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Franchisor and Franchisee Relationship

Franchisor and Franchisee Relationship (feat. Jim Vonderhaar of Griswold Home Care Houston Southwest)

Transcription:

Amanda: All right, good afternoon. I am joined today by one of our Griswold Home Care franchisees, Jim Vonderhaar, in Houston, Texas, Houston Southwest technically. Jim, how are you?

Jim: I’m doing great today. How are you, Amanda?

Amanda: I am doing well, thanks for asking. So we’re gonna jump right into it. I know we’ve got a lot of information to cover, and you got a lot of great things that you wanna share. So just wanna start, you know, for our listening audience little bit of backgrounds. Prior to coming on board with Griswold Home Care and opening your franchise, what did life look like? What was your career prior to this and all that stuff?

Jim: Yeah. So prior to getting into this business, I’ve spent 32 years in the energy business, and pretty much every aspect of the business that you could be in, starting at helping a power plant to run in an energy consulting business therein. So spent 32 years in that business and loved it but kinda got burned out on it. And the company that I was with got bought and sold a couple of times, and on the last acquisition, it was kinda time for me to take the next step in my life.

Amanda: All right. So it sounds like a timing thing. At that point in your life when you decided to move on, was retirement an option? Did you know that you wanted to start something on your own? Take me through that.

Jim: Yeah. So I was, in my mind, too young and not ready to retire. So, you know, I needed to do something. I was at a point in my life…well, over there, I’ve always wanted to own my office. And so I was at a point in my life where I wanted that business to be something that allowed me to give something back to the community. So leading after that, in my final stages of my energy career, that last acquisition that I referred to a second ago, the company that bought us that was a very large corporation, and they wanted the management teams to stick around for three years to ensure the success of that acquisition. So about a year into that three-year contract, I made the decision that I’m not gonna stay. I will fulfill my obligation in this contract, but I’m not gonna stay. I wanna do something different, I wanna own my own business, and as I said, I like for that business to be something that allowed me to give something back.

So, as fate would have it, about that time, my father came down with lung cancer, so I helped take care of my father until he passed. And then my wife’s mother had pancreatic cancer, and so I helped care for her as well. So, over a two-year period, my wife and I saw firsthand what it was like to try to take care of an aging parent, especially one that had some health issues. So, that’s kind of what started me going in that direction, but at that point in time, I still didn’t know exactly what I was going to do. A friend of mine that was kind of going into the same process in his life, and he told me that he had actually contracted with a franchise broker, which at the time I didn’t even know existed. So I contacted that same franchise broker, shared with her what my goals were, and she started pitching ideas to me. And one of the ideas that she pitched was Griswold Home Care. And that, even then, still took me a few years to finally get here, but that’s kinda what started the process.

Amanda: All right. So you said that you always knew you wanted to own your own business. What was kind of the draw there? I mean, we know that business ownership is not for everyone, but it sounds like you knew probably pretty early on that someday that’s kind of what you wanted to pursue. What was the draw there? What was, you know, the goal for wanting to someday own your own business, whether that was in the long term or the short term?

Jim: Yeah. So probably part of it was just stubbornness/bit of a rebel. I wanted to be able to be in control of my destiny, and I didn’t want to, you know…I wanted my efforts to be for me, not for someone else. So that was part of the driver. Part of it is just, you know, wanting to kinda test myself, can I start something and grow it and be successful on my own, without, you know, corporate America behind me? I mean, and of course, there’s always the…I shouldn’t say always. For me, the negative aspect of corporate America, with all the bureaucracy that you have to go through and stuff like that, I just kinda got burned out on that, and so I was ready to do something that was more smaller, something that I’m more in control of, and something that’s for me. Kind of interesting observation as I went through this process, you know, I was used to working 60, 70-hour weeks, and I just kinda hated that. Now, I work 80-hour weeks and I love it. It’s funny how, when it’s for yourself, you have a different perspective. When it’s for somebody else, it’s a different story altogether.

Amanda: Absolutely. What’s the saying? If you love what you do, you’ll never work a day in your life.

Jim: Exactly, yeah.

Amanda: Eighty hours looks very different when it’s for you versus somebody else.

Jim: Right.

Amanda: Great. Yeah, lots of great stuff. So, again, just sounds like kind of time for a change, and home care fit right into that. It sounds like you got a lot of personal experience, as I know a lot of folks in this Griswold Home Care franchise, but really a lot of folks in the home care industry space, it’s something that’s very personal and near and dear to them as a lot of have experienced that. But you know, when you were viewing franchise business opportunities, you said you worked with a franchise broker. What was that process like? What were some of the questions that they asked or things to really help you find the right fit for you?

Jim: Yeah. So I’m sure they’re all probably different, yet, you know, similar in their approach. But for me, not knowing anything about franchising, and my broker happened to be a woman, so she was extremely helpful in helping me to ask the right questions about franchise, of the franchisor, and whomever it is that I was dealing with. She was really helpful in helping me formulate what those questions are in terms of, “What type of revenue can you expect? What’s the total capital contribution that you’re gonna have? What kind of time commitment are you going to have? Is this the type of business that you need to be involved in full time, or can you do it from afar? Are you gonna have the opportunity to talk to existing franchisees? If you are, here’s a list of questions you ought to be asking them. What’s a relationship like between a franchisee and a franchisor? Are the numbers a franchisee has been experiencing, do they jive with what the franchisor has been telling you?” I mean, her insight and knowledge was just really, really instrumental.

And in addition to that, she also pointed me to a couple of books that had been written, and I apologize I don’t remember the names of those books, but there are several of them out there that will help you understand what the franchising world is about. And I would strongly encourage anybody that is looking at franchising to do as much research as you can, not only about the particular franchise opportunity you’re looking at, but franchising in general. There’s a lot of good books out there that kinda show you and tell you what you should be looking for, what are the, you know, ups, the down, positive, negative, questions you should be asking. So she was helpful in that respect too, pointing me in the right direction. Again, I know it’s not a requirement, but it was extremely helpful for me to have the benefit of her knowledge.

Amanda: Yeah, and there’s lots of great resources out there. I know you talked about a couple of books that you read and brokers and talking to, you had mentioned previously, talking to other folks that were kind of in the same spot as you were at the time. But I wanna talk just a little bit about kind of the introspective piece of it, right, because it’s not an easy feat to make the jump from corporate America, where things are, and it sounds like you kind of always knew that’s what you wanted to do. But when the rubber meets the road, right, when it’s really time to make that decision, it requires a lot of thought, and there’s a lot of people involved in that discussion. I know, families are always a big part of that. So, what did that look like for you? What did that conversation look like with yourself when it was time to say, “Okay, you know, I’ve always kind of thought about this, but now it’s really time for me to seriously consider it?” And how did you kind of process through all of that?

Jim: Yeah. So, obviously, as you can imagine, huge decision for anybody to make. You know, for me, I’ve spent 30+ years in corporate America. So even though there’s no such thing as a secure job in today’s world anymore, and there’s so many very little loyalty from employer to employee and vice versa, but there’s still, as an employee of a large corporation, even a small corporation somebody else owns, there’s a certain sense of safety and security that goes along with that. And so, to step out and do your own thing is a scary thing to do. I have several friends who have owned their own businesses. One friend, in particular, has been a serial entrepreneur. He, you know, started and sold multiple businesses throughout his life. And he gave me a piece of advice that I will never forget as long as I am in this business and probably beyond that. But he’d said, you know, “Don’t ever underestimate the value of the 15th and the 31st.” And what he meant by that was, in corporate America, you know your paycheck is gonna show up wherever it is, whether it’s every two weeks, once a month, twice a month, whatever, you know you’re gonna get that paycheck. When you own a business, all of a sudden, it’s you that’s gotta make that payroll. And so, that’s a huge switch. And no longer do you have the security of that 15th and the 31st, and not only do you not have that security, but you are now on the hook for making sure that your employees do have that security. Probably some of the best advice I was given just in a sense really made me stop and think about, you know, the magnitude of what I’m doing.

But for me, personally, yes, very scary decision. You know, not only am I embarking on a new career that I know absolutely nothing about, an industry that I know nothing about, but I’m leaving behind a career and an industry that, for my clients and my peers, I am considered a primitive expert in my business. And I’m walking away from that and I’m jumping into something that I don’t know squat about. I jokingly tell people, but this is true, I went from being that primitive expert and not knowing crap. So huge learning curve, but part of the appeal and part of the reason that I still enjoy it is because of that learning curve, you know. I’m learning something new every day, and I’m being successful at it, and I’ve reached the point where I am now considered expert in this new business most of my new clients and my new co-workers and so forth. So a lot of introspective stuff that goes on as you’re trying to figure out, “Am I gonna be able to do that? Am I gonna be successful in that?”

Obviously, my wife, you know, we’ve been married 40-something years, so big, big part of that decision as well. But kind of what it really came down to was, you know, throughout my whole life, I’ve always worked hard, and I’ve been successful for the most part in everything that I’ve done. And so, you know, what I said to myself was, “You’ve always succeeded before, why is this gonna be any different?” And so, obviously, I had a lot of confidence in my ability to make this successful. And then the other side of that was, you know, I have a nest egg that I use to invest in this, and so I could have invested that in the stock market or I could invest it in a business that I’d run myself. And, you know, part of my decision was I have a lot more confidence in my own ability to perform and provide a return on that investment than I’d do sticking it in the stock market, which I had zero control over. So those two things right there were probably the things that got me the most comfortable with my decision. The fact that I’ve never failed in anything like this I’ve ever attempted, so why would this be any different? And I said, like, I have a lot more control over my investment if I’m invested in myself versus invested in stock market or some other vehicle. So those were two big things and I got comfortable with that allowed me to take that step forward.

My wife, on the other hand, a little different. When I first started going down this road…and a little background on my wife, she’s not worked outside of the home in over 20 years, I don’t know what career she did, but once we had our child, you know, she stayed home, and so she hadn’t worked outside of the home in over 20 years. And when we first started going down this road, it was not my intent to have her involved in the business. But a series of events happened, and you know, she got dragged in kicking and screaming supposedly for just six months or so until we got things, you know, up and running. And four and a half years later, she’s still involved. She’s backing out some now. We have a new grandbaby, so she’s wanting to spend time with that grandbaby. So she’s backing out now, but she’s been, you know, mostly full time since the beginning up until the last several months. So big, big decision for both of us. Big change in her life, going from stay-at-home mom to fully employed, and then, you know, me going from having that corporate safety net, whatever that means in today’s world, to stepping out and doing my own thing. But I can say that, you know, there’s a lot of satisfaction in doing something like that and being successful, and we certainly have enjoyed it and one of the most rewarding things I’ve ever done, so glad we made the move.

Amanda: We are, too. And I wanna go back to something that you had said about making that transition from, you know, being an expert in your industry and in your field and being looked up to by clients and other folks that you interact with to not knowing squat about the home care industry and what that looks like. And, you know, I have to comment on the fact that you value learning and all of the things that go into that, but that’s a big component of anybody who’s looking to make the switch, whether you’re going into an industry or you’re looking at purchasing a franchise in an industry that you already work in and know a lot about or something that’s brand new to you. It’s a whole different ballgame when it’s your business. So, what would you say to somebody, you know, just the value of being open to being coachable? We’ve talked a lot about being driven by your egos and being successful, and you talked about, “I’ve been successful up to this point, why would this be any different?” But the ability and that hunger for knowledge and to be learning, what part of this whole thing would you say that plays? Because it’s very much a learning experience all the way through the process, even into opening your business.

Jim: Yeah, so a lot of aspects there, so I’ll focus on a couple of them. From the business side of things, as I’ve said, I did a lot of research on what it’s like to be running a company. And in my career, there were a couple of times in my career where I was the leader of a small business. So I had run a business before, even though it wasn’t my own, you know, I was doing it for someone else. I had run a business before. So I did have the benefit of that experience. But also, just in the research that I had done, and again, I don’t remember the statistics, but I’m gonna be pretty close on this. Most small businesses fail, I think the number is like 75% of most small businesses or all small businesses fail within the first 5 years of their business. Where in franchising, about 75% of franchises are still in business after 5 years. So, that was a huge, huge factor for me. And again, several things that I read and research that I did kinda pointed in that direction. So, because I didn’t really know what it was I wanted to do other than I wanted to own my own business and I want it to be something that allowed me to give something back, really there wasn’t any one thing that I was passionate about that I said, “You know, I wanna do this business.” And so, not having that, I really kinda had to dig around and see what was gonna be the right business for me, and if I’m going to invest in a business, I wanna do everything I can to make sure that business is successful.

And so, in that research, determining that, you know, franchises have a higher success rate than going in alone, that was probably the biggest driver towards me deciding to go the franchise route versus the standalone route. And even in this industry, you know, as I’ve been in it, I’ve talked to competitors who have done the wrong thing and started their own business. Some of them have been successful, some of them not. But even the ones that are successful, it took them a lot longer to kinda get to that breakeven point than it did me. Now, is that because of me? Is that because of the franchise versus, you know, independent? Who knows? We’ll probably never have the answer to that question. But for me, I’m gonna say it was a combination of this research I did pointed to that and in my ability to kinda follow-up on that was a key factor. So that’s kind of the business side of things in terms of, you know, how I came about doing this.

From going from energy to, you know, kind of quasi-health care. Not knowing anything about that, as we’ve already established, probably the thing that I did that I think was good move on my part, and I think part of this was because of my corporate background and my corporate training, I didn’t feel like I had all the answers already, and I had a whole team of people that I leaned on that I have their support in my corporate days. And so when I did make the decision to get into this business, you know, I did it with the knowledge and the understanding that that franchisor is that expert, and so I wasn’t so proud or so bullheaded that I felt like I had all the answers. So I leaned heavily not only on the franchisor on Griswold to help guide me in that startup process and figuring things out, but for me, I actually bought in investing franchise because I had the benefit of working with the former owner as well. So I think having that, you know, I wasn’t so stubborn that I thought I had all the answers, and I have the experience of working in corporate America where I had support, so I took advantage of that support and that knowledge that Griswold had to help me start my business or kind of ramp it up.

Amanda: Great. You know, it’s so important, and I love what you said about not being so stubborn or, you know, bullish about not needing help, because you’ve been there right on the head, right, especially coming from corporate America where you have all that support. Going out on your own is, you know, [inaudible 00:20:18] franchising is your own business for yourself but not by yourself. So I love what you shared about that. And you said that you didn’t know, you know. You wanted to do something for yourself and have more control over that nest egg and its growth, but you weren’t really sure what that looked like and what opportunities were out there. So, did you consider other industries outside of home care? And what were some of them if you did?

Jim: Yeah. So as I’ve said, I hooked up with a franchise broker, so she pitched several ideas to me. There were two others in particular that I pursued a little bit, not obviously that’s part of I did with home care, but those were in the auto repair business and then in, it’s gonna sound kinda funny, one extreme to the other, but basically a karate studio, so a business that’s focused on children. And, you know, so I went from children to seniors. But I did pursue both of them, fairly far. On the auto repair side of things, it was a garage-type thing. And I’ve always been kind of a car guy, and so I thought that would be kind of fun because I enjoy cars anyway. Of the three that I looked at, that one probably got eliminated first, primarily for two reasons. The capital investment required for that was significantly higher than the other two that I looked at. And I was going to have to get some debt in order to make that one happen, and I wasn’t ready to do that yet. So, that one probably got eliminated first.

And then the other one was the karate studio. And it had a unique stand on there, and they had a huge focus on bullying and using karate as a tool to help people, you know, to educate about bullying and teaching people how to deal with bullying. I’ve always been involved in the youth, you know. I’m very active in an organization called Young Life, always coached my son in his athletic endeavors and involvement with confirmation classes in my church. So I’ve always been involved in the youth, so that one was appealing to me because it allowed me to continue doing that, which, you know, I already knew that I like doing. That one I pursued pretty far down the road, and currently, although there was a little bit of a lapse in time, and I’ll address that in a second, but I’m pretty much been currently. Until the point where, again, going back to something I said earlier, make sure you understand the numbers, and I couldn’t make the numbers work on that one. When it got to the point of validation, where I was talking with their franchise owners, just things didn’t add up for me. And so, that was the reason I bailed out of that one. But I actually went through that validation process while kind of on hold with Griswold. So little unique spin on my relationship there.

So, as I’ve said earlier, you know, I was in the energy business and small company got bought and sold a few times. The last acquisition was by a very large corporation, and they gave us three-year contracts to stick around. So it was in that first year of that contract that I made the decision that I was going to, you know, do something different. And so, that was my first time that I really contacted Griswold. And I actually made up my mind that I was gonna go down the road with them, but I wanted to fulfill my obligation under that three-year contract. So I wanted to wait a year or two, and they wouldn’t let me. At the time, I wasn’t really happy about that. I was willing to write the check to pay the franchise fee, I just couldn’t start working, at least not full time, until I fulfill my obligation under my contract with the other company. And to their credit, they said, “No, that’s not how we operate. We want you to be able to devote your full time to it when you buy. When you write your check, we have a timeline that we like to adhere to. And by you doing this, it wouldn’t allow you to adhere to our timeline. And so, you know, we’re gonna have to say no to that.” And I said, “Okay. Well, I might give you a call back in a year.” And you know, a year later, we touched base, and it was during that year that I did the validation on this karate business and came to the conclusion that, again, I couldn’t make the numbers work. So I said I did them concurrently, but it was a little bit of a lapse in time there as that was going on. So, probably a little different, probably. I’m sure I was the only person who’s ever done that, so.

Amanda: A little bit of a unique story there, absolutely, but really ties into, you know, and as our listeners go along on this journey with me, looking at potentially making that jump themselves from corporate America or from a career to owning a franchise. And what was it about Griswold Home Care that you said, “You know what, it’s been a year?” You could have done any myriad of different things, and whether, you know, we called you or you called us, or whatever the case may be, we went forward from that point. And here you are, four and a half years later, running a very successful office. But what was it about Griswold Home Care that you said, “This is it. This is where I’m gonna invest my time and my money and make that transition and grow my office?”

Jim: Yeah. So I think, for me, the deciding factor was, again, as I mentioned earlier, the family dynamics that I went through in that two-year period from, you know, that first year to the final year of my contract, with my father having lung cancer and then my mother-in-law having pancreatic cancer. Again, it was that experience that kinda helped me say, “You know what, this is the business that I wanna be in.” And there’s a reason why, you know, I didn’t move forward with the other opportunities that I looked at, that this is the industry for me. And so then the question is, “Okay, why Griswold instead of somebody else?” And to be honest, I didn’t look hard or seriously at any other operation, and part of the driver, and this is gonna be kind of ironic, but part of the driver was, at the time, Griswold’s model was one…it was kind of a quasi-independent contractor model, which was attractive to me simply because, you know, I didn’t know a whole lot, but what I did know is I did want to be the employer of a large low-wage employee base. I didn’t want the headache, my perceived headache associated with that type of a business. And so the Griswold model was very attractive to me because it allowed me to still do home care without having to be the employer. So, that was probably the biggest driver in my decision to move forward with Griswold versus somebody else. As the case may be, I actually ended up changing my model, and I now have a full employment model, which is, again, another really good move, I think, on my part. So, anyway, it’s all worked out well.

Amanda: Good. I’m glad that it worked out well. And I wanna kinda go back to what you said about, you know, that transition too, because we just kind of glossed over it. But we talk a lot about franchisors and franchisees as almost a marriage, right. It’s a two-way street and it’s not, you know, a sales thing, and it’s we’re in this together kind of deal. But how important, and does the fact that…you said, you know, “I can’t be involved for a year or two,” based on your current situation, and they said, you know, “Well, that’s not gonna work for you. And in order for you to be successful, you really do need to be involved in the business.” So, did that play any part in your decision, you know, the fact that whoever you talked to at that point said like, “Oh, this is what you need to do in order to be successful,” rather than just take your money and sell you something that they knew wasn’t gonna work out the best for you? Did that factor in your decision at all?

Jim: Yeah, absolutely. I had a sense that the, what’s the word, integrity of the business, which was obviously, you know, I was dealing with one individual at Griswold, but that one individual in my mind represented the company, and integrity with which he operated and [inaudible 00:28:30] himself to me was symbolic of the integrity of the company as a whole, huge factor in my decision. Kinda go back to, you know, something I think that I’ve said, I wanted this business to be something that allowed me to give something back, but at the same time, I also want it to be a business that the culture of the business aligned with my culture, and I didn’t want to be part of an organization that was all about just, you know, to your point, getting my money and moving on to the next deal. I wanted to know that they have the same culture, they share the same ethics, same business ethics. And I certainly got that sense from Griswold, which is probably the primary reason for me, and I don’t remember exactly who called who, but for reconnecting after that year was that I had a really good feeling about, you know, the relationship that I would have with this company. And to your point, you know, it does become a family, and you want that family to be a good family, not a dysfunctional family. I had a good feeling about it, and that feeling is certainly, you know,