IQ: I'm guessing it's like British Gas. There are hundreds of one man band operations that can easily undercut them, yet they still prosper. There are those customers out there that believe and trust in brand names. Their thinking is yes the local guy is cheaper, but will there be any come backs? This company is high profile, so they won't do a poor job.
The other reason is, the local one man band may only give an estimate to cover themselves if the circuits they're altering are not up to spec. If this is the case, the customer may be thinking, well the local guy said it will be £400 if everything is ok with my electrics, but how much will he be charging me if they're not? Another £400? That will be £800! At least they know with the franchise guy it will be £600, no more and no less.
I don't know for sure, I'm only guessing. I have researched flat rate pricing for quite awhile now and I've been speaking to American electrical contractors personally. I actually like what I've been hearing, but then their thinking is totally different to ours. One thing they quote alot with flat rate and I'm inclined to agree, is that someone starting out fault finding will take a couple of hours to find the problem and fix it. Five years down the line and more experienced he will find it in 15mins and fix it in about the same time. If he is charging T&M, then he was earning more when he had less experience. Now he's experienced he's earning less, in effect he's being punished for be good at his job.
Certainly makes you think.