Latest / Franchise Conversations with Fexingo: Buying, Running, and Scaling Franchise Businesses / How Franchisees Use Utility Bill Audits to Lower Costs
Transcript
- Lucas: So Luna, you know how we're always talking about the big levers — labor, rent, food cost. But there's this one line item that almost every franchisee pays every single month, and hardly anyone actually looks at it. Luna: You mean the electric bill? I feel like that's just something you pay and forget, right? Lucas: Exactly. And that's the thing — the utility bill is one of the few expenses where a simple audit can uncover real, immediate savings. I'm talking about finding errors that go back months, sometimes years. And unlike renegotiating a lease or cutting staff hours, you don't have to change anything about how you run the business. Luna: Okay, so what are we actually looking for? I mean, I glance at my bill, but I don't know what I'm supposed to see. Lucas: So here's the thing. Utility bills are generated by complex billing systems, and they're prone to mistakes. A franchisee I spoke with — she runs three sandwich shops in Ohio — she found a demand charge on her electric bill that was way too high. The utility had been applying a commercial rate meant for a much larger facility, and it had been going on for over a year. She ended up getting a credit for about four thousand dollars. Luna: Four thousand dollars for doing what, exactly? Just reading the bill? Lucas: Reading it, and then questioning it. She had a friend who worked in energy consulting, and they showed her how to read the rate schedule on the back of the bill. She saw that her rate code didn't match her store's usage pattern. So she called the utility, asked for a rate review, and they reclassified her. It took a couple of months, but the credit came through. Luna: That's wild. And it's the kind of thing that if you're a multi-unit operator, that four thousand per location adds up quickly. Lucas: Absolutely. And it's not just electricity. Water bills, gas bills, even sewer charges — they all have their own quirks. The problem is, most franchisees don't even know where to start. That's why we're dedicating this whole episode to it. Luna: Before we get into the weeds, I have to say — these conversations we have, they're only possible because listeners like you support the show. We keep it ad-free, and that's a choice. If you've ever gotten a tip that paid for itself, you can help us keep doing this by buying us a coffee at buy me a coffee dot com slash fexingo. It's a small gesture, but it genuinely keeps the lights on. Lucas: Thanks for that, Luna. And honestly, it's fitting that we talk about utility bills and then ask for support to keep the show going — they're both about being smart with resources. So, back to the audit. Lucas: The first thing you want to do is gather twelve months of bills for each location. That gives you a baseline for seasonal patterns. Then you look for anomalies — a sudden spike in usage that doesn't match your business activity, like a new piece of equipment that should have reduced usage, not increased it. Luna: So you're looking for both billing errors and operational issues, right? Like, maybe a water leak or a thermostat set wrong. Lucas: Right. A lot of times, the utility bill is the first place you find out about a leaky toilet or an HVAC system that's running inefficiently. But the audit also involves checking the rate structure. Are you on the right rate class? Are there any riders or surcharges you can opt out of? Some utilities have economic development rates or green energy options that might not be the best for your bottom line. Luna: I remember reading about a franchisee who found out they were being charged for a fire suppression system they didn't even have. That's a water bill line item that was just sitting there for years. Lucas: That's a perfect example. Those are called 'tariff line items' and they can be obscure. That's why you need to understand what every charge on your bill actually is. And you can do that by calling your utility's business customer service line. They're actually pretty helpful if you ask the right questions. Luna: But for a franchisee who's already stretched thin, is this something you can do in a weekend, or do you need to hire someone? Lucas: You can start yourself. Spend an hour going through your bills line by line. If you see something you don't understand, Google the tariff or call the utility. If you find a discrepancy, you can file a dispute. But for a thorough audit, especially if you have multiple locations, it might be worth hiring a specialist. There are firms that work on contingency — they take a percentage of the savings they find. So they only get paid if you save money. Luna: That's a good model. But what about the timing? Is there a statute of limitations on utility overcharges? Lucas: It varies by state and utility. Some allow you to go back three years, others only twelve months. That's why it's better to catch it sooner rather than later. And some utilities are more cooperative than others. But the key is to document everything — keep your bills, note the dates of your calls, and get everything in writing. Luna: I've also heard that you can sometimes negotiate a lower rate just by asking. Is that true? Lucas: Sometimes. If you're in a deregulated energy market, you can shop around for a better supply rate. But even in regulated markets, there might be different rate options for commercial customers. You can ask the utility if they have a rate that better fits your load profile. For example, if you can shift some of your energy usage to off-peak hours, you might qualify for a time of use rate that saves you money. Luna: So it's not just about finding errors, it's about being proactive with your rate structure. Lucas: Exactly. And that's where the real savings are. I talked to another franchisee, this time in the fitness space, who had a 24-hour gym. They switched to a time of use rate and moved their laundry and equipment charging to off-peak hours. They saved about fifteen percent on their electricity bill every month. That's a significant win for a business where margins are thin. Luna: And that's without changing any of the services they offer to members. It's purely operational. Lucas: Right. And the beauty is, once you've done the audit, you can set up a system to monitor your bills going forward. You can compare usage month over month and flag any anomalies. Some utilities even offer online dashboards that let you track your consumption in real time. That can help you catch issues early, like a piece of equipment that's running when it shouldn't be. Luna: Let's talk about the franchise system for a second. Do franchisees have any support from the franchisor in this area? They often provide preferred vendors, right? Lucas: Some do. Certain franchisors have negotiated master agreements with energy consultants or utility auditing firms. And that's a resource worth checking. But a lot of franchisees don't use them because they don't know they exist. It's worth asking your franchisor if they have any preferred providers for utility management. Luna: So it's a mix of do it yourself and leveraging the system. What's the one piece of advice you'd give to a franchisee who wants to start this process tomorrow? Lucas: Start by pulling up your most recent electric bill and look at the 'rate schedule' or 'rate class' section. If you don't understand what it means, call the utility and ask. Just that one step could uncover something. And if you're a multi-unit operator, do it for one store first, perfect the process, then roll it out to the others. Luna: That's smart. It's easy to get overwhelmed, but starting with one bill is manageable. Lucas: And the potential payoff is real. We've seen franchises recover anywhere from a few hundred to tens of thousands of dollars in overcharges. Plus the ongoing savings from being on the right rate. It's one of the few things in business where the effort is low and the return can be immediate. Luna: It's like finding money you didn't know you had. And in a franchise business, every dollar saved goes straight to the bottom line. Lucas: Exactly. So if you've been ignoring your utility bills, consider this your nudge to take a closer look. It might just be the easiest money you'll make all year.