Business Administration – Franchising (10 pts.)
Name _________________________
Date ______
Case Study: Growth through Franchising – PODS Inc.
Youtube link https://www.youtube.com/watch?v=9jP2Whiiju4&list=UUlStS
pZXKZXXoevJSuLP5ww
Website link – http://www.pods.com
In the mid-1990’s, Peter Warhurst, a former Largo (Florida) paramedic who had sold a
company to Bell Atlantic for $10 million, started a second venture, which became PODS
(Portable On Demand Storage). Initially, Warhurst and a partner built a mini-storage
center in Clearwater to provide a source of revenue that required little time and few
employees. They quickly encountered difficulty in finding a suitable location for a second
center, and the idea of bringing storage to customers emerged. “I checked the Internet
and nobody was doing it. I couldn’t even find someone to copy.” Peter, and two partners
from the Largo Fire Department, developed a weather-proof storage unit and a patented
hydraulic-lift system (“Podzilla”) to transport whatever customers put into their units.
Since the first storage-unit delivery, in 1998, the business has grown swiftly. Initially,
Peter thought he might be able to develop an 80-unit business. He quickly learned that he
had greatly underestimated the demand. Not only did customers want PODS for storing
household and business items at a PODS facility, they wanted to use them for moving.
Soon after start-up, PODS received numerous inquiries about investment and franchising.
PODS sold its first franchise that same year. As of April 2008, PODS is serving
customers in the United States, Australia, and Canada – having made over one million
reservations, and placed more than 130,000 containers in the market. Franchise
agreements were offered for markets of 200,000 to 400,000. PODS maintain consistent
product information and clear communications be centralizing and monitoring functions.
All phone calls are directed to PODS call centers, and billing, collections, and training are
centrally controlled.
This franchise model has been a tremendous growth mechanism for PODS, providing much
of the company’s capital. In only 10 years, Peter Warhurst saw his business grow from an
idea into a venture-backed company with franchises nationwide. Following the sale of
PODS, in late 2007, Warhurst stepped aside as president and CEO, after having created a
franchising phenomenon.
Case Study Analysis (8 pts.)
1.
What benefits did PODS gain from franchising?
2. PODS is the official moving and storage company for the military. Why
would PODS and military employees be good partners?
3. What benefits do franchisees get from the PODS and Podzilla names?
4. Open the PODS (PDF file – PODS FranchiseMeasureSuccess) and find the
following information:
a. How much capital is currently required to secure a franchise?
b. What is the current franchise Royalty fee?
c. What are the competitive advantages that PODS identifies?