How to Grow a Chem-Dry Carpet Cleaning Franchise: Q&A with Larry Boger
Larry and Tina Boger serve Milwaukee, Indiana and a big chunk of Florida
After growing up in Indiana and working for McDonald’s management in their 20s, Larry and Tina Boger decided to strike out on their own, becoming entrepreneurs. In 2002, they bought a Chem-Dry franchise in the Milwaukee area, and they have grown their operations to cover most of the metro area. Many new franchisees learn from the Chem-Dry support team how to go from one truck to two, then to five, then to 10, and the Bogers are a shining example of what’s possible for Chem-Dry franchisees.
That’s not all. In 2012, the couple partnered with their daughter and son-in-law to open a Chem-Dry franchise in Fort Wayne, Indiana. Then, in 2013, they continued their growth story by purchasing an existing Chem-Dry business that owned three licenses in Florida, and in early 2014 launching a major expansion in Florida, adding six more territories that stretch from the Atlantic to the Gulf of Mexico near the Florida Turnpike.
Their growth strategy is paying off. In just two years, their fast-growing business in Florida is generating as much revenue as their established business in Milwaukee.
Larry says that they have succeeded by embracing the additional service lines Chem-Dry is able to offer customers. Yes, they do plenty of carpet cleaning, but they also clean area rugs, clean tile and stone, and clean upholstery.
Florida, in particular, shows just how much you can accomplish by offering the additional services. Their Florida operations not only focus on the carpet cleaning available in Florida, but they have found that tile and stone rule. And with Chem-Dry’s solutions and brand, tile and stone can be an even better opportunity, Larry says.
This is his story:
What were you doing before Chem-Dry?
I was a stockbroker and Tina was working at an office. We have owned businesses off and on going back to 1982. We don’t really like taking direction from other people. We like having the ability to do things how we want to do them. We worked mostly in restaurants, and then I was a stockbroker.
How did you find out about Chem-Dry?
Back when we were in the fast food business, I was always interested in the carpet cleaning industry because it seemed like a business where you could have employees with less turnover. As opposed to selling a burger for $1, you were charging more like $100 or $150 at a time for your services. Also, cleaning was a service that had to be done again, so it wasn’t a one-time sale.
Back in the ‘80s and ‘90s, we used to see ads for Chem-Dry all the time in the back of business magazines. Steam cleaning looked like very hard work to me, but back at that time Chem-Dry had a system that was seemed to be physically easier. Then in 2002, we bought an existing Chem-Dry business.
What sets Chem-Dry apart as a business opportunity?
As far as other franchises as a whole, Chem-Dry was a good fit for us in terms of service-oriented businesses. The average ticket was a size that seemed much better than the fast food industry. Chem-Dry also had some innovations like stain removal products and faster dry times.
What sets Chem-Dry apart for customers?
It’s definitely the faster dry times. That’s the huge benefit that we can offer over other carpet cleaners. Beyond that, the products that we have are excellent by comparison to what’s available in the market.
What kind of person makes a good Chem-Dry franchisee?
You don’t need to have a background in carpets. You do need to be somebody who is oriented towards providing excellent customer service. You have to know going into the business that you’ll be dealing with people who are very concerned about their house and how you do the job while you’re in their home.
Is there a misperception about the carpet cleaning industry?
The biggest misconception is that the industry is going to die because more people have hardwood floors. It’s creating a lot of pressure in the industry, but it’s also creating more opportunities. For one, as people are moving away from carpets, they are moving to tile. Cleaning tile pays better than cleaning carpet does. (Chem-Dry franchisees can clean tile, too).
Another opportunity is that when people put hardwood in, they tend to buy area rugs to put on top of hardwood. Area rug cleaning is more knowledge-based, and it’s more profitable. People still have floor cleaning needs. Chem-Dry is trying to position itself to take advantage of those needs. As far as I can see, in the commercial market, there is no shift away from carpet. Commercial is also more profitable than residential. All of the things that people are shifting towards are also more profitable than what they are shifting away from.
How large is the opportunity for growth?
There are Chem-Dry franchisees out there that run one van and are very happy with the operation that they have. Then there are those running more than 10 vans and still growing even at that size. The ability for growth is entirely dependent upon the franchisee and the market that they start in. If you start in central Kansas where there’s only 50,000 people in a six-county area, you probably are going to have limited growth. But if you start in New York City and want to be big, then the opportunity is there.
How have you grown? What were the challenges and the benefits?
Our primary growth method has been a 50/50 mix between buying out other franchisees and own organic growth of advertising and referrals. The most successful thing we have done is Valpak. We also have an ongoing program to reward customers when they give us a referral. We also have sites online, and advertise in the newspaper and phone book.
As far as challenges, finding good help is always a big one. Once somebody has passed their initial training and you feel they can do the job, in essence you’re putting them in your truck with your equipment. You’re sending them off to take care of a customer that you acquired, and are trusting that they’re going to do what they’ve been taught.
With growth, the struggle is going from one to five. When most people have one, they are the ones doing the work. That requires very little in the way of management and supervision. At some point, you get busy enough to try to put a second van on the road. It’s unlikely that you will be able to hire two techs and have them both go out independently and manage both of them. The challenge becomes running a van and trying to supervise at the same time. That’s hard to do. It’s a matter of fighting through it.
Most franchisees probably keep cleaning too much of the carpet themselves because it’s more profitable. My advice would be that once you hire someone, give them as much work as they can handle so that it starts freeing you up away from the physical activity of cleaning. Then you have time to run the business. My other piece of advice is once you start growing, it becomes very important that you have more capacity than what you need on a daily basis. If you want to run three vans, you can’t just have three techs. You need four to run the three vans because stuff does come up. If not, you’re back to filling in and doing the things that you hired other people to do.
Tell us about your growth in Florida.
We bought the business of a Chem-Dry franchisee who was ready to retire from the business. He had three licenses and was focused on just residential carpet cleaning for his longtime customers. We saw an opportunity to serve a lot more customers by offering tile and stone cleaning, grout cleaning, and by marketing the business. It’s nice for longtime Chem-Dry owners that they can often do well just by serving their repeat customers who’ve been using them for years, but as a new guy, you’re not going to have all those years of loyalty, so it’s important to get your name out there. Earlier this year, we added six more territories, so we now serve customers all the way from the Atlantic side to the Gulf of Mexico. We’ve been growing about 25 percent year-over-year in Florida. I split my time between Milwaukee and Central Florida, overseeing the business.
Who are your main customers?
Our customer base is typically more affluent than average. Very few of our customers have a household income below $70,000 a year. We’re mostly on the residential side, about 85-90 percent.
What do you like about the business?
Tina and I have split our areas of responsibility. My area is the technicians, equipment and how everything goes that impacts what happens in customers’ houses or businesses. Her main responsibility is everything that happens back at the office, so paperwork, billing and booking. We evenly split the decisions.
What does franchise ownership allow you to do that you couldn’t do before?
I’ve been in business for myself where I had total decision making control. With franchises, you don’t have that complete control, but there are more benefits. There are people providing us with the resources that we could never come up with if we were on our own.
The best value is that Chem-Dry has grown to a point that there are extremely smart franchisees within system. Through networking, Facebook and conventions, you get a chance to communicate with them.