Question-and-Answer Session
Operator
(Operator Instructions). The first question comes from the line of Jim Barrett, CL King & Associates. Please proceed.
Jim Barrett - CL King & Associates
Good morning, everyone. Kevin, can you talk about California and what sort of plumbing trends you're seeing in that marketplace relative to the total U.S.?
Kevin McNamara
Jim, I'll put it this way. California is -- we don't have many operations in California, just a couple. That's where our major franchise, our multi-source franchisees have their locations. We have a couple. We are getting reports from them that their call volume is down substantially, and their sales are down substantially. But it doesn't really have much effect on us. But as far as they have alluded to, the demand shortfall with Roto-Rooter is in the Southeast. It is something we followed pretty carefully, is a review of our bottom ten units. And of the bottom ten units, about six of them are in Florida.
So it's a double whammy of -- the fact that there is no new construction for houses, it forces all plumbers into repair plumbing and drain cleaning. And it makes commercial jobs very tough, makes it very difficult to get large jobs in that type of a market, because you get bids and you get some of the plumbing outfits making bids just on -- no profit margin, just to keep everyone busy.
But the answer your question, generally speaking, is California has very little effect on our business. Reports that we are getting are that things are tough in California. But again, given the fact that we don't have company operations, we just have really one pretty good size operation in California, so that does doesn't have much effect on us.
Jim Barrett - CL King & Associates
Would you expect acquisitions of franchisees likely to increase if this economic downturn continues?
Kevin McNamara
I'll put it this way. The answer to your question is yes, and we are getting more inquiries, we're having negotiations. As we mentioned in the past, it seems it's not so much going to be tied to the economics. It's tied to the fact that most of our significant franchisees are second generation franchise holders who are nearing retirement. And given that there's likely to be substantial changes in capital gains tax rate, and or estate taxes depending on how the election goes, that seems to be more of a factor than does the current economic condition. Although no question about it, this type of situation reminds people that trees don't grow to heaven with regard to some of these businesses.
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