Responding to Facebook Comments: The Truth About Franchising I The Real Franchise Episode 38

Rhiannon Hello and welcome back to another episode of The Real Franchise, a video series designed to deliver real information, real answers, and real insight into franchising.

The series is brought to you by James Home Services Australia. I’m the CEO and Justin is one of our owners and our head of new businesses. In this series, we tackle all of the big topics unscripted, unplanned and unfiltered. We go where no others will and there’s no sales, no fluff. We just give you information straight up. Today’s topic is about jumping off a cliff.

It’s a different one for us. Justin, when I say jumping off a cliff, what I mean is the transition from, mostly a salaried position into starting your own business that jump into business ownership. And in our last episode, we talked about the reasons people feel nervous. And we gave people a framework for how to ask themselves some deeper questions and question themselves on should you do it?

Should you take that leap? Today’s episode, we’re going to talk about the safety net that we’ve built for people to help them in making that decision and helping them in starting their business. But in the last episode, you, you introduced to us what I think is a brilliant analogy for doing things scared, jumping off the cliff. Do you want to share that with us so that we can frame that throughout the rest of today’s conversation?

Justin Yeah. So we were talking about fear. The fear of I’m terrified of jumping off a cliff. But one of the best ways to answer fear is knowledge. Fear to me. Always think of an acronym for a, false expectation appearing real. The best way to answer fear is with knowledge and and allowing it to. Once you understand how a parachute works and what a parachute is, whilst you might still be scared of taking the plunge, if you’ve got a quality parachute, you know if you follow the system, you know, wait five seconds, pull whatever it is, pull the right cord, follow that system.

You know you’re going to come down and be fine. And that’s the beauty of having a parachute. But you’ve got to understand how the parachute works, and you got to use the system to make it work. And that analogy flows. Exactly. I feel into what we’re talking about here.

Rhiannon Yeah, it really does, because what we’re actually saying is a franchised network, a good one is your parachute. Our system. Our network is your parachute. So today we’re going to talk about how our parachute is designed to get you from the top of the cliff to the bottom safely. So let’s start right at the beginning. Justin, the very first thing that we do to help people start successfully is we actually won’t start you unless we genuinely believe that you’re going to be successful.

Can you dive into that in a little bit more detail? Because it kind of sounds a bit silly, doesn’t it?

Justin Yeah. But I mean, one of the things I love about our business model when we do well, if a business owners do well, so it’s no point. We don’t make money up front selling someone a franchise if they take a subscription. Right. It takes and we’ve explained this in previous episodes, and that’s very different to any other model out there.

So. The pressure on me as the director of sales is not to sell, it’s to find the right sort of people that this will be good for. And we will, you know, it works both ways and we call it ethical sales. And one of the, recent episodes was on what ethical sales for us looks like. So if you want to know all about that, go see that.

But if we don’t feel this is right for you, we’ll say so. I think I had eight people in call last night about joining a network. One of them I’m taking further through the process because I feel, yeah, this could be really good for these. But the other seven, I don’t think we’re at this point in time for them, not the right fit for them, for a whole range of different reasons.

Everybody’s unique. But, if you’re one of the people that employed definitely, I think there’s potential. So we’ll start going through the different things that make up our safety net with these people. Just to make sure it’s right for them.

Rhiannon Yeah, but we’re not trying to bring everybody through our process. Right? Adults aren’t wide, wide open. And we just kind of shepherding people in. Right. That’s that’s not how we work. Because because that ends in tears for both parties. Right? It it ends up with people starting businesses with us that, that this just wasn’t suited to because of franchising is not for everybody.

There’s plenty of reasons why a franchise might not be the best option for you. There’s plenty of reasons why starting a business might not be the best option for you.

Justin That’s the big thing, I think.

Rhiannon Yes, absolutely. It’s so easy in Australia and it’s been completely glorified, you know, starting a business, it’s very, very easy. Get an AB and register a business name. Poof. You’re away, right? That’s why we say 80% failing in those first three three years. That’s why. Because it’s too easy. And most people don’t really understand how hard it’s going to be.

And most people don’t have the tools in their toolkit to actually get up and away successfully and a franchise network to minimize that risk. Because our parachute is your toolkit, our system is your toolkit. We’ve done all those things. But ethical sales for us is very much about making sure that if we don’t feel like we’re the the right fit for you or that business ownership is the right fit, we won’t let you do it.

We just want we’re going to be really, really honest with you about that. And it’s really important to us. And it’s the first thing that we do to help us build that parachute for you, to help us build that safety net, is that if we don’t think that you’re going to be able to make this work successfully, we’ll tell you so that you potentially don’t make a huge mistake before you’ve even gotten started.

The the next thing I want to highlight is, we’re going to role, you know, the typical support training, togetherness, all of that into one. Right. Because I have an analogy for this that I really love that we shared in a previous video. But if you think about, an elite athlete or your favorite elite world class sporting team, no one’s doing it alone.

An elite athlete has a whole team of experts behind them dieticians, psychologists, behavioral scientists, people who help you with movement, people who help you with technique. People who help you with your finances, with your media, with your PR, you have an entire team. And then you think about your favorite sporting team. There are hundreds. There is a team of literally hundreds of people all behind elite sporting teams to help them be at that level.

So when you start a business, if you want to be successful, you need a team. Don’t try and tackle this solo. You need a team. And if you can’t or don’t have access to assembling your own team, then a franchise network is an option. Because guess what? Our job is to assemble the team for you. That’s what we do.

Our head office team is your personally curated team of experts to help you with anything that you need help with, right? We have experts in media. We have experts in marketing. We have experts in, how to help you employ people. We have experts in, helping you to understand your finances in your business and with your bookkeeping in your business.

Our business coaches are experts in our system because they’ve all been previous business owners and they’ve applied it and they’ve built successful, robust businesses that they’ve been able to sell. And that’s now why their business coaches in their network because they’ve walked the walk. So we have curated for our business owners a team of experts to help them, to help them succeed in their business.

And that is the second thing that we do that is our safety net. Now, most franchise networks will talk about support training. You know, having somebody there that’s your regional manager that you can call for questions. We go above and beyond all of that. We’ve built a team of experts. And that team is your go to there’s there’s not a question we can’t answer or help you with.

That’s how we support in this network. And next thing we do justice system. I’m going to throw back to you for this one. What is a system in a franchise? We’re always throwing around that word. Why is a system part of a franchise network and why is it so important?

Justin What’s so important? It’s a systems that make everything work. We’ve got a great couple at the moment joining us in Victoria, and he’s he’s had two previous businesses fail in a big way. So he is this whole fee that we’re talking about is real for him. He’s still paying off his last business. And he but he’s a mechanic like a highly skilled, mechanic, works on massive machinery.

So as I have to talk about the system is if he gets a machine that’s not working, he just goes through the systems and quickly identifies which system is it? The fuel system. The electrical system. What is it? What’s not working? He works out. And once he’s got that system is functioning properly, he knows he can turn the key and the thing’s going to work and it’s going to perform.

That’s what a system delivers. And I think, you know, I, I share this one of the last podcasts we see comments on a Facebook page. You know, having a lawn business that’s cutting grass, how hard can it be having a cleaning business, right. That’s the function. That’s the what you actually do. But it’s the business and the systems that actually deliver the results for you that actually make the profit, the money for you deliver your goals, whatever they may be for you.

So it’s that system that’s critical. And we have developed our system over 30 years, and it’s something I’m incredibly proud of, particularly over the last five years. What we’ve refined, you know, we’ve spent hundreds and hundreds of thousands of dollars on the computer system that our business owners get to use, that everything is collected as data, and then our coaches can work with the business owners on it.

And, you know, it’s just it’s it’s why last year, every single business we started, none of them failed doing well. I was just sharing with you how the one that was a struggling a bit is really starting to kick some goals now. You know, I don’t think any other network in Australia could put their hand on their heart and say that, and it’s because we’ve got great systems, people who are passionate in their roles, we’ve got a great team of staff that have used these systems.

As you said, the business coaches have all been operators of it. It’s not just about cutting grass or cleaning, you know, that’s the function. It’s the systems that deliver the results.

Rhiannon Yeah. And to simplify that, even first even further, a system is just the process you follow to achieve an outcome. Right. So when we talk about systems, we mean we have a system for marketing your business, i.e. we have a process we follow. There are actions that we take that we teach you to take. And when those actions are completed, there is an expected outcome.

We have a system for liaising with your clients to lock in a job. And when that that system is just a process, it’s a it’s a, you know, a series of actions that we teach you to take when someone makes an inquiry and when it’s followed, when those actions are followed, you can expect a certain outcome.

We have a system for how you prepare a quote. When you follow that series of actions, there’s an expected outcome. And what we mean when we say we have a proven system, we mean that over the last 30 years, and as you mentioned, particularly over the last five, since your ownership, we have refined those systems and we have proven demonstrated beyond doubt that the business owners in our network who have followed our systems, i.e., they have simply implemented the series of actions to take on any given component.

They get a specific outcome. They get the job, they create leads. They get a higher hourly rate. They create a satisfied, loyal customer. There are outcomes that you can expect to get in our network as a business owner. If you’re following the system and the system is just a series of actions that we guide you to do, that’s all it is.

Results. Let’s talk about results. Results now are part of our parachute, results, part of the safety net results are something that we’re very focused on. And we’ve really seen and some incredible results in the last 12 months, particularly you mentioned before, we haven’t had a business owner that we’ve started in the last 12 months fail.

I want to talk about some more specific results as well. We’ve had business owners. Most most that we’ve started has hit $1,000 week by week three a week for most. Not all. I want to be very clear. Not all, but most, as in like 80% that we’ve started have hit $1,000 a week by week three a week for, we’ve had business owners doing $7,000 by week three and wakeful, we’ve had business owners doing 3500 dollars by week three, and wakeful, we’ve had some business owners that haven’t had that first start, but by week 7 or 8, when we’re really working with them and we’re helping them to understand the different elements of that

system, then we’ve started to see them lift consistently, and by week 12, they’re meeting their breakeven, and they’re consistently sitting between that 2000 and 2500. Now, I’m not sharing names, but for every single example I’m giving, there is a name in my head. I, I know exactly who the business owner is that I’m talking about. So these are not just random numbers, these.

And I’m not sharing names because I would like to protect people’s financial information. But for every single example that I’ve just given, there’s a name in my head. There is a business owner in our network who has genuinely achieved that outcome of.

Justin Can I just jump in the question? This could be rude, but you just highlighted such a key part on these systems, right? Some start early, some it takes a wall. Right? Those ones that it didn’t happen to. Week seven. All right. What’s happened there. As you I’m sure would agree, over a few weeks our coaches have been able to identify because everything is tracked.

What’s going on in this part of the system, you’re not following or you’re not using or you’re not good at. Let’s help you. And the business coaches got involved at that point, remedied this situation. The people started to apply the system as intended. And guess what? It’s a proven system and bang, they’re off and away. You know, the gentleman we were talking about before clearly identified where the challenges it took a while for that individual right to come to grips with that, but has started to work on those things.

Bang. Instant take off. Yeah. Well, again, it’s just time and time again. It’s that system that delivers the results. If you use the system, it’s why you take a parachute.

Rhiannon Yep. Exactly. It is to go back to your now in gosh, this episode is full of analogies. I hope that if you’re listening along, this is making sense to you. But to go back to the analogy of the mechanic. You know who? Diesel mechanic who, you know, he his job was to diagnose the particular system within that machine that was failing.

And once he diagnosed where the failure was, he pinpointed it, he fixed it. And then he knew the expected outcome was that you turn the key in, the machine turns on. Right. So in our network, what you’re just talking about is our business owners, incredibly skilled individuals. And our system is also incredibly detailed. So much so that what we do is we take a really deep look at what our business owners activities are.

We simply find the activity or the system that isn’t being implemented as well as it needs to be. Now, sometimes it can be a mental roadblock. Sometimes the franchisee is the one who says, I don’t need to do that. I don’t want to do that. It feels uncomfortable. Or sometimes it’s a skills roadblock where the franchisee is trying their absolute best and they just haven’t got those skills.

What our business coaches do is identify whether it’s a a, like a mental roadblock, like a mindset roadblock or skill based deficiency. And then the way that we hope that business owner is very, very different depending on what we identify, the problem actually is that it’s the same as the days of a mechanic. We pinpoint what we pinpoint exactly what’s not working.

It is a precise science for us nowadays. It’s really precise. We pinpoint exactly what’s not working, we fix it. And then the expected outcome is that if the business owner then implements or continues to work on their skills in this area, the expected outcome is that we will see results. I lift in their income over the next few weeks, and we do say that when somebody implements that guidance, the expected outcome is achieved.

Justin Absolutely.

Rhiannon All right. Let’s move on from results. Let’s talk about brand. It’s very common that a franchised network will say you should join a franchise because we’ve got a brand and it’s thrown out. There is a bit of a no brainer like everybody expect, you know, understands what that means. What is the value of a brand just and actually what is the value of our brand as opposed to other independents out there as opposed to, you know, people who don’t have the systems that we have?

You know, when you consider tenure of our brand in Australia, what really is the value of our brand and what does it mean for our business owners? What advantage is it to them?

Justin For me, there’s two things. It means what it gives someone when they take on a brand. It it it gives them professionalism and it gives credibility in the eyes of the customer. To me, those are the two big wins. You know, you might have you want to just finish your training. Yeah. You turn up to talk to someone and you’re in your giant uniform with the sign vehicle.

Instantly the perception from the customer is very different because, oh, this is a professional and there’s a level of expectation that comes with that. You know, if you just turn up, actually we’ve got someone joining the team now that has an existing business and, and I’ve just been working on signage and the signage on their current thing is like about that big.

Right. And you wouldn’t even see it. We make you come across professional. And what that does is it does a whole range of things, but it means, if you’re following the system, you’re conversion, right? Getting customers is so much quicker and easier. You know, we can turn on an advertising campaign in an area and it’s going to generate X number of leads a week from day one.

It doesn’t matter where in this country we do it, so long as it’s in a, you know, place with more than 2500 homes. We know we’re going to get an outcome because of the professionalism and it gives credibility.

Rhiannon Yeah. You know, the other thing that it does and we we see it in our numbers. Right? You and I. Very well know what our average hourly charge out right is what on average our teams. Mike you and I both know it is significantly higher in and network than it is on average in Australia for a business owner in a lawn and garden care business or an interior cleaning business.

Yeah. Why can our business owners charge more? Because we’re premium. Why are we seen as premium? Because our brand elevates our business owners to that level. We are the brand. We get callbacks from real estate agents, not call backs on our own work. We get called when they’ve tried the alternatives, when they’ve tried the lower cost budget cleaners, when they’ve tried the other brand name cleaners.

Even where the ones that get called to fix the others jobs. We are the ones that people call when they’ve tried the low cost alternatives. We have business owners that you know when they’re just starting out their business, they get really disgruntled when they lose a client or not lose a client, but lose a quote. And when they lose a quote on price and when the specific comment from the customer is, but I can get that cheaper if I go over there to so and so.

We get this often we get it not we get it from time to time. We hear this feedback, and we’re very quick to reassure the business owner that that’s okay. Not everybody is your client firstly, but secondly, you’ll be surprised how many times you lose the quote initially at over the next 12 months, you get a call from that customer because they’ve tried the cheaper alternatives and it turns out they were prepared to pay a little bit more for someone who was reliable, did a decent job, showed up on time, was a good communicator, and who could manage to get an invoice out on the same day.

You know when people first are shopping around, they will do just that. They will shop around, they will be price sensitive. We find all the time.

Justin Yeah. Real life example. Last night as part of this process that we were talking about that we take people through, you get to meet franchisees. Right. And so last night I hosted one of these meetings and that mechanic was on there that we’ve been talking about. And he asked David Mona, who have just started with this. They were on this item as well.

They are in week four, I think a week five weeks.

Rhiannon Five. Yep.

Justin Week five of their business, also in Melbourne. So mechanic asked David and Mona, how do you find competing with the competition like price and David went and looked at each other and he said, well look, yeah, there are dozens and dozens of cleaners in our suburb. So I looked on Facebook and I just see cleaners everywhere. I said, if you want a $15 an hour cleaner, heaps of mat that you can go get a.

And he said exactly what you just said, but that’s not our customer. We deliver a premium product. And he looked at Mona and these guys business has taken off. As you know they’re doing great. He looked at my and said of all the quotes we’ve done, have we lost any because of price? And she said, no. And it’s just because they have a system, they’re following their brand, they’ve got the reputation and they’ve just walked in and followed the system, and they’re getting the results.

Rhiannon And they are getting the results. At the end of week three, they had 11 regular customers locked in. Now they are now in week five. I haven’t checked back in and looked at their results since, but given that at the end of week three they were already at 11, surely they’re around 15 now? That’s incredible because when you actually break it down and look at I mean they’re hubby wife team, so their capacity to do these jobs is higher than if you’re out there solo.

But as a benchmark for anyone listening, if you’re out there solo, as a cleaning business owner, if you’ve got 35 regular customers, you’re kind of approaching capacity. They were in week three and they were almost a third of the way there already. That’s wild. That means by week ten, if they kept that up by week ten, they would have had one of them at capacity.

So it’s it’s another very real result. It’s a very real demonstration of how our system is designed to get you results fast in your business. All right. Let’s move on from brand. Let’s talk about our accelerated startup program. This is something we do that we’ve designed. We own nobody else in the industry is doing this. Justin, what is our accelerated startup program and why should people care about it instead of looking at starting with us?

Justin Well, well, they should care about it. The number one question people ask come to me or concern or fear that we spoke about is, Justin, I’m leaving this income. I need to replace it. I need to be earning money quickly. That’s the number one concern that people have. Accelerated startup is all about that. And what we’ve done is accelerate.

People start up. And a key part of that is we do so many things we do. I think it’s 120 things now. That list is up to that. Our team do.

Rhiannon It takes going.

Justin Broke. We just keep adding to it this long. It’s over 120 now or things that we do. Yeah before people kick off. Whereas most companies won’t start doing stuff till you signed up and in training. Right. And and we used to be like that and we found that it then delayed the income weeks because for the first few weeks people are doing all the setup stuff.

We now start, we take the risk and we work with people first so that when I come back from training, they quoting the jobs are in. They also on our way. Yeah. And it’s just had well close to 100% success rate last year.

Rhiannon Yes. David. That one or in that example that we were just talking about 11 regulars by the end of week three. The only reason I’m not the only reason, I mean, the reason they were able to do that is because they’re great people following a system and putting the absolute all behind it. Credit where credit’s due. That’s all them following the system.

But part of the reason why they were able to start so quickly is that we had squared away all of the admin, all of the setup, all of the bank accounts, the business name registrations, the ABN, the insurance, the first idea. Did you get all of the boring admin stuff? We had completely squared that away. And within week one they were completely their heads were clear of all of the admin set up.

They were ready just to get straight into operating their business. And what that has meant is that by the end of week three, they’ve had three full weeks of being able to market, quote, liaise with customers, get customers, they’ve got 11 regulars. Now, if frankly, that set up stuff takes about three weeks. So if we did what everybody else does that at the end of week three, they would have had zero regular customers and we probably would have just been finishing that start up process with them then.

So the I mean, that is almost one of the best examples of why we do the accelerated startup program. It is usually to accelerate the rate at which you can hit the ground running in your business.

Justin Yeah, yeah. And it’s one of the reasons why we have our income guarantee because we know the accelerate. We know by week three people should be up around that 1500 a week. So we back up with an income guarantee. But our money where our message we know our system delivers the key is working the system.

Rhiannon Yeah. And so the final piece of that I will I mean not the final piece. I mean, there are so many pieces to this parachute that we’ve designed, but we talked through a few of the key ones this morning. The final component of it is our income guarantee. There’s a very good reason why we mentioned this last right.

We could mention this first and we could put everybody’s mind at ease right in the first 30s and say, don’t stress. We have an income guarantee, which means that if you’re not earning $1,500 a week, by week three, we will top your earnings up to that. So for 12 weeks from week three onwards, you can rest assured that so long as you are implementing our system, we will be topping up your income to 1500.

You have a secure income for those 12 weeks, a $1,500 a week, to allow you to focus on building your business without financial stress. We could have mentioned that in the first 30s there’s a reason why we did it, because it’s the last. It is the very last thing that we call on in our safety net. I would much prefer that we focused on getting our system working so effectively that no one needs that income guarantee.

That’s our focus in our network. That is our so how drive up, right. That whole the ethics behind what we do is if we set this whole model up to be so, so focused on getting outcomes for our business owners, then the income guarantee becomes almost completely null and void. That’s our goal. And last financial year, we paid out on it less than 0.5% of the time because it wasn’t needed or because somebody wasn’t implementing the system.

But that’s the damn thing. Yeah. So there’s a reason why we mentioned it last. It’s there. It’s part of the safety net. It’s part of the design of our parachute. But we much prefer to put the work into our system and into our support to make sure that you don’t need it.

Justin And to me, the income guarantee is the carrot to try and help people follow that system and all those things you were just talking about, it’s so if I want to call colorful, I always say to people, look, whether or not we had the income guarantee following the things that are in that guarantee, and it’s the nuts and bolts of the system, just the key items you do, those things you’re going to be off and running and we won’t have to pay you.

And we say that, so what? We do it, we don’t have to pay it hardly ever. We have no issues with buying on it. But when people follow the system, they’re often away earning more than that.

Rhiannon Yep. And the the person that we were talking about previously that had has had a slowest start than, than, than most of our business owners. And he is week idle week nine at this point I think probably wake. Hey, and I’m really pleased to hear that we’re starting to see some results with him now. That’s great.

I’m going to jump into his account afterwards and just have a little look, because I’ve been, I’ve been watching, going, oh my goodness, I just, I hope, I really hope because I trained him and he was just such a lovely individual and, you know, young family really wanted, really wanted success and business coaches always sounding like starting to move the needle, which is great.

But we did actually pay out on our income guarantee for him for a couple of weeks running there because he was following the system and we were supporting him to do that. And interestingly enough, there was a week earlier on he didn’t qualified because he wasn’t following the system. The results he was getting reflected that in the last couple of weeks, we have actually been paying the income guarantee, top up payment to him because he’s been following the system and now you’re reporting to me that he’s results are starting to increase.

What a beautiful coincidence. In fact, I think that’s no coincidence at all. That is exactly the reason why we do this income guarantee. Right? Because I will say that, you know, there was an element of complacency, I think, from him in those first couple of weeks, slack joined a franchise network. They’re going to send me late. This is all just going to happen.

Right. And then the reality hit that no, no. Like you got to put the work in here. You got to be the one that chases this down. You know. And there are certain skill sets that we really have helped him with as well. So there was an element of complacency. The income guarantee was, was us being able to say, here’s the things you need to do.

If you do them, you’ll qualify, you’ll get that payment top up. But also if you do them, I wouldn’t mind betting you’re going to see results in your business, which is exactly what’s happened. What a wonderful thing. Yeah. Very quickly before we wrap, because we’re pretty much there. But the other, the other really important element of the reason why we offer the income guarantee is because I’m going to be completely honest here.

In order to qualify, you got to submit us a time sheet that shows your activities every single week. Now, some people might be going, whoa, hold up, Big brother. Hang on a minute. Didn’t I sign up to my own business so I could have freedom, flexibility, control? Choice? Yes, you did. And you can have all of those things.

So long as we get your business up and off the ground and operating fast enough that you can pay your bills and replace your salary, and the way that we help you to do that is by helping you to grow a business. And the reason we ask for a time sheet is not because we’re big brother, but it’s the diesel mechanic looking for the part of the system that is failing.

If you’re giving us the time sheet of your activities, our business coaches can use that to determine which of our systems you’re not implementing. And when I said before, you know, our diagnostic work now is a precise science. This is exactly what I mean. It is a precise science because we’re collecting information from you that is allowing us to identify any gaps or any skills deficiencies.

And then our business coaches can be straight onto very tailored support to help fill that gap. And that’s what helps us to get outcomes for our new business owners.

Justin Absolutely. Great spot to wrap up.

Rhiannon Yeah. All right. Let’s leave it there. I hope that if you’ve been listening and joining us, this has been a longer one. I hope you found it helpful. If you’re thinking about making an inquiry, go ahead, take the leap. Because now we’ve painted the picture of how we’ve designed our parachute for you, to help you safely to the ground.

And I hope with that, you’ll join us for the next episode of the real franchise very soon.