Welcome to franchise talk with Emery Orosz, industry specialist in buying and selling franchises presented by Morgan & Westfield, a nationwide leader in business sales and appraisals. Here's your host, Emery Orosz with today’s special guest.
Emery: Hey, good afternoon, Mary Kay. [This is] Emery Orosz of Morgan & Westfield. How are you today?
Mary Kay: Good afternoon, Emery. I'm fabulous. It's a spectacular day in Waco, Texas.
Emery: Good to hear. Same over here in Santa Fe. For those in the audience, I just want to introduce Mary Kay Liston. She's the president of 5 Star Painting, and I'm excited to be working with the team over the Dwyer Group to help them open some new franchises this year. Mary Kay, I understand 5 Star is the newest addition to the Dwyer Group franchise family so I guess my first question is why did the Dwyer Group decide to purchase 5 Star Painting?
Mary Kay: Well, you're familiar with the Dwyer Group, and you know that there are seven other brands. And what we have in…
Mary Kay: Common at 5 Star Painting with those other seven brands is that we're all essential home services.
Mary Kay: And so a painting company fits in very nicely with a plumbing company, HVAC , appliance repair, glass repair, rainbow restoration... all of our other brands, the grounds guys for landscaping… the painting just fits in very nicely.
Emery: Okay. So, just a good all-around fit for Dwyer Group as a whole.
Mary Kay: It was, and what we've been able to do is learn from each other because there are commonalities among the brands, amongst services, and so, it's a very synergistic campus where we're always going to school on each other… so this one fits in very nicely.
Painting company fits in very nicely with a plumbing company, HVAC , appliance repair, glass repair, rainbow restoration... all of our other brands, the grounds guys for landscaping… the painting just fits in very nicely.
Emery: Excellent. Excellent. Now, I know a lot of the audience are thinking, well, "I don't have any painting experience whatsoever." How would you address that concern?
Mary Kay: I've never personally purchased a can of paint by myself. [Laughter] But really, what we're selling is great customer service, and the vehicle is the paint. So, when I look across the franchise ownership, I see a lot of former Fortune 100 executives, a lot of guys and women who have never picked up a paint brush in their lives, and it's really not necessary. It's running a customer service business.
Emery: Okay. So, no painting experience necessary…
Mary Kay: No painting experience is necessary because you're going to be hiring estimators or sales people. You'll be hiring project managers…
Mary Kay: Or job bosses and you're going to subcontract for the painters.
Emery: Okay. I understand, from doing a little research, that it's a home-based business as well. So, how does that work exactly with all these people involved? How can it be a home-based business?
Mary Kay: Well, because the majority of the workers are going to be your painters and as subcontractors, they go to your customers' job site when you would…
Mary Kay: Meet them there but that's… you're not directing their every move. They're not employees.
Emery: I see. Okay. That makes sense. Can you give me an idea, Mary Kay, of just some of the costs involved? Say someone was interested in, maybe, opening a new franchise in Ohio—and I just say that because that's where I was born and raised—but what are some of the costs that are involved?
Mary Kay: Well, the… initially, of course, there's purchasing the territory…
Mary Kay: And then, there are some technologies start-up costs. Certainly, you're going to want to market your business. That's going to be one of your cost drivers in the beginning, but when it comes to needing equipment, it's really quite simple. You need to have a laser measuring tool. You need to have a couple of wheels, one to measure [the] interior and one to measure [the] exterior. The way that we go to market is we create the estimate right on the job site so you'll have a laptop computer and a printer in your vehicle, and you'll be able to print out the estimate right then and bring it right back to the home owner.
Emery: Yes. And you mentioned that laser device... I think I've seen those things at Home Depot. I think they're less than $300….
Mary Kay: Yes.
Emery: So, we don't want to give them the impression that that's a real expensive piece of equipment.
Mary Kay: Right, it's not. You can really get going at far less expense than a franchise if it required having a brick and mortar site or if you had to have a squad of vehicles. In most cases, the owner will start out serving the role as the estimator and the job boss, [Laughs] the one who goes out and starts projects and then, as your business grows, then you would add those positions underneath you…
Mary Kay: The vehicle wrap is quite striking, so you will want to wrap the vehicle that you drive around town. It's got big paint brushes on it. [Laughs] It's very eye-catching.
Emery: Yes. And you can go to just a regular guy that does vehicle wraps, and you know, I used to be in that business, and I think I used to wrap a vehicle for just a couple hundred dollars so that's not expensive at all, but it is good publicity. It draws attention to the brand, and so it really gets your name out in the community. So, I imagine the phone number's on there as well?
Mary Kay: Yes. The phone number is there, and the way that we operate is that the owner does not have to answer phone calls. We have a call center…
Emery: Ahhhh… Okay.
Mary Kay: That takes all of the leads, either over the phone or the online leads, and then they'll go ahead and schedule estimation appointments for the owner, or if you have estimators, then, for your estimators. If they have your calendars, they actually just plug it in.
The way that we go to market is we create the estimate right on the job site.
Emery: Okay. So everything goes into the call center and then…
Mary Kay: Yes.
Emery: The call center would imagine calls the owner, the franchisee, or the job boss and sets up the appointment.
Mary Kay: Actually, if they have access to the calendar…
Mary Kay: They capture all of the customer information and put that into the system…
Mary Kay: It's really pretty fixed. When we talk about a home-based business, I know you're picturing, "Oh no! Someone's sitting while answering the phone all day long." [Laughter] That's not it.
Emery: [Laughs] “Honey, get the phone will you?” [Laughs] So, yes, that's a good system. What about some... we talked a little bit about the initial equipment that you need right out of the gate. Are there any other start-up items that would be needed by the new franchisee?
Mary Kay: I mentioned marketing, and marketing is really important because you are going to be doing the local marketing yourself. Certainly, we have programs where we help with the online local business listings, that sort of thing, but you're going to want to get lawn signs, you're going to want to get logo wear, you're going to want to get T-shirts with a logo on it for the painters, so they can be advertising your business while they're out there doing that great job in the neighborhood.
Emery: Maybe some business cards as well?
Mary Kay: Yes. Yes…
Mary Kay: Business cards and flyers and door hangers and all that good stuff.
You're going to want to get lawn signs, you're going to want to get logo wear, you're going to want to get T-shirts with a logo on it for the painters, so they can be advertising your business while they're out there doing that great job in the neighborhood.
Emery: Okay. You know, Mary Kay, a word that's thrown around a lot is, you know, is the business scalable? A lot of folks may not know exactly what that term means. Would you mind explaining what a scalable business is?
Mary Kay: Sure. As your business grows, as word gets out in the community and as your reputation starts to take hold in the community, then, you're going to get busier. In order to satisfy those customers, you can just… because the call center answers all the phone calls so you don't have to hire another person to answer the phones, none of that… all you need to do is just secure other painting crews to work as sub-contractors for you so you can be doing two, three ,or four, how many jobs you want to do on the same day using different crews.
Emery: So basically, you can take it to whatever level you're comfortable with?
Mary Kay: Yes.
Mary Kay: Yes, exactly. The infrastructure is not impacted so much by when you grow.
Emery: I forgot to ask you at the beginning. How long has 5 Star been part of the Dwyer Group? It's a recent acquisition.
Mary Kay: January 5th we officially launched [Laughs] . . .
Emery: Of this year?
Mary Kay: Of this year, yes….
Mary Kay: So, we're a couple of months into it. But 5 Star the brand has been around for 10 years.
Emery: Right. But the Dwyer Group just purchased...
Mary Kay: Correct.
Emery: And brought it into the franchise family.
Mary Kay: Correct.
Emery: So, is it too early, Mary Kay, to be getting any feedback from the franchisees or have you been getting some kind of feedback, and if so, what have you been hearing?
Mary Kay: Well, in fact we've been seeking feedback from the very beginning from franchise owners. And I know that sometimes it can be a little bit unnerving if your parent company all of a sudden changes. We're fortunate that the annual convention occurred just a couple of weeks after the acquisition, so Dina Dwyer-Owens and some of the other executives from the Dwyer Group came with me to Orlando. We were able to address concerns that the franchise owners had face-to-face, one-on-one. The timing was great for that…
Mary Kay: But the franchisees are happy [Laughs] at 5 Star.
Emery: So far…
Mary Kay: Yes.
Emery: So far so good.
Mary Kay: Yes.
Emery: You said Dina Dwyer... wasn't she in on Undercover Boss?
Mary Kay: She was, yes.
Mary Kay: Yes.
Emery: Any chances of you going… [Laughter] going to do… [Laughter continues] we’ll leave that for our next conversation. That's on the table, at least, right?
[Laughs] We'll see. That remains to be seen.
Mary Kay: Yes.
Emery: Anything else you wanted to add, Mary Kay? Why does someone want to look seriously at 5 Star?
Mary Kay: Well…
Emery: Anything you'd like to add?
Mary Kay: Yes. I'd tell you what. The systems, the software, the call center, all of that integrated backend that’s in place is really terrific. Everybody needs… I mean, every community needs someone to paint, and we've carved out a really nice niche for ourselves where we're not the biggest yet, but we're certainly striving to be. And it's a network that's supportive of one another, the franchise owners, the peer groups, they do spend a lot of time helping each other along and coaching each other. We've got a brand-new franchise support team that we just put in place in the last two months. We've got lots of support for franchise owners, and it's just a great model. It's a wonderful model. In fact, a lot of our other franchise owners are peeking over […], saying hmm? [Laughter]
Emery: Are they really?
Mary Kay: Yes.
Everybody needs… I mean, every community needs someone to paint, and we've carved out a really nice niche for ourselves where we're not the biggest yet, but we're certainly striving to be.
Emery: It's a great opportunity for folks out there, and as I mentioned at the onset, I'm excited to be working with the Dwyer Group. I just love you, guys. [Mary Kay laughs] I love the folks over there. I haven't gotten the opportunity to get over to Waco yet, but I have a plan for this summer to drive over there and meet everybody. Mary Kay, thanks so much for your time this afternoon, and maybe we can talk in the future about more aspects of 5 Star. Again, I appreciate your time this afternoon.
Mary Kay: My pleasure. Thank you, Emery, and we would love to host you out here in Waco.
Emery: Thank you, Mary Kay. You take care.
Mary Kay: Okay, thanks.
You've been listening to franchise talk with Emery Orosz, Morgan & Westfield's expert in buying and selling franchises. If you'd like more information about selling or buying a business franchise, call Emery at Morgan & Westfield at 928-793-3000 or send in an email to emery at firstname.lastname@example.org.
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If you would like additional information on Five Star Painting, please call Emery Orosz at 928-793-3000.