Holiday lighting is one of the most popular services to add when trying to keep workers employed during the shoulder season, and Christmas Decor is probably one of the most recognizable names tied to Christmas lights, as its franchises can be found across the country.
But how did the company even get started?
Christmas Decor was born out of necessity in 1986 when founder and CEO Blake Smith needed an off-season supplement to his landscaping business in Lubbock, Texas, so that he could avoid laying off employees and maintain cash flow during the winter.
“We had grown to a size to where we had trucks, trailers, equipment, employees,” said Brandon Stephens, president of The Decor Group. “We couldn’t just scale back to nothing during the wintertime. We wanted to maintain some type of a cash flow during the winter, so we tried a number of different services and product sales during the winter season. We found that holiday decorating was a service that people wanted and that they were willing to pay good money for, and it fit us pretty well seasonally.”
Eventually, the holiday lighting service became the most profitable part of the company, and Christmas Decor got out of the landscaping business. It now has several brands under The Decor Group, including Nite Time Decor, which offers low voltage landscape lighting, and Barcana, which sells specialty products like Christmas trees, figurines and commercial ornaments.
It was 10 years later in 1996 when Christmas Decor started franchising.
“He (Smith) started experimenting in different markets and found that it (holiday lighting) was something that really resonated in every market,” Stephens said. “The best way to scale up quickly was franchising. So, we wanted to provide the system and support and everything else and just help other contractors help fulfill a need, and we just found it was the best way to scale it up.”
Christmas Decor can now be found in about 325 markets in 49 states and Canada. Hawaii is the only state the company has not been able to break into due to unique logistical challenges, but it would love to add an operator out there.
The company believes there are about 800 available territories in the country and that number is growing every year. It tries to add between 25 to 40 new franchises a year, and in some cities there can be seven or eight franchises functioning within them.
Franchises average a little over $200,000 in gross revenue, but certain businesses make close to $3 million in just the short span of 75 days, according to Stephens.
When it comes to who can become a Christmas Decor franchisee, size doesn’t matter.
“We have some very strong operators that have three to four employees,” Stephens said. “We have franchises that have 200 employees, so it really runs the gamut.”
Stephens says that he likes to look for consistency and character when meeting with a potential new franchisee. They look at a company’s background to see if they are stable and have a good track record in operations. By ensuring that only quality companies are joining the franchise network, Christmas Decor is able to maintain consistent professionalism across the country.
The base franchise fee is $9,900, and then there is an adjustable territory fee that is based on the size of the territory given to the company.
“We take that territory fee,” Stephens said. “We take the lion’s share of it, about 90 percent of it, and we reinvest that into their lead generation program in their first year.”
Stephens advises for those interested in becoming a franchisee to have a little bit of cash on hand or good banking relationships so they can withstand the initial investment, and then have some money for inventory.
“Often times they have a lot of the trucks and the trailers and the equipment that they need but there may be some additional things that they need, so money to invest is another staple,” Stephen said.
Once a company has joined the franchise network, they spend five days training and learning everything there is to know about the business.
“Everything from product introduction to how to not design displays, how to market, how to sell, how to install,” Stephens said. “We do some field training. We’ve developed our own custom industry software, so it’s a business management software where we have a day of training on that.”
Christmas Decor provides franchisees with all the materials they need to market and sell and are also assigned a franchise consultant for everything they may need from a support standpoint.
“We understand that you’re not going to retain everything that you hear at the five-day training, so it’s an ongoing process,” Stephens said. “We have a private intranet system, where franchisees only can log in, and we have a full selection of training videos, recorded webinars, all types of sales tools, business models, pricing, really everything that they need to be in the business.”
Despite the window of opportunity for Christmas lighting being a rather short one, it is a yearlong operation at Christmas Decor. Much like how Santa and his elves start on next year’s toys the day after Christmas, those at Christmas Decor start procuring lights for next December following the holiday.
“We look at last year’s experience, last year’s products and we make any adjustments that we need to make,” Stephens said. “We bring in new products, develop new relationships with factories. We revise educational programs, all of our support programs, sort of retool for the big issues that came up during the 2017 season so we can implement solutions in the 2018 season.”
In February, a survey is sent out to franchisees and in July, Christmas Decor holds its annual conference where franchisees gather for three days of education, networking and new products.
As the market continues to grow on both the commercial and residential sides, one of Christmas Decor’s challenges is still maintaining market share with the larger market.
According to client surveys, a majority are buying the service out of convenience but also due to reliable results.
“Our model is designed to be a hassle-free experience for the client,” Stephens said.
Stephens credits Christmas Decor’s success on three main elements.
“Number one is just the collection of best practices and whenever you have a network there’s an environment where we freely trade ideas, and we kind of scrape the good ones off of the top and we implement those,” he said.
The second key to success Stephens lists is how the company is continually improving its systems and keeping up with trends and what’s going on in the network.
“Number three is making these franchisees a priority, not only are we in business with these people, we genuinely care about them,” he said. “Some of them, we have lifelong friendships with, and we’re always looking out for them and what’s best for the franchisees is generally best for us.”