velofix vs beeline bikes vs bike doctor mobile

If you want to go with a franchise, which one is best for you?

As 2019 comes to a close, the franchise-option has narrowed, significantly.

Beeline Bikes is essentially gone, at least in terms as a mobile bike shop company.  Beeline opened for business in 2013 and was purchased by Accell North America (ANA) in 2018.  Shortly after its purchase, ANA announced they’d no longer be selling Beeline mobile bike shop franchises and opted, instead, to focus on Beeline’s software as a service (SaaS) provider.  ANA itself ran into some problematic issues and has since been largely shut down by its parent company, Netherlands-based Accell Group.

Bike Doctor Mobile, the only other known mobile bike shop franchise company, seems to be another non-option.  After selling two(?) franchises in Florida, it appears that that’s it.  I was unable to visit their website (11/1/2019) as it appears the website wasn’t upgraded to a secure site (http vs https), and isn’t currently accessible.

So, that leaves Velofix.

Velofix:

Already have sufficient funding? Or willing (and able) to assume up to a six-figure business debt? Lacking mechanical skills but you’re a passionate cyclist and businessperson that wants to take that enthusiasm to the next level?  You’re willing to pay for what seem’s to be a proven product with excellent brand identification? If that best describes you, Velofix would seem an appropriate answer. For better or for worse, they’re the big boys on the block. Their growth has been constant and sustained. It seems rarely a month goes by without another positive Velofix press release and another corporate partnership. From afar, Velofix appears to cater to the businessperson or investor who’s not a mechanic, but needs one. Look no farther than the regularly posted ads in Bicycle Retailer and Industry News for ‘Velofix Mechanic Wanted’ postings.

Velofix heavily promotes their Velofix Direct program, where a consumer may purchase a new bike from any of more than 20 new-bike manufactures. Velofix will take delivery of the bike, build it, deliver it, perform a basic fit for the rider, follow-up with a 30-day check-up, and be available for warranty-related issues.

Our thoughts on selling new bikes as a mobile bike shop operation? It didn’t work for us. The margins are very slim. The hassle is great. Taking delivery of a big thing in a big box from a supplier, storage issues, inability of the customer to test-ride more than one bike at a time, and the not-insignificant grief of returning a bike that a customer didn’t quite like. Those were a few of the bigger issues we confronted during the time we dabbled with new-bike sales, which led to a startling conclusion: we’re not a brick and mortar bike shop, so we stopped pretending to be one. This brings us back to what we believe is the secret to success for a mobile bike shop operator, it’s all about service and repairs, not sales.

Beeline Bikes:

New franchises are no longer available.

 

Bike Doctor Mobile:

Bike Doctor Mobile may no longer be offering mobile bike shop franchises.

Final Thoughts on Going With Any Mobile Bike Shop Franchise:

At least for now, the only available choice, if you’re interested in a franchise, is Velofix, which will cost up to $200,000.  Relatively speaking, that’s a lot of money. For comparative purposes, for as little as $31,000, you can open an H&R Block franchise (https://www.entrepreneur.com/article/227639).

For some apples-to-oranges franchise-fee comparisons, to give a perspective of what others are charging: Jimmy Johns franchise fee, which Entrepreneur Magazine ranked as the #1 franchise in 2016? $35,000 (https://www.entrepreneur.com/business-opportunities/198153). Jiffy Lube franchise fee, if you’ve a veteran? Free! (https://www.entrepreneur.com/franchises/jiffylubeintlinc/282479).

As previously noted, the bicycle business is a challenging one, and has been for awhile. That’s probably not going to change. The retail bicycle industry is a battlefield of littered failures. For each of the mobile bike shop franchises, many of their respective franchisees are operating under lease-to-own plans with their respective cargo vans. A lot of their franchisees are investors who farm-out the day-to-day activities to others. If you don’t have $100,000 (or more) at your disposal, the financing obligations may be prohibitive.

Nonetheless, years later, with scores of mobile bike shop franchises, the business model is seemingly a successful one. The Velofix method aims for a unique high-end experience, one where the client is invited into a Mercedes Sprinter van while the work is performed, where the customer can wait for the bike service to be completed while watching a flat-screen TV of pre-recorded (presumably bike-themed) programs, while enjoying a hot beverage from the van’s integrated cappuccino machine, all while surfing their favorite websites through the van’s integrated WiFi. If those amenities are a big hit with consumers looking for bike repairs, Velofix nailed it. But they’ve done so at a literal high cost. Those higher costs are expressed through the Mercedes van itself. Prepare yourself for the $400+ price-tag of the 10,000-mile service and the additional infrastructure costs associated with the coffee machine, WiFi, sound system, several deep-cycle marine batteries, and a power inverter to electrify those components – and you still may not have air conditioning or a fridge. There’s also the ‘VeloNet” fee that will total over $1,000 per year. Then there’s the price of the required commercial space that needs to be leased in order to fulfill at least some bicycle wholesalers minimum requirement to do business with them. Although the commercial space cost may be limited to a 5′ x 5’ storage unit, that price would still likely be in the neighborhood of $700 per year. All of those costs will result in higher rates passed to the customer, or by the additional stress to the franchisee in delaying the break-even point of profitability. In addition to the higher costs of the non-bike-related add-ons, those items take up a not inconsequential amount of space, a critical component of any mobile business, which could otherwise be used for tools and inventory.

Another Option?

The downside of a mobile bike shop franchise:

The big one, no matter how you chop it, if you don’t have $200,000, that’s a lot of money. If you do have the funding, that’s still a lot of money. What’s more, franchisee discussions of ‘tough winters,’ difficulties in keeping bike mechanics employed, online schedules (which are easy to check) that rarely seem full. Coupled with that, a fair bit of anecdotal evidence of investors with available means, a passion for cycling, but with little or no experience of having worked in a bike shop. A common refrain: ‘I always had a dream of one day opening my own bike shop, and this seemed like a great [i.e., cheap/easy compared to opening a brick and mortar shop] way to do it.’

Another concerning issue: there are few, if any, company-owned mobile bike shop franchises. If owning a mobile bike shop franchise is as successful as promoted, why wouldn’t Velofix continue to operate a number of ‘demonstration’ corporate-owned vans? They did at the outset, but they pivoted rather quickly to promoting and selling franchises rather than remaining in the mobile bike shop business themselves. This is not the case with a number of established, successful franchises like McDonald’s, which owns about 20% of their franchises. In all fairness to Velofix and Beeline (and most other companies), they’re not McDonald’s, nor is that their intention. For a comparison of established mobile-type franchises, however, Snap-On Tools owned 168 of their franchises in 2016; Rooter-Man owned 15 of their franchises in 2015; and MaidPro has owned at least one of their franchises for the last ten years. Confession: I’m cherry-picking franchises that have company-owned operations. Plenty of successful franchises don’t own any of their respective operations. Nevertheless, given the relative newness of the mobile bike shop franchise companies, and their respective limited experience with franchising and (save for Bike Doctor Mobile) not very much experience in operating a bike-service business, some food for thought.

A depressing reality for any aspiring mobile bike repair businessperson. Even if you’re a great bike mechanic, but you’re not already independently wealthy, there’s a reasonable chance you’re not going to be able to afford any of the existing mobile bike repair franchises. What’s perhaps worse, if you are approved for upwards of $100,000 (or more) in financing to buy one a franchise, that’s a significant financial responsibility. The $1,000+ monthly payment, and that’s after you’ve paid up to tens of thousands of dollars in out-of-pocket funds in purchasing your franchise, is due every month, even in the off-season when your bike-repair appointments, and you’re cash receivables, will likely be less. Take that cost, plus the monthly technology fees, the 12% of gross proceeds billed by the franchisor, the required commercial space (Velofix), and that all adds up to a lot of money that’s going out the door, every month.

What’s more, while you may have purchased the rights to a set of hands-off zip codes, that exclusive franchise area is only exclusive to your company. Independently owned and operated mobile bike shops, and there are a lot of them out there, are free to come and go as they please, in any area, including yours.

Another recurring cost, for each of the mobile bike shop franchises, you’ll need to re-up every five or so years. What’s that mean? Be prepared to renew your franchise contract, which could come at a cost of $5,000 or more. Yet another cost that should be budgeted for, and asked about, with each of the bike shop franchise models.

A lot of hoopla has been made over access to direct-to-consumer bike sales one would obtain with either Bike Doctor Mobile or Velofix. Just our humble experience, but our dabbling with new-bike sales was cumbersome and not terribly elegant:

“The color of the bike looks different in person than it does on the website.”

“I know that’s the size I ordered, but it doesn’t feel right.”

“I changed my mind, I’d like to return the bike.”

Hey, it’s a consumer-driven marketplace. Bike returns happen. But it’s much more of a hassle when you’re operating your mobile shop out of your home, shipping bikes back to the distributor, if they’ll take them. Bikes are big and bulky, which is why the mobile bike shop method seems to be flourishing. Get ready for this, the margins on a lot of new bikes aren’t that great. So, while we still will sell a new bike to a customer who really wants one, we’ve refocused ourselves on service, where, believe it or not, a decent living can still be made.

A final note, depending upon who you ask, between 70% to 90% of all bike-shop businesses in the United States are independently owned and operated. While the franchise method has not previously succeeded on a large scale in bicycle retail, and that’s not to say it won’t within the mobile world, that’s maybe another cautionary tale with regard to making the mobile-bike-shop-franchise leap.