(Ambrosio’s note: After having done over a hundred interviews with different franchise executives, I’ve gotten pretty good at sensing who really knows their stuff. Willan Johnson, with his impressive resume and business experience in management consulting and tech, stands out as someone who truly understands the industry he’s in, and has what it takes to lead his company to success. Ever heard of the expression, “bet on the jockey, not the horse”? I don’t know much about the pool industry, but I was very impressed with Willan.)
Prior to VivoPools, Willan Johnson spent 9 years as an entrepreneur in the Internet space and the previous 7 years in management consulting. In early 2000, Willan was very fortunate to jump on board GoTo.com (which later become Overture) and help build the pioneer in Paid Search (an online advertising industry today dominated by Google Adwords).
Overture was later acquired by Yahoo!, and as Vice President and General Manager of the Yahoo! Publisher Network (YPN), Willan’s team launched a new business venture taking an advertising and publisher services platform from concept to a multi-million dollar business.
Willan left Yahoo! in 2006 and spent three years helping a number of Los Angeles based start-ups, including SupplyFrame and SocialVibe, raise venture funding and begin to build their businesses.
Franchise Chatter (FC): Can you tell us how VivoPools got its start?
Willan Johnson (WJ): I would first like to say that I love Franchise Chatter. I have been a vociferous reader for quite some time, and found the information really helpful in structuring our franchise model based on the lessons learned of others. So thank you for creating such a great site. (Ambrosio: That’s awesome. Thank you, Willan!)
In 2009, I started to think about opportunities outside of technology. One day, I was literally brainstorming with some friends and partners, and we agreed the swimming pool industry was a sector that had not achieved the same level of professionalism as other industries had.
At first, we thought about building a marketing platform to help the current pool companies market themselves more effectively through such means as Google maps, realtor referral programs, etc. However, we then recognized the poor experiences we had gone through with our pool service providers and believed there was a bigger opportunity to become a swimming pool management company and provide a new model for pool related services (i.e., a strong focus on client satisfaction, using technology and innovation to lower the overall costs of pool management, and an emphasis on pool safety).
We attended several trade shows, talked to suppliers, potential competitors and consumers, and in late 2009, we decided to jump in and grow a great business.
FC: What are some of the milestones in your company’s history that you are proudest of?
WJ: Life has been a whirlwind since officially starting the business in January 2010. We have launched company-owned operations in 4 states (Arizona, California, Florida and Nevada). Currently, we manage over 3,000 clients and, in two years, have become one of the largest pool companies in the US. In terms of the proudest milestones, I can highlight a few:
- Employee growth and development: Since launching the business (and despite the difficult economy), we have hired many personnel and invested in their careers (including sending several employees back to the National Swimming Pool Foundation in Colorado to become Certified Instructors);
- Financial growth in our company-owned operations: We grew from ~$1.8M year one revenue to ~$6M in year two, and are on track for additional growth in year three;
- Building a loyal base of clients: It has been great to have so many of our clients refer us new business;
- Launching the new franchise model this Spring.
FC: What made you decide to franchise your business at this time?
WJ: There were two primary factors: First, swimming pool management is a very personalized service, especially for homeowners. As a service professional, you are in a client’s backyard 52 times a year (in the Sunbelt) and a relationship begins to form. You know the pet’s name, and watch the kids grow up. And in this regard, it is helpful to have a local owner present who is involved with the community and is motivated to nurture and grow those relationships.
Second, franchising allows us to more quickly expand our services throughout the United States. There is such a big demand for high-quality, affordable pool services, and it is impossible for us to meet our growth expectations without enlisting franchise partners.
FC: What is the state of the pool service and maintenance industry today? What makes this industry an attractive area for franchising?
WJ: For the most part, pool management (i.e., service, repair, remodels) is a highly fragmented industry, and yet it continues to grow as does overall pool ownership in the US and around the world. With 10M swimming pools and another 6M spas, and over $5B in spending on pool services and supplies, there is a big market to serve.
The industry dynamics make it very attractive for franchising. In our company-owned operations, we have found that with proper management of labor and chemical expenses, the overall profit margins can be significant. Moreover, the revenue base is recurring. Some markets are seasonal, but many markets are strong year around.
Finally, the industry is an attractive area for franchising as it is untapped, making it desirable in terms of its growth potential. You will find most competitors are not professionally managed leaving the opportunity for a quality brand name to strongly develop. In fact, the opportunity to align a national brand with a local owner really makes sense for a local service like swimming pool management.
FC: Under your franchise model, what do your franchisees actually do?
WJ: What they really do is provide peace of mind for homeowners and commercial property managers with respect to the safety, convenience and fun of the swimming pool. Franchisees will be responsible for a number of areas:
- Actively seeking out new residential and commercial clients;
- Managing the day-to-day operations of a pool management company, including the cleaning of pools and spas, repairing and upgrading pool equipment, assisting in remodel work as necessary. As part of this service, our franchisees will be not only be servicing pools, but also providing and selling all the related equipment;
- Ensuring that we all offer unparalleled customer satisfaction.
FC: What kind of background and/or skills set do you look for in a prospective franchisee?
WJ: I was struck by a recent interview you completed with the CEO of Menchie’s in that he talked about the importance of business acumen and financial resources, but even more important is the ability for the franchise owner to connect with the community. I completely agree with his view.
Homeowners and commercial property managers are looking for someone they can trust with the responsibility of maintaining sanitized water and a safe pool experience, while also making it a fun and enjoyable environment. As a result, we are looking for franchise owners who care about their community, are very service focused, and have the entrepreneurial desire to partner with us to create a great brand and service offering.
FC: What kind of training and marketing support do you offer your franchisees?
WJ: We really expect our training and marketing support to be unparalleled in the industry. We have learned so much over the past few years through our company- owned business as we have conducted over 12,000 pool cleanings per month, and thousands of repairs. We can now take all this knowledge and share it with our franchisees.
Our comprehensive training program includes both in-field as well as corporate training. Even more importantly, we will be working hard to keep our franchisees updated on new products (i.e., automation, new chemical applications, etc.) to improve the overall pool management experience.
With regard to marketing support, we will partner with our franchisees to launch and build a sustainable and growing business. We are offering traditional marketing support programs (prospective customer lists, sample creatives, etc.), but will also be very aggressive in social media and more innovative marketing programs.
With our operating company, we have tested everything from cable TV advertising to radio to direct mail to referral programs. We know what drives results and what price points work, and in turn, will share and consult with our franchisees on these opportunities.
FC: Does each franchise come with an exclusive territory? Is there an ideal geographic territory or neighborhood for a VivoPools franchise?
WJ: Yes, each franchise does come with an exclusive territory. There really is no ideal territory per se. It is true that the vast majority of swimming pools are in the Sun Belt states, but there are many examples of successful pool operations in the Midwest and North East. I believe the key to success is not so much the territory, but rather the franchise owner’s willingness to engage within the community and develop a sense of trust with clientele.
FC: What can you tell us about the estimated initial investment, royalty fees, and profit potential for a VivoPools franchise?
WJ: The initial minimum investment to start a VivoPools franchise is $24,980, of which $19,900 is the franchise fee. We offer a tiered royalty fee starting at 8% and going down to 7% on sales in excess of $400,000 (annually). Our fees also include a 2% of gross revenue contribution to our marketing fund.
With respect to profit potential, unfortunately, we are not permitted to share this information at this stage in our development due to federal and state law restrictions on these disclosures. Although, as the company ages, we will be able to include this information in our future FDDs.
FC: Can you name a few franchises (inside or outside your category) that you admire, and why?
WJ: One of the great benefits in joining the franchise industry has been the ability to reach out to franchisors who have a number of meaningful experiences to share. I have to thank John Rotche of Belfor Brands (Ductz, Hoodz), Dina Dwyer Owens of the Dwyer Group and others for all their help and insights as we have launched our business.
In terms of specific franchises I admire, a few come to mind: Ace Hardware for their ability to build a national brand, but maintain a local feel for customers; 1-800-Got-Junk and Menchie’s for their innovative marketing programs; Pinkberry for their product innovation. Finally, one has to admire some of the larger franchises (McDonald’s, Subway, etc.) for their long term growth and ability to provide benefit for all stakeholders.
FC: What are your growth targets for 2012 and beyond, and how do you plan to scale the business?
WJ: We just launched our first franchise in early April 2012 and have several more lined up to launch in the next two months. We expect to grow to 10-15 franchises by the end of the year. We are excited to work with our initial group of franchise partners to implement the system and exhibit success for all parties. We will be aggressively marketing and then expanding our business as we grow into 2013.
FC: Is there anything else you wish to share about VivoPools?
WJ: Swimming pools are meant to be a fun environment where friends and families can come together to share in memorable experiences. We are excited to launch our new business, and look forward to working with our franchise partners to help homeowners and commercial properties create these experiences.