American Home Shield 2009 Annual Report Download - page 9

Table of Contents
respectively. Related franchise operating expenses were 1.9%, 2.0% and 2.2% of consolidated operating expenses in 2009, 2008 and 2007, respectively. Total
franchise-related profits comprised 25.9%, 32.2% and 31.7% of consolidated operating income in 2009, 2008 and 2007, respectively. We evaluate the
performance of our franchise businesses based primarily on operating profit before corporate general and administrative expenses and amortization of
intangible assets. Franchise agreements entered into in the course of these businesses are generally for a term of five to ten years. The majority of these
franchise agreements are renewed prior to expiration. The majority of international licenses are for ten-year terms.
COMPETITION
ServiceMaster competes with many other companies in the sale of its services, franchises and products. The principal methods of competition in
ServiceMaster's businesses include quality and speed of service, name recognition and reputation, pricing and promotions, customer satisfaction, brand
awareness, professional sales forces and referrals. Competition in all of the Company's market segments is strong.
Lawn Care Services. Competition in the market segment for lawn care services comes mainly from local, independently owned firms and from
homeowners who care for their own lawns. Competition also comes from The Scotts Miracle-Gro Company, which operates on a broad geographic scale.
Landscape Maintenance Services. Competition in the market segment for commercial landscape maintenance services comes mainly from local,
independently owned firms and, to a lesser degree, from a few large companies (notably, The Brickman Group, Ltd. and ValleyCrest Landscape Companies)
operating in multiple regions and from property owners who perform their own landscaping services.
Termite and Pest Control Services. Competition in the market segment for termite and pest control services comes mainly from regional and local,
independently owned firms, from homeowners who treat their own termite and pest control problems and from Orkin, Inc., a subsidiary of Rollins, Inc., which
operates on a national basis. Ecolab Inc. competes nationally in the commercial pest control segment.
Home Service Contracts for Systems and Appliances. Competition in the market segment for home service contracts for household systems and
appliances comes mainly from regional providers of home service contracts.
Home Inspection Services. Competition in the market segment for home inspection services comes mainly from regional and local, independently
owned firms.
Residential & Commercial Disaster Restoration and Cleaning Services. Competition in the market segment for disaster restoration and cleaning
services comes mainly from local, independently owned firms and a few national professional cleaning companies such as ServPro Industries, Inc.; Paul
Davis Restoration, a subsidiary of First Serve Corporation; Belfor, a subsidiary of Belfor Europe GmbH; and BMS Cat, Inc.
Home Cleaning Services. Competition in the market segment for home cleaning services comes mainly from local, independently owned firms, from
homeowners who clean their own homes and from a few national companies such as The Maids International, Inc., Molly Maids, Inc. and The Cleaning
Authority, Inc.
Furniture Repair Services. Competition in the market segment for furniture repair services comes mainly from local, independently owned firms.
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