Franchisee Application

Franchise Business Development Strategy

 

boxgalaxy naples extIntroduction

Nearly four years ago, we established Box Galaxy with a two-pronged approach to developing our franchise nationwide:
One, we would aggressively promote the development of individual franchise stores around the country to create momentum for the Box Galaxy brand.  We believe by establishing individual stores nationwide that fully prove out our franchise concept, we will build exceptional value for everyone associated with Box Galaxy.
Second, we would also offer Master Franchise territories to promote faster development of the entire franchise network.  Master Franchises allow the corporate office to establish a broad-based sales network around the country to focus on the development of sub-franchises in a variety of geographic areas.  This approach dramatically expands the pace of our overall franchise network development.  It also builds broader brand awareness and financial value for all members of the Box Galaxy family.
In each of these cases, our marketing messages remain the same.  Therefore, we have created this document to outline our marketing strategy and key messages, and to also offer advice and guidance to prospective franchisees.

Business Description

We believe Box Galaxy is unique in the marketplace.  No one else offers our combined wholesale/retail approach to both business and consumer customers.  We feature larger stores – generally 2,500 to 3,000 square feet – where our products can be inventoried in bulk.  By buying in bulk, we keep inventory costs down and prices low.  Our larger facilities also give us the opportunity to provide end-to-end shipping services that are unavailable elsewhere in the market, including UPS, FedEx and DHL shipping; U. S. Postal services; custom packing and packaging; international freight services, and in some cases U-Haul rentals.
Our strategy is to offer customers a whole host of quality services at below-market prices.  We profit from every step along the way, delivering a return on investment to franchisees that exceeds what our competitors can achieve.  In general, Box Galaxy stores are designed to generate gross profits of between 50 and 55 percent of revenues annually.  With the majority of our sales to other small businesses, we offer franchisees steady income month in and month out.  At the same time, our stores are designed for profitability that can often exceed what our retail competitors currently produce.

(SEE OUR UNIFORM FRANCHISE DOCUMENTATION FOR AVERAGE INCOME AND EXPENSE FIGURES.)

Competitive Analysis

With our unique business model, we face few direct competitors nationwide.  Often, when we describe the Box Galaxy concept, listeners equate us with a UPS or Postal Net store.  But we prefer to describe Box Galaxy locations as “UPS stores multiplied.” In effect, we are like the Costco of the pack-and-ship industry. We buy in bulk, we price below our competitors, and we sell in large quantities to businesses and consumers.
When we compete directly against other local stores, such as UPS, Home Depot, U-Haul and storage companies, we do so through a combination of low prices, a broad inventory mix, and customer-centric services.  We often hear from new customers who have switched to Box Galaxy that no one else has the right products on hand or in the quantities they need.  Other stores seldom have the expertise we offer, or the end-to-end packaging and shipping services we provide.  In addition, as we continue to build out the Box Galaxy network around the country, our prices will become even more competitive as our buying power strengthens.
The fact is, we have found that our so-called “competitors,” such as UPS and Home Depot, are often our best referrals.  Virtually every day of the week in our San Diego store, we get customers who tell us they’ve been recommended to us by a similar store down the street that couldn’t fulfill the customer’s need.
Perhaps our toughest competitors are online sellers, such as U-Line.com.  U-Line sells a lot of boxes and other packaging materials nationwide.  They are very price competitive, but they have many competitive disadvantages, as well.  For one, U-Line charges shipping costs, which often places our products at a price lower than theirs.  In addition, U-Line customers must order in very large quantities to balance out the shipping costs.  That means customers must spend more up front, and they must have storage space for all  their supplies.  They also have to wait to receive their order.
At Box Galaxy stores, customers come in and pick up their orders (except in cases where they spend a minimum of $300 and agree to a small delivery charge.)  Our approach allows these customers to order only what they need, giving them a real-time-inventory advantage.  In addition, we offer customers advice and counsel on how to pack and ship at the lowest possible prices.  We also offer the opportunity to complete the packing and shipping process in our store from end to end.  We’re one of the nation’s few one-stop shops for packing and shipping at a discount.  Our online competitors can never provide this type of service, which gives us a strategic advantage we’ll never have to worry about relinquishing.
Our combination of price and service is a powerful motivator that generates long-term relationships with customers and steady income for any store that reaches out to both businesses and consumers in their locales.  Add to this our friendly atmosphere and accessible locations, and Box Galaxy stores have virtually unlimited potential in their spheres of operation.

Market Strategies

Our primary strategy in the marketplace is to be the low-price leader.  But we also add exceptional value to our products and services by being an end-to-end provider.  Often, Box Galaxy stores carry products and offer customer services – including discounted shipping and freight, pick up and delivery, and customized packaging – that are available nowhere else in their markets.
As for advertising in local markets, we rely heavily on our world-class website that is search-engine optimized for local and regional audiences, thereby generating a significant number of organic hits on a daily basis.  In addition, we recommend a powerful pay-per-click program that stimulates additional website responses at a low cost and high return.  As we build out the franchise network, we’ll add regional and national advertising programs to our marketing mix.
An even more important focus of our marketing program is achieved through positive word-of-mouth in each Box Galaxy community.  By providing great prices, exceptional service and a wide variety of products, we are able to generate powerful word-of-mouth “buzz” in our market areas with both businesses and consumers.
We also strongly suggest that store owners join and actively participate in local and regional business networking groups such as the Chamber of Commerce, Business Network International, and industry-specific trade organizations.  We supplement these programs with suggested direct mail initiatives to select business communities, including:  independent moving companies, restoration firms, small manufacturers, art galleries and other businesses that ship on a regular basis.
Underlying all of our marketing efforts are the essential brand messages of Box Galaxy, including:

  • Our use of “green” materials (the vast majority of our products are made from recycled material or are recyclable).

  • Our clean, fresh and friendly store atmosphere

  • Our best advice and counsel to all customers, even if that advice means limiting a sale.

  • Box Galaxy stores always provide service with integrity that is aimed at creating lasting customer relationships above all else.

The Financial Advantage

As with all franchises, Box Galaxy offers a number of special advantages over independent companies.  For one, franchise businesses often find success where others do not.  According to the U.S. Chamber of Commerce, franchises have far better success rates than non-franchised businesses.
Within five years of opening, franchises have a 97 percent success rate.  Within that same five years, 86 percent of franchises are still under the same ownership.  Conversely, 62 percent of non-franchise businesses close within the first five to six years of existence. The reason for the success of franchises is simple:  They are based on proven, successful business models.  And they come with a support network like no other.  In the case of Box Galaxy, franchisees receive:

 

  • A 300-page operations manual that defines every possible aspect of opening, owning and operating a successful store.

  • One week of in-house training that covers all operational aspects and provides franchisees with real-world experience in running a store from opening to close and everything in-between.

  • A fully operational website especially optimized to drive local and regional traffic to each Box Galaxy store through a significant presence on the worldwide web.

  • Professional commercial real estate assistance with finding a location and negotiating a lease.

  • A collective “buying” program, using national vendors to generate the best possible product pricing.  (As we build out the network, we’ll also add a collective advertising program that builds additional presence for our brand.)

  • Regular telephone and email conferences to explore new revenue channels and business processes that can help all of our stores profit from each other’s experiences.

  • The intrinsic value of a growing, successful franchise network.  As we build out nationwide, the financial value of each store will grow exponentially.  It has been proven that successful franchised stores sell at a 50 percent higher multiple than independent stores.

Understandably, the last bullet point above is one of the most important to any prospective franchisee.  It means that an average $85,000 to $95,000 investment for a single Box Galaxy franchise can quickly turn into a significant return a few years down the line.

Conclusion

The management of Box Galaxy has always believed strongly in our unique store concept and business model.  At the corporate office, we work hard to assure each franchisee’s ultimate success.  In addition, we assist and counsel our Master Franchisees by helping them to leverage the Box Galaxy brand for success in their chosen markets.

To assist Master Franchisees, we provide:

  • Box Galaxy locally optimized website(s)

  • Box Galaxy branded designs for business cards, folders, brochures, etc.

  • Franchisee uniform disclosure legal documentation

  • Support in locating store sites and lease negotiation

  • Conference call presentations by Box Galaxy management

The primary role of Box Galaxy management is to assure that all of our stores are clearly and effectively differentiated in the marketplace; the more successful our stores, the easier it is for Master Franchisees to bring in new Box Galaxy members.  But in the end, Master Franchisees are one of the backbones of our growth strategy.
Master Franchisees have the responsibility for thoroughly understanding, targeting and developing their own territories, while the corporate office assures that they perform within the guidelines of our brand.  Through this approach – a powerful business model, successfully run franchised stores, a strong and active Master Franchisee team, the Box Galaxy network can and will provide lasting value for all who join our family.

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To apply for an BOX GALAXY franchise, please provide the following information to us. This form is a preliminary application.

Franchisee Application:

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