Service Franchises Serve Up Success - Part 2

Franchise puts new twist on dry cleaning business

Service businesses that provide time-saving convenience to busy consumers are increasing at twice the rate of product oriented businesses. Pressed4Time has established a niche, offering a sophisticated dry cleaning pick-up and delivery service for professionals, dual-income families with young children and other over-scheduled consumers who value time as a rare commodity.

Over the last 20 years, dry cleaning sales have increased over 50%. Each year, over 400 million garments are cleaned at an estimated $5.3 billion in sales. "Early on we tapped into this lucrative and mature industry, known for its steady, repeat business and added a new twist for today's personal service market," says Randy Erb, Pressed4Time Director of Franchise Development.

You are probably thinking that dry cleaning delivery is nothing new so what's the twist? "We are the only dry cleaning pick-up and delivery service in the country that builds business by providing service to our customers at their places of work as opposed to going to their homes. In any given area where we operate, there might be one or two competitors, if you want to call them that. But normally, these are local dry cleaners that put little effort into promoting that side of their business. By contrast, we are very aggressive with our marketing and have developed a very profitable concept," says Erb.

The concept is simple enough. This is a high-repeat service business with rapid growth and no inventories. Erb explains, "We set up a twice weekly schedule and establish a convenient drop-off and pick-up point at an office building. All the customer has to do is leave his garments in our garment bag, any day of the week. The order is returned and will be waiting for the customer, in the same spot, after our next visit. We guarantee our reliability and we promise it will work just like clockwork. Prices are competitive and there are never any extra charges for pick-up and delivery. Payments are left at the designated service area so no one has to be disturbed while they are at work."

Franchisees focus on serving customers, not dry cleaning
Pressed4Time franchisees don't actually do any dry cleaning, and they don't operate like other delivery services either. "Although we don't do the dry cleaning, to our customers we are the dry cleaner. We contract with a local cleaner in the area to do all of our work. That includes everything from opening up the bags to tagging the garments, cleaning, assembling, and then packaging the orders so that everything on the order says 'Pressed4Time.' So you see, rather than working as a delivery service for a dry cleaner, we hire a dry cleaner to do our work for us," proclaims Erb.

Customers for this business include anyone who dresses up to go to work and has to take their things to a dry cleaner on a regular basis. Typical examples would include corporate employees, attorneys and paralegals, real estate agents, stock brokers, accountants, and so on. To target this market, Pressed4Time franchisees use a multi-call marketing approach. Erb says, "We begin with simply walking into an office and leave information behind that announces 'hey we exist.' This gives us control over where the customers are located so that our people are not driving all over the country to pick up orders here and there. Approaching specific office buildings makes it possible to build a very tight efficient route. Our people typically drive less than 15,000 a year - that's pretty good for a mobile service!"

Growing number of consumers are pressed for time
Since it was established in 1987, Pressed4Time has grown to be the largest dry cleaning pick-up and delivery service franchise on a national level. Currently there are more than 170 operations in 34 states and four countries. Corporate clients include names like American Express, Black & Decker, Century 21, Coca Cola, Coldwell Banker, Dean Whitter, General Foods, and Hewlett Packard.

Convenience is key in today's marketplace, which is why more and more franchises are adopting some form of mobile service. Erb says, "We've been in the business longer than anybody and every year we just see more and more people are pressed for time. With our service, we can return time to people and make their life a little easier."

Contact Information: Randy Erb, Director Franchise Development, Pressed4Time, randy@pressed4time.com, www.pressed4time.com, (800)423-8711.

Check cashing services go mainstream

According to the Federal Reserve Board, nearly 13% of families in the U.S. do not have a checking account. What may be surprising is the fact that the majority of these consumers are "un-banked" by choice. About 15,000 check-cashing outlets in the United States cash more than $80 billion worth of checks annually for consumers who prefer to manage their money on a simple cash basis.

"Most people have misconceptions about this industry," says Wayne Barry, Vice President of Development for United Check Cashing. "They think of the ghetto or the seedy part of town, when actually we are developing stores in the highly developed commercial areas. Our stores are situated along side Dunkin Donuts, Quiznos, and Cold Stone Creamery in highly visible shopping centers. Our franchisees operate clean, bright stores where customers can feel safe and comfortable in familiar surroundings. We present ourselves as a boutique bank."

Customers want speed and convenience
United Check Cashing centers offer better hours than a traditional bank by staying open later and being open on Saturdays. "But the main attraction," says Barry, "is being able to cash a check with no holds while it clears the banking system, all for just a couple of pennies on the dollar." Check cashing accounts for about 85% of the business, but there are also ancillary services such as money orders, wire transfer, utility bill payments, income tax preparation, and prepaid debit cards.

Unlike the typical bank, United franchisees work to establish ongoing relationships with their customers. "The first time a customer walks in the door, we go through a process that takes maybe 15 minutes to verify that the person is who he presents himself to be. That information is entered into a database so that the next time, all he has to do is show his photo ID. The second part of the process is verifying the check to be cashed. Again, the customer's transaction history is entered into the database so the next time they present a check from the same company, it goes pretty quickly," says Barry.

Barry points out that even with this process, there is no guarantee that a check will clear. But the track record is surprisingly good. "Generally we see bad checks account for less than 1/2% of the revenues," says Barry.

United cashes in on changes in the banking industry
Check cashing centers have mainstreamed only in recent years, but United Check Cashing has been around since 1977. Barry says, "The business has really gone through a transition over the last 30 years. This used to be a welfare type business, but not any more. There are two big reasons for this shift. First, is the tremendous influx of people from outside the US who don't believe in banks. They are used to dealing on a cash transaction basis and are very comfortable with this particular service. Plus, they appreciate the convenience of being able to do things like transfer money back home and pay their bills, all in the same visit. It doesn't mean all our customers are foreigners. Actually most are blue and white collar workers just like you and me."

"The second reason is the banking industry, which has also changed tremendously over the last few years. For starters, consumers need to keep minimum levels of bank balances to avoid monthly service fees - and those fees have gone up from a few dollars a month to $15 a month. Then, if you bounce a check you get hit with anywhere from $30-50. The biggest change though was the Check 21 law that the government passed last year. It reduced the float time so moneys from bank to bank are now transferred overnight. People used to have a two or three day float before they had to get money in the bank to cover the checks that they wrote. Now it's one day. So you find people with low balances in their bank accounts have big problems. Let's say they may have a $200 balance in their checking account and they present the $500 check. The bank will only give them up to $200 because that's all they have in their account at the moment. The other $300 has to wait for three or four days for the bank to clear it. Now if that person writes a check for more than $200, the bank might let it go through, but they'll hit the account holder with a new fee for 'Unavailable Funds.' It can cost $40 or $50, just as if it was 'Insufficient Funds' even though the money is there," states Barry.

Barry says when you look at how banks operate, it's not surprising that a lot of people use check cashing services. "You have to understand how banks make their money. It's by keeping the money, not giving it out. They are not interested in cashing checks. By using our service, a customer can get a check cashed quickly and without a hassle. The franchisee makes a few dollars in the process and everybody's happy."

Contact Information: Wayne Barry, VP Development, United Check Cashing, wbarry@unitedfsg.com, www.unitedfsg.com, (800)626-0787