Catching up with Budget Blinds and why Chad Hallock believes there is a better way for dealers to do business.
The goal has always been clear. Now it seems to be in reach. Shortly after 1992 when Chad Hallock and the four other founders of Budget Blinds started their franchise business, a specific plan was in place. They had selected designated market areas across the country, decided on exclusive territories of 32,000 households, and established a national advertising fund into which each franchise owner would contribute.
When Draperies & Window Coverings interviewed Hallock a few years later (see D&WC April 2003), the plan—along with the training program that goes with it—was already under way. The aim was to reach a specific number of franchises, because that’s when the national advertising fund would reach critical mass with the ability to get a third of its target market thinking of Budget Blinds first.
“We have a proven track record, not just of 100 franchises, not just of 200, but with 1,000. And we’re only 500 away from achieving our vision. Now there has never been a better time. I think retailers have got to be looking for a company to align with that is going to make them stronger.”
As president of Home Franchise Concepts, the holding company for Budget Blinds and Closet Tailors, a similarly run franchise program for home interior organization, Hallock believes today’s economy has many independent window coverings dealers rethinking their businesses.
“That’s what our thought is,” he agreed. “That’s why we want to take this opportunity, while they’re struggling, while they’re looking at it, while they’re trying to figure out, Do I go out of business or is there a better way? My answer is, Don’t go out of business, there is a much better way,” said Hallock.
“Right when we started our business, Orange County [CA], where we launched Budget Blinds, was bankrupt—literally. The housing market was more upside down than it had ever been in years, unemployment was higher than it had ever been in years, the list goes on and on. There are so many similarities back then to where we are today. I wouldn’t say it was as bad as where we are today, but it was really grim specifically where we started, yet we were able build a business and thrive in that marketplace because we learned how to build a business with very little money—because of grassroots efforts, because of the willingness to do work that others weren’t willing to do.”
Hallock stressed the idea that with a national franchise network, dealers today don’t have to go it alone. “That’s exactly our philosophy. The networking, the tools… all those things that make a good franchise concept work, we can offer that.
“Right now, all these independent retailers are competing day in and day out; and my argument is why compete against each other? We can all join forces, have a huge advertising budget, have perfect-sized geographic areas, share in all the ideas, share in all the tools, share in the pricing model, share in the advertising model and each person benefits. Stop competing against each other and wearing away and tearing away the margins.
“Take for example, Phoenix. We could make about 20 territories in the Phoenix marketplace. Think of instead of 20 competitors going after the same market, each competitor picked up a piece of that geography. Now each has the Budget Blinds brand with 32,000 households—how much stronger would they be, how much more margin would they get, how deep could they go in their market share if you add the huge dollars in an exposure campaign?
“Everybody thinks, if I have more area I’ll do better. It doesn’t really work that way. You’re only going to be as big as you advertise and you’re only going to be as big as the personnel you have to cover the leads from the advertising.”
ADDING TO THE MODEL
Now with two franchises up and running under this business model, Hallock said Home Franchise Concepts is in a position to take it even further. “The plan is for us to get more and more involved, not only in the window coverings business, but in other aspects of home improvements,” he said, but explained that each franchise concept would be run by different owners.
“The idea is that once we’re in the home if we can do blinds and then closets and then, let’s say, area rugs or whatever becomes the next concept we get into, taking one customer all the way through anything they need for home improvement and let us be the one-stop solution. But instead of doing it all under one brand, do it under multiple brands and pass those leads back and forth among the different companies. Then have each of the two share their databases, have them share their experiences in sales and what their unique situations are in each customer’s home, by which they both benefit in the areas they are each focused. Ultimately to have each franchisee share in a national ad fund that is large enough to dominate the mind of the consumer.
“We’ve proven Budget Blinds, we feel we’ve got to prove Closet Tailors. Once we’ve proved that then it won’t be a fluke that Budget Blinds is where it is and wouldn’t be a fluke that Closet Tailors is where it is, but then adding a third, fourth, or fifth concept from that point should be a much easier venture.”