After a Banner Year, Chem-Dry Franchise Looks Ahead to a Bright 2016
Chem-Dry’s Senior Vice President of Franchise Development Doug Smith recaps the highlights of 2015 and explains why next year will be even better
After nearly 40 years in business, Chem-Dry continues to rapidly grow in North America and around the world. In 2015, the world’s largest carpet cleaning franchise added more than 115 franchises in North America: Chem-Dry has 3,500 franchises that clean 10,000 homes a day.
In a year where so many industries struggled against the lasting effects of the Great Recession, Chem-Dry not only grew in size but in profitability. Early in 2015, we released the results of survey we conducted the year before to measure the level of profitability among our franchise owners. The survey revealed that among the 216 franchise owners who participated, the average annual revenue per franchise owner was $272,782. Of those owners, 67 franchisees met or exceeded this average.
What is the secret to Chem-Dry’s success?
For starters, Chem-Dry is a scalable business with multiple revenue streams that consistently outperforms our competitors through the employment of our best-in-class cleaning methods and products. In 2015, Chem-Dry put its reputation at stake by commissioning an independent lab to measure the effectiveness of our cleaning methods — and the results were astounding. The lab found that Chem-Dry’s hot carbonating extraction process removes an average of 98.1% of allergens from carpet and upholstery, and when our sanitizer is included, 89% of airborne bacteria. In a nation where more than 50 million people suffer from allergies, according to the American College of Allergy, Asthma and Immunology, our ability to render a home allergy-free is a huge selling point for Chem-Dry franchise owners.
In this interview, we talk to Chem-Dry’s Senior Vice President of Franchise Development Doug Smith to find out why Chem-Dry continues to grow, the commitment that Chem-Dry makes to drive value to its network of franchisees, the highlights of a tremendous 2015, and why 2016 will prove to be even better for the carpet cleaning franchise.
How many carpet cleaning franchises did Chem-Dry sell in 2015? How many more are you expecting to add to the brand in 2016?
This is the third year in a row that we’ve sold more than 100 franchises in North America. It’s a very impressive number when you think about the fact that Chem-Dry has been in business for more than 40 years. Currently, we have 2,100 franchises in the United States and Canada. We have 3,500 franchises worldwide. With so many franchises in our network, you would think that we would be relatively saturated, but that is not the case. We’re forecasting that we will grow by 11 percent in the United States and Canada in 2016. While we do have a large footprint, there are many places in North America that Chem-Dry hasn’t conquered, so to speak, and where we will do very well. The next few years are going to be big growth years as we actively target the markets where the demographics and population would allow for a profitable Chem-Dry franchise.
Why is the growth of the Chem-Dry brand both so positive and so consistent?
The initial reason people look into ownership of a Chem-Dry franchise is that we’re a very affordable franchise to get into — our minimum investment begins at $42,000, and that’s more affordable than many other franchise systems. When you dig down a bit deeper, the reason that entrepreneurs invest in Chem-Dry franchises is that they’re looking for two things: 1) a proven business model and 2) differentiation — how does Chem-Dry out-compete and outperform our competition. We offer best-in-class cleaning methods, which are green-certified, are proven to remove allergens, are far more effective and are far faster to dry than what our competitors could possibly offer. We have our equipment, which we offer to our franchisees at substantially discounted rates. We are a huge family, and — like a family — we provide ongoing support. We have a quick start team that is dedicated to getting our new franchisees up and running in 12 months. We help them with everything from building business plans, marketing strategies, finance and keeping the books. Every new franchisee is provided with a coach who holds them accountable. They have weekly meetings to ensure that our new franchisees are making the calls, making sure they’re utilizing SEO marketing strategies, and act as a sounding board. If a new franchisee is running into roadblocks, the coach can provide not only their personal insight but also insight from the 50 other franchisees they are coaching. Essentially, our level of support means that our franchisees are not alone.
Another important factor in the recruitment of Chem-Dry franchisees is that the Chem-Dry corporate team wins business on their behalf. We have contracts with about 80 companies across the nation: The corporate staff wins the business, and our franchisees benefit immediately from the relationships that we maintain. From there, the client can become educated on the different services that we offer, making for a potentially profitable long-term client. The fact that our business is one that offers multiple revenue streams outside of carpet cleaning — tile and stone, upholstery, area rugs — means that our franchisees have scalable businesses that can grow to be as large a business as they would like to own.
What did initiatives did Chem-Dry roll out in 2015 that help franchisees succeed in their businesses?
In 2015, we focused on the healthy home and healthy business environment. Perhaps the single biggest thing that we did on behalf of our franchisees was commission an independent laboratory to measure the effectiveness of our cleaning methods. Our franchisees win new business by using this report as a selling point. If you’re a consumer and you have the choice between a company whose products are proven to be effective in removing nearly all allergens from a home or office, or a company that can’t back up what they do — which would you choose? This study has become a huge promotional positioning tool. We can tell our clients with assuredness that our cleaning methods will remove 98% of allergens from a space. In November, we had three independent carpet cleaning businesses that converted to Chem-Dry because of the results of this study. They wanted to take their business to the next level. They wanted to use our green-certified products and 80% less water than our competitors use. All of these facts about our cleaning methods are also attractive to consumers.
We just rolled out a granite countertop renewal service, and the feedback is phenomenal. When our franchisees are already in a client’s home or business, they can offer a service that is very hard to find. Renewing granite countertops isn’t a huge ticket item, but if you’re already in a house, this service is worth it if is going to increase your overall ticket size.
We also ramped up our focus on our pet urine removal treatment service. Seventy-five percent of customers have pets, and so they have to deal with the issues that having pets can bring from time to time. I have two dogs, and I have not found anything that works as well as our product. We do a surface clean and an odor removal at a molecular level, which crystallizes the urine so it can be removed, rather than being masked.
We also rolled out a new truck mount system. It’s much more powerful and offers more flexibility — you can run multiple pieces of equipment off the truck at one time. It has the ability to do high and low pressure at the same time (tile is high and carpet is low) so you can have two technicians in the same home working on two different projects. This increases profitability and cuts down time.
How supportive are Chem-Dry franchise owners to one another?
Our network of franchisees are really tremendous people. One of the largest factors in recruiting entrepreneurs to franchise with Chem-Dry is the support they receive from fellow franchisees. We are really proud of the franchisees in our network — they are more than willing to mentor and share their own experience with their peers. Part of the success of our business model is that our franchisees share with each other what has worked. In a large city or a large area, we may have multiple franchise owners, but we don’t see competition — we see collaboration. Our franchisees want their peers to be successful because that will make the brand successful. So when our franchises are in the same general area, they don’t see competition when they pass a fellow Chem-Dry van, they see a rolling billboard for their business. A rising tide floats all ships.
What qualities do you look for in a new Chem-Dry carpet cleaning franchise owner?
We look for someone who wants to be hands-on, someone who wants to be involved in the day-to-day running of the business. We look for some entrepreneurial experience or the desire to become an entrepreneur, which is just as important in a lot of cases. It’s very important to be passionate about growing a business and building a good team. We want someone who is going to come out strong, follow the business model, and someone who wants to get out of the truck and grow into a multi-unit franchisee. A lot of Chem-Dry franchisees are creating legacies that are going to be handed down to their children. We look for people who have that drive to create a better life for their children and their children’s children.
What areas is Chem-Dry targeting for expansion in 2016?
As big as the Chem-Dry presence is, we definitely have hot markets that we’re excited to get into. In New England, especially in Boston and Providence, Rhode Island, the opportunity is there for multiple successful Chem-Dry franchises. We’re very focused on targeting the New York metro market, which is a huge area with obvious tremendous potential for a carpet cleaning franchise. New York City has a ton of opportunity. We’re targeting parts of the Southeast, such as central and eastern Florida, Georgia, Alabama and South Carolina. We’re looking to get in deeper in Southern California and the Upper Midwest.
What initiatives is Chem-Dry planning to roll out in 2016?
There are so many exciting things that are forthcoming next year, but it’s too early to let the cat out of the bag! All I can tell you now is that the Chem-Dry corporate team is always developing initiatives that will meaningfully impact our franchisees in their businesses, and 2016 will be a very big year for our brand.