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Renovation Riches

[ 0 ] Sep. 1, 2007 | SBO Editor

Mark Loberg was 37 years old when he walked into his boss’s office at a Phoenix car dealership where he had been a top executive. He tossed him his keys and walked out on a six-figure income and almost 20-year career in the auto industry with absolutely no idea of what he was going to do next. He knew only that he wanted to work for himself, making a good living and depending on himself, not someone else to make the right decisions.

That was March 1999. A little more than six months later, Loberg was putting in 18-hour days, seven days a week. He had lost more than 30 pounds from his 5-foot-9, 160-pound frame from the long days and even longer nights. But he was paying his mortgage, putting food on the table and doing it on his own.

Loberg had found a company that was seeking distributors for an epoxy floor coating material used to upgrade residential garage floors. He had done a cost analysis and believed Phoenix would be a good market for such a service. At the same time, he started selling ready-to-assemble cabinets from another company. He started with a makeover of his own 640-square-foot garage.

He bought small ads in community papers and each week Loberg’s children, then 11-year-old Lauren and 7-year-old Matthew, would help put mailing labels and stamps on postcards sent to new homeowners. The jobs started coming. With each one, Loberg would buy a little more inventory, a little bigger ad and the phone would ring just a little bit more. He did everything himself, with some part-time help from a high-school student.

Today PremierGarage—launched with an initial inventory that Loberg put on his credit card before loading the materials in the back of his Chevy Tahoe—is both the largest provider of garage enhancements in North America and the largest franchisor in the garage enhancement industry.

PremierGarage specializes in creating garage environments that equal the style, quality and attention to detail found throughout its customers’ homes. Complementing its revolutionary hybrid polymer floor coating system with its own heavy-duty, made-for-the-garage cabinetry and all-steel organizer components, PremierGarage lets homeowners transform what is often the largest, but most forgotten, least-utilized space of the house into an organized, clean and safe extension of the home.

The company has enjoyed a 788-percent annual growth rate over the last three years and its franchise network is projected to complete an estimated $58 million to $62 million in installations in 2007.

PremierGarage began franchising in 2002 and has rapidly grown to 86 franchises in 38 states and 3 Canadian provinces, securing inclusion at No. 125 on the Inc. 500 ranking of the fastest growing privately held companies in the United States in 2006. It also made the list in 2004 and 2005. The company expects to grant 15 to 20 new franchises in 2007 and is well on its way toward reaching its long-range goal of 125 to 130 North American locations.

The company has locations in many major markets, but still has multiple growth opportunities in all market sizes. Targeted locations for growth in 2007 include Los Angeles, Sacramento, Riverside, San Bernardino and Fresno, Calif.; Cleveland, Philadelphia, Boston and Fort Worth, Texas.
“I wasn’t a woodworker, a cabinet installer or a painter,” Loberg says of PremierGarage’s rapid success. “I was basically just someone who had a much larger than average mechanical aptitude, a whole ton of common sense and a heckuva lot of desire. Those were the main components of my success in the beginning.”

PremierGarage is one of the fastest-growing franchise opportunities available and the fastest-growing one in its category. The franchising program was originally launched with no promotional campaign. PremierGarage opened its first franchise in Hilton Head Island, S.C., in January 2003 and opened eight more in 2003.

Loberg had to delay granting four more franchises until the following January, simply because he didn’t have the manufacturing capability to produce the cabinetry needs of the new locations.

By the end of 2004, PremierGarage had grown to 43 locations. As the company has grown even more, so have its resources.

PremierGarage has almost 90 corporate employees; manufacturing and distribution centers in Phoenix and Atlanta and a fleet of eight semi-trucks that deliver its products to franchisees throughout the country.

In June 2006, PremierGarage invested $5.5 million on a 57,000-square-foot facility in Phoenix and spent nearly $2 million on equipment, almost tripling the size of its former location. Its Atlanta facility boasts an additional 45,000 square feet of space.

With recent homebuilder estimates that Americans spent $2.5 billion on enhancing and upgrading their garages, PremierGarage’s state-of-the-art machinery in its manufacturing centers isn’t going to see any downtime. Garage enhancement has become the hottest new category in home improvement today. In fact, an independent research firm found that 82 percent of respondents agreed that the garage was an important factor when considering any home purchase.

“There are 65 million garages out there, of which estimates say only five percent have been improved,” Loberg said. “But people are realizing that the garage is the first room they enter in their house and they want it to be as nice and welcoming as the rest of the house.”

With the garage enhancement industry still in its infancy, prospective franchisees relish the opportunity PremierGarage offers. The estimated initial total investment ranges from $132,900 to $407,750 and franchisees are required to have a minimum of $250,000 in liquid capital. Franchises are priced by market size and territories are determined by a number of factors including population, geographic size, home values, new home starts, income levels and market potential.

PremierGarage is unique in that it does not charge its franchisees a royalty. Instead, franchisees pay an annual fee that is equal to 10 percent of their initial franchise fee. Franchise fees generally range between $35,000 and $75,000. PremierGarage generates revenue from product sales since it manufactures and/or distributes all of its products and delivers them directly to its franchisees.

“People are attracted to the fact that we don’t charge a royalty,” Loberg said. “It’s one of the big positives when comparing us to other franchise systems.”

Loberg said PremierGarage has attracted a “melting pot” of franchisees from firefighters and engineers to ex-CEOs of large manufacturing companies and even executives from other franchise concepts. They are all looking to capitalize on a fast-growing niche of the home improvement industry that didn’t even exist just a short time ago.

And while Loberg has come across many challenges as a franchisor that he didn’t encounter in his former career, he says the formula for success is still the same.

“Certainly everything is challenging the first time you come up against it, but it’s also very much the same,” Loberg said. “Whether you’re selling socks, cars or garages, it all comes down to taking care of your customers… providing them with quality products and service, following through on your commitments and doing the right thing.”

Mark Loberg left a successful career in an automotive dealership to launch his own business. Today his company, Premier Garage, is both the largest provider of garage enhancements in North America and the largest franchisor in the garage enhancement industry

Category: Magazine, Small Business Opportunities, Small Business Opportunities Sept 2007