NEW YORK (AP) — ZIPS Cleaners wanted to expand, but needed some help.
The chain located in the Washington D.C., area was adding franchises but didn’t have the corporate structure or money to realize its goal of expanding along the East Coast.
“We couldn’t take it to the next level,” says Brett Vago, owner of three ZIPS stores and the company’s former CEO.
ZIPS grew out of eight individually owned stores, each with its own name. In 2002, the stores’ 14 owners decided to band together as a chain called ZIPS. The chain grew further as they added three jointly-owned stores and, in 2006, ZIPS began selling franchises.
By early 2013, ZIPS had more than 30 stores. It was too big for its owners to manage while they also ran their own stores.
“We weren’t able to provide franchisees with the dedicated amount of time they should be entitled to,” Vago says.
And ZIPS didn’t have enough cash to grow at the rate the owners wanted.
The owners needed help. They hired business consultant Reid Bechtle, who introduced them to JPB Partners, a private equity firm that owned restaurants and other companies that cater to consumers.
“The money was secondary. Bringing management to the table, their past experience — that was very important,” Vago says.
JPB bought a controlling stake in ZIPS in April of this year. The company did not reveal what it paid.
Bechtle became ZIPS’ CEO. His job was to take a company that started with mom-and-pop cleaners and turn it into a unified operation with 36 stores in four states. One of his biggest challenges is getting all the owners to set their stores up so they look like part of a chain, with the same signs, uniforms and procedures in each store. That can be difficult when dealing with people who are used to running their own shops.
“They can no longer do everything they’ve been doing,” Bechtle says.
Having someone else to manage the franchise operation has made life easier for ZIPS’ original owners. Vago says he now has the time to concentrate on his own stores.