Buy a Velofix Franchise or Start My Own Mobile Bike Shop?
Should I Buy A Velofix Franchise?
Some upfront clarifications:
1. I don’t sell mobile bike shop franchises.
2. The thoughts that follow are based on a combination of publicly available information, Franchise Disclosure Documents, direct communications with mobile-bike-shop franchisors, and Velofix franchisee (and former Velofix franchisees) who have reached-out to talk.
3. Why? Who the heck am I to pass judgement on a system with which I have zero first-hand experience? Many years ago, when I did consider going with a franchise, I did lots of studying, lots of note-taking, lots of Excel-spreadsheeting. After spending a considerable amount of time and effort, it seemed a waste to throw it all away. At about the same time, questions started arriving from others who were also curious about starting their own mobile bike shops. I love talking shop and comparing notes, but it became a bit overwhelming. It was easier to refer those inquires here.
4. More Why? “You didn’t buy a franchise. It’s none of our business!” A legitimate question.
I care because, first, I’m passionate about mobile bike shops. It’s been exciting, it’s been financially rewarding, and it’s been terrifying. It’s never been dull. I also care because, second, I’m in the same mobile-bike-shop industry as Velofix. A rising tide lifts all boats. Similarly, falling waters can be non-beneficial for all of us. If a mobile bike shop franchise fails, and I’ll call the Beeline Bike franchise method a failure, that puts a bit of a stain on the rest of us. It’s not a great message to consumers, nevermind wholesalers who might be even less enthusiastic in approving a new mobile-bike-shop account inquiry.
With that done, let’s begin!
If you’re looking for a turn-key operation, with a tricked-out van, training, scheduling, marketing, advertising, and established wholesale accounts with lots of bike-industry sellers, buying a mobile bike shop franchise is the way to go, hands down.
But you’re going to have to pay for that. A lot. Frankly, as well you should. If there’s anything I’ve learned during the last several years, creating, managing, growing, and operating a single day-to-day mobile bike shop from scratch is hard. It’s hard. Some days, it’s horrible. Nonetheless, beyond what can be a considerable financial savings, going it alone has a number of other attractive attributes: running a business the way you’d like, when you’d like, and how you’d like, without meddling from HQ. The days can be long, and no blaming the main-office for goof-ups because all mistakes will be yours. But the rewards of owning and operating your own shop have been very fulfilling, to say the least.
While I don’t offer mobile bike shop franchises, and I chose to go the Independent route, I still love mobile bike shop franchises. I love Velofix. I love the left-behind Beeline Bike franchises. I loved when Bike Doctor Mobile used to be around. We’re all in this together.
While mobile bike repair operations have existed in some areas for decades, even today, I still regularly hear, “What’s that all about?” We’re still in the equivalent of the early pizza-delivery days (1889, if you must know), when a lot of people thought that was crazy, too. As time has shown, there’s plenty of room for Papa Johns, Domino’s, as well as lots of successful independent pizza guys. Here’s the not-so-secret to operating a successful franchise or independent mobile bike shop: If you’re half-good at what you do, you show up when you say you will, you’re nice, you charge a reasonable rate, and you back-up your work, you’re golden. Some unsolicited advice: don’t get greedy and don’t bite back at the rare customer who does you wrong.
I used to engage like-minded people from all over the country, for free, on a fairly regular basis. I love talking shop, sharing ideas, debating the pros and cons of the best way to build-out a cargo van, talking smack about those QBP mobile-bike-shop-haters, but I’ve run out of time. That’s the primary reason all of this information is here, and updated on a semi-regular basis. For free! I still love to talk or email, but that’s under Mobile Bike Shop Consulting offering at $89 per hour. If you’re interested, by all means, please call (571-293-0689) or email. If you’re in the area, in-person meetings and a tour of my customized mobile bike shop van are also welcome.
What follows are my extended thoughts on the status of brick-and-mortar bike shops, the mobile bike shop business model, and the differences between going-it-alone versus purchasing a turn-key mobile bike shop franchise. After reading all that follows, perhaps you’ll have one or more of your questions answered.
Some Bad News:
Times are changing, again, within the bike industry. Competition from the likes of Walmart, Target, and Amazon is significant and established. Why buy an “inexpensive” $400 bike from a local brick and mortar bike shop when you can buy something that looks almost identical for $129 at Walmart? Likewise, why buy a $2,000 bike from a ‘real’ shop when you’re able to purchase something similar from Bikesdirect.com for $800? Interested in a top-shelf bike? Trek and Giant recently announced direct-to-consumer options, as did Colnago. More recently, Canyon Bikes, which has always been direct-to-consumer, is also now available in the U.S.
Margins on new-bike sales have declined consistently for years. Even with higher-margin parts and accessories, there’s little relief. Some top-shelf components are available through UK internet sellers such as Wiggle.com, Merlin.com, or Chainreactioncycles.com, at prices below what US-based brick-and-mortar shops pay, wholesale, for the exact same item. And those UK sellers regularly offer free shipping with no tax. It’s no wonder the number of bike shops in the United States has declined, by the hundreds, every year for the last several years. Since 2000, 38% of all bike shops have closed.
Adding to the misery of brick-and-mortar shops, the salary for a bike mechanic, to put it politely, stinks. According to the US Census Bureau, which tracks the wages of thousands of different occupations, including bike mechanics, the average bike mechanic salary in 2019 was $31,360. If you’re a bike mechanic and you made more than $42,630 per year, your salary was higher than 90% of all other bike mechanics in the United States. Ready for this? The highest paid custodians (and no disrespect to custodians) make more than the highest paid bike mechanics.
A depressing reality: even if you’re a great bike mechanic, but you’re not already independently wealthy, there’s a reasonable chance you’re going to have trouble affording one of the existing mobile bike shop franchises. A lot of those franchises are purchased by investors who then hire their own bike mechanics to run their van. What’s perhaps worse, if you’re a bike mechanic who’s fortunate enough to be approved for upwards of $150,000 (or more) in financing for your own franchise, that’s a big financial anchor around your waist. The monthly franchise fees and business loan payments are due every month, even in January and February when demand for bike work slows.
The Good News:
The mobile bike shop model capitalizes on the same ultra-competitive forces currently bearing down on traditional bike shops. For starters, the overhead costs of a mobile bike shop are significantly lower. I’ll digress for a moment, don’t confuse “significantly lower” with “free.” Nonetheless, the reduced costs are bolstered by a significant convenience to the consumer. Hard core cyclists may not think twice about bringing their bike to a shop for a tune-up, but what about the frazzled parent with four kid’s bikes, a Honda Civic, and no bike rack? What may be a big nuisance for many people (lugging bikes to a bike shop) is an easy option with a mobile bike repair service. Which leads to a great big non-secret in the industry, bicycle maintenance services are one of the last higher-margin money makers.
The commoditization of bicycles and bike parts that’s causing great angst within much of the brick and mortar bike world? Almost irrelevant for a mobile bike shop, which focuses on service. Parts and accessories exist to support the service-oriented mobile bike shop business, not the other-way-around. A customer might be able to order a Dura Ace cassette online from Wiggle, but it costs a lot more to ship a bike to the UK to have it installed. And guess why your local brink and mortar bike shop needs a week, or two weeks, or more(!) to perform your basic summer tune-up? Because demand is WAY more than supply at that time.
For many shops, it’s simply not feasible to keep a summer’s-worth of competent mechanics on the books all year long when there’s not much to do in the slower months. The alternative? Grunt your way through June, July, and August with an inadequate number of mechanics and hope you don’t make too many customers mad about the long waits – and hope those same underpaid, weary mechanics don’t walk out the door and forget to come back. If the supply of available bike mechanics could keep pace with the needed bicycle related services, there might be a compelling reason to keep the brick-and-mortar way of doing things alive and well. That’s unfortunately not the case.
Should I Start My Own Independent Mobile Bike Shop?
If you’re interested in taking the independent mobile bike shop route, it’s been successfully done by many. For a great example of a guy who made it work, look no farther than Erik Fetch. He operated a prosperous mobile bike shop in northern California for some 30 years. What’s more, he wrote a tell-all book that’s worth its weight in gold: The Bike Doctor’s Mobile Bicycle Repair Manual: How to Start and Run A Mobile Bicycle Repair Shop. That used to be the best $34 you could spend on Amazon. It’s unfortunately no longer available (unless you’d like to pay more than $800, last time I checked). If you can find a used copy, anywhere, at a reasonable price, grab it. Incidentally, there’s no relation to Erik’s “Bike Doctor” mobile bike shop in California and the “Bike Doctor Mobile” franchise business in Maryland.
A big disclosure, all of the thoughts that follow worked for us at Ashburn Bicycle Repair. This may or may not work for you. The final goal for most shop owners is to run a profitable business that makes you happy. There are an infinite number of ways to arrive at that destination. How you get there will of course be based on you. Results will vary.
Wholesale accounts? It took us a while, it was a major pain in the butt, some accounts took years to establish, but we did it. You can, too. To date, Ashburn Bicycle Repair has more than 20 wholesale accounts with a variety of large and small distributors. Quality Bicycle Products?! Almost. The QBP ship has been slow to turn, but they seem to be adjusting their respective policies with regard to independent mobile bike shop operators. From a hard-no not very long ago, to a we’ll-see approach. We suppose that counts as progress. Our most recent application (2018) was declined as we don’t have a “commercial address.” Gaining such an address is doable through a storage unit that accepts deliveries. That cost, about $1,000 a year in our area, remains unappealing. If we had to, we would. But we don’t. We’ve cultivated relationships with a number of different wholesale distributors, including Bicycle Technologies International, Chris King, Cyclone, Dahon, HLC, JBI, Lezyne, PaceLine, Provelo, Phil Wood, Sapim, Shimano, United Bicycle Supply, and Wheels Manufacturing, to name a few. There wasn’t much we couldn’t get from the others that we could only get from QBP. Undoubtedly, some parts and accessories are exclusive to QBP, but some seven years later, we’ve learned to live and thrive on the distributors who love us. And by golly, we love them right back!
The Van? We purchased a new Nissan HD 3500 short roof cargo van in 2015. SHORT ROOF?! Yep. Our mechanic likes to sit while he works. If you love to stand while you work and you’ll die if you bonk your head, don’t get a short roof. For us, the benefits out-weighed the disadvantages. A short roof means we can squeeze the van into a residential garage. Beyond the security of keeping your van garaged at home, if you’ve got a pesky Home Owner’s Association that doesn’t allow commercial vehicles in the neighborhood, that means you don’t have to find an off-site location to park your van. In our area, that may cost $50 to $100 a month. EVERY MONTH. Other than the added parking cost, there’s also the matter of efficiency. When we work, we like to get up and go. Not get up and drive to where the van is parked, then drive to our customers, then drive back to park the van, then drive home. If you’re in an area where it’s OK to park at home, and your wife and kids aren’t embarrassed about your cool van in the driveway, more power to you.
“But your van is too small!” Keep things organized and you should be just fine. We’re currently able to keep more than 2,000 parts and accessories on-board, including larger items like wheels, floor pumps, and about 40 different-sized tires. If you pack well, there’s space. As Chris Guillemet, founder of Velofix, correctly proclaimed: “chains are small.”
How much? Many new cargo vans will quickly surpass $30,000. By the time we were done outfitting ours, which included a build-out of Ranger Design shelves, cabinets, a nice bench-top, and a solid floor, the total price was a bit north of $40,000. We’ll be the first to admit, you don’t have to do that. A good, reliable used cargo van can be had for as little as $5,000 to $10,000. You also don’t need Ranger Design cabinets and shelves. If you’re handy, you can build-out a terrific van, yourself, for the cost of the supplies and a bolted-down tool chest from Home Depot or Lowes.
What’s the best way to make your mobile bike shop van say “CALL ME TO FIX YOUR BIKE”? Custom paint job, a full-on wrap, great big custom magnets? Ready for this? How about nothing? We do have a set of large custom magnets that completely cover our side panels and rear doors. They undoubtedly help. It feels great to get a call from someone who says, “Hey, I’m right beside you at this stop light, when can you fix my bike?!” Depending upon how busy we are, those big magnets go on and off on an as-needed basis. Much of the time, however, they stay off. We’ve been getting too busy. We’ve had more than a few instances where passers-by stop and say hello, and “That’s such a great idea! Tell me more!” when we’re engrossed in the first of 8 jobs for the day ahead. We love to talk, and talk, and talk. But not while the clock’s ticking. We run a tight ship and 10 minutes of chit-chat here and there can kill the daily schedule. Going stealth has worked well for us. What’s more, as many cargo-van-based contractors will attest, a wrapped van also advertises the following: “Attention Bad Guys, Lots of Expensive Tools, Inventory, and Bikes RIGHT INSIDE HERE!” On a related note, taking your own bike on a rare day off to a local trail for a ride is almost impossible when you park and everyone comes running-up for help, “this will only take a second!”
Advertising and Marketing? If we drive around in an unmarked short-roof cargo van, we must spend a ton on Google and Facebook ads, right? Nope. Our advertising budget is a whopping zero-point-zero dollars. Several years ago, we used to spend a hundred or so dollars a month in online ads. For us, that didn’t seem to translate to a lot of work. What did work? Referrals and repeat customers. How does that work? Be humble, be grateful, be polite, be flexible, show up when you say you will, leave when you say you will. Most importantly, go back if there’s any kind of an issue, which includes “I’m missing one of those black caps that covers the place where the air goes into the tire.” And when you make that 20-mile round trip to install a missing Schrader valve cap, do it with a great big smile and apologize, profusely, for the oversight. No ad will sell your services more. Like many consumers, most of our customers pay a lot of attention to Facebook, Google, and Yelp. Good social media reviews are nothing short of gold. Any other advertising or marketing tips? Spend money on a good web developer. We think we have the best (“Chris,” who’s been doing web-development and small business consulting since the early days of the World Wide Web). A good website might cost $8,000 to $10,000, but it’s worth every penny. What about spending $300 a month on Yelp? We love Yelp, but my goodness their salespeople are aggressive. And, no, we don’t advertise with Yelp, either.
Point Of Sale systems? What’s that? In layman’s terms, a super-charged cash register that helps with inventory management, customer tracking, margin information, and more. If it can be bar-scanned, most POS systems can generate some really interesting reports. For much of the bicycle retain industry, Litespeed is the clear favorite, as they say themselves on their website, “One out of two bike stores choose Litespeed.” Other POS options include Shopify, CashierLive, MicroBiz. Just about every POS systems is based on a subscription fee, most of which start at, or eventually rise to, about $100 per month. The information that a good POS system can offer a mobile bike shop can be amazingly helpful. If it’s used wisely, the subscription fee can pay for itself.
Which POS system do we use? None Of The Above. Although we technically have thousands of items in stock and available for sale, as a service-oriented business, we may only sell 20-ish items a day. Our cutting-edge inventory management method? We tear off a part of the packaging of an item sold, then stack those in our special torn-packaging-pile spot. At the end of the day, we grab the stack and add those respectively sold items to our JBI or Hawley or BTI shopping carts. Once we’ve reached the free-shipping threshold for a respective wholesaler, usually about $500, an inventory replenishment order is placed.
Old fashioned? Sure. Horribly inefficient? Maybe. If we were more of a traditional retailer, or if we had five vans and 12 mechanics, our preferred caveman system wouldn’t work. But that’s not us. We’re still the very small business we started as some many years ago. Between Excel and PayPal Here, which we use to process credit card transactions, we can still generate plenty of customer reports, sales information, State tax information, margin reports, repeat-customer reports, customer lists, and a whole bunch more. As a small business, not spending $1200 a year on a POS system is a choice that’s worked for us. Could that change? Sure. After several years of business and thousands of transactions, so far, so good.
Pop-Up Bike Shop?
We still envision our mobile bike shop as just that, a mobile shop. We visit our customers at their homes, businesses, movie theaters, grocery stores, and so forth.
BUT, if you can arrange for your customers to bring their bikes to you, that’s huge. Why would they do that as opposed to bringing their bike to a brick and mortar bike shop? Because the customer gets their bike back a whole lot faster. Hanging out at a local college or corporate setting for a day might be super busy, with the goal of same-day-service. It’ll save a bunch of money on gas, wear-and-tear on your van, and your daily earnings will be boosted, perhaps significantly. There’s little to no downtime driving to the next appointment.
Can Brick and Mortar Bike Shops compete with Mobile Bike Shops? Of course. Essentially with one ‘easy’ step: While You Wait Service. Will they do this? Easier said than done. As old-world brick and mortar shops continue to close and new-world service-oriented brick and mortar shops open, it’s possible. At least for now, that’s not a threat to most mobile bike shop operators.
Lastly, if you’re still in need of counsel, and you’d like to splurge for some personalized consulting, we’re here to help. For $89 an hour, we can assist with wholesale-account guidance, choosing the best business arrangement (C-corporation, S-Corporation, LLC?), applying for a Federal Employment Identification Number, registering your new business with your local taxing authority, selecting the most appropriate liability insurance, thoughts on which vehicle is best-suited to your needs, cargo-van build-out plans, advertising and marketing suggestions, appointment scheduling, inventory management, purchasing our website (everything you see here, but a warning, that’s more than $89) that’s customized to your town or city, reviews and recommendations of bicycle mechanic certification schools (Barnett Bicycle Institute, Chris King, DT Swiss, Park Tool, Shimano, United Bicycle Institute), and more.
It’s no accident that the franchise agreement you’ll need to sign with Bike Doctor Mobile or Velofix is about 200 pages in length. By law, those franchise agreements are required to be extensive. If the euphoria of owning your own mobile bike shop franchise purchase fizzles at some later date, short of declaring bankruptcy, that’s going to be a challenging financial matter to unwind.
At the end of the day, a franchised mobile bike shop ‘mortgage’ is not inexpensive:
- Monthly van payment.
- Monthly loan payment related to the buy-in of the franchise.
- Monthly ‘technology’ fees charged by each franchise, from $100 to $175 per month (not for Bike Doctor Mobile).
- Monthly commercial-space lease payment with Velofix or 5% to 15% surcharge fees with Beeline inventory (not for Bike Doctor Mobile).
- 10% of gross sales to Velofix and Beeline; 8% to Bike Doctor Mobile.
- Franchise renewal fee, in the neighborhood of $5,000 every five years.
For some markets, those aforementioned costs may approach the overhead rates associated with a brick and mortar shop, which goes against one of the fundamental advantages of a mobile-oriented business: lower overhead. When it’s all said and done, the franchisee is paying quite a bit of money, in our humble opinion, for appointment scheduling, inventory management, T-shirts, and marketing brochures.
Caveat emptor – buyer beware.
To the contrary, if you’re not happy with us, that’s an $89 one-hour investment, which by the way we’ll refund if you think we’re terrible.
Either way, good luck. Owning and operating your own mobile bike shop will be, if nothing less, an exciting adventure!
A repeat of the initial disclaimer: all of the above information was acquired through an examination of Franchise Disclosure Documents, coupled with multiple phone calls and email exchanges with representatives of mobile bike shop franchisors. As with any franchisor, things can and do change, including the specifics discussed here. For actual prices/fees/loan-terms/obligations/agreements, it goes without saying, contact Velofix, Bike Doctor Mobile, and/or Beeline Bikes, directly. Lastly, these are evolving thoughts regarding the bike industry, franchised mobile bike shops, and independent mobile bike shops. If anything seems amiss or incorrect, please send us an email to let us know.