Seal Of Approval - Franchises, Driveways Add Up To Success

Silly me, I always figured that you had to be a Kentucky colonel with a secret blend of 11 herbs and spices to succeed in the franchising game. Or maybe own the formula for churning out soft ice cream. Or at least have a system for turning out rubbery cheeseburgers in a matter of seconds. Brothers Andy and Doug Hoiland have taken a different approach: They’ve translated first-rate customer service and guaranteed satisfaction into a growing franchise chain that generated system wide sales of $4 million last year. You might have a hard time believing their business, however: The Hoilands are proprietors of Jet-Black International Inc., a Burnsville company that specializes in what they call…ahem… “driveway beautification.” Translation: They’ve figured out a way to sell franchises to folks who do asphalt and concrete sealing and repair, largely in the residential market. By year’s end, they counted 110 franchises in 25 states, and were making plans to add another 100 this year. It all added up to corporate revenue of 2.1 million in 2001, including franchise fees ($15,000 each), royalties (8 percent of sales), and the sale of equipment and materials. What’s the attraction? “A simple, ready-to-go approach” from the back office to the application process, said Mike Moran, a childhood friend of the Hoilands who has owned a Jet-Back franchise in the northern St. Paul suburbs for five years. Rudy Voll, a Jet-Black franchisee in southern Indiana and northern Kentucky, also was drawn by a focus on customer satisfaction that meshed with his own approach to business. Service the focus “My philosophy has always been that you succeed by doing a better job than the competition,” said Voll, who spent 26 years as a distributor of heating and air-conditioning equipment to the manufactured-housing industry before selling out to become a Jet-Black franchisee in 2000. In fact, customer satisfaction is such a priority that the Hoilands have gone to the trouble of locating investors to buy out franchisees who don’t measure up. So what led them to the improbable notion of peddling sealcoating franchises? It started in 1987 with a shoddy sealcoating job done on their parent’s driveway. “The contractor did lousy work,” said Doug Hoiland, 37. “He left cracks in the driveway and spots on the sidewalk and garage. We figured, if this is the way it’s done, there’s gotta be an opportunity for somebody who’ll do a good job.” They did some research and discovered that “most sealcoating was being done as sideline by paving companies,” said Andy Hoiland, 39. To them, that meant a lower priority on the business, particularly on small residential jobs. So they bought some 5-gallon drums of sealcoat and a few squeegees and went after the residential market with the notion of distinguishing themselves with fast, reliable service. Their marketing approach involved direct mailings and handouts in target neighborhoods.

It worked – almost to well. Despite being in a seasonal business, the Hoilands hoisted their sales to $350,000 by the end of 1992, when they decided to begin franchising. Fastest growth in 2001 There were two motivations: “First, we had more business than we could handle; we were just being overwhelmed,” Andy Hoiland said. “And because most of our employees were college kids, we kept losing good people when they graduated.” By that time the Hoilands had more to offer prospective franchisees than simply the concept of quality and reliability. They also had worked with a supplier to develop a special formulation that gave their asphalt sealer a grainy, non-slip texture and the rich black color that inspired the company’s name. They also had developed a compact trailer custom designed to carry specialized equipment. Ditto for user-friendly software program to schedule work crews and manage the business. While growth has been steady since 1993, the biggest jump came last year, when the number of franchisees nearly doubled to 110 from 61at the end of 2000. Similarly, system wide sales last year climbed 60 percent above the 2.5 million total in 2000, while corporate revenue jumped 92 percent from the year-earlier gross of $1.3 million. There were two reasons, the Hoilands figure. First, they opened a regional office in Chicago in May to help spread their franchising message. The recession and the Sept.11 terrorist attacks, however, might have provided the most important boost, Doug Hoiland said.

“There were a lot of laid-off people with severance checks in the bank with which to buy franchises,” Doug Hoiland said. “In that sense, the recession has been good for franchising.” And there’s been plenty of work for the new franchisees, Hoiland added, because many people have forgone travel to spend more time on home-improvement projects, including- ahem-driveway beautification.

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