This article appeared in Issue 3#5 (July/August 2009) of Business Franchise Australia & New Zealand
AIMING ABOVE THE LINE
Winner of Emerging Franchise of the Year, Mr Rental’s success is driven by a culture of family values.
Mr Rental hires out major home appliances such as fridges and freezers; washing machines and dryers; televisions, DVDs, VCRs and game consoles; video cameras and computer equipment; furniture and fitness equipment.
Glen and Kerrianne Hickman founded Mr Rental almost by accident. Having grown up in Campbelltown, NSW, the couple moved to Bribie Island, QLD in 1983.
Campbelltown used to be a country town says Glen, “The city came out and swallowed it, and the whole atmosphere of the place changed. We had young kids and we thought, ‘Let’s go and find somewhere nice to live.’ We actually haven’t looked back.”
The Hickmans raised their young family on the Island while managing their first business – the local video store that also rented out televisions and VCRs on a short term basis.
Glen recalls the turning point, “One day a woman came in and said ‘Glen, will you rent me a washing machine?’ And I said, ‘We rent videos here, but come back tomorrow and we’ll see what we can do.’
“I actually went out and rented a washing machine from another company and we on-rented it.” They put up a small sign in their shop saying, ‘We rent fridges, washers, televisions and videos’. In just four months, the couple was making more recurring revenue from the appliances than the video rentals.
In 1991, the Hickmans sold the video store and operated Mr Rental from their home garage for a number of years, says Glen. “We then moved on to a small premises. But we really didn’t encourage people to come to us – we didn’t even sign write the premises!
“All the time we’ve been learning. Our business has grown around us promoting ourselves in a different way, to get the telephone to ring. After about 10 years, we realised we had a fantastic, profitable business model and thought, ‘Where do we go from here?’ We had a very good lifestyle but we still wanted to be involved.”
Glen describes the idea of franchising as an epiphany. He thought, “If we can do this, why can’t other people do it? We also thought we could expand.
“We had made our mistakes and learned from them, so we systemised everything. We went on the market in 2001 and the first franchise we sold was actually the master franchise in New Zealand. A guy over there approached us. We sold him the master and we had a handful of franchises operating in New Zealand before Australia!
“That’s all changed now – we’ve actually bought that master franchise back and we now have over 60 franchises in Australia and New Zealand.”
Glen says franchising far outweighed employing a team: “A franchisee brings something that you’ll never get in a corporate situation. They bring skin to the table, and they are motivated above and beyond an employee. We believe that is a major part of becoming a company of excellence.”
It must be working; Mr Rental was awarded the 2008 FCA/MYOB Emerging Franchise System of the Year at an awards ceremony in October last year.
Glen reveals his and Kerrianne’s joint revelation: “We had a really big vision – of being the world’s first choice in home appliance rental.” He stresses, “The first choice. Not necessarily the biggest, but we wanted to be excellent at what we did and have people come to us first, before anybody else.
“We created a culture: of excellence and constant improvement.” The basis of that culture is what Mr Rental calls ‘Above the Line’. It’s a bold notice with a horizontal line positioned half-way down the page. The words sitting above the line are ‘Ownership – Accountability – Responsibility’. The words below the line are ‘Blame – Excuse – Denial’.
“You’ll see it in any of our franchises – and it’s on my office wall at home”, says Glen. “We strive to do everything above the line. If I get below the line or someone else does, anyone in our organisation has the right to call us on that – and we have to restructure ourselves and get back above the line.”
Mr Rental also strictly follows its ‘12 Points of Culture’, which includes a detailed paragraph under 12 titles: commitment; ownership; integrity; excellence; communication; success; education; team work; balance; fun; systems; and consistency. Glen comments, “It works incredibly well for us.”
Glen emphasises that being a Mr Rental franchisee is about personal involvement, not just making a financial investment: “Initially we like our franchisees to work in their business on a daily basis, but because of the profitability of the business, it’s not long before they get to a stage where they can put people on to replace themselves. What we still require of the franchisees is that they actually manage those people, to be the best that they can be.
“We have key performance indicators to tell us how those franchises are going, and we have a very high expectation that they continue to grow.”
Glen believes Mr Rental provides a niche market: “The businesses that work really well in modern days are the specialist businesses, because they become really good at what they do.”
The other business advantage of Mr Rental is that it creates recurring revenue. Glen explains, “I call it the ‘Magic of Recurring Revenue’, which is ‘MRR’ – the initials of Mr Rental.”
He compares his business to the largest, most successful organisations in the world – industries such as telecommunications, banking and insurance. “They’re all based on recurring revenue. In other words, you make the sale and you get paid over and over and over. That’s the driver for this business.”
The other driving factor is his and Kerrianne’s joint personal values. Glen says, “We’ve got four kids, so we’re very family orientated. We have a way of communicating with people. Kerrianne in particular is very outgoing and loves people. We know every single franchisee and to varying degrees, we have a relationship with each one of them. I believe they respect us because of our basic family values and integrity – our whole culture.”
Glen, now 59 years, worked as a Telecom technician for seven years in the 1960s. He says, “It was a good job but I had ambition; everyone was saying sales was where you could make money.”
In the early 1970s, Glen took a sales role with a welding alloys company, but it paid commission only. Glen admits: “If you didn’t sell, you didn’t make money, and Kerrianne and I were gradually going broke.
“But I had a great Sales Manager – Dick Elliott – he changed the way I think.” To Glen’s shock, one day Dick asked him to train a new salesman.
“I felt obligated, so I agreed”, says Glen. “I went home to Kerrianne and asked for her help. She said, ‘What’s that Sales Manual you brought home a couple of months ago – why don’t you read that?’
“And I did – I read it. The Manual had all these sales scripts in it – I learnt them and I went out and planned my work that week. I picked the new guy up, took him training and we organised to meet Dick mid-morning.
“Traditionally after a demonstration, if the guy I was selling to said no, I’d just walk out. But I started using the sales script and before our meeting I had four sales – more than I’d done in the last three weeks!” He stayed with the company for 10 years.
Glen reveals, “It brought home to me that systems, scripts and structure works – and that’s what franchising is about. A franchisee knows everything from day one. They don’t make the mistakes I made.”
Glen continues, “Part of my role is convincing our franchisees that they’ve got everything they need already – all they have to do is have a belief in themselves – and stop limiting themselves. My best franchisees are doing things much better than I ever did. And I talk to these guys and I try to analyse why they’re so good.
“Basically, they say they follow our business system without deviation and implement the action plans jointly created with their Mr Rental business coach.” Another factor in their growth is the brand building strategy and Glen sees this as his responsibility.
“I would always rather somebody with enthusiasm and an ‘above the line’ attitude, with no qualifications at all, because they will get the qualifications if they have that attitude.”
After several years of working both in and on the business, the Hickmans decided they needed help to get to the next level. “We realised we have certain strengths and weaknesses”, admits Glen. “Rather than spending another 10 years making mistakes, we decided to employ somebody who had the acumen, the business skills and experience to get us there quickly.”
Accepting the General Manager role with Mr Rental in October 2004, Alan Payne was procured to help implement the vision the Hickmans had for the business, while remaining true to its culture and values. Alan best describes his role as a “traffic cop” to many.
His business background is extensive. Initially studying law, Alan owned his first business at a young age. He has worked for the corporate sector in the finance, business and automotive industries. His first taste of franchising was as a Bob Jane T-Mart franchisee; his second with Bridgestone.
However, his most significant role was effectively introducing franchising to Battery World. Alan worked with that franchise for seven years and has fond memories: “It was both extremely rewarding and educational.”
Glen explains that Alan manages the day to day business at Mr Rental: “Alan’s focus is operations and management. Kerrianne and I are more visionary; we’re looking at where the company will be in five and 10 years’ time. I think it works better than me or Alan trying to do both.”
Glen goes on, “What works for us is that demarcation. If you’re working IN the business on a consistent basis, I think you miss the opportunities. You’re too busy trying to make everything work.
“I am able to keep asking myself questions: How can I improve my company? How can I get more business? If you’re working flat out on a day to day basis trying to make ends meet, you’ll never get the answers.”
Alan concurs, “Glen and I share so many common values. That’s what appealed to me – the culture of the organisation and the shared values.”
He adds: “My role is very much about implementation and strategy, and how we get that strategy out there – developing core competencies and relating that back to our vision. Glen has that opportunity to take the overview and my role is to release him to do a lot of that.
“Kerrianne is very much the ‘Culture Queen’ – the person who’s very focused on our culture. We all focus on it, but she is very much concerned with the sensitivities. A lot of it stems from their family values and the growth of their own business and being involved in the community.”
Alan continues, “I share that vision but, at the same time, I understand that my major contribution is in the actual implementation of that strategy once we’ve agreed on it.”
Mr Rental is now moving towards a more national/international organisation, to take it to the next level. When Alan started, he put business cases to the Hickmans to demonstrate how this could be achieved.
“We really need to do what we always say we do, which is punch above our weight”, explains Alan. “We need to act tactically as a small company but think like a big company. We need to do market research, and look at our brand and communications strategies. I was brought in to put forward options as to how we could advance.”
Mr Rental constantly goes back and consults with and reports to its franchisees, involving them in that continuous cycle of improvement.
Alan says, “We review the plan each year but every three years we go through a major planning cycle. We’re in that process now, so again, back doing consultations with our franchisees and about to roll-out our next three year strategic plan.”
As Alan hinted earlier, Mr Rental is heavily involved in the local community and the Hickmans have always encouraged giving back through their network. One of their three annual awards is the Community Involvement Award. Glen comments, “It’s part of our culture that our franchisees get recognised for how much they do in the community.
“I truly believe that we get our dollars and our living from the community, so we give back. We do a lot of cash donations but what’s really pleasing is when our franchisees and support team actually get out and participate. We have a saying in our organisation: There’s only one failure and that’s the failure to participate.”
Glen reiterates that his and Kerrianne’s values system has never wavered. He says being who they are naturally has worked extremely well in all aspects of their lives: “I couldn’t see any reason why we would change because we’re in business – and we’ve been like that right from the beginning.
“We’ve come from being successful business people from a relatively small business on Bribie Island. We’re now an international company and in these tight economic times, demand for our business and our franchises is increasing.
“Our planets are aligning, our brand awareness is growing daily and most importantly we have a synergy amongst our stakeholders that gives us a competitive advantage as well as innovative direction.” Glen believes this is a very exciting time for Mr Rental and its franchisees.