Although the news release says the two firms entered "a new partnership," all indications are that Banner has acquired controlling interest in Zerorez Franchising Systems, a nearly $150MM annual revenue firm, and that it has begun to implement a rollup strategy to "become a leading residential and commercial services franchisor in the United States."


Sometimes when firms formally announce news, such as via a news release, they may choose to limit what they disclose.

This reality is something I've seen play out again and again during my 12+ months as a journalist with Silicon Slopes.

Although I may not like it, per se, the reality is that the choice remains with the announcing organization(s) and not me as to what they will or won't disclose, so I tend to shrug my shoulders and move on.

Occasionally, however, I come across a a press release that just leaves me hanging and wanting to know more. And that's exactly what happened earlier this week when I read this headline:

Banner Ventures Announces Partnership with Zerorez.

The language of the news release was fairly strightforward: Lehi, Utah-based Banner Ventures had entered a new partnership with Zerorez Franchising Systems, a Pleasant Grove, Utah-based carpet cleaning franchisor with over 70 locations in the United States and the United Kingdom.

What type of relationship the two firms had was not disclosed in the release. But the release did state that

"Zerorez's current management group and the acquired franchisees retain a meaningful ownership stake in Zerorez ..."

The announcement also referred to "franchisee partners" in 10 major cities in the U.S., namely

  1. Colorado Springs,
  2. Dallas,
  3. Denver,
  4. Minneapolis,
  5. Phoenix,
  6. Pittsburgh,
  7. Raleigh,
  8. Salt Lake City,
  9. Spokane, and
  10. St. Louis.

Additionally, the release further disclosed that Zerorez had "system revenue of ~$150 million."

However, what did the partnership between the two firms actually entail? That was not clear.

Nor was it clear what the term "franchisee partners" meant.

So, even though it was after 9 o'clock Tuesday night when I happened upon this press release, I did the only thing I could think of: I banged out a pretty detailed direct message to Banner Ventures' Managing Partner, Tanner Ainge, asking if he'd be "willing to talk?"

His short answer just a few minutes later: Yes.

So talk we did yesterday, and during our conversation Ainge explained that

"Banner's specialty is focusing on founder-led, family-owned businesses, not just in Utah, but throughout the Intermountain West.”

As with many firms that target private equity investments, Banner looks for opportunities to help family-owned and operated businesses accelerate their growth potential by making strategic investments in them.

When I asked Ainge if Zerorez planned a strategic rollup to help drive growth, he chuckled and said, "The rollup has already begun," as he clarified that as a franchisor, Zerorez had just acquired 10 of its top franchisees, each of which gained ownership in Zerorez (the parent company) as part of the process.

To his credit, Ainge refused to disclose whether or not Banner had actually acquired a majority position in Zerorez or not, holding true to the tack the news release had taken.

Nevertheless, given the few tidbits shared in the new release, I feel it's pretty obvious that Banner has acquired a controlling interest in Zerorez.

Case in point, I believe this is particularly clear when one takes into account the phrase in the news release that says,

"Zerorez's current management group and the acquired franchisees retain a meaningful ownership stake in Zerorez  (after the partnership with Banner) ..."

{NOTE: It says "meaningful ownership stake" not "majority ownership stake."}

After visiting with Ainge, I expect to see some pretty aggressive Zerorez growth in the months and years ahead, much of it likely to occur through the acquisition of other carpet-cleaning businesses (and possibly carpet-cleaning technology), with funding for such acquisitions powered by monies from Banner.

Should be interesting to watch in the months and years ahead.


AUTHOR'S NOTE: If you dig all the way to the bottom of the Zerorez home page on its website you'll find this little factoid:

Carpet cleaning is a $5 billion industry.

I would have never imagined it was that big. Crazy!

Additionally, beyond carpet and rug cleaning, Zerorez lists 12 additional services it currently offers, from pet odor treatment to air duct cleaning.

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