The Fidelity Story by Nelson Thomas
When I was twenty two years old I had restored a 1939 Ford panel delivery truck and struck out one summer to travel around the country. I had a bed in the back and some camping equipment so my expenses were low. During my travels I went to up-state New York where I met a fellow traveler who was also from California. As we became acquainted he told me that he was in the fire extinguisher business and that he made about three hundred dollars a week. In 1973 that was an impressive income. About a year later I was back in California and looking for a job. I found an ad in the L. A. Times that read “Fire Extinguisher sales and Service, will train, earn up to $300 a week.” I got the job and eventually started my own fire extinguisher business.
My first employer had paid me a fifty per-cent commission to set up new accounts and service them. I decided I could service accounts for half of what my competitors were charging and everyone would want to do business with me because my prices would be so much cheaper. I did ok until I got married and moved out of my parents’ home. Money was tight and I still did not understand the fallacy of charging cheap prices as a means of growing a successful business.
In the late seventies corporations were under attack for making profits. There was a growing perception that corporations were ripping off the consumers by charging excessive prices. Richard DeVos and Jay Van Andle the founders of Amway Corporation took out full page ads in several major newspapers that defended the profit motive. They explained how those profits helped to fund business expansion, develop new products and created new jobs. Their reasoning was so compelling that I immediately doubled my prices for my services and observed that I made more money and got just as many new customers. When I raised prices on existing customers to a more reasonable price very few of them even notice the increase.
Over the years I took on a business partner, opened an office and shop, built several service routes and expanded my business. During President Carter’s administration the country was teetering toward a depression. Many were out of work and the economic outlook was grim at best. Friday afternoons are always slow for cold call business sales because many decision makers leave at noon on Fridays. I came home one Friday afternoon and told my wife that we might be in a depression because everywhere I went from noon to five that day I found the owners in and working. For the most part though the recession hadn’t really affected my business. A few of my customers had gone out of business but most had just cut back and hunkered down to wait out the bad economy.
We decided to not participate in the recession and hired three more service techs and six commissioned outside sales representatives. With so many people being out of work we had an abundance of well qualified candidates to choose from. For the next three years we increased our gross sales by 50% a year and eventually had eighteen full time employees plus my business partner and myself. You might have thought we would have gotten rich with so many employees and so much new business but sadly that was not the case.
Managing employees was a significant headache. They were paid on commission and if they had a good day they would take it easy the next day. Some of them stole from us. They would leave work early to pick up kids from school and to take care of other personal business. After a while they would quit because they were not making enough money which meant we had high employee turnover which made it necessary to constantly hire and train new employees. Some of our employees quit to start their own businesses and some of these tried to take our customers.
We eventually had an office secretary who was really thoughtful and very accommodating and offered to drop off our daily bank deposits at our bank which was on her way home. Later, which was too late, we found out she was skimming the cash from the deposits and adding back checks that had come in the mail to balance the deposit and we eventually lost our business. I was burned out on employees and on being self-employed so I took an outside sales job selling hose and rubber products. After a year of being an employee I missed being self-employed and started another fire extinguisher service business.
I realized that my happiest time in business was when I didn’t have employees so for the next twenty five years I continued as an owner-operator. I serviced my accounts from a home based service van and did all of the work at the customers location. I had very little overhead and kept all of the profits. Before cell phones my wife answered the phone but with new technology I was able to talk directly to my customers and answer their questions in the field and make arrangements to take care of their needs. I made really good money and had very loyal customers because I treated them better than any of my employees ever would have. My evenings and weekends were mine to enjoy and because we service customers who are open all day we can just show up without a prior appointment so if we take time off no one misses us. I have on occasion taken a business call on the lake while I was fishing.
Eventually I was in a serious automobile accident from which I latter recovered pretty well but it did slow me down. I have loved the fire protection business and never forgot my desire to build a large company. Eventually I decided to take what I had learned over the years and to craft a franchise system for owner-operator franchisees so they could have a successful business without having to make some of the same mistakes I made. Over the years I had built four different companies from the ground up through cold call selling to businesses but I wanted to save my franchisees from having to start from scratch.
Most franchised concepts have a system of doing business that when followed will eventually make them money but my franchisees start with a well-established route of accounts and start making good money from their first day in business. I don’t believe you can find that with many other franchise systems.
My oldest son worked for me for a couple of summers when he was in Law School. He set up and serviced accounts and I let him keep all of the profits. One day he came home and told me that he had often come across my existing accounts and had noticed that all of my customers were really nice people. Even though our franchisees are not employees we still need to have a good working relationship with them so we try to choose nice people to work with. If you’re a nice person and easy to work with and you want a secure future then you might like being a Fidelity franchisee. Let us know if we can assist you in making that important decision.
Sincerely: Nelson Thomas
Founder: Fidelity Franchise Services LLC