Expetec� Is Prepared For Explosive Growth

What a difference a year has made for Expetec, the Aberdeen , S.D. , provider of high-level technology services to commercial and consumer customers. Through the first six months of 2003, Expetec granted seven franchises. Through June 1 of this year, an astounding 54 franchises have been sold and by year’s end the number will likely exceed 100, according to Expetec founder and CEO Lonnie Helgerson, whose goal is to open 5,000 locations within 10 years. As a result of the stratospheric growth, Expetec is charging ahead with its area development program that kicked off in March under the direction of Steve Salzer, Expetec’s director of area development. These regional offices will be responsible for marketing and sales of Expetec services � already a benchmark in the industry � along with franchisee support and development of new franchises within their designated territory. “If we want to get to one of our goals, which is 1,000 units, selling one or two franchises at a time is not going to get you there,” said Helgerson, whose company has slightly less than 200 locations in 30 states. “I knew there was a certain point in the chain’s life when we needed to add this piece of the puzzle if we wanted to attain our goals.” The 39-year-old Salzer not only heads Expetec’s area development, but he is a working model of the program. He oversees Expetec’s corporate-owned territory covering North and South Dakota and Moorhead , Minn. It is serving as a prototype model of the program. Twenty-three franchises have been granted in the area, with two already open and another expected to open soon. Expetec’s first non-company-affiliated area development regional office is expected to open in either Indiana or Missouri and be operational within the third quarter of this year. Helgerson said he is seeing strong interest in the program. Expetec did not anticipate offering its area development program until the third or fourth quarter of this year, but Helgerson said after hiring Salzer they were able to develop the prototype, begin a marketing campaign and have it ready for rollout within three months. Before joining Expetec in February 2004, Salzer spent 14 years with the Aberdeen Housing & Redevelopment Commission before leaving as executive director. Helgerson came to know Salzer from serving on the commission’s board of directors. “When this position became available, I knew there was only one person who could execute my plan and that was Steve,” Helgerson said. “He accelerated the implementation of our program by more than six months, much quicker than we thought it would take.” Salzer should have little trouble attracting potential area developers, whose numbers or size of territories could grow in quantum leaps. Helgerson estimates there is capacity in the United States for 10,000 Expetec locations. Area developers will initially be expected to sell 10 franchises according to a defined schedule while also providing franchisee support. Once that goal is reached they will have the opportunity to gain more territory. Targeted growth areas for 2004 are East Coast markets including Boston , Hartford , New York and Washington , D.C. Expetec’s biggest industry advantage is its unparalleled marketing support. Expetec’s seven-person outbound marketing department calls on 2,000 businesses for each franchisee during their first year in operation, generating leads and appointments. It has proven so successful that an ongoing program is now available to all franchisees to continue after their first year. Those marketing efforts have only grown stronger with the addition of area developers. They will have a full-time field marketing executive working under them, who will follow up on leads generated by Expetec’s “The Smart Connection”� call center. The end result is that Expetec’s franchise owners are left to concentrate on their area of expertise: serving customers. Salzer said Expetec’s marketing has returned strong results in his territory. “It has been very successful,” he said. “We have basically swamped our franchisee in Aberdeen . We will go out and find business for our franchisees. I know our competitors don’t offer the support that we do from the corporate level on down.” Added Helgerson: We have a lot of great technicians among our franchisees that are not really interested in the marketing or accounting side of their business. It’s one less thing they have to do.” The final piece of the puzzle is Expetec’s new Internet-driven Customer Relationship Management (CRM) system, a direct result of the more than $500,000 Expetec has spent during the past three months on software and hardware upgrades. The system, whose rollout began this month and will be first introduced in South Dakota, Tennessee, Florida, Indiana and possibly Missouri, allows Expetec’s corporate headquarters, area developers and franchisees to be linked at all times, while providing customers with unprecedented ease of use. Customers will be able to go online, log a service call and immediately be assigned a technician in their area. An integrated accounting system will handle billing when the job is completed. The entire system is integrated through the use of hand-held PDAs, allowing area developers to see what services franchisees are providing, and what they are billing along with their customer logs. “That’s going to be a very nice selling feature to area developers’ the fact that we can all be tied together in a streamlined system,” said Salzer. Helgerson is looking to attract area developers who are already well-versed in the business. “It’s important for us to get the top-shelf area developer who understands franchising extremely well and has done this before,” Helgerson said. The first-rate talent Helgerson is looking to attract will find a company that is already averaging 30 leads a day, almost all from the Internet. A direct marketing campaign, aimed at current business owners looking to convert to Expetec, is going to be launched this summer. Because Expetec’s first area development regional office is corporate-operated, Helgerson and Salzer have been able to refine the program before a national launch. It’s an extremely important element, given the feedback Helgerson has heard from area developers of other concepts while attending industry conferences. “I found that the amount of support and design they had wasn’t there, even with big chains,” Helgerson said. “They were basically told, ‘Here’s the franchise. Start selling.’ It was important for us that when we went to an area developer, we wanted to have a package for them very much like what we have for our franchisees, which is a turn-key program.”

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