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Entrepreneurs

Franchising For The Long Haul

By Neil Cotiaux, posted Mar 13, 2015
Chris Holman (above) started Advanced Maintenance with his wife, Janet, with the idea of driving to commercial fleet vehicles that need repair or upkeep instead of having them come into a shop. (Photo by Chris Brehmer)
For Chris and Janet Holman, taking the on-ramp to franchising has proved to be a sweet ride.

Fifteen years ago, the retired military couple turned the key on Advanced Maintenance, a go-to-you preventive maintenance and emergency road service for commercial truck fleets, and they’ve never looked back. 

Starting with just two service vans, Advanced Maintenance now uses an expanding network of franchises to drive sales. With company-owned offices in Wilmington and Jacksonville and 11 franchise locations at Dec. 31, system sales last year reached more than $10 million, with franchising generating about two-thirds of that amount.

Year over year, “We are up 25 percent across the board,” co-founder Chris Holman said.

Holman, an ex-Marine who did mechanical work on amphibious assault vehicles and wife Janet, who tracked submarines in the Navy, tied the knot after meeting online.
Once wed, they realized they had the combined maintenance and administrative skills to create a niche business catering to truck fleet owners, for whom down time means lost profits.

By sending Advanced Maintenance crews directly to a client’s motor pool and also making emergency repairs roadside versus towing away a disabled vehicle, the couple knew they could increase the road-life of trucks and also get them back on the highways faster.

Scheduled maintenance is the company’s bread and butter. Technicians engage in about 30 different functions during each service call to keep fleets compliant with federal regulations.

During their first year in business, the Holmans wore out shoe leather knocking on prospects’ doors with a brochure and price list.

“After the second year, I started learning about the national leasing companies,” Chris Holman recalls.

Reaching out to household names like Budget, Penske and Ryder, Advanced Maintenance developed a roster of clients with ongoing servicing needs as well as brand names immediately recognizable to other prospects. Budget Truck Rental emerged as the company’s strongest big-name relationship.

The Holmans also started doing business with the General Services Administration, the infrastructure administrator for federal agencies that’s responsible for about 200,000 vehicles nationwide.

With business stable, the Holmans began looking down the road and in 2006 decided to start franchising.

“We didn’t want to get into selling our business, we wanted to get into growing our business,” Chris Holman said. 

The couple developed a model that imposed an up-front, $35,000 franchise fee and royalties set at 6 percent of weekly gross income, an arrangement unchanged to this day. Active duty or honorably discharged service members receive $5,000 off the up-front cost.

According to Holman, the franchise fee is not a revenue-generator.

“By the time we’re done we will probably spend $40,000 training them. … We almost give three months of training within the first seven months,” he said.

If a franchisee wants to open a second location within a territory, the fee is waived, he added.

Franchisees enjoy the same deep-discount arrangement with suppliers as company-owned locations, and the home office specifies the types of vans and service equipment to be purchased.

Since the first franchise opened in Raleigh in 2007, 11 others have been created in North Carolina, South Carolina, Ohio and New York.

To date, the Holmans have inked agreements with only 10 percent of all applicants. With an intensive 120-day window for launching each new franchise, Holman is sticking with a maximum three openings a year for now.

Opened in June 2013, the Columbus, Ohio, franchise is already suffering from growing pains.

“I’ve got too many customers and not enough mechanics,” said owner Brett Filous, a former investment banker who “stumbled across” Advanced Maintenance during some merger and acquisition work.

Filous is recruiting additional staff and plans to buy another truck
.
On Feb. 28, Chris Holman hopped a flight to meet with the owners of his newest franchise on Long Island.

Sanjai Singh and Gerard Elizer, naturalized citizens from Guyana and Haiti, were employed at North Shore University Hospital when they decided to step out on their own.

“We wanted to build something that we could leave behind for our families,” said Singh, then the hospital’s laundry department manager and Elizer’s supervisor.

Eyeing Dunkin’ Donuts, Subway and TGI Fridays, the two backed off.

“They want an incredible amount of money from you,” Singh said.

Taking a call from an Advanced Maintenance broker, Singh and Elizer realized that on-site truck fleet servicing was a niche waiting to be filled. Moreover, the Holmans had a lock on business with Budget and other large accounts that would provide some immediate income.

“That made it very easy for us to want to be part of the Advanced Maintenance team,” Singh said.

By the time Chris Holman touched down, the new franchisees had completed their end of the business plan and met with him to confer on equipment, pricing and site selection. Holman approved two of four sites during the visit, and work is starting on a lease near Long Island MacArthur Airport. Closer to the franchise’s June 1 opening, he’ll return to participate in sales calls. 

With strong retail and commercial markets on Long Island and heavy truck traffic supporting demand, Singh and Elizer believe their franchise will expand quickly, and they’re ready to take on all comers.

“My success is very much dependent on them, and their success is dependent on me,” Singh said of the Holmans.
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