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Brian Scudamore, founder and CEO of 1-800-GOT-JUNK, leads a group rally in the lunchroom of company offices in downtown Vancouver May 22, 2009.JEFF VINNICK FOR THE GLOBE AND MAIL

Brian Scudamore didn't plan to discover his next new business concept in his own kitchen.

But that's what happened when the founder and chief executive officer of 1-800-Got-Junk LLC was desperately looking for his Vancouver home to be painted last July without turning it into an uninhabitable work zone for several weeks.

He got lots of bids for the job, but one pitch he couldn't resist: Jim Bodden, owner of a company called One Day Painting, said he could get the whole house done in a single day.

When Mr. Scudamore arrived home at the end of the appointed day to find his house transformed (and his six-year-old daughter not trapped in her room by drop cloths), he realized he not only had a great paint job but the new idea he'd been hunting for: another home-service business that would allow him to grow in a new direction but leverage his existing operations.

"I just fell in love with the concept. It was one where I said, "Why didn't I think of that?" Mr. Scudamore recalls.

For one thing, he instantly saw that house-painting – like household junk removal – was a "very fragmented, beat-up market" crying out for someone to bring a sense of standardized professionalism to it.

On top of that, Mr. Bodden's added touch – painting completed in a single day – offered differentiation in a big, crowded market of house painters, ranging from drifters with a brush to high-end companies.

For Mr. Scudamore, 1-888-Wow-1Day Painting is an opportunity to use everything he knows and has already acquired for 1-800-Got-Junk: his call centre, training system, real-estate division, existing relationships with vehicle providers and brand reputation.

"There's a lot of leverage there by levering up the first brand. And then we do booking and dispatch with our existing sales centre," he says.

He is also creating new touches for the new business: a specialized training course for painters, specific vans and uniforms, morning meetings to decide how the team will swarm the house, flowers left at the home at the end of the day, and follow-up calls to make sure everything is all right.

As a result of all that, he already has sold five franchises in Canada and the United States (Mr. Bodden, who has been in the painting business for 22 years and developed the one-day idea two years ago, has a 12-per-cent stake in the new company and owns the Vancouver franchise).

Mr. Scudamore expects to have 15 franchises by the end of the year.

"It took me three and a half years to get to 15 franchises after I started franchising 1-800-Got-Junk in 1999," recalls Mr. Scudamore, whose company is now up to 250 franchises in Canada, the United States and Australia.

Mr. Scudamore isn't the first to discover of the power of leveraging one business to build others.

Franchises helped bring standardization to sectors often populated with haphazard amateurs. In recent years, companies have been taking that systematization and business efficiency one step further by operating what's called multiple-concept franchises, applying the skills they've already acquired in selecting franchisees, writing operations manuals and setting up shops to a group of franchise lines.

The franchisors don't just get to leverage call centres and experience in developing systems, says John Hayes, a U.S. franchising expert currently teaching in Kuwait who specializes in multi-concept franchises.

"You get another huge advantage: no cost of finding a franchisee. In the U.S., it may cost as little as $10,000 and as much as $50,000 to find a franchisee, but when you sell to an existing franchisee who you already know, or who you can leverage out of an existing concept, then you save those seek-and-find marketing costs," Mr. Hayes wrote in an e-mail.

Proving that point, Mr. Scudamore has already sold two franchises to people who were working in 1-800-Got-Junk franchises.

Most of the current multi-concept groups tend to cluster their franchises around businesses that have a unifying theme. The best known multi-concepter, The Dwyer Group Inc., based in Waco, Tex., is the centre of gravity for Mr. Rooter, Mr. Appliance, Mr. Electric, Grounds Guys, Glass Doctor and Aire Serv.

Other companies that have acquired franchises, rather than starting their own, have also usually opted for a thematic approach.

Yum Brands Inc., based in Louisville, Ky., which bills itself as the world's largest restaurant company, controls the franchises for KFC, Pizza Hut, Taco Bell, A & W, and Long John Silver.

Not all operators stick to similarly themed holdings. T&M Management Services Ltd. owns businesses ranging from Boston Pizza to Mr. Lube.

That's not as strange as it sounds, says franchise consultant Wayne Maillet.

"The skill sets and the infrastructure to develop a franchise are transferable from one kind of business to another," says the Delta, B.C.-based president of Franchise Specialists. "But if you get into an area where you have no experience, the best advice is, if you don't have the knowledge you need, you should go out and hire it."

That's what Mr. Scudamore did. He bought out Mr. Bodden for his 12-per-cent stake. In return, Mr. Bodden is writing the operations manuals that provides the road map for a smooth, one-day job, including how to round up crews quickly, how to assign tasks in the morning meetings, and what order to paint in. (Hint: The ceiling gets sprayed first.)

The new business will be Mr. Scudamore's test of whether he can transfer his franchise savvy. Mr. Maillet thinks he's got a good chance.

"Early on, people told him franchising of junk removal couldn't be done," Mr. Maillet says. "But he did it."

Pluses and minuses

Multiple-concept franchising has lots of upsides and few downsides, according to the experts:

Pluses

  • A way to keep growing when your original franchise is reaching its limits
  • A way to leverage: the new business can use existing call centres, supply relationships, accounting departments and marketing
  • Complementary franchises can help smooth out seasonal cycles (summer versus winter) or economic ones (high-end services versus value-priced ones)
  • New business can provide additional business for existing franchisees to run

Minuses

  • Moving into unfamiliar territory could backfire unless the franchisor hires people with the necessary expertise
  • Different franchises could end up being in competition with each other
  • Very different operations could end up confusing a brand

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