Neighborly
Neighborly is an American holding company headquartered in Waco, Texas, that serves as the world's largest franchisor of home services brands, operating more than 30 franchises focused on repairing, maintaining, and enhancing residential and commercial properties through specialized services such as plumbing, HVAC, electrical work, appliance repair, cleaning, landscaping, and restoration.[1][2] Founded in 1981 as the Dwyer Group by Don Dwyer Sr., the company initially centered on service-based franchising and expanded through acquisitions and organic growth into a multi-brand platform supporting nearly 5,500 independently owned franchises that collectively serve over 14 million customers annually across North America and parts of Europe.[1][3] Rebranded as Neighborly in 2017 to emphasize its role as a consumer-facing network connecting clients with vetted local experts, it has been backed by successive private equity investors including Riverside Company, TZP Capital Partners, Harvest Partners, and KKR, enabling scaled operations in a market exceeding $300 billion.[3][4] Neighborly's brands, including Mr. Rooter Plumbing, Molly Maid, and Aire Serv, have earned consistent recognition in Entrepreneur magazine's Franchise 500 rankings, with all 19 North American brands listed in 2025 and several securing top category positions based on metrics like unit growth and financial stability.[2] The company's model prioritizes franchisee support through training, marketing, and operational systems, fostering entrepreneurship in essential services while addressing homeowner needs for reliable, localized expertise.[5]History
Founding as Dwyer Group (1981–2000)
The Dwyer Group originated in 1981 when Don Dwyer Sr. launched Rainbow International, a franchise system focused on carpet dyeing, cleaning, and restoration services, headquartered in Waco, Texas.[6] Dwyer, leveraging prior entrepreneurial experience including early ventures in sales and motivation, sought to build a replicable model for home service franchising that emphasized operational standardization to mitigate risks inherent in skilled-trade businesses.[7] Initial capital was derived from personal resources and business acumen rather than large external funding, reflecting the bootstrapped nature common to early franchise pioneers amid tight credit markets following the Federal Reserve's anti-inflation measures in the late 1970s and early 1980s.[8] Throughout the 1980s, operations centered exclusively on the Rainbow International brand, with efforts directed toward recruiting and supporting franchisees in a sector vulnerable to economic cycles, as discretionary home maintenance spending declined during the 1981–1982 recession.[9] Successes included steady network growth through multi-unit ownership models, where select franchisees operated multiple territories to achieve economies of scale in marketing and supply chains, demonstrating the viability of franchising for capital-constrained entrepreneurs in fragmented local markets.[10] Challenges arose from inconsistent service quality across independent operators and fluctuating demand tied to housing market slowdowns, prompting empirical refinements in selection criteria and performance metrics to prioritize operators with verifiable trade skills.[11] A pivotal development was the creation of proprietary franchisee training protocols in the mid-1980s, which standardized techniques for restoration processes and business operations to foster reliability and scalability despite macroeconomic volatility, including high interest rates that deterred small-business borrowing.[6] These systems, delivered through in-person workshops and manuals, emphasized hands-on skill certification and financial controls, contributing to retention rates and unit-level profitability. By the early 1990s, this foundation enabled the first international expansion, with the sale of a master license for Rainbow International in Germany in 1992, adapting U.S.-centric models to European regulatory and cultural contexts.[12] The organization formalized as The Dwyer Group in 1993, solidifying its identity as a multi-brand incubator while sustaining growth to become one of the largest home service franchisors by 2000, with hundreds of units operational.[11][9]Expansion and Private Equity Involvement (2001–2016)
In November 2003, The Riverside Company, a private equity firm, acquired The Dwyer Group, taking the franchisor private in a transaction valued at approximately $50 million and enabling accelerated expansion through targeted acquisitions and operational enhancements.[13][14] Under Riverside's majority ownership from 2003 to 2010, Dwyer professionalized its management structure, invested in franchisee support systems, and pursued add-on acquisitions to broaden its portfolio of home service brands, which initially included six franchises focused on plumbing, electrical, and restoration services.[15] This period marked a shift from organic growth to a more aggressive scaling strategy, leveraging private equity capital to fund marketing, technology upgrades, and territorial expansions that increased the franchise network's footprint across North America.[16] By 2010, when Riverside sold Dwyer to TZP Group LLC, the company's franchisees and company-operated units generated nearly $800 million in annual system-wide revenues, reflecting compounded growth driven by the low-overhead franchising model that minimized corporate fixed costs while incentivizing owner-operators to expand locally.[17] Under TZP's ownership from 2010 to 2014, Dwyer continued independent expansion without Riverside's direct involvement, adding brands and territories through organic franchise sales and selective acquisitions, which further diversified services into areas like appliance repair and glass services, while maintaining resilience amid economic fluctuations due to the model's emphasis on recurring, essential home maintenance demands.[18] Riverside re-acquired majority ownership in August 2014, at a time when system-wide revenues approached $1 billion, providing renewed capital for bolt-on deals that propelled brand count toward 20 by the mid-2010s.[19] Key acquisitions during this second Riverside tenure included Five Star Painting in January 2015 and Service Brands International in June 2015, the latter adding Molly Maid (residential cleaning), Mr. Handyman (home repair), and ProTect Painters to the portfolio with $283 million in combined system-wide sales from 417 locations.[20][21] These moves, supported by equity infusions, drove system-wide sales beyond $1 billion by the end of 2015, underscoring the efficacy of serial acquisitions in scaling a franchise platform with inherently scalable, service-based operations that distribute overhead to independent operators.[22] The period's growth was empirically tied to private equity's role in facilitating 10+ add-ons overall, enhancing cash flow efficiency and market penetration without proportional increases in central infrastructure costs.[23]Rebranding to Neighborly and Further Growth (2017–2020)
In March 2017, Dwyer Group launched the Neighborly online platform as a centralized hub to connect consumers with its portfolio of home service franchise brands, including Aire Serv for HVAC services.[24] This initiative aimed to streamline customer access to local providers across categories like plumbing, electrical, and cleaning, fostering greater visibility and cross-referral opportunities among franchises.[25] On September 20, 2018, Dwyer Group formally rebranded its corporate identity to Neighborly, effective immediately, to encapsulate the "neighborly" ethos of reliable, community-oriented service delivery.[26][27] The change positioned Neighborly as a cohesive umbrella organization for its expanding array of specialized brands, emphasizing integrated digital platforms to enhance consumer convenience and franchisee collaboration in a competitive market increasingly influenced by online service aggregators.[26] Complementing the rebrand, Neighborly accelerated expansion through targeted acquisitions, notably acquiring Real Property Management on February 27, 2018, which integrated over 300 property management locations and marked the 11th such deal in 42 months.[28][29] This move diversified the portfolio into residential property oversight, alongside the 2018 addition of Mosquito Joe for pest control, contributing to a unified network that supported franchisees with shared digital marketing and operational tools.[30] By late 2018, these efforts had solidified Neighborly's structure for broader market penetration, with the Neighborly platform providing franchisees enhanced online lead generation and booking capabilities to maintain relevance against digital disruptors.[26] Pre-2020 growth positioned Neighborly for scaled operations, with the rebranded entity's focus on brand interoperability laying groundwork for international franchising potential through standardized support systems and expanded service categories.[31] The company's network approached 4,000 locations by this period, driven by acquisition synergies and platform-driven efficiencies that promoted cohesive expansion without diluting individual brand identities.[29]Acquisition by KKR and Post-2021 Developments
In July 2021, global investment firm KKR agreed to acquire Neighborly from previous owner Harvest Partners in a transaction that closed in the third quarter of that year, marking a shift to new private equity backing from KKR's North American fund.[32] The deal emerged from a competitive bidding process and provided Neighborly with substantial capital to fuel technological enhancements, such as digital platforms for franchise operations, and to pursue strategic mergers and acquisitions aimed at expanding its brand portfolio and market reach.[33][32] Under KKR's ownership, Neighborly pivoted to accelerate recovery from COVID-19 disruptions, leveraging its classification of many services—like plumbing and electrical work—as essential to maintain operational continuity through implemented safety protocols and adapted marketing efforts that supported franchisees amid lockdowns.[34] These measures contributed to heightened franchise interest, evidenced by the company surpassing 5,000 franchise units by early 2022, a milestone reflecting robust post-pandemic demand for home service opportunities.[35] By 2025, developments emphasized technological integration, including a October partnership with Rilla to deploy AI-driven coaching tools for field technicians in brands like plumbing and HVAC services, which analyzed over 375,000 conversations and boosted sales performance for more than 2,000 professionals across the network.[36] This initiative aligned with KKR's initial rationale for investment, focusing on real-time insights and efficiency gains to enhance service delivery and franchisee competitiveness in a recovering market.[37]Business Model and Operations
Franchising Structure
Neighborly's franchising structure centers on an initial franchise fee that grants owners the right to operate under one of its brands, including access to proprietary training, operational systems, and initial support. These fees range from $60,000 to $200,000, varying by brand and territory size, with total startup investments encompassing equipment, inventory, marketing, and working capital often falling within a similar broad spectrum.[38] This upfront payment secures a legally binding agreement outlining operational guidelines, intellectual property usage, and financial obligations, typically spanning 10 to 20 years with renewal options subject to performance criteria.[39] Ongoing economic terms include royalty fees, calculated as a percentage of gross revenues and paid monthly, which fund continuous franchisor support such as updated training, supply chain access, and brand development. Franchisees also contribute to a national advertising fund, typically 1-2% of revenues, to support collective marketing efforts for lead generation and brand visibility.[38] These fees, combined with ad contributions, total around 6-10% of revenues in practice for home services franchises, enabling scalability while tying costs directly to performance.[40] Territory protections form a core operational safeguard, assigning exclusive geographic areas to minimize intra-brand competition and allowing franchisees to focus on local market penetration without overlap from other units. Multi-unit incentives encourage expansion, offering economies of scale through potentially reduced per-unit fees, shared overhead, and larger territory awards for proven operators, which lowers relative costs and accelerates growth.[39] Contracts emphasize compliance with standardized procedures to maintain brand consistency, with provisions for termination or transfer under specific conditions like breach or sale approval. The model's viability for owners hinges on recurring revenue streams, particularly from subscription-based maintenance plans and service contracts in categories like cleaning and lawn care, which generate predictable cash flow by addressing ongoing homeowner needs such as preventive upkeep.[41] This structure contrasts with one-off transactional models, providing stability amid economic fluctuations through repeat business and long-term customer retention, though actual ROI timelines depend on factors like location, management, and market demand, with industry benchmarks for home services suggesting payback periods of 2-5 years for efficient operators based on median unit volumes exceeding $500,000 annually.[42] Public disclosures in franchise agreements highlight the potential for positive returns via these mechanisms, without guaranteed averages due to variability across units.[38]Brand Portfolio and Service Categories
Neighborly maintains a portfolio of 19 North American franchise brands specializing in home services, encompassing essential maintenance, repair, and improvement sectors as of 2025.[43] This structure spans plumbing, HVAC, electrical, cleaning, landscaping, and property management, enabling risk mitigation through diversification—such as balancing year-round demand services like plumbing against seasonal ones like lawn care.[44] The brands collectively operate more than 5,500 locations, predominantly in the United States with significant presence in Canada.[45] Key categories include:- Plumbing: Mr. Rooter, offering drain cleaning and pipe repair services with over 40 years of operation.[43]
- HVAC: Aire Serv, providing heating, ventilation, and air conditioning installation and maintenance.[43]
- Electrical: Mr. Electric, the largest electrical franchise in the U.S. and Canada, handling wiring and lighting solutions.[43]
- Cleaning and Maintenance: Molly Maid for residential cleaning; Dryer Vent Wizard for vent cleaning; Window Genie for window washing.[43]
- Appliance Repair: Mr. Appliance, the only national U.S. franchise focused on major appliance fixes.[43]
- Handyman and General Services: Mr. Handyman for home repairs and assembly.[43]
- Lawn and Pest Control: Lawn Pride (acquired in August 2022), The Grounds Guys for landscaping, and Mosquito Joe for pest management.[46][43]
- Specialized Repair: Glass Doctor for glass services; Precision Garage Door Service for doors; ShelfGenie for custom storage.[43]
- Restoration and Removal: Rainbow Restoration for water and fire damage; Junk King for debris hauling.[43]
- Property and Inspection: Real Property Management for rental oversight; HouseMaster for home inspections.[43]
- Painting: Five Star Painting for interior and exterior coatings.[43]