What's a fair price to pay a roofing company to work under their license/company (out of state storm)

Hey guys just looking for some thoughts on this. I am a Chicago-land roofer that specializes in storm restoration work locally. We have never chased a storm before, we have always had a storm to work in IL the past 5 years. I am interested in going to AZ to work a storm this winter. I had planned on setting up my own shop, however it will take to long to get the proper licensing to make it worth it. So what I am proposing to do is bring down about 6 of my top storm restoration sales reps and work under a different shop. We would run our own shop out there and not need a thing from the company other than working under their name/license. If they have enough crews then we would just use their crews, and if they didn't I have crews that would come down and work under them for our jobs. So basically we would be running our company within their company and just paying them to be able to work under their name. I am planning on doing somewhere in the ballpark of 350 shingle roofing jobs (20-30 squares) or around $2,500,000 give or take. I was thinking something like $200 per roof or 3% of our total sales would be fair. Any more than that and it would most likely cut too much into our profit and probably not make it worth all the work in doing it vs. just staying here and lining up work for the spring. What do you guys think? Does this seem like a fair offer? Too much or Too little? I appreciate any input.

Thanks Cowboyroofer for the great response. I am working with a local company, we are just all employees but it's still working kind of like I planned where I am still running the show with my team. I didn't want to risk getting busted with how hard the ROC is there. Damage is crazy, but we have had some trouble getting things really popping. Hopefully after the 1st things will pick up. Thanks again for the responses guys. Hey Cowboy if you want to keep in touch you can hit me up at Josephjohnward@gmail.com, maybe we can help each other out.

The bus left for Glendale a few weeks ago. It a mess. I didn't get deployed on this one. B) :) :) B) Deep Down In Florida Where The Sun Shines Damn Near Every Day

Sounds huge, ciak how come your not there with the bus?

Well I just got back from spending 3 weeks in Phoenix and they have done a wonderful job of closing all the loopholes stormchasers try to get around. I would venture to say that AZ is harder than FL. You CANNOT work under someone elses license, it is a 2 degree felony to the owner and the other contractor. There is no way to get around this. There is no 1099 in AZ, salesman have to be incorporated to be 1099 but then they would need their own license and insurance and w/c or W-2 and covered by w/c. Crews have to be e-verified and legal as hell under the same guise as the salesmen, incorporate and have your own license and such or go on the clock. The only caveat to this that I can see is the roofing crews have it made, they will pay 50 a sq. between all your guys on the crew at what ever rate AND THE CONTRACTOR HAS TO PAY THE TAXES ON THE 50 A SQ. because you can only 1099 another corporation not an individual.

influencer I can tell you this about AZ and the storms that hit there, Its bad, real real bad. 400-600 hits a square, multi-trade damage(which roofers can only do roofing and GC can do all repairs and shake and shingles but cannot do any flat, bur, spf or coatings) and 80% of the a/cs on the roof will have to be replaced. A/c fins so beaten that the WHOLE thing looks like its wrapped in aluminum foil and cannot be combed. Every trade is licensed there from the painter to the floorguy and they have it set up that this cannot do that and vice versa. We have already turned in our k42 license and are waiting on the license number.

If anyone goes to phoenix go straight. I know of 3 storm chasers that are already under investigation in Glendale and Phoenix and the state will prosecute, for christ sakes your talking Sheriff Joe Arpaio. There is probably 100-150 square miles of damage(yes I said 100-150 sq.miles) of heavily populated residential and commercial work. SPF is very popular there and misused alot. The damage is in glendale, chandler, mesa, gilbert, scottsdale, tempe, phoenix and avondale. the hail wasnt big(1.5 - 1.75) but it was hard as granite. I have seen some big storms and some bad storms but this takes the cake so far. Looking forward to it.

I have been offered this same type of deal a couple times. I always turn them down and say good luck.

Do know a local contractor who did decide to sit back and make money while an outside company basicly ran his company. They are a large national company doing only insurance work and they happened to have the same name as him! He was paid a couple hundred bucks per roof and all was well until the Winter set in. The phone rang off the hook with unhappy home owners with roof leaks. The best thing the outside "contractor" would do was send up his repair crew in the Spring. Reports were he made about $80,000 the year of the storm and then next Spring made another $80,000 selling his name to them. He had worked 20 years making his name reputable and it was gone in less than one year. He now goes under a new name.

Had a friend do this during the '04 storms here. He knew the guy from Ohio so it wasn't a "stranger" thing. Personally I wouldn't dream of doing it without a six figure escrow account set up to insure everything works out. I don't know about AZ contractor licensing laws but down here in FL (if you con someone) they'll put you in an orange jump suit and you'll see yourself on local TV while they cart you off to the can........JMO. Take my advice and just get the license yourself. BTW, go BEARS! (I'm from IL too)

JET

Joe email me. I have recently been involved in a deal with similar circumstances. It can work if setup correctly.

what you are proposing sounds good from YOUR perspective- but I wouldn't come within a hundred miles of that deal. june 8 ,2007- major hail storm in my neighborhood-within 2 hours I had phonecalls from Texas storm chasers offering essentially $100,000 for a similar arrangement. I didn't bite- because I have to LIVE with these customers after the storm work is over

another local,successfull, and well respected company DID bite- by september the owner had 6-8 law suits against him- last year he died of a heart attack( he was younger than me!) As a practical matter-why would a successfull local contractor-assist you in coming into his area, going into competition with him, potentially damaging his name,and potentially leaving him holding the bag-liability wise-after you are back in Chicago? stephen

Well it really depends OldSchool, we can offer a 1 or 2 year workmanship and agree to cover half the warranty work costs if necessary. On 300 basic re-roofs there really shouldn't be that much of an issue. I usually get 1 to 2 leaks per hundred roofing jobs a complete and 9 out of 10 of those are taken care of with less than a $200 expense so I don't think that would be much of a concern. We would cary all necessary insurance so liability wouldn't be too much of an issue. So really it would be $75,000 for pretty much scott free. And twill59 yes we would handle everything, we would even handle production and QC so really all we would be using them for is the ability to work since it takes 10-12 weeks to get the license completed in AZ it would kill too much of the time otherwise we would open up our own office thru our company. It's the damn license lag time that is killing me.