DVDs On The Run to franchise

DVDs On The Run founder plans to franchise his fledgling business Date published: 5/11/2006

By CATHY JETT

Cris Pollnow was blown away the first time he used DVDs On The Run on State Route 3.

All he had to do to rent a video game or movie was pull up to a drive-through bay, make a selection from a touch screen and swipe his credit card. His selection would drop down a chute.

"I met Richard [Nehrboss, who created the concept] there, and I said, 'You've got to franchise this, and I want the first one,'" Pollnow said.

Now the Chancellorsville businessman is getting his wish. He plans to build a DVDs On The Run in Rappahannock Industrial Park on Tidewater Trail once Spotsylvania County approves his site plan and building permit.

"I would like to get it open within about 90 days," he said.

Pollnow's franchise will be among at least three new DVDs On The Run going up in the Fredericksburg area soon. Nehrboss, who built the prototype next to the Wawa at Chewning Lane and Route 3 last May, is going through a similar permitting process to build his drive-through DVD stores across from the Rob's Car Wash in Fredericksburg's Central Park and on U.S. 17 near Falls Run in Stafford County.

These will be company stores. He also had a meeting recently with people who, like Pollnow, want to buy DVDs On The Run franchises for $166,000 to $228,000. The price includes the cost of the building, which may vary depending on the site.

"Interest was very high," Nehrboss said. "I'll probably only let five of them go. If they want more, they'll have to wait for the next round of offerings" later this year.

Nehrboss is the second Fredericksburg-area businessman to franchise a concept this year. The other is Rick Ivey, a Spotsylvania chef who started the Virginia Barbecue restaurant chain in 2000. There are now six Virginia Barbecues, and two more will open this July, in The Shops at Ladysmith and Davis Ford Crossing in Manassas.

"People generally franchise their businesses because they recognize franchises are an effective way to expand a business into new markets and do so fairly rapidly with a relative minimum of expense," said Matthew R. Shay, International Franchise Association president.

"You're licensing the right to use your intellectual property to another entrepreneur, who is responsible for putting up the capital investment and serving as the day-to-day manager," he said. "In a corporation, if you were managing it all yourself, you'd have to put up the capital and hire and train staff."

Nehrboss said he decided to franchise DVDs On The Run after talking to about 1,000 people who used the prototype store soon after it opened. Some, like Pollnow, were intrigued with the idea of owning an automated business requiring only a few hours of labor a week to restock it with new DVDs.

"We have a whole range of people who are interested, from people who want to keep their day job to those who are retiring but still want to do something," he said. "Most of them are really attracted by the fact that they don't have to hire employees."

Nehrboss and his wife, Ruth, came up with the idea for DVDs On The Run while discussing ways automation could boost a business's bottom line. They first considered automating a drive-up espresso stand, but decided applying that approach to the movie rental business made more sense.

There would be no health regulations to follow, for starters. And the profit margin would be higher than that of such competitors as Blockbuster, because operating expenses would be lower.

The result was DVDs On The Run, which has four drive-through bays equipped with touch-screen computers and credit-card slots. Customers can either order online ahead of time at DVDsOnTheRun.com or from computer screens on-site. A mechanical arm uses radio-frequency identification chips to find the correct DVDs and drop them down a chute.

"The response we got after we opened was kind of overwhelming," said Nehrboss, who spent several hours a day talking to customers for the first few months the prototype store was in operation last year. "People said things like: 'Thank you for opening. Now I don't have to get my kids out of the car.'"

DVDs On The Run had a positive cash flow by the end of the first week, and was a success by the end of January, said Nehrboss. A little over a month later his wife, who is an attorney, began the paperwork to franchise the business.

His timing is good. Video rental kiosks, which have been popular in Europe for some time, are starting to catch on in the United States, said Sean Bersell, spokesman for the Video Software Dealers Association. The Encino, Calif., trade group represents the United States' $24.3 billion home video rental and sales industry.

Redbox, for example, recently signed an agreement to put its kiosks, which feature about 50 new titles, in more than 80 percent of all Giant stores this year. These are likely to include the Giants in Park & Shop shopping center in Fredericksburg, Spotsylvania Crossing Shopping Center and on Courthouse Road in Spotsylvania, according to spokesman Jamie Miller.

DVDs On The Run, however, carries about 10,000 movies, and is the only DVD rental company he's heard of with a drive-through component, according to Bersell.

"It sounds like a great concept that should prove to be popular," he said. "The video rental business is a very innovative industry. People are always reinventing the mousetrap and looking for new ways to provide value and convenience to the consumer."

One such reinvention looming on the horizon is video on demand, or VOD, which allows viewers to select and watch video content over a network as part of an interactive television system.

But industry experts predict that technology probably won't affect existing DVD rental companies for about 10 years, said Pollnow. And larger metropolitan areas probably will get the fiber optics needed for VOD before suburban areas such as Fredericksburg.

"Yes, there's an end to this, but there's an end to any business," said Pollnow, who would like to open five DVDs On The Run locations in the next three years. "The payback on this investment has to be short enough so you can absorb that risk. That thing had a positive cash flow in a week. There are not many businesses in the world that can say that."

Courtesy of The free lance star

Why rent movies when you can starting trading for them at

www.mydvdtrader.com