An experienced view on the future of franchising in the pool sector
Even after 40 years in franchising, Poolwerx founder John O’Brien is still brimming with energy and searching for new challenges, including the business’s ongoing expansion around the globe. Here, he offers some insights into challenges for retailers in the pool and spa industry, and the future for franchising.
Future retail and pool industry challenges
O’Brien says there are obvious challenges for the retail sector in the current economic situation.
“People are nervous, retailers are nervous, and they’re either dropping prices or they’re not putting their prices up and they’re squeezing their gross profit margin. But you miss one price increase, you never get it back, and you take a pay cut as a business owner as a result of that, and you devalue the sale price of your business.
“We’ve never missed a year at taking our due price rise. We provide good service, and we put in appropriate prices and always maintain our gross profit margin. So I really encourage independents to do that, to value the service they provide.”
Another serious challenge is environmental consciousness.
“Environmental challenges and awareness in our industry is coming at 100 miles an hour. I think it’s a bit of a sleeping threat in our business. As an industry we need to get on board with that faster, not just multispeed pumps and energy consciousness, but the chemicals we put into water and how we dispense that. I think we need to be more proactive in that, or governments will do it for us, and that’s not a good thing.”
Technology, and in particular AI, is a third serious challenge.
“Technology and AI is coming at us. We’ve got a team of 18 that work on that, and we’re way ahead of the curve. But that’s got to be pretty scary for most people. Luckily, there’s some really good products coming on the market.”
Future of pool retail and franchising
Comparing the disorganised industry 32 years ago with the pool industry of today, O’Brien says things have improved dramatically.
“It used to be the case that the people who made money in our industry were the suppliers. But I think there’s a much more even share of the pie these days between suppliers and retailers – and there had to be.
“Even so, I think it’s really difficult for independent businesses today. I mean, it’s quite amazing. I can’t think of another industry anywhere in the world that has so many independent people. Most industries have been organised – whether it’s hardware or fast food, you name it. Because you can’t compete in digital marketing, in technology, in supply chain, negotiations, human resource practices, keeping yourself out of IR issues. You come home from work as an independent at seven o’clock at night, you have a bite to eat and a beer, and then you’ve got to chase up your debtors and do wages. It’s too hard, so franchising, I think, is the way. But having said that, 70 per cent of Australia is still independents.”
O’Brien says there is absolutely still a long term future for independents in Australia.
“A lot of organised industries today are about 50 per cent franchised small businesses, 25 per cent buying groups, and 25 per cent strong, healthy, family independents. And I think that’s where we’ll end up. In Australia, we’ll end up 50 per cent franchised. There’ll be multiple groups – there will probably be more than the three now – and 25 per will be part of buying groups suppliers, with Fluidra’s group or Focus’s group or Bioguard’s group, and 25 per cent will just be those really great, strong, independent businesses that are second and third generation.”
SPLASH! asked O’Brien about the scandals that had plagued some elements of the franchising sector over recent years, and if he thought that had affected attitudes toward franchising by the public, small business owners and regulators.
“In fact, I was in Parliament House discussing this recently,” he says. “We worked out there’s been 18 federal parliamentary inquiries into franchising over the past 40 years. Australian franchising is arguably the most government-regulated sector in the world. As a result, we have one of the lowest rates of disputation in the world. I think there’s something like 92 countries in the world that have franchise associations. I think we’re in the bottom five per cent of disputations. So Australia worldwide is very regulated and held out as best practice in franchising.
“Look, are there ratbags in franchising? Yes. Are there ever going to be problems? Yes, there will be. But really, in the course of things, it’s such a low percentage, I think it’s something like two per cent of the 65,000 franchisees in Australia are ever in dispute at any one time. So it makes good media; it will always pop up. But having said that, we’ve just come out of yet another franchise code review, and as we speak, there’s yet further regulation coming through.
“So potential franchisees are extremely well informed and extremely well looked after in Australia. And in terms of franchise inquiries, we’ve never had so many,” he says. “We sold 18 new franchises over the past 12 months. So that’s one of our better years.”
Main image: John O’Brien in younger days, when Poolwerx was just beginning in 1992. (Supplied)
Image below: John O’Brien in more recent times. (Supplied)
