Finding the right franchise partners is Mattress Depot USA’s goal for the future
as it looks to branch out from its roots in the Pacific Northwest.
By Eric Slack
Since 2002, Mattress Depot USA has demonstrated that consumers can actually enjoy the mattress-buying experience. The company started as a small side business operating out of a warehouse. Today it remains a family owned business, but it has a presence in many markets in Washington State. Now, the company’s foray into franchising is helping Mattress Depot grow into new markets.
“We had been turned off by the whole process of mattress shopping with few options, limited selection of product and prices, and a high-pressure in-store experience,” President David Smith says. “We saw a niche for a concept where people could buy factory closeouts from first-tier manufacturers supplemented with second-tier brands. We saw steady interest early on, and our warehouse was attracting people from an hour away. We opened our first store location in 2003. It became a success right away and we’ve been growing from there.”
Spreading its Wings
Mattress Depot has maintained its commitment to sell high-quality, brand name mattress sets at discounted prices in a low-pressure environment. The company’s sleep consultants work to provide customers with knowledge and unbiased information on products so they can make an educated purchasing decision. Thus far, Mattress Depot has added three franchised locations along with its 22 corporate-owned stores. A fourth franchise will open in September.
“As we looked to grow outside of Washington, we knew we’d need to add more layers if we wanted to grow our corporate footprint,” Smith says. “That is why we saw franchising as a good option, and we know it gives the opportunity to sell our company locations to franchisees if we choose. We’ve been franchising for the last two years, growing from our nucleus in Washington and seeing interest in other states.”
Smith says the biggest challenge is finding the right franchise partner. He compares it to hiring an employee in the sense that you need to find out if they will fit the bill in terms of their business skills and management traits.
“The way we run our company-owned stores is to give managers a sense of ownership,” Smith says. “When we looked into franchising, we wanted the same type of individual as a franchisee. They also needed to have the back-end entrepreneurial skills for running a business. On top of that, this is a business that requires sales expertise. You have to be able to sell the customer when they come in, and the toughest portion is that sales process.”
Therefore, Mattress Depot’s franchisees must understand how to manage a sales environment so they can motivate salespeople and get them to perform on the floor. To solve that challenge, Mattress Depot has closely examined the success it has had at company stores. “What we have done is put those lessons into the resources we provide to franchisees so people know what kind of people they need to sell at their stores,” Smith says.
Other challenges Mattress Depot has faced include making sure franchisees understand its operating processes. That is why the biggest support that Mattress Depot provides to franchisees is in the initial phases of setting up operations. It helps franchisees find the right locations to make sure they are in the right area to reach the target customers, and to be sure they have the right kind of storefront. It also provides process manuals and gives franchisees a fair amount of autonomy around product purchasing.
“We have our main staple of brands and models they should carry, but they have a little freedom to choose based on market demographics and what sells well in their individual market,” Smith says. “The focus is on business processes and the customer experience. They need to have the right salespeople and offer the right buying experience so they are different than the competition.”
As the company has ventured into franchising, it has homed in on specific areas. It felt its first franchise location should be in Washington so it could benefit from existing branding and advertising initiatives. The company didn’t have a presence in Bellingham near the Canadian border, and it found the right partner with an extensive retail sales background.
“This was three years ago when then retail market had a lot of excellent available spaces,” Smith says. “That first one has been performing since day one. Now we have franchised locations in Oregon, and Spokane and Boise are on the way.”
Similar to its early corporate store growth phase, Mattress Depot is looking to add two to three franchisees per year to its footprint. As it grows, the company wants to extend its reach further outside of Washington into markets like Oregon, Idaho and Canada. North of the border is an area where the company sees a significant amount of opportunity.
“Our Bellingham franchisee lives in Canada and can help us go international,” Smith says. “That market is even more of a monopoly market with only a few smaller regional chains.”
The company knows it will need to add to its human capital to ensure it can support its franchising pursuits in every area, from sales and vetting prospects to consulting, training and beyond. Ultimately, Mattress Depot believes there will be opportunity to grow around the entire United States and Canada.
“There are other competitors in our business, but there are few mattress franchise companies,” Smith says. “This is an industry that has seen a lot of consolidation over the last decade, and we feel that we can do things differently by having a single, consolidated brand that utilizes a franchised approach to growth.”