A-1 Sewer And Drain Embraces Change

Brothers build business with quality work, careful investment and a focus on the growing municipal market.
A-1 Sewer And Drain Embraces Change
The staff at A-1 Sewer and Drain in Rapid City, South Dakota, includes (from left) Shannon Franke, Jonah Vincent, Jeff Warrior, Albert Lewis, Dalonda Franke, Jason Franke, Christian Lewis, Joshua Franke, Josh Hansen, Zac Hansen and Duane Rosekrans.

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A good example is A-1 Sewer and Drain in Rapid City, South Dakota, which by any measure started out small in 2000. That’s when Jason Franke started the venture with just a small cable machine, an old jetting truck once owned by the City of Los Angeles and a used Ford pumper truck for cleaning septic tanks.

But the company steadily grew by recognizing emerging markets for other services — especially sewer cleaning and inspections, along with trenchless pipe relining — then capitalizing on those opportunities by making careful investments in equipment.

Today, the company — now owned by Jason, 36, along with his younger brother, Josh, 34 — is a fully diversified business, offering services that include commercial and municipal pipeline cleaning and inspections and septic tank cleaning, along with trenchless pipeline rehabilitation. The company also recently built a 9,600-square-foot shop and runs a large fleet of equipment that represents about a $1.5 million investment, including three combination jet/vac trucks, a jetter truck, camera truck, two septic pumping trucks and a pipe relining system.

The firm now employs 13 people and services a wide geographic area that includes all of South Dakota and parts of Nebraska, North Dakota and Wyoming. About 90 percent of the company’s sales stem from municipal projects with the remainder coming mostly from cleaning septic tanks — quite a switch from the firm’s early days, when septic tank services dominated.

The Frankes’ success story underscores the importance of embracing change and taking calculated risks to enter new markets, while at the same time being financially conservative and not growing so fast that things spin out of control.

“We experienced pretty steady growth in all aspects of our business,” Jason says, referring to the company’s early years. “Everything kept expanding. We hired more people and replaced equipment as needed. We were where we wanted to be profit-wise. We saw what happens when companies grow too fast. We’ve seen too many businesses go under by expanding too fast — hiring too many employees at once or buying too much new equipment.

“We always looked at what we owed on trucks and equipment and never took too large a leap,” he continues. “If we wanted a new vac truck but could only afford a refurbished unit, we went with the refurbished truck. We never took too large a risk.”

New equipment keys growth

Investments in new equipment were critical to the company’s success. In 2004, with growth somewhat stymied by an already competitive market for cleaning septic tanks, Jason noticed more and more requests for sewer cleaning and inspections.

“We were seeing a lot of demand for roadwork — cleaning out culverts and storm sewers — and the closest contractor with a combination vacuum truck was 360 miles away,” recalls Josh, who joined the company in October 2001. “Development was really booming, so a lot of roads were being built. And cities and towns were pushing to get existing infrastructure cleaned and inspected.”

Intrigued, Jason and his late father, Jack, who ran a plumbing outfit where Jason worked before striking out on his own, attended the Pumper & Cleaner Environmental Expo. That’s where they decided to invest in a factory refurbished Vac-Con truck.

“The show opened their eyes to all kinds of different things — trucks, tools and jetter heads — equipment with a lot of potential,” Josh recalls. Unfortunately, the truck was heavily damaged in an accident on the way to Rapid City, so Jason ended up buying another refurbished Vac-Con once used by the City of Chicago.

“At $140,000, it was a big investment ­— we financed it, with some help from Vac-Con,” Josh continues. “But right after it was delivered, Jason scored a contract to clean 25 miles of sewer lines.”

Pipe relining provides a profit center

After a little more than 10 years in business, the brothers felt comfortable about the company’s status. Business volume was growing steadily and the company was profitable.

Yet both had the feeling that with the right opportunity, they could take things to another level. And because the market for cleaning and televising sewers was getting more saturated, it was unrealistic to expect exponential growth from expanding those services.

In the timing-is-everything department, that’s when the brothers noticed that more and more financially strapped municipal agencies were putting out bids for lucrative trenchless pipe relining projects, attracted by substantially lower costs compared to open trench pipe replacement and repairs. “We were astonished to find what these entities were spending on relining,” Jason says.

Realizing that demand for such service would only increase due to aging sewer systems, they began looking at various pipe relining systems. After a false start with one manufacturer, the brothers last year invested about $500,000 in a cured-in-place pipe system from CIPP Services.

From a business standpoint, the results have been as astonishing: an increase in sales of more than 100 percent from 2013 to 2014.

“The equipment we purchased from CIPP Services enables us to be more efficient and gives us the ability to install any size liner, from 6-inch-diameter to 72-inch-diameter lines,” Josh explains. “The CIPP equipment helps us double our production, which in the end doubles our profit.”

A 2000 Mack box truck carries the system’s essential components: a 150 hp steam generator made by Clayton Industries; a boiler that heats water to 180 degrees; a Multiquip generator; and a 1,000 cfm diesel air compressor made by Atlas Copco CMT. The company also purchased a 2006 Freightliner Classic XL that pulls a 53-foot reefer trailer made by Carrier Corp. The trailer carries wet liners to job sites from an Illinois wet-out facility owned by Fast Pipe Lining, a sister company of CIPP Services.

In simple terms, the CIPP Services system uses compressed air to install a resin-impregnated pipe liner, which is then cured with steam. After it hardens, which takes about two hours, crews reinstate lateral lines. Then the pipe is good for another 50 or more years, Jason says.

“We use a design software from CIPP Services that calculates how thick the liner needs to be,” Josh explains. “We can rehabilitate pipes for 50-plus years for 70 to 80 percent cheaper than open trench techniques — plus we don’t have to tear up streets or utilities.

“We still see open trench projects where a street might be closed for a month,” he continues. “But in one day, we can shoot three blocks of sewer line with a new liner, cook it, cool it, then reinstate the laterals. It really saves a lot of money for towns that are having trouble budgeting for any kind of repairs.”

Josh points out that contractors need to do their homework and make sure there’s a market for relining services before investing in the equipment. “We clean and televise anywhere from 250 to 300 miles of sewer lines per year around here, so we know the state of the local infrastructure,” he says. “The relining equipment represents the largest investment we’ve ever made. But our first job, which involved relining an 8-inch-diameter sewer pipe that ran under a school, paid for all of it.”

Hard work pays off

Getting to where the Frankes are today wasn’t easy, the brothers note. It required a lot of hard work and persistence, especially during tougher times.

“At times, trying to keep up with demand was a struggle,” Josh says. “But we kept taking on work and upgrading our equipment. Just that one purchase of the first Vac-Con combo truck enabled us to do so much more work in a day. But for a long time it seemed like we were just trading in money for more equipment.

“As we got more experienced, we made sure we had enough contracts in place — enough work — to pay for the equipment before we purchased it,” he adds. “Business can definitely be a gamble, but you can make it a calculated gamble.”

Being a family-owned-and-operated business gives the company a competitive advantage, Jason says. The employees are a close-knit group and the business is small enough for the brothers to easily keep tabs on what’s going on in the office and out in the field. Providing top-notch customer service is also key, he notes.

“We never leave a job half done,” he says. “If it ends up costing us more money to do a job right, we’ll do it so that we still have a loyal customer at the end of the project. One of biggest things that helped us grow is the quality of our work.”


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