How Redbox+ is growing its conversion business in recession-resistant construction

While an uncertain economy can dampen demand for certain types of construction projects, it may also present opportunities for others. The company behind the Redbox+, known for its distinctive red roll-on containers with portable toilets, thinks its model is perfect for the moment.

Belfor Franchise Group acquired Redbox+ in 2021 and the company now has an estimated 90 entities covering 300 locations across the United States.franchise group is Belfort Property Restoration, which generates approximately $2 billion in annual revenue from 140 US locations and multiple brands such as 1-800 WATER DAMAGE, provides cross-selling opportunities for waste services.

While new construction may be slowing in some areas, Belfort sees plenty of tailwinds as mortgage rates rise and home improvement activity remains strong. Waste Dive recently spoke with Doug Smith, Belfor’s senior vice president of franchise development, about Redbox+’s expansion since the acquisition, what led franchisees to get into the resale business, and more.

The following interview has been edited for clarity and brevity.

WASTE DIVE: What have been some of the biggest changes for Redbox+ franchisees and customers since the deal happened?

man with goatee

doug smith

Courtesy of Belfort

Smith: When it comes to things like marketing, training, onboarding and procurement, we have entire departments dedicated to it. So I think the level of support that the franchise has received has increased significantly. We’ve added four full-time on-site business coaches — just going around and meeting with our franchisees, reviewing their business plans, looking for growth opportunities — something we didn’t necessarily have before. We formed a Franchise Advisory Council — they didn’t have one like this before — to represent all over the country and speak on behalf of the franchisees.

What have franchisees been saying about how this helps them differentiate themselves from competitors and secure new cross-sell opportunities?

What we’re starting to see is a synergy between Redbox+ Dumpsters, the Belfor Property Restoration company and several of the brands in our franchise family. They use millions of dollars worth of litter boxes every year. Prior to our purchase of Redbox+, for the most part, the bin business went out of Belfor to any number of suppliers. So it doesn’t mean that all of them will be handed over to Redbox+ immediately, those franchisees still have to earn their own money. What we can do is we can get them into all these offices, briefing general managers across the country, and then as long as they have the bins and services that we need as Belfor, they have a chance to secure their business.

Lately, conditions have been tough for waste handlers of all sizes due to labor, inflation and equipment constraints. What are you hearing from franchisees heading into 2023?

Regarding the equipment, I will tell you that the litter box is not a problem for us. We have local and US litter box suppliers who are actually building up a pretty good inventory for us right now. Trucks have been a bit of an issue, obviously chip shortages and some supply chain issues that most people have. However, our order quantity is large.

So we’ve ordered about 12 large trucks. We recently had six come in.all six [trucks] We shot, one new franchisee, and the rest to existing franchisees. Between January and May we will have another six trucks coming in. These will be distributed among existing franchisees looking to expand, as well as some new franchises that we have in the pipeline. So not saying it’s easy, but our size and size and the amount we order does help to be at the front of the line.

Waste volumes have also been difficult to predict over the past few years, although your business has seen an increase in home improvement activity. In terms of residential demand, what are you seeing in the area?

As of September this year, our system-wide sales were up approximately 43% year-over-year. Now that means the whole system has grown, so it’s not all organic. But our same unit sales, apples to apples, were up a little over 10.1% year-over-year.

So we’re still seeing growth and that’s mostly attributable to renovations and some of those specific locations. I think everyone following the news has seen that both commercial and residential construction have started to slow down. Obviously, with the rumors of an impending recession and rising interest rates, we’re seeing some of these buildings coming down. But that’s not necessarily our best pick here at Redbox+. Most of our franchisees specialize in short-term rentals. Some of them are what I call recession resistant. For example, roofs are a big vertical for us. If your roof gets hit, recession or not, it will get hit. So we’ve been involved in roofing, siding, window replacements, landscaping, and remodeling and renovations.

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