Taking a bite out of pest-control market
Homeowners don’t like those blood-sucking pests and that’s translating into growth for MosquitoNix.
Nobody likes mosquitoes, except for maybe bats. But do people hate mosquitoes enough to pay thousands of dollars, plus an annual fee, to get rid of them?
Dallas-based franchise MosquitoNix thinks so, and its mosquito misting system is luring franchisees and customers. The five-year-old company, which had 10 locations at the end of 2007, has 26 franchises currently and is on pace for 40 by the end of the year.
MosquitoNix lets owners control their yard misters.
"The mosquito problem is prevalent throughout the United States," said Dan O'Neal, the company's chairman and CEO. "When a franchisee opens their doors, like they did in the Carolinas, they explode with new customers. Every market we've opened, they've had business on day one."
MosquitoNix is relatively unique business – though there are plenty of pest control franchises there are few, if any, that focus exclusively on the flying bloodsuckers. Yet a handful of companies have emerged in recent years to offer mosquito-misting systems, which are also offered by some more general pest-control companies.
A pair of entrepreneurs started MosquitoNix in 2003 and O'Neal's group, FEMO Holdings, bought the company in 2006. It has since decided to focus on franchising, owning only one market – Dallas – while franchising the rest. It also sells the chemicals used in the misting system.
The company's main product is the misting system that costs consumers $3,000, plus an annual fee for the chemicals – providing the company with a recurring revenue source that O'Neal believes to be key to franchisees' success in the business. Three-quarters of franchisees' revenues come from their recurring business.
At a glance
Franchise Fee: $45,000
Royalty: 5 percent
Ad fund: 1 percent
Initial investment: $130,000 to $213,000
Misters are installed on the perimeter of a property, every 10 feet. They are programmed to spray a pyrethrin-based chemical for 30 to 40 seconds three or four times a day, and the property owner can also have the chemicals sprayed at will. Pyrethrins are a low-toxicity chemical that have been used to kill flying insects for decades.
The company also has a monthly service for homeowners who don't want to pay the cost of the automated misters. That product, QuickNix, is a repellent, unlike the typical misting product.
The misting systems have become widespread enough that earlier this year the American Mosquito Control Association released a statement questioning their use. The association claims the systems lead to unnecessary insecticide use – the pyrethrin can kill beneficial insects, such as honeybees, and they could help some insects develop a resistance. The association also said they increase pesticide exposure and that there is a lack of information on the systems' effectiveness.
O'Neal said the chemical is safe, and that his company has a 95-percent retention rate – what he points to as is a strong indicator that customers are satisfied with the product.
He also believes there's a strong safety factor behind his product: West Nile. The virus's entrance into the U.S., and its spread through mosquito bites, heightens the desire of customers to get rid of the pests.
Yet, even without the virus, O'Neal said the main reason his company's product is popular is simple: "People spend a lot of money to landscape their property...and for them not to be able to enjoy that property, the cost is negligible. It's a small percentage on what they spend on landscaping."