2457 - The Franchise Empire Changing How We Work and Pamper Pets with Loyalty Brands' John Hewitt

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0:46Visit podverified.com if you'd like to be featured as a future guest. I'm Josh Elledge. Let's get into it. With us right now, it is the one, the only, John Hewitt. John, it is great to have you. Thank you for joining us. Josh, it's my pleasure. Thank you. You are the CEO of Loyalty Brands. You have a long and storied background as the founder of Liberty Tax and other brands throughout your history. And today, again, your website is loyaltybrands.com, which we'll be talking about. You're also the author of the book, I Compete, How My Extraordinary Strategy for Winning Can Be Yours. We'll talk about that.

1:30And again, more resources we have all linked up at your website, loyaltybrands.com. Well, John, it's great to have you. And before we kind of get going talking about the work that you do, the brands that you work with, the franchise brands that you work with today, you know, I always love just hearing what great leaders do for fun when they're not at work. And I understand you, you're pretty, pretty avid sports fan. Who are you? Who are you watching right now? Well, during baseball season, I have a subscription to the, to the Yankees. And so I've watched part, at least part of almost every game.

2:08So that's, that's 162 games, even if they don't make the playoffs. Goodness. That's a lot of gap. So you go to Yankee Stadium, and I'm not a huge fan. So what is that? Because it's such a historic and just such a legacy team. What is that experience like of going to see a Yankees game live? You know, I just love the ambiance of being there. I don't even stay for the whole game typically. I try to beat the crowd out after the sixth or seventh inning. but um uh it's uh i love having my hot dog and my beer and my peanuts and and sitting in yankee stadium and i've been going for uh it'll be 50 years two more years it'll be 50 years so wow and and of course they've changed stadiums about 10 years ago so it's in a whole new stadium but it was funny when i walked into the new stadium i looked at the outfield and it looked like I was in the old stadium, except they set the outfield walls, same exact distances as they have in the old stadium.

3:15So it's, it's, it's thrilling, just, you know, kind of goosebumps. You just think about, you know, the, you know, over the decades, you know, just, you know, about, you know, people who were watching, you know, folks that were fans who were watching the Yankees back in the, you know, I don't know when, do you know the origin of the ball club? Like when? Oh, the Yankees are over a hundred years old. Yeah. They're there. I remember Babe Ruth was traded to them, I think 1913 or something like that. So they're, they're well over a hundred years old, man. You just think about the legacy of, of, of, of the club.

3:58Right. And you just, I think about like, you know, folks in the past, you know, and, you know, during World War II, you know, just like all of those eras, you know, folks just really coming together, you know, you know, not not just as, you know, watching, you know, these guys play baseball, but just coming together as a community. Yeah, the excitement and enthusiasm is the reason you go, right? You can get a better view on TV and closer up and replace, but it's the, again, the ambience of the history and also the enthusiasm of the crowd is impossible to replicate. Yeah, love it. John, thank you so much for sharing that experience.

4:41So share with me just a little bit about the work that you're doing with Loyalty Brands. What is Loyalty Brands? We have eight different franchises in two different buckets. One is tax and accounting and advisory. And I just finished my 57 taxes. So I'm the self-proclaimed great-grandfather of tax. And then the other bucket is pets. And our number one, our fastest growing jewel, our crown jewel is Zim and Grimm, which is not only the largest mobile pet company in the country, but of all the 70 pet franchises in the country, we're number one fastest growing. Wow. Do you mind? I want to ask you about both of those industries and then we'll talk about franchise, you know, kind of the franchise world right now.

5:36So pet franchises, you know, I look at, you know, my relationship and I comment on this frequently with my wife. But now some of it could be the stage I'm in. My kids are older. And so, you know, as pet parents, John, to say that we're a little bit extra, I think, is being fairly conservative. And it was not like this, the way that our relationship with our pets was not like this in the 80s and 70s and 80s and 90s. Maybe in the 90s it started getting in that direction. Did you have a feel for that whole industry? Yeah, the way I describe it is in a couple ways. Number one is you're old enough, I believe, to remember the phrase, I'm in the doghouse or I got in the doghouse, right?

6:32And the connotation is that it was the husband always got in trouble with the wife and she said, you got to go out in the doghouse with the dog. Well, that's when there were doghouses. There are no houses. In Virginia Beach, I haven't seen a doghouse in 30 years. Dogs are inside. And so society has changed over the last 20 years that young people are in their 20s, 30s, and even 40s are having pets instead of children. And over the last five years or six years, now they're having pets instead of getting married. So I call it the humanization of pets. Wow. Wow. So obviously what that means for the industry, then, if you could kind of continue that path, what do we see economically because of that cultural shift?

7:26Yeah, the industry has doubled in revenue in the last five years. So it's averaging about 14 or 15 percent growth a year. And everyone is forecasting for it to double again over the next five or six or seven years. So it's amazing. When we looked at what industries to go into, the fastest two in franchising in growth were elder care and pets. And I got to tell you, pets is a lot more fun. Um, what is it like, uh, being the, uh, you know, speaking specifically, I know you've got, you've got various brands, uh, as part of, um, your group loyalty brands. Um, but, um, why is, why is zoom and grooming in particular, it's mobile grooming.

8:20Why is zoom and grooming in particular going through so much growth? Well, the couple reasons. Number one is the industry is the right time in the right place. And again, mobile has expanded dramatically over the last 30 years. I don't know if you're old enough to remember a world where back in the 60s in pizza, there was no one delivered pizza. And along came Domino's. And Domino's delivered pizza and it became a billion dollar company because of delivery and in the 21st century you can't find a pizzeria that doesn't deliver anymore and 20 years ago there was no such thing as uber eats and and order up and all these all these uh mobile services we and amazon so for example i I buy all my groceries at Amazon.

9:18I never go to a grocery store. So the world is going mobile. And so it's in the right place. The world is going pet. The United States is going pets. It's going mobile. And Josh, I've been blessed with, I've always been in a fast growing environment. When I was with H &R Block, they grew from 3 ,000 to 9 ,000 locations in 12 years. When I was with Jackson Hewitt, we grew from six offices to 6 ,000. I was with Liberty Tax. We grew from zero to 4 ,000. And so I've had just a blessed career that I'm really, my expertise is changing lives. I've brought in 5 ,700 franchisees in my career and created over 1 ,100 millionaires.

10:02So it's just, I've always been in the right place. God gives out, God opens doors and windows and I've just been seized the opportunity every time. Hmm. Where are we with the tax industry right now? And I'm curious, you know, what kind of an impact AI is going to make on those tax solutions providers, or are more consumers going to feel empowered to just do it themselves with their AI? Any feeling on where that industry is going? Absolutely. I'm the premier expert on tax, right? I've been doing it for 57 years. Yeah, you got some credibility in that world. My two companies that I founded grew to 10 ,000 locations.

10:48And they've done 100 million tax returns. So what's happened, Josh, over the last 21 years is 21 years ago, there were 60 % of people would pay a prepare and 40 % would do their own, almost all by paper and pencil. Over the last 21 years, it's changed. 60 % still pay a repair, but 20 % or the 40%, they do it by computer. So what's happened is it hasn't eaten into the percentage of people that pay a repair. It's just taken away from do it yourself on it. Instead of doing a paper pencil, you do it, you do it on a computer. And I don't see that changing. There are reasons people are driven to pay a repair.

11:39One is fear of the IRS. I love that, that, you know, the IRS, thousands of people have told me in my career, I'm afraid of the IRS. No one's ever said to me, I'm afraid of the CIA or FBI. So people are afraid of the IRS. And then it changes every year. In 57 years, it changes. And so even if you knew what to bring your taxpayer, what might be deductible, what help you needed, how should I shape my future, it changes. You know, the big, beautiful bill is one of the biggest, beautiful tax changes ever. So things all change, and that drives people to repair. And then just the fact over the last 50 or 60 years that people want more services.

12:29They want more free time for themselves. So there was no such thing as mosquitoes in your yard or lawn services or pool cleaners or maid franchises or all those. Everyone wants services today. So those are the reasons that people pay a preparer. And AI isn't going to change that. We already have great software, great software, do-it-yourself software. But the largest software provider is TurboTax and owned by a company called Intuit. And they learned a long time ago that while people are going through the tax work, they run into questions. Is this taxable? Is this deductible? So TurboTax has thousands of paid people that you can get into a chat with and zoom in with while you're doing the tax run.

13:26They learned that they couldn't grow without the human element. So I don't see that changing. Yeah. John, where does loyalty brands fit? So who are you working with? And then is loyalty brands, are you looking to expand your portfolio and attract other businesses that want to franchise through loyalty brands? Is that how it works? We are, but we're going to stay in those two verticals. One is tax and accounting and advisory. We just added to our, we had tax and accounting and we added on property management, managing mostly single family homes for residential. And in pets, we have had four different pet brands and we're adding dog training as a franchise.

14:24Oh, yeah. Wow. We're either into everything dog or everything related to tax and financial services. Yeah. I would imagine that, you know, compared to other franchise opportunities, these strike me as relatively lower cost. Exactly. And virtually all of our. And lower risk. Right. It's lower risk because you can keep your day job and manage them in your spare time. So you don't most businesses, if you buy a McDonald's or a hotel or I mean, it costs millions of dollars and you have to go and manage the business. But in our brands, they are they are keep your day job and try it. And then if you like it, then most people start to keep their day job.

15:19And when they like it, then they dive in full time as it as the business can afford the cash flow that they need to live on. Hmm. So, John, your book is I Compete, How My Extraordinary Strategy for Winning Can Be Yours. You give the book away for free. You just go to loyaltybrands.com, and then there's a link up at the top that says claim free I compete book. Share just a bit about who this book is for and what the outcome is that you help folks create. Yeah, it's an autobiography about some of my life of building. You know, we raised in August of 82, we raised$129 ,000 and 15 years later sold it for$483 million.

16:09So it's how I built two$500 million companies that became public companies from scratch and how to do it. and lessons learned along the way. So it's a sign of our mission statement. Our mission statement is having fun, improving lives. And my mantra is, thank God it's Monday, not thank God it's Friday. If you're living a thank God it's Friday life, then I feel bad for you because life's too short. You need, if a Monday morning you're going to work and you're not looking forward to it, you're going to the wrong place. So first thing is you got to have fun and enjoy life. And secondly, improving lives, there's nothing more rewarding than improving others' lives.

17:00There's nothing more joyful than helping other people improve. So that's our mission statement. I love it. It's four words. Any of you can borrow it and use it for yourselves. It's a great, I believe it's the greatest mission statement ever. Yeah. Your website, loyaltybrands.com, who should be reaching out and what would you recommend their next step be, you know, in addition to the book that we'd recommended? Well, if anyone has any desire to be a franchise, then they should talk to us. Because my goal is to help everyone improve, I don't just help people that want to join us. I give advice to people that just, should I be a franchisee?

17:55And what brand should I choose? And when it's, you know, I want what's best for every person and what is best for me, too. That's that's rewarding. But but we're dedicated to to give advice on on changing lives and improving lives. And even if it's even if it's not even if it's we're not selfish about it. Well, we'll have anyone give you advice as to what your journey should be. And you have to be careful in franchising. People don't talk about that enough that there are 4 ,000, Josh, there are 4 ,000 franchisors in this country. And to be in the top 50 % of all franchisors, you only need 20 locations.

18:36So most in 20s failed franchisor, right? People think of the McDonald's and the Jackson Hewitts and the Zuma Grimm and the big companies that do well. But most franchisors don't do well. So you have to be careful. And the thing you always need to look for when you get into franchising is franchisors that believe this as a mantra, happy, successful franchisees. When I have happy, successful franchisees, I can't help but grow. And if I have unhappy or unsuccessful franchisees, I can't help but die. So that's the key is find a franchisor that has proven they can develop and they believe in happy, successful franchises.

19:27Well, congratulations on your franchise success, both historically with Liberty Tax and then as well. Looks like Zuman Groomin is adding two or more vans each week. week that is some crazy growth so john hewitt legendary leader in the franchise world your website loyaltybrands.com you can click on the claim free i compete book and grab that and as well there's of course lots of ways to engage with you and the team on your website john thank you so much for joining us been a great conversation josh it was my pleasure thank you

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