Market Trends: May 2000

NEWS: Christmas, NiteTime Décor Franchises Growing Strong

About three years into running his growing full-service lawn maintenance business in Lubbock, Texas, Blake Smith wanted to find a way to keep his 10 employees working over the winter months.

A few of his clients asked him to decorate their homes for Christmas and that seemed like a good solution to his problem, as well as an additional revenue source. After three years, Quality Lawn Care was generating 25 percent of its gross revenue by hanging Christmas decorations for its clients.

“But it took many years of learning,” Smith said. “The holiday season is short. If a landscape contractor isn’t organized when planning these jobs, he or she can run into problems.”

Over the next four years, Smith perfected this area of his business. Today, the Christmas Décor franchise business Smith started in 1996 is a company with franchises located in 46 U.S. states and Canada.

“As a landscape contractor, if you don’t find niches to bring in higher margins, you could wither away and die,” he said. “By using the same fixed costs, the same assets and the same personnel, filling a specific niche can increase profits dramatically.”

The Christmas Décor franchise business has grown rapidly – from eight original franchises in 1996 to more than 225 in 1999 – because many other landscape contractors share the benefits of being a franchisee, Smith said. “Having a small piece of a large pie is better than having all of a little pie,” Smith explained. “These companies are developing a niche business and building strong long-term corporate relationships at the same time, which makes learning the business and growing it a lot easier because of the support team in place.”

Competing companies that operate a Christmas Décor franchise do not compete on this niche area of the business because the franchises are separated into territories that do not overlap, Smith said, making networking a more open experience for franchisees.

Weaker areas for Christmas lighting franchise opportunities include California and Arizona because those states don’t experience a winter season, but Smith’s landscape lighting franchise start-up, NiteTime Décor, may solve that problem. NiteTime Décor is only 10 franchisees away from its 2000 goal of 75 U.S. franchises.

“Landscape lighting is strong 10 months out of the year and weakest when Christmas Décor is strongest,” Smith said.

Franchising is popular in the green industry now, Smith said, because it creates a networking opportunity for those involved.

“The core of a good franchising system is shared buying power and shared knowledge,” Smith said. “By being committed to improving how other people manage and grow their businesses, I am successful.”

For more information on Christmas or NiteTime Décor, call 800/687-9551 or visit www.christmasdecor.net.

NEWS: Wisconsin Residents Voice ‘Pet Peeves’

EAU CLAIRE, WIS. – Wisconsin pet owners who suspect neighbors’ lawn care programs sickened their furry friends are turning to a state warning system for protection.

The Landscape Pesticide Advance Notice Registry is designed to provide 12 hours public notice of pesticide spraying. “Then I’ll be able to keep the dogs in the house,” pointed out Dan Perkins, a college journalism professor who, although he has no proof, claims a pesticide sprayed on a neighbor’s lawn last May drifted onto his yard and nearly killed his dog.

According to registry rules, all Wisconsin commercial lawn care companies are required to check the list and notify registered people located within the nearest block or adjoining blocks of their customers’ homes at least 12 hours before spraying pesticides. Contractors can notify people on the list by telephone, mail or by distributing literature at their doorsteps.

According to the registry’s last update, there were 43 new names on the list this year and approximately 750 re-applicants from last year’s nearly 1,000 people. In 1999, there were 17 complaints about noncompliance with the notification rules.

John Crossmock, president-elect of the Grounds Management Association of Wisconsin, said lawn care contractors are generally interested in making the notification law work. “Making sure we don’t create trouble in our communities is in all of our best interests,” Crossmock said. “Following that rule is the best business practice a landscape contractor can follow.” Fore!

To encourage industry professionals to support the work of the Evergreen Foundation, members joining the non-profit greenways group before May 31 are eligible to win a weekend for two at the John Deere Classic PGA Golf Tournament in Moline, Ill., in late July.

The EF membership rate to become a Green Backer level member is $100 per person payable by check or credit card when faxing an application form or when joining through the EF Web site at www.evergreenfoundation.com. In the month of June, the EF will conduct a drawing to select one Green Backer as a winner of the weekend trip, which includes hotel, meals, tournament transportation and VIP treatment as guests of John Deere. Transportation will be arranged through Novartis Turf and Ornamental Products.

“The Evergreen Foundation is a non-profit organization so the membership fee is tax deductible as a charitable contribution,” said Den Gardner, development director for the EF. “The money we raise will be used to help create a national greenway system, and by doing so foster a greater appreciation for green spaces.”

VW&R Buys Turf Industries

AUSTIN, TEXAS – Van Waters & Rogers (VW&R), one of the largest distributors of specialty chemical products for the structural pest control industry, continued its initiative to develop a presence in the turf and ornamental market with the acquisition of Turf Industries, Dallas. Turf Industries adds two locations to VW&R’s more than 110 locations across the country, and the company has plans for additional acquisitions to further strengthen its position in the turf industry.

John Bolano, vice president of VW&R’s Professional Products & Services, said this acquisition “sets the pace for our growth as a key national distributor to the professional turf and ornamental marketplace.”

Frank Gasperini, industry manager – turf and ornamentals for VW&R, acknowledged that the company’s plan is to be a key player in the turf industry nationally – beginning with the Sun Belt. “Acquisition is the primary way we’ve grown our pest control business in the last 20 years, and now we’re the leading distributor in the pest control market,” he related. “The fact that we’re looking for good acquisitions to take us into the turf market isn’t a secret, and most of our people with turf expertise are in Florida and California, so we think that’s a logical place to focus initially.”

Gasperinie noted that the size and growth potential of the turf industry, combined with the limited remaining growth potential for distributors in the pest control industry, made the company’s new turf focus an obvious move. “The turf market is probably four to times the size of the pest control industry in terms of distributor sales potential, and our locations are in the urban and suburban areas that lawn and landscape companies are located in already,” he explained, adding that approximately two-thirds of VW&R’s 110 North America locations handle some turf business right now.

“The lawn care business is very similar to the pest control business in that these are similar type companies dealing with many of the same labor and productivity issues, so that simplifies our transition,” he observed. “We don’t see ourselves as a manufacturer, although you’ll probably see us do more private labeling in the pest control and turf markets in the future. But we do believe we’re the best distributor of specialty chemicals.”