John Thomas was born in Wisconsin, raised in Clearwater, Florida. John received BBA from Southern Methodist University, Dallas, Texas and MBA from the University of Florida, Gainesville, Florida. John is married with three children and actively involved in numerous charitable organizations and church.
Franchise Expo: Tell us about the Pinch A Penny concept.
John Thomas: Pinch A Penny is the nation’s largest and most successful franchise system of swimming pool supply retail stores and service departments. We’ve been around since 1975, have been franchising since 1976, and I think are one of the best kept secrets in franchising.
FE: Why do you say you are a “best kept secret”?
JT: First, I say that somewhat in jest. But it’s partially true for two reasons. First, the majority of our stores are located in Florida. And while we are slowly expanding in the various Southeast/Southwest states, we don’t have a national presence, even though we have more locations than many national franchised systems. Second, our approach to franchising is a little different. We’ve never considered ourselves in the business of selling franchises.
Our focus has always been to be the best pool store and service department in the markets where we compete. And, we believe that we can only be the best by having franchisees to partner with in serving our customers. For us franchising is a vehicle to deliver the best service to our customers, it’s not our purpose for being in business.
FE: How and when did you become involved with Pinch A Penny?
JT: You could almost say I was born into it. My father started the company when I was eight years old. I spent every weekend and summer vacation working in the business, mostly in the retail stores. Albeit young, my father allowed me to wait on customers, fill bleach containers, test customer’s water samples, and sell merchandise. And while I had my share of loading and unloading trucks, mopping floors and cleaning bathrooms, my father always let me do whatever my abilities allowed, even when some customers had a hard time reconciling my age with what I was doing.
FE: What about later in life?
JT: After earning a business degree from Southern Methodist University and an MBA from University of Florida, I rejoined Pinch A Penny on a full-time basis focusing my time on retail operations, marketing, and advertising. By 1995 I became President of the company, assuming responsibilities in all aspects of the business, but to this day I focus my attention more on operations and marketing.
FE: What are some of the advantages in being a Pinch A Penny franchisee?
JT: We provide an incredible amount of backend support to help our franchisees focus on taking care of customers. While there is no way we can eliminate all of the responsibilities a business owner has in dealing with office/administrative matters, advertising, training, and merchandising; we offer so much in these areas that it frees up time for our franchisees so that they can focus most of their energy on being with the customers. Next, we are a “home grown”, family-owned, American success story. My father started this business with virtually nothing, and with the help of great associate/employees and franchisees, we have become the largest and most successful franchised retail/service provider in our industry. And, we are only operating in five states! The money generated by the system stays here; it’s reinvested in the system, given to local charities, and supports the thousands of families whose careers are part of our system. We don’t expatriate our profits to a foreign nation nor are we a publicly traded firm or private-equity owned firm where quarterly earnings drive business decisions that may be good for today, but are wrong for the long-term.
FE: Who is your ideal franchisee?
JT: First and foremost, we are looking for people who have a moral compass that points north. The franchisee/franchisor relationship is like a partnership. Honesty, ethics, and integrity are owed by me to our franchisees, and it is owed by them in return back to us. No business relationship in the long-term can succeed without these attributes being at the center. Second, we are looking for people that want to work. The success of our system is based on our franchisees working in the stores, taking care of customers. We don’t want passive investors that think success will come by hiring a manager to run the store while they stay home, or spend their time in other pursuits. If I thought that was a great way to succeed, I would turn Pinch A Penny into a chain of corporately owned stores. I don’t need franchisees for their financial resources. I need them because as a business owner, they will care more about the success of the store, have more passion for the business, and work harder to satisfy the customer. We want franchisees that are not afraid of hard work and being involved in the daily routine, working side by side with his/her employees.
FE: Tell us a little about the retail/service swimming pool industry?
JT: I love it, but I suspect I’m a little biased having spent my whole life in it. I love it because it is a needs based business. The super majority of our transactions are based on either solving a customer’s problem or preventing one. And we are somewhat insulated from economic fluctuations. No matter what is happening in Washington D.C., algae will grow, pumps/motors/filters will eventually break, pools get dirty, etc… We have a customer relationship that is similar to that of Doctors and their patients. We treat the sick, and we help the healthy stay that way. We focus on learning what needs to be learned to be the best source in town for help, having the best products to support that help, and doing so in a caring, friendly way. And because knowledge and service are such key components, mass merchant competitors and the internet can only capture and compete for a minority of the overall market. So the majority of pool owners are served by specialty retail stores and service providers. And with approximately 15 million swimming pools and spas in the United States, there is plenty of opportunity for success.
FE: What are some of the greatest lessons you’ve learned in growing this franchise?
JT: First, there are no secret formulas or mysteries. Success comes from hard work, and working with honorable people. There are virtually no problems that cannot be overcome when you have good people working together that are willing to do what’s needed to fix it. Businesses don’t succeed or fail, people do. Our success is based on our people; our franchisees, the associates that work in our stores, our service departments, our distribution center, and our administrative departments. And most importantly it’s based on our customers and their happiness with us. Second, franchisees are partners and must be treated that way. They are not employees and they deserve to have open, fair, and honest communications. You have to have a culture where both the franchisor and franchisee are trusted to each do their jobs respectively. And both groups need to have clear lines over who is responsible for each of the jobs that are all ultimately needed to satisfy the customer. The customer could care less whether we are a franchise system or a corporate system. The structure is irrelevant. What’s important is that the franchisor does its job so the franchisees can do their jobs. And if both parties do their jobs well, the customers are taken care of seamlessly and with excellence.
FE: What advice do you have for someone looking to acquire a Franchise?
JT: Visit, in person, as many franchisees of that system as you can, and talk to the owners. Ask them what they like and what they don’t like about the business, their franchisor, and their lives. If you randomly meet and talk with at least 20, preferably more, you will have a solid grasp on what your life will be like as a franchisee of that system. If you visit that many, you will likely come across some that are unhappy, some that are thrilled, and some that are in between. But, if you hear the same thing from everyone, good or bad, you can factor that issue into your decision. Also, read the Franchise Disclosure Document and draft Franchise Agreement.
Don’t be afraid to ask questions of the franchisor. Don’t be afraid to contact franchisees that have retired/left the system within the past few years. Researching a franchise system is not hard, it’s just time consuming.
I always encourage our applicants to visit our franchisees and study who we are. Dissatisfaction from franchisees comes from the franchisee expecting one thing, and finding out that reality is something different. Life is too short to go through it unhappy, so prospective franchisees should take the time on the front side to find out what life is like in that system. Franchisees are not going to materially change the system, so find a system that is already close to what you are looking for. Franchisees that do this will prevent all of the grief that comes from trying to fit a round peg in a square hole. Franchise applicants need to be honest with the person they see in the mirror, know what they are looking for, and only proceed with a particular franchise when they truly believe it is aligned with their personal goals/desires. Our franchisee satisfaction ratings are extremely high because we force our applicants to take more time to research us. It’s not that we are perfect and don’t have challenges. All businesses do. But, we work hard to help our prospective franchisees know who we are and what we are so they can be certain we are a good fit for each other.
FE: In your opinion, why do you think that Pinch A Penny would be a great opportunity for someone?
JT: Based on some of my answers above, it may not be. For some people, Pinch A Penny is not a great opportunity. We are only a great opportunity for someone that shares our belief in the importance of ethics/integrity/work ethic and so forth. It’s only a great opportunity for someone who wants to have a family business where their kids/grandkids can work; one where you are home for dinner at night, and one that is driven by customers’ needs, not wants. We are an excellent opportunity for someone that is not looking for just an investment, but is looking for a place to work where they ultimately get the rewards of their hard work. It’s an excellent opportunity for someone that wants to own a business, but doesn’t want the business to be open 24 hours/day, seven days a week, or serves alcohol late at night. While there is nothing wrong with selling donuts, operating a hotel franchise, owning a food franchise, or a convenience store, every business has its challenges. Our franchisees like the fact that they don’t have to get up in the middle of the night to get their business ready for the day. They like not going home at 2:00 am. Our franchisees like having the ability to be closed on major holidays. Pinch A Penny is an opportunity to own a business that provides for better balance of family life and business than many other franchise concepts, and one where family members can work side by side, building a future together.