This article appears in the November/December 2013 issue of Business Franchise Australia & New Zealand
If we look back throughout the last few decades in the building and home franchising industry, there are few placed like Bill Vis, from V.I.P. Home Services, to provide insight into the changes, trends, challenges, and successes in the industry.
Recently I spoke with Bill and here he shares his franchising story.
How did you begin V.I.P. Home Services?
My parents were Dutch immigrants who were poultry farmers. They didn’t want me to go into the family business and I wanted to be a car salesman. I could only get a job selling Electrolux vacuum cleaners on a commission only basis. I saw a local bloke mowing lawns and thought I’d give that a go. I started out on Saturday’s and ended up making more money this way, so I started full time.
What made you decide to begin franchising?
Basically, I bought everyone off the market. After a while I took a $50 deposit for other lawn-mowing rounds, which I eventually changed to a membership fee. This was in 1979 and I’d never heard of the term ‘franchising’. I didn’t even realise at the time that I was indeed franchising my lawnmowing business.
What do you feel is your biggest achievement with V.I.P.?
That’s easy, changing people’s lives. One of our early franchisees called just to talk six months after joining V.I.P. He thanked me for changing his life. He had financial security, increased fitness, he was happy, so I began to wonder how many other people like him were out there.
What do you think sets V.I.P. apart from its competitors?
Our franchisees can enter our system at a level that suits them. In a way we view ourselves as life and business coaches. Although we’re in the lawn mowing and cleaning business, if you don’t provide good customer service you can’t retain clients. We encourage our franchisees to look after clients and follow our best practices. If our franchisees aren’t achieving the things they want to achieve, we have a strong commitment to work with them. This might mean being able to send their kids to private school, own their own home or take regular holidays. This might even mean helping them to set up their own self-managed super funds by connecting franchisees to professionals in the industry.
What changes have you seen occur in the franchising industry over the years?
Over the last 33 years, even before the whipper snipper and blowers, we’ve seen changes in technology. I mean, my phone was like a brick. Before our marketing efforts were predominantly utilising yellow pages, local and national TV. Now everything is digital, SEO (Search Engine Optimisation). Customers want an instant response nowadays so we have to meet their expectations.
What do you feel have been some of the biggest challenges that have occurred in the franchising industry?
In some cases we had more customers and more calls than we could handle. Recruitment in franchising is always a challenge, so it’s tough to get the balance right. In 1979 there was a recession, so we were able to take advantage of this as unemployment rates were so high. It was easy then to sell a franchise. Also, the average lifespan of a franchise agreement is five years, so you need to invest in your franchisees by helping them stay longer, increasing retention rates.
I guess there was also the point where everyone started to franchise. They had no substance and no training systems. We now have regulation through the Franchise Code of Conduct which now protects franchisees from unscrupulous operators and fly by night franchisors. I have learnt a lot since we began all those years ago. The first 10 years in business I learnt from my mistakes and continue to work toward reaching constant milestones. Today we have 1100 franchisees and are working hard to continue to grow the V.I.P. family.
What do you feel are the positive aspects of mobile services franchises in comparisons to other options that are available in the market?
Firstly, there are no overheads or reliance on ‘position, position, position’. You can take your service to your clients. You’re advertising your business while you go about your daily business driving around. You have a constant billboard on the street with consistent exposure. We’ve estimated that from our 1100 strong franchise network that we generate over $5.5 million in free advertising. This is a powerful mechanism and we’re constantly encouraging our franchisees to upgrade their trailers and take pride in their work materials.
What do you think is the future of landscaping franchises such as V.I.P.?
With the recent drought, we saw a surge in the installation of fake lawns and turf. Instead of feeling threatened by this, we saw it as an opportunity. Our clients were demanding total garden and lawn maintenance, so we learnt to adapt. For us to achieve only a 4 per cent stake in the home maintenance market, we would need 14,000 franchisees, so there is huge growth potential. I also see technology playing a big part in the future of our industry as the energy and labour markets change.
What advice would you give to someone looking at investing in a services or landscaping franchise?
Look at whether you like the people you will be dealing with. Have they got the brand name, and take a look at the advertising they’ve done. Will you be inheriting an existing client base or will you have to find your own customers. Speak to clients of the franchise and ask “who is going to support me on a day to day basis?” Be sure to meet the support manager as they’re the person you will have a relationship with. Also, find out if the franchisor offers group buying discounts for your car, equipment, etc. Talk to existing franchisees. Are they comfortable to recommend the system? Finally, do your research on the system’s reputation and gather as much information as you can online.
When looking at investing in a franchise, what do you consider to be the top three things people should be looking for?
Firstly, return on investment. You should achieve a 12 month return for what you pay in fees. Work out what your net return will be. Secondly, consider if you are buying regular clients or a territory. Finally, make sure you like the people you’ll be working with, especially the franchisor, as this relationship is much the same as a marriage.