Making A Splash

What does it take to turn a franchise into an award-winning business? Poolwerx founder John O’Brien must know – he has done this twice already. For the second time in 12 years, he has just won the Franchise Council of Australia’s Established Franchisor of the Year Award. He can reflect with pride on his achievements in building a 100-strong retail chain in Australia backed by a fleet of 400 vans.

It is a long way from his first experience with franchising, when as a corporate employee, he was tasked with turning 400 delivery drivers in to owner-operators at Cadbury Schweppes.

“The business was not going so well, and my boss came back from the International Franchise Association conference in the US and told me I had been promoted to national franchise manager. I had no idea what franchising was, and wasn’t sure if I had been promoted or demoted.”

Thanks to the experience of industry stalwart Rod Young, who had had 10 years working for a franchisor and owning a franchise, O’Brien got to grips with the challenges and demands of franchising. Within a year some of those regional franchisees had become master franchisees.

“The ACT was the last area left. I convinced the company to grant the franchise to me, with 12 trucks. Then I took on the master franchise for Western Australia and Queensland. I was on a fast track. I was the youngest guy in the company globally reporting to a board. They even offered me New Delhi and Bourneville in the UK.”

But O’Brien saw his future elsewhere.

“I come from an entrepreneurial family, growing up around hotels. I always had theintention to go into business for myself.” So at 28 years old he took the franchising path, buying, running and selling a string of businesses.

 

DISORGANIZED ROUTE

When his brother Michael died in 1995, O’Brien took a six-month sabbatical and decided to look for a longer-term opportunity, something in which he could really make his mark. “I was looking for a disorganised industry, something with mobile service roots, high gross profit margin, repeat customers.” What he spotted might have passed unnoticed to a casual observer: a truck with pool poles in the back, driven by a tattooed surfer. Further investigation proved he had found what he wanted: a disorganised sector on a local and global level.

“I bought a few vans and a 40-year-old business, and launched on Australia Day 1996 as Poolwerx.”

His strategy was to be purposely mobile, rather than competing with retail chains Clark Rubber, Poolside and Swimart. “Mobile was our DNA. We focussed on being the best at service, with good systems and employing best practice.

”By 2004 the business had entered, and won, its first Franchise Council of Australia award. “We were the smallest brand to win Franchisor of the Year – we had 200 trucks.”  It was at that point O’Brien committed to moving to a new model.

“We needed to reinvent ourselves with both mobile and retail. Retail caters for DIY, mobile is ‘do it for me’. ”The first concept store at Middle Park in Melbourne was corporate owned.

“Typically pool stores were chemical, smelly, dirty and dusty with unfriendly staff. We set about creating a retail environment for the consumer.”

It was an environment that appealed to female customers, and today women aged 45-64 continue to be important decision makers.

“Australia has the highest standards in the world for the pool industry,” says O’Brien. He cites the 80 per cent of equipment and chemicals sold by professionals in Australia with just 20 per cent bought in mass-market outlets to the 50/50 sales in the rest of the world.

Today the pool retail scene comprises nearly 1000 outlets, with 100 of these having Poolwerx branding. Unlike competitors who had kept their mobile and retail businesses separate, Poolwerx has a clear career path for franchisees. Following the group’s “four tiers in five years” mantra means a franchisee buying a mobile business for less than $100,000 can work their way up through the four stages of ownership: a single van, multiple vans, hub and spoke retail model, multiple retail outlets.

O’Brien sees this as an answer to a common franchising problem: “When you can afford to buy, you’re a bit old to put in the energy. We want to bring in younger people.

“The ethos was to create bigger opportunities for franchisees to grow into. It’s an integrated franchise model where vans drive business to the retail outlet, and stores drive business to the vans. Now people can buy in at any point. That’s working for the experienced small-business owner and mid to senior executives who are taking up franchise opportunities.

“We wanted to be in business with business people. There’s a lot of leverage in that – we saw it as the future of franchising. This means we need to be far more strenuous in training needs, to find out exactly the skill gaps.”

Retail franchisees now complete the standard three-week learning program and an extra week dedicated to retail. Forming good habits is the key, and a three-month program of support has been extended to 12 months.

There is a retail suite of three former franchisees who consult back to the business. They go in-store on opening day and are “shoulder-to-shoulder” for three weeks.

“We’re in this together, everyone does their bit, it makes sense,” says O’Brien.

Franchisees seems to appreciate the approach.

“We have Greg Nathan’s Franchise Relationship Institute conducting a satisfaction review every year, and the result for seven years is that we’ve done better than the benchmark – double-digit growth,” says O’Brien.

 

FRESH VALUES

However, a few years ago O’Brien found himself in a crisis.

“I was coming out of a divorce, and had lost my way as a leader – but I didn’t know it. We  got ourselves in a mess with partners, and were on the cusp of a franchisee revolt. There were two options: either bury my head in the sand, or confront it.

“We had a leadership meeting offsite with a theme, ‘how do we stop this?’.” It resulted in O’Brien realising he needed to be more collaborative.

“We had values, but they were all mine. At the national conference I tore them up, and from there we sought suggestions for our five values. It took a year.”

The system is called “odyssey”, a Greek word that translates to “journey”. It’s one way, one journey, says O’Brien, who believes that constantly refining the values has been a critical part of the business’ success.

“A franchise partner joins your brand because they want your system. They are not coming in to change it. We want them to bring in their entrepreneurship, their energy. We call it being an intrapreneur.

“For the first 12 months there’s a focus on energy. Then they can start to be entrepreneurial, and we can see how their experience can bring in new ideas.

“In some systems there’s an arbitrary limit on growth. Our view is we’re entrepreneurs by nature and we want you to come into business to have the opportunity to do something for the family. We have an important obligation: to encourage people to grow.

“Our view is, if you have a site that’s doing well, get into a second. We have a guy in Phoenix with five. We’ll pick it up between us if you go too far.”

This is the Dare to Succeed value in action. And with 65 per cent of the company’s growth achieved through multi-unit franchising, it is a crucial element.

The company’s core values are: People First Always, Do The Right Thing, Dare To Succeed, Find The Better Way, Energise. Value For People is first for a reason, says O’Brien.

“Head office, supply, customer, franchise – every answer is in your people. If it’s not working, check who you choose, your training, your remuneration. You can have the best model and the best system, but if you don’t have the people it all falls down.

“I started with Cadbury Schweppes, in HR. It was the luckiest thing I did.

“Franchising is all about people delivering the brand and the system.”

Poolwerx was one of the first franchises to employ an HR specialist and today has a team of six or seven in the expanded division of HR, learning and development. HR audits and coaching are run through head office or in consultation. There are 1000 people in the business, and each employee gets a review and has an incentive program.

McDonald’s founder Ray Kroc’s book Three Legged Stool was a big influence for O’Brien. “I read it when I was beginning, and we wouldn’t be where we are today without it.

“We have Partners in Profit, and have used this language for 20 years. We had to educate our suppliers about this. As an example, we have three-day conventions with about 60 supplier reps and no closed doors.”

For franchisees, a structured set-up of support includes a Poolwerx Advisory Council and a regional version for each of the five regions. All representatives are elected by franchisees and meet monthly, and a chair on each sits on the national council, which also meets 12 times a year.

There is also a senior leadership group and senior business management team.

Three years ago the charter for these councils was revised to a single page, which highlights that items can be put on the agenda only if they help advance the whole business.

 

INNOVATION, EXPANSION

“We’ve always had a 10-year rolling plan,” says O’Brien.

“We have a very clear plan, supported by structure. We stay on track with an 8am senior meeting every week.” In the eight-week period before Christmas, Poolwerx had eight store openings planned – four multi-unit franchisees extending their portfolios, and four greenfield sites with new franchisees.

“We exhibited in 2007 and 2008 in Paris and Washington, but we saw the economic storm clouds and went home.”

US expansion has sped along since Poolwerx eventually launched there in 2015. There are now 20 stores and 90 vans over five states, and six further outlets set for unveiling as 2016 drew to a close.

The business has partnered with its global suppliers, Spanish and Swiss companies, who have seen the model is first class, says O’Brien. Over the next 12 to 24 months, Poolwerx will be dipping its toes into new markets through acquisitions. Europe and South America are in its sights.

“We launched the plan, appointed an external board with three non-executive directors and Rod Young as chairman. They hold us to account. The senior leadership team is the last piece.” O’Brien sees change and innovation as crucial, believing people in the network are open to new ideas from the Poolwerx Advisory Council, from senior franchisees, new franchisees who come from other brands, and the leadership team of four.

“One of our obligations is to constantly look under rocks and stones for new opportunities.” In the mobile model he created a division for commercial clients, then found six disparate sectors within that. In retail, the business is developing pool-fence rectification, renovation and pool solar innovation.

“We’re a pool service and retail business that uses the franchise model. Technology is an enabler, it never replaces execution.”

What technology enables is for the franchise method and franchisees to flourish, and it allows for higher customer contact time, says O’Brien. “What we’ve done we’ve done as first movers.”

After nine years with one provider, Poolwerx is changing its Point of Sale provider. “Every facet needs to be interlinked, compatible, global, accessible and app friendly.”

For the first time, a chief information officer has been appointed and heads up a team of four.

“Winning the award is great validation by our peers that we’re on track… It’s not the franchisor, it’s the brand winning.

“It’s a third-party endorsement for people thinking about investing in the brand, it gives financiers more confidence, and our stakeholders and franchisees can put out their chests and be brave.”

The network has had franchisees and franchise support staff also win national awards. So is he looking to add another franchisor trophy to the cabinet?

“We would need to be mature – that’s 350 stores – before we enter again.”

 

Originally published by, www.franchisebusiness.com.au in Jan/Feb 2017

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