Restructuring During A Pandemic

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The Freedom Tampa franchise consists of 30 locations now, including Clearwater, Fla.

The Freedom Tampa franchise consists of 30 locations now, including Clearwater, Fla.

Freedom Boat Club of Tampa Bay has added a marina to help accommodate the 364 boats it has preordered for its 30 locations along a 100-mile footprint on Florida’s west coast and is spending the off season restructuring the entire company so it can accommodate the unprecedented growth seen during the summer.

“We are splitting up the franchise into nine different districts — nine smaller franchises, in a way,” Capt. Dean Iverson, training manager for the operation, told Trade Only Today.

Prior to the split, it was difficult for certain districts to stand out since their markets were so different, said Iverson. Now certain people who had been dock workers are in charge of marketing and sales for their district, or training, said Iverson.

“We can divide them between areas where there are springs and the manatees go, and down south, where it’s more sandy beach and island boating,” said Iverson. “That’s nothing like boating on the lakes up by Orlando. I think the districts are really going to love what they’re seeing.”

The franchise added a marina in Tarpon Springs Fla., the first one it owns, to accommodate the boats necessary to grow in 2021, but it only has 30 slips, said Iverson, adding: “Thirty boats doesn’t get us very far.”

The franchise could have grown more rapidly last summer if it had been able to get boats. In fact, Iverson began his communications role to keep customers informed about the holdups.

“In 2018, we began setting goals for 40 percent growth year over year,” said Iverson. “We had succeeded in that endeavor by November of 2019 and had ordered our new boats for 2020 based on the same rate of growth. However, as the season started to pick up in March, Covid-19 started to shut down the nation. We had a major influx of members starting in April and business was booming with little else in the way of activity open to the public.”

It became clear that the franchise would have to sacrifice its typical 10-to-1 ratio of customers-per-boat due to supply chain hang-ups.

“Our November boat order came to a screeching halt and parts disappeared from wholesaler shelves with no resupply,” said Iverson. “Our members became extremely frustrated with the decreasing boat availability and we had to scrap and scrounge wherever we could while simultaneously pausing our marketing efforts in our dense population areas.”

Morale plummeted to an all-time low as members accused the franchise of hoarding profits and ignoring their need for more boats, said Iverson.

“Even after these factory shutdowns returned to levels in the 90 percent range in the fall, we were still unable to purchase all the parts we needed to maintain the fleet which, by the way, were getting beaten to a pulp from tremendously high use,” said Iverson.

Capt. Dean Iverson is the training supervisor and communications director for Freedom Boat Club of Tampa Bay.

Capt. Dean Iverson is the training supervisor and communications director for Freedom Boat Club of Tampa Bay.

The franchise had more than 83,614 reservations as of Jan. 1 — a 52 percent increase over the same time the year prior, said Iverson. “We didn’t grow over last year; that’s just every boat going every day,” he added.

“We finally got back on track by November, but there was plenty of unrealized gains left on the table this summer due to the marketing cutback,” said Iverson.

“Going forward, I suspect it will take until next fall to recover the backlog of boats and parts we need to continue our planned growth path. My biggest worry is how the delay may affect our new boat order for 2021.”

Iverson worked to educate the member base about why it was so difficult for them to obtain boats.

“All the conspiracy theories being thrown around — we were taking everyone’s money, not buying boats, and I started communicating to let them know, we’re trying our best, we’re reaching out to vendors trying to get boats from them,” said Iverson. “I started adding graphs to show that it was true, and that it was a problem nationwide. People really did [want to get granular]. So, I got people every single number — how many boats were actually operating, when we expected parts to come in to make the others operational, what we expected new to come in, and when.”

Some couldn’t be answered precisely, but Iverson was transparent about that, as well.

“You have to get very clever and find ways of solving problems,” said Iverson.

Read more about how businesses have gotten creative during a surge of demand, and a global pandemic, in the February issue of Soundings Trade Only

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