As the owner of a lawn maintenance company in Minneapolis, Rick Place was resigned to one fact of life: Wintertime shuts his business down. But as the winter of 1997 loomed, Place was no longer content to be discontent. So in October of that year, he opened a Christmas Decor franchise. Since then, the seasonal franchise, which provides installation of outdoor Christmas lights for homes and businesses, has enabled Place and his employees to work during the cold, lawn-less months.
"Christmas Decor has become a perfect complement to my lawn maintenance business," says Place. The timing of the franchise's peak season seems perfect, too. "The first day we started putting up Christmas lights, it snowed."
Best of all, Place's Christmas Decor sales are growing rapidly. After only three years, sales from the business have surpassed those of his 10-year-old lawn-care company.
"The phone rings constantly during the Christmas season," says Place, who started the company for $19,000 and made $20,000 the first year, despite a late start. In 1999, he brought in $120,000 from October through mid-December.
Place is just one of many entrepreneurs riding the tide of elevated earnings during the Christmas season. According to the International Mass Retail Association, retail sales are consistently up during the fourth quarter of each year. Total department store sales in the last three months of 1999 were more than $98 billion, compared to $72 billion during the summer months of that year.
The holiday season can be extremely lucrative, says Jim Ketchum, CEO of Christmas Decor Inc."Our franchisees are only limited by how many lights they can actually install," he says. "Most do very little, if any, advertising [compared to other franchises]. They've found if they advertise more than 10 days, they get inundated and can't keep up."
Of course, Christmas lights aren't the only things people buy during the holidays. People need ham, too-and The HoneyBaked Ham Company and Caf�, which boasts 28 franchises in 15 states, gives it to them. "Sixty percent of our sales occur during November, December and Eastertime, so our franchisees naturally get very excited about the holiday season," says Mike Whitten, HoneyBaked Ham's vice president of franchise operations.
Due to the very nature of seasonal businesses, franchising these concepts tends to work best as a business format. "We tried to export the Christmas lighting business and open branch offices in other cities, but it just didn't work, because there was a nine-month off-season for the people we hired," says Ketchum. "We finally realized, in order to make the concept work, we needed entrepreneurs with an equity interest."
Julie Bawden Davis is an Orange, California, writer who specializes in small and homebased business issues. She often contributes to The Los Angeles Times and The San Francisco Chronicle.