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Velofix offers bicycle repair at the customer’s home or office. Pictured is CEO Chris Guillemet, left, and franchisee Nick Di Cristofaro. (Pawel Dwulit/The Globe and Mail)
Velofix offers bicycle repair at the customer’s home or office. Pictured is CEO Chris Guillemet, left, and franchisee Nick Di Cristofaro. (Pawel Dwulit/The Globe and Mail)

THE CHALLENGE REVISITED

Mobile bike shop expands in high gear Add to ...

Before the term “market disruptor” had any meaning in the bicycle business, former Olympic rider Lorne Atkinson and his son Dan had a secret drawer in the back of their bike shop.

The store, Ace Cycles in Vancouver, is still a going concern. But half a lifetime ago, when Lorne and Dan were still there, letting me fix my steel racer alongside them, the air thick with WD-40, they motioned toward the drawer.

Dan opened it. There sat a pristine Campagnolo Record gruppo, a collection of top-line Italian parts, still in their original box, if I remember correctly. It was a moment evoking the mystique of classic bikes and bike shops.

But times inevitably change. The new world of direct-to-consumer Internet shopping and low-profit margins is shutting down countless bicycle shops.

Enter Velofix Holdings Ltd., a mobile bicycle-repair service, which comes in a brightly painted red, black and white Mercedes van to fix your broken bike at your home or office.

Vancouver-based Velofix is a franchise business, so each van is locally owned. In some busy territories, such as Vancouver, Seattle and Toronto, franchise operators have multiple vans, equipped with Wi-Fi, a coffee machine and the promise of friendly advice if you want some do-it-yourself repair tips.

When The Globe and Mail’s Small Business Challenge profiled the company in November of 2014, Velofix was still in its teething stage, debating how to grow its head-office functions as the company started expanding across North America. It has since hired more staff, although the operation remains trim. What has changed enormously is acceptance from suppliers.

“When we launched this company in 2013, not one [bicycle] supplier in Canada would sell to us because we weren’t a brick-and-mortar store. That’s how much the industry has now changed. So, yes, I think we are disrupting the industry, and I think frankly the other big disruptor is online sales,” said Chris Guillemet, chief executive officer.

The company has expanded to most major Canadian and U.S. markets, with close to 100 franchises. The latest annual revenue growth was approximately 320 per cent over the previous year, and the company bills itself now not as a curbside repair service but as a complete, mobile bike store, selling “anything you need for your bike, any parts and accessories,” Mr. Guillemet said.

For instance, Velofix has deals with 26 bike manufacturers, including Eddy Merckx and Ellsworth. You can order a bicycle and Velofix will deliver it and properly fit it for you – in other words perform all the functions of an ordinary bike shop. Mr. Guillemet hinted that more partnerships with bike manufacturers are likely.

“People have been buying things like helmets and shoes online for a long, long time. But really in the last couple of years bike purchases [online] are starting to happen,” he said. “And Velofix, being that last mile [of delivery], has allowed them to do that.”

The company has found another revenue stream in contracts with corporations to fix commuting employees’ bikes and in-house bicycle fleets. “Microsoft is a great client. Google, Facebook, Starbucks’ head office, Intel, companies like that,” Mr. Guillemet said.

“As we get more and more trucks on the road in different markets, the corporate opportunity becomes greater,” he said.

Yet another line of business is servicing major cycling events such as triathlons, charity rides, school events and European-style Gran Fondo bike rallies. This year, the company is expected to be at more than 2,500 events, and some franchise partners handle 30 to 40 a year.

So, it’s been a fast progression from early 2013, when the company had its first van in Vancouver up and running.

The franchise fee is $25,000. Operators need to purchase the Mercedes van and stock it with parts, and the head office gets an 8-per-cent royalty from gross sales. The professional look, complete with a certified mechanic wearing a Velofix work shirt, is, for better or worse, all part of the company’s disruptive effect.

Bike mechanics in some shops can be independent minded, akin to maverick chefs. But that kind of service has fallen victim to non-traditional shops, such as Mountain Equipment Co-op offering walk-in repairs, and crowd-sourced reviews on Yelp.

“We try to make the transaction and the process much more professional,” Mr. Guillemet said.

More competition is likely to come, he added, but as of now, Velofix has really only one direct, smaller competitor, Beeline Bikes Inc., based near San Francisco, which operates under a similar franchise model.

“The bike industry is very fragmented. It’s still driven in North America by mom-and-pop shops. Unfortunately not many [industries] are like that any more. Most businesses have been consolidated,” Mr. Guillemet said.

“So we got excited about that, because we thought that if we can get this business going, and if we can add trucks on the road, we can be a pretty significant player in a short period of time.”

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