www.slumberland.com / Headquarters: Little Canada, Minn. / Michael Larson, director of real estate development: It s the best-kept secret in the franchise world. HOT RETAIL FRANCHISES Slumberland Furniture has 126 stores throughout the Midwest, and 77 of its locations are franchises. Fulfilling Dreams Slumberland has perfected a turnkey business model that sets franchisees up for success. BY JANICE HOPPE Slumberland Furniture has evolved from a specialty bedding store when it began almost 50 years ago to a whole-home furniture store, specializing in quality and stylish merchandise. As the company s product lines and store square footage expanded, so did the concept when Slumberland began franchising in 1975. Slumberland has continued growing ever since. We are no stranger to the franchise world and really started doing that before any other furniture concepts were franchising, Director of Real Estate Development Michael Larson says. New franchise concepts are selling a great idea or a dream, and hoping it pays off. We have a solid track record of success. A father/son team opened the first Slumberland location in Richfield, Minn., as a mattress-only specialty operation, which was purchased soon after by Larson s father, Ken, to begin the family owned chain. Mattress-only stores were a rarity at the time and people could only purchase mattresses at furniture or department stores. Slumberland not only sold mattresses and sleeper sofas, but also provided sleep experts who spe- 30 franchising-today.com SUMMER 2016
Slumberland gives franchisees exclusive territories, but it wants its locations to be within a 30- to 40-minute drive for consumers. cialized in finding the right mattress for each individual or couple based on body size, sleep habits and other needs. The company s first product expansion was La-Z-Boy recliners and Slumberland continues to be one of the nation s top sellers of La-Z-Boy recliners upholstery. The company then expanded to offer bedroom furniture and ultimately to whole-house furniture and accessories. We expanded from a couple thousand square foot small, specialty shop to a full-line furniture store with stores ranging from 32 franchising-today.com SUMMER 2016
20,000 to 40,000 square feet, Larson says. Today, Slumberland has 126 stores throughout the Midwest and is headquartered in Little Canada, Minn. Seventy-seven of its locations are franchises and 49 are corporate. Franchisors don t usually operate their own company-operated stores, Larson notes. That makes us unique as franchisors as we have a lot of skin in the game. We know what it s like to make a successful store. Solid Foundation Slumberland stores are located in small towns with populations of a few thousand to major metro areas such as the Twin Cities. Slumberland s strategy is to have a convenient store within a 30- to 40-mintue drive, Larson adds. We do give people an exclusive territory and it depends on the market size. If it s a large metro area, it s a five-mile radius and if it s a smaller or medium market it s a 10-mile radius. Director of Franchising Gayle Voigt-Frolek says Slumberland s model is based on customer convenience. We have stores in convenient locations, we offer online shopping and education services, and we make it convenient for customers to easily transfer merchandise orders anywhere within our trade area with no cost pickup or for the cost of a local delivery fee, she adds. Because of Slumberland s longevity as a franchisor, the company has built a complete turnkey business. We cover every element of running the business and its operations, which is part of what you get when you buy into the Slumberland sys- Brisky Commerical Real Estate specializes in helping growing businesses find smarter solutions; this full service commercial real estate firm is headquartered in Minneapolis, Minn. With extensive local knowledge and experience, Brisky Commercial offers real estate solutions for businesses of all sizes; the team recently assisted Slumberland with the acquisition of a new corporate headquarters. Brisky Commercial Real Estate features a complete team of retail development experts and takes pride in the ability to handle complex projects for successful brands like Slumberland. Brisky Commercial is particularly well equipped to handle tertiary markets, where retailers like Slumberland often require expert, specialty assistance. For more information and to learn just what Brisky can do, visit www.briskycommercial.com or call 612-413-4200. SUMMER 2016 franchising-today.com 33
tem, Larson says. Historically we have had very few stores close, which most franchisors can t say and [that] speaks to our success rate. One of the biggest advantages Giving Back Slumberland Furniture created the 40 Winks Foundation in 2008 to help children get a good night s sleep. The foundation provides mattresses and beds for children and families lacking these resources to help them attain a full and healthy night s sleep. Every franchisee is encouraged to participate and for every new location Slumberland partners with local charities and donates 40 new beds to the community. The 40 Winks foundation services people and kids who are sleeping on the floor; this is not an upgrade, says Michael Larson, director of real estate development. We encourage each of our stores to give back on an ongoing basis. for our franchisees is access to the Slumberland marketing program, Voigt-Frolek says. Slumberland produces over 52 colored preprints yearly, produces all the TV commercials, and creates the direct mail and online programs. We have a corporately produced website with tools and educational segments that help customers learn about furniture and mattresses. The ideal franchisee is someone who wants to be part of a successful program and follow the Slumberland plan. We look forward to working with franchisees that share our mission and core business values. That is the foundation of what has been successful for us as we have continued to grow, Voigt-Frolek says. Franchisees do not have to have a furniture background, and Larson says it is easier if they don t because Slumberland s model is so different from any other operator. We do have a lot of multiunit franchisees in our system and that s a sign of a healthy franchise system because Montage Furniture Services Slumberland Furniture has been an important part of our business. We continue to develop our partnership with them in providing the best experience possible for their customers through quality furniture protection plans, end-to-end service management and delivering key customer satisfaction insights for business planning. We look forward to working together to further elevate the Slumberland brand and help them achieve their customer experience goals. Thank you for a beneficial and meaningful partnership that continues to evolve as we both look to strengthen the Slumberland brand. 34 franchising-today.com SUMMER 2016
current franchisees are investing in additional franchises, Larson says. We look for people who want to partner and grow the Slumberland brand. Ongoing Support Corporate sends a team of people including a project manager, sales and operations trainers, accounting professionals and a franchise business consultant to assist in new franchise location openings. Depending on the real estate, a new location can be open in six months to a year-and-a-half. What s unique about us is the level of training that we can provide, Larson says. Most of that training is done onsite at their location, but we do have some classroom training at our headquarters before the location opens. Director of Franchising Gayle Voigt-Frolek (left) and Franchise Development Manager Kate Saba support Slumberland s franchisees. The training teams will set up the store and ensure the franchisee has everything they need to open successfully. Some members of the team will then check back on that store in 30, 60 and 90 days to ensure they were properly trained and are servicing the customer. The level of support franchisees get is above average from what a typical franchisor would provide, Larson claims. SUMMER 2016 franchising-today.com 35
FRANCHISEES HAVE AC- CESS TO THE BEST BRANDS AND WHOLESALE PRICES IN THE INDUSTRY. In addition to the upfront training, franchisees receive ongoing support from corporate. Every location has access to one of Slumberland s distribution centers where franchisees can buy product and receive it during the store s weekly shipments. It reduces the dollar amount investment of what it would normally be for a furniture store to operate and we have fast-turning products, Larson says. Our trucks stop two to three times per week at each location. Franchisees not only have access to the inventory in the company s distribution centers, but access to some of the biggest brands in the furniture and bedding industry. Franchisees have access to the best brands and wholesale prices in the industry that independents wouldn t be able to get on their own, Larson explains. We offer Sealy, Tempur-Pedic, Simmons, Stearns and Foster, Broyhill and many others. They are getting fantastic brand names and it really helps set recognition in new communities. Slumberland also hosts an annual all-store conference for its franchisees and corporate operators to network, learn about new products and marketing campaigns, and to share best practices. Attendance is nearly 100 percent and owners want to attend because it offers a place to learn about what is working in their local markets and understand the direction of the company moving forward. Further Growth Restaurants and the service industry often come to mind when thinking about franchises, Larson says, and adds that it s a very crowded space. They don t think of furniture, he says. If people really check out the Slumberland model, they will be impressed with what we have built over time and impressed with our franchise model. It s the best-kept secret in the franchise world because there are not a lot of furniture opportunities out there. 36 franchising-today.com SUMMER 2016
Slumberland continues to see growth with new locations opening throughout the country. The company opens six to eight stores per year and is focused on getting that number up to 10 or 15 new locations each year. Our strategy is to contiguously grown additional Slumberland locations within the upper Midwest area. Slumberland is also committed to building additional distribution centers to keep up with demand. The company currently has three, one each in South Dakota, Minnesota and Wisconsin. We are growing in all directions, but are not looking to go international, Larson notes. To accommodate continued growth, Larson recently transitioned from director of real estate and franchise development to director of real estate, and Kate Saba joined the Slumberland team as franchise development manager. We are growing at a point where Michael s responsibilities have exceeded him in both capacities, Voigt-Frolek explains. We will continue to open corporate stores and Kate will focus on Slumberland franchise store growth. Every Slumberland location can buy product from a distribution center and receive it during weekly shipments. U.S. Bancorp (NYSE: USB) with $429 billion in assets as of March 31, 2016, is the parent company of U.S. Bank National Association, the fifth largest commercial bank in the United States. The company operates 3,129 banking offices in 25 states and 4,954 ATMs and provides a comprehensive line of banking, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com. SUMMER 2016 franchising-today.com 37