Three-year growth 223%
Five Star Painting has had more than a brush with success. The relatively young company, which sells painting franchises, has 50 franchises in three countries, grew 223 percent in three years, and in 2008 ranked No. 18 in franchisee satisfaction in the Top 50 Franchises Under 50 Units. “That’s our goal,” says Scott Abbott, co-founder. “It’s all about making the franchisees happy and successful. They’ve become like family, and it’s one of the most rewarding aspects of my job.”
Five Star Painting began as a company that painted houses. Two long-time friends of mine started it. I was working at a consulting firm at the time, and they were looking to expand the company. Then I got involved and started thinking of the painting industry, which has a history of being unprofessional, highly fragmented and low tech. Coming from my consulting background — and knowing the potential a painting company with a strong brand could have — I saw an opportunity.
So I quit my job and started working on developing a software that potential franchise owners could use. It would do all of their bidding and streamline the entire process. Our goal was to essentially be a technology company in the painting industry.
The early stages were all about research. We called 500 painters in Utah, and two out of 10 painters answered their phone. Two out of 10! It was a terrible customer experience. We knew we could change that.
Our first franchise was in August 2005 and it was in Winnipeg, Manitoba, Canada. The interesting thing about our franchisees is we’re not looking for painters. We’re looking for people who want to run a business and take ownership in the company. So we have a kung fu teacher, an accountant, a sports star — you name it.
The big question is why franchising? When you’re trying to expand from one city to the next, you have to think it through. If someone doesn’t have ownership, what motivation does he have to work? We tried expanding into three cities before we started franchising, and it was a complete disaster. It became apparent very quickly that the only way to expand was to attract people who want to own a business — people who are invested, dedicated and committed.
We mitigated a lot of the growing pains through venture capital. Our challenges came from managing the cash flow and growing so fast we didn’t have the resources to meet demand. Having money to fuel the growth has been invaluable.
Running a franchise operation is extremely technical and highly regimented. We were foolish to think we knew what we were doing — but I wouldn’t have done it any other way. We had quite the shoestring budget going. In a typical franchise system, you can drop six figures on legal work alone. So we painted a lawyer’s house to get what we needed. Whatever works, right? (laughs)
We have an annual conferencewhere all of our franchisees fly in and we get to spend time with this family we’ve put together. It’s an opportunity for them to learn from each other, and seeing that interaction and feeling of teamwork is so rewarding. It’s great to see people rally around one another and make it work.
A good leader has to have vision — and he rallies his troops around that vision. You’ll never get there by yourself. You need everyone to push in the same direction.
There’s definitely a little luck involved when it comes to success. So much of it is timing — being at the right place at the right time doing the right thing — and then being ready to take on the challenge. I don’t ever want there to be a day where I don’t have the guts to take the right risks.
Three years from now we’ll have 300 franchises. In five years, we’ll have 500. Our vision at Five Star is to be the No. 1 service industry franchise in every respect — in size and in the satisfaction level of our franchisees. It’s a monumental task, but we’re up for it. Q
The only way to expand was to attract people who want to own a business.