Fort Lauderdale-based Service America closing, laying off 161 workers
Fort Lauderdale-based home warranty company Service America is shutting down after 43 years.
The decision will result in 161 layoffs and the closure of offices in Fort Lauderdale and Clearwater by Jan. 18, according to a notice filed with the Florida Department of Economic Opportunity. Positions to be eliminated at the two offices include 10 air-conditioning installers, two install helpers and a supervisor, 15 A/C technicians, 10 appliance technicians, five couriers, five “comfort consultants,” 17 customer service representatives, nine plumbers, eight universal technicians, and three dispatchers.
The company sold yearlong and multi-year warranty contracts to homeowners and businesses covering failure of major electric components, such as air-conditioning systems, water heaters, washers and dryers, stoves, garbage disposals, dishwashers, refrigerators and
plumbing systems.
In an interview Tuesday, Ken Stoll, chief operating officer, said prorated refunds are being sent to subscribers for the unused portions of their warranty terms. The company started mailing refund checks on Nov. 23 and should reach all of the company’s subscribers within three weeks, he said.
Operating only in Florida, the company had 23,000 subscribers. Most were in the tricounty region, while about 5,000 were in the Tampa, Orlando and Fort Myers areas, he said.
The company stopped scheduling new service calls on Nov. 19 but is continuing to show up for appointments made through that date, Stoll said. All operations are expected to cease by Dec. 15, he said.
Competition from national warranty companies and small, locally based companies proved insurmountable for Service America, Stoll said.
“It’s a highly competitive environment and, unfortunately, due to the overall performance of the company, [remaining in business] is no longer a good fit for us,” he said.
Service America is a member of a family of property services and management brands owned by a Canadian company, FirstService Corp. With Service America’s closure, the parent company will no longer be in the home warranty business, Stoll said.
The Canadian company acquired Service America in 2006, when the company was generating about $30 million in annual revenue and had 65,000 subscribers.
A year earlier, a group of what was then 300 employees purchased Service America from its parent, publicly traded Chemed Corp., based in Cincinnati, Ohio, according to South Florida Sun Sentinel archives.
A decade before that, Service America emerged from the merger of two dominant South Florida warranty companies, Amira Services and Encore Service Systems, following their acquisition in 1993 by Chemed Corp., which also owned the plumbing service Roto-Rooter.
Amira and Encore had more than 200,000 subscribers statewide in 1992 and employed about 375 people, published reports said.
A long-term decline in satisfaction among Service America’s customers is evident from comments on the company’s Yelp review page, where it has a cumulative rating of 1.5 out of 5 stars.
Among the 318 reviews are complaints about service call cancellations, long delays to get technicians to homes, and being unable to speak with live attendants when trying to schedule service calls.
In a critical post written in September, a subscriber complained that the company required service call fees to be paid in advance for an air-conditioner service repair, then forced the customer to wait two days for the appointment. “Ummm, what are we supposed to do without AC in summer for two days? We got another company out instead,” the post said.
Stoll said social media sites such as Yelp and Google are often disproportionately composed of negative reviews because unhappy customers are more likely to be motivated to post.
While poor ratings and reviews on the two sites can be seen as “symptoms” of problems contributing to the company’s downfall, they didn’t fully represent how customers felt about the company’s work, Stoll said, adding, “We have a lot of satisfied clients.”