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Deal Radar 2010: Just Moulding , Maryland

Posted on Monday, May 3rd 2010

Just Moulding is an interior design firm that is using a franchise model with strong online and software components to change a business “usually handled by skilled carpenters in an unskilled manner.” Just Moulding was founded by Mark Rubin and Kevin Wales and has its headquarters in Maryland with a business in Washington, DC. Both founders had backgrounds in IT and were tired of working for other people. Rubin was keen to start his own brand, and Wales had some experience in light carpentry. The company currently has franchises in Boston, Massachusetts; Richmond, Virginia; and Washington, DC. Moulding is usually made out of pine or poplar and can be put on walls, floors, ceilings, or architectural designs. Building and installing it requires skill because it is often placed on the seam where the ceiling meets the wall, such that from a cross-section view, the three sides (moulding, wall, and ceiling) form a hollow triangle. Creating corners that join together properly is an especially delicate task. Just Moulding created a process to use lasers, digital protractors, and its own software to replace skilled workers. After measurements are taken, Just Moulding creates the moulding or other trim offsite and returns to install it. Rubin says that the moulding market is immature, and it’s difficult to estimate its total size. On one hand, of course every home has walls and ceilings. On the other hand, the moulding market (materials only) in the United States is just under $3 billion. Given that materials cost is around 10% of the installed service cost, Just Moulding believes that the current installed market size is $30 billion. From the other direction, each home has about 2.5 rooms without moulding. This works out to around $2,000 in business per home. According the 2000 census, there were about 105.5 million occupied housing units in the country, about 66% (~70 million) of which were detached or attached single-family units, for a TAM of $139 billion not counting apartments or condos. The target market is homes built in the past 20 to 30 years with little or no interior trim. The best targets are large neighborhoods with a few home models and big builders doing generic work, and condos are another successful market. The company gets about 250,000 hits a year to its website. In Washington, DC, this works out to between 60 and 100 leads a month. Just Moulding converts about 70% of these leads to installations, with an average job size of $2,000. Installation time is usually one week but can be as short as one day. The local business in the DC market does about $650,000 in revenues. Revenues from the three franchises cannot be disclosed owing to compliance reasons, but they bring total revenues to over $1 million. Rubin says there is little in the way of organized competition. Many competitors with a large online presence, such as Moulding and Millwork, are wholesalers only. Business is also often regionally based; for example, The Crown Moulding Company serves the Phoenix, Tucson, Denver, and Colorado Springs areas. Just Moulding says that its franchise approach and online process make it fast, clean, and professional while beating the average price points. Just Moulding also creates and installs moulding and trim for hotels, office buildings and other commercial spaces, and in this market it positions itself as delivering a product superior to that of general contractors, which often must create thousands of feet of trim at once. The founders raised about $700,000 through a private placement, put in some of their own funds, and grew organically from there. Just Moulding is seeking an additional $500,000 to build out a solid franchise sales engine; all of the other components of the business are built. The company would like to complete the money-raising by July 1. The ideal investor is someone who is in the franchising space, already has several franchise brands under their belt, and wants to add another brand to their portfolio. Rubin and his team plan to franchise the concept until they reach 100 franchises or $100 million in sales and then sell to an existing franchise brand that wants another in-home service targeting the same customer base. Recommended Readings Deal Radar 2010: Deal Radar 2010: Graystone Creations Deal Radar 2010: WaterFilters.NET

This segment is a part in the series : Deal Radar 2010

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Richard Hayman Tuesday, July 13, 2010 at 8:08 AM PT