This article appeared in Issue 3#5 (July/August 2009) of Business Franchise Australia & New Zealand
I was to interview Chris and his wife Michelle for this article, but as is typical of family life, Michelle had to attend to a sick family member. But then surely that is one of the joys of working for oneself as a franchisee – the flexibility to look after the really important things in life when such challenges arise.
So Chris, somewhat nervously, was left to grapple with my questions on his own. But another life lesson quickly emerged as it was quite apparent that Chris had planned ahead and put considerable time and thought into his responses; a trait and skill that he has undoubtedly applied when developing his highly successful business.
As background information, Hotondo Homes is one of Australia’s biggest builders and was started in Deniliquin in rural southern NSW by Kevin Renwick and the company is now run by his son, Michael. Hotondo Homes’ goal is to make their builders’ businesses more profitable by providing much of the administrative support.
So Chris, what was your background before joining Hotondo Homes?
I was an apprentice carpenter back in 1981 and worked largely on commercial buildings before becoming a sub-contractor to a local builder. In 1995 I gained the qualifications necessary for me to commence as a builder in my own business. I worked as a self employed builder for about nine years building five houses a year, supplemented by other commercial and renovation work. I was always busy but couldn’t seem to make money commensurate with my efforts. I was still “on the tools” throughout this time. My wife Michelle gave up her career and was committed to taking over the administration side of the business. We had three small children and this allowed Michelle to be there for the kids as she could work from home. We are very much a family business and I couldn’t have done it without her support. We now build over 30 homes a year with a turnover of over $7 million. We have a purpose built Sales and Display Office and have had several Hotondo Homes Display homes.
When did you become a franchisee?
It was in 1997 that we made the big change. At the time there were many people telling me why it wouldn’t work but I decided not to listen to the anecdotally ignorant doomsayers and to trust my own skills, investigations and judgements on the Hotondo Homes people and then just believe in and trust my Franchisor. The rest is history and nobody questions our decision now.
Why did you join Hotondo Homes?
I have always held the belief that a team will out perform an individual and that is what I saw in Hotondo Homes – a team. I’ve always been a sports fanatic, playing rugby league and hockey so that environment appealed to me. Also, I found that I was still a nail bag chippy, working all day, only to come home exhausted and be faced with a mountain of paperwork and could see the Hotondo Homes system helping me enormously with that burden.
The power of brand was also a significant influencer for my decision to become a franchisee. In Queensland, there are about 25,000 builds a year and approx 80% of those are done by the top ten builders! I thought it would be far better to be part of the big team.
I did look at other building franchises but Hotondo Homes were the most professional in that they at least followed me up to encourage me to join their system.
I was a good Tradie but I didn’t become a business man as well until I joined Hotondo Homes.
You are a regional builder – does that make dealing with a Support Office 2,000kms away difficult?
Initially it was difficult as being new we needed more help, but we made sure we had regular contact with our Business Development Manager and Melbourne. Now of course, with electronic communications, life is much easier and we find we don’t need to be contacted by Support Office all the time either. Like us, Hotondo Homes have come ahead in leaps and bounds during our time with them and communication is very good; we have even had “happy calls” just to see if we need anything!
What qualifications did you need to become a Hotondo Homes franchisee?
I was a qualified chippy but also held a Full Open Licence in Domestic and Commercial Construction with No Restrictions. So I could build high rises if necessary, as well as homes. Most of the Hotondo Homes guys hold domestic building licences as that is their focus.
What attributes do you need as a franchisee?
You have to be a team player. You have to follow the systems, even when it seems hard and may not seem to suit your specific area at the time. You have to trust your Franchisor and learn from their advice no matter how difficult that may be.
Organisational skills have also been important for me as I have two site supervisors, up to seven full timers and 60 contractors, so life can become a bit hectic if I’m not organised. Michelle keeps me on the straight and narrow too!
What’s a typical day?
There isn’t one, but we do have a well planned week with Team meetings. We also make sure we ring all our clients every week so they know what stage their project is up to.
Being a regional franchisee do you get sufficient corporate advertising support and what do you do for local area marketing?
Hotondo Homes give us prevalent coverage on TV, press and press releases. We also receive billboard designs and clothing designs and other support. I budget to spend around 1.5% locally on such areas as sponsorships of sports clubs and charities. We support the Australia Day functions and the local Christmas Spectacular for example.
We trade as Hotondo Homes Gympie and not under our own name, which we did for many years. Then I realised that the power of the brand was best utilised if we dropped the emotional attachment to our own name and traded as Hotondo Homes – maximising the benefit of the Hotondo Homes corporate advertising. I also realised that Hotondo Homes Gympie was a saleable item when my time comes to retire, whereas my own name was probably not attractive to a buyer.
What other assistance do you get?
Hotondo Homes have a library of flexible plans, an insurance package designed for us, extra warranties on products and the buying power on purchases of course is a big help.
I also get accounting and general business advice and the benchmarking of our performance against other franchisees and the industry in general is most helpful.
If the office receives a bad report from a client they can tell us off too! We’ve only had one, but Hotondo Homes certainly wanted to know the circumstances and how the customer could be kept happy.
How has the shrinking economy affected your business?
Yes it has hurt us a little but we are still trading strongly and after a slow start to the year our pipeline now looks good and we are surging back. My Dad always said “wear one hat and wear it well” and that’s what we are concentrating upon.
Were your ingoing costs what you expected?
Yes they were and we very quickly recovered the costs by being part of the system.
What fees do you pay?
1% of each contract as the Hotondo Homes management fee, 1.5% of each contract to advertising (over my local commitment) and a fee to cover the annual conference and training. Before a Franchisee should whinge about fees etc they should just ask themselves the question, “Do I get value for what I pay?” and I think that is easily answered in the affirmative.
If you had your time over again would you become a Franchisee?
Well we have been with Hotondo Homes for 12 years and just re-signed for another five year term so that answers that question!
Chris, if you were Michael Renwick running Hotondo Homes, what would you change in the Hotondo Homes system?
We need a corporate box at Suncorp Stadium to watch the Broncos and at the Gabba for the Lions!
The real answer is that I wouldn’t want Michael’s job. I am busy enough running my own organisation, let alone the huge one he now runs. He’s a good bloke and does a good job; he is always available for any franchisee to speak with him and the relationship we have is very solid.
Perhaps consideration could be given to restructuring fees on commercial jobs. State variations in laws sometimes cause us issues and what works well in one state may not be so good in another.
Do you have a Hotondo Homes home yourself?
Michelle and I have nine Hotondo Investment Homes at this point in time. The designs suit our area for size and property value. The wide range of plans cover all areas including the First Home Owners, Investors Packages, Family Homes and the Retirement market. In fact life in general is pretty fantastic!
Phil Blain is the Chairman of Franchise Alliance. Call 1300 72 55 77 and be connected to your Franchise Alliance state office.