In this episode, it was our pleasure to speak with Jesse Johnstone, the President of Fibrenew. He explains to FBR's CEO, Eric Stites, how Fibrenew is designed to succeed in both good times and bad and discusses the way they're supporting their franchisees in the midst of the COVID pandemic. The two also give advice to potential franchisees and emphasize the importance of understanding the demands of business ownership.
Listen to the full conversation here or read the transcript below.
Eric Stites: One of the things I love about franchising is that there are hundreds of different businesses out there. Many of them you would have never imagined existed as a business, and yet they're generating millions of dollars a year in sales. My guest today runs a franchise company just like that. Jesse Johnstone is the president of a company called Fibrenew, and what Fibrenew does is amazing. They fix leather, vinyl and plastic, which is literally everywhere, from furniture to cars, boats to planes, even a pair of nearly life-sized elephants, Fibrenew makes Fibrenew again. And as the recession goes, Fibrenew has historically performed very well in a down economy. Let's hear from Jesse about what makes Fibrenew a strong franchise business, and the projected growth they see in the years ahead.
So Jesse, tell me a little bit about Fibrenew. I know a lot of our listeners probably haven't heard of your company before. Tell us a little bit about what you're all about.
Jesse Johnstone: Sure. So let's start first I guess, Eric, with the name. So Fibrenew, meaning that anything that's essentially made out of a fiber type material is what we're going to renew and make better again. So just to paint a bit of a picture as a visual, if you're a pet owner at home and you maybe have a cat or a dog who's used your sofa as a scratching post or something to chew on, we do a lot of pet damage. So we'll go in and actually just repair that damage that's been done on that piece of furniture as opposed to having to either recover that damage or replace the entire couch in a more extreme scenario. So, that's just on leather in a home. But we do leather work in vehicles, in airplanes, in boats. We do actually some high end fashion as well. So it could be a purse or a jacket or boots. That's all leather material that again needs restoration after use.
We also do a lot of work in vinyl restoration. So, not records back in the day, you know wax recordings. Vinyl material that you would typically find in a medical facility. So I'm sure listeners have been in a clinic, whether it's a dental clinic or a medical clinic or maybe even a chiropractor or a massage where you'll see a rip or a tear in the vinyl material. We've got the processes and service to go and actually repair that right where the bed or the chair is. So we'll go right into a medical clinic or a dental clinic and our technicians will repair that vinyl right then and there. So we're seeing actually a lot of uptick in the medical space in particular. And the vinyl that you see in a medical clinic is very similar to the vinyl you see in restaurants.
So we do a lot of work in restaurants as well. Same thing where we see maybe a seat or a booth or a chair in a restaurant that's covered in vinyl. It gets cracked over time. Stress wear. Maybe even torn accidentally. So again, our guys will go in, repair it wherever it is and basically extend the life of that piece.
That covers leather and vinyl so far. And then we also do work in plastic restoration. So we find plastic damage, again in vehicles. So you think about dashboards, armrests, panels on doors. We do a lot of work in the aviation space, a lot of work again in marine with all the plastic you find on consoles, et cetera. So a lot of times our guys will go in and do work on a seat in a vehicle and at the same time end up doing a color touch-up or repair on the door panel. Same thing in marine. We'll go in and maybe do some work on either leather or vinyl on a boat or a yacht. And then at the same time they'll say, "I actually have a little crack in my console over here. Can you restore that as well?" So a lot of combination jobs come around that way.
But all this to say, this is a long winded way of explaining that leather, plastic and vinyl restoration is at the core of what we do and we do it primarily in a mobile sense. So we'll do it wherever the piece is. Our guys will go and just do it wherever it happens to be.
Eric Stites: Yeah. I love your brand. When people think of franchising, so often they think of restaurants and food because that's what we all know. And you guys offer a service that I think most people would never even think about like, "Oh yeah." They think about that need, but they don't necessarily see that as a business. So I mean, the fact that you have a successful franchise out there and have all these operators that are making these repairs. I mean you mentioned there's just an endless list of things that can be fixed. I'm assuming that's a growing list. Tell me a little bit about how you personally got involved in the company.
Jesse Johnstone: Oh, great question. I'm not asked that one very often, but my start with Fibrenew goes back 13 years ago. So I actually come from a technology background. I'm a computer science guy by trade and by schooling. And I was running at the time, going back 13 years ago, a consultancy. So, we had some servers, we were doing some web programming, we were building web software, doing websites, all this kind of stuff. And at the time, Fibrenew put out a request for proposal. They needed some work done. And my little company was one of the three that was chosen to go in on that first round of bids. And we put the proposal together and did the interview, reference checked, the whole thing. And luckily enough we were chosen. So my company at the time was hired by Fibrenew just to do some one off things that they needed done.
And then it just started to grow and it started to become, well, can you guys do this and this and this and this? And before too long, Michael Wilson, CEO of Fibrenew, just said, "Look, you've just got to come work for us." So, myself and my two employees who were with my consultancy firm came with me, and all three of us are still now employed with Fibrenew. And it's just been this growth pattern personally for me inside the company and for the company itself at the same time. So it's been a wonderful journey so far, Eric.
Eric Stites: That's awesome.
Jesse Johnstone: I can't wait for the next live team.
Eric Stites: Yeah, that's awesome. So how many locations do you have around the United States?
Jesse Johnstone: In the US alone, we just surpassed 180. So, that's coast to coast. We have three in for training right now. So that number will be closer to 185 by the time two weeks is up from now. And then globally, we're just shy of 260. So that's Canada, US, Mexico, Chile and New Zealand. And we're having conversations with people all over the place, not just in the US and Canada, but we have a lot of international interest growing right now as well. So if you and I have this conversation a year or two from now, who knows? We could have a bigger footprint globally. We'll see how that goes. But most of our focus right now is in the US and Canada primarily. There's still so much opportunity. Even with the 180 locations in the US, there's still room for at least 200, if not 300 more franchise locations for Fibrenew. So still lots of room for growth.
Eric Stites: That's awesome. So, obviously we find ourselves in some pretty interesting times today. I've talked to a lot of franchise executives over the last couple of weeks and obviously depending on the business, some businesses are completely shut down, some are operating at half speed, some are operating more than, doing more revenue than they were before COVID-19 and the crisis set in. Tell us a little bit about operating in a downtime. How does your business respond to that?
Jesse Johnstone: That's the question of the day, isn't it? Business operations and specifically franchising goes. So we've seen a bit of a varied answer to that in that a lot of our franchise owners have not seen any downturn at all. I mean, it's full steam ahead for them. And some of them have personally chosen to close to right down and that could be influenced either by their own concerns over the pandemic and/or what the local health authorities in their area are telling them. So, obviously New York was one of the first states to close down. Our franchise owners in New York state in particular have seen a dip in service, in revenue just because they've had to. Other areas like Georgia, Tennessee, Florida, our guys down there have really not seen much of a downturn at all. I mean it's just business as usual as best they can.
So it is varied across the country in terms of what's happened locally. But it does point to the fact that our service is still needed no matter what's going on in the economy. And especially in times of tightening, which we're certainly going to enter into economically speaking is where restoration really becomes a preference over replacement. And we've seen this play out numerous times over the course of our 35 years as a company, where wherever there's a recession or a downturn that happens, people actually turn to restoration and to Fibrenew even more. I mean, there's still a lot unknown in terms of what's going to, you know, the next few months and weeks to come. But we know that we're well positioned no matter what seems to happen. And that part feels good amongst the uncertainty that's out there generally.
Eric Stites: Yeah. Yeah, I've talked to a lot of business owners, both franchise and non franchise and now obviously there are challenging times, but I think many people agree that being part of a franchise system now is a great time to be part of that because these mom and pop businesses that are out there, they just don't have the support that a franchisor like yourself can provide and the updates and the trainings and all that stuff. And I think so many people are seeing that value of oh, this is what a franchise system is all about.
Jesse Johnstone: Absolutely. Yeah. I mean, we've got our own little net inside of the Fibrenew franchise system amongst everything that's going on. And I've actually seen that play out, Eric, over this time where people are uncertain. There is some fear out there. They don't know what's happening. And they're actually turning inwards, meaning back into the Fibrenew fold even more through a time like this. So we've been holding more Zoom calls. I mean we just actually two weeks ago finished our complete seminar series for the year over Zoom video. So we had almost 260 franchise owners log onto Zoom over the course of a week to get together, to talk shop, to learn new skills, to cover the new products that we released this year, to share ideas on what everyone's doing through this time.
And then also twice a week now, every Tuesday and Thursday mornings, we get together for what we call a company wide huddle call. So again, through Zoom, anybody who's available can join in. And I mean we've got 50 or 60 people at a time joining these twice a week, alongside all of the one off conversations and emails and everything else we're having. So, we've really seen this banding together that's happened through this. And to your point, it's just, that's really the value of a franchise concept, isn't it? Is to points like this.
Eric Stites: Yeah. I mean when you look at the numbers of people that have been obviously laid off over the last few weeks, I mean it's astounding. And I think there's going to be a pretty sharp recovery. That being said, I know historically we know that when companies shed workers like that, they're always a little bit slow to re-hire all those positions. So, I suspect, as many experts do in the franchise industry, that there's going to be a lot of people, especially those later in their career, that have a really tough time finding a job, and that's going to drive a lot of interest in franchising. So, with that being said, what is it about a candidate, what type of skillset really is critical or makes a franchisee within your system successful?
Jesse Johnstone: Well, if Bob Johnston, our Director of Franchise Development, was on this call, he would list a few things. So what he always says to that question is, first of all, it seems a little bit odd when we say it, but you can't be colorblind. So, in Fibrenew, color matching is really, really important. So that's actually one of first criteria when someone comes to us in as far as saying, "Okay, let's just get this question out of the way now. Here's an online test. It's 20 questions. Let's just make sure that you can distinguish color before we continue the conversation," because it is a game changer or it's a game stopper actually.
Eric Stites: Yeah, fix that crack with red when it's really green.
Jesse Johnstone: Right. Yeah, you're not going to make it very far. So being able to distinguish color, as I said, as silly as that may seem, is really important to us. The other one is that you've got to be someone who's somewhat mechanically inclined. So someone who's not afraid to work with your hands and/or problem solve to figure things out. So, if you're a tinkerer, if you're someone, we have a lot of people in the system who work on their own vehicles or do their own house renos or fix toasters and coffee makers. I mean anybody who's not afraid to get in there, get your hands dirty, have the mindset to want to repair things and figure it out is really, really important.
Jesse Johnstone: The other one that's really big is the ability just to talk to people and network and just introduce yourself. So we're not really talking about stone cold sales calls here. We're just talking about the ability to just let people know who you are, what you do and how you can help them. And have that positive energy to you to welcome that call back from that person you did the introduction to when the time is right to say, "Yeah, I can help you out." So, it's not really, we don't refer to it as selling, Eric. It's just really just letting people know because I mean leather, plastic and vinyl is everywhere. Everybody out there has some item that's made of leather, plastic, or vinyl. So our ability to help them is great. And all you have to do is let them know that you're in the local area. This is how you can get ahold of me and we'll help you out kind of thing.
Jesse Johnstone: The other one is we want the hustle. So what we mean by that is someone who's got the energy to be out in the world all day, every day. We are a mobile service. So that means that you're not going to be sitting behind a computer. You're going to be in and out of your vehicle doing jobs in and out of your vehicle, helping clientele in and out of your vehicle, hauling product back and forth, et cetera. So, the energy level's got to be there and we just refer to it as the hustle. And then also, kind of the just overarching theme to this is just someone who not necessarily has always wanted to own their own business, but maybe someone who's just looking for control over their employment and their paycheck and the ability to just create their own destiny, as cheesy as that may sound. It is really important, especially through times like this, where having control over your paycheck is really important. Not being at the mercy of someone laying you off, or doing the furlough route, or just eliminating your job outright.
So we've had no closures through this time. Nobody in our system as a franchise owner has said, "You know what? I don't want to do this anymore. I don't think I'm going to survive COVID." Not one franchise through this whole time across our whole system.
Eric Stites: That's great.
Jesse Johnstone: If anything, we've heard the opposite of people saying, "I'm so thankful I made the decision to start a franchise with Fibrenew because I can ride this out. I know I can. My service is still going to be needed. I'm still going to have a "paycheck". I'm still going to be myself. And then also the fact that we've really just supported our franchise partners through this time. But more than anything, Eric, just the ability to see that they're going to be okay and that they have control over this time that does seem a little bit uncontrollable. I mean, they can at least control their own business and control their own destiny and there's a need for a service. So that part's been really, really good to see, that our franchise owners remain confident.
Eric Stites: Yeah, that's great. I know so many people that look at franchise businesses and they're like, "Why would I take the risk to start my own business when I've got a nice secure job?" Well, certainly that has changed very quickly and people realize that job security is not a thing.
Jesse Johnstone: It's actually not.
Eric Stites: But employment security with a business, with a franchise business especially, you've got that support and that longterm growth opportunity. And I like that hustle aspect because that's, I don't know, have you figured out a good way to measure hustle in an individual? That's a great skill to ... if you could measure that in an individual for sure.
Jesse Johnstone: Well me and my technology background, you think it would have created a hustle-o-meter app or something. But no, we haven't done that yet.
Eric Stites: So, two questions before I let you go. What's the craziest thing you've ever seen one of your franchisees repair in all the years that you've been doing this?
Jesse Johnstone: Wow. Well, some unusual ones. I know one of our partners in Denver did work for, I believe an Indian restaurant downtown Denver and they had a bunch of nearly life size to scale elephants in the restaurant that was wrapped in leather. So he had to go in and restore elephants. That one sticks out as being unique. Another one that comes to mind is tour buses. So our guys in Nashville, we have three franchise partners in Nashville, do a lot of work when tour buses come back from a year long tour or whatever it is. They come back just, I mean destroyed. So our guys go in and they have to make this bus presentable again for the next lease that it goes out on. And they have not divulged names, because I don't think they can, but they've rubbed shoulders with some pretty big stars in the tour bus space.
Eric Stites: That's pretty cool.
Jesse Johnstone: Yeah, that's always pretty unique. All the way up to doing scheduled work for the prime minister of Canada. So, the equivalent of Air Force One in Canada, our franchisee in Belleville, Ontario goes in and does a complete refurbishment of the interior of the prime minister's plane. It's three or four times a year. We've had, I mean, multimillion dollar yachts been worked on by our franchise owners. So some really, really high end stuff. And then everything in between. I mean, it's really, really unique, the scale and scope of what our guys face.
Eric Stites: Well, and I imagine it's a very, viral is not the word to use these days, but word of mouth business, where I picture a franchisee walking into a marina to work on someone's boat, and suddenly everybody in that marina is calling them saying, "Hey, come work on my boat," or whether it be buses, like you said. I mean-
Jesse Johnstone: You called it, yeah.
Eric Stites: ... that word of mouth spreads quickly.
Jesse Johnstone: Totally. Yeah, even in front of a customer's home, if we pull up to a residence to work on a couch, just having the vehicle parked out front or in the driveway, neighbors will start to look and say, "What's this Fibrenew van about? What's going on?" And they'll actually come over and talk to our franchise partner.
Eric Stites: Yeah, that's cool.
Jesse Johnstone: And ask questions. And lo and behold, we'll end up doing a job for the neighbor. And so, yeah, just visibility and the viral effect, like you said, go a long way.
Eric Stites: Right. So Jesse, last question. I guess, what advice, for somebody that's looking at franchise opportunities, whether it's your opportunity or some other, what advice would you have for a candidate today before they invest in a franchise?
Jesse Johnstone: Well, first and foremost, if you haven't owned a business before, understand what it takes. Business ownership isn't for everybody and you have to really, really commit to long hours off the hop to get it going. There's no shortcut to that. There's no shortcut to the work it takes to get things going. So, be honest with yourself. Be honest with your family. It is a family decision, Eric. So I think that's one of the biggest things, is make sure that your partner and your kids are involved in the process. They know what you're about to get into. They understand what the business is. Get them excited about it because they may want to be involved down the road as well. So don't be an island inside your own house thinking I'm going to figure this out and go and start this business and just take care of it. It just doesn't work that way.
So, do your homework. Understand what it takes to run a business. Bring your family into the mix. Make sure they're involved. Really understand the culture of the franchise concept as well. And I think you do that through two streams. One is with talking with as many current owners as you can, and if you have access to it, talk to past owners as well. So through your validation process, ask the franchisor if you can have names and numbers of people who have been in the system and who no longer are. That's really important perspective and that's something that we do here at Fibrenew. You can phone anybody you want, current and past owners. And also talk to the leadership team and the people who actually run the company right from the support staff to the administrative staff to the leadership team.
Talk to the people at the helm. Talk to the people who are on the street, running the businesses, being the franchise partners themselves to get a sense of the culture, to make sure that ideology is matching, to make sure that it's going to be a good fit for you because you've got to be good with it. You can't have someone with opposing stance on worldviews or opposing stance on business ethics or anything in general. I mean, you've got to make sure that you share the same vision and can march to the same mission. So I think in no particular order, that's my list, Eric. Just conversations, family, and just understanding what it takes.
Eric Stites: Yeah. I mean, I think that's great advice. I mean, I have the luxury of only talking to brands that I know have outstanding franchisee satisfaction, like your company. But I also tell candidates all the time that you've got to talk to franchisees and talk to the corporate office and really find out what that culture is all about because every company is a little bit different and has slightly different cultures, and these are the people you're going to be spending the rest of your life with, or a good chunk of your career time with. If they're not the kind of people that you feel comfortable hanging out with, it's probably not a good fit.
Jesse Johnstone: That's right, because it is relationship based, isn't it? I mean, it's the same as, as you're making friends if you move to a new city, you start to pick and choose who you want to be friends with or you pick and choose your spouse or your partner. I mean, it's kind of the same vein. Just, you've got to be careful. Right?
Eric Stites: True. True. Well Jesse, I appreciate the time today. I wish you the best of success and I'm sure business is going to be booming here in a couple of months as we crawl out of this craziness. Again, I wish you and your team the best of success.
Jesse Johnstone: Look forward to it, and all the best to you and the team at FBR as well. Appreciate it.