Growing "Green Franchises"

Monday, November 01, 2004

Companies Lead the Way to Environmentally Friendly Profits

Today’s enlightened consumers share an environmentally conscious belief that maintaining a home and way of life should not endanger any life, whether human, plant or animal.

Since the 1990s, an influx of so-called “green companies” has met the growing demand for natural, organic, pesticide-free and recyclable products and services. These companies use safer chemical alternatives and techniques that aim to reduce the flow of waste into landfills, while educating consumers and working for environmental causes. In recent years, franchise companies have also picked up the practice of blending profitability with environmental improvement.

THE ORGANIC MOVEMENT Models of successful “green franchising” are provided by organic lawn care companies such as Naturalawn of America, Nutrilawn Ecology Friendly Lawn Care and EnviroMasters Lawn Care. Each has won accolades from environmental groups for its role in the development of natural fertilizers and the reduction of pesticide use. In addition, for the past 5 years, each franchise has received high marks within the franchising industry because of their financial performance, corporate management, franchisor/franchisee relations and opportunities for growth.

In 1987, Naturalawn of America, the first organic lawn care franchise service, opened its doors in Frederick, Maryland. The company pioneered an integrated pest management (IPM) system that reduces pesticide use by more than 85%, an unprecedented amount compared to traditional lawn-care services. “The IPM program applies biological controls by spot-treating areas only, rather than the typical ‘blanket’ spraying, which can apply too much pesticide and kill beneficial pests,” said Melissa Foreman, Naturalawn’s Public Relations Coordinator. Today, Naturalawn has 73 franchise locations in 27 states, serving over 45,000 customers and generating more than $24 million in total annual revenue. In addition to its ongoing efforts to educate the public about the dangers of pesticide use, the company also provides comprehensive support to franchisees through classroom training, on-site field training and national buying programs for proprietary organic-based fertilizers. APPEALING TO CONSUMERS AND FRANCHISEES “We believe in customer satisfaction, which leads to a long-term relationship. Employee training and career programs give us long-term employees and a lower turnover rate than most companies,” said Foreman. Two Canadian franchise systems that are also providing thicker and healthier turf are Toronto-based Nutrilawn Ecology Friendly Lawn Care and Caledon East-based Enviro Masters Lawn Care. Unlike many commercial fertilizers that are high in sodium and only provide lawns with rapid “greening” of the top grass layer, these companies offer 100 percent organic or organic-based fertilizers infused with natural ingredients, such as sea kelp, sugar beet and corn gluten, which provide nutrients, control weeds and promote deep root growth.

According to Enviro Masters President Martin Fielding, consumers appreciate the difference and are willing to pay a premium for it. He credits Nutrilawn’s success to the loyalty of customers who subscribe to the company’s techniques for properly watering, cutting, aerating and recycling grass. “We spend a lot of time educating our customers about good cultural practices and proper turf-maintenance procedures,” he said. “An educated customer is our best customer.” When it comes to selecting prospective franchisees, however, green franchisors agree that a savvy businessperson is preferred to an idealistic environmentalist. A passion to protect the environment is a desirable attribute, but the more important qualification for a franchisee is the ability to follow the system and effectively pursue environmentally conscious consumers, such as families with children and pets. According to Nutrilawn President Larry Maydonik: “Our franchisee qualifications are 1) capital investment level; 2) management ability; 3) sales and marketing skills; 4) a passion for healthy lawns with minimal or no pesticides and lastly 5) a partner who can work with us—a team player.” GOVERNMENT REGULATION The satisfaction of providing consumers with a peace of mind is just one of many reasons why “green franchising” is growing. Another reason is an increase in government regulations, such as those affecting the dry-cleaning industry. More than 90 percent of dry cleaners depend largely on a solvent called perchloroethylene, or perc, which the EPA classifies as an air and water pollutant and a suspected carcinogen. Some air-quality management districts have even voted to ban use of the chemical by 2020.

While many of the nation's 30,000 dry-cleaning services are hesitant to switch to more expensive, less toxic cleaning solvents until forced (some are even sponsoring their own research to counter the EPA’s claims), other companies, such as Hangers Cleaners and Dry Cleaning Station, are embracing the green shift.

Established in 1996 and franchising since 1998, Burnsville, Minn.-based Hangers Cleaners currently has 60 franchises in the United States and three in Canada. Instead of using perc, Hangers Cleaners uses a recyclable liquid carbon dioxide-based technology that is safer, less polluting and gentler on fabrics. The average Hangers Cleaners have reached annual revenues of over $1 million, according to President John Hupp. “Our environmental goals are a natural result of success in meeting our financial goals as well,” he said. Although not all of the company’s franchise locations have achieved profitability, Hupp believes the company is heading toward a more sustainable future than its dawdling competitors. “We simply ask the prospective franchisee to recognize that going into dry cleaning with anything [besides environmental solutions] is risky, ” Hupp said.

Photo courtesy of Hangers Cleaners.

Hangers Cleaners' patented liquid CO2 process leaves no toxic solvent residue behind, and is safer on clothes and the environment. Dry Cleaning Station, another popular eco-friendly dry cleaner, uses an odorless, non-toxic, silicone-based dry-cleaning process licensed from GreenEarth Cleaning. Since committing itself to bio-friendly practices in 2001, the company has been able to turn profits each year while maintaining prices 15-20 percent lower than those of other dry cleaners, in part due to state-of-the-art equipment that uses fewer chemicals that can also be recycled for more efficient and less costly results. Based in Minneapolis, Minn., the company currently has 48 franchises in 17 states.

COST AND BENEFITS OF GOING "GREEN" The cost of investing in green systems that may be more expensive than their competitors—Hangers Cleaners requires $750,000 in investment and Dry Cleaning Station requires an investment between $276,000 and $485,000—may deter some franchisees from considering such opportunities. However, these companies maintain that their way of business creates substantial benefits. Companies that use few or no harsh solvents do not worry about zoning restrictions, regulatory paperwork, insurance and taxes for hazardous waste disposal. By using bio-friendly chemicals that do not alarm landlords, franchisees may find it easier to lease locations.

Furthermore, numerous states reward companies that adopt greener technologies in the form of rebates, tax credits or even lower interest rates for loans on new capital. The South Coast Air Quality Management District, for example, has issued grants of up to $10,000 to help Southern California dry cleaners replace old equipment. North Carolina provides a 20 percent tax credit for dry cleaners that invest in pollution prevention. Oregon offers a 35 percent business energy tax credit and a small-scale energy loan program for environmentally friendly companies. The Indiana State Energy Office supports similar programs through innovative public and private partnerships. Photo courtesy of the South Coast AQMD.

Several states offer financial incentive grant programs to assist businesses in making the switch to greener technologies. Whether consumer-driven or regulation-driven, the consent among green franchisors is that environmentally safe technologies present a chance to reinvent the industry for the better.

“These days everyone is concerned about the environment because they realize that for years they have been doing very little to help out,” Fielding said of the motivation behind Enviro Masters’ environmental focus. “They realize that with the increase in population, everyone had better start thinking about this or else we will be in a lot of trouble, leaving a very big mess for our children to deal with.” After all, said Hangers Cleaners Hupp, “all other things being equal, people would rather ‘go natural’ when purchasing goods or services.” FEATURED "GREEN" FRANCHISOR: NATURALAWN OF AMERICA || Naturalawn of America is the only nationwide lawn care franchise offering an environmentally friendly lawn care service incorporating natural, organic-based fertilizers and biological controls. Franchise owners provide customers with lawn services using safer and healthier products, eliminating the need for harsh chemicals and pesticides.

For More Infromation Please contact:
Melissa Foreman
Public Relations Coordinator

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