Building Franchise Success

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-By Claire Suttles

In 2007 four friends had an idea that they couldn’t resist. Corey Passey, Darren Wallis, Leigh Wallis, and Greg Gardner all had experience in new home building and franchising, and they all noticed that many previous customers would later come back to have their homes expanded. The group realised that there was a strong market for renovation, but that “nobody was actually franchising it,” Co-founder and Director Corey Passey reports. The team took the leap from idea to company in 2008 under the name Smith & Sons Renovations & Extensions, and “just started selling franchises from there.” Within 18 months the company had 20 offices open across Australia and New Zealand. Mr Passey explains that there isn’t actually a Smith (or sons) involved. Rather, the team chose a name that would suggest a family business and reflect the team’s old fashioned values and a solid work ethic. “Everybody knows a Smith right?” Mr Passey explains. “We could have called ourselves Renovation Experts… but Smith & Sons has got a certain ring to it and it’s worked.”

The founding directors work out of Smith & Sons’ corporate office in Mooloolaba Queensland. The corporate office is focused on selling Master Franchise areas and supporting Master Franchises once they become operational. “Those Masters then sell the model to builders, help support the builders and set them up in business,” Mr Passey explains. Smith & Sons has sold three master franchise areas in New Zealand, one in Queensland, and two in New South Wales, and the team is currently on the lookout for Masters in Victoria, Adelaide and Perth.

Franchisees pay a small fee to buy into the group within one of the Master Franchise areas. “We’re not expensive,” Mr Passey says. “For most builders to go to another level they have to buy into a new home building company franchise which is really quite expensive [and requires] a lot of capital.” Smith & Sons offers an option for less established builders. “We’re taking guys as young as, 25 years old,” Mr Passey reports. After joining the company, franchisees are provided with a start-up pack that includes various business essentials such as branded t-shirts, brochures, software, and business cards. They also receive initial systems training at the company’s training centre. “We take a smaller builder who wants to grow his business and we provide him with the systems and processes to take him to another level,” Mr Passey explains, “And teach him how to run a building company more effectively.” Franchisees receive ongoing support and all the benefits of a larger corporation, whilst remaining small business owners. “It’s giving the smaller guys a chance to be more professional and take more market share,” Mr Passey says, “And helping them be more competitive.” The payment structure follows the standard franchise building company model, with branches invoiced monthly based on a percentage of their job started. If the branch doesn’t earn anything during a pay period, then they pay no fees as all.

Smith & Sons takes care of every aspect of a renovation, from “concept to completion.” The process is aided through the use of an office space, or design centre, in every franchise. “The thing that sets us apart from other small builders is that we set our franchise up into a design centre,” Mr Passey says. “People actually have a location to come and sit and talk to the builder, whereas most builders do business on the bonnet of their ute with the dog barking in the back. We’ve got a professional office and it’s got samples of building products and kitchen colours and that sort of thing. It’s a nice professional environment [for customers to] sit down and talk about what they want to do.” Most branches also have Project Consultants who specialise in renovation design and can assist customers in planning and personalising their project.

Mr Passey estimates the renovation market in Australia to be around $31 billion according to the HIA stats. “There are a lot of builders who do renovations,” he admits. With so much competition, the company has to set itself apart to stay ahead. Individual branches benefit from shared marketing and branding, group buying power, and ongoing training and support. The company doesn’t promise customers significant savings, but focuses instead on offering superior service and skills. “We don’t say that we’re going to be the cheapest. We don’t promote… a cheap renovation. That’s not what we’re about. We’re more about quality and getting the job done right the first time, on time, and [within] budget.”

The Smith & Sons’ approach has been extremely successful. BRW recently named the company the fastest growing franchise in Australia by outlets, and the second fastest growing by revenue. Furthermore, the company enjoyed high growth rates even during the Global Financial Crisis. “Within six months of starting [Smith & Sons] the GFC came into full swing,” Mr Passey recalls. “We turned that to our advantage. A lot of builders were without work. A lot of them were struggling. We went in on the angle that joining our company will help you out with marketing, will get you more leads, better pricing, [and help you] be more competitive, because it’s going to be harder the next few years.” The angle worked. In fact, Mr Passey believes that the GFC actually helped the company expand. He also believes that joining Smith & Sons helped builders themselves through the crisis. “We’ve got a lot of happy franchisees,” he reports. “Most of the guys that have come on board have either doubled or tripled their turnover.” The company recently conducted a survey to judge franchisee satisfaction and found that “100 per cent of them were happy that they signed up and would sign up again.” That’s rare in any business!

Smith & Sons credits a fair share of its success to a tireless local and national marketing campaign. “Our branding is really strong,” Mr Passey reports, and “[We are] very staunch on our branding.” Franchisee requirements include driving a black vehicle with the proper signage and wearing a black shirt with the Smith & Sons logo while on the job. Mr Passey reports that the branding is paying off and the Smith & Sons logo and colours are becoming increasingly recognised. New franchisees instantly benefit from the positive reputation that the company has built. “They get… all our branding that we’ve done and continue to do. They come in under our banner,” Mr Passey explains. Corporate headquarters is responsible for all marketing and associated costs, so franchisees continue to benefit over the long term.

Smith & Sons also utilises the internet and social media to promote the company and attract customers. “We do quite a lot of work with Google,” Mr Passey reports, “just getting our rankings up there.” Right now, there is only one Smith & Sons website, and the team is currently building over 50 new sites, each one individually tailored to promote a specific branch. The company hopes the effort will bring more attention to each of its franchisees and improve search engine optimisation. The current Smith & Sons website offers contact and location information for each branch, renovation and design ideas, testimonials from satisfied customers, and photos of key projects. The website also features an intranet accessible only to franchisees that helps unite the separate branches. Intranet resources include administration and marketing files, reports, and business advice.

In order to attract new franchisees, Smith & Sons advertises in trade magazines and franchise magazines. The team also does a good deal of telemarketing directly to builders. The company has a strong relationship with “all the major suppliers” and even credits some of them with aiding recruitment. “We’ve gone to a local Bunnings store and asked ‘who are your top ten renovators in this area?’ and they’ve given us names,” Mr Passey says. “These guys have backed us since day one and helped us get established.”

Smith & Sons has achieved tremendous growth since its inception, and the team plans to continue its rapid expansion both domestically and internationally. First, the firm aims to create 100 franchises in Australia. Currently at 52 franchises, it has made it over halfway to its goal in just four years. After the 100th franchise opens in Australia, the company plans to expand to Canada and the UK and perhaps even more countries after that. To get to that point the team is focusing on “Really growing the franchise as much as we can. [We] really want to get our name out and grow our business.” Of course, creating new franchises means attracting new builders. “We’re looking for quality builders who are interested in growing a business,” Mr Passey says. “We’d love to talk to anyone who is interested.”

Home Automation

Call it ‘domotics,’ and you are likely to receive a blank stare, but refer to it as ‘smart home’ or ‘home automation,’ and you will get a nod of acknowledgement. For the past few years, consumers have heard the word ‘smart’ attached to countless products and services, from food and drink to snacks like popcorn and mobile phones, which no one seems to refer to as a ‘cellphone’ anymore. Yet what, exactly, constitutes ‘smart’?

November 29, 2020, 12:31 AM AEDT