The Real Franchise – Ep8 – Transforming James

Watch the full episode of The Real Franchise Episode 8 – here

Rhiannon – Hello and welcome to The Real Franchise, a video series designed to deliver real information, real answers, and real insights into franchising. This 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 together. We’re going to tackle all of the big topics unscripted, unplanned and unfiltered.

No sales, no fluff. We’re just going to give you the information straight up. Today’s topic is all about transformation. It’s probably no massive secret that James Home Services has had 30 years of history in our country, and like most companies of that age, it’s had some ups and downs through that time. Justin and his business partner have been the owners of the network for just over four years now, and it was in a bit of an interesting state when they took on the national business four years ago.

Right as Covid was dawning on our globe. And it’s safe to say that in the last four years, what we have done with this business is nothing short of total transformation. There is very little that looks the same in our network as it did four years ago. So today’s topic is all about that journey, because if you’re thinking about joining our network and you want to know the good, the bad, the ugly, you want a fair and reasonable depiction of as much information as you can get.

And so we’re going to share where we were, and we’re also going to share just how far we’ve come. Justin, when you purchased the national network four years ago, you headed it up as the managing director and I, I was at the time, involved in the team as the operations manager. But I remember you being so utterly clear on what it is that we needed to do to make sure this network was a success.

And indeed, I don’t really think that it’s out of school for me to say what we needed to do in order to turn it around, because that’s where we were at. You purchased a network that had a lot of potential, but needed a complete rebuild of foundations. And so it’s been a journey. But let’s just start right back at pretty much day one.

As the new owner of the national business, you were very clear on what needed to be done. What were those things, and did they work?

Justin – Yeah, there was, I’d been a franchisee for over a decade at that stage in this network, and being, I won’t say I was cocky, but I think I felt I knew from being a franchisee, from observing, from also working with the leadership at the time, I felt I had a very clear picture on what we needed to do to turn the company around, because the previous owner had put a lot of passion and a lot of money into the business.

He’d done a lot, but the company hadn’t turned around. Things were not in a good way, being honest. And and so I came in with a very clear picture that we really needed to put some really good support in place, some good leadership, firstly, so that people, our franchisees, our business had a very clear sense of direction, and then supports around that.

So, supporting systems, that sort of thing also felt, our marketing was very, so the second area that we need to focus on was a marketing. And then the third area, was sorry that the systems and support being two side systems in that, you know, we were pretty much we were a paper based business, you know, in 2020.

And, we needed to really turn that around and then get support in the way of, you know, if we want to have a national business, people are out there on their own, how do we support them? And previously, there wasn’t really support systems, in my view, that worked at all. and that was sort of a handicap.

So there was three things I thought, how hard can it be? ways that we tackle those three issues and, and predominantly you as the operations manager jumped in and, and really put your heart and soul. it was almost like Pandora’s box, wasn’t it? So what did you feel when you started to tackle those three things?

Rhiannon – Oh, well, I mean, I’d been part of the due diligence team. And so, for anyone listening, not, not familiar with the term due diligence. essentially what that is, is when you buy a business, you go through a due diligence process. And what it is, is a forensic investigation of what you’re about to purchase, to make a determination as to, “A” it’s worth the money that you’re valuing it at.

But “B” also if you go ahead and once you get in, what are you dealing with? You know, have you got good solid systems and processes? Are your people all about to jump ship? Is your brand in need of a major refresh? Like what? What’s actually going on underneath the surface? Because it’s it’s it’s really easy to look at financials and make, a guess about the health of the business.

It’s another thing to understand and deep dive into it. So I’ve been part of that due diligence team. And, we spent six weeks deep diving into this business before we, you know, before you decided to proceed with the purchase. so I had an idea of what we were walking into and I had an idea and and in fact, I remember sitting in that final meeting with the due diligence team and yourself and your business partner and, and, you know, we made a presentation and we said, this has a lot of potential.

You know, and the people in the network are its biggest asset that that’s worth protecting in and in and of itself. But but best be prepared for five years before you see a return on your investment. And best be prepared for and awful, awful lot of capital to be required to turn this ship around. Everything needs to be rebuilt.

So I had an idea, and then. And then we. Yeah. You took the keys, so to speak, and, and the weeds got a lot deeper and a lot muddier very quickly, just things like processes that had not been rewritten since. Yeah, since inception 30 years ago. And, training that had not been updated in a decade, if not longer.

Everything was handled on paper. I remember at one point building you a spreadsheet to manage sales inquiries. And I mean, this is only four years ago and we needed a spreadsheet to handle. There wasn’t even a CRM. There was nothing. There was no no supporting software. The brand hadn’t been touched in terms of its visual impact, probably in 12 to 15 years, in fact, probably 20 years.

It was very, very minimal workplace health and safety systems in place. and that, frankly, was first cab off the rank for me as ops manager. It was literally I think it was pretty much the same day you took ownership, that I had already chosen a consultant to come in and build us a workplace health and safety management plan and build us a system, because that just what was in place wasn’t adequate.

So and I mean that just that is just the tip of the iceberg as to what we found. And it, you know, those first few weeks and the first couple of months, I, I look back on now and I think the sheer hours we worked, it blows my mind. You know, I didn’t sleep. And when I did sleep, I was dreaming about all of the things that we needed to do, you know?

And seriously, I’d get out of the shower and it was like, quick, get me to my laptop before I lose all eight things that I’ve thought about in my head. I need to get all of these down because these are all things on my to do list. You know, the to do list was like, you know, I’ve gone back to days that I don’t even remember, but, you know, like, fax paper that was all joined together in perforated lines, like my to do list was just like that never ending paper stream fax paper.

You know, it was a wild few months, and it was a point at about 8 to 10 weeks in and I was chatting to someone that I, that I have a business, he’s my business mentor. And, and we were sitting down and having a bit of a chat and he was asking me what we were doing and what what I was doing in the business, and I was explaining it to him and, you know, like, without taking a breath, I was explaining everything that we had in front of us.

And he just looked at me and he said, this is a transformation. You have got your work cut out. This sounds like a transformation. And it was really the first time, you know, I thought that we would just kind of, you know, you just tackle a challenge and then you tackle the next challenge. And it was his word.

That was the first time I realized that what we had on our hands was a total transformation of this business.

Justin – Yes. Yeah. Yeah. It’s interesting, isn’t it? Like having been a franchisee that, in the business itself, the had the absolute belief in our business system. The eight step system is what we call that a franchise. These words, it’s just proven over and over. And I remember being so precious about that. You don’t touch the system Rhiannon, don’t touch the system.

And and it took a while for me for that dawning to realize, yes, the systems, the eight step system still works. Absolutely. But there’s so much more to running and transforming this business. Yes, the eight step system works on the ground servicing our clients, running our franchises. But to be able to support our franchisees and to be able to turn the ship around, so to speak, there was a whole plethora of things that needed to be done.

And I guess, a big part of driving that forward was then, you stepping into the role of CEO and actually then taking the helm of the ship, so to speak, again, so for you what I mean, what are the key things that you’ve, you focused on when you took on? Because it was still things were starting to change, but we were a long way from turning things around.

Rhiannon – Yeah. We were I got to say, I was very nervous. I stuck my hand in the air, and I, you know, when, when you and your business partner came to me and said, hey, we like what you’re doing. You’re impressive. we want you to make a longer term commitment to this company. We want your skills on the team.

And I went away and I thought about it and said, yeah, I really want to be part of this, but I don’t want to be 2IC, I want to be. I want to be the one that takes responsibility for following through what we started because, you know, we worked tirelessly on those three key areas in that first 12 months that you were managing director.

You know, we tackled support. We instantly and immediately, hired additional human resources into the team to make sure that our network of business owners had that support. And we did so much work to actually communicate to them that you now have people, someone that you can talk to, that you can get that business support from. You know, we had no marketing pipeline whatsoever for service for our business owners or frankly, for our sales leads for franchises, for new business owners to join the team.

And, you know, so we worked really tirelessly on trying to put that in place. And, you know, the systems, we, systems was where I focused for that first 12 months under your direction. It was, you know, I really took carriage of making sure we had workplace health and safety systems, making sure our training got updated, making sure all our procedures got updated, even just from scratch, setting up how our head office team worked, like, who has access to bank accounts?

How do we manage governance? Who pays what, who saves what, who’s got access to these, what permission levels we needed to set up? I basically set up an entire I.T system for the network in like four hours. One afternoon I remember having it. I remember having this is a weird anecdote, but it’s just one of those moments in the last four years that I really remember.

I remember having a conversation with someone who was a CEO of a local organization in the area at the time, and we’d been long term associates, and we had worked together quite a lot. And I remember seeing her at an event and having a chat and saying, what’s happening in your world? And she spent ten minutes telling me how taxing it’s been, rolling out a new I.T system to her organization of a few people, a few people, membership based organization with a few head office staff.

Right. And I just kind of remember standing there being I just kind of hummed and hard and went along with her, and in my head, I’m going. I’m pretty sure I did that in four hours. Three weeks ago on a Friday afternoon. Like that was the pace at which we were moving at the time. You know, something that had absorbed her life.

So eight weeks we knocked over in four hours in an afternoon. So the processes was where I focused for the first 12 months. But it was after that first 12 months and then you and I transitioned roles. You know, we allowed you to go back to your roots and your skill set and where you found the most passion and fulfillment, and that is working with new business owners.

And I stepped up into that position of responsibility for where are we taking this? How are we turning the ship, and then where are we getting it to once we’ve done that? And, the To-Do list didn’t get any shorter. It’s still no shorter, to be honest. But now we are on a continuous improvement journey rather than a total rebuild journey.

And look, probably the thing that stuck in my mind is our biggest challenge. 12 months in when I took to the helm as CEO was, generating really great quality new business owner leads. So you know how many people who are wanting to join our network are inquiring with us? And there are some behemoths in our industry as our competitors that we can’t outpace.

We can’t out budget. We can’t, we can’t be louder than them in the marketplace. It’s not possible that they’re spot where they are. They’ve put in the hard yards. And now we needed to as well. So we had to be clever. We had to be tactical. we had to get very strategic because we didn’t have the budget of human resources just to blow our competition out of the water.

And so we really started focusing on the little things make a really big difference. And we started to focus on our model, and we started to focus on even better quality support and how we were telling our story. And our marketing got better and more sophisticated, and our strategy just improved out of sight and the complexity in what we were delivering.

And then we went and we brought on Salesforce and Salesforce. For everybody listening is the world’s largest CRM. And in really simple terms, if you have customers in your business, you need something that manages those customers. Salesforce do better than anybody else. Customer management. However, Salesforce was singly the most the biggest expense. I mean, probably you can term it much, much more accurately as an investment because it is it’s it’s an investment that will, you know, continue to return to us for many, many years.

But we invested in Salesforce and we custom built that platform from scratch. There is no other business on the planet that has a system like we have, because we’ve built it to do exactly what we need it to do, and it does that for us head office. It also does it for our business owners. So we didn’t just go and implement a Salesforce system that we could use to run head office on.

No, no, we built out a whole system that ran our business and runs our franchisees businesses. And that that took 12 months to build that and roll it out to 12 months. So much of the first amount of time that I was CEO, I spent focused on that, that and the marketing in the last 12 months where we’ve really focused is how are we getting our new businesses started.

And in the last few months, we’ve reached a real point of clarity, and we have now really honed and refined what is our accelerated start up program. And now the focus is on the quality support of our business owners and making sure that we get them. We get them started quickly, we train them really, really well and that the support we give to them is absolutely unrivaled in our industry.

If you are looking for exemplary level of support and not just not just, you know, a bit of training at the beginning and then, hey, off you go, you’re a business owner. Best of luck. Let us know how you go. We’ll write to you in 12 months. No, no. Like if you want strategic support like genuine training around how to understand financials and manage your business from a financial perspective, how to market your business, how to win quotes, how to follow up clients that I just I just we don’t have time to me to actually dive into the detail.

In fact, we’ll make another episode. I’m going to say our accelerated right because it deserves a conversation all of its own. But yeah, that transformation journey, there’s there’s no stone unturned. Early days, it felt like almost every meeting I had with you and your business partner, I was coming to you saying, right, we need to do this and we need to do that, and we need to change this.

And, oh P.S. our brand needs to be refreshed, you know, and there was some little there was some moments of tension. You know, I remember the first time I came into a board meeting and I said, okay, guys, I’ve been thinking about this a lot. It’s been almost it’s been over a decade since our brand has had any kind of visual refresh.

We need to refresh the brand. We need to bring it back into the 2020s, you know, and, you particularly you particularly Justin, we’re like, no, no, don’t touch the brand. The brand is great. And the brand was, you know, it had it had strong visuals that were identifiable as us in the marketplace, but it also just needed a refresh.

So, gosh, I that is such a shambles of an answer to your question. You know, where did I focus once I took to the helm? Everywhere, everywhere, all at once. And, there was so much change that, it was it was a conversation every now and then that you and I would have is, you know, how much change is too much change and Rhi

We might need to pump the brakes like, our people will be change, fatigued. We have to consider this. And I just thought if we pump the brakes now, the last two years of our hard work come to a screaming halt. We don’t have. We don’t. We can’t do that. And it’s 2020. By then it was 2022. If you’re not evolving in real time with your market and your customers and frankly, the needs of our franchisees, you’re losing pace.

You’re falling behind. So, yeah, it was rapid. It was rapid change was frequent and rapid and a lot of it and I think probably at times our franchisees did maybe feel overwhelmed with the sheer volume of change. But I will say we also had an awful lot reach out to us during that time saying, we see what you guys are doing, and we say the sheer volume of work that’s going into this and our hats are off.

That’s probably that was probably the most fulfilling part of those few years.

Justin – Absolutely. Yeah. What I guess really sums up in a nutshell how the sorts of things we’re focused on between us to, to transform this business and to definitely see it now, pairing off in the right direction.

Rhiannon Yeah, yeah, yeah, yeah. It’s you know, the lesson for both of us was that, you know, and you particularly. But I’ve learned this along the way as well, is that, you know, you come in with really strong ideas as to what you think might be wrong, what we might need to change and what we learned instead.

It’s not about just addressing a couple of issues and then moving on, you know, hang in the boots, the boots of change up and saying, rightio, you know, we’ve now got an effective team that’s going to win. Away we go. You know, we just roll out what we did yesterday and I will we will be Bob’s your uncle.

What we learned is that you have to be continually evolving. And that change is no longer a project. Change is not someone being brought in to do a job. Change is our business as usual in this network, and we continue to change every day, every week. There’s not there’s not a week that goes by that we’re not updating a system or updating a process or changing a changing direction in a strategy.

Gosh, you and I just finished a chat about marketing strategy. And, you know, and we’re talking about a change of strategy and slight change in direction again, because we think we can do something to get better results from what we’re currently doing. And, and that that is the real summary of the last four years of James. It is being everything is always on the table.

Is there a better way to do this? And if the answer is yes, then we say rightio. Let’s find a way to get a better outcome for the businesses in our network and for our head office team as well.

Justin – Yeah, definitely. That’s good one.

Rhiannon – But I think that some I think it’s a natural place to wind this, this chat up. we mentioned a couple of things. You know, I mentioned Accelerated Startup Program. We’re going to do a whole episode talking about that because that’ll talk anybody through what the process is. You know, once you once you sign your franchise agreement and you’re a fully fledged James Home Service business owner, what happens?

You know what? How do we get you started? How do we start businesses. So we’re going to dive into that in an episode. And the other thing that we didn’t even touch on is the invention of the subscription model. And of course, we we were the world leader. In fact, we are still the only company in the entire world to be offering a subscription model.

And that change came out of the challenges that we faced. And yeah, we’ll dive into that in a whole other episode, but perhaps fit it. I believe that here. And, and, hopefully some of you listening along might join us in the future for those episodes. We hopefully will see you then.