Here is an interesting case study of a company, which franchised mobile car wash units. It started with the humblest of beginnings indeed. I can say that with complete knowledge because this is a company I started at age 12 years old. It was not until I was nearly 32 years old that we franchised my business. This franchise was great in concept but franchisees would not follow the system enough, they deviated from the plan in most cases. The franchisees that stayed with the plan did very well, the ones who did not, did okay, but could have done better.
Since this was our first try at franchising, we made the franchise documents too lenient and therefore it was hard to enforce standards. The customers were blown away by the idea of getting their car washed anywhere at anytime by phone call or e-commerce B2C. They love us, it is better than being the Fed Ex or UPS guy. If someone has not played sports or been involved in competitive events sometime in their life; we will not sell them a franchise. We want the Olympic style attitude. Because of this the Competition hates us, but only because I am so competitive since I was involved in sports and politics myself. Also in 1991 a car wash owner tried to run me out of business by lobbying to local politicians and lodging complaints to code enforcement, EPA, and County environmental control boards. This was the new environmental age and I was learning quickly about politics and business the hard way. Most Industry leaders representing our competition are clashing with us due to our drive, electronic Blitz marketing and bright yellow HERE I AM mobile car wash trucks.
At one point I had 53 Independent contractors in 39 cities washing cars. Kind of like a mini-franchise system. It was hard work. Soon I realized I was going to have to franchise this business. So we did in 1996-97. Upgraded everything, painted trucks yellow and allowed independent contractors to transfer in. Some did, most did not. Why should they sign anything they were already making money and it was all on a hand shake. I didn't blame them.
As the franchise grew we started allowing those franchisees who bought multiple trucks to have additional areas to expand into, giving us better marketing power to sing up bigger accounts in many areas. It worked. Then came e-commerce, upgrades and we took everything we learned and kept upgrading, unfortunately soon the original franchisees did not look anything like the newer franchisees; different equipment, training, marketing, CDROMS, business plan, new web site. And we needed to divide and conquer each market sector individually. We were washing golf cart, shopping carts, wheelchairs, ski lifts, silos, buses, trucks, cars and we got into a situation were there was too much work, and a challenge to hold onto routes and consistency.
We decided to upgrade the system. Since I had always owned the trade name myself we started another company WashGuy.com to divide up the markets and franchised all our ideas to allow maximum use of all my contacts, and the associates I had gathered and their skills. Then we would franchise each brand name by itself and let all the franchisees of all the systems work together trade leads and operate in harmony washing their specialty niche. The New Car Wash Guys; www.carwashguys.com would be part of WashGuy.com, which was going to acquire the franchise Car Wash Guys International, Inc. Unfortunately Car Wash Guys International did not have the royalty stream to service the franchisees properly and grow correctly so it was closed and all the franchisees in good standing were allowed a no franchise fee entry into the new system to be fair. Those that were not near current status on royalties were terminated prior to closing.
WashGuy.com agreed to take on the burden of keeping up those franchisor requirements in the previous Car Wash Guys International agreement even though it would be a loss. It would give the new franchise system a head start with franchisee numbers and make it easier to secure group discounts on products, and entice lending institutions to go with lower rates and better terms and prevent us from ever having to use sleazy leasing companies, with exorbitant rates causing a poor ROI for team members and slower growth rate for new trucks and to add to the franchisees arsenals. I did not charge a royalty, I charge per unit, so the more trucks the more royalties to grow the franchise. The only way for me to make more is if the franchisees have so much business they need more trucks to do the work. I win only if they win. If they lose, I lose worse; indeed a great incentive to work together and communicate. I even co-authored a book in which this was my main theme; "Franchising 101" Dearborne Publications.
This was a great franchise and growing fast. Our customers are anyone one that owns a car. There are on average 1.7 cars for every man woman and child in this country and so my potential exposure to this market is 5 times that of the cable TV Industry and twice that of cellular phones. Average car wash is $10 X 50 weeks a year. So of all my markets this is the most challenging of all. It will take twenty years to conquer. What I need is a 40-60 million dollar financed competitor to go and set up the major markets with mobile car washing so I can take all those customers away with superior service and more efficient operations thus lower prices. I need this competitor to teach my future customers how to do business with me and then I will slice and dice city by city as Car Wash Guys earn our destiny.
I started washing cars because I ran out of local airports to wash at since I had a 35% market penetration at all the near by airports and needed more to wash. Plus I got my drivers license. This was when I was 16. Boy I will tell you being a franchisor is the toughest business in the World and if you want to do it, you are nuts. I work 17 hours a day 7 days a week, no days off in 15 years. I can remember one three-year period I have skipped every third night of sleep, and follow up with a ten-hour crash. You have to give up everything to be a franchisor. For many Entrepreneurs this is simply part of the game, but for most they cannot deal with it. I understand that, accept it and challenge myself since there are no market leaders of any significance in my markets. We designed and attempted to build an LPG car wash truck to help the environment and worked on an aircushions hover system with electric motor. It did not work, it seems as an entrepreneur you are always doing stuff, some works, some doesn't but you are always pushing the envelope, God Bless the entrepreneurs, I hope you enjoyed today's case study as it is a chapter of my life as well as lessons learned in franchising. Think on this.
"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.worldthinktank.net/wttbbs
Chicago limo Skokie ..Have you been searching for the perfect home-based business? I... Read More
If you're looking for start-up capital for your business, but... Read More
Fuel prices these days are quite high and they take... Read More
In this series of articles I'm going to show you... Read More
Do you own a franchised business? Over 400,000 franchised businesses... Read More
Opening a carpet cleaning business is a great way to... Read More
I only have to point to the 555 plus failed... Read More
There's no question that hard work and a little luck... Read More
Here are some useful tips on what to consider before... Read More
Take advantage of world politics today and start your own... Read More
You bet a name is important. Many small business owners... Read More
If you discovered the bottom line in your business depended... Read More
My colleague, Jane, recently lamented to me an all too... Read More
Have you ever wondered what the difference is between a... Read More
The key to organizational focus and helping those who need... Read More
Let me get right to the point. The single most... Read More
KEEPING INTEREST HIGH: Supervision is key to the success of... Read More
(Although this article is geared towards small business owners, the... Read More
Buyers want both online and local information about where to... Read More
Which questions do you need to ask to even get... Read More
Starting and managing a small business is no fun chore,... Read More
When someone owes your small business money, you certainly feel... Read More
A cherished business doctrine is that growth must be a... Read More
What is a Family Business? A family business is basically... Read More
The reason we Franchisors call it an exclusive territory is... Read More
limo O'Hare Bonfield ..Pardon my enthusiasm, but a large part of your small... Read More
Just recently, I took a break and caught "The Return... Read More
Competition in the business world is often viewed as a... Read More
You're a small business owner with a hot new product... Read More
Expanding your business requires you to take a good hard... Read More
Owning a small business in Wichita, KS might not be... Read More
With all the cabinet refacing business opportunities out there, you... Read More
Support is critical for your small business survival. You may... Read More
If you are a small business you know that you... Read More
The temporary staffing industry continues to expand, with yearly double-digit... Read More
When working from home, it is usual to find that... Read More
Increase your profit potential by identifying ? and avoiding ?... Read More
TRUTH IN THE LAWN MOWING INDUSTRYWe do not wish to... Read More
When the recent Games of the XXVIII Olympiad came to... Read More
In the 2003 Auto Laundry News Survey it was determined... Read More
Forget everything you've ever heard about the U.S. Small Business... Read More
What does buying a fat pig have to do with... Read More
I am simply amazed at the problems some of my... Read More
When it comes to cost, how much can you afford... Read More
Many physical therapists in private practice have the appearance of... Read More
The key to organizational focus and helping those who need... Read More
Many small business startups fail within the first 2 years... Read More
You've heard marketing and advertising gurus quip, "Sell the sizzle,... Read More
After over thirty years advising small business it still comes... Read More
If you're just ramping up your small business email newsletter,... Read More
Small Business |