Ca22

Like I said before I am in favor for a website advertising fee. This would accomplish so many of our corporate needs. We could and should be focusing on how to drive more business to our operators. The web site needs lots of work, and Justin can’t due it all. We need a team working on bringing us to the top. I an not sure that I would start out at $100 a month, but I feel that $50 would be a great start. Once the operators see that they are getting a return on the investment with the new and improved web presence then they will see the value of additional increase to the advertising fees.

I also agree with cutting back on the 101 for new operators. The amount of 101 that they are receiving is more than enough. I don’t feel we will have lost a single sale on franchises due to a cut in the amount of 101 they receive. This should be our goal in every change. Making it so that we don’t loose sales. Instead giving the potential buyer more reasons to invest in Heaven’s Best. The covenant Franchise 50 award is a goal that we should not forget about. It speaks volumes to potential operators.

Shipping fees go up every year. I still believe in charging something for shipping, but if we are to worried to charge for shipping then we should at least raise the minimum order from $100 to $150. This would cut a fraction of the shipping cost the MCO is paying for.

As far as raising prices on product I would be in favor of a flat 5% increase next year in the middle of the busy season. This would give the guys a chance to get use to the added advertising fee and start making money on the jobs that I feel the changes would bring them.

I would be in favor of restructuring how we sell franchises. I have to admit that it is harder then I thought it would be. I have no training, or credentials to sell businesses to people. I would much rather work with my operators and focus my attention on making them more profitable then to try to sell franchises. I feel that what Heaven’s Best needs is a sales team that is good at what they do SELLING. We are coming into a new opportunity to sell franchises right now. Just this week I have had two friends get laid off of their job. They both received a nice package ,and they are looking into starting their own business. It’s just to bad they don’t live in Arizona.

With all of these proposals it will bring in a large amount of revenue 200k-400k a year to corporate. I still believe that keeping things on the small side and small changes like these will help with franchise sales. Being proactive with our operators and helping them grow will boost revenue. For every franchise sale that we have the amount of revenue will go up. If you factor in new sales, and the increases we should be more in the range of 250k-500k a year in three to five years down the road. It has never been my intention to question, or doubt the kings intentions. Cody has thrown out some paper smart ideas for changes. If you take them for what they are on paper they sound good. He also has asked for input in to what we think about the new changes. Just because it looks smart on paper does not mean that it will work in real life. I papered out the purchase of Arizona many times, and it has been nothing close to what we projected. If you feel that the new deal that Cody has come out with is perfect, I want to know why. I want to hear what it will do for us and how it will be positive for the operators on up. I think that we all respect Cody for who he is as a CEO and as a person. There is nothing wrong with helping him with suggestions on the direction that we are moving. Please lets hear more suggestions, and what we feel that we can get behind and less follow the leader just because we need change.

If you find that you have to refer it out I recommend tagging along to watch. Be up front with the repair man and tell him you want to see how it is done. I learned most of my repairs on my own, but I have learned quite a few tricks from some of the old timers in the business.

I want to clarify a few things that has been brought up. I know I am just a small piece to the larger puzzle, but at least everyone will know where I am coming from.
1) I believe that we need to split the web site in two. We can not accomplish great results with either carpet cleaning or franchise sales with heavensbest.com Heavensbest.com should stay heavensbest.com with a major face lift. The focus should be about scheduling jobs for the operators. When I say scheduling jobs we need to get back to basics with target audience (women). A great looking easy to navigate website, that is set up with getting to the top organically is in my opinion the best fit for all of us. Keep all of the back pages for operators to log in on HB.com so that we are still driving in traffic for us. Set up a landing page that has better options to make it feel more customized and targeted.
2) have a website that is set up strictly for selling franchises. Give it all the bells and whistles to get people really interested. It should have many pages of FAQ, video, and who are heavensbest owners. This would be the first place we send potential buyers. I would like each state to have there own page where they can list areas open for sale and contact info for them and other operators. At this point Ron you can set up pay per click advertising and direct them to your info on the site. If we do not do this at the corporate level then AZ will have a frachise sales site. I believe in the power of pay-per-click and I need to sell some areas.

The Internet will have a big impact on our business in the future. For some of us it is already change the dynamics of advertising. I like the concept Randy is talking about with the hb.us site of giving our operators more control and accessibility. I am not a fan of the site, and feel that we would be taking a great risk in hopes that some day it might work. I feel that if guys were going to spend money on a site why not have it go to corporate, and have the hb.com site done up right. You are talking about $11,500 if we had a $35 website fee just like hb.us is asking. I am sure with that amount of budget for web development and SEO we could have more man power to making it happen.

I have been seeing first hand the power of the Internet. I have helped a few people set up with google and get online. I call and check in with them and they are booking jobs. That is what this is all about. They get more jobs, buy more solutions, add trucks or sell off territory, we have great number to show potential buyers. As times are changing so are our potential buyers. If I was looking at buying a franchise today I would want to see a website that is bringing in rev. that comes with my purchase. I am Not saying this is the only options, this is just my two cents.

Heavensbestlv, I was going to call you directly today. Then I read this post. I was searching the term heavens best and you showed up with Yahoo. It was a paid sponsor listing. If wsi or yodel is the one who put this up then shame, shame, shame, on them. You need to do Geo-targeted advertising only in the areas you serve. It does you no good having a person clicking on your site in California. Give me a call and I can probably help you focus your pay per click campaign. I will never charge you for my help, but you might have to take me out for a beer next time I am in Vegas. I would check to see how many times the keyword heavens best has been clicked. 95% of them probably came from other operators going to our site to place an order. They see your add for HB and click. Next thing you know you just spent 4-5 dollars.

Sorry for the back to back postings. I was going through the forum and came across this:

Gordon Kohler wrote:
All of these are good points.
Service Master or Stanley Steamer (I can’t remember which or the two) spent 5 million this year in national TV ads.
What percentage of that bill do you want to pay? Who would decide how, where, and with who those ads are ran?
I am the expert in the markets in my area. and you are the expert in yours. As it is, you have the complete choice to advertise how. and with who as you see fit.
Some operators would go under if we had a mandatory pay out for national advertising.
I don’t want to give up that control of advertising.(place or $)

I’m glad I’m in Heaven’s Best!

Ammon I will have to sleep on this as far as the 101 sales. Maybe it might sound to harsh, but it gives them something in return. I have some experience with the ins and outs of other franchises and this is a very common thing to require a certain amount of purchases. It is like belonging to a country club they are mandated to spend a certain amount on products every month whether they need it or not. If a guy is operating with six fees then he should be doing 12k a month. It is my job as a state owner to guide them to this and beyond. Being the devils advocate on my self I can see how the areas that have more climate issues could be effected. I still believe this is a better direction then a flat 100% increase in fees with nothing to show in return to the operators.

When I look at the contracts that I have on most of the operators I am floored by the irresponsible way they have been written. I believe no matter how many fees a guy has it should be in full effect by the time his contract ends. I have contacts stating increases based on population growth. In some cases I might never see that fee kick in. I would much rather cross the bridge of added franchise fees due to population growth when it come up for renewal. In my proposal it would work just like the royalty fees kick in. The 101 would follow the same as the royalties. As every year passes and a new fee kicks in so would the 101 mandate.

Spotter Sales
I had to call every operator in the areas that had a store that this would effect. I will have to get written approval from them to make this work. After talking to them they were behind it 100%. I feel that with the right approach we can have an addendum to the contracts. If we are transparent on our objectives, and can show them their return it should not be a problem. I will stick my neck out on the line on this one. If anyone thinks this is a bad Idea, or has an operator they feel will not go for it I personally will talk to them myself and give my best to get this through. I bet I could even talk Ron Hollingsworth 😈 in AZ into this one and he hates everything. If push came to shove I am sure that we could put in to the margins a percent that went to national advertising that would directly effect operators growth. I hope you still have connections with Kroger. If this ever did take up we would have lots of things to consider. Having a rep to talk to the chains would be one of them.

I have been working for the last 24 hours on a plan that I want feedback on. It could possibly be a plan that would take care of all our needs. I will throw out the cliff note version as a I am working on a full business plan as we speak. Our objective, as I know, is to free up stagnant territory, boost sales for the state owners, more revenue to the corporate office, and increase profits to the operators. When I became a state owner, the biggest shock was how little product operators buy. I have always bought 10 to 16 gallons a month. I always knew that I purchased more than most operators, but I think my guys in Arizona have a contest to hit as close to the $100 minimum per order. We have a clause in our contracts that states we must maintain a month’s supply at all times, and I strongly believe that in the real world this almost never happens. Here is a glimpse:

1) Have two websites. HeavensBest.com should exist to promote and book carpet cleaning jobs, not selling franchises. The one-size-fits-all approach is not the best interests for anyone. Having a website that is stronger for the operators will boost their number of jobs. Whilst having a website that is all about sales is going to give each one of us a platform to sell. It should be the first place we direct perspective buyers. This is where we can show them why Heaven’s Best is the right choice. With a website like that, we can do our own Geo-targeted pay-per-click in areas of our states to capture perspective franchises. I would ask that each state owner contribute to the development of the site. If we contributed an annual fee of $200 each, that would generate $6000 a year for development and SEO (search engine optimization) in the future.

2) MCO Inc. is the Polaroid camera of the carpet cleaning industry. They make their money mainly from product sales, not franchise sales. Further more, it is Cleaning Solution 101 that is the backbone of all of our revenue. I propose a minimum order of two gallons of 101 per operator or a min. order of one per franchise territory. Meaning that if a guy has one fee he is required to make an order of at least 2 gallons. If a guy has eight fees, he is then required to buy 8 gallons and so on. This will accomplish many things: We, as state owners, will be able to count on a min. of X number of 101 per month. Corporate will sell more 101. Our operators will have a real incentive to not skimp or dilute as I know some do. If an operator has 8 fees but does not need all 8 gallons, then it won’t take them too long to realize that they either need to book more jobs or sell off territory. Trust me, when they no longer can park in their garage due to excess inventory, they will make a decision. The only way they can get rid of it is to package it up in a nice bundle for the new operator that is going to take over some territory or invest more time into the company, resulting in exposure. It has been said that 101 should make an operator $1500-$2000 a month. So if a guy has only one or two territories, it is safe to assume that $3000-4000 a month is a very, very low target. If an operator is tying up 10 territories, then he should be able to pull in $15-20k a month.

3) A national advertising fee is something that we should pursue. Let’s start off small- say a flat fee of $30 per operator, which would bring in over $9500 a month or $115,200 a year. It is a firm start and the operators should be able to swallow it much easier. This fee can go up on an annual basis, but keeping it reasonable will be key. What is national advertising? I think of radio, television, print ads and even the Goodyear blimp during the Superbowl. Let’s be realistic, we don’t have enough territories to cover a campaign in any one of these venues. We could possibly pull it off in California, but Arizona would be a huge waste of money. Most of my guys are in the Phoenix area. The rest is wide open. The Internet is a great start. Having pre-done radio/TV commercials for operators to use/buy from the corporate office is another. We must start thinking outside of the box on this. I have posted and received very little feedback on getting our product on the shelf in supermarkets, except for Gordon today. Let us look at the possibilities with doing something like this. BRAND AWARENESS being the reason for me. I want people to recognize us. Who does most of the shopping? Women. The more they see the logo, the more they will TRUST the name. I can respect Gordon’s dilemma with Chem Dry, but we are NOT Chem Dry. We don’t have the branding that they have. This, to me, is the greatest form of advertising. It is *FREE* to us and it gives MCO a new revenue stream. Best of all, how much would you love to tell a perspective buyer to go down to their local supermarket and see what is on the shelf? If you are an operator, how much would you love to be a fly on the wall when the competition sees it on the shelf? I do not have any Resolve carpet cleaners in my area. At the same time, we have hands down the BEST looking spotter bottles as well as the most effective spotters in the market. And I don’t think anyone can say otherwise. This would probably send the guys over at Chem Dry and Stanley Steamer through the roof.

I know it’s a lot to take in, and strongly welcome (and expect) feedback or suggestions. Like I said, this is only the cliff notes version and I will write up a complete business plan in the near future.

I do want to hit quickly on raising the new territory fees to $160 a month. At first I thought this would not be a problem for me. I have now realized this would drastically effect me as a state owner. I bought the state of AZ as an investment. I did calculations on further growth and potential in royalty fees. I don’t feel that I will come even close to meeting these goals with a 100% increase in royalty fees. I will have large areas that I will need to sell and telling a perspective buyer that he will be looking at a $1600 a month royalty fee will send them running. We have exclusive territories and it is not always practical to split up a territory into mini territories in every situation. I will be forced to raise the population calculator to 100-200k per fee. This will be a direct 50% decrease in state revenue. I will do my best to sell smart and not give away the farm, as this was done in the past. As a new state owner I want to eventually see a profit. I believe that a $100 fee is certainly a lot more obtainable.

I am glad you said that Bryan. You are exactly right when you assume that those with the larger territories will most likely just walk away. We had an operator in AZ that tried to sell for six months, even used a business broker, and couldn’t. He just walked away and that was before any of these increases. I am certain that there will be a lot of people in that same situation. What affect will that have on selling in the future when our numbers have dropped so drastically in such a short period of time?

I think there needs to be a lot more discussion along with a better solution before anything is put into place.

Kim Miller