Learn How to Grow Your Business Like a Franchise (Without the Franchise!)

Transcript

Malcolm Palmer (00:00.045)
The Making Your Business Less Dependent on You podcast sponsored by A4G Chartered Accountants and Durbin Offshoring. I’ve got a really interesting guest today who I’ll introduce to you shortly. In this podcast, we’re going to find out what the typical small business owner can learn from the franchise world, maybe whether franchising is something for you to consider as well. Before we get started though, I just wanted to take a moment to briefly mention our two sponsors. A4G are an accountancy practice in Kent near Brands Hatch.

with 30 years of uninterrupted growth, specializing in helping business owners deal with all the challenges of growth. Durban Offshoring, our other sponsor, recruit high quality professional desk -based staff in any profession in Durban, South Africa to work for UK businesses. So, let me introduce you to my guest, Danny Hanlon. Danny is the Chief Operating Officer.

Granite and Trend Transformations UK, which is a nationwide franchise, which I’ll get Danny to tell you about. Danny has 25 years of franchise experience and is passionate about the home improvement world. He’s well known in his field for his creative strategic thinking and motivating style. Danny was in effect the company’s first employee, contributing significantly to the brand’s growth in Australia and North America before permanently relocating to the United Kingdom to do it all again.

He now oversees the group’s EU operations based from its headquarters in Tunbridge Wells. The reason I wanted to get Danny on the podcast was twofold really. First of all, there may be some of you who are in service industries and aren’t sure how to grow it further without the considerable stress, the considerable stresses. I’m going to read that again, because then she can edit it. The reason I wanted to get Danny on the podcast was twofold really. First of all, there may be some of you who are in service industries.

and aren’t sure how to grow it further without the considerable stresses that come with building up a bigger workforce. And secondly, for those of you who work on your own or only have two or three staff, so are pretty stretched, it’s that whole thing about thinking of your business as if it is the first franchise, even if you have no intention of ever franchising yourself. So, first question, Danny, what does Tunbridge Wells have that Australia doesn’t?

Danny Hanlon (02:26.781)
So, gosh, Malcolm. You know, I came here in 2004, right, to help establish the company and.

I thought, I really thought that I would be here for two years and that I would return to Australia. And, you know, since being here, I fall in love with this country. It’s home now for me. It’s possibly the longest I’ve ever spent anywhere. And I love the fact that you can be in the city in one moment. You got these beautiful green fields.

in another moment, which is not too far away from the city. I love all the history that’s over here, which we obviously don’t have in Australia. I love the people too. I once heard a stat that…

the UK was something like, in the top three countries in terms of giving money to charities. And I think that just speaks volumes to the values of the people that live in this place. I love the people here. I think it’s funny. I love the pubs, the culture, all those kinds of things. So for me, it’s like my second home, but obviously the place where I’m going to stay really, I enjoy it so much. Yeah.

Malcolm Palmer (03:35.15)
Fantastic, so let’s just confirm. I’ve always thought that Australia was a bit overrated really so All that sunshine and you know

Danny Hanlon (03:39.805)
Yeah, yeah, yeah, you can say that, Miss Anne. You know, tell us. I guess I get the best of both worlds, right? I get to go home every couple of years to see family and friends and things like that. So yeah, I have that luxury also. But yeah, you’re right. We don’t have seasons in Australia. It’s pretty temperate all year round. So the fact you have seasons here too is something that was quite novel when I first got here. But yeah, it’s a fun place. People beat it up too much. I love it here. So anyway.

Malcolm Palmer (04:09.485)
Brilliant, good stuff. Well, just for a sort of a bit of context really, would you mind just telling us about what granite and trend transformations do that will help everyone make a bit more sense of some of the answers to the questions.

Danny Hanlon (04:23.453)
Yeah, sure Malcolm. So, Granite Transformation is we’re a franchise brand. We’re in the home improvement market. We renovate kitchens and we do it in a very unique way. We have a very unique material which we call Ethereum. It’s essentially a quartz and a granite that is only seven millimeters in thickness. And we apply it over existing kitchen worktops.

So rather than tear out your kitchen work top and damage the splash back and all of those sorts of things, we come in and we can transform that work top in as little as one day. And the way that we do that is that…

We have a franchise network, global franchise network, but in the UK we have about 20 franchisees. And they run retail premises in terms of like showrooms, as well as small factories. So they’re responsible for finding the business and generating the leads. They then go into the client’s home and they’ll sell the product.

And once that sale takes place, they have their technical team who go in and make a cardboard template of the existing kitchen work surface. And then that cardboard template is taken back to their factories where they cut the exact shapes and patterns of the material. They put the edges on it, like the returns on it, and then it goes back out to site and it’s all installed in one day. We change the sink and the hob at the same times. And essentially, it’s like a shoebox lid that goes over the existing work surface. We give it a lifetime

Malcolm Palmer (05:56.173)
Yeah.

Danny Hanlon (05:57.455)
warranty we’ve got something like 36 different colors and and we’ve converted over a million kitchens using this particular process since 1996 which is when the company started.

There are a lot of add -ons that we’ve improved on the franchise model over the years. So like these days, about 27 % of our business is also door replacement where we’ll take all the old kitchen doors off and we put new kitchen doors on with soft close hinges, soft close runners. We can improve the functionality of the kitchen as well where we’ll put a lot of like different hardware options in there and convert a lot of those, what would be…

kind of awkward spaces in the kitchens where people would have to get down in the back of the cupboard to actually drawers that come out to you. So from a functionality point of view, it can be easier to use your kitchen. And in a lot of cases, the actual structure of the kitchen is sound, it’s in good shape. It’s just that it needs modernizing in terms of colors and materials. And that’s what our customers love about the service that we provide.

Malcolm Palmer (07:03.629)
Yeah, fantastic. So just for the, everybody knows the word franchising and many people know what it is, but I guess there’ll be some of our readers, some of our listeners that won’t be completely familiar with how a franchising model works. So do you mind just sort of explaining that for everyone?

Danny Hanlon (07:24.253)
Yeah, of course.

You know, I guess essentially a franchise is a business arrangement where an established company, which is called the franchise or license it licenses its operations, its products, its branding, its knowledge to independent operators. And those independent operators are called franchisees and they do that in exchange for a fee. The franchisee then has the right to sell the company’s products and services under its name for a limited period of time.

time.

In our case, our franchise agreements are five years long. A lot of our franchisees renew at that point, right? There’s this automatic right of renewal and a renewal process that we go through. In fact, we have a very mature network. A lot of our franchisees are in their 20th year of operating now. And the fees, there’s an initial franchise fee that you would traditionally pay and that will get you kind of your onboarding training, perhaps some sales and marketing material to get started.

those kinds of things and then there’s ongoing fees. Probably people are familiar with the term royalty. So royalty is one of those ongoing fees. We call it in the UK a management service fee because those funds tend to pay for the support that our franchisees receive. And then other franchise brands and it’s true of ours, we have what we call the national marketing levy where our franchisees will pay a percentage of their revenue into a central fund and then we’ll use it.

Danny Hanlon (08:56.367)
that fund to promote the brand on a kind of a national level right so they tend to be kind of the ongoing fees with our brand as well because we’re selling a product we sell the slabs of quartz and granite to our franchisees we make a margin on the sale of those products into our franchisees also so that’s essentially how our franchise works there’s lots of different alterations of that depending on what kind of sector you know the brands operate in.

but yeah that’s essentially how they work.

Malcolm Palmer (09:30.381)
So what would you consider to sort of be the biggest benefit to somebody becoming a franchisee?

Danny Hanlon (09:38.397)
I think the biggest benefit of franchisee is…

I think first of all, it’s less risky, right? You know, I heard stats that like less than 60 % of new businesses survive past three years. I think that’s a well -known stat in the UK. The failure rates within franchising are correspondingly very, very low. In fact, over the last 20 years consecutively, 90 % of all UK franchisees have reported profitability over the previous 12 month period, right? So I think that speaks volumes to the success of how a franchise

model works and the reason for that being less risky is that other people have done it before you and I think also with every franchise that joins a system you know you get new learnings from it you get an opportunity to refine your model even further based on the skill and experience that that incoming franchisee brings because they all add something to it so certainly it’s less risky in terms of a startup it should give

you a competitive edge right whether that’s a product or a service or both that that brand is promoting you should get a competitive edge out of it.

The other reason for less failure is that you know, there’s a lot of training and support that goes into franchising I think you know when you start a business it can be a very lonely place quite often you feel like you’re the only one Doing this with franchise and you have other franchisees around you you have the support of a team that are employed by the franchise or to help guide you so that hopefully you’re not making the same mistakes as as

Danny Hanlon (11:20.335)
a new startup would do. So that training and support, there’s a lot of value in that. You don’t need any kind of previous experience to run a franchise either. I think that’s important to point out because of that training and support that’s offered. And, you know, with all that, it gives you an opportunity to really hit the ground running, right? Your…

learning curve, if you like, when you start a business should be greatly reduced if you’re joining a franchise brand because others have done that learning for you, right? So.

Malcolm Palmer (11:48.173)
Yeah.

Danny Hanlon (11:51.549)
Hopefully you’re not making those same kind of mistakes. In our brand, you get an exclusive territory to operate in, which I think is kind of neat and novel as well. And, you know, with our franchisees, we get an opportunity to pool our resources. So, yes, we provide the principal product to our franchisees in terms of quartz and granite slabs, but…

Malcolm Palmer (11:54.605)
Yeah.

Danny Hanlon (12:14.589)
There are other ancillary products that our franchisees have an opportunity to sell, such as, you know, door replacement. We talked about appliances. We sell like, kind of in flooring as well, like luxury vinyl flooring. So, you know, using the bulk buying power of the group, we negotiate heavily with those third party suppliers and we drive down our prices for our franchisees so they can make a higher margin when they sell those ancillary products. So,

It has an immense amount of benefits to it, I guess, and it makes it a fun place to be in. There are a couple of advantages for franchisors, so people looking to probably franchise their brand as well. So I guess you have an opportunity to use other people’s money to expand your brand, right? So other people’s capital. I guess our franchisees…

certainly have a vested interest in ensuring that that business unit succeeds, you know, as opposed to a manager of a store, they have an own interest in that store and therefore they fight harder to make it work, you know. It gives you a chance to expand your brand very rapidly. Every new franchisee that we recruit gives an injection of enthusiasm within the network and they all bring fresh thinking and fresh ideas.

Malcolm Palmer (13:24.301)
Yeah.

Danny Hanlon (13:37.757)
based on whatever kind of background that they had before they joined us, you know? Some of the best ideas that have helped to enhance our franchise model have come from our franchise owners themselves. So there’s benefits to being a franchisor and a lot of benefits to being a franchisee. And that’s the great thing, that this partnership of franchising just works very, very well.

Malcolm Palmer (13:58.925)
Yeah, but I was interested in what you said about the benefit of learning from other people. So that’s sort of one of the themes of our podcast before and still to come is that, you know, there’s, I call it the three degrees of learning. You know, you’ve got people that don’t learn from their own mistakes. Hopefully most people are smart enough to learn from their mistakes. But even better is if you can learn from other people’s mistakes and because then there’s, you know, there’s no cost.

attached to that. And of course, that’s the biggest benefit of being a franchisee is that you get to learn from, you know, all the mistakes and that’s what the learning curve is and you get to jump on the learning curve a lot further up.

Danny Hanlon (14:42.237)
It is it is is you know, and it’s interesting when you watch the like the life cycle of a franchise owner You know, they’ll start off very enthusiastic They’ll see a great deal of value in short, you know, you’re like shortcutting all those learnings not making those mistakes So initially they say great deal of value and paying the fees to the franchise franchisor

Then there comes a life, you know, a period where they almost, well, what we call it in franchising, you’re kind of, you’re a child and you’re learning. And then you go through the teenage years where you get a little bit grisly with your franchise or cause like, why am I paying them all these fees when I know this stuff? And then you turn into a mature franchisee where you realize that actually there’s this co -dependence and you really need each other to be doing your respective roles in order to create success. So yes, it’s very, that psychological curve of a franchisee is kind of interesting to me.

Malcolm Palmer (15:26.029)
Yeah.

Danny Hanlon (15:31.855)
watch over the years. But yeah, I think anything that reduces and helps people become more successful initially is a great thing. And you know, I guess franchising, a lot of people have heard of it, but you’d be surprised about the number of businesses that are franchised. You know, just in the UK alone, franchising adds 17 .2 billion per annum to the GDP, which makes up about 1 % of GDP across the UK. And there’s just over 700 ,000

Malcolm Palmer (15:33.901)
Yeah.

Danny Hanlon (16:01.759)
people employed in franchising. So it’s a very big sector really.

Malcolm Palmer (16:04.525)
Yeah. Well, if ever I get dragged into that place with the golden arches outside, the one thing I always want to know, because obviously that’s not actually McDonald’s that’s trading from there. That’s one of their franchisees, isn’t it? I always think somewhere in this building is a little sign that actually says the name of the real company that is trading here. And so I’ve never seen it, no matter how…

how hard I look, I can never see it, but it must be somewhere in that building. Because you actually have to say what the name of the company is. So, you know, Fred and Barbara Restaurants Limited Trading as McDonald’s or something. It must be somewhere. So, it’s good.

Danny Hanlon (16:43.037)
You do?

Danny Hanlon (16:49.821)
Yeah, you are absolutely right. We need to do the same in our operations as well.

Malcolm Palmer (16:54.861)
Yeah. So if your business is at a stage where you feel you’re starting to perfect the model, maybe, and are thinking about franchising as the next stage, what would be your advice for how to get started on that part of the journey?

Danny Hanlon (17:17.341)
I.

I think you need to determine if franchising is right for you, right? I think franchising needs to be kind of aligned with your long -term goals, right? And certainly your own values because you are then opening your business and your brands to a partnership, right? With many other people. And by the way, all franchisees have opinions on how the business should be run. So I think you need to just be aware of that going into it. I think you need to evaluate the franchisees,

potential, you know, so consider the franchisees costs of starting the business, the potential return on investment for them, what competitors they’re going to be up against, kind of target customers, and then other nearby franchisees that they may be up against as well. So all those things need to be taken into consideration. You want to create a business plan, you know, that will kind of help you plan for challenges and opportunities, and certainly securing the finance that you need to get your franchise venture.

underway. You need to prepare a operations manual. You might also need to register your trademarks. You want to certainly create a franchise sales strategy and budget, right? Because when you do open, you’re going to be recruiting new franchises to your brand. So you’re going to have to put some marketing budget and a strategy behind that to attract new investors. And then you’re going to have to create a franchise agreement as well, right? Which is the contract that outlines the

terms in which the franchisor is going to grant the franchisee the right to use their business model and trademarks and training and support and all those kind of things. That all sounds pretty complicated and there’s a lot to take in, I appreciate that, but you know the great thing is that there’s a lot of really good franchise consultants out there in the UK and they can help guide anybody through that process who may be thinking about it. And I think the first place to kind of look for those

Danny Hanlon (19:18.895)
consultants is probably through the British Franchise Association. They have a website, they have affiliated professionals on there as well as other franchise brands and you can find a list of franchise consultants on there. They’ve been very heavily vetted right and they do things the right way. So yeah there’s some good people and I would you know get educated learn as much as you possibly can about franchising and then start to set up some meetings with some people.

Malcolm Palmer (19:47.885)
So I guess you sort of, one of the things you mentioned in there was the dreaded operations manual. And I mean, obviously if you’ve got the right consultant on board, that’s something they’d be able to help you with. But that most of what’s got to go in there has got to come from you and your team, I guess. As you know, you’re the ones that know how it all works.

Danny Hanlon (20:07.421)
Yeah.

Danny Hanlon (20:11.133)
Yeah, you’re right. You’re right. And listen, it’s a bug bear for any franchise or any business. By the way, I think every business should have a kind of an operations manual, right? I think from just a disaster recovery point of view from a.

you know, best way of doing business point of view from training new employees, all those sorts of things, you know, but we don’t always get the time to do it because there are due us tasks that take a long time and they quite often get put on the back burner. So yes, you do need to create one. You are right there, Malcolm. It needs to come from the people, you know, that do those particular roles, I guess. And,

you know, we provide, well, we kind of approach it in such a way as they’re like, you know, delegate, divide and conquer. So, you know, on our franchise support team, we have experts that look after marketing, sales, operations, technical, the technical part of the business and also the finance. So what we tend to do is to delegate the particular part of the operations manual to those individuals. And,

I guess the best way to do it is just to think about it very methodically and each one of those people started by setting up a Word document and very thoroughly documenting every single process that needs to happen. And then we review it, we vet it. I think it’s always good practice to kind of get someone who is not familiar with that particular process or procedure to also…

go through that task and that way you can assess whether you’ve actually missed anything or it’s all documented correctly because they do it right the first time. And you just got to do it, you just got to reserve time to do it. And I think once it’s done, it’s a wonderful resource for training new employees, certainly franchising it’s essential you need it, because so much of what is drafted in the franchise agreement links back to the operations manual, the two work hand in hand.

Danny Hanlon (22:15.207)
So, and then our challenge as a franchise all really is to stay on top of that operations manual. I guess there are always business improvements. We’re always tightening up on procedures if you like. So to review that operations manual every six months, every 12 months and update it and then reissue it to your franchisees is something that’s I think very, very important.

Malcolm Palmer (22:38.637)
And I guess as franchisor, the reputation of your brand is at stake if people go rogue on some of those operations as well.

Danny Hanlon (22:50.813)
Yeah, yeah, you’re absolutely right. It’s the challenge of any franchise brand is to establish consistency from one location to another. And you mentioned McDonald’s, I think is something that they just do so well. You know, regardless of whether you’re in a McDonald’s in Tunbridge Wells or a McDonald’s in Manchester, the experience is the same, right? And… Yeah.

Malcolm Palmer (23:13.805)
different types of customers as Danny surely.

Danny Hanlon (23:20.477)
I’ve visited McDonald’s in both locations. I love it. So yeah, but you’re right. You know, it’s like establishing that consistency is so important. That’s where the operations manual comes in. It’s also where IT and a whole lot of other things that support that operations manual play a big part.

Malcolm Palmer (23:24.045)
Yeah.

Malcolm Palmer (23:41.165)
So there’s sort of particular characteristics that you look for in a franchisee. Some sort of, perhaps some non -negotiable characteristics.

Danny Hanlon (23:52.573)
Yeah, I, you know, when I look at our franchisees,

there are always things that they have in common, I guess. I think first of all, with our particular brand, and ours is not an easy business to run, Malcolm, not by any stretch of the imagination, because you’re running a retail element and you’re running a manufacturing element, right? So they’re two parts that are challenging really. So I think our franchisees, they’re very good at man management and people recruitment. They’re very

good at establishing like very clear goals and a vision and getting people excited and enthusiastic about that. They’re great at training. They’re very ambitious.

And fundamentally, they have to care about home renovations, right? Because it’s the sector that we operate in. So they really enjoy the project side of things. I guess going into a kitchen and converting it in as little as one day or some cases when we do a more elaborate makeover, it might take a week. But they’re very proud of…

the finished product, right? You can sense that in the photos that they show you and those kinds of things. So yeah, I guess all of those kinds of characteristics are really what we look for in a successful franchisee. But the managing a team is probably one of the most important for us.

Malcolm Palmer (25:24.109)
the ability to be able to manage a team.

Danny Hanlon (25:26.845)
Yeah, the ability to manage a team. You know, we, in our brand, you’re dealing with a lot of different characters. I mean, we have sales people that are going into clients’ homes.

you know, and they have to be closing sales every single day and every month. They’ve got targets to reach. Then you’re managing a technical team as well of like very skilled kitchen fitters. The people that fabricate our work tops in their factories are perhaps not as skilled as the kitchen fitters, but they’re good with their hands. And then you’ve got your showroom hosts as well, right? That are manning all the showrooms and dealing with the initial inquiries. So they’re all very different.

characters. They all have very different motivations if you like and I think that’s why it’s very important that our franchisees are great at man management.

Malcolm Palmer (26:18.877)
And so one of the things that’s sort of interest to me, because I mean, as you know, I’ve sort of told you about how the systems we’ve got at our office and but we’re an office based business. So it’s not often when our staff have got to go outside of our office and not have access to our systems and checklists, etc. So, you know, you’re going…

your franchisees and your franchisee staff are going into people’s homes. And I mean, did they sort of take a big procedures manual with them or is there a never a degree of training that’s required so they know what they’re doing?

Danny Hanlon (27:03.421)
Yeah, degree of training really, you know, I think we have.

like sales aids that we give them. So they all have a sales kit and that they’ve kitted out with brochures. They’re kitted out with hard samples. We try to bring the kind of the showroom experience into our customers homes. There are a lot of customers that we have Malcolm, believe it or not, that will never go to our showroom. They just like the convenience of us coming out to see them. So we, yeah, we have a full sales pack that they’ll take in and they’re trained on how to do that sales process if you like kind of the needs.

assessment and finding out what is really important to the client and then presenting the products and then moving into kind of the pre -close and closing the deal. We always make a brand promise that we leave a quote with the client on the day so we can we work out the prices then and there whilst we’re in the kitchen and we will leave them a quote. It has very detailed terms and conditions on it and we’ll try and close the deal on the day as well so we’ll take a deposit but all of that is covered off in the training that we’ve done.

that we provide to our franchisees. And then we have what we call a FAST team, a franchise advisory and support team. And that’s made up of like experts in particular fields. So we have someone who looks after our marketing, our sales, our operations, all the technical side of our business and then the finance. So in the case where a franchisee might be having some challenges in the sales area, for example, and they want our sales coach to go out with them,

or with one of their salespeople for a day, then we can provide that kind of support. So not only is there the initial training, but then there’s the ongoing support that we provide as well, to take care of those things. And I think that’s quite important that that process is done, one, to establish consistency and standard, and just keeps everybody sharp and engaged.

Malcolm Palmer (28:58.413)
Brilliant. So one of the big challenges that most of our clients are finding at the moment is the difficulty in getting good staff and staff that they can trust and rely on. So just sort of asking all of my guests this question really, but your franchisees, is that a challenge for them at the moment or do you think it’s easier for them to find staff because they’ve got this procedures manual behind them?

Danny Hanlon (29:24.125)
listen, I would go as far as saying behind generating leads, right? It’s probably the…

equally up there as the next biggest challenge within our franchise system, right? Finding people and particularly for us, it’s like installers at them for the last couple of years, you know, especially as we came out of COVID because there was this huge bounce in home improvements and finding good installers was very difficult and they were very expensive as well. So in short, no, it’s a challenge. I think whether you’re an independent business owner or part of a franchise,

I guess there’s some things that we do as a franchise brand which make it a little easier for our franchisees. Like when we take on a new franchisee, I mean, a lot of those business owners have never hired kitchen fitters before. Some of them have never hired salespeople before.

So we have a set of like job adverts and also CVs that they can use. We have various platforms that we use to post those ads and recruit people. We can put them in touch with also employment recruitment agencies that we’ve worked with in the past. So we can help out in that area. The other thing is that the FAST team find themselves getting involved in the interview process, the first lot of interviews that a new franchisee will do.

because that way we understand what key questions to ask. We really know what we’re looking for in an individual, whether it’s an installer or a salesperson that we’re recruiting. So I think our new franchisees really find that service valuable to begin with. And then once they’ve got a handle on it, then they find recruitment a little bit easier thereafter, you know? But listen, it’s a challenge, I think. From my perspective, I think people broadly fall into kind of two categories. And it only comes with experience that you spot there.

Danny Hanlon (31:21.423)
And they’re kind of, I heard this analogy once, they’re either drains or radiators, right? People either drain energy from you or they radiate energy, right? So we tend to look for characters that will fall into the radiator bucket and they’re the ones that we like to recruit, right? So, yeah.

Malcolm Palmer (31:41.773)
Yeah, that’s interesting because because some of what you do is kind of where our worlds meet a little bit really because we obviously are for our clients, their owner managers, they tend to be good at what they’re you know, whatever it is that they do and and then, you know, not have vast experience in all the other areas. So, you know, if they’re if they were a lorry driver originally, they interview somebody to be a lorry driver, they know within 20 minutes whether this person’s any good or not.

If they’re interviewing somebody to do sales or bookkeeping or whatever, those people can often pull the wool over their eyes and can be doing a terrible job for, you know, six to 12 months even before they realize. And having that, you know, that’s where we help out with the interview process, particularly on financial roles, but sometimes on others as well because…

You only know what you know really and that’s when you need some help from somebody else.

Danny Hanlon (32:44.509)
Yeah, yeah, I think so. That’s a great service that you provide to Malcolm. You know, I think business owners should certainly look to kind of leverage that. I think the more help you can get. You know, it even works with us when we recruit new franchisees. Years ago, I mean, I used to be the only one that would recruit them. These days, we tend to have our entire FAST team kind of form a view and opinion of those new recruits before we let them come into the business and buy a franchise. And so I think the more eyes and

the more opinions you have during that interview process, the better off you are. Yeah, so no, I absolutely agree because the cost of bringing someone who is wrong into a business is immense. I mean, if they’re toxic or dark matter, as we call them, then they tend to infect others in the workplace and they drive down morale. And I think nothing destroys great employees.

Malcolm Palmer (33:37.325)
Yeah.

Danny Hanlon (33:44.335)
more than business leaders who put up and tiptoe around and tolerate bad employees, right? And we’ve probably all been guilty of that at one point or another in our careers. I know I certainly have. So I think, you know, getting the right people is absolutely key. And the franchisees that join us and absolutely fly in their first couple of years and do really well. When I look back at that, they’ve got the right people from the beginning. The ones that struggle go through…

Malcolm Palmer (34:11.885)
Thank you.

Danny Hanlon (34:14.239)
a period of their first year where they might replace the installer two or three times, same with the salesperson and they’re struggling on that recruitment point of view. So yeah it’s such an important point for any business people.

Malcolm Palmer (34:27.277)
Yeah, well, we, one of my clients who runs a sort of quite specialized recruitment business, he’s quite choosy about who he, you know, who he places with his clients. And he said to me, he went, he said, the problem with our industry is that there’s just the same old bad pennies going around all the companies. And I went, I said, that’s in every industry. I said, we’ve all got our bad pennies. And we had somebody work for us for a couple of years. I mean, I, you know, as anyone who knows A4G will know most of…

Almost all of our team on the client facing side originally came out of school and sort of worked their way through. But every now and again, we just had a little gap in a particular area and we’ve had to take somebody on. And we took on this guy who worked for us for about 18 months and was perhaps the most toxic person I’ve ever had working in the organization. I didn’t know it for, took me about six.

nine months at least until I realised all the problems he was causing and some of that was possibly to be covering up the poor quality of work he was doing. And anyway, finally I’d sort of almost got him cornered at which point he had his noticing and off he went. And a few years later somebody told me about a firm that was, the owners were looking to retire and would I be interested. And it wasn’t.

We weren’t really interested, but I’ll always have a little look. So I went onto their website and of course there he is on their website as one of the senior managers. So I thought, well, you know, even if I was interested, I’m not now. Cause, and it wasn’t the place he’d gone to because, cause these, you know, these people, you know, they, they can hang out for a couple of years, can’t they? But then they’re off again. And, and, you know, one of the qualities that those people have is that they’re good at interviews because they’ve done so many of them.

So, you know, and, you know, so you, you just think, you know, I’ve had a lot of clients that have had big disasters and it always started with them taking somebody on as, they’ve done this and they’ve got this and there’s a little love affair for three months before they realized that they’re actually perhaps the worst person they’ve ever taken on. So.

Danny Hanlon (36:23.037)
Yeah, yeah. You’re right, A.

Danny Hanlon (36:45.181)
Yeah, yeah, and you’re right. I’m always curious about those kinds of people. If you look at those who work around them as well, when they’re at various companies, how many good people in companies that they actually drive away? That you lose good employees because they’re just not, they’re not happy to work alongside this kind of toxic person. Yeah. You got to identify them quick, which can be difficult, can’t it? And then remove them as soon as you possibly can.

Malcolm Palmer (37:12.589)
Yeah, well, this is interesting. So we had, when he joined, we had somebody else who worked for us, who was quite a hard worker actually, but was one of the most miserable people I’ve ever worked with. But we kind of had him a bit surrounded really. So just the fact he was a bit negative and moany and about everything, you know, not just his day -to -day work life, but his football team and the weather and the government, everything he was negative about.

But when this other guy came in, they were sort of magnetically attracted to each other. And they often say it takes one bad apple to ruin a barrel. My view is it takes two. And you can surround a one bad apple, but get two people together. And in 29 years, it’s probably one of the most difficult times I’ve had, these two fairly senior people just.

causing us loads of grief. So yeah, you’ve got to, you know, get some help for that interview process, check your references, keep an eye on people. People can talk the talk when in the interview and in the first few weeks, but the proof of the pudding is two or three months in is actually really looking at the quality of the work they do.

Danny Hanlon (38:32.893)
Yeah, yeah, definitely. No, no, I agree.

Malcolm Palmer (38:35.821)
Yeah, good. So a bit of advice for our small business owners from the franchise world. I mean, what would be your number one tip on delegation?

Danny Hanlon (38:47.901)
delegation? Gosh.

I mean, look, to be honest with you, Malcolm, years ago, I wasn’t very good at delegation. You know, I think it’s probably something that comes with experience too. When I look back at it, I was probably a bit of a perfectionist when I was younger, you know, and I… Yeah, you think so.

Malcolm Palmer (39:10.605)
That’s what you want in a franchise or though, isn’t it? That’s the point, isn’t it? You got to get it all in that procedures manual, right?

Danny Hanlon (39:17.213)
You think so, right? But then what I found, and it’s only through reflection I draw on this, it’s like I found it very difficult to delegate and let things go because I didn’t think anybody could do as good a job as me. Falsely, that’s a false belief too, by the way. So, you know, and I think I suffered. I think probably the companies that I was looking at after at the time suffered and certainly the people around me suffered. So, you know, I think with delegation, I think it’s well, for me, it was a case of

of getting out of my own way. I think it was a case of trusting those around me, let them showcase their talents. I think it came with experience and age with me where I got more comfortable with that.

And thank goodness I got hold of that, right? Cause I got an incredible team of passionate people around me now and that care very deeply about the success of franchisees and they continue to do amazing stuff every day. So yeah, I think it’s just, you have to trust those around you really. I think be very clear in terms of like who needs to do what, check in with people regularly to see if they need any kind of support from you and then just let them get on with it. Don’t micromanage them, right?

I’ve been on the receiving end of micro management when I was very young and didn’t like it. I think setting very clear kind of time expectations also helps everybody concerned when you’re kind of going through delegation. But yeah, that would be my advice. I think I’m much better at it now than what I was many years ago. You learn with experience, don’t you?

Malcolm Palmer (40:51.629)
Yeah, and with some of the international experience you’ve got, are there any sort of distinct management differences between some of the countries that you’ve worked in or with?

Danny Hanlon (41:06.589)
Probably, yeah, there probably are. There’s definitely different ways of doing business. I think, you know, in Australia, it’s a bit more casual and relaxed than here, if you like. But sometimes can be a little bit too relaxed in that regard. You know, I think the UK has the perfect middle ground and I’ve worked in the US too. I was over there for a couple of years and…

guess what I found then is you probably need to be a little bit clearer in the US in terms of exactly what you need people to do. Over here I found that the UK culture is kind of like…

let people get on with it, be very clear on what the expectation is, but then just let them get on with it. They do incredible jobs. So yeah, I guess there’s some cultural differences between each of those markets for sure. I guess I’m probably here and staying here, Malcolm, because I prefer it here the most. I prefer the people here the most, you know, in terms of like managing teams. So yeah, but yeah, it’s in individuals are different all over the place, aren’t they, you know?

Malcolm Palmer (42:16.301)
Yeah, yeah, this, you know, the this this certain characteristics are a little bit stronger in some countries than others, aren’t they?

Danny Hanlon (42:25.853)
Yes, yes. And I know you’ve had experience of this too with some of your brands that you’ve taken internationally. So yeah, there are.

Malcolm Palmer (42:35.021)
Fantastic. So sort of one last question really for, you know, there’s most of the people listening to the podcast are not franchisors or indeed franchisees. So even whether they’re thinking about it or not, but what do you think for those businesses might be the biggest lesson that they could learn from the franchise world?

Danny Hanlon (43:01.949)
I would say it’s, you know, in franchising, you need to be very disciplined in terms of process, procedures, documenting it all.

because you need to be able to share that with franchisees. And I think that that would probably be the greatest thing to learn from franchising really. I think sometimes when we run small businesses, you just get caught up and there’s an assumption that everybody knows what they’re doing and you don’t document it. The next minute you have a key employee leave and you think, gosh, now I need to train this new individual. And you find that you’ve got no resources to share with them or guide them, you know? Whereas if everything

Malcolm Palmer (43:40.237)
Yeah.

Danny Hanlon (43:41.631)
was documented then you would perhaps make that transition a little easier. So I think that’s the greatest thing that franchising offers other small businesses is to kind of get in that franchising mindset of doing all of those best practices Malcolm. And who knows right you might just have a business that is absolutely franchisable and as you go through that process you might actually think you know what we’ve got something here it’s pretty unique I’ve done all the work and now let’s franchise.

Malcolm Palmer (43:46.413)
Yeah.

Malcolm Palmer (44:08.621)
Yeah.

Danny Hanlon (44:11.503)
and expand my own brand, you know? I think there are a lot of great businesses out there who don’t consider franchising as a way of expanding their brand. And actually if they did, they would, you know, one, it would be more rewarding for them from a profitability and an earning point of view. But you know, you grow something that, you know, into a national brand that could be incredible and help a lot of people. So yeah.

Malcolm Palmer (44:13.837)
Stay safe.

Malcolm Palmer (44:36.781)
Yeah, yeah. Fantastic. Danny, thank you ever so much for that. Good to get an antipodean view on the challenges in this podcast. So many thanks and I know I’ll be seeing you soon anyway. Okay.

Danny Hanlon (44:58.397)
Yeah, sounds good Malcolm. I really enjoyed today’s podcast, my first podcast. So thank you very much for inviting me on and I hope people found it really helpful. All right, enjoy your weekend Malcolm. Thanks, bye bye.

Malcolm Palmer (45:07.213)
Brilliant, thank you.

Yeah, cheers, Danny.

Malcolm Palmer (45:14.573)
Right, still recording but I’ll sure cut it there. I’ve got to, I suddenly realized I hadn’t pulled up my little closing thing but you’ll, let me just, I’m not sure if it needs you to be on long while I do that. it came across really well, yeah, no, that was good. Yeah, it really goes, I was pleased with that. How long did we do? 45 minutes, that’s about right really. So.

Danny Hanlon (45:27.805)
was good. I think that came across okay didn’t it?

Good, good, good, good. Now, and hopefully there are…

Is it? Yeah. Isn’t this a night?

Malcolm Palmer (45:41.389)
Yeah, I did one of the others. I just, I felt I’d sort of chucked a few too many questions at him really. And we ended up going over the hour. It was probably, it was probably at the time 45 is about right. My ones when I just do a speaking one, because I’m sort of doing alternate ones. So I’ll do one, which is just, just me talking and they’re, they’re, they’re quite tight. They’re sort of 15, 20 minutes. And, but once you start talking, you know, engage in a conversation, it’s, it’s always going to be a lot longer.

next time.

Danny Hanlon (46:12.253)
Yeah, yeah, no, that was great. We’ll push this through all of our channels as well, Malcolm. So, you know, hopefully it’ll give you a bit more exposure at your end too. I think it can work for both of us, you know? Yeah.

Malcolm Palmer (46:23.405)
Yeah, brilliant. No, I really appreciate that. So let me just open up my last bit.

Danny Hanlon (46:29.309)
Mm -hmm.

Danny Hanlon (46:52.093)
And I see you too, Malcolm. We probably need to organize a lunch where we can get together and just chat, you, me and Hayley, you know? We haven’t, yeah, we haven’t looked too deeply into the Durban operation yet.

Malcolm Palmer (46:58.061)
Yeah, I’d love to. Yeah. Yeah, definitely.

Danny Hanlon (47:11.773)
but there’s probably other things that we could just chat about during lunch that might help us. And you never know where these things go, do you? So, and you said you had some systems that may be interesting to franchisees as well, so we could talk that over. And yeah.

Malcolm Palmer (47:28.109)
Well, on the on the the side, you mean? Yeah, so we’ve basically set up a whole set of systems for agents to sell recruitment positions on Durban Offshore. And we’ve put we’ve put like, I mean, it’s literally like a little franchise package almost. So yeah, you know, if you’ve got somebody whose customers are businesses, then.

Danny Hanlon (47:51.229)
Is it? Yeah, yeah.

Malcolm Palmer (47:57.997)
I can just do a little training program for them and then they’ll just get an ongoing commission from any business that they sign up. But we’ve documented everything. We’ve given them marketing tools, the whole lot. So it just needs more of my time to drive it, really.

Danny Hanlon (48:15.997)
challenge isn’t it eh? You don’t have anybody doing loft storage conversions on your books do you?

Malcolm Palmer (48:17.901)
So.

Malcolm Palmer (48:24.301)
loft storage conversions.

Danny Hanlon (48:27.069)
Yeah, you know where you can give it your loft and make it, board it out and give it some storage space.

Malcolm Palmer (48:32.717)
Yeah, yeah.

Danny Hanlon (48:35.613)
Is it?

I’m thinking about starting another franchise brand in that field because it’s kind of home improvements, which is what we know. It’s a man in a van deal. Man in van sell a lot of those franchises and it’s something that we’re kind of toying with at the moment. I’m just doing all my competitor analysis right now to kind of see where we can target it from a point of difference to everybody else that’s out there doing it. But yeah, I think we could sell quite a lot of franchises in that field.

Malcolm Palmer (49:07.437)
Danny, let me just record my last three lines and then I’ll stop the recording and we can carry on talking. So, hold on. Well, thank you everybody for listening. Don’t forget to head over to the websites of our sponsors, Durban Offshoring and A4G, LLP. You’ll find them both pretty easy through Google. We’ll be back in a couple of weeks with another guest. Thank you.

Malcolm Palmer (49:37.197)
Something went wrong stopping. Please reload and try again.

Malcolm Palmer (49:46.893)
bit weird.

Malcolm Palmer (49:55.981)
Some reason it’s got stuck on the stopping function. That’s a bit weird. It says 99 % uploading. It says it’s uploading, so.

Malcolm Palmer (50:17.037)
go back to me systems. she’s written me some systems.

Danny Hanlon (50:25.341)
You’re at home today, are you, Malcolm?

Malcolm Palmer (50:27.085)
I’m at home today, yeah. I normally go up on a Tuesday morning, come back sort of late Wednesday afternoon, and then work from home Monday, Thursday, Friday. So what I’m trying to do is I’ve set my target as to get down to 1 ,000 hours a year. And normally I do about, yeah, normally I do about, I mean, if you look at sort of a full -time employee is about, on our system is 1 ,650.

And I’ve been, you know, many years I was over 2000 hours. So if I can get down to that, and I’ve got, you know, I’ve got a good little team behind me now. So for the last two or three years, we’ve got, we have the partners and we have a board. And so there’s sort of seven people really. And three of us are on both, three of us are partners and on the board.

One of the other two apart from me are Emma White who’s been with me since 1999. She was 18 when she joined. And a guy called Josh Curti. So Josh joined in about 2006 as a graduate with a history degree. And then alongside them on the board side got a lady called Holly Smith.

and Holly was 18 when she joined in 2003, I think, 2004 maybe. So Holly gave birth to what we call the first A4G baby because she met her husband at A4G. Yeah, there’s four A4G babies now. She’s got two of them. And then there’s another couple. So on the partner’s side, we’ve got two partners, Caroline and Chris.

Danny Hanlon (52:04.445)
really? How good is that?

Malcolm Palmer (52:15.885)
who they run big client bases, but they’re not on the board because that’s not really their skill set. So Chris, he’s married to one of the senior managers, Charlotte. So they’ve got two kids as well. So yeah, they met. I think they got together about six months after Charlotte joined. That’s about 10 years ago now. So that’s sort of the team. I’ve grown up with them. I’ve been to loads of weddings. Got another one in three weeks time, one of our younger.

Danny Hanlon (52:28.445)
wow. Good.

Malcolm Palmer (52:45.453)
managers that got an invite to the evening do and you know, so they sort of they know the firm inside out and it’s just it’s just getting them to that next level of just dealing with some of the difficulties that come up the day to day stuff. I’ve got no worries on that side of things at all, but it’s just sometimes just you know, I can I can smell a problem from six months away, you know, it’s how do you get that bit over?

Danny Hanlon (53:11.581)
Yeah, yeah. Yes, yeah, yeah, exactly, exactly. It says a lot about your culture though, when you recount those stories and you know, I always think it’s good when people at a workplace like that do come together, you know what I mean? Because it says that as a healthy like social culture, dah, dah, dah, I think it’s wonderful. A4G babies, I like that.

Malcolm Palmer (53:37.453)
Yeah, yeah, yeah. So this is still, this is really weird because this is uploading, but it’s still, it’s just not stopping. So how do I stop a recording? It’s like the recording button is just grayed out. It wasn’t. When it, before I just clicked stop and then it just said there’s a problem with stopping or something. So that’s a bit weird, isn’t it?

Danny Hanlon (53:58.589)
Are you really?

Danny Hanlon (54:02.429)
If I leave, will it stop? But then you want to record your finish, don’t you?

Malcolm Palmer (54:04.045)
Well, that’s what I was thinking. Yeah. Let me just see what it says. Click the X on your teleprompter. I haven’t got the teleprompter. Stop and click leave. The instruction after stop was leave. So, I think it’ll just give me end session for all. So I think I’ll have to do that. But that’s ending our conversation as well. So.

Danny Hanlon (54:23.005)
What was that?

Danny Hanlon (54:32.093)
No worries, no worries. Well, how about I drop you some dates anyway, and maybe we get together. I mean, we’re in Tunbridge Wells, there’s a good pub close by, but we could do it closer to where you are. So you’re in the…

Malcolm Palmer (54:35.373)
Yeah, problem.

Malcolm Palmer (54:43.053)
Well, you’re only, I mean, what’s Tom Bridgewell? Tom Bridgewell is about 40 minutes away, isn’t it? So somewhere, there’s plenty of places in between, isn’t there? Hurst Green, Roberts Bridge, I’ve been up and down that A21 about 500 times now, at least. So.

Danny Hanlon (54:53.341)
Let’s do that.

Danny Hanlon (55:02.269)
Yeah, yeah, yeah, yeah. Do you know a good place halfway where we could meet? A good pub or something like that, Matthew?

Malcolm Palmer (55:07.949)
I’m sure it will, yeah.

Danny Hanlon (55:11.773)
If I ping you a few dates that Hayley and I have and then how about we just, we’ll organize something. Yeah, I’ll drop you an email.

Malcolm Palmer (55:14.829)
Yeah, perfect.

Yeah, perfect. Because, yeah, Monday, Thursday or Friday when I’m not in the office, that would be perfect then.

Danny Hanlon (55:25.277)
Thursday or Friday okay no worries all right

Malcolm Palmer (55:26.925)
So, because it’d be nice to have meetings that are not on the days when I’m in the office.

Danny Hanlon (55:33.109)
Yeah, yeah, yeah, exactly, exactly. No, no, we’ll do that. I’m with Hayley next week, so we’ll drop you a note next week and lock something in. All right? Yeah, have a good weekend, Malcolm. See you later, bye bye.

Malcolm Palmer (55:35.437
Yeah, yeah, fantastic. All right, look forward to that.

Malcolm Palmer (55:43.917)
Brilliant. All right. Look forward to it. All right. See you soon, Danny. Yeah, enjoy. Have a good one. Cheers. All right. Bye.