In this fascinating episode, John Hewitt, CEO of Loyalty Brands Inc, shares how went from $0 to $480M in 15 years, then built one of the top 10 fastest growing franchises ever, and helped over 1,000 entrepreneurs become millionaires.
You will discover:
– How to stop struggling to win the game that everyone else is playing and create success your way
– The million dollar difference between listening well and doing it the hard way
– Who should be self-employed and who shouldn’t
Episode Transcript
Scott Ritzheimer
Hello, hello and welcome welcome once again to the secrets of the high demand coach and I am here with a fascinating and high demand coach working with somewhere on 10,000 different leaders now if I remember correctly, but this is the one the only John Hewitt. Now you may have heard that name before because he’s best known in the tax preparation industry having founded two of the largest tax prep companies in the United States, Jackson Hewitt and Liberty Tax now in 1982, John Hewitt founded Jackson Hewitt, a tax prep company, and that company grew to over 6000 locations nationwide at the top of its success. Now he’s sold it to Cendant Corporation for over $480 million in 1997. In 1998, he founded Liberty Tax a major player in the tax prep industry as well, with at one time over 4000 locations in the United States and Canada. In addition to success in business, John is also a philanthropist who’s dedicated his time and resources to helping others through fighting world hunger and other charitable endeavors. Today, he’s the CEO of loyalty brands, which we’re gonna explore a little bit. He’s also the author of a great book, I compete, how my extraordinary strategy for winning can be yours. Well, John, welcome to the show. excited to have you here. I’ve got a lot of questions. I’ve seen labor Lady Liberty, dancing on a intersection or two. So we’ll dive into that in a bit. But tell us a little bit. What was it about the tax tax prep industry that that drove you to it?
John Hewitt
Or sly was very blessed that 20 years old to find out what I wanted to be the rest of my life. And I took a course at h&r block while I was in college. And it it just was perfect for me, because, number one, it was helping people and improving their lives. Number two is it was legal. And so you got to argue and there’s always gray areas in legality and, and with the IRS and the tax code. And then finally, with my math skills that you can remember, come close to remembering the work without computers. But not only do we not have computers, we didn’t have calculators, we started out with an end machine pulling the hand off an ending machine. So my my man, one of my blessings, my math skills, and it came in came in extremely handy in preparing tax returns quickly. Yeah,
Scott Ritzheimer
that’s fascinating. So what was it? You know, because a lot, there’s a lot of tax prep businesses out there, right? There’s a lot of CPAs and accountants and there’s a lot of folks who do what do you think separate in your approach? They created such enormous success not once, but twice.
John Hewitt
Well, first of all, to succeed, you have to have differentiators. You know, if David had gone down to the field with the same sword in the same armor, and the same shield is Goliath, there would be no David and Goliath story. So he’d be the 180 Night guy killed by God. So you have to have things that you do better. And what when I, all my companies, I’ve improved on the standards of the industry. So we have differentiators that make us a little bit better. I’ll give you example of one of them. We have about 15 or 20 things we do better than then all of our national competitors. Now that I’ve started Ajax and what is that, in the tax season, most people think of it as low as 15 weeks from January 1 to April 15. But rarely do we do most of our business in just four busy weeks. And so what we do, unlike our competitors, I love driving by an h&r block office that quartered a night in the morning and there’s customer standing outside, the door’s locked, and there’s taxpayers sitting in playing the computer. Because they’re like a bank, they they’re up until nine o’clock. And then at five after nine, there’s a knock on the door. And they don’t even get out of their chair. They just wave them away, come back tomorrow because they locked the door at nine o’clock. Well, we just simply during those four busy weeks, expand our hours. So we’re more convenient when we offer a better service to our customers. And so that’s just one of the the 15 clear objective differentiators that set us apart. You don’t have to do everything better. But you do have to hit you do have to have a few things that you’re extraordinary, not ordinary.
Scott Ritzheimer
And how did you how’d you go about doing that? So one of the things again that I kind of aware I heard about you guys, not the first but the most frequently was your advert. One of your advertising strategies for Liberty Tax, which if I remember correctly, was you know, you’d have Statue of Liberty kind of outside of Have one of the How did you come up with that 100 You use that as a way of attracting people into your stores?
John Hewitt
Well, I read a book, just before I left Jackson Hewitt back in 1996 called guerilla marketing. And he talks about standing up. And for example, in Virginia Beach, there’s 550,000 people, there’s over 40,000 businesses. And so if you’re having an office of any kind, in Virginia Beach, you’re competing against 40,000 other businesses that are trying to get your attention. And suddenly, you can’t do the same thing as everyone else. If everyone else design TV, or radio, or billboards, or direct mail, or yellow page, you have to do something unique. And I didn’t invent, I didn’t embed costume characters. Back in the 50s. And 60s, there was a run on McDonald’s, there was a little Wendy’s with a weak red haired Wait, there was a Burger King with a big head, Burger King. There was Chick fil A as a cow. So I didn’t invent it. But I’ve asked, I’ve asked this question to 1000s of people. So how many businesses do you pass on the way to work each day? Typically, they’ll say hundreds, I said, How many can you name? And they say, 20. And I say, Well, if you saw a costume character, Lady Liberty, or in our case, and h x in the eagle, if you saw costume character weaving it you were in traffic every day from January through April, would that be one of the businesses that come to mind? So doesn’t matter how many messages you’re bombarded with on TV or radio or, or on the Internet? If you see that costume character, it thins out more than anything. And we tried it, and it works.
Scott Ritzheimer
So you’ve done this a few times now of and so how is it different from the first time to the second time? And how is it different from the second to the third? What did you do differently? How did you show up differently?
John Hewitt
Well, when we sold Jackson Hewitt for $483 million, a public company, I had been there 15 years. And if you build something from zero $129,000 investment to 483 days, in 15 years, and, and again, they grew to 6000 offices, if you grow to that size, and you don’t hit didn’t learn a zillion lessons, you’re an idiot. So I was a lot smarter and more experienced. And plus, so I had the advantage of 15 years of experience already doing it once. And my name was famous in the industry, right? And maybe not in the whole United States. But in the tax preparation industry. There’s only two names block in us. There’s only two guys that are bounded national tax changes and I’ve done it twice. And as you pointed out, I built 10,000 offices and Henry block only built 9000 house. So my name was famous, my so I was attractive, attractive to everyone in the industry was interested in hearing me and I was much more experienced and the so the path was much easier the second time then then the person down what when I went to Liberty Tax now there was a nuisance because now I have can be not only with h&r block, but it can be with my own name and my own system and my own people and my own software. So yet, in those in the first 12 years, we grow to 4000 offices, the Bassett, one of the top 10, fastest growing franchisors ever, so again because of my my experience, so I had experienced that Blanca experienced that I took that to Jackson Hewitt that I took those who combined 27 years experience went to liberty. And now I’ve started again with a tax. And each time I’ve had the best system and the best news growing organization, then my entire career.
Scott Ritzheimer
Wow, wow, it’s fascinating. So frat franchises play a big part of this and really cracking the code for the franchise strategy. Now you do a lot of work with your company, loyalty brands as well. So tell us a little bit about what work you’re doing there and and how you help other entrepreneurs to succeed.
John Hewitt
Well, I’ve have six Murthy brands has six different franchisors that and the two fastest growing are a tax which is a direct competitor with Jack Newell and liberty and zoom and grim zoom and grimace. during basketball, I just grown to love them. The pet industry, zoom and Grimmond is a mobile grooming pet service. And I just love pets it grows by 10 to 12% a year everything pet, whether it’s food or picking up boob or dog walking or pet sitting or delivery of food, euthanasia, I mean, everything is growing exponentially. And so I just loved the pet industry. And those two are my, my fastest growing franchisors. But we’re in the franchise business. And we have as I said, we have six short franchise that we’re looking to build in Crossmark. Our largest grooming, mobile grooming has 5000 customers, while 5000 of them need a tax return, our largest grooming ever our largest tax obviously is 7000 customers well 4900 have pets that need and most of those need grooming. So we’re one of the things we do well is cross market between the different franchise systems.
Scott Ritzheimer
Wow. You’ve done this for a while you’ve worked with lots of franchisees. What are some of the key traits for an entrepreneur who you’ve have found is likely to succeed as a franchisee?
John Hewitt
Well, well, there’s two standards right there. The first standard is should you be self employed? And then the next standard is once you should be self employed, how do you succeed? So I brought in 5200, franchisees, Mike, we’re about about a quarter of them should never be self employed. Because they either didn’t have the risk tolerance, or the startup startup in the initiative, no one’s there to telling you what to do. When you’re, you’re self employed, no one says you got to be there at eight o’clock in the morning. And he got to stay until six o’clock at night. So much. So many people need bosses to what I found is two thirds of the people in the United States need, they want to be self employed, but only about half of them can be self employed, because they just don’t have, they just don’t have what it takes to be that that independent without guidance without the security that comes with a chai. So first was okay, now they passed the test, they shouldn’t be an entrepreneur. Now, in a franchise system, that the key is very, very simple. Doesn’t matter how smart you are, doesn’t matter how experienced you are, doesn’t matter how educated you are, what my job is give you the best system in the industry. I’ve been doing that for 54 years. If I do my job, your job is to power that system. And Scott, you would think that’s automatic. That’s simple. I mean, thank you for yourself, you weren’t even thought of when I started in this industry. And yet, out of the 5200 people I brought in not one person’s lesson 100% The best listen 98 or 99% and but typically are in the worst I’ve had 1000 become a nurse, and 1000 have gotten out of this, the 1000 that are Mainers they listen 98% No one’s ever listened to another. And the people that go out of business, they listen to that they list in less than 90%. And if you don’t listen, I promise you it’s gonna cost you time or money or book.
Scott Ritzheimer
Wow. Wow. So fast forward a little bit, then you’ve got a book now I Compete as to tell us a little bit about why you wrote the book and what you hope folks would get out of reading it.
John Hewitt
I decided a long time ago that that to whom I mean in this, this comes from the Scripture, right? That too much is given much as expected, then God didn’t give me all the blessings that I’ve got to just sit around and and go on a beach somewhere and, and just relax and retire. So they got to kill me to stop me. But I decided that that my goal is my what my purpose is, is to improve lives. And our mission statement says it all. And in four words, having fun, improving life. I believe that on Monday morning, if you’re going to work and not looking forward to it, you’re going to the wrong place. It’s not thank God, it’s Friday. Thank God, it’s Monday. And we’re here to improve lives of our shareholders, our employees, our customers, our vendors and the world around us. So I’m what my goal is to improve lives. And so I wrote the book with some of the lessons one of the biggest compliments I’ve gotten in my book over the years is that I talk a lot about men mistakes. I don’t just talk about what went right. I talked about, I talked about the obstacles we had to overcome, which which some of the obstacles or many of the obstacles were of my own doing?
Scott Ritzheimer
Well, so it’s a question I like to ask all my guests, and it’s this, what would you say is the biggest secret to life to business success to whatever it may be? What is the biggest secret that you wish wasn’t a secret at all? What’s that one thing that you wish everyone listening to or watching this podcast knew?
John Hewitt
Well, my mantra is buying something you love. Work hard, persevere. That’s, it’s that simple. Now, if, and if there’s a secret, I’m better than that. It’s do what you say you’re gonna do it. Yeah, you know, I read some time, and I believe this vehicle. If you always do what you say you’re going to do, you’re going to be successful. So just do what you say. And that’s, to me, that’s integrity. Integrity is that, to me, obviously, it’s about the past. And integrity is about the future. If I say that, I’m going to call you next Tuesday. That’s been tight. And I that’s integrity, whether I really am fanatically committed to that or not?
Scott Ritzheimer
Wow, I love that distinction. So there’s some folks listening, maybe they’ve been thinking about jumping into the entrepreneurial world, and you’ve challenged them. And they’re saying, Yeah, I think I’ve got the initiative, I’ve got the resilience, I want to give it a shot. But they don’t want to do it alone. They love the idea of stepping into a franchise environment or working with someone who who can give them the advice that they need. They’re ready to listen, how can they find out more about you and the work that you guys are doing there?
John Hewitt
I’m easy to find now. You can Wikipedia me or personally, or I’m on loyaltybrands.com So if anyone’s got if anyone’s interested in a free copy of my book, if you just send it to email to me at [email protected] Happy to send you a free copy of my book.
Scott Ritzheimer
That’s awesome. Well, thank you so much for that John will get that email address in the show notes, folks. It absolutely take him up on it. Just this brief introduction I had to the book was phenomenal. You will not regret it. John, thank you so much. I mean, just thank you for the time that you’ve given us today, the wisdom. This is one of those episodes that what you shared was so deep and so succinct that folks have to go and listen to it again, because they missed about half of it the first time. So well done. I really appreciate that. For those of you watching, listening, genuinely go back and listen to it again. You’re going to hear so many new things that you missed. And thank you for being here. Your time and attention mean the world to us. I hope you got as much out of this conversation as I know I did. And I cannot wait to see you next time. Take care.
Contact John Hewitt
John Hewitt is best known for his success in the tax preparation industry, having founded two of the largest tax preparation companies in the United States – Jackson Hewitt and Liberty Tax. In 1982, John Hewitt founded Jackson Hewitt, a tax preparation company. Jackson Hewitt grew to over 6,000 locations nationwide at the top of the company’s success. Jackson Hewitt was sold to Cendant Corporation for over $480 million in 1997. In 1998, he founded Liberty Tax, a major player in the tax preparation industry with over 4,000 locations (at one time) in the United States and Canada. In addition to his success in business, John is also a philanthropist who has dedicated his time and resources to helping others through fighting world hunger and other charitable endeavors.
Want to learn more about John Hewitt’s work at Loyalty Brands Inc? Check out his website at https://loyaltybrands.com/
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