The Franchises Are Coming

In the history of the pool industry, there have been few franchise businesses. Pinch A Penny, a swimming pool retail and service franchise, started in 1976; it was the lone franchise for years. So for an industry that hasn’t seen a new franchise company since 2012, adding three in the last five years seems like a boom.

In 2007, America’s Swimming Pool Co. joined Pinch A Penny as a swimming pool cleaning and maintenance franchise.

VivoPools started a service franchising business in 2012, but Poolwerx bought its retail and residential servicing and maintenance division in 2015. Poolwerx, a successful service and retail franchise in Australia since 1995, entered the U.S. market in 2015, first with the purchase of Phoenix-based Cactus Valley Pools, then VivoPools and others. Buzz Franchise Brands, which started the Mosquito Joe franchise in 2012, launched pool service franchise Pool Scouts in 2016.

The International Franchise Association expects to see 1.9 percent growth in franchise establishments in 2018. And since 2014, growth has been at least 1.6 percent each year.

Swimming pool franchises are attracting new people to the swimming pool business and persuading existing pool businesses to convert. The ease of startup, tapping into existing systems, marketing support, buying power and succession planning are just a few compelling reasons.

Pinch A Penny
The Forefather Continues to Grow
Though it’s been selling franchise locations since 1976, Pinch A Penny converted its first existing pool retail location in 2018. The company has had steady growth, focusing on the Sunbelt.

“There’s so much fertile ground right here in the South,” says Bob Slaughter, chief business development officer for Pinch A Penny. “We’ll continue our focus here in the southeast and southwest, until those markets are growing well and saturated. For us, it is about quality not quantity. It’s the reason we haven’t closed a store in decades: We want to find the right people.”

Tom Parison and his wife, Jennifer, met those criteria. Parison has been in the industry since the early ’90s, working for family friends and then Scott Waldo, owner of Platinum Pools. Parison ran one of Waldo’s retail locations and bought him out when Waldo decided to shutter the retail arm of his company.

“I’m in a heavy market,” Parison says of Kingwood, Texas. “I did have growth year over year, but I wanted that little extra push. I could probably get there on my own in the next 10 to 15 years, but let’s do it in five. I know Pinch A Penny can get me there.”

Parison’s store was damaged in Hurricane Harvey. “As the water was flowing out the front doors, everybody’s water was real brown water,” he says. “I had blue water. All those thousands of pounds of chlorine chlorinated my whole store.” He did a mini conversion of his existing location to let customers know it’s now Pinch A Penny, but he’s building a new store that will be fully branded and merchandised to Pinch A Penny.

In addition to accelerating his growth, Parison says purchasing power and marketing support were other big pluses. Pinch A Penny makes a lot of its products and provides franchisees with attractive pricing.

He says the franchise fees are made up with the discount on the price margin he gets on its chemicals. “It was an easy conversion for me on doing a line switch,” Parison says. Another thing that pushed him over the edge was advertising. “All that is taken off the owner,” he says. “I hired two companies last year and incurred tens of thousands of dollars just trying to do something different, and it’s just not working for me — I get the same customers. Pinch A Penny takes a lot of the weight, making sure the customer gets in here, and it’s all built into their franchise fee.”

Slaughter says the swimming pool industry has been the best-kept secret in franchising because people who don’t own a pool don’t understand the opportunities. “Look, it’s easy for you to understand a pizza franchise or a burger franchise,” he says. “You eat those things on a regular basis. Historically, the super majority of the people who have owned and operated a Pinch A Penny are pool owners.”

Slaughter says its retail and service approach help recession-proof the business, hitting the pool owners who can’t or won’t pay for regular service and catering to those who will. He says most locations average a unit volume of $1.2 million.

“It’s just an incredible needs-based opportunity with a multiple-revenue approach when you add the pool service component to the DIY retail component,” Slaughter says.

Parison is also looking toward the future. When you call a broker, he says, you get pennies on the dollar for the business, but “You go the Pinch A Penny way [and] they qualify the people. They get you a full market value.”

America’s Swimming Pool Co.
A Pool Service Company that Became a Franchise
Stewart Vernon, CEO and founder of America’s Swimming Pool Co., used to have the luxury of saying his was the only franchised pool brand in the country. That changed about three years ago.

“It’s certainly nice to see others come in the space and recognize something we saw earlier on,” Vernon says, “which is that the model for swimming pool cleaning and repair business in this country really had not taken off on a national scale.”

Out of college, Vernon was looking to start a service business. “[The service industry] is just a low-capital, lower risk sort of thing,” Vernon says. “At 22 years old, that was certainly the position that I was in.”

In 2002, he saw an opportunity in his hometown of Macon, Georgia, to service swimming pools. He started All Seasons Pool Company (where the A, S and the P come from). Without any prior pool business experience, Vernon doubled revenue year over year, eventually having multiple trucks. By 2005, he was testingfranchise locations.

One location turned into two, and then 10, and around 2007 he’d made the leap over to the franchise company full-time. He sold the original Macon franchise to an employee. “I put all the chips on the table to the real business here, ASP Franchising,” Vernon says.

Franchising aligned with some of the things Vernon himselfloves to do.

“Franchising is taking a business you have created and turning it into a road map for someone else,” he says. “I love teaching. I love coaching and helping. That is what franchising really is. It’s teaching someone else business. You’re teaching them how to do something better than the competitor.”

From the beginning, Vernon strategically aligned with manufacturers and Poolcorp, using its large distribution network to supply its franchisees.

“We’ll spend in the multimillions just with Poolcorp,” Vernon says. “All our franchisees purchase through one national account, and we work with one point of contact who services our franchisees at all of the different branches.”

This approach is different from most franchise models, where products are private labeled.

“We came to find out, these manufacturers all have their own strengths in different markets and their own promotions at different times,” Vernon says. “Team up with all of them and allow your franchisees to do what’s best for them.” He says it has worked well to never mandate, but to allow its franchisees to run their own business and do what’s best for them.

While people who came from outside the pool industry operated the majority of ASP franchises, they have converted about five existing pool businesses over to an ASP franchise, including the company’s largest franchisee.

“He was just stuck at $700,000 in revenues and had been doing that for 15 years,” Vernon says. “We brought him into our system, and he’ll do $3 million in revenue this year. Our future really is with conversions.”

ASP franchisees use PoolOps, what Vernon calls the digital version of their roadmap.

“All of our franchisees operate digitally,” he says. “Technicians have GPS on their cars, and the customers are communicated with via email and text messaging…. We always try to find out what’s missing in the industry, and jump one step ahead and map that out in a format a business-minded person can follow.”

Pool Scouts
Franchise Veteran Enters Pool Service Market
Pool Scouts is new to the swimming pool industry, but the company isn’t new to franchising. Buzz Franchise Brands owns the company, which started with the Mosquito Joe franchise — and has added Pool Scouts and others to its list of franchise companies.

“Being part of Buzz Franchise Brands, our mission is to enable people to achieve their dreams,” says Michael Wagner, president of Pool Scouts. “That sounds corny, but at the end of the day it’s really enabling the business owner to be successful. We know that without the success of our franchisees, we’re not here.”

Wagner says Buzz became interested in the swimming pool industry because they like businesses that have recurring service models.

“Our aim is to treat or clean people’s pools on a weekly basis,” Wagner says. “When we do a good job and retain those customers, you’re building a base that you can build upon. You have a real solid level of predictability when it comes to the business, which will help us drive efficiency.”

Pool Scouts started franchising in 2016 and currently has 11 franchisees in nine states, including the conversion of an existing pool service company in Dallas.

“If we have a franchisee that is a pool service company and they’re bringing a customer database with them, we offer them a royalty holiday for a period of time with their existing customers,” Wagner says. “We make it more attractive for them to bring customers into the system. Of course, right out of the gate they’ve got to use our systems, our marketing methodologies. Making sure they’re open to the marketing requirements of our business is certainly a challenge. They have to be willing to do that to grow the business quickly. Then the second side is making sure that they adapt our standard operating procedures on the Pool Scouts’ way of doing things.”

Wagner says that in addition to creating websites for all of its franchisees, it also has a digital marketing and direct mail program.

Since most of its current franchisees come from outside the pool industry, the company also offers lots of technical support.

“We’re extremely hands-on with our franchisees, including going out and traveling with them and cleaning pools with them,” Wagner says.

That support attracted Matt Smith, who owns the Pool Scouts franchise in Austin, Texas.

“That was really the selling point for me,” Smith says. “It’s not like they’re just trying to sell franchises and leave you on your own. They’re trying to grow your business like it’s their own.”

Smith partnered with his brother to open Pool Scouts. They wanted to start a business but were looking for something that was ready to go. “We have limited experience starting our own businesses; nothing on a large scale like this,” Smith says. “We wanted something that was turn-key, where a lot of basics are taken care of for you.”

Wagner says Pool Scouts felt it could raise the bar in the pool service industry.

“Defining the market better and professionalizing the market more is better for everybody,” he says. “When you have that, it drives price points up, it drives the level of professionalism up. Having competitors is not bad for the marketplace at all.”

Smith echoes that. “I felt like there was a really good opportunity to be the best in the city at pool service,” he says. “If I want to do something, I want to be the best at it.”

Poolwerx
Australian Company Continues Growth in United States
Right out of college, John O’Brien joined a large, multinational franchise company in Australia. But he got the entrepreneurial bug, left his corporate job and became a franchisee. Since then, O’Brien has started three franchise systems and has made a name for himself in franchise development both in Australia and globally.

“It’s what I do,” O’Brien says. “Franchising is simply small business done well. The statistics globally, they’re the same in the United States as they are in Australia.” For every new business that commences today, 80 percent will be out of business within five years, he says — and for every new franchise business that commences today, 80 percent will still be in business in five years.

Before O’Brien started Poolwerx, he knew the type of franchise he wanted to start next. He just didn’t know which industry.

“I was looking for an industry that was high on service because service is the way of the future — it’s about repeat business,” O’Brien says.

In California, O’Brien saw a beat-up, rusty service truck on the road. A blond-haired surfer was driving, music loud. “He had a pool pole and a surfboard hanging out the back of his truck,” O’Brien recalls.

The more he thought about that image, the more he thought he could do it better. “It didn’t add up to me as a professional service,” he says. “I went home, found out it was the same in Australia and [that] it was perhaps a global opportunity for me.”

To start he bought a pool store with three routes.

O’Brien now has 120 stores in Australia, estimating he’s opened a store almost every month for the last 15 years. Along the way, he discovered something: Every time Poolwerx opened a retail store, its service business around that store grew. “We found that our stores were our best marketing tool for our service business,” he says. “Therefore, we created what we call a hub-and-spoke business.”

Poolwerx was ready to enter the U.S. market in 2008, but when the economic crisis hit, it decided to hold off. In 2015, it purchased Cactus Valley Pools in Phoenix, followed shortly by businesses in Southern California and Florida. It worked to tailor its model for the United States, and reworked it again based on nuances of different areas. It finally started franchising in 2017.

The Poolwerx franchises allow the franchisee to grow with the business and give different levels of entry. “You can join us as a younger family with less capital available to you, as a man-and-a-van operation,” O’Brien says. “We can take [somebody] to a multi-truck business, to a retail hub and spoke, to multi-store and multi-vehicles,” he says. “We have people at all stages along that journey.”

O’Brien sees a huge opportunity in the States to convert existing pool businesses. Father/daughter team Ken and Ashley Oblock converted their pool service company to Poolwerx in 2016, opening their first retail store in 2017.

When they originally started their company, they bought a swimming pool route of 40 pools and grew it to about 90 for a couple of years, Ken Oblock says. When they opened their Poolwerx retail store, they went from 110 pools to 170 in nine months. The pair also were awarded Poolwerx’s retailer of the year. “Five years from now, we should have two more stores opened and have about 800 weekly maintenance accounts,” Ken says.

Ken handles the service side of the business, while Ashley takes care of retail. Ken helps promote Poolwerx at various conventions in the Houston area and says he talks to many pool professionals interested in the franchise for the same reasons he was.

“They’re at 100 pools, 50 pools and they want to grow like we did,” Ken says. “[They want to] have a future and an exit strategy as well. If we decide in five or 10 years we want to sell Poolwerx, it’s got a strong backing, and that goes a long way.”

In his travels across the United States meeting with pool companies, O’Brien found two general groups that seemed prime for franchising: The first were 40-something couples who had taken over the business from their parents. The second were people in their 60s who had worked in the industry most of their life. Their children have moved on outside of the industry and the business is their retirement package. “It’s very hard to sell a pool business because you’ve got so many moving parts,” O’Brien says. “It’s hard to get the value you deserve for 40 years of hard work. You see people turning off the lights and selling their business for stock, for inventory.”

O’Brien still sees the second group as great potential franchisees. Poolwerx can help put everything in order — make over the store, brand, uniforms, back-of-house system and financial reporting, “then let’s go to marketing — six months, two years, whenever suits you — and help you sell your business,” O’Brien says.“But not to a pool service guy who has one truck and doesn’t have the money to buy your business. Not through a broker who finds your business too hard to sell compared to others. We’ll go to the franchise community where there are 15,000 franchises sold a year in America. We’ll find somebody from middle-corporate America that’s looking to buy a business.”