Got-Junk founder looks to big jobs
Commercial contracts offer franchise avenues for expansion
It’s hardly a secret that Vancouver’s Brian Scudamore is Canada’s franchise king.
Scudamore, who in 1989, at age 19, launched the 1-800-Got-Junk trash collection operation (then called Rubbish Boys), has been lionized in the press as a canny entrepreneur who almost singlehandedly wrenched the franchise business model from its fast-food roots to a focus on humble but much-needed service businesses.
Scudamore’s company, O2E Brands, has relentlessly expanded and now features several homeservices franchise chains. The predominant one is 1-800-Got-Junk, now ubiquitous in most large cities in Canada, the U.S. and Australia.
O2E has added other franchises to its stable, most of which follow the 1-800 model. These include Wow 1 Day Painting, which, well, paints; You Move Me, a home moving service; and his latest venture, Shack Shine, which provides gutter and window cleaning, and power washing. The constant expansion has turned O2E brands into a franchise powerhouse, with its outlets generating about $275 million last year.
Surprisingly, however, the next big move for O2E is into commercial work — particularly through a more corporate business model. The company, which has 400 direct employees between its Vancouver and Toronto offices, is piggybacking on its franchise systems to provide higher-end services for larger Canadian companies, primarily chain stores.
While the franchise business is still O2E’s prime revenue generator, it’s nearing saturation in terms of expansion.
However, Scudamore contends the commercial division, now earning $58 million a year, could be much bigger because a network of removal is already in place and the accounts would likely be much larger than in the home-service business.
“Ten years ago, we got a call from a store chain that was remodelling its stores in Toronto and needed a lot of removal, but it had to be done at night,” Scudamore recalled. “We could do it because we work at all hours. It was an account worth a million and we realized, wow — we can do this for others. Now we do all the national retailers.”
What makes it easy for O2E is that it has a junk removal operation in almost every Canadian city, and certainly every city that features the larger store chains. Also junk removal can be done at any hour — a prime need for chains that can’t afford to shut down while undergoing re-construction or other changes. For example, an ability to work at night was a big draw for the original caller, a Toronto chain store.
Also, making it easy is the wellhoned O2E system, which has a centralized contact system accessible from everywhere, a single bill that can be delivered to a chain’s head office, and other streamlining systems that appeal to timestrapped executives.
“They like that they can make a call to one number (The Vancouver nerve centre of the national system) and have all their stores cleared out at the same time if they need it,” Scudamore explained. “It’s a 24/7 personalized system.”
Also, it’s relatively simple for his company to handle the larger accounts, he said. For example, the commercial section employs only 14 people.
Of course, local franchisees are pleased with the commercial account system, because it provides steady, and often bigger, jobs that don’t require much legwork to acquire.
David St. James, O2E vicepresident, marketing and commercial sales, said the company’s commercial operation is appealing because it is available when there is a “trigger” — in this case, a change that is common among chain stores.
“The perception of value is the relationship of time, space and effort, so it’s often easier to pay someone else to do something.
“Our key contacts are property managers, contractors, and real estate people, who are involved when a company is moving, renovating, or needs some cleanup,” St. James said.
The commercial division currently accounts for between 25 and 28 per cent of O2E revenue, and is expected to climb to 35 per cent in “a couple of years,” he said.
“Our clients tend to change often, so we’re called in regularly. Some stores change their look every season. That doesn’t happen so much with homeowners. They’re mostly one-offs.”
Of course, that will likely continue to climb: O2E is already studying similar expansions into New York, Chicago and Los Angeles.