Minneapolis, MN, July 19--Some call it the last frontier of the home remodeling craze that has overtaken our TV schedules in the past four years. They're talking about that cracked-cement, oil-slicked, embarrassingly disordered space where you park your car.
And folks such as Doug Arndt and Tom Holm are turning a growing demand for organization and style in the garage into a million-dollar business.
Founder Arndt and his partner, Holm, are building a young Minnetonka franchising company called the Complete Garage, a so-called "garage-enhancement" business that sells and installs epoxy flooring and a variety of storage and organization systems designed to add eye appeal and order to what typically is an unsightly mess.
Offerings range from an array of decorative, easy-to-clean epoxy flooring to the StoreWall line of wall-mounted storage panels to the Gladiator line of steel-case modular cabinets, refrigerators and freezers recently introduced by Whirlpool Corp. In all, there are five different lines of storage and organization products and accessories.
My favorite: For $2,300 (installed), you can have a motorized shelf to lift your motorcycle or snowmobile 10 feet off the floor, leaving plenty of room for the hood of your new Beamer.
Arndt opened a showroom in 2000 to sell residential garage flooring, then began adding storage and organization items as customers demanded them. That makes him a pioneer in the garage-products field, said Randy Voss, national sales manager for Whirlpool's Gladiator line.
"He was in the space before it became an industry, before it was on anybody's radar screen," Voss said. "Three years later, research by Peachtree Consulting Group in Atlanta puts the potential market at $500 million."
In Voss' view, the Complete Garage has a logical business model that includes a "good product assortment" and a showroom strategy that "helps a customer choose what fits his pocketbook." Translation: Customers can shop for what they want, then choose either to install it themselves or pay The Complete Garage to do the job. So far, about 75 percent of sales include installation, Arndt said.
All of which is why the Complete Garage was the second independent vendor of garage products that Whirlpool selected as one of 95 authorized dealers when the Gladiator line was introduced last year, Voss said. It's also why he frequently refers potential franchisees to Arndt and Holm.
In addition to a company-owned showroom in Hopkins, three other locations have been opened by franchisees in Maplewood, Eagan and Milwaukee since the company began active marketing in November. Arndt and Holm expect to have a dozen showrooms open by year-end, including franchised units scheduled for Des Moines; Charlotte, N.C.; Seattle; Indianapolis; Denver, and even Auckland, New Zealand.
They also have franchise agreements for showrooms to open in Omaha, Charlotte, Indianapolis and Seattle in 2005, when they plan to add at least 12 more locations.
The payoff: The partners expect 2004 revenue to reach $2.8 million, including franchise fees, royalties and wholesale and retail sales of garage products.
That compares with $1.1 million in 2003, when they had just the company showroom and a wholesale business that peddled garage products to a dozen dealers in the Midwest. Now, they are wholesaling product to their franchisees as well.
The Complete Garage is the outgrowth of Concrete Technologies Inc., an industrial flooring business that Arndt ran for 12 years before being forced to shut it down in 2002 because of the recession and his overambitious growth strategy. The failure cost him the $750,000 he had plowed into the business in the preceding three years, along with $300,000 his father-in-law had loaned the company and a similar amount owed to vendors.
The company specialized in polymer flooring to seal concrete floors in food and beverage plants. But Arndt kept getting calls from homeowners seeking ways to cover their chipped, cracked and stained garage floors, which is why he opened a small showroom four years ago to accommodate residential customers.
By the end of 2001, residential sales reached $300,000, so he split the Complete Garage into a separate operation in 2002 and merged it with Holm's company, which produced custom-made cabinets for garages.
