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The growth current at Venice-based Freedom Boat Club has been whip strong for a few years, despite the recession.
But President and CEO John Giglio, while not dissatisfied with 25% annual revenue growth, now seeks something that's sometimes proven more elusive for many alternative businesses in a traditional industry. That objective is industry respect. Says Giglio: “We've always been the redheaded stepchild of the boating industry.”
Freedom Boat Club is a combination of 57 franchisee-owned locations, from Austin, Texas, to Warwick, R.I., and 11 corporate-owned stores, including ones in Cape Coral, Sarasota and Venice. The model is to provide members access to an extensive menu of boats, from fishing vessels and flat boats to pontoons and cruisers. Members pay a onetime fee, usually about $5,000, and monthly fees of $149 to $199.
Members, in return, can access boats mostly any day and time they choose. Members also get to avoid boat ownership hassles, though they do pay for fuel.
Customers clearly have responded well to the club's pitch, given sales are up 61% since 2010, from $4.8 million to $7.73 million in 2012. “We've experienced remarkable growth,” says Giglio. “It's been a great few years.”
Yet the boating and marina industry in many areas nationwide, Giglio says, views Freedom and other boat membership clubs skeptically. Boating manufacturers and dealers worry a Freedom customer could mean a lost sale. Marinas, moreover, can't lease dock space to someone who doesn't own a boat.
Giglio, in response, wants to show the industry that anyone on a boat is a good thing. That's especially true given how tough the recession has been on all boating-related businesses.
Freedom has significantly increased its marketing budget to get out its message. It's also teamed up with the National Marine Manufacturers Association, for which it provides boats for customer tryout and training programs at boat shows. The industry outreach effort, which includes franchise marketing, costs about $500,000 a year.
“We are trying to be seen as a complement, not a threat,” Giglio says. “Our goal is to just get people out on the water. We want them to spend money on the industry, not outside the industry.”
Giglio, 38, has been with Freedom Boat Club since 2004, when he started in sales. A Rhode Island native, Giglio, along with business partner Bob Daley, bought the company in early 2011 from a Cincinnati-based investment firm. Freedom Boat Club was founded in 1989.
Daley retired last year, and Giglio bought out his ownership stake. Then, earlier this year, Giglio made a big commitment to the future of the business when he bought the Tarpon Center Marina in Venice for $1.3 million. Freedom recently relocated its headquarters from a Venice office to the facility, where leases 20 boat slips.
Giglio has made other financial commitments to Freedom. The firm, for example, has spent $2.25 million over the past few years upgrading and increasing its fleet. It also increased the payroll, from 56 employees in 2010 to 100 this year, and it recently hired Lakewood Ranch-based Grapevine Communications, a marketing and advertising firm.
Grapevine will analyze growth opportunities for corporate-owned stores and franchisees. Those growth goals, says Giglio, go in tandem with the industry respect generation effort. “We are trying to grow the concept and brand nationally,” Giglio says. “The concept isn't mainstream in a lot of areas in the country.”
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