Creating A Category

Like the national economy, the pest control industry finds itself in the midst of market uncertainty with few prospects for dramatic growth on the horizon. In the past decade alone the historically lucrative flea control market has been co-opted by veterinarians; advancements in baiting technology have been so significant that the industry’s cockroach business is a shadow of its former self; and public health pests, while garnering dramatic headlines in newspapers throughout the United States, remain largely the responsibility of state and local health officials.

Against this backdrop of market uncertainty, pest management professionals have been working overtime to identify legitimate growth opportunities both inside and outside the pest control industry. Retail sales showed some initial promise in the 1980s and 90s, but during that time only a small percentage of pest control operators have developed significant over-the-counter operations.

Orkin Pest Control and other progressive pest management firms ventured into the deck cleaning business with modest revenue gains, but little impact on their bottom line. Still other companies have rolled out steam cleaning, professional lawn care, and pool maintenance services, with varying degrees of success.
Little did these and other companies know that one of the industry’s most promising growth markets was literally in their customers’ own back yard – nuisance wildlife control.

A RELUCTANT INNOVATOR. Like hundreds of PCOs before him, Kevin Clark, owner and president of Critter Control Inc. – the nation’s largest wildlife control company – had no intentions of embarking on a career in the pest control industry. An all-state wrestler, Clark graduated from Crestwood High School in Dearborn Heights, Mich., uncertain of his future. “I had no clue what I wanted to do or where I was going,” Clark said. “I would enroll at a college, last a semester or two and lose interest. I just couldn’t get into the classes. They were meaningless to me.”

After dropping out of college in 1975, Clark returned home without a degree and without any job prospects, much to the consternation of his father, Jack, a high school teacher and wrestling coach with a “no-nonsense” personality. “I don’t think my dad was too happy with me, but he was supportive.”

Clark quickly jumped back into the workforce, trying his hand at a wide range of jobs, including real estate, bartending and new home construction. After accepting a sales position with a local publishing company in 1977, Clark’s professional life appeared to stabilize, but when the company was sold three years later he found himself “married, making $250 a week and suddenly out of a job.” To pay the rent while he looked for another position, Clark’s father suggested Kevin clean chimneys, something he had done part-time to supplement his teacher’s salary. “He loaned me some equipment and I bought a ShopVac and a chimney sweep and I was in business for myself.”

Taking advantage of the telemarketing skills he developed as a salesperson, Clark sold $3,000 in business his first three months in business, not enough to get rich, but more than enough to stay afloat financially while he considered his professional options. “The chimney cleaning business was steady, but I started getting more and more requests to pull various animals from chimneys,” Clark recalls of those early days. “All of a sudden, instead of breathing soot, I was pulling animals from structures, doing roof repairs and installing chimney caps. What I discovered is wildlife management was not only a less physically demanding business, but a more profitable business, so I decided to concentrate on my animal control work,” incorporating the name Critter Control in 1986. The rest is the stuff of legend.

During the next four years Clark methodically built his Critter Control business, strengthening his base of operations in Michigan before offering franchises in several surrounding states. “For all intents and purposes, the franchises I initially opened should have failed,” according to Clark. “That first year I put them in poor markets, but I learned from my mistakes and eventually created a business model that worked.”

Despite some early miscues, the timing couldn’t have been better. The wildlife control market was in its infancy, but urbanization and suburban sprawl were displacing hundreds of thousands of animals throughout the United States every year. At the same time, government cutbacks were reducing the number of animal control officers who could respond to homeowner complaints about wild animals encroaching on their property.

“Urban wildlife control was a market just waiting to be tapped,” Clark said. “There were individuals serving the market on a local and regional level, but more often than not they were hunters or trappers, not pest management professionals trained in the discipline of wildlife management. I set out to develop a national standard of excellence for the market.”

And, by all accounts, Clark has been successful. “When he first started, the industry was dominated by fur trappers, but that’s not the case anymore,” says Dr. George Rambo, an industry consultant and Critter Control franchisee based in South Carolina. “Some of those people have left the industry and some of them have stuck around to learn some new skills and change with the industry. There’s no question the overall quality of the service has improved since Kevin got involved in the market.”

Not only have wildlife control services become more professional, but the size of the market also has grown thanks to Clark’s marketing acumen and leadership skills. Critter Control is currently the largest wildlife control company in the United States, boasting more than 110 offices in 38 states, and generating in excess of $20 million in revenues annually. “We’re growing at a 20 percent annual rate and unless market conditions change dramatically it will be a growth market for many years to come,” according to Clark.

A front-page story appearing earlier this year in the Wall Street Journal supports Clark’s market optimism. The article, which featured comments from a wide range of individuals involved in the wildlife control field, stated, “Hundreds of companies ... have sprung up to get in on the hundreds of millions of dollars now spent annually dealing with nuisance wildlife that were once harvested as a renewable resource.”

In fact, a 1997 survey by Utah State University’s Berryman Institute for Wildlife Damage Management found that three in five metropolitan U.S. households had battled wildlife in the previous year, sustaining $3.8 billion in property damage along the way. “Wildlife are running out of space,” observed Kieran Suckling, executive director of the Center for Biological Diversity, Tucson, Ariz. “Conflicts between wildlife and suburbia are increasing and will continue to increase.”

MARKET POSITIONING. The Critter Control concept calls for humane and environmentally responsible techniques for successfully addressing nuisance animal problems. The Traverse City-based company uses innovative, integrated methods to provide ecologically sound wildlife management services for home-owners, businesses and municipalities. The firm also provides on-call services for communities that do not need or cannot afford a full-time animal control officer, providing professional wildlife control services in places where it might not otherwise be available.

Not surprisingly, there are only so many wildlife management jobs available from the federal government so there’s a large pool of students graduating from U.S. colleges with wildlife management degrees without anyplace to go, according to Clark. “As a result, there’s no shortage of talented people interested in entering the field,” he said. “We have two choices. We can take a person with a business background and teach them wildlife or we can take a wildlife biologist and teach them business.”

Joe Felegi, owner of a Critter Control franchise in Ft. Lauderdale, Fla., is typical of the kind of people entering the field. After graduating from Slippery Rock University with a degree in wildlife management, Felegi was working as a field researcher for the National Park Service in the Great Smoky Mountains National Forest. “I was involved in black bear research, tagging and relocating them,” he said. Since it was seasonal work, Felegi decided to visit a friend in South Florida during the winter, enjoying the sights and sounds of Miami by day and working as a bartender at night. “I was single and dead broke at the time, so I started to look for a day job and saw an ad for a wildlife management specialist in the newspaper,” Felegi recalled. “I thought it might be a scam, but I figured I would interview anyway.”

Felegi met with Clark, who was expanding into the South Florida market, and he was so impressed with the company that he signed on the dotted line immediately. “The Park Service called me to come back, but I decided not to return,” he said. “I was having too much fun in Florida. I was so convinced it was a viable business that I bought the franchise with nothing down. That was 13 years ago.”

Felegi, 35, said his first year in business was difficult, characterized by 16-hour days and anemic sales. “I worked two other jobs – bartending and waiting tables – to cover my expenses and I did Critter Control jobs in between. The first year I only had $10,000 in sales. Most of my roommates made fun of me. They thought it was a joke, but I knew I would be successful.”

Once he got his arms around the business, however, the franchise began to turn a profit, generating $100,000 in sales its third year. “Nowadays, the franchise program is set and guys come out of the gate running, but it was a little more difficult back then. We were still learning the business.” Today, Felegi’s Ft. Lauderdale franchise is the largest in the Critter Control network, generating $1.5 million in annual revenues and employing more than 18 people.

BECOMING A FRANCHISEE. While anyone can apply for a Critter Control franchise, Clark prefers to award franchises to those with a track record of success at his company. “Very, very few people become franchisees immediately,” he said. “Ninety-five percent have to go through an incubator period as branch managers, purchasing a franchise after they learn the business and have been doing the job a year or two.”

The company experiences about a 10 percent turnover rate each year, with most resulting from poor performance or franchisees cashing out of the business. “We have minimum income quotas for our franchisees, but they’re readily attainable if you follow the system we put in place,” Clark said. “We try to weed the non-performers out of the business because they drag the reputation of everyone down, but we do everything we can before taking that step to ensure the success of our people.”

The average Critter Control office has three employees, with franchisees coming from “all walks of life,” according to Clark. “We tell them to follow the plan because it’s a proven concept. If they don’t, they’re far less likely to succeed.”

The initial franchise fee was $7,500 with zero down in 1987 and now ranges from $2,500 to $33,000, depending upon the royalty rate and the size of the territory. A fully paid franchise fee results in a 6 percent monthly royalty, although a generous rebate program leaves franchisees paying as little as 2 to 3 percent after rebates, Clark says. 

For their investment, franchisees receive the sales and marketing rights to the Critter Control logo and trade name, a 300-page operating manual, training manuals, and monthly newsletters, as well as benefit from a $500,000 national sales and marketing program funded by the franchisees’ 1 to 2 percent advertising contributions. In addition, Critter Control holds a national sales meeting once a year in various cities around the country.

“We give people as much freedom as they want and as much support as they need,” Clark observed. “The support is there if they want it. We think it’s a solid package.”

A GROWTH MARKET. By all accounts, demographics play a key role in the success or failure of Critter Control franchises. The company’s most successful offices are those located in markets with 500,000 to 1.5 million people (i.e., the largest 100 metropolitan areas in the United States). “There are exceptions, but to be successful you need to have access to a reasonably large population base,” Clark said.

While exclusive territories are still available, Clark said they’re being gobbled up quickly. “We’re currently adding about one office a month.” In 2002, the company expanded into 17 markets, with 11 offices added in 2001. “We’re being more selective than we were in the past, but there are still ample opportunities for growth,” Clark said.

With success, however, has come increased competition. “In the late 1980s, our only competition was a few pest control companies and some trappers,” Clark said. “That’s no longer the case today. Now everybody and their brother is into it. In Michigan alone, when we got into the business there were 30 to 40 people with wildlife control licenses. Now there are 350.”

Critter Control’s ace in the hole, however, is its national market presence, resulting in regular referrals from traditional pest control companies. “A lot of pest control companies don’t want to be bothered with wildlife control services, so they’re happy to refer those customers to us,” Clark said.
 “We know that the job is going to be done right (when referring jobs to Critter Control),” said Bill Russell, president of Eradico Pest Control, Ferndale, Mich. “If there is a problem, it will be solved in a timely manner.”

Why aren’t more PCOs interested in offering urban wildlife control services? Simply put, the revenue model isn’t as attractive as traditional pest control service. While a PCO typically charges $75 to $100 per hour for his general insect control services, wildlife control professionals usually charge $40-$50 per hour. “You can’t charge as much for our services, but that doesn’t mean you can’t make money,” Clark said. “If run efficiently, PCOs can make good money providing urban wildlife control services.”

And Critter Control has the track record to prove it, but that’s not the only reason Clark has dedicated most of his adult life to developing the business.

“Being a Critter Control franchisee is like playing detective,” he said. “It’s an exciting job. People think it’s all about trapping animals, but that’s not the case. It’s about solving a customer’s problem in the most humane way possible and that’s very gratifying when it’s done properly.”

The author is publisher of PCT magazine.

“CATCH & RELEASE” – A UNIQUE PARTNERSHIP

Critter Control is a key sponsor of the International Game Fish Association’s (IGFA) Junior Angler Program. Launched in 1997, the Junior Angler Program has kindled a passion in thousands of children to appreciate, conserve and preserve fish species and fish habitats worldwide.

“The IGFA is essentially a conservation organization,” observed Kevin Clark, owner and president of Critter Control, Inc., Traverse City, Mich. “That’s why I’m such a strong supporter of the organization. Our philosophies are much the same – catch and release. We’re both big into education and we’re committed to the environment.”

“We’re pleased to have Critter Control as a contributor to our association,” said Dina McDermott, director of development of IGFA. “Kevin has been a longtime supporter of our group.” Clark was recently appointed to the IGFA’s Advisory Council.

Clark says IGFA’s Junior Angler Program and “catch-and-release” philosophy promotes environmental stewardship among the next generation of children. “Much like business, fishing is a passion for me,” he said. “It’s something I’ve always enjoyed doing and it’s something I’m pleased to lend my time and energy to.”

For more information about IGFA or the Junior Angler Program, visit the association’s Web site at www.igfa.org.