STRATEGIC GROWTH FROM CHEM-DRY

STRATEGIC GROWTH FROM CHEM-DRY

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Strategic Growth From Chem Dry

Over the past 24 months, we have made some strategic investments geared toward strengthening the Chem-Dry brand, helping our owners grow their businesses locally and expanding our network in the U.S. and Canada and around the world. Since being founded in 1977, the brand has undergone a few updates but nothing significant in the last decade or so.

We kicked off our plan to update and contemporize the brand by investing in an extensive national consumer research study to gain a clearer picture of consumers’ perceptions and behavior in the carpet and upholstery cleaning category, as well as better understand their views of Chem-Dry’s unique hot carbonating cleaning process. The

results provided some clear insights into what consumers care most about for our category and specifically with respect to our brand, and we have incorporated those learnings into the brand refresh we launched earlier this year. Our focus is on educating consumers that Chem-Dry’s green-certified solution and proprietary process deliver a deeper, safer, healthier cleaning experience. We have either updated or are in the process of updating all of the key elements in our marketing mix, which includes a brand new website we launched this past December, new uniform options, new van graphics that are being rolled out now, and a wide array of new local marketing templates and tools

that can help our owners compete more effectively and win more jobs locally.

At the same time, we have added to our support staff in several key areas to help execute some of our growth strategies. These additions were in areas including marketing, training and business coaching, commercial account sales and international development. The marketing staff has been integral to our brand refresh and our stronger online presence. New business coaches and training staff have allowed us to bolster our training regimen,

including the large number of regional classes we offer across the country, and provide more sophisticated coaching

programs that have helped participating owners post sizable revenue gains in their business. We have also bolstered our national account sales team to help deliver more commercial jobs to our network, as well as added to our international development team that is helping expand our footprint and our global market leadership by developing master license partners in more counties. In addition, we saw an opportunity to improve the tools we were offering our owners to manage their daily operation more efficiently and with better data. As a result, we invested a significant amount of time and financial resources over the past year to develop and launch a new business

management software system that makes it easier for our franchisees to manage and track their daily operation and better market to their customer database. The exciting thing is that we have already begun to see some of the pay-off from these initiatives. Our franchise sales more than doubled in 2013 with 117 percent growth compared to the previous year, soaring from 49 new franchises sold in 2012 to 101 this past year. One important note related to our accelerated growth is that over 50 percent of the new franchises sold in 2013 came from existing franchise owners expanding their operations, which is a good reflection of the positive impact some of these recent changes are having.

Some recent consumer trends have been in our favor as well – including increased consumer spending on home services, a growing preference for national brands within the home services sector, and the rising popularity of environmentallyfriendly businesses – which have created greater opportunities for franchisees and contributed to our growth. The company also saw dividends from our efforts to attract larger, multi-unit franchise owners along with our geo-targeted marketing programs, which were designed to expand our presence in unserved or

underdeveloped areas. These programs have helped us attract savvy entrepreneurs to our brand, highlighting the opportunity to join the number one franchise brand in the carpet cleaning category and grow their own business by following our winning business model. These recent initiatives are all part of the plan we had in 2011 when I came on

board as President and CEO of Harris Research, Inc. (HRI), the parent company to Chem-Dry as well as its sister brand, the N-Hance Wood Renewal franchise.

Based on my past experiences running other franchised businesses, I saw the vast potential Chem-Dry had and continues to have to expand upon its industry-leading technology, its number one market position and a network of passionate franchisees committed to providing exceptional customer service. Our goal with these investments is to increase the value of each franchise, and thereby expand our market leadership position and strengthen

the foundation of the Chem-Dry brand and network as a whole. After a solid first quarter of 2014, we remain committed to this plan and to making further progress on the initiatives we have undertaken. We foresee not only

continued strong growth in the U.S. and Canada, but also accelerated growth overseas. We added two new countries in 2013 and an additional two just in the first quarter of this year, and I anticipate adding several more international master franchise partners in the coming year that will further extend our global reach.Our team’s focus and commitment to progress on all of these fronts – from our brand refresh to our higher level training programs and increased adoption of our new business management software – will help our owners grow the profitability and

value of their franchises and will help put the Chem-Dry brand in an even stronger position for the future.
About Dan Tarantin: Dan Tarantin is the CEO of Chem-Dry, the world’s largest carpet and upholstery

cleaning service with over 3,500 units in 44 countries. Celebrating 35 years in

business, Chem-Dry prides itself on its green-certified products and exclusive hot

carbonating extraction process. Harnessing the power of carbonation, Chem-Dry’s

cleaning method uses millions of carbonation bubbles that penetrate deep

into the carpet fibers and safely release dirt from the base of the carpet so they can be easily extracted. The result is a deep, long-lasting and healthier carpet cleaning. By using 80 percent less water than typical steam cleaning, Chem-Dry’s process allows carpets to dry faster – in hours,rather than days – and won’t wet through to the base of carpets, like steam cleaning, that can become a breeding ground for mold and bacteria. Chem-Dry’s process also does not leave behind any dirt attracting residue that can require more frequent professional cleanings.
About Chem-Dry

Founded in 1977, Chem-Dry is the world’s leading carpet and upholstery cleaning service, with a network of over 3,500 units in 44 countries serving over 10,000 homes a day worldwide. Its green-certified solution and proprietary hot carbonating extraction cleaning process provide a deeper clean, allow surfaces to dry faster, and leave homes healthier. Chem-Dry has been ranked the number one carpet cleaning franchise by Entrepreneur magazine for 26 consecutive years and has also been featured in the magazine’s Top Home-Based Franchises list among the top

10 concepts for 19 consecutive years. For more information on franchise opportunities, visit
www.chemdryfranchise.com, or to schedule a cleaning, visit www.chemdry.com.

Chem-Dry is owned by Harris Research, Inc., which is also the founder and owner of the fast-growing N-Hance

Wood Renewal franchise.