Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email firstname.lastname@example.org.
For years, Dennis Marunde’s business was nearly nonexistent in the winter. Working at his family's swimming pool and hot tub company, no one wanted to buy a pool when it was freezing outside. Eventually, Marunde began looking into opening a seasonal business that could occupy his winter months. Now, he keeps customers happy all year round: in the summer, with swimming pools, and in the winter, with holiday lights and decorations. Here’s what he has learned as a Christmas Decor franchisee.
Name: Dennis Marunde
Franchise owned (location): Christmas Decor in Crystal Lake, Ill.
How long have you owned a franchise?
We started looking into add-on franchise concepts as a way to extend our family’s seasonal business. When we recognized that holiday lighting and decorating services would be a good way to compliment the seasonality of our swimming pool and hot tub business, it only made sense to insure year-round success by purchasing a franchise. We knew that investing in an established franchise system would come with training, marketing, product resources and expertise, and a source of new customer leads which would allow us to shorten our learning curve and establish ourselves as experts from day one.
What were you doing before you became a franchise owner?
Our family has been operating a successful swimming pool and hot tub business for more than 56 years, which my brother and I are still involved with.
Why did you choose this particular franchise?
After considering a number of lighting franchises, we determined that Christmas Decor was the best fit for us based on the business model, cost of entry, marketing support programs and overall company culture. We knew that investing in a franchise would be the perfect way to better serve our clients by diversifying our service offerings, retain employees during the winter months and generate a more consistent stream of revenue without increasing overhead costs by utilizing our existing resources and equipment.
How much would you estimate you spent before you were officially open for business?
The average price to invest in a Christmas Decor franchise can range from about $11,000 to $50,000, which includes an initial franchise fee of $9,900 ($2,000 is reinvested in lead generation). The initial franchise fee covers a four-day comprehensive quick start training program and three-day annual conference, Christmas Decor industry software, ongoing support and guidance, a complete sales and marketing program, and consistent product availability. There is also a 5 percent ongoing royalty fee. Additional fees may include inventory and equipment ($7,000 to $10,000), lead generation ($5,000), and other miscellaneous costs to cover rent, licenses/permits, insurance/legal fees, vehicles, tools and travel expenses.
Where did you get most of your advice/do most of your research?
We first learned about Christmas Decor at an industry trade show. We recognized that lighting could be a good complement to our existing business and used the internet to research similar franchise concepts. We also asked the Christmas Decor representatives for a list of current franchise owners from around the country and called a number of those who owned seasonal businesses similar to ours.
What were the most unexpected challenges of opening your franchise?
Believe it or not, the most unexpected challenge was how quickly the business gained momentum and required additional investments in lighting products and installation supplies. We toughed it out in the first season but immediately adjusted our business plan to add an additional salesperson for the following season. We also found ourselves in the surprising position of hiring additional seasonal helpers between the months of October and December, which was something we had never done in the past.
Our original goal had been to simply extend the working season for our existing employees while doing more business with our existing customers. What we got was an expansion of both our customer base and workforce. Our employees actually look forward to the holiday season knowing that they will be working extra hours leading up to Christmas and they enjoy the excitement of our customers’ great enthusiasm for their work when they see the finished product of a decorated home.
What advice do you have for individuals who want to own their own franchise?
Make sure the franchisor you choose has a business model and company culture that that works for you. Make sure they are trustworthy and have your best interests in mind. Follow the system until you have built an established customer base and have thoroughly learned the existing systems. Even then, be careful implementing changes on your own. There are good reasons behind the franchisor’s approach.
Have patience. Offering new services that may initially be unfamiliar to you can take an abundance of time and energy in regard to planning and budgeting, especially when transitioning from running a six-month business to providing services year-round. To be successful, franchisees need to be extremely dedicated in the new business’s initial stages, even when revenue is not actively being generated.
What’s next for you and your business?
We will continue to build both seasonal businesses by growing our current workforce each year while looking for additional opportunities to complement our existing services. We recently launched a new website dedicated specifically to our Christmas Decor franchise, which we will continue to enhance the features of during our off-season. Next summer, we plan to increase up our Pay Per Click (PPC) advertising budget as well to further augment our profile in this service category.
We have already started considering options that will allow us to ramp up labor production on a more flexible basis so we can better respond to the seasonal rush when it strikes. By next season, we hope to equip each of our salespeople with tablets that offer digital design capabilities to produce on-site quotes in record time. We are also experimenting with online design consultations that might enable us to sell smaller jobs over the phone without ever seeing the property.