KKR Owns Neighborly, Leonard Green Owns Wrench — The Institutional Capital Behind HVAC Franchising

The HVAC franchise market is not just a collection of independently owned local franchise operators. At the top of the structure sit institutional private equity firms that have bet enormous sums on the franchise model as a vehicle for residential home services consolidation. Understanding which PE firms own which franchise systems — and what their strategies are — is essential context for any HVAC business owner evaluating the competitive landscape.

The two most significant PE-backed HVAC franchise systems in 2026: Neighborly, acquired by KKR from Harvest Partners in Q1 2025, which includes Aire Serv (HVAC), Mr. Rooter (plumbing), and a dozen other home services franchise brands; and Wrench Group, backed by Leonard Green & Partners, which operates HVAC, plumbing, and electrical businesses in major US markets through a direct-ownership rather than franchise model.

KKR and Neighborly — The World's Largest Home Services Franchise

Neighborly is the world's largest home services franchise company by brand count, operating 30-plus home services brands across more than 5,000 franchise locations in the US and internationally. KKR — one of the world's largest and most prominent PE firms — acquired Neighborly from Harvest Partners in Q1 2025, committing the institutional firepower and operational expertise of a firm managing more than $600 billion in assets to the residential home services franchise thesis.

Aire Serv, Neighborly's HVAC franchise brand, was ranked number one in HVAC franchising in Entrepreneur's 2025 Franchise 500 — ahead of One Hour Heating & Air (Authority Brands/Apax Partners). With KKR's backing, Neighborly has institutional capital to accelerate Aire Serv's franchise development, support franchise owners with better technology and marketing resources, and potentially pursue adjacent acquisitions or international expansion.

• KKR's background in services investing: KKR has deep experience in residential services businesses, including its earlier CoolIT Systems investment that generated a 15x return in two years. Its Neighborly investment reflects conviction in the home services franchise model as a scalable, recurring-revenue business.

• Aire Serv's competitive position: As the #1 ranked HVAC franchise, Aire Serv has brand recognition, established training infrastructure, and a royalty-based recurring revenue model that is attractive to institutional capital seeking predictable cash flows.

• Franchise territory development: With KKR's backing, Neighborly/Aire Serv will likely accelerate franchise territory development — awarding new franchises in underserved markets and potentially converting some franchise territories to company-owned operations à la Chemed/Roto-Rooter.

KKR's acquisition of Neighborly — the world's largest home services franchise company including the #1 ranked Aire Serv HVAC franchise — from Harvest Partners in Q1 2025 placed one of the world's most prominent PE firms behind the residential HVAC franchise model, competing directly with Apax Partners-backed Authority Brands (One Hour Heating & Air) for franchise territory development and system growth.

Wrench Group and Leonard Green — Direct Ownership vs Franchise

Wrench Group, backed by Leonard Green & Partners (a Los Angeles PE firm managing approximately $50 billion in assets), takes a fundamentally different approach from the Neighborly/Aire Serv franchise model. Wrench Group owns and operates HVAC, plumbing, and electrical service businesses directly — not through franchise operators.

The direct ownership model has specific advantages and disadvantages relative to franchising:

• Advantages: Full EBITDA capture (no franchise royalty split), direct control over service quality and customer experience, ability to invest directly in technology and training without negotiating with independent franchise operators, and cleaner financial statements for capital markets purposes.

• Disadvantages: Requires deploying capital for each new location (franchise operators provide their own capital), greater operational complexity managing employed technicians across diverse geographies, and higher risk if a specific market performs poorly.

Leonard Green's backing gives Wrench the capital to pursue the direct ownership model at scale — acquiring established HVAC and home services businesses in major markets and integrating them into a technology-enabled platform. The CTC Acquisitions PE tracker places Wrench in the tier-two category alongside NearU Services, Crete United, and Authority Brands.

The Three-Way Competition in HVAC Franchising

The residential HVAC franchise market now has three well-capitalised institutional competitors:

• Neighborly/Aire Serv (KKR): The largest system by location count, #1 ranked HVAC franchise, global presence, newly equipped with KKR capital and operational resources

• Authority Brands/One Hour (Apax Partners): Growing rapidly with 246 new franchise owners in 2025, 340 new territories across 31 states, accelerating pace

• Wrench Group (Leonard Green): Direct ownership in major markets, less franchise operator dependence, higher capital intensity per location

For independent HVAC contractors evaluating their options, the institutional capital concentration in franchise systems is relevant context: the systems they might consider joining are no longer small entrepreneurial franchise operations — they are institutionally backed businesses with sophisticated financial sponsors behind them. Due diligence on the franchise system means understanding the PE firm's strategy and timeline, not just the franchise terms.

Frequently Asked Questions

Who owns Neighborly and Aire Serv?

Neighborly, the world's largest home services franchise company including the Aire Serv HVAC franchise brand, was acquired by KKR from Harvest Partners in Q1 2025. KKR manages more than $600 billion in assets globally and has experience in residential services businesses including the CoolIT Systems investment.

Who owns Wrench Group?

Wrench Group is backed by Leonard Green & Partners, a Los Angeles PE firm managing approximately $50 billion in assets. Wrench Group operates HVAC, plumbing, and electrical service businesses through direct ownership — not franchise operators — in major US markets.

What is the difference between Aire Serv and One Hour Heating & Air?

Aire Serv (Neighborly/KKR) ranked #1 in HVAC franchising in Entrepreneur's 2025 Franchise 500. One Hour Heating & Air (Authority Brands/Apax Partners) added 246 new franchise owners and 340 new territories in 2025. Both are institutionally backed franchise systems competing for franchise territory development and operator recruitment across the US.