S1 E8: Meet the Biggest Phone Franchise in Bermuda
Meet Alex Jones, former banker, triathlete, Olympic hopeful, and dad of two.
For nine out of 10 franchise owners, one unit just isn’t enough to generate the levels of income they’re aiming for. But, very rarely, a site and franchise come along that perform so well that everything just falls into place. And that’s where Alex Jones’ CPR store comes in.
The Wolf talks with Alex about leaving the world of finance to chase his passion for windsurfing, why you should convert an existing phone repair shop into a franchise, and how to build a transparent culture in your team.
You’ll hear why Alex’s Bermuda franchise is the best-performing location out of 850+ worldwide, why your customers are the best salespeople, and why your internal customer service is crucial for success.
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Episode Transcription
The Wolf of Franchises:
Welcome to Franchise Empires, where aspiring entrepreneurs learn exactly what it takes to become a successful franchise owner from one location to 10 and beyond. I’m the wolf of franchises.
Hey everyone. It’s The Wolf. Today on the show is a little different. We had a schedule and conflict with some other guests that left a gap, but Alex Jones filled the spot and Alex is a former investment banker who almost made the Olympics in windsurfing. But while he’s not a multi-unit owner, he is the owner of the best performing CPR cellphone repair franchise in the entire world. And that’s a brand with over 500 locations worldwide. So that’s no small feat. The craziest part though, is that that location is in Bermuda, a country with a population of just 63,000 people. We talk about how that actually helps his business as well as how he turns his customers into the best salespeople for the business and why your internal customer service or how you treat your employees is equally as important. I hope you enjoy this episode.
Narrator:
The Wolf of Franchises is the CEO of Wolf Pack Franchising as well as a creator at Workweek Media. All opinions expressed by the Wolf and podcast guests are solely their own opinions and do not reflect the opinion of Pack franchising or workweek. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. The Wolf Workweek and Wolf Pack franchising may maintain positions in the franchises discussed on this podcast.
The Wolf of Franchises:
I guess just a good place to start would probably be, what were you doing before Y you landed on C P R cellphone repair?
Alex Jones:
We started as an independent cellphone repair franchise, and it’s a sort of long or winding road to get here. So my background’s in finance and I always hated doing math for a living. My last job before this was literally sitting in front of spreadsheets for 10 hours a day, which it pays very well, but it’s hard to have a life while doing it. And so I was an athlete as well. One of my best friends and training partners went to the Olympics in 2008 for the US and he came back from China with this cool Chinese phone. And so I thought they were cool. I looked at them, I looked at the local market here for phones, and I said, okay, these things are really cheap. I wonder if we could sell them locally. And I did a whole analysis and brought in a couple of Chinese phones to see if they were worth selling here.
And they were terrible. I mean, they were so bad. But fast forward to 2014, I was still sort of had a hobby of playing with weird cool electronics, and the phones got good coming out of China, Android 4.4, and so I started selling these phones. My wife would get mad at me if I bought stuff and just played with it and then was just spending our money on crap. And so I started listing them on our local edition of Craigslist and reselling the phones afterward, and I started to make a profit on, so my wife really couldn’t be mad, so I’d start buying five or 10 phones at a time and then selling them to recover the cost of it. And then I got this tablet, which was a seven inch tablet, ran Android 4.2, and I put up an ad for it When I was done with it for the price I paid and I got 18 calls before I could take the add down.
And I went, okay, there was a market here. And so I was consulting and my contract finished and I had some time off and I didn’t take another gig right away. And I got together with a buddy of mine. We put together some money, we opened a kiosk in the mall, filled it with Chinese phones and tablets and started selling this is in February, 2015, like a ton of phones and tablets just out of a kiosk. And then I thought I was going to hire some young person to stand there on commission and throw phones at people and it took off. And so I said, okay, I don’t really need to go back to work now. And so I started selling these phones and we were selling with a warranty and I knew nothing about phone repair. So I went around to all the local phone repair places and I found them all to be wanting.
And I ended up finding this hole in the wall in a battery of town, and it was like eight feet wide. It was like an alleyway that they’d covered up between two buildings that had a phone repair store in it, and it was piled with trash. It had no air conditioning. They kept the lights off to save money except in the back where the guy was working. And I started taking my phones to him to fix them. And I started to learn about what he was doing. And then I spilled water on my MacBook Pro and I was all ready to spend $800 on a new logic board for this thing. And I took it into him and I gave it to him at five o’clock at night. And he called me the next morning and said, here, computer’s ready, it’s a hundred dollars. I went, oh wow.
So I gave him 150 bucks and approached the owner about the business because it was obviously just kind of abandoned and it wasn’t being managed. It was just a technician sitting in a room. And so we took it over and it turned out that the business was actually pretty deeply in debt hadn’t paid its rent in a while, wasn’t paying its staff properly, wasn’t paying any of its taxes. And so we took over the business for the debt and then plus an amount to be paid out afterward. So he financed the whole thing. And then we turned it around and we just started old-fashioned business building, serving people, marketing, cleaned up the front area. We got an entire giant dump truck of trash out of a space that was 40 feet long and eight feet wide. And under that name we just started doing business.
And then we moved it to a larger location and kind of got rid of the mall kiosk in the mall, which was about 600 square feet, and built it up to where we had six technicians, me and then three front desk staff working. And that was about when I approached the various cellphone repair franchises. And I know this part is your bread and butter. And a lot of people say to me like, wow, you guys approach them because the franchises are out trying to sell to the independence saying, Hey, come convert, come convert. And I spoke to you, break I fix, which I think most people are familiar with, and they wanted me to give them 7% of our sales. Just off the top
The Wolf of Franchises:
Just before we get there, so you didn’t like your job in finance and once this business was cash flowing and you saw opportunity there, you’re happy to move on from your w2. Why approach a franchise even at all versus just stay independent and grow your own brand?
Alex Jones:
So I thought that the franchises would have some special sauce that would fix all of my problems
Because it’s every day was a struggle because I was just sort of figuring out how to do it on my own from even sourcing the parts. We used one part supplier and they got rated by the US authorities and shut down. And so we went from ordering every week from this one supplier to, they just were not in business anymore. And so we had to scramble around to find another supplier. And back in 2017, the whole supply chain was just not in North America, was just not very good. So we were buying from China and it would be a three or four week lead time, and then you order a part that’s supposed to be one quality, but what you get is something completely different. And I went to one of the trade shows in China to try and source things like cases and screen protectors and accessories, and we got those, but it was all just everything was me figuring it out the hard way. When we took the business over, there was no ticketing system, there was no management system. It was all just, they put the phones in a little Ziploc bag with a carbon copy receipt with a person’s name and phone number, tap to it, and then stick it on a long peg and then he would work from the back to the front. It was like being a short order cook of a repair phone repair place.
And that obviously doesn’t scale very well. So we implemented N E R P and started ticketing and implementing check sheets for booking things in and out so that the customer couldn’t back come back and say, Hey, that was working when I gave it to you. And I thought that the franchises must have some special sauce that I was lacking. And so I approached C P R and ure. I fix to try and get that special sauce.
The Wolf of Franchises:
Yeah, okay. That makes sense. So I mean, you’re in Bermuda too maybe, and I’m jumping O over a bit, but how did you end up in Bermuda and what’s the landscape out there? Is there other franchises in the cell phone repair business
Alex Jones:
Or No, there’s no other franchise in the cell phone repair business. There were incumbents who had been doing it for many years. One company had been doing it since the dawn of cell phones and doing repairs. Another one of the companies was a relative upstart. And then there were a couple of independent guys running around doing it with various levels of professionalism out of their homes or out of a small office. Bermuda is a self-governing British territory, about 700 miles off the east coast of the United States. We’re not in the Caribbean. It’s not particularly hot here. And it’s a first world country. It’s one of the richest countries in the world with 63,000 people in it. And everybody has a cell phone, everybody has a high-end phone. And then things here are quite expensive. So when you drop a phone and break it, people repair it. They don’t just run around, buy a new one. And how I end up here, my family’s from here, my mother’s family goes back to the 1620s. My father’s family’s also very old Bermuda family. And I was educated to a large measure in the us. My wife’s American, my dad was American, but I’m not. This is my home. This is where I’m from.
The Wolf of Franchises:
All right. So I guess you proposed your independent business to youre dry fix, which is basically a direct competitor for those who don’t know and CPR cellphone repair. Yeah. I mean what was that process like and why’d you end up opting for cpr?
Alex Jones:
Well, I talked to both at Reasonable Length. Ure I fix seemed to be a phone people who got into business, and that’s a lot of the cellphone repair industry. It’s technicians who had to become business people because they started out of their home and then ended up with a storefront. And C P R at the time was owned by a private group and they were business people who happened to be in the cell phone repair business. So ure Guy FIX was trying to sell me on, they were hiring guys who, they went to church ways together and that seemed to be how their clique was formed. Whereas C P R seemed a lot more professional and both companies have since been bought out by large insurance companies. So your mileage may vary.
The Wolf of Franchises:
Interesting. Okay. And so you went with CPR mean, has it been smooth, did they elevate the game for you and I mean you talked about supply chain issues earlier, have a lot of those problems that you as the C E O and founder of your own business had to figure out on your own? Have they largely solved anything for you?
Alex Jones:
Well see, here’s funny about the whole thing is I had no concept that our store was in any way exceptional. There’s this sort of saying that some people’s lives are an example to others and other people’s are a warning. My view is that my life is a warning to everybody else because of the string of failures that I’ve had that I didn’t really talk about. And so I didn’t realize we were in any way exceptional. And so I was talking to the senior management of C P R and I was talking to some sales guy and you break guy Fix, right? We were dealing at different levels of the organization. And so I remember the call with the C P R guy, it was dark, it was kind of late here. I was alone in the store with all the lights down and he was kind of talking about the sales they expected per technician and he threw out a number and I just nonchalant.
And he said, okay, well that’s not a problem. We do double that. And he sort of stopped. Then he continued and then he asked, he said, our average store does X numbers of sales. I said, okay, well we do Y. And he stopped. And so I had until that moment no concept that we were exceptional. And then they invited me out to Vegas to meet them at their annual trade show and we met and were able to do a deal that kind of worked out, I think for everybody. So a lot of what we were doing was already best practice. I thought that CPR R was going to fix all my problems. And I think a lot of good franchises do, but the real value in this business is in the network of people you get. And if you’re someone who’s struggling to go from a technician to becoming a business person, you’re suddenly going to get a whole bunch of mentors who aren’t competing with you in the other store owners. That’s where the real value comes from. And yeah, CPR corporate, they’re going to help you get a nice pretty looking store that’s full of products that are going to sell well at margins that you can make a living on, but it’s going to be up to you to take it to the next level.
The Wolf of Franchises:
Yeah, okay. So you’re saying that the network has been more valuable than anything else because in reality you happen to figure out how to run this store really well on your own. So you kind of had a good operational playbook in place.
Alex Jones:
And I don’t want to make it sound like we did anything special. It was just like we’d make a mistake, we’d fail and then we’d fix the problem kind of systematically.
The Wolf of Franchises:
And just to dive into the numbers a bit, for folks who don’t know cpr, cell phone repair, largely in the US they’ve got about 500 locations. It’s not as far as retail investments go too expensive. Their investment range is about 80 grand to close to 200 per location for a new build. And in 2020 they showed about 900 grand in average revenue for the top stores, the top 25 stores. So Alex, whatever you’re comfortable sharing, just you mentioned, I think you have one of the top stores in the whole system. Does 900 sound in the ballpark of what you’re doing?
Alex Jones:
We are the top store in the whole system and we are doing multiple. So that,
The Wolf of Franchises:
Okay, so that’s fascinating because you’re in Bermuda with the population of 63,000 people total and somehow you’re outperforming every single franchise in the United States, which theoretically has a much larger market and population density within miles of those stores.
Alex Jones:
But when you think about cellphone repair, there’s a cellphone repair store on every block. And so we’re dealing with a lot less competitive market, which really, really helps. And an owner, there are owners who do more than us because they have three or five or 10 stores, cell phone repairs pretty hard to scale beyond that and have it stay profitable. But in terms of single location, yeah, we’re it,
The Wolf of Franchises:
That’s that. It’s crazy. It’s awesome. So it sounds like you’ve probably networked a bit within the system as far as other franchisees. Have you maybe seen comparables to, let’s say a franchisee in a smaller town in America? Because like you said right there, there’s less competition given the small market size of Bermuda. Do you think that can be replicated?
Alex Jones:
Yeah, I think if you’re in a small town, so the way we dominate is by also word of mouth and reputation. We protect our reputation very aggressively. And there’s some other owners who are really killing it on reputation. There’s a guy out of Lancaster, Pennsylvania, and the guy is just absolutely killing it with five star reviews on Google. He just blows everyone else away with his five star service and he’s an Energizer bunny and I can see why he can do that.
The Wolf of Franchises:
Yeah, and I don’t want you to be humble here. Did you think that the market really plays that? That’s the driving factors, that it’s simply, you’ve done a good job, you have the reputation, but it’s only room for one player, so your kind of presence is just keeping everyone else away?
Alex Jones:
There’s a bit of that. There’s definitely economies to scale because we can keep all the parts in stock. And so once you end up on the backside, so there’s either a cycle of decline or a virtuous cycle in this business where if you have the capital to do it, then you have the parts in stock, then you can serve the customer right away, and then that customer then keeps coming back. And so you end up spiraling up and up and up. Whereas if you don’t, then you end up slowly burning your pile of capital until your business shuts down. And I, I’ve seen people do both sides and I’ve also seen guys convert to cpr and previously they were on this struggle of barely taking out enough to live, but still shrinking their pool of capital and then they’re able to convert and with the help of the network and CPR get themselves really on top of their cash flow.
The Wolf of Franchises:
So that cash conversion cycle sounds pretty critical for probably any retail business.
Alex Jones:
Well, especially important when your parts go out of stock or go out of style in three years, maybe a part will be good for five years, but you really have to stay on top of that stuff and turn it over really fast or you’re going to be in trouble. I think that’s what makes it hard to scale.
The Wolf of Franchises:
I see. Because if you don’t sell it fast enough and it goes out of style, no one’s going to buy and then you’re sitting on inventory that’s never going to turn a profit for
Alex Jones:
You. Yeah, I mean I ordered a bunch of S 20 cases and for whatever reason the S 20 didn’t sell that well. And I still have 30 s 20 cases just sitting there. And for us, that’s not material to our overall business. I mean, it still sucks to have hundreds of dollars sitting there that are probably never going to get sold, but if someone does that on large scale, they’re out out of business, you’re out of the game.
The Wolf of Franchises:
So who makes those decisions? Is that it’s a franchisee now kind of calling the shots on what specific products and quantities of products to bring in? Or is corporate dictating
Alex Jones:
Them? Absolutely. It’s really at the franchisee level and there’s such a wide variety in different markets and even different stores in the same city. I was talking to guys from a major city in the US and they have one store in the upscale downtown where they cannot give away phones. And then they have a phone in a more working class neighborhood where they’re doing financing and they’re selling tons of phones.
The Wolf of Franchises:
That’s almost counterintuitive. I would’ve guessed that the first,
Alex Jones:
It’s because all the people downtown just go to Apple and buy a new phone.
The Wolf of Franchises:
I haven’t had a phone break in a while knocking on wood now. But I’m trying to think, is there some cultural difference there where it’s just, if you have the money, you say, screw it, I’m buying a new phone versus going through the headache of fixing it. Do you think that’s at play there?
Alex Jones:
There’s probably something like that. I mean, if I was looking to open a cell phone repair store in the US, I’d look for a second tier city. One of the top performing stores was in a small state capital for a long time and this one guy blew everybody else away. So what we’ve done well in the marketing is, you know, can spend whatever you want on advertising, but at the end of the day, the best salespeople are your customers who go out and sell for you. And if a guy gets what he feels like it’s a really good deal on a phone. Cause we sell lots of views to recondition phones. If someone gets a good deal, they go and tell everybody about it. And if you treat everybody, they’re really a first class person. Yes sir, yes ma’am. Set that up for you. Yes, yes is your answer to everything. People go out and rave about you and that’s what we’ve done. Well,
The Wolf of Franchises:
I love that I that idea of just that the best salespeople are your customers.
Alex Jones:
There’s no way that you can hire, we have 10,000 salespeople out there because that’s many people we’ve successfully served
The Wolf of Franchises:
And it, it’s free marketing.
Alex Jones:
Well sometimes it’s very expensive marketing, you know, have to do the right thing for people. And sometimes that’s expensive. We’ve warrantied things that we really shouldn’t have warrantied to protect the reputation.
The Wolf of Franchises:
And is that almost the situations where angry customer, frustrated customer and you kind of just decide that charging for certain things maybe aren’t worth it and you’re kind of doing a solid for the customer,
Alex Jones:
But you can’t wait till the customer gets angry. You have to think of head and put them themselves and put yourself in their shoes. And we had a case today even where a guy came and got his battery replaced in his iPhone and there ended up being a strange issue with his speaker phone afterward it passed all of our tests on and out. And what we found out was that there was actually a problem with the housing of his phone where it was grounding out something super random and we ended up having to warranty and replace that entire housing because it was the right thing to do. We didn’t break it, but it protects that reputation. We really think about the lifetime value of a customer because we have to, because we’re in a small place. If we do a bar job, each person comes back to us every single time they have a problem. It’s not like we’ve got a population of two or 3 million where we can burn someone every time we interact with them.
The Wolf of Franchises:
No, for sure. But just to play devil’s advocate, so that the housing is what you said was problematic for this customer, was that not on warranty that the customer couldn’t have paid whatever the claim was or would be?
Alex Jones:
It wasn’t about the claim, it was about doing the right thing. Right, because it came into us from his point of view working and he got it back not working.
The Wolf of Franchises:
I see, okay.
Alex Jones:
Yeah. All right. We didn’t bend the housing to cause it to ground out the microphone. He did, but at that point we could either have a big fight with him about it or we could just take care of it.
The Wolf of Franchises:
I see, okay.
Alex Jones:
And this guy, each customer has a lifetime value in the hundreds or thousands of dollars depending on your timeframe. So eat the $200 cost.
The Wolf of Franchises:
Yeah, yeah. No, okay. I gotcha. And this is a theme I see with a lot of successful owners is you’re just, you’re thinking more long term where others might just see that $200 that you mentioned in the short term and say, I don’t want to pay that. That’s going to cost me money. But yeah, I guess there’s strategic decisions and times when, you know, concede more maybe upfront today, but you’re going to earn that back hopefully in multiples down the road
Alex Jones:
And to protect the reputation. And one of the things we’ve done recently, well because we were doing so badly at it is now we’ve done a pretty good job teaching the staff to consistently do the right thing for the customer without needing to involve management. And that’s really important if you want to build a system and scale at all.
The Wolf of Franchises:
And how do you train that of your employees? Because I know a lot of owners have this fear that, and this reminds me of, I was at a conference, I forget who the speaker was I think it was one of someone from Jocko Wilks crew, if you know who he is. But there was kind of a similar thing, and there was this, the example they used was at Toys R Us, a cashier had a customer who there was a return policy around Christmas time, and if you returned it, I think on the 26th or the 27th, it was L, you know, missed the deadline and you had to hold onto it, you kind of so l. But in this case, the customer was pleading saying that there was something that happened. I think it was a baby was born or there was some crazy life event that per really just prevented them from being able to make it to toys us.
And it seemed very genuine and the cashier was like, no, I’m really sorry, that’s the return policy. And the manager ended up stepping in. It was saying, Hey, come on. Obviously in certain circumstances we have to be treat other people like humans and cut ’em a break. And that was a scenario where they realized their training was wrong because they were like, Hey, our employees should know that off the bat. So how are you kind of determining and giving them a structure to work within where, hey, this is when you can make concessions. This is not when you can because that would be potentially giving away money for no reason.
Alex Jones:
So when we started out, we didn’t have even priceless for anything. We didn’t have an e r P system. It was all just, I just remembered what the prices were for various repairs and we had to go through the whole various painful process of putting together a system of putting in pricing and putting in automatic discounts that people can use and then empowering the staff to use those discount line items. I went away and got married. My wife and I have been together for a long time, but we got together, we got married in 2018 in January, and I went away and sales absolutely tanked. I left the store and sales tanked. And that was when I was like, oh, I need to fix this. I had a toxic employee who appointed himself the manager while I was gone and thank goodness got himself fired about six months later.
And I would’ve done well to have gotten rid of him long before then. So we made sure that it was a lot more systematic and formulaic as to how people could use discounts. And then I really said to the staff, I modeled the behavior first off so people could see how to talk to people. And then I just asked people to tell me to make a decision and then tell me about it. So if you’re not sure and you can’t reach me, make a decision and then just let me know what it was, and if it’s the wrong decision, we’ll talk it over. And I kind of set some price limits that they could do that with. And sometimes it went well. And sometimes we had a case where someone walked out without paying a $400 bill because their credit card only partially went through, but they came back with a bank statement, which showed the hold on their card and said, look, it went through and everything is a learning experience. The staff member didn’t do anything wrong because they tried to use their best judgment to keep someone happy. We talked about how it wasn’t the right thing, but it wasn’t a disciplinary action for them.
The Wolf of Franchises:
It sounds like leading by example and operating with transparency and you’re almost, and transparency and giving your employees the right essentially to make a mistake is what it sounds like your leadership style is.
Alex Jones:
And sometimes those mistakes are good mistakes and sometimes they’re bad, but by and large, people can make good decisions if they’re empowered to and some people really can’t and they probably shouldn’t be making decisions. You just have to learn who you can delegate those decisions to.
The Wolf of Franchises:
Definitely. And how has retention been of employees? Because I can see where if you’re retaining employees and they’re getting a feel for what the right and wrong decisions are based on them going back to you every time they have one of those moments with the customer, it’s super valuable. So how have you thought about retention and how how’s that gone?
Alex Jones:
Our retention’s been very, very good. Fingers crossed. And I know you said to not be humble, but every time I start to get on a high horse, I get smacked down in life. So, so far retention’s been good. I might have half my staff ready to quit and just not know it. But no, we try and just treat people well. A lot of it is just about being authentic with people and we have a pretty strict policy about not lending money to staff and not having staff owe us money, like vice versa. It just never ends well. And we have gone out of our way, for example, to help a staff member purchase a vehicle or when two of our staff got stuck out of the country when covid happened because they were on vacation. Two guys had a three day overlap where one was gone and the other was coming back. And that happened to be when the Philippines where they’re from, locked down the airport. So they got stuck out of Bermuda for several months and we did things like making sure they still had health insurance the whole time so that if something happened to them, they would’ve been okay.
The Wolf of Franchises:
It’s funny worked. I worked in a multi-unit franchise system, that’s my first job out of college, and it was a retail business for H V A C equipment and parts. And so I have some experience selling products and dealing with warranties and all that, but just on the employee side, mean customer service was number one. And that was the core philosophy and theme of everything every employee did. But sometimes I’ve found that businesses that focus on customer service, they don’t almost treat their customers far better than their employees. And I can tell you have a balance of focusing on both.
Alex Jones:
And it’s your internal employees, your internal customer service. Like people say, oh man, man, it must be great to work for yourself. It’s like, actually I work for literally everybody else. <laugh>. Like I work for my wife, I work for my kids, I work for my staff, I work for my customers, I work for my suppliers. The last person I work for is me. And I’m pretty happy doing that. And it does sometimes mean taking the employee’s side against customers. We had a guy this morning, so we interact closely with customers and so we have a mask mandate in the store. Okay. I do not want someone coming in no mask and interacting face to face for 10 minutes with a staff member. That’s a great way to have staff members out sick all the time irrespective of your personal political views. It’s a business decision whether you want to view it or not.
And so we have a mask mandate. And so we had a customer act up this morning and said he’d never come back and he doesn’t need our services. And the staff member texted me and said, Hey, can you watch the cameras on this? I’m really sorry. And we talked about it and she has had a big journey about not getting her buttons pushed by angry customers emotionally, because it’s their problem. Some people are assholes and they’re going to come in our store and act up. And you just have to pity them because they’re only our problem as long as they’re in the store. Once they leave, they have to deal with being assholes the rest of their life. And that’s a hard thing.
And then we’ve also fired customers before. I think that’s really going to too is, is to fire customers. The most egregious example was we had someone making inappropriate comments to an 18 year old attractive female member of our front desk staff, and he was in his fifties and he was not welcome in our store ever again. If he comes in the store, I’m calling the cops. And at the other end, we’ve had customers who have misbehaved, who are welcome back if they have shaved up. We had a customer walk out without paying for a phone, and our supervisor begged him, man, don’t do it. Don’t do it. I’m going to do it. And he did it and he got arrested a block away.
The Wolf of Franchises:
Oh no.
Alex Jones:
And he’s still welcome in the store because he came back and was kind of apologetic and I think he was drunk and having a bad day. And so he is kind of welcomed in the store if he’s sober. And it’s a small enough community to get away with that kind of stuff.
The Wolf of Franchises:
For sure. Again, back to my days in the H V A C distribution world, you know, got to know your customers and you knew who the regulars were. And we served in the location. I was out about 4,000 customers in the database of which 2000 were, would come in on a yearly basis varying amounts, but we had our customers, so we know where the headaches end. One of our ways of firing customers was simply just increase the prices to a point where if they buy it, if they still buy with these increased prices, it it’s worth the headache they’re going to give us. But if not, if they complain, it’s like, Hey, sorry, that’s the price. And sometimes that that’s enough to where they’re like, fine, I’ll bo I’ll take my business elsewhere and which is what you
Alex Jones:
Want. And for us, it’s usually been me having to have the hard conversation and say to someone, Hey, you’re not welcome in here anymore. You need to leave and sticking up for the staff.
The Wolf of Franchises:
No, and I think even that in itself, it’s just a good point for people who maybe haven’t owned a business yet, that if you’re the owner and the top dog, I mean, you’re the one who has to step up in those situations and it’s not a sure, it isn’t a comfortable thing for you to do.
Alex Jones:
I think as well as the owner, you’re often not the top dog, you know, have to pick up the broom and sweep when the sweeping needs to be done. You have to take up the trash. That’s something that some people really struggle with, especially if you start to make it. And it’s something that I, I’m really working on trying to remember.
The Wolf of Franchises:
Definitely. Yeah, I think leading by example is incredibly important. And the franchise owners I worked with, I couldn’t speak highly of them enough. I mean, they were first people in last ones to leave every single day doing all the little tasks if they needed to. And yeah, it was definitely a good way to set the tone for the rest of the employees.
Alex Jones:
Well, it’s important to remember too, that for the staff, this is a job and for me, this is my life. If something happens to them, they leave employment, they go find another job. If I screw up, I kind of lose everything. And I went broke, I guess about 11 years ago now, and that was the worst experience of my life by far the worst year of my life. And really everything fell apart. I had failed business and ended a romantic relationship. And I was trying to qualify for the Olympics at the time, and the combination of massive stress and everything else, I didn’t make it as an athlete. And so there’s actually a picture of me in an Spanish ambulance at the World Championships in 2012 with my foot crushed. I was a wind surfer with a big smile on my face because it was like, thank God this is finally over <laugh>. And so I never ever want to go back to that again. That was the worst thing. And there’s kind of lasting trauma when you go broke. My wife thankfully grew up quite poor in Maine. And so between the two of us were very tight with money and having a bulletproof personal financial situation really helps with peace of mind.
The Wolf of Franchises:
Definitely.
Alex Jones:
I think a lot of people end up getting themselves levered up, and we probably could have grown faster if I’d taken on a bunch of debt but that’s a great way to blow up. And I want to blow up again, and I don’t know if you guys, you talk with your listeners about blowing up, but in financial terms, blowing up is when you have lots of debt, not enough income to cover it, and you go from making it or appearing to make it to very, not making it very quickly.
The Wolf of Franchises:
Yeah, no leverage is a battle. And I’ve been doing recently on Twitter, this thing where I do kind of a business story every Sunday, and it varies what I cover, but it’s always related to a franchise. And there was a one that got a lot of attention about Quiznos, which like you said, I mean that they blew up big time. I mean, it wasn’t necessarily like it’s different blowing up as a franchisor versus a multi-unit
Alex Jones:
Franchisee. And it’s different blowing up as a corporate versus blowing up as a person or a franchise owner. Yes. Because you can go from publicly looking very successful with a bunch of stores to absolutely flat on your ass in no time and with no warning to the people around you because you’ll look successful right up until you’re evicted.
The Wolf of Franchises:
Precisely. Yeah. It’s a dangerous game. Mean there are some who play it and you don’t want your eyes to get bigger than your stomach as far as what you take on from a growth perspective. But if people are patient and play the long game, I, I’ve think I’ve ever seen anyone go bust from growing too slowly. They may cap their upside and miss out based on allowing other people to enter in before them. But if you have stability at one or two locations for a franchise, that’s tough to lose out at that point.
Alex Jones:
And so for us, we grew without any debt and that was a hard thing to do because it was when we first started to really take off, I was ordering parts, having them FedEx overnight, so I’d order them 7:00 PM at night at that time. We could still get FedEx overnight. They’d show up the next day at two, and then I’d started installing them on phones right away and then be calling those people the next morning, Hey, come pick up your phone. And I was doing some of the technician work, a lot of it, and I’m not a very good technician but that was how quickly we had to turn over our capital and I would literally just order what I had in the bank account and I had a little sheet to make sure I wasn’t going to bounce my payroll. So I just used a little spreadsheet.
There’s some good templates out there with a column that would sum up all of the incoming and outgoing, and then I’d literally put them in with the expected date as well as the expected sales as a positive number, outgoing is a negative, and make sure I wasn’t going to overdraw or bounce checks or not make payroll. And so for a long time when you’re growing from a business that does say $15,000 a month in sales to one that does 80, we did that in a year. That’s really hard on cash if you don’t have any outside financing. And we didn’t. So I don’t think I’ll ever feel out of the woods, and I don’t think I’ll ever feel financially secure again after that. I’ll always be looking over my shoulder for that reason.
The Wolf of Franchises:
Yeah, I can understand that. You know, kind of never want to get complacent. Well, I guess to wrap up on the topic of expansion, do you have aspirations to move beyond this store or you content to stay where you’re at or maybe even introduce another brand in another business to the mix?
Alex Jones:
The thing I’m turning over in my head is Bermuda’s kind of a protected market. You as an American can’t come here and open a business restaurant. Franchises are actually banned here. No, McDonald’s
The Wolf of Franchises:
Really
Alex Jones:
The only franchise restaurants that are here are kfc, which predated the ban on franchises, which was in the late nineties. And one that’s buzzed, that’s a local company that’s now franchising outside of Bermuda.
The Wolf of Franchises:
Did the coffee shop buzzed?
Alex Jones:
Buzzed? It’s a B coffee shop in cafe, yeah.
The Wolf of Franchises:
Oh yeah. I’ve seen them in California.
Alex Jones:
I don’t think it’s the same one.
The Wolf of Franchises:
Oh, okay,
Alex Jones:
Gotcha. But they’re a local company and they’re got stores in the Philippines, I think now and a couple other places.
So I think that I’m kind of looking for other franchises that I could open in Bermuda that would be adjacent to us. I don’t think I’d want to open up any more self and repair stores because it’s really hard to manage a business that’s a plane flight away. All of the CPR guys kind of have their stores within a five hour drive, which even five hours a hell a long way. But yeah, the guys who have good quality of life have all their stores in one corner of a city and a few guys have ones that are spread out all around a city. So it really depends on the city to what makes sense. But I really don’t know what’s next. I’m trying to figure it out. If one of your listeners wants to offer me an obscene amount of money to come live in Bermuda, run a C P R cellphone repair franchise, I, I’m open <laugh>
The Wolf of Franchises:
The offer’s on the table
Alex Jones:
Folks, but it would have to be enough money that I wouldn’t have to worry about what to do next for a while. And I’ve got two small children, and so even if I’m pushing 40 I’m going to be paying school fees until I’m at least 60 at this rate. So yeah, I’ve got that all to look forward to.
The Wolf of Franchises:
Yes. Well that’s an interesting fact. I never knew that they banned food franchises in Bermed. So
Alex Jones:
It was actually called the Hamburger Wars. And the reason for it was the US Navy base was pulling out a Bermuda and it had a McDonald’s and a local politician wanted to take over the McDonald’s and that offended other members of his political party. And so they got together and they actually just banned franchises to keep it from this one guy’s hands,
The Wolf of Franchises:
Huh.
Alex Jones:
Because they don’t want Bermuda to become everywhere else. People hate the thought of a Bermuda that’s full of McDonald’s and Foot Lockers and that kind of thing. So we do have to be a bit careful about being a franchise in Bermuda. One of our competition does love to scream on social media that we’re a foreign franchise, which is, I mean, a bit silly because it’s not like we’re owned by a C P R corporate. But
The Wolf of Franchises:
Yeah, I, it sounds like it’s elevated the kind of tension between franchises and independent businesses and Bermuda. But I do see that play out in a lot of markets in the US as well, where it’s buy local, not from franchises, but the reality is that franchise owners are local business owners too. They just chose a different path
Alex Jones:
And a lot of it’s xenophobia and stuff. And I liked my unique places and going into dive bars and stuff was one of my great pleasures when I used to go to bars. And there, there’s something special about that.
The Wolf of Franchises:
Definitely. No, a a hundred percent.
Alex Jones:
So do you have any other, I guess questions for me?
The Wolf of Franchises:
No, no. I was going to wrap up. This has been great. I guess if people want to reach out, is there any Twitter, LinkedIn, or anywhere specifically where you’re active that they could talk to you?
Alex Jones:
The best place is to reach out via Twitter at Rebel Banker. You can put that on the thing.
The Wolf of Franchises:
Yeah, I’ll put that in the show notes.
Alex Jones:
My tweets tend not to be particularly business oriented because my business is very boring. It really is just just mainline retail, no different than owning a mechanic shop or anything else that you have a bunch of technical provisioned people and you’re processing through repairs. And then we retail, we stock items and we sell them and it’s really boring.
The Wolf of Franchises:
I hear. well, hey,
Alex Jones:
But I like boring at the stage of my life.
The Wolf of Franchises:
Yeah, over the excitement. But yeah, we’ll have your Twitter handle in the show notes, and I think I can see you got a pin tweet of your crushed foot. So that’s a story that people maybe will get to read up about on Twitter someday.
Alex Jones:
And I think my career and finance, I got to do lots of cool stuff and I managed to always dislike doing it. And so I’m much happier here, but I wouldn’t recommend this path to anybody. We made it and we’re kind of out the other side of building this business and making it, but we haven’t made it to be mega rich or anything. I think that there are franchises and chains that you can build and do really well for yourself. And this was really hard and we suffered a lot to do it. And it took a lot of long nights. And the reason we made it was because we didn’t have a lot of personal overheads. I think that’s the most important part to this. I think if we’d had an expensive lifestyle if I’d had kids when five years ago, I wouldn’t have been able to afford to build this business.
The Wolf of Franchises:
Understood. Now that’s a great point to make and just some of people to consider. But yeah, I mean, you’ve certainly had an eventful path to that’s led you to where you are today.
Alex Jones:
It’s been fun,
But I wouldn’t look at someone, we were kind of born on third base, so to speak, with our business by virtue of our market and the competition we had and the backgrounds that we had. My wife has been instrumental in building this business. The initial technician we got is really, really, really good. And so we started with this really strong base that we were able to build on in a really fertile ground. And so I think that without those things, it would’ve been a much, much harder slog. And even then, it was still a really hard slog.
The Wolf of Franchises:
Definitely.
Alex Jones:
But if you’re an independent cell phone repairer store owner I think it’d be crazy not to convert at this point.
The Wolf of Franchises:
Okay. That’s good. That’s good to note. But all right, man, well look, this has been good. But yeah, thanks for coming on, Alex, and I’ll talk to you soon.
Alex Jones:
Thanks for having me.
The Wolf of Franchises:
Thanks for listening to Franchise Empires. We’re coming to you soon with actionable insights to take the next step on your franchise journey. So make sure to subscribe on Apple, Spotify, Google, or wherever you listen.