Want to hitch a ride on a financial rocket while advancing environmental and social change? Consider an eco-friendly franchise opportunity. The franchise business model splits off the most challenging and risky aspects of organizing new entrepreneurial ventures from scratch, such as the need for prescient and visionary new business concepts, along with access to large-scale financing like venture capital. The model then divides operations into manageable segments that ambitious franchisee entrepreneurs can build into lucrative businesses.
In this way, franchisees experience a broad range of benefits. Franchisees enjoy the independence of being in business for themselves while they benefit from the support of a larger company. They often benefit from immediate brand recognition in an existing customer base. Moreover, entrepreneurs can capitalize on the franchisor’s support right from the start while setting up their franchise business. That support extends to aspects like the design and construction of facilities; the selection of optimal locations and equipment; the training of management and staff; and marketing support. And often, all this support only requires a relatively modest licensing investment.
Recently, entrepreneurs have extended the franchise model to a broad range of eco-friendly businesses, such as those which appear in the following profiles. The trend that’s driven these business concepts has been growing demand for eco-friendly products and services.
For example, a landmark October 2015 Nielsen study found that 66 percent of global respondents—including most Baby Boomers and about three-quarters of Millennials and the younger Generation Z—would pay more for sustainable products and services from firms committed to positive social and environmental impacts. Moreover, a later 2017 Cone Communications study revealed that almost 70 percent of Millennials bought a product within the past year with an environmental or social benefit. Cone’s survey also disclosed that about 90 percent of all consumers would buy a product with an ecological or social benefit, and are more likely to buy from, trust, and devote more loyalty to companies that support environmental or social issues.
Eco-friendly demand has become so pervasive that a February 2019 Harvard Business Review study concluded that some firms are now “creating real strategic advantage by adopting sustainability measures their competitors can’t easily match.”
Read on for examples of potentially lucrative franchise opportunities from eco-friendly companies.
Most readers of BustedCubicle are familiar with the iconic brown vans of United Parcel Service, one of the best-known brands in the world. Similarly, most of our readers are also familiar with the firm’s franchise retail outlets known as The UPS Store.
Rebranded in 2003 after UPS bought Mail Boxes Etc., these 5,000 stores have served as a frequent stop for millions of consumers and small business operators and employees. Along with domestic and international shipping, typical stores offer packaging, printing, mailbox and postal services, moving supplies, and other small-business services.
However, many of our readers may not know about the substantial reputation UPS has built in the realm of environmental sustainability. For example, beginning in late 2012 the company started converting its fleet of 93,000 delivery vehicles to new models that recover 70 percent of the energy the old trucks lost when braking, a principle pioneered by Toyota Prius hybrids. But unlike the hybrids that charge batteries with the power, the new UPS vehicles store it as pressurized hydraulic fluid in fortified tanks. Built by Germany’s Daimler AG, the new trucks look like the old ones, but the new powertrains boost mileage by 35 percent.
The last mile in a ground shipment’s delivery chain is by far the most energy-expensive—much more expensive than long-haul trucking miles on interstate highways.
To further minimize energy consumption, the firm uses a system called ORION, an acronym for On-Road Integrated Optimization and Navigation, which was first deployed in 2016. After accounting for planned pick-up and delivery times, the technology uses GPS signals to calculate the shortest routes. Even better, a new version rolling out during 2019 will dynamically re-optimize the shortest routes during trips based on real-time updates about new pick-up stops, traffic congestion, and road conditions.
Patrick Browne, the director of global sustainability at UPS told Supply Chain Dive, “We’re saving on average six to eight miles per driver per day.” That translates to a savings of 100 million miles, 10 million gallons of fuel, and $400 million in gas and labor each year in the United States.
Delivery density—i.e., multiple packages delivered at each stop—saves energy, too. To build in density, the company introduced UPS My Choice, a program that gives customers a choice of convenient times and places for delivery. Besides the UPS Stores, customers can choose from a network of access points the firm has assembled that include gas stations, dry cleaners and lockers similar to the new Amazon Lockers.
Several authorities have recently recognized the firm for these sustainability efforts:
Other authorities have recognized The UPS Store for franchise viability. In 2019, Entrepreneur Magazine’s annual Franchise 500 list ranked the company fifth after two years of fourth place showings and #19 in brand strength.
From an environmental perspective, carpet cleaning—one of the services least understood by consumers—remains a resource-intensive, dirty business that still employs dated technology. For example, the hot water extraction (HWE) cleaning process that many continue to refer to by the misnomer “steam” cleaning first received a patent in 1964 in the United States and moved into extensive use across the nation by the early 1970s.
A 2016 survey found that about 90 percent of U.S. carpet care professionals continue to use this 55-year-old technology as their primary method, with three out of four practitioners using truck mounted equipment. This process needs 50 gallons of water or more to clean an average-sized home, and often leaves carpeting damp, sticky and prone to more rapid soil collection afterward.
Since the 1970s attempts have been made to reduce this water consumption by using “dry” chemicals, applied either as powders or foams. Many of these products on the market today contain toxic chemicals used in traditional dry cleaning. These include Tetrachloroethylene—also called Perchloroethylene and colloquially known as “Perc.” Evidence of an association between Perc and an increased risk of certain cancers has been identified among those heavily exposed, including dry cleaning shop employees and some who exclusively wear dry-cleaned garments during the work week.
Fifteen years ago an MBA student named Jonathan Barnett had learned that carpet cleaning businesses offered competitive advantages over other kinds of franchises:
He sought to exploit an underserved segment of the carpet care market discouraged by the potential health effects of cleaning chemicals on the health of their families and pets, as well as the damp carpeting left by most HWE vendors.
The prescient Barnett recognized that the way to take advantage of this opportunity was through innovation. He realized that the industry had not yet embraced two advances in chemistry that were very new at the time.
The first advance was oxygenation, such as through compounds like sodium percarbonate which breaks down into hydrogen peroxide when exposed to moisture. This compound is the nontoxic active ingredient in the wildly successful laundry additives and cleaning products marketed today by Church & Dwight under the OxiClean brand.
The second was polymer encapsulation, in which polymers bind soil attracted by detergent molecules into brittle, crystalline structures that snap away from fibers. A vacuum or cylindrical counter-rotating brushing device could then lift the encapsulated fragments out of the carpet pile.
Collaborating with chemists, Barnett created an eco-friendly cleaning system incorporating both advances, free of sticky residues, and safe for kids and pets. Moreover, his approach requires 96 percent less water to clean a house—only about two gallons—and dries in roughly an hour.
With a brand logo resembling OxiClean’s, Barnett’s Denver firm Oxi Fresh today serves 370 markets across North America. New franchises launched since 2016 serve almost a quarter of these markets. Entrepreneur Magazine ranked his firm #2 in their carpet/upholstery maintenance services category within their 2019 Franchise 500 chart. And he estimates that his firm has saved over 35 million gallons of water.
Consider this exciting possibility: what entrepreneur wouldn’t love to be selling a product or service that’s free? That nobody had recognized a way to turn a virtually free service into a gold mine before visionary irrigation professional Russ Jundt’s innovation seems almost astonishing.
What’s even more remarkable is how out-of-step Jundt’s innovation seems when compared with the pricing of most other eco-friendly products and services. For example, organic produce and foods typically charge higher prices than competing products. Yet Jundt’s eco-friendly service reduces costs borne by customers.
What is this magic innovation that Jundt brought to market? Understanding Jundt’s solution first requires understanding some facts about water consumption many readers probably never have heard.
Accessible fresh water makes up one of the world’s most limited resources because it covers less than one percent of the planet’s surface, and over a billion people have no daily access to clean, fresh water.
Nevertheless, in the United States, water also ranks as one of the most wasted resources. Jundt learned in 2010 that the nation’s inefficient landscape irrigation systems wasted approximately 1.5 billion gallons of fresh water each day. However, a November 2017 Environmental Protection Agency report asserted that such waste now amounts to about 4.5 billion gallons every day.
Every time a typical irrigation system cycles, it consumes 25 times the roughly hundred gallons an average household uses each day indoors. During a visit to an Orange County, California neighborhood on a hot, sunny afternoon not long ago, one could observe wasted lawn irrigation water running down street gutters and into storm drains. Waste like this is common across the nation.
Furthermore, every use of water requires prior treatment and delivery. The purification and pumping require vast amounts of electric power, which consumes two percent of all energy consumption in the United States. The EPA says that segment is “adding 45 million tons of greenhouse gases annually.”
Jundt created an auditing process that discloses not only the visible waste from sprinkler “geysers” and runoff but also the hidden waste in a residential irrigation system, such as from cycles during times outside the optimal 2:00 AM to 5:00 AM window. Then, he paired these audits with recently developed, state-of-the-art irrigation efficiency technology.
His result—delivered by a new company which he calls Conserva Irrigation—embodies an irrigation efficiency service that should on average save about sixty percent of a home’s water use and pay for itself through lower water bills. In other words, for most customers this service will not require additional costs above their pre-optimized water charges. Jundt claims that the average Conserva customer saves just under 400,000 gallons of water and $2,040 on their water bill each year, and that the young company has already saved customers over 100 million gallons.
The other surprising aspect of Jundt’s innovation is that nobody had created a landscape irrigation franchise before Conserva. Since licensing its first franchise in 2017, the Richmond, Virginia-based company has already licensed franchises in 32 markets across the nation, including franchises like this one in drought-ravaged California. Jundt claimed in December 2017 that some franchisees were on track to report up to half a million dollars during their first year after only investing between $40,000 and $80,000.
Sometimes, getting fired can be the best thing that can happen. For example, consider Phil Catron, the CEO of Frederick, Maryland-based NaturaLawn of America, which licenses 90 franchises in 24 states.
In 1986, Catron had been trying to persuade his chemical company employer to begin offering organic lawn care products during an era when the industry was too busy hawking profitable chemicals like Roundup (see profile below) to take eco-friendly alternatives seriously. Catron told Forbes, “It was almost a forbidden fruit because it was very easy to pull the chemical trigger to make a lawn green and weed-free.”
In exchange for his foresight, the company “exited” Catron from his job as vice president of operations. During the next three years, several other chemical firms rejected his ideas as unprofitable and refused to hire him.
But Catron continued to persevere. Finally, in 1989 Catron sold his first franchise in Pennsylvania for an innovative, disruptive new business that would offer products and services focused on environmentally-friendly lawn care. NaturaLawn was in business, and Catron was back.
Catron’s inspiring story offers lessons for entrepreneurs. In particular, it demonstrates the crucial role played by franchisees in bringing innovations to the marketplace. After all, entrepreneurs who can persuade franchisees to buy licenses probably don’t need to convince venture capitalists to invest.
At first, the notion of using ruminant animals for landscaping—let alone building this concept into a franchise business—might strike some as comical and unbelievable. And indeed, as captured live in this video, hilarity ensues as hundreds of gleeful goats jump out of trucks on their way to yet another satisfying day hard at work eating fire-prone wild plants, weeds, and underbrush for eight hours—plus overtime if they’re lucky.
But by no means could one consider this business a goat rodeo. Hungry munching goats offer a compelling array of economic and environmental advantages over mowing and trimming. Major underwriters like Seattle’s Pemco Mutual Insurance encourage the practice, which works exceptionally well in wildfire-ravaged areas like California’s Sonoma and Napa Counties 45 minutes north of San Francisco; the region lost 40 lives,162,000 acres and over 5,000 homes to wildfires in October 2017. Ruminant landscaping works in such areas because goats effectively defoliate and “mow” remote terrain like steep hillsides with trees—geography difficult or impossible to render fire-safe with conventional mowing equipment.
Furthermore, harmful smog-producing exhaust doesn’t constantly bellow out of goats. But that’s certainly the case with gasoline-powered mowers, none of which come equipped with emission control systems like the catalytic converters required on vehicles. That means goats can clear brush even during spare-the-air days in California when the state requires mowers sit idle.
What’s more, acids and enzymes in the animals’ digestive tracts render the seeds goats ingest to be sterile. That means vegetation in fields “treated” by goats takes much longer to regrow than those mowed, offering cost savings on future upkeep.
In this way, goats eliminate the need for weedkillers that expose landscapers to known or probable carcinogens, as well as pollute creeks and groundwater. The stock of Monsanto’s parent company Bayer plunged more than 10 percent on March 20, 2019 after a jury in the United States District Court in San Francisco determined that a plaintiff developed cancer from spraying the subsidiary’s weedkiller Roundup in his yard in Sonoma County, California (see the sidebar, Weedkiller Cancer Litigation Intensifies).
In this rapidly-growing eco-friendly industry, one business that’s been offering franchising opportunities since 2016 is Vashon, Washington-based Rent-a-Ruminant. CEO Tammy Dunakin now licenses franchisees in eight states and told Forbes she has “several more in the pipeline.”
Besides the litigation decided on March 20, 2019, Bayer faces 11,200 more cases in the United States alone alleging the herbicide glyphosate—the active ingredient in Roundup currently under intense worldwide scrutiny—caused severe illnesses.
“The case marked the second legal defeat in seven months for the German pharmaceutical giant over its weedkillers. Last summer, a separate jury hit the company with a $289 million judgment for failing to warn customers of the cancer risks tied to its Roundup and Ranger Pro brands. . .Bayer stock, which trades on the New York Stock Exchange, is down 34 percent since the first trial; that translates into $33.8 billion in lost market value.”
Many authorities discourage the use of weedkillers like Roundup. One expert who has investigated the effects of glyphosate exposure in humans is Dr. Paul Mills, a public health professor at the University of California, San Diego who works with the UCSD Cancer Center’s Cancer Prevention and Control Group. Mills told the newsletter Healthline, “There is consensus, among non-industry scientists, that there is no safe level of exposure to glyphosate. That is, no level established that comes with no possible harm.”
And at the trial in San Francisco, Dr. Dennis Weisenburger—a pathologist specializing in blood diseases—testified that the greater one’s exposure to Roundup, the higher the risk one faces of developing non-Hodgkin lymphoma. He is a member of a team of scientists who since the 1980s has studied the rapid increase in lymphoma. Weisenburger testified about research indicating “that glyphosate is both genotoxic and carcinogenic.”