With People Stuck at Home, Energy Bills Went Up, and Koala Insulation Stepped Up Its Game to Meet DemandThe company scaled rapidly to over 200 territories in a year and secured its first ranking on the Franchise 500.

When people were stuck at home during the height of the pandemic, their new home-renovation activities famously drove demand for a wide range of at-home services. But it also meant people's energy bills went up — and as they began looking for ways to cut costs while staying cozy, the Melbourne, Florida-basedKoala Insulationsaw opportunity.

Despite starting its franchise-development efforts a month and a half before national shutdowns, Koala Insulation surpassed its goal of expanding to 200 territories in a year and is well on its way to 300. That helped it go from unranked last year to No. 242 on this year's list. Here, we spoke with Koala's founder and CEO Scott Marr about how the company plans to sustain its growth.

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Why do you think insulation services have spiked so much?

Insulation can provide a significant return on investment. It's also a service that's within reach for a lot of people. Solar, for example, is great but very expensive, so a lot of people have to finance solar. Whereas at Koala, insulation has an average ticket of $2,800.

What did Koala do to meet increased demand?

We worked with our suppliers and distributors to ensure that our franchise partners could get the materials they needed. And we sourced additional material suppliers for our franchise partners to be able to get the best prices possible. Some materials became scarce with the supply-chain problem, so we had to go to great lengths to source various components — some within the States, some from Canada, and we spoke with vendors in Sri Lanka.

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What do you look for in franchise partners?

We look for folks who are going to be reasonable and amicable in adverse situations. We're looking for folks who can follow a process, and who are gritty and competitive. We've found that supercompetitive people will go to great lengths to win. And that's a big deal for a business owner because during trying times, you have to go to great lengths to remain viable.

How does Koala plan to sustain its growth long-term?

A lot of emerging franchise systems don't start with a robust foundation. But what we've done is very different. When we started our franchise-development efforts, we had 12 team members supporting three franchisees, so it was very much a specialist-led organization. By the end of our first year, we had a staff of 25 at headquarters. And when the pandemic set in, we said, "Let's grab some really fantastic talent who are out of a job." We also created a proprietary software system that has added a lot of efficiency through automation. Today we have around 85 franchise partners.