Podcast published on October 28, 2021
Announcer:Franwise Presents “What’s Your F’ing Business”, a podcast about Franchising. Here’s your host, Mary Ann O’Connell.
Interviewer:Hey, everybody. Welcome back to another addition of “What’s Your F’ing Business?”, a podcast about Franchising. I’m your host, Mary Ann O’Connell. I am the President and founder of Franwise. We are franchise consulting services. I’ve been a multiunit franchisee, I’ve worked with multiple franchisors, and for the last 20 plus years, I have been consulting with franchisors, and I know that there are some franchisors who just get it. They understand the promises they’re making to their franchisees, and they fulfill them. I want to highlight the ones who we think are doing it really well. This season, we’re also focusing on those brands that might not be considered sexy.As franchise professionals, we all get asked “what’s new, what’s hot, what should we buy?”and it’s not always the newest thing on the block. Sometimes, what you really want to look at are those services that the public needs, wants, and can perform consistently. Today, we’re going to talk about a brand that has business to business services and that’s sometimes overlooked in the Franchising world completely. So, we’re going to introduce Kim – I’m going to say it wrong – Kim Gubera, who is the President and CEO of PIRTEK USA. Welcome, Kim.
Kim Gubera: Thank you, Mary Ann, and thank you for the opportunity for sharing about our brand.
Interviewer: It’s my pleasure. I know a lot of people don’t understand what PIRTEK does. I had to go look it up when we first decided to do this together. So, can you please tell our audience about the business?
Gubera: Certainly. First off, I’ll start off with when we started, which was in 1980. PIRTEKactually started in Australia, and they eventually came to the US in 1998. What our franchisees do is, we provide mobile, primarily, hydraulic hose maintenance and replacement services. We are B2B and we do focus a lot on the mobile service because our tagline is WE’LL KEEP YOU OPERATING®. So, when you have a large piece of construction equipment – just to put it in everyday terms – out in the field working and it goes down, that can cost thousands of dollars for our customers if they’re not able to keep moving their work forward, so that is what we do. And actually, my background is not hydraulics. You might have guessed.It’s accounting, but in Franchising, there’s so much opportunity in this business and I like that you said we’re not always related to as a sexy brand. We laugh a lot about that, but we say, you know what? After 2020, we do seem a little more sexy because we did pretty well considering that we service a lot of essential businesses.
Interviewer: That’s great. We’re going to get into some of those details. You’re making me think; just this week we were talking with Joe Malmos from Batteries Plus and he was saying there are big batteries that need to be replaced on stationary equipment or in the field. And there used to be a company up in Canada that was a franchise called For Refuel and those big pieces of equipment that you’re serving – the hydraulics – they don’t go to the local Arco station to fill up, someone has to come to them.SoI always think of these as the businesses we never think of, but we can’t operate without.
Interviewer: How long ago did you start?
Gubera: So, we, here, in the US, 1998. So, we’ve been in the US 23 years. PIRTEK has been in business for 41 years. They actually had their big 40th celebration planned last year in Australia, but unfortunately, Covidnixed that. It was just our founder, Peter Duncan,he came over from New Zealand to Australia. Their family had owned related type businesses, and they saw a need for this mobile type service, went to Sydney, and that’s where they started. They didn’t start out franchising right away, but within a couple of years, they realized that was the way to go. Then they grew over into the UK and then, finally, they came to the US, and so they’re in a total of 23 countries. I oversee the US and Canada.
Interviewer: Okay. You’re not someone with a background in hydraulics. Is it necessary for your franchisees?
Gubera: No, absolutely not. Not that we don’t have people that do have that background. Several of our owners are former engineers, and this is their second career type thing. We also have some of our own technicians that have kind of grown up in the field, doing the service, that have then become owners. But we also have people from I.T. backgrounds, a former CFO, so, somebody that probably would never have touched a hydraulic hose before. We provide a lot of the training. A lot of people just have mechanical type ability, and they can pick this stuff up as they’re learning, but we give them a good foundation to start with. Then we provide a lot of ongoing technical support, because that’s just something that’s required in this business.
Interviewer: To me, there’s just something about, you say the word hydraulic, and I’m pretty sure that it’s way beyond my pay grade and something I could do. Are there professionals that they sometimes must or choose to hire to do the work?
Gubera: No, really, I would think, most people would tell you their hydraulic experience, no matter what level they are at, has come from, kind of, on the job training. So, there’s the Fluid Power Society. There are things people can become certified in, in certain parts of hydraulics, but for what we do, there’s just two weeks of training that we do. We do ongoing technical support, and it’s just amazing what people learn from other people, especially if they have a technical mind like that. Or you think of somebody that’s kind of like – I always compare it tocars. Some people can work on them, and some people can’t. A lot of times when I talk to my husband about certain things that are happening at work, he gets it right away, and I struggle with understanding it because I don’t have that mindset, but I’m learning about it. I have made a hose. I’ve been up in one of our vans and made a hose, and I realized it does take some training there and that’s why we provide that training to them initially.
Interviewer: So, does your training focus on the technical parts, or is it a blend of the technical and the business parts?
Gubera: So, when I say we provide training, we actually provide training for our franchisees’ technicians. So, anyone that’s going to be, what we call, a mobile sales and service technician, or MSST, they actually have the opportunity to come here for a weeklong technical only training. We’re running those, like, every other week to provide that service for our franchise owners. Some of our owners use it. I’d say the majority of them probably do after they have had the person kind of ride in the van for a month or so just to kind of get a feel for it. But then again, you have some other owners who have very heavy technical experience themselves and so they handle the training at their location. For new franchisees, they do a combination of one week of the technical training just like any other technician would do. And then we have a week of, I guess, what you would call normal, new franchise training, where we look at the business aspect – marketing, sales, I.T., et cetera.
Interviewer: That’s extraordinary commitment. The amount of training that you’re offering. That’s an extraordinary commitment. Are you capturing any of that on video so that they can have it on demand?
Gubera: Yes, absolutely. We do snippets of it, though, because we don’t want it to take the place of the hands-on piece because the technical training that we do here for a week, part is in a classroom with classroom type materials and then part of it is out in our warehouse, hands on,actually doing some of these things and practicing. So, we will train people virtually along with that class – we had to do that here during COVID, right, because we couldn’t have people necessarily coming to Florida to interact with everybody else. We’re trying to keep people pretty, staying where you are. But we also have started something new within our brand called PIRTEK University. And that’s where we’re doing just snippets of different types of products and ways to work on different machinery. And then we make that available on – we use FranConnect – and we make that available to our franchise owners and also their employees if they choose, a series of two-to-five-minute videos. Just “how do I do this?”because maybe you don’t remember after coming to training, whether it’s new franchise training or the technical training. And so, we are building that library constantly, but we did a lot of that for the technical part during Covid, out of necessity.
Interviewer: I think that’s very important. We’re used to digesting information quickly. It used to be that we were used to YouTube. Now it’s TikTok,really fast, but I would think that would be very important if I’m pulling up to a job and I just need that refresher. I could pull that up on my phone, watch it, and then go in and feel a lot more comfortable.
Gubera: Yeah. It’s going to take us a while to build a library of everything that could be covered because there’s a lot of different pieces and parts that go into that. Another thing that we do for our owners that we started about two and a half years ago is we actually have“call-a-technician”. So, we have a 1-866 number that anybody can call 24 hours a day, seven days a week, and we have a senior technical level person here on our staff that’s the same person, does it all the time. He loves it because he’s been in the field for – he’s a 20-yearPIRTEK person, and he knows everything there is to know about hydraulics. They can call that number at any time, and they can get immediate assistance because we are 24/7, so it could be at a time when we’re not in the office, necessarily. So, we started that two and a half years ago, and there is not a month that goes by that we do not get calls to that number.
Interviewer: I’m glad to hear you say month not a day, because that would be extraordinarily difficult. When we talked before this call, you were talking about how important values are to your culture. So, can you talk about the company culture a little bit?
Gubera: Yeah. I’d love to because that’s very, very important to us. I have to say, just from a personal perspective, it’s one of the things that drew me to this company. I work very closely with the owners of the company, and I didn’t just hear what they were saying, I saw it in action. And so, we are very big – I like to say we are very focused – on integrity, transparency, as much as possible, with our franchise ownership. I like to talk a lot, specifically myself, about mutual trust and mutual respect, because being governed by a franchise agreement is all well and good, but that’s not what you want it to be built on. You want it to be built on a relationship, and we do have enormous respect for what our owners do. It’s a lot of hard work to be a business owner. In the last year and a half, I think it’s been even harder to be a business owner, maybe a little lonely, and so I respect each and every one of them for what they have accomplished and what they’ve committed to, even to the point, one of the first things I did as the CEO back in 2019, is I went and visited every single location, just because I feel like it was important, I felt like it was important, I still feel like it’s important to go and sit with them where they do business and see what they’re doing – not me just sitting here in my nice office in Florida, making decisions that affect the entire franchise network and not taking all those things into consideration. So, the mutual trust and mutual respect is something that almost a day does not go by that we don’t talk about that here. We had Discovery Day here today, and we definitely talked about that quite a bit, but we live it, and that’s what I think makes us different. We had an ownership change about five and a half years ago where the founding family bought this business back and we have worked really hard over that time to refocus back on those values, and I have to say I give a lot of credit to our owners for sticking with us. I think more than ever we have a very strong brand awareness and network of brand ambassadors out there and that’s what we contribute a lot of our success to here lately.
Interviewer: I find that fascinating, that,first of all, that the founding family bought it back. So that’s going to make a big change. Was there any resistance from the franchisees in going back that way? Because to me, going to a culture of mutual respect is nothing but an upside.
Gubera: I think it’s just changed. So, from 1998 until it was purchased back in 2014, there was another owner or a group of owners, actually, but one in particular. And I think it’s with any franchisor, they kind of look to him as the founder. So anytime there is a founder change in the franchise system, everybody knows that that’s a big adjustment just because it’s the fear of the unknown. So, I think it was just more of what’s going to happen now. We know they’re the founders of the business, but – I’m speaking from a franchisee’sperspective – They had not worked with them directly. They had been part of the other owner who had started it here in ‘98, but that took a couple of years for them to see that the commitment was there, and a lot of things did change, and that’s always a little painful, but I think it has changed for the better and I think most of them would agree. It’s no bad reflection on the former owners. It’s just different and we just had a different perspective going in and what we wanted to see happen here in the US with PIRTEK.
Interviewer:When we were talking earlier, you mentioned that you had done the Franchise Business Review FranchiseeSatisfaction Survey twice. Was part of that because you were taking the temperature during this changeover?
Gubera: Yeah. Absolutely. So, we did the first survey in April of 2019, so just four months after I had taken over, and the son of the founder, who is our chairman of the board now, he was here as the CEO from the time they purchased it until I took over. I’m building my own management team. We wanted to kind of take the pulse of where we were at because it’s very important to me, and I believe to everybody on my team, that we’re moving the needle. So, we needed to have some kind of benchmark to start with to measure ourselves against. And we saw, it wasn’t that we received bad results when we did that in April 2019. As with all surveys, you receive some, sometimes things you may not have realized,but they’re so helpful, and we use that.We took that. Every member of my management team reads the entire FBR survey. If you’re familiar with those, they’re not small, especially when people put comments, but we read every one of them and if there are things that need to be addressed specifically with someone from what we read on that, we do that. But then we use that information to hopefully move the needle. So, when we did it again in October of ‘20, we waited a little bit longer than the year because of COVID, obviously, the big areas that we increased on:“I trust my franchisor” and “I respect my franchisor” and that’s what we were looking for specifically. So, for us, and we had close to 70% of our owners took the survey, and so we considered that a win. And it’s not that everything in the survey was perfect, but those two categories, being the biggest areas of improvement, were what we were really seeking at that point, because again, we feel like if we can get that locked in, everything else kind of falls in place.
Interviewer: Absolutely. First of all, to rank so high on trust, particularly, because when you’re working as a team with trust, you can make the changes you need to. You’re not going to get quite that amount of resistance. And to me, having some negatives aren’t bad. First of all, none of us are perfect, but rather than there were some things that weren’t great, were there any things that were real surprises? That, to me, is telling when someone will say something that never had occurred to anybody in the office that this was an issue.
Gubera: Surprisingly, no. I think what it does, though, is it gives us, and I guess this is not a great answer to your question, but I think when I come away with the biggest “AHA” out of the whole thing was more about just how different – and we all know this, perception is reality to people – but how different people’s perceptions can be of the same tool or the same initiative. And I mean, that’s just part of having different personalities. And we want that, you know, there’s not just like a one size fits all franchise owner, but really, there wasn’t anything. We went through an ERP upgrade in ‘18 and ‘19. So there was a lot of pain points about that. But again, that wasn’t a huge surprise. So really not anything that was shocking or anything. But again, you do always pull away a few really importantnuggets that go, “Okay, maybe we can do a better job of communicating on this because maybe we are doing whatever the initiative is, but people don’t realize that.Maybe we need to do more”.
Interviewer: Now as long as – to me – getting feedback in terms of a survey, handing in your financials, if I as a franchisee am getting something back from it, and sometimes what I need to get back is just to know I’ve been heard, makes a huge difference. And the fact that you were taking that and making changes. One of the things that I liked and when we talked a couple of weeks ago was that you said you had a very, it was, a technical franchise. She had a very straight value proposition. There were a few things that made you work, that it was a value-based strategy. If I have this right, it was you treat the customer right, you invoice them on time and you clean up.
Gubera: Yeah, it’s probably a lot of different things. I think I did answer that kind of off the cuff, but I guess what I’m really focused on is we’re not here. We’re not always just constantly doing “we’re going to go this way with this strategy, We’re going to go this way with this strategy”. It’s really more about just those things providing a consistent experience for the customer, a high quality one, both with our products and our services. And I hate to say simple, because that’s maybe not always a good term, but it is simple. And I mean, we believe in treating the customer right, treating our employees right, treating our vendors right and that’s the way we operate. That’s the way we want everybody to operate. And those things that really comes down to them as our strategy is just strengthening and expanding our brand. And that’s it because it’s all those things being done right every single day in every single location that we have. And we strive for that. And I will tell you, I think we have I’m sure I can’t say we have 100% compliance on that every day of the week because I’m not in all 107 locations, but we have a pretty high response that that’s what’s happening out there. And we even hear that back from customers. We have a pretty robust national account program. So you get a lot of shared information there for how things are going amongst your system. And it’s really impressive to me again and goes back to the quality of our owners and their commitment amongst their employees as well. And again, that’s what I think tells us that we are moving things in the right direction.
Interviewer: It’s a good indicator. And none of us are going to do everything every day because we’re humans, and sometimes our humanity, the darker side, gets in the way. Let me ask you this. You went through a lot of support changes during the pandemic. How many of those – of course I say it as if it’s all over now, but how many of those are going to become a permanent part of your support structure?
Gubera: Well, we did make – there’s some things like our sales, we have, like, a sales manual to assist our owners with sales, that was permanently changed during Covid, and we kept it afterwards because again, you’re right, I’d love to say it’s over, but it’s not over yet. And we also are doing more virtual calls with our owners. And so that’s something that we did. Primarily, we did phone calls with our owners because the weeks that we could not be on the road, which was about eight weeks, we called every owner, every single day and made about 2200 phone calls to our franchise network just to get a pulse of how they were doing. And that helped us gather information, too, of what was going on in different markets. And so, from that, we thought instead of just going and seeing them a couple of times a year and talking to them once a month, maybe we do these virtual calls just, you know –Today, we’re doing a podcast that’s being recorded, but you and I are looking at each other on the screen. I just think there’s a little bit deeper exchange that happens there than just over the phone. And so, we started those virtual calls, and we’ve continued to do those as well. People are a lot more open to that now. Some of the other things that we did is we did a lot of online – we did an online, a virtual town hall meeting because we couldn’t have our fall meeting like normal. We did an operations manager boot camp virtually. So, we’re going to be doing that again in January. So, some of those things stuck with us as an organization. Not that we were really behind on the times, but I guess we didn’t do as much virtually as some other company would do. And so, like everybody else, we’re a little more on board with that now. And that allows people to attend these type of events that maybe they couldn’t fly to wherever and be out of the office for three or four days, but that we can still have. We had pretty high attendance with those things. So, we’ll probably always keep those.
Interviewer: That would be hard for your people to fly and leave because they’re really on call all the time, aren’t they?
Gubera: Yes, and for our tier two model, which is the mobile only that eventually grows into tier one, they might be one of two people on their staff. So, if they’re gone for three daysor so, that would not be conducive to business. We found that to be really helpful, and we’ll probably continue to use that as well. And then one final thing I just thought of is, I have to admit, I don’t love the virtual part very much, but we started doing weekly calls during the pandemic. We did weekly virtual calls with all of our network just to touch base with them, give some motivation talk about PPP or whatever else we had garnered that might help them at the time. And we had pretty high participation of that. So, we’ve toned that down. Now it only happens every other month, but there for a while we were doing it every week, and before then, we had not done anything like that. And so, I think the communication, communication is key, right? And it’s just another way to communicate with them. So those are the support things, but gosh, we just learned a lot of lessons here in Covid like I think everybody else did.
Interviewer: Before COVID, we only thought Zoom was the noise you made when you were talking about fast cars. But I have a feeling with all of us having to adopt new technologies and doing it very quickly. We’re probably more relevant to younger potential franchisees than we were before, because this is as natural as breathing and technology drives their thought process and their efficiencies. So, whether we liked it or not, we’re sort of pulled into our future because that’s who’s going to be buying the next round of franchises.
Gubera: Yeah, you’re absolutely right. And quite truthfully, we would have probably gone kicking and screaming, right, any other way. But when you’re forced to do it, I mean, we were like, how in the world are we going to do a virtual town hall meeting and let everybody interact? So, we did it in small groups, and it actually was super successful. And even in March of this year, because it was still a little weird to ask everybody to come together and we had not had a conference in a little over a year, we did our awards ceremony that way to give out our awards for 2020 because we didn’t want people to have to wait until September of this year when we are having a conference to get their award for 2020. Then we even took it one step further and did it based from here, but I flew to where the franchisee of the year was, and we showed it there, me coming in and giving them their award in person. And we were like we had never done anything, that, to us, that was high tech, but we pulled it off. So again, yes, it does force you to get outside your comfort zone.
Interviewer: High tech and high touch in a pandemic. That’s pretty remarkable. Have you ever positioned yourself before, as you were a business that was recession proof because now – or recession resistant – because now I think you can say your recession resistant and pandemic resistant?
Gubera:Yeah, we definitely can. And yes, we did say that all along because the thing is with this equipment, and it’s not just the equipment, you know, we service a lot of fire departments and waste companies and people, anything that conveys the fluid. That’s what we’re involved in. So, there’s manufacturing. But we always said before that in bad economic times, people repair machinery a lot more. Right? And so that always bodes well for us.In good times, people don’t mind using mobile service to come out and help them, because guess what? They’re just wanting to get it done and move on to the next thing. So yeah, we definitely, nobody wants to say your recession proof or pandemic proof, but we do say that – I actually like to say we’re just resilient because of the way that we and our franchisees push through and continue to service our customers, helping a lot of the essential services, like fire departments and garbage companies and all those things that still needed to work during the pandemic.
Interviewer: I like the word resilience, because to me, it means you basically come through the Crucible and you’re stronger. Not just resisted it. I persevered and came through. So, looking ahead, let’s assume the worst of the 2020’s is behind us. What do you see as the main growth points for the brand?
Gubera: We definitely want to see our number of units grow, obviously like everybody else, but at the same time, we want to make sure our franchisees can grow their individual businesses, which then grows the system overall. That’s increasing our brand awareness and our footprint. We’re now in 26 States. So, we still have a lot of States to go, 26 States and one territory because we are in Puerto Rico now. And so, we want to consider that.We want that to continue to happen. We have just added more, another service line, to our business, which is industrial hose products. So that opens up a whole entire door for our franchise network to increase their business with existing and new customers. And so, it’s just really about growth. We have a lot of opportunity to grow here. It’s why the founding family bought the business back is because they wanted to see the US saturated with PIRTEK. And so that’s our focus, but at the same time, not ever losing sight of, just throwing on new franchises is not the way that’s not what we’re looking to do to grow. We want our individual business owners to grow at the same time. And so that maybe it’s a lofty goal, but that’s what everybody here on our team is committed to.
Interviewer: I think it’s a little touching that you would think that’s a lofty goal because to me, that’s what Franchising should be. You have to grow together. Seeing the area saturated? Well, that’s what most franchisors set out to do, but it sounds like you’ve done it with some intelligence so that you are supporting and understanding what you have before you throw more at them. The minute you said the industrial, I’m like, okay, then they can start hiring more people. Maybe they can take three days to come to a meeting now.
Interviewer: If there was one thing that you really wanted the listeners to take away to understand about PIRTEK and what makes it unique, what would that be?
Gubera: Wow. That’s a very hard question. I think that I would say a lot of our competitors are mom and pop locations, and we won’t necessarily be the cheapest, but I do believe we’re the best, and I believe we’re consistent. And we see that happen when we have customers come to us here in the US where they’ve used us in Germany or Australia, and they’re excited to see that PIRTEK is here. I think we have an awesome and unique opportunity to pave the way for maybe more types of industrial type franchises, because this is again, something that’s kind of unique, but it’s a necessary service. And I guess the last thing I would say is that we’re pretty proud of our brand and we live up to what we say we are going to do. And I feel confident that if they went to any location in the whole United States or probably anywhere in the world, they would get that kind of service that we’ve talked about today.
Interviewer: That’s lovely. And that’s something that’s not always said by franchisors, they don’t have the confidence. And I’m going to end with a question that I think I should have started with – the name PIRTEK. What’s the Genesis of it?
Gubera: So, it is kind of a unique name, obviously. And people want to call it “peer tech” and all kinds of things and “Pyrotech”, and we get all kinds of things. But when they formed the business in Australia, they were actually using Pirelli products instead of what we used today. And they were told, “hey, you need to find a name that doesn’t mean anything, you know, that you can trademark”. And so, because of the technical part of it, they said, “okay, Per and tech”. And that’s where it came from. And just a quick story, if you don’t mind, is that when I came to work here, of course, I had heard of PIRTEK only because I had a mutual friend that knew the previous owner, but I didn’t know him specifically, but I didn’t really understand what they did or anything like that. But of course, the first couple of years that I was here and people like, “Where are you working now?” And they’d be like, “PIRTEK? What’s that?” And so, I went to Australia. I was fortunate enough to go to Australia for the first time in 2018, and a driver picks me up from the airport, and he said, “Oh, are you here for business or pleasure?” I said, “Business.” And he said, “What company?” I said, “PIRTEK”. He goes, “PIRTEK?! I know what PIRTEK is.” And so, I’m living for the day when everybody here knows what PIRTEK is, because that was pretty exciting for me, but it’s starting to happen. People are definitely starting to recognize our brand, because now that we’re over that 100 Mark, we are getting more notice. I think after the way that we went through 2020, people are noticing that and they want a business that they can depend on. And then our owners also are very good at sharing that information with candidates or their friends and family. And so that’s how we’re growing. And we’ll just keep doing the same things we’re doing.May not sound super exciting, but it works.
Interviewer: And this is proof. It may not be sexy, but it’s working. And to me, making money, having a good job and feeling good about what you do? That’s pretty darn sexy.
Interviewer: Well, I want to thank you so much, Kim, if our listeners would like more information about the company, how can they reach out?
Gubera: Well, definitely at our website, www.pirtekusa.com. And of course, we’re on LinkedIn, Instagram and also Facebook. And so, you’ll find out a lot about our company there. We’re pretty aggressive on our social media, so there’s a lot of activity there. We’re not on TikTok yet, by the way, but I guess that will happen at some point. Somebody will have to tell me, but we’d love to hear from anybody and everybody. We do make sure that we keep up with all those things. And yeah, learn about PIRTEK. That would be great.
Interviewer: Well, we’ll make sure somebody does that. And for our listeners, as we say each week, if there is a brand whose story you would like to hear, or if you would like your brand story heard, please reach out to us at firstname.lastname@example.org. Kim, thank you for your time. Thanks for sharing some good, down-to-Earth information,some good information and also explaining that you don’t have to be flashy to have a great franchise business model. I very much appreciate it. Thank you. And thanks to all our listeners for tuning in, we hope you join us next week.
Gubera: Thank you.
Announcer: “What’s your F-ing business?” is created by O’Connell and Company, Inc. and Franwise. It is written and directed by Mary Ann O’Connell. Technical mastering by Ryan Cleary. Her theme music was written and performed by Sean J. O’connell and Leviathan Brothers and is available on Spotify. All rights to this podcast and music are reserved.