The 2018 Restoration Industry Leaders Review

Businessman watching a tornado. Concept for success.

by Jeff Cross

The 2018 Restoration Industry Leaders Review is about success. Not just the numbers, but also how companies impact their clients and communities. Take a few minutes and read on to learn what you can do to make your own company a true success story.

Without further ado, here are the 2018 restoration leaders:

[infobox title=’Delta Disaster Services’][/infobox]

Start-up restoration companies often have two main goals in mind: To provide people in crisis with restoration services and to create a profitable, efficient company.

That was what Mike Mastous, founder and president of Delta Disaster Services, had in mind, but also a bit more.

With nearly 20 years of experience in insurance, franchising, and restoration, 13 years ago he launched Delta Disaster Services in the Denver market with one objective — to build a quality business model that he could then franchise.

And franchise he did. Delta Disaster Services is a nationally recognized, award-winning franchise brand that provides full-service restoration services to commercial and residential properties. Its restoration services cover damage from flood and water to smoke and fire, as well as mold and other environmental conditions. Delta Disaster Services franchise offices, located in 16 markets across the United States, are proud to have technicians certified in all restoration services they offer.

And now Mike is proud to be part of HRI Holdings Inc., based in Nashville. The company is probably best known in this industry as the parent company to Chem-Dry Carpet & Upholstery Cleaning, but also owns the fast-growing N-Hance Wood Refinishing franchise. HRI Holdings acquired Delta Disaster Services early in 2018 and added the company to its portfolio of franchise offerings.

Early days

Delta Disaster Services was a true start-up company. Thirteen years ago, it was just Mike, flying solo. “I doubled our revenues every year for the first three years, and by our fourth year in business, we were an Inc. 500 company and one of the top 500 fastest-growing businesses in the U.S.” A solid reason to be proud. “By year five, we were a $5 million restoration firm, not only meeting, but surpassing our goals. In year six, we began franchising. And now, we’re aligned with the top insurance carriers in the country.”

Because of this type of fast growth — coupled with how Mike built the business “the right way” — he quickly caught the attention of the HRI Holdings acquisition team.

Unique partnerships

Although Mike has been solidly involved with the development of Delta Disaster Services since its inception, his vision to eventually franchise wasn’t based on a mere dream.

“Believe it or not, I started out as a franchise development director with Chem-Dry many years ago,” he recalled. “In this position, I witnessed a number of Chem-Dry franchises expand into the restoration business. It was clear to me then that this was an emerging industry, and there was a consumer need and a market opportunity that I could build on. To date, I’ve been in the restoration industry over 33 years.”

Now his company is part of a global community with more than 3,500 locations, including the HRI Holdings’ other residential and commercial services portfolio companies, Chem-Dry and N-Hance. Delta Disaster Services already has locations in Colorado, California, Utah, and eastern Gulf states but has plans to grow as any franchise model envisions.

And growth should happen since with Chem-Dry alone the company is in 55 countries, serving 11,000 homes and businesses each day. The franchise model should play out well for Delta Disaster Services. Some of that growth will come from within the HRI family of businesses. In fact, HRI reports they have already sold three Delta Disaster Services franchises to existing Chem-Dry franchisees within 30 days from offering the opportunity under the HRI umbrella.

Core values

Dan Tarantin is the president and chief executive officer of HRI Holdings. When his team was performing the due diligence common to acquisitions, they noticed a common belief in company values.

“As we began talking to Mike and learning more about Delta Disaster Services, we found the same kind of commitment to quality and innovation that we have with Chem-Dry and N-Hance,” Dan said. “Their very successful company-owned operation in Denver was the foundation for the unique Delta Disaster Services franchise model. Their innovation in areas including systems where they’ve built a customized, integrated, cloud-based communication and project management platform sets them apart in the industry.”

Mike saw the same thing.

“I also wholeheartedly agree with Dan that all three brands have a strong commitment to quality and innovation that make them a good fit within the HRI portfolio,” he observed. “One additional point worth mentioning is that, in our discovery process, we also found that the companies were well aligned in our mission and values. Both cultures are very customer-focused and built around the principle of helping our franchisees to be successful in running and growing their businesses. To me, that’s also a critical part of a successful integration of businesses and why I have so much confidence in this partnership and in the future growth of Delta Disaster Services.”

And everyone benefits from this business model. Delta Disaster Services can achieve its goal of growing to a national scale because of it being part of the HRI Holdings team. And Chem-Dry and N-Hance franchisees can now look at expanding into the property restoration market.

“The acquisition of Delta Disaster Services was a monumental step for HRI,” Dan said. “Existing Chem-Dry and N-Hance operators now have an opportunity to expand into the restoration industry with the strong, established franchise model that Delta Disaster Services has built and be a part of growing the brand on a national scale. Many of our Chem-Dry franchisees, similar to independents, have been offering restoration services but have hit a ceiling on their growth. The Delta Disaster Services system will help them break through that ceiling. It’s exciting to see this already beginning to come to fruition, with some existing Chem-Dry owners seeing the value and buying a Delta Disaster Services franchise. And we expect to see a lot more of that growth soon, not only from within our existing networks, but also from outside them.”

Optimistic outlook

Although right now a very successful property restoration company, more must be done, especially with the franchise business model.

“We are excited to see Delta Disaster Services achieve national scale and prominence in the restoration category in the coming years,” Mike said. “HRI has developed Chem-Dry and N-Hance into internationally acclaimed, award-winning brands. By leveraging their expertise and the same growth model, we have the opportunity to experience that same type of exponential growth.”

[infobox title=’Estradatize Cleaning & Restoration Systems’][/infobox]

Owning and operating a small, lean cleaning and restoration company in a huge metropolitan market such as Houston can be a logistical nightmare, but one entrepreneur has taken the challenge on with optimism.

David Estrada is the president of Estradatize Cleaning & Restoration Systems, running the company with his capable wife Melanie — whom, he would admit is “the real boss.”

While David has company growth on his radar, at this time it is a small blip, as he wants to make sure expansion is “slow and steady” so he can keep a handle on everything client related, as he has built a faithful following that he truly cares about.

His company is staffed by five capable professionals and specializes in water and fire restoration, which is what David claims is his true passion and most profitable division of the company. Estradatize also offers complete pack-out services and structural rebuilding, along with carpet, rug, upholstery, and tile and grout cleaning.

A modest company offering it all.

Starting at the bottom

Prior to his work in the cleaning and restoration industry, David was a purchasing agent and worked for two import/export companies and traveled to Mexico to visit different company locations. But that came to an end when he was laid off.

As a young man looking for work, he struggled to find something that was satisfactory. He eventually responded to a classified advertisement for a carpet cleaning technician position. The salary was $1,000 per week, which was what he was looking for.

He jumped into the work and found he enjoyed it immensely, along with the restoration side of the industry. The entrepreneur in him wouldn’t allow him to stay there long, and in 1991 he launched his own company.

Growing pains

Over the next 10 years, he built his company to a multi-truck operation, offering everything from carpet cleaning to mold remediation. Then the terror attacks on the United States brought the cleaning side of his company to a screeching halt. “People were afraid to spend money, not knowing how this tragedy would affect them,” David said. “I had to downscale to one van and shortly thereafter stopped the mold remediation part of my operation since insurance companies would not cover that any longer. Fortunately, my overhead was not very high, so the impact was not so severe.”

Since then, a strong marketing campaign has helped all aspects of his company, although he had another personal setback. “I went through a divorce, and that impacted not only me, but also my company,” he explained. “Things were kind of in limbo for a while, since I was used to my ex-wife’s assistance with the business.”

With his substantial experience in the industry, coupled with his bilingual abilities — he can speak both English and Spanish fluently — his career is on the move.

Making it work

David’s credentials and a willing-to-learn attitude makes growth a certainty. He won’t give up, and focuses on the big picture when he works on expanding his operation.

He believes in certification. In fact, years ago he was an Institute of Inspection, Cleaning and Restoration (IICRC)-approved instructor, helping others in the industry with their technical expertise. As the first Spanish-speaking instructor and teaching the first certification classes in Spanish, he made history. Whether it was using Spanish or English, David enjoyed helping students with technical expertise. And he hopes to return to teaching again soon. “Being certified in this industry sets us apart from other companies,” he explained. “And I feel it is very necessary.”

He plans to continue to grow his company by doing what has worked successfully so far, such as utilizing a recorded consumer-awareness message. “Since I’m a strong advocate of consumer education, it has helped me draw quality clients. Also, the ‘five-around’ cold-calling method I use in the neighborhoods I work in is a great way to reach new clients.”

What would he do differently, thinking back over the years? “I would have attended more marketing classes,” he laments. The technical expertise is one thing, but getting a quality clientele is another component entirely, he said.

“But no matter what, don’t let life’s ups and downs affect your business,” he advised. “Keep a positive and optimistic attitude.”

[infobox title=’SteamMaster Restoration and Cleaning’][/infobox]

Many restoration companies have their roots in cleaning, specifically carpet cleaning, and when they envision their company name, it usually ends with “Cleaning and Restoration.”

Cleaning first, and restoration second, even if the company does more restoration than cleaning.

Not so with SteamMaster Restoration and Cleaning in Minturn, CO. While the company offers most cleaning and restoration services, it is a very restoration-focused firm and makes sure that’s how the company is represented when people see the SteamMaster name and logo.

Raj Manickam is a co-owner and chief executive officer of the company. The company, established in 1978 by majority shareholders Gary Gilman and Julie Stoxen, is in its 40th year of operation. Matt Monica is the vice president and co-owner and has been part of the company for more than 30 years.

SteamMaster serves nine counties in Colorado, mainly in the towns of Vail, Breckenridge, Aspen, Steamboat Springs, Winter Park, and the surrounding mountain resort communities.

The birth of SteamMaster

When Gary Gilman founded the company, he wanted to provide a single source of cleaning and restoration services in the Vail, CO, area — and also support his skiing habits.

Gary Gilman moved to the Vail area in 1977 to ski for one season and obtain in-state tuition for college at Colorado University. With the El Niño ski season, Vail had more than 500 inches of snow. Gary was hooked. With that kind of skiing, he decided to abandon plans for returning to college and started a cleaning company after the ski season. This allowed him to pursue his passion of skiing powder when the conditions were right. Since then, the company has grown and also experienced ups and downs.

Currently, SteamMaster hovers at just under 30 employees, with nearly 20 work vehicles housed in a 12,500-square foot, three-story building that also touts a nine-employee housing unit so their trained technicians can respond to emergency losses at any time and on any day. Housing costs and the general cost of living in a ski resort area is obviously prohibitive for many, and with on-site housing for those in the company who want it, it’s a win-win situation.

The services SteamMaster offers is lengthy, but Raj indicated that the largest volume of revenue comes from the company’s restoration division, which includes emergency water mitigation, smoke and fire damage restoration, and mold remediation.

Specific challenges

In a ski resort town, the obvious challenges are cost of living coupled with finding great, trainable, and sustainable employees, Raj said.

“After the economic downturn, many competitors started to create a one-man or two-man cleaning company, and several restoration companies also came into existence as competitors,” he recalls. “The marketplace became saturated with cleaning and restoration companies. We combated this with always remaining true to our values, cause, and being consistent. We never try to compete in our competitor’s terms and how they do business, but rather work harder at our own creativity and the benefits we bring to our clients, customers, and the communities we serve in.”

Everyone works in line with the SteamMaster company values, which uses the acronym B.R.I.E.R, representing balance, responsibility, integrity, excellence, and results. It works. “It is not what we occasionally do, but what we do all the time,” Raj said. “We are a community-impacting organization, year after year. And we are proud of our civic engagement, environmental, and sustainability contributions we make.”

The downturn in the economy came about a year after it really started, at least for SteamMaster, which is a tribute to their success. “We went down 50 percent in volume, in both revenue and employees,” Raj recalls. “The market in a resort town tends to be the last that is affected, and the last to come out of it, as well. We had many quick-moving companies betting on fast profits and unscrupulous tactics come one after another, and then fade away.”

SteamMaster maintained a lean, frugal, and hunkered-down mentality, while keeping its company values intact, Raj said. “This helped us rebound slowly and steadily. We have yet to get back to our 2008 and prior year revenues, but we are resolved to get there with sustainable growth. We have added three new services that will help stimulate new opportunities for revenue, and anticipate the next five years will see incremental double digit growth.”

He sounds like a banker, doesn’t he?

“Prior to working in restoration, I was in the banking industry,” he said. “Those are the two main areas I have been involved in. Two different spectrums, but it was the best thing I ever did for my career in restoration.”

Solid philosophy

Growth rarely occurs by mistake, as Raj will testify. It occurs because a determined team effort makes it happen.

“This is a noble industry when the intent and actions equate to doing the right thing. Our industry has its bothersome stigma with bad apples operating without conscience,” Raj said. “When done right, we make a huge difference in the lives of people we serve, enhancing quality of life. Indoor air quality, responding in an emergency and bringing calm, bringing back the beauty of all surfaces we clean and restore, and enhancing them, is what we strive for. Getting feedback from our customers and clients is what I appreciate and like.”

The plan is to keep doing what works, which includes giving back to the community, keeping up with cutting-edge technology and equipment, and always offering their clientele the best service possible.

See the 2017 Restoration Industry Leaders Review here

Jeff Cross

Jeff Cross is the ISSA media director, with publications that include Cleaning & Maintenance Management, ISSA Today, and Cleanfax magazines. He is the previous owner of a successful cleaning and restoration firm. He also works as a trainer and consultant for business owners, managers, and front-line technicians. He can be reached at [email protected].

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