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2013 Franchise 500

How 3 Franchise Owners Came Back From Disaster

How 3 Franchise Owners Came Back From Disaster
Image credit: Photo courtesy of Express Oil Change and Service Center
Remains of the day: John Carney fought to rebuild after a tornado leveled his business.

Picking Up the Pieces
John Carney
Express Oil Change & Service Center
Tuscaloosa, Ala.

The live shot from a local TV station's camera on top of the Tuscaloosa County Courthouse showed the tornado coming. There were 13 people in my Express Oil Change & Service Center, and everyone rushed to the downstairs pit where we do the oil changes, pressing themselves against the walls. The tornado hit at about 5:15 p.m. We had been in business for 25 years, and it took 45 seconds to erase that.

There was nothing but rubble left, except for one lift standing in the mechanical department. All of my outside tanks were turned over. The 14 vehicles on the property were destroyed, and trees were snapped in half. As we walked around, the whole town was silent except for the sound of the gas lines leaking.

Rebuilding was complicated by the fact that the city tried to change the building codes. I had been in business so long that there was no real code for a business that provides quick oil changes and same-day maintenance service. They almost didn't let me rebuild at all. I fought that, but I had to absorb about $300,000 in added costs from moving my building, changing my entrance and exits, increasing the number of parking spaces and using specific building materials.

The insurance money ran out four months before we could reopen, but I continued paying my employees out of my pocket, including their benefits--probably about $175,000. For many guys, this was a career. I didn't want to leave them hanging, and I thought things would get back to normal a lot quicker if I had an experienced crew once we did reopen. We piecemealed the money together through my and my brother's home equity line of credit.

Even though much of the block is still vacant, we were at about 90 percent of our old volume within two months. On reopening day in August 2012, people were waiting in line that morning for 20 minutes. I think part of it was just being visible, speaking at the city council meetings and trying to help get people back to work. We're honest with people and try to do the right thing for the community. I think that's just the right way to go for longevity.

 

Caring for the Caregiver
Kelly Stephenson
ComForcare Senior Services
Carthage, Mo.

After being laid off from my job at Schering-Plough Research Institute in North Carolina, I moved back to Missouri so my two children and I could be closer to my parents. I learned about ComForcare Senior Services, which provides nonmedical in-home care, and decided in April 2011 that it was a good fit for my next career move. Then my 9-year-old son, Trace, was diagnosed with Crohn's disease, a chronic inflammation of the intestines, and needed to be hospitalized three hours away in Kansas City. At roughly the same time, I injured my back--a herniated disk that would require surgery to repair.

It was the worst possible timing, but there was no turning back: I had already signed on the dotted line and handed over my money for the franchise. My mother and aunt, who are in their 60s and 70s, painted the office for me as I worked remotely from Trace's hospital room, fielding potential client calls, interviewing staffers over the phone, answering e-mails and setting up bank accounts. I was in pain and finally had back surgery in mid-August.

"It was the worst possible timing, but there was no turning back: I had already signed on the dotted line."

We opened after Labor Day 2011, nearly two months later than planned, but the franchisor never put any pressure on me. They told me to get well and take care of my son first. Almost immediately I promoted one of our three caregivers to be my assistant, because I needed someone in the office when I go with Trace to get his treatments every six weeks. That has worked really well and gives me flexibility to leave the office. I never would have had that as an employee.

Today I have about 25 employees. Since February 2012 we have tripled our billing hours, and I hope to break even by the end of the year. And I've realized that these challenges actually helped in the business. People call us, and they're in crisis. I've been in crisis myself, and it has given me more empathy and understanding for what our patients and their families are going through. It lets us be better at what we do.

 

Success Without the Ex
Judy Briggs
1-800-Got-Junk
Worcester, Mass.

My ex-husband and I opened a 1-800-Got-Junk franchise a few months after reading about the company in 2003. Our goal was to grow the business to the point where we could put some management in place, then relax a bit and travel. Then, Christmas day 2006, I found out he was seeing someone else. By the end of 2007, we were divorced.

At the divorce settlement, I had to hand him a six-figure check to buy out his part of the business and the house. That meant refinancing the house, but because I hadn't taken a paycheck during the first years of the business, I had no income record and ended up with an interest rate of 11.875 percent.

But that wasn't the only challenge. When the economic downturn hit, we had a commercial customer for whom we did about $85,000 worth of work who paid about half and then stopped making payments. We ended up settling, and I took a loss on it. Then an employee tried to sue me over a workers' compensation claim. That was settled after they realized I wasn't a bazillionaire.

"I had no income record and ended up with an interest rate of 11.875 percent."

We took revenue hits in 2008 and 2009 because of the economy. But I stuck with it, and just kept marketing and keeping the business going. It meant 16- to 18-hour days sometimes. Despite the tough credit market, I was able to refinance the house in 2009. In 2010 my revenue went back up by $200,000--I had continued to maintain at least a $1 million revenue level throughout. Last year was just as good, and 2012 is our best year in five years; we've had two record-revenue months.

It hasn't been easy. During this time one of my four sons has been stationed in Iraq twice. I've relied heavily on fellow franchisees and members of the Boston chapter and global members of the Entrepreneurs' Organization for advice and assistance. Throughout all of it, the Sunday dinners with my boys have been a constant. You have to stay focused, reach out to family and friends and remember that tomorrow's always a new day.

Gwen Moran is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).

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This article was originally published in the January 2013 print edition of Entrepreneur with the headline: How I Did It.

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