their use to temporary or emergency circumstances. However, recent legislation has eased regulation on ADUs in the state.
Local and state regulations regarding ADUs and tiny homes are something potential franchisees should research with the help of an attorney before purchasing a franchise.
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Franchisee requirements and support
Colton says the company offers franchisees a marketing team, an appointment team and assistance with the various permits and legal issues that arise from jurisdiction to jurisdiction.
Apart from the financial commitment, there are also some qualities Small moored houses is looking for in a franchise: “The number one thing we want from a franchisee is someone who will buy the brand and then have sales skills,” says Colton. “We generate the leads; it's just a matter of the franchisee convincing them that we're the right company to do it.”
What Scott, a co-owner, looks for in a franchise is more abstract: “The 'go-get' mentality,” he says. “Ownership mentality. They do whatever it takes to get the job done and sell the units and build a business. This has to be a hands-on person; this is not a burger franchise.”
Market for ADUs and Tiny Homes
The small home market is expected to grow more than 2.5 billion dollars by 2030, marking a huge opportunity for builders. Although costs can fluctuate due to material supply and other factors, including Covid-19 and the war in Ukraine, Colton says the industry has weathered those storms well, and he's optimistic about the role that tiny houses and ADUs will play. can play in the country's housing market.
“There are somewhere between seven and 10 million homes that need to be built across the country,” says Colton. “We're not going to get there with single-family homes. So that's where we believe we come into play. There's a huge market.”