A large California pool builder has set its sights on new markets.
West Covina, Calif.-based California Pools has launched a calculated yet aggressive growth strategy for its licensee business model.
“We are looking at doubling where we are now, so we hope to introduce another 20 [licensees] into the marketplace,” said Steve Terry, who rejoined the company this past summer as vice president of licensee development. Terry previously was manager/owner of the Santa Clarita office from 1998 to 2006.
California Pools first looked at this concept six years ago, but a slow economy and the absence of dedicated staff delayed implementation. With Terry at the helm, the plan now is moving forward.
Founded in 1952 by Wayne Steimle, the family-owned firm is composed of 17 independently owned agencies, or branches, throughout Southern California and one corporate-owned office. These branches build under the corporate license. In addition, there are five licensees in California, Texas and Arizona who build under their own. All future operations outside of California will be licensees.
“Our future growth is going to be in helping local, independent pool builders build a brand of their own, and grow their own business,” said Vanz Steimle, executive vice president. “Since day one, that has been our business model and we’ve succeeded at it.”
The first phase of the plan is already under way in Texas, where California Pools of Austin opened its office in July. The firm also is in talks with builders in Houston, San Antonio and Dallas. By early 2013, Terry said he anticipates at least five licensees operating in the state.
“We think Texas is an exciting market,” Steimle said. “The whole industry has its eyes on Texas.”
Texas has been on the radar lately because the state fared relatively well during the economic downturn while other areas suffered dramatically from declining pool builds and home starts. In response, a number of large pool builders opened offices there.
In 2010, Paddock Pools, Patios & Spas and Premier Pools & Spas — based in Arizona and California, respectively — entered the Lone Star State. And this past February, Ohio-based Anthony & Sylvan Pools expanded its presence there when it teamed up with Anderson Pools and Patios in Bulverde.
But entering the Texas market is nothing new for California Pools. The company’s first foray into the region was in 1986, when the firm opened in San Antonio, followed by offices in Austin and Houston. By 2002, however, California Pools exited the market.
In addition to Texas, California Pools is seeking to expand its brand into more areas where it once had a presence, including Northern California, Arizona and Nevada. Efforts in the latter two will follow once those states show signs of a more robust economic recovery, particularly in Tucson and Las Vegas, where the company left in 2004. Meanwhile, the firm also will pursue previously untapped markets such as Utah.
In the past, the licensee model has been criticized by some in the industry. Those business owners have stated that it’s difficult to manage distant offices and implement corporate culture while serving the individual markets adequately. Some even question what would happen if a franchise located far away went out of business with projects incomplete.
California Pools addresses this concern head on, noting its familiarity and prior experience in the regions. Growing consumer interest and builder prospects also play significant roles in the overall strategy.
Not having the right builders to uphold California Pools’ reputation of customer service and core company values is what drove the firm to exit some of these markets in the past, Steimle said. Therefore, the company is committed to finding builders who fit in with its culture and style.
“It’s more calculated than just opening the marketplace up to anyone,” Terry said. “We’re not in a blast growth pattern. There are a few companies out there that want to be the biggest in the nation, but that’s not our mantra. That’s something that’s really sensitive to our growth pattern, so we’re careful about where we are going, and how fast we grow. You start growing too fast and you lose that control.”
“We’d love to be in Florida and Georgia, but it’s not that time for us right now,” Steimle added.
He’s also confident that the licensee business model will become more and more common for the industry in the future.
“I think you are going to see a lot more of this available for pool builders,” he predicted. “I really believe that’s where the industry will go.”
To concentrate on this latest initiative, the company has turned over the distribution logistics of its subsidiary, Master Supply, to PoolCorp. Master Supply will remain its brand, but likely will focus on manufacturing, Steimle said.
California Pools, Premier Pools, Paddock Pools, and Anthony & Sylvan are Pool & Spa News Top Builders.