Welcome to the Fear and Greed Daily Interview. I'm Michael Thompson. As we head into the warmer months, it seems a pretty good time to talk about swimming pools, but bear with me because this is serious business. One of the most successful Australian franchises is a company called Poolwerx. Anybody with a pool in their backyard would probably be familiar with them. Even if you don't have a pool in your backyard, you've probably seen their vehicles buzzing around the suburbs. The business now has more than 150 stores, well over 500 service vehicles and operates across Australia, New Zealand and the US. It's the world's largest swimming pool and spa service company. We want to take a look today at what has made this business so successful and why the founder chose a franchise model to roll it out. John O'Brien is the founder and CEO of Poolwerx and a serial entrepreneur. John, welcome to Fear and Greed.

Welcome to the Fear and Greed Daily Interview. I'm Michael Thompson. As we head into the warmer months, it seems a pretty good time to talk about swimming pools, but bear with me because this is serious business. One of the most successful Australian franchises is a company called Poolwerx. Anybody with a pool in their backyard would probably be familiar with them. Even if you don't have a pool in your backyard, you've probably seen their vehicles buzzing around the suburbs. The business now has more than 150 stores, well over 500 service vehicles and operates across Australia, New Zealand and the US. It's the world's largest swimming pool and spa service company. We want to take a look today at what has made this business so successful and why the founder chose a franchise model to roll it out. John O'Brien is the founder and CEO of Poolwerx and a serial entrepreneur. John, welcome to Fear and Greed.

Thank you, Michael. Good to be here.

Thank you, Michael. Good to be here.

Let's start at the very beginning. Why pools? What drew you to the business of pools?

Let's start at the very beginning. Why pools? What drew you to the business of pools?

It's a funny story, Mike. I've been in franchising most of my career and after having a corporate career in franchising and then four startup franchise brands of my own, I went looking for my next franchise opportunity. I actually travelled the world for six months and I had a criteria, a handful of criteria that I was looking for. I was after an industry. I wasn't after a brand. I wasn't after a business. I went looking for an industry that had a high service component. It had repeat clients. It had high gross profit margins. It was an established business. I didn't want to build one, but most importantly, it was a disorganised industry, and had global upside. So I had all of those things in mind and it was like trying to find a needle in a haystack. It was very hard. Because franchising organises disorganised industries. And lo and behold, I was in California. I saw a beat up pool truck go by, did some homework. It didn't make sense that that beat up pool truck was going into wealthy homes with swimming pools and bingo. I found that the pool industry, both in retail and service, was disorganised globally. And I bought a little business back here in Australia with a store and a few vans, and away we went about franchising it, 30 years ago.

It's a funny story, Mike. I've been in franchising most of my career and after having a corporate career in franchising and then four startup franchise brands of my own, I went looking for my next franchise opportunity. I actually travelled the world for six months and I had a criteria, a handful of criteria that I was looking for. I was after an industry. I wasn't after a brand. I wasn't after a business. I went looking for an industry that had a high service component. It had repeat clients. It had high gross profit margins. It was an established business. I didn't want to build one, but most importantly, it was a disorganised industry, and had global upside. So I had all of those things in mind and it was like trying to find a needle in a haystack. It was very hard. Because franchising organises disorganised industries. And lo and behold, I was in California. I saw a beat up pool truck go by, did some homework. It didn't make sense that that beat up pool truck was going into wealthy homes with swimming pools and bingo. I found that the pool industry, both in retail and service, was disorganised globally. And I bought a little business back here in Australia with a store and a few vans, and away we went about franchising it, 30 years ago.

I want to come back to a few of those points in what you were looking for in a successful franchise, but just for some of the basics of the Poolwerx business, and for listeners who aren't familiar with it, or haven't used you before. What do you actually do? What's the main service that you're providing?

I want to come back to a few of those points in what you were looking for in a successful franchise, but just for some of the basics of the Poolwerx business, and for listeners who aren't familiar with it, or haven't used you before. What do you actually do? What's the main service that you're providing?

I always like to put why you do it up first, and for us, we create backyard family memories that create Australian, New Zealand, American around the pool with your family and friends and they're enduring memories. And we make sure they're safe and fun. To deliver that, we have both retail stores that cater for the do- it- yourselfer, and we have both home and commercial mobile pool service that caters for the do it for me. A lot of people think we just do service, but importantly, we also treat the pool and sell the chemicals. We do all the maintenance and repair of the equipment, sell the equipment and we do service. So we're not just a labour business. But we don't build pools. Once they're built, we look after everything you could possibly imagine with your pool in a one stop shop.

I always like to put why you do it up first, and for us, we create backyard family memories that create Australian, New Zealand, American around the pool with your family and friends and they're enduring memories. And we make sure they're safe and fun. To deliver that, we have both retail stores that cater for the do- it- yourselfer, and we have both home and commercial mobile pool service that caters for the do it for me. A lot of people think we just do service, but importantly, we also treat the pool and sell the chemicals. We do all the maintenance and repair of the equipment, sell the equipment and we do service. So we're not just a labour business. But we don't build pools. Once they're built, we look after everything you could possibly imagine with your pool in a one stop shop.

Do you find that there's a lot of people that build a pool and think that they're going to be able to manage it themselves and then actually realise there's a fair bit of work involved in this?

Do you find that there's a lot of people that build a pool and think that they're going to be able to manage it themselves and then actually realise there's a fair bit of work involved in this?

It's part of the pool builders sell is that I'll build you a pool that you don't have to touch. But as we know in most things, it's like buying a brand new car. You end up finding that you've got it in the shop quite a bit and it costs a fair bit. But we're finding that homeowners very quickly realize they need a professional service to look after their pool and keep it clean and healthy and shiny and sparkling.

It's part of the pool builders sell is that I'll build you a pool that you don't have to touch. But as we know in most things, it's like buying a brand new car. You end up finding that you've got it in the shop quite a bit and it costs a fair bit. But we're finding that homeowners very quickly realize they need a professional service to look after their pool and keep it clean and healthy and shiny and sparkling.

And so I suppose that goes back to one of those principles that you were looking for, something that has repeat business. Who would be the typical client then, is it a private kind of backyard pool, people who are just looking to maintain their own pool and therefore are going to be coming back to you every couple of weeks or every month?

And so I suppose that goes back to one of those principles that you were looking for, something that has repeat business. Who would be the typical client then, is it a private kind of backyard pool, people who are just looking to maintain their own pool and therefore are going to be coming back to you every couple of weeks or every month?

Most of our clients, we look after 20% of Australia's swimming pools of which there's about 1.5 million pools in the ground. And we look after most pools on a monthly basis, that's the core of our business. We have lots of other services. We look after pools of houses that are being sold and people that are on holidays, or people that are too sick or elderly to look after their pool. But yeah, that's the core of our business, a monthly repeat service, which is gold from a marketing point of view, because you're constantly building and building on your client base.

Most of our clients, we look after 20% of Australia's swimming pools of which there's about 1.5 million pools in the ground. And we look after most pools on a monthly basis, that's the core of our business. We have lots of other services. We look after pools of houses that are being sold and people that are on holidays, or people that are too sick or elderly to look after their pool. But yeah, that's the core of our business, a monthly repeat service, which is gold from a marketing point of view, because you're constantly building and building on your client base.

So you mentioned the criteria when you were searching for the business. High service component, repeat business, something that is quite disorganised as an industry overall. But once you'd settled on that, why did you decide to franchise it? Why didn't you decide to build it up yourself and essentially operate every element as a company in a non- franchise model?

So you mentioned the criteria when you were searching for the business. High service component, repeat business, something that is quite disorganised as an industry overall. But once you'd settled on that, why did you decide to franchise it? Why didn't you decide to build it up yourself and essentially operate every element as a company in a non- franchise model?

I was lucky enough in my twenties out of university to join corporate. I joined Cadbury Schweppes, and whilst I was there in my mid twenties, I found myself being promoted to the head of franchising of Cadbury Schweppes in Australia. So it's become my career and it really resonates with me because I come from a strong entrepreneurial family, a multi- generational one. And what I fell in love with, with franchising is the entrepreneurial nature, or some people call it intrapreneurial because you're actually buying in as a franchisee to an established brand, which is quite an interesting twist. But what franchising does, the corporate creates the brand and the system. When you add that to the franchise partner coming in and their guts and determination and drive, you add the brand to the drive and you've got an insatiable force. The person that owns the business, runs the business. The brand looks after the back house. The brand, the supply, the training. The franchise partners look after the front of house, the client facing part. And when the person that owns a business runs the business, you get an enormous amount of entrepreneurial energy. And I love dealing with that. I particularly love when franchise partners or prospective people come to me and they talk about the dreams they have for them, or them and their wife, for their family, their children. And I love working with them to see that come true on the sweat of their guts and determination. It's very fulfilling.

I was lucky enough in my twenties out of university to join corporate. I joined Cadbury Schweppes, and whilst I was there in my mid twenties, I found myself being promoted to the head of franchising of Cadbury Schweppes in Australia. So it's become my career and it really resonates with me because I come from a strong entrepreneurial family, a multi- generational one. And what I fell in love with, with franchising is the entrepreneurial nature, or some people call it intrapreneurial because you're actually buying in as a franchisee to an established brand, which is quite an interesting twist. But what franchising does, the corporate creates the brand and the system. When you add that to the franchise partner coming in and their guts and determination and drive, you add the brand to the drive and you've got an insatiable force. The person that owns the business, runs the business. The brand looks after the back house. The brand, the supply, the training. The franchise partners look after the front of house, the client facing part. And when the person that owns a business runs the business, you get an enormous amount of entrepreneurial energy. And I love dealing with that. I particularly love when franchise partners or prospective people come to me and they talk about the dreams they have for them, or them and their wife, for their family, their children. And I love working with them to see that come true on the sweat of their guts and determination. It's very fulfilling.

Stay with me, John. We'll be back in a moment.

Stay with me, John. We'll be back in a moment.

I'm speaking to John O'Brien, founder and CEO of Poolwerx. Franchising is essentially by its very nature, quite decentralised in that each operator, each franchisee is running their own business, of course with the guidance and support of headquarters. How hard then is it as the founder to actually implement a level of quality control then, especially when you think that the business itself is quite spread out?

I'm speaking to John O'Brien, founder and CEO of Poolwerx. Franchising is essentially by its very nature, quite decentralised in that each operator, each franchisee is running their own business, of course with the guidance and support of headquarters. How hard then is it as the founder to actually implement a level of quality control then, especially when you think that the business itself is quite spread out?

It's always a challenge in any franchise brand. Compliance or what we like to call alignment. You can go too far. Remembering that if a franchise partner comes in, they come in, they're putting their house on the line. They're often investing a lot of their capital, if not risking all of their capital. And they've got their own energy and twists and ideas about how to run with your brand. Some brands I believe go too far with dictating the alignment or compliance in their business, and they lose a lot of the benefit of the ideas they learn. Like McDonald's say that 60% of their new ideas come from their franchise partners. So we have a level of alignment, not compliance in our business that leaves our franchise partners a fair degree of autonomy to play with the brand and come up with new ideas. So it's a balancing act and you have to be prepared to give that up a little bit.

It's always a challenge in any franchise brand. Compliance or what we like to call alignment. You can go too far. Remembering that if a franchise partner comes in, they come in, they're putting their house on the line. They're often investing a lot of their capital, if not risking all of their capital. And they've got their own energy and twists and ideas about how to run with your brand. Some brands I believe go too far with dictating the alignment or compliance in their business, and they lose a lot of the benefit of the ideas they learn. Like McDonald's say that 60% of their new ideas come from their franchise partners. So we have a level of alignment, not compliance in our business that leaves our franchise partners a fair degree of autonomy to play with the brand and come up with new ideas. So it's a balancing act and you have to be prepared to give that up a little bit.

And so I suppose then it really does rely on that investment by the franchisee that this is their business. They're going to want to make it succeed, and in a way that is going to be the quality control and implement that high level of customer satisfaction that you're going to need.

And so I suppose then it really does rely on that investment by the franchisee that this is their business. They're going to want to make it succeed, and in a way that is going to be the quality control and implement that high level of customer satisfaction that you're going to need.

There's an interesting stat in franchising. I don't know whether I invented it or somebody else did, but I'd like to call it like the 10/80/ 10 rule. 10% of the people that join franchising are incredibly driven people and they'll probably be successful in whatever they do, whether it's in franchising or not. There's another 10% of people at the other end who probably shouldn't have bought a franchise. They got excited at the barbecue one afternoon with their mates and went out and bought one. They probably should have stayed employed because they don't have the energy to get up every morning and lead their team. It's the 80% in between that have a dream and a vision for something better, that added to the brand, make a success out of it. And that's where franchising really sings.

There's an interesting stat in franchising. I don't know whether I invented it or somebody else did, but I'd like to call it like the 10/80/ 10 rule. 10% of the people that join franchising are incredibly driven people and they'll probably be successful in whatever they do, whether it's in franchising or not. There's another 10% of people at the other end who probably shouldn't have bought a franchise. They got excited at the barbecue one afternoon with their mates and went out and bought one. They probably should have stayed employed because they don't have the energy to get up every morning and lead their team. It's the 80% in between that have a dream and a vision for something better, that added to the brand, make a success out of it. And that's where franchising really sings.

So moving on from the franchising model, over the last 30 years, you would've seen some good times and some pretty tough economic times. Have certain periods been tougher than others? And I suppose I'm thinking of two, in particular, the pandemic and what lockdowns might have done to the business. But also after the GFC. Is pools and the upkeep of a pool, something that drops back during tough economic times?

So moving on from the franchising model, over the last 30 years, you would've seen some good times and some pretty tough economic times. Have certain periods been tougher than others? And I suppose I'm thinking of two, in particular, the pandemic and what lockdowns might have done to the business. But also after the GFC. Is pools and the upkeep of a pool, something that drops back during tough economic times?

I remember when the global financial crisis hit. We thought people would definitely cut back on pool servicing and look after the pool themselves. It didn't happen at all. We're 30 years old next year, and there's only been one year that we haven't had double digit growth. So right through GFC, I don't know what people cut back on, but they didn't cut back on their pool service. And I hear from colleagues that have other home service franchise brands, the same thing happened to them. The good thing for us is that we're not like a home cleaning business. We're a home pool service and maintenance business. So swimming pools are a living beast. They consume chemicals and consume equipment, one of the reasons I chose it. So you can't actually turn it off or put it in a garage or ignore it. You can't let the grass grow. You can let the grass grow, but you can't ignore the pool. So that was very important for us. And it's quite technical. For those people who have had pools, looking after them. They're a tricky thing. So you need technically qualified people to look after them and balance them. So right through the GFC, we went really strong. It was important for us. We kind of future proofed our business. So we started as a domestic home pool service company and we saw that we had winter downturn in demand and in cash flow. So we grew a commercial side to our business, which is constant all year round. And it has six streams. Hospitality and defence forces and universities and schools and whatever. Then we saw that we were missing out on the do- it- yourself market, so we opened retail stores. And then we saw where we were too focused on labour only, and we started selling equipment and selling chemicals and labour. So we've got the domestic, the commercial, the retail. We've got three roads to market and we've got three primary product areas, equipment, chemicals, and labour. So that kind of future proofs us against all sorts of downturns, and we can pull lots of levers at different times. I mean, one of the other interesting things in franchising generally and for us, is that if there is a quiet economic time outside of our business, it's often a time where you get an increase in demand for franchising because people want more security about their future. They want to buy their future rather than run the risk of being let go. So there's always a spike as there is at the moment.

I remember when the global financial crisis hit. We thought people would definitely cut back on pool servicing and look after the pool themselves. It didn't happen at all. We're 30 years old next year, and there's only been one year that we haven't had double digit growth. So right through GFC, I don't know what people cut back on, but they didn't cut back on their pool service. And I hear from colleagues that have other home service franchise brands, the same thing happened to them. The good thing for us is that we're not like a home cleaning business. We're a home pool service and maintenance business. So swimming pools are a living beast. They consume chemicals and consume equipment, one of the reasons I chose it. So you can't actually turn it off or put it in a garage or ignore it. You can't let the grass grow. You can let the grass grow, but you can't ignore the pool. So that was very important for us. And it's quite technical. For those people who have had pools, looking after them. They're a tricky thing. So you need technically qualified people to look after them and balance them. So right through the GFC, we went really strong. It was important for us. We kind of future proofed our business. So we started as a domestic home pool service company and we saw that we had winter downturn in demand and in cash flow. So we grew a commercial side to our business, which is constant all year round. And it has six streams. Hospitality and defence forces and universities and schools and whatever. Then we saw that we were missing out on the do- it- yourself market, so we opened retail stores. And then we saw where we were too focused on labour only, and we started selling equipment and selling chemicals and labour. So we've got the domestic, the commercial, the retail. We've got three roads to market and we've got three primary product areas, equipment, chemicals, and labour. So that kind of future proofs us against all sorts of downturns, and we can pull lots of levers at different times. I mean, one of the other interesting things in franchising generally and for us, is that if there is a quiet economic time outside of our business, it's often a time where you get an increase in demand for franchising because people want more security about their future. They want to buy their future rather than run the risk of being let go. So there's always a spike as there is at the moment.

Well, I suppose that leads into my next question, which is about expansion and where you see the business going. I mentioned that you're in Australia, New Zealand and the United States. Can you expand beyond that? And does it come down to finding countries that have this backyard pool culture similar to Australia? Is that something that's fairly unique?

Well, I suppose that leads into my next question, which is about expansion and where you see the business going. I mentioned that you're in Australia, New Zealand and the United States. Can you expand beyond that? And does it come down to finding countries that have this backyard pool culture similar to Australia? Is that something that's fairly unique?

One of the interesting things about us. Most brands expand in franchising because they get a phone call from Dubai from somebody's auntie, which is a reactive way of expanding, and it normally ends in tears. We started our business 30 years ago, wanting to be a global business. That's why I did the homework I did. And then about 20 years ago, we went and did a lot of work with consultants to work out what were the list of countries we could go into and bingo, we found about 20 countries that met our criteria and they were simply hot and rich. So that's what a lot of consulting money boiled down to. So we went and protected our brand, our domain name and our trademark in those 20 countries all that time ago. Thank heavens we did. And that's why we expanded into New Zealand as our test once we got Australia covered. Expanded into New Zealand as our test market, and then obviously went into the biggest opportunity, which is the US where we're now in eight different states with a head office in Dallas. And Europe is obviously our next target. We were close to an acquisition pre- COVID and we're back reengaging with those people now. An interesting fact, the five largest pool countries are also the five largest franchise nations, USA, Brazil, France, Australia, and Spain. So that's where we're heading.

One of the interesting things about us. Most brands expand in franchising because they get a phone call from Dubai from somebody's auntie, which is a reactive way of expanding, and it normally ends in tears. We started our business 30 years ago, wanting to be a global business. That's why I did the homework I did. And then about 20 years ago, we went and did a lot of work with consultants to work out what were the list of countries we could go into and bingo, we found about 20 countries that met our criteria and they were simply hot and rich. So that's what a lot of consulting money boiled down to. So we went and protected our brand, our domain name and our trademark in those 20 countries all that time ago. Thank heavens we did. And that's why we expanded into New Zealand as our test once we got Australia covered. Expanded into New Zealand as our test market, and then obviously went into the biggest opportunity, which is the US where we're now in eight different states with a head office in Dallas. And Europe is obviously our next target. We were close to an acquisition pre- COVID and we're back reengaging with those people now. An interesting fact, the five largest pool countries are also the five largest franchise nations, USA, Brazil, France, Australia, and Spain. So that's where we're heading.

It seems like a fairly good match up then.

It seems like a fairly good match up then.

Yeah.

Yeah.

One last question, John, before we wrap up. What are you seeing happening within the broader franchising space? I understand there's a bit of interest now from private equity.

One last question, John, before we wrap up. What are you seeing happening within the broader franchising space? I understand there's a bit of interest now from private equity.

Because we've got quite a large US business, we've seen over the last three years, maybe five, that private equity, like in the States, there's $ 3 trillion looking for a home. What they call it won't matter. But the private equity has identified franchising as another area of investment, and we've seen quite an aggregation of brands within retail, within fast food. And in the last couple of years in service, home service brands. And what they're doing, they're gobbling up home service brands, packaging them up and then flipping them into IPOs and public. It's interesting.

Because we've got quite a large US business, we've seen over the last three years, maybe five, that private equity, like in the States, there's $ 3 trillion looking for a home. What they call it won't matter. But the private equity has identified franchising as another area of investment, and we've seen quite an aggregation of brands within retail, within fast food. And in the last couple of years in service, home service brands. And what they're doing, they're gobbling up home service brands, packaging them up and then flipping them into IPOs and public. It's interesting.

Yeah, it certainly is. John, thank you very much for talking to Fear and Greed this morning.

Yeah, it certainly is. John, thank you very much for talking to Fear and Greed this morning.

A pleasure, Mike. Thanks for having me on.

A pleasure, Mike. Thanks for having me on.

That was John O'Brien, founder and CEO of Poolwerx. This is the Fear and Greed daily interview. Join me and Sean Aylmer every morning for the full Fear and Greed podcast with all the business news you need to know. I'm Michael Thompson. Have a great day.

That was John O'Brien, founder and CEO of Poolwerx. This is the Fear and Greed daily interview. Join me and Sean Aylmer every morning for the full Fear and Greed podcast with all the business news you need to know. I'm Michael Thompson. Have a great day.