3 ways franchisors can use PR to grow their company with John Hewitt

In this episode, John Hewitt joins On Top of PR host Jason Mudd to discuss three ways franchisors can use PR to grow their company. During this episode, John breaks down the cost of getting earned media and why it’s worth it.

Tune in to learn more!

Short Guest Bio

John Hewitt is a renowned entrepreneur who has made a significant impact in the business world through his innovative ideas and strategic thinking. He is best known for his success in the tax preparation industry, having founded two of the largest tax preparation companies in the U.S.

Watch the episode here

Also available on

Listen to the episode here

5 things you’ll learn during the full episode:

1.  How to use PR to build your credibility
2.  How PR efforts can MAKE you money
3.  The mindset needed to take advantage of PR opportunities
4.  Where to start when looking for PR opportunities
5.  Why maintaining relationships with journalists is important

About John Hewitt

John T. Hewitt is an American entrepreneur, founding Jackson Hewitt, Liberty Tax Service, and Loyalty Brands. Together, these companies account for approximately 10,000 tax preparation and business services franchises in the USA and Canada. In addition, Hewitt is a pioneer in the development and use of specialized tax-preparation software, which is now the industry’s standard practice.

After leaving Jackson Hewitt in 1996, John decided to launch a new company that would be the vehicle for further marketing and brand development innovations, Liberty Tax Service. The new company initially focused its operations in Canada. Liberty Tax Service was launched there when Hewitt purchased a Canadian tax company on September 1, 1997. The new concern achieved a huge measure of success by opening more than 4,000 offices in North America by 2012, which made it the fastest-growing major tax-preparation company in history. Liberty Tax Service is best known for the costumed "wavers" dressed as the Statue of Liberty used in front of offices nationwide. Hewitt left Liberty Tax Service in 2018 and founded Loyalty Brands.

Loyalty Brands is a synergistic group of franchise businesses and services designed to work together to help the franchise buyer prosper both quickly and over the long term. Decades of documented franchise and business success have enabled Loyalty Brands to develop a business system that drives customer loyalty, repeat business, and financial stability. The proven systems allow a franchise business to run smoothly and efficiently while achieving consistent, measurable growth.

Quotables

• “Part of what a leader has to do is have a somewhat rational goal and be able to sell that goal.” - John Hewitt
• “You need a rival to inspire people and show them the path that you’re on.” - Jason Mudd
• “PR creates that brand name, and it creates support from the local community.” - John Hewitt
• “We often call this newsjacking. That’s the term we use for when something’s happening in the news, and you twist it or position it to your benefit.” - Jason Mudd
• “If you get to start all over again and you don’t do it much better, then you’re an idiot.” - John Hewitt
• “Building relationships with people and not rushing into relationships but just building them slowly over time is important to public relations.” - Jason Mudd
• “I’ve gotten more comments when I’ve provided substantive commentary and expert, helpful advice when I’m quoted in the news.” - Jason Mudd
• “How can someone do business with you if they’ve never heard of you.” - Jason Mudd
• “Happy successful franchisees, that’s our mantra. If franchisees are happy and successful, you can’t stop growing by leaps and bounds. If they’re not, you can’t grow.” - John Hewitt
• “There’s nothing more fun than changing and improving lives.” - John Hewitt 

Resources

• iCompete: How My Extraordinary Strategy for Winning Can Be Yours 
• Connect and learn more about John Hewitt on LinkedIn.
• Visit loyaltybrands.com for more information.
• Listen to more episodes of the On Top of PR podcast.
• Find out more about Axia Public Relations.

Additional Resources from Axia Public Relations:

• How to use newsjacking to support brand awareness and engagement
• Franchise Industry Services
• Improving your earned media coverage solocast with Jason Mudd
• 12 ways journalists annoy PR professionals 

Disclosure: One or more of the links we shared here might be affiliate links that offer us a referral reward when you buy from them.

Episode Highlights

[01:02] What led John into the tax prep business?

• He started working at H&R Block because his dad owned a franchise.
• John really enjoyed the math part of taxes.
• He also enjoyed helping people who were afraid of the IRS.
• Lastly, he enjoyed the legal side of taxes and being able to stand up for people.
• He went into business with his father and truly enjoyed it.

[05:30] What attracted John to franchising?

• He was introduced to franchising at H&R Block.
• He then started Jackson Hewitt and wanted to go bigger than H&R Block, so he started franchising. 
• Then, he started Liberty Tax in Canada and franchised it.
• His two businesses together have 10,000 locations –– more than H&R’s 9,000 locations. 

John: “Part of what a leader has to do is have a somewhat rational goal and be able to sell that goal.”

Jason: “You need a rival to inspire people and show them the path that you’re on.”

[08:41] How did John use PR to help build his companies?

• At H&R Block, he did free tax returns for those affected by the flood in New York. This caused him to get lots of recognition, and he even won a national award at H&R Block for the most public relations that year.
• He had even more people come in that year to do paid tax returns due to him amending free tax returns.

John: “PR creates that brand name, and it creates support from the local community.”

[13:40] Using PR to build credibility

• At Jackson Hewitt, he sent out a press release stating they would be doing free tax returns for laid-off employees after seeing an article about how 5,000 employees in the area would be laid off.
• Again, more people came in for paid returns after hearing about this than those who came in for their free tax returns.
• The earned media his company received from doing these free tax returns gained him more paying customers and made his investment well worth it.

Jason: “We often call this newsjacking. That’s the term we use for when something’s happening in the news, and you twist it or position it to your benefit.” 

[18:26] What’s the mindset behind good PR opportunities?

• When the floods occurred, it didn’t cost much to do a tax return in June and July. Thinking through the cost of things can help make opportunities for PR in your company.
• You can’t be afraid to create these opportunities. One John Hewitt employee would lock her door when they did these promotions because she didn’t believe it would make her any money. John said he would pay her to do it one time, and it worked out because she gained three new clients afterward with referrals and people coming back to her after the promotion.
• Do things that benefit your clientele. John would always incorporate customer appreciation days.
• Instead of thinking, “It’s costing me money,” do the math for the number of new clientele you’re attracting and how much they will pay you against how much it costs to do promotions (John’s free tax returns).

John: “If you get to start all over again and you don’t do it much better, then you’re an idiot.” 

[32:34] John’s success with the WSJ and other national publications

• John saw a mistake a journalist made in a publication in the WSJ.
• He reached out to the journalist, who said, “I’ll check, and if you’re right, I’ll either cite you or let your boss know you’re doing a good job.”
• He told his boss he was doing a good job, and a year later, John was promoted to his company
• However, he still kept a good relationship with this specific journalist and even took him to a Yankees game (the journalist paid for ethical reasons).
• John and his company got quoted or published multiple times a month due to his relationship with this journalist (starting 5 to 6 years after first meeting him).
• Look for local events and see how you can participate! 
• Get John’s book by sending him an email with your shipping address. 

Jason: “Building relationships with people and not rushing into relationships but just building them slowly over time is important to public relations.”

Jason: “I’ve gotten more comments when I’ve provided substantive commentary and expert, helpful advice when I’m quoted in the news.”

Jason: “How can someone do business with you if they’ve never heard of you.”

John: “Happy successful franchisees, that’s our mantra. If franchisees are happy and successful, you can’t stop growing by leaps and bounds. If they’re not, you can’t grow.”

John: “There’s nothing more fun than changing and improving lives.”

Enjoy the Podcast?

If you did, be sure to subscribe and share it with your friends!

Post a review and share it!

If you enjoyed tuning in, leave us a review. You can also share this with your friends and family. This episode can give you professional insight into media coverage. Know your rights and the regulations to follow when it comes to the media.

Have any questions?

You can connect with us on Facebook, Twitter, and LinkedIn.

Thank you for tuning in! For more updates, visit our On Top of PR website or join the community. You may also tune in on Apple Podcasts, Spotify, and YouTube.

Transcript

Announcer

Welcome to On Top of PR with Jason Mudd, presented by ReviewMaxer.

Jason

Hello, and welcome to On Top of PR with Jason Mudd. I am Jason Mudd, your host, and today we are joined by John Hewitt. We're really glad to have John on this episode. John is the CEO and founder of Loyalty Brands, but you probably know John from his other endeavors, including creating or founding the successful tax preparation company Jackson Hewitt. And so John, welcome to the show. We're glad you're here.

John

Thanks, Jason. It's my pleasure.

Jason

So you are a renowned entrepreneur who's made a significant impact in the business world through innovative ideas and strategic thinking. You're best known for your success in the tax preparation industry, having founded the two largest tax preparation companies in the United States. John, tell me about what led you into the tax prep business.

John

I was blessed when I was 20 years old to find out what I wanted to do. My dad was a frustrated entrepreneur, and he always wanted to be self-employed, but I was born when he was at Michigan State and he had two other children before he left college and two quickly after that. So he never had a chance until I was 20 years old to investigate being self-employed because he needed to make money to support the family. So he called H&R Block in 1969 and asked them if he could buy a franchise in Hamburg, New York, a suburb of Buffalo. And they said, well, as a matter of fact, we're going to open a company store there this year. We don't. You have your son take our course, maybe it could work for us. So I started working for H&R Block and loved it, loved franchising, loved taxes, and that was 54 years ago.

Jason

Interesting. So, for full disclosure, one of my very first clients was H&R Block many years ago. And so John, tell me what made you interested in taxes? What'd you like about it?

John

There were several things. Number one, it was a world without computers. It was 1969. In fact, we didn't even have calculators. We had to use a machine back in that age. So I'm very good at math and multiplying, adding, dividing, and so that came in handy in a world without computers and calculators also people are scared of the IRS and afraid and not knowledgeable on taxes. So it was helping people and that drew my attention, and it was a love of the law and the ability to argue about the gray issues in the tax system. So those three things combined to make it a perfect type of opportunity for me.

Jason

Perfect. Talk to me about your growth. I mean, obviously, you had incredible growth, but where did you go from being with H&R Block into deciding to start your own business? And then how did it grow from there?

John

Yes, 12 years later, I was managing 250 H&R Block offices, and it was 1981. My dad was a CFO of a public company, and he decided that we should computerize taxes. He liked the little Apple computer better than the mainframe that was running his public company. And so, in 1981, we both quit our jobs and built a first tax software for an Apple computer. No one wanted it. It was way ahead of its time, and we found a company in Virginia Beach called Mel Jackson Tax Service. Mel had died. We bought six offices from his widow. Over the next 15 years, we changed the name to Jackson Hewitt merged two companies, went public, and sold it for $483 million.

Jason

Wow. Wow. That's a great story. Who was the entrepreneur behind that? Was that you or your dad or a combination?

John

Well, my dad was my introduction, and I have the same kind of personality a lot like my dad. So I was very much attracted to the opportunity, and we did it together after that, we did all of our companies together.

Jason

Nice. That's a great story. So you're not a believer in people who might say that the best family business has one family member and that blood and business don't mix. You feel very different about that.

John

Totally. Because it actually brought my father and I very close together, and I worked 365 days a year because everyone in my family and my friends either own stock, they own a franchise, they're an employee, and so there's never a dinner at Easter or Christmas or Thanksgiving or any holiday where we're not talking about my businesses.

Jason

Yeah, I totally understand that. So what attracted you to franchising? When did you decide to start franchising?

John

Well, actually, H&R Block is a franchise, so I was introduced to it very early and if you read my book, the second biggest mistake I ever made at Jackson Hewitt while I was building Jackson Hewitt was I started out, we bought six offices from Mel Jackson's widow, and after six months we had 11 offices. A year later, we had 15. A year after that, we had 22. Meantime, H&R Block had 9,000, and our goal was to be bigger than H&R Block to have 9,000 offices. And although it's pretty good in two and a half years to go from six offices to 22, I realized I was going to be about 2200 years old, but by the time I got to H&R block size, so we copied what Block had done, and many others and immediately started franchising.

Jason

Okay. And then what happened next?

John

Well, we went from 22 offices to 49 to 200 to 300 to 500. And so we grew very quickly. Again, we sold the company for $483 million. It became a billion-dollar company, and I had a tH&Ree or non-compete, and the non-compete didn't cover Canada. And having grown up in Buffalo, I knew the Canadian tax system. So my next venture was to open Liberty Tax in Canada.

Jason

Okay, got it. Got it. Did you end up growing it to be bigger than H&R Block? Did that happen?

John

Actually, Liberty, within 12 years, grew to 4,000 locations. So between the two, Jackson Hewitt had 6,000, Liberty had 4,000 H&R Block never got. They today are still at the 9,000. They were in August of ‘82 when I started Jackson Hewitt. So my two companies combined have 10,000 offices, and they're bigger than Block, but neither company got as big as H&R Block.

Jason

Was it helpful to you to have a vision of getting bigger than H&R Block to inspire your team and create a vision of what success and what the direction the company's headed into?

John

Yeah. I've built two of the top 100 retail chains in the country, two 500 million companies. And to do that, part of what a leader needs to do is they need to have a goal that's somewhat rational and they need to be able to sell that goal. So yes, having that target made it a lot. It is a team-building venture.

Jason

Yeah, yeah. I'm a big believer in that you need a rival or you need some kind of clear vision to inspire people and to motivate people and show them the path that you're on.

John

Exactly.

Jason

Yeah. So let's talk about public relations. My understanding is you're an advocate for PR, and tell me about how did you use PR to build your various companies?

John

Well, I'll take you back to when I first got into block management. They moved me to Elmira, New York, and in Elmira, New York, they had had a flood. And there's a special tax break that you get if you are in an area that's declared a national disaster area, you can amend your return immediately. So this was September of ‘75, and the flood had just happened in June of ‘75. And so it was declared a national disaster area. 

So in looking for an opportunity to use PR, I invented a strategy that we, and I was still at H&R Block, we would amend everyone's tax, anyone that was affected by the flood for free. So I was in an area called the Southern Tier of New York, and it had Corning, New York, Ithaca, New York, Hornell, WA against Glenn Myers, Sayer, Pennsylvania, and every one of them had a radio station. They had TV; they had little newspapers. I got so much public relations for doing free tax returns, amending free tax returns that I won the national award at H&R Block for the most public relations that year.

Jason

Oh, wow, okay. Okay. And that PR of good faith offering to amend people's tax returns probably created some sense of loyalty in addition to the visibility. Right.

John

People love it when you do things like that. We had more customers come in and pay us to do a return in the following year just because we had made that offer than we did free returns. So it actually is very, all brand name recognition is powerful. Yes.

Jason

Yeah. So to clarify, you're saying that not only did you do X number of complimentary amended returns, but then you saw even more people who were, for lack of a better word, strangers who had heard about your good work or your goodwill and who didn't exactly come in to have their tax return amended, but they just came in saying, we heard what you guys did and we want to do business with a company like yours.

John

Exactly.

Jason

Yeah. And John, I personally think that's one of the big things that people misunderstand about PR, right? They're looking for PR to be self-serving. They're looking for PR to just tell their story because they want it told as opposed to what you're describing is you did something good for the community that was worthy and an exchange for doing something good from the value you created. You raised visibility in the markets, and that drove good faith from the community saying, I want to do business with this organization.

John

That's exactly right. The PRS has the huge value of creating brand name, of course. And there are so many different companies, industries, opportunities that are constantly bombarding the average American with. It could be online, it could be TV, radio, newspaper, whatever. You're constantly bombarded by messages, and it's so hard to get brand name PR gives you that brand name. And it also creates, as you indicated, it creates a loyalty and a support of the local community. They're happy to see that you're helping the community.

Jason

Yeah. Excellent. Excellent. John. Hey, we're going to take a quick break. We'll be back on the other side in just a minute. We're going to talk to you about the H&R Block ways franchisors can use PR to grow their company. We're also going to talk about how you can get a copy of John's book, IComp Compete, and we'll be right back after this message

Announcer

You are listening to On Top of PR with your host, Jason Mudd. Jason is a trusted advisor to some of America's most admired and fastest-growing brands. He's the managing partner at Axia Public Relations, a PR agency that guides news, social, and web strategies for national companies. And now back to the show.

Jason

Hey, welcome back to On Top of PR, Jason Mudd here joined by John Hewitt, and we've enjoyed learning more about his background. And now we're really going to dive a little bit deeper into the H&R Block ways franchisors can use PR to grow their company. We may have gotten a little ahead of ourselves and started that process, but John, let's talk about using PR to build credibility.

John

Yeah. I'll give you another example of that, of how I use PR in building brand name and custom base. When I started Jackson Hewitt, we started in Virginia Beach Market, and we had 21 offices here. And when we decided to franchise, we said, well, if someone's going to be interested in a franchise, they're going to look at it and say, well, you can do taxes and be successful in Virginia Beach, but how's that going to go in Las Vegas or in Chicago in Miami? And so we decided to open in one of the closest major cities in Durham, North Carolina, about a three-hour drive from here. And we opened, and I had been very successful, and as I described, I had won a couple of national awards at H&R Block with our 9,000 offices and invented a concept that in one march, in that first march when we opened in Durham, North Carolina, we saw an article in the paper that 5,000 employees were going to be laid off from a factory.

So we issued a press release that it was March of 1984, and we issued a press release that we would do text rings for free for any of the laid-off employees. Well, on the local news that night at 11 o'clock news, we were on both two of the tH&Ree major stations. We got a half-hour radio talk show. We got a nice article in the local paper with a picture, and we only ended up doing about six or seven free returns for employees. But again, we had twice that many people that came in and said, that was very nice of what you did. We're going to use you because that was such a nice gesture of your company to offer free tax returns for employees.

We're always looking for an opportunity. When you try to get the attention of the press, you need to look for things that are happening and come at it with a different twist. Earlier I talked about when there was a flood in the Almira Corning area of New York that we offered free amended returns. Well, there's so many articles written when a natural disaster area, the press is always looking for after a few days for a new angle. So we always try to invent it a new angle for public relations. One story I love from a competitor, I was very jealous of this, and it was many years ago, maybe 25, 30 years ago, that Philadelphia Cream Cheese, the Philadelphia Eagles were going into Dallas to have a playoff game 25, 30 years ago. And one of the grocery chains in, or no Philadelphia Cream Cheese took their cream cheese off of the shelves of the grocery store because they were competitors of the Dallas Cowboys. So you have to look for opportunities like that to draw the attention of the public.

Jason

Yeah, I love that. I love that. In the business today, we call this, someone has termed this newsjacking. And so that's the term that is often used to take where something's happening in the news, and you twist it or position it to your benefit later. And to your point, sometimes you got a news jack very quickly because the media isn't going to cover something for several days. But the examples you gave I think are very good. They have a longer tail or a longer timeline. So I love the idea of turning floods and layoffs into a newsjacking opportunity. Let me ask you, John, when you were telling me about 5,000 employees being laid off, what's the mindset you have to have to take advantage of an opportunity like that? Because if you weren't the boss and you had a less ambitious ownership group or leadership team, they might be scared to death that they're going to get overwhelmed with nearly 5,000 people looking for free services.

John

You have to test it. I've always tested things and you test it on a small scale. And I saw back when we had done all the articles and all of the publicity we got from the flooding, we didn't do very many tax turns. And you can imagine, Jason, that it doesn't cost much to do a tax turn. The flood was in June, and it doesn't cost a lot to do a tax turn in July, August, September, October, and November because we don't have staff. And so we can make an appointment and do it by appointment only. So you have to look for opportunities that don't cost much. And we've learned by experience. When I was at Jackson Hewitt, we invented a give back to the customer day, a give back to our customers, and so on. Every Friday in March, we would do free tax returns, and that was our way to give back to our customers and the community.

And so I had one franchisee in upstate New Jersey across from the city that got an article in the local paper, we're going to do free tax turns on this Friday. The neighboring franchise was so terrified of that. They locked their door, they locked their door, and it did not open. So second year comes along the franchise, and he didn't do five returns for free that day because March is a very slow period. People that want their refund quick have already filed, and people that are procrastinators wait until April. So it's not very busy. And so the next year came and the franchisee next door, she was going to lock her door again, and one of my support people said, well, what should I do? And I said, well, let's tell her that we will pay her full price on anyone that comes in during that Friday.

So the convention happened a couple months later. I ran into her, and her name was Lynn. I said, Lynn, how did it go? And she said, well, actually, I had tH&Ree customers, and it worked incredibly well because I'm one of the customers. Their sister came in, and they paid in April on a different day, they referred their customer, and they referred the customer a paid customer. And on the second customer, they had two prior year returns to do. So I did this year's return for free, and I got paid on two prior returns. So it worked like a charm. Yeah,

Jason

Absolutely.

John

So it was funny because how people are, because people just don't listen, they don't learn. The third year came along and got an article again, and the support person called up and said, you'll never going to believe what Lynn asked. And I said, yes. She asked if we would pay again, and I said, no. And she locked her door again. And then she was a franchise for five years, and at the end of five years, she just walked away. She did not have the mindset of an entrepreneur.

Jason

Right, right. Yeah. Well, it's funny you mentioned this because reminding me of a story early in my career, John, we were doing a canned good drive and I was on a radio station and they were doing the canned good thing or whatever, and they kind of put me on the spot and they were like, Hey, Jason, what is your company going to do if somebody comes in and brings a canned good? And at the time, we were in the business of selling $20 a month services. And so I said, Hey, for every canned good you bring in, we're going to give away a month of free service. And man, my boss heard that radio interview live, and I think he pulled a U-turn on the interstate and came back to tell me how he felt about that. Right? I mean, as you can imagine, a canned good doesn't cost hardly anything.

And here we are giving away $20 in service. So he came into my office and kind of told me exactly how he felt about that, and I was pretty upset. And the good news is I think we only had about five to seven redemptions and they just brought in one canned good. They weren't looking to take advantage of the offer like I had phrased it or whatever. And so you're reminding me of that situation; he had the fear mentality as an entrepreneur and told me he really struggled to run a business. It was really hard for him. 

But I guess John, one thought that comes to mind as I'm thinking from this as a contrarian standpoint, there's somebody who would say, well, does PR even work if we only had so many people come in and actually redeem? And I think your story is really good, and I wonder if you have any other anecdotes that even though a lot of people didn't respond to the request to do a refile, you had people come in who heard about you and felt good about you. So what would you say to that person who says, that's not a lot of redemption? So did the PR even work?

John

We learned that after I sold Jackson, he and I started Liberty. I had Jackson Heit for 15 years and grew it to a half-a-billion-dollar company. And if you get to start all over again and you don't do it a lot better, you're an idiot.

And we had the one customer appreciation day was so successful that we expanded that at Liberty Tax. And now at Liberty, I had to compete against my own name, my own software, my own system at Jackson Hewitt. Absolutely. So we went to freebie tax returns all of March because again, March is very slow. The average office does in 12 hours a day, does about tH&Ree or four tax returns. So they have 6, 7, 8 hours a day. They're not doing anything. The preparers just sitting there fully available, already paid for. And so the cost to do a free tax return is very low, costs less than $10 to do a free tax return. But what happens, Jason, is let me take you H&R Block the math quickly. The average tax return today or at H&R block is about $250.

So let's pretend that we require each office give back a hundred free returns to the community in March, and they have to be by appointment only and new customers only. So what we've learned is that we actually make money because out of the hundred returns you do, and we keep statistics on this, I've been doing this since 2000, that over 30 customers come back and pay you full price, and you get at least 20 referrals. So for every hundred free returns you do, you get 50 people. Between the 30 people that return and pay full price and the 20 referrals that pay full price, you get 50 customers paying you $250; you get $12,500. And so actually, if you divide that by the number of customers, you're getting $125 each when you give a free return, and it only costs you $10, and the profit on the incremental customers is 70 or 80%. And that's only the one-year impact because those customers are going to come back again and they're going to refer customers in the future. But the immediate impact in 12 months of giving a free return is you're making $125.

Jason

Yeah. Yeah. I love that. The other thing I really like about what you shared, and this is something that I think we've done a solo cast on in the past, is this idea that in order to calculate your true ROI, John, as you know and I know as business owners, you've got to know what your true profit margins are and what your true cost of doing businesses, because otherwise, you're calculating what I call your return on value or maybe your return on income, right? But to get your true ROI for your investment, whether that's in PR or marketing, whatever you're doing, you want to make back the profit, not just the income. And I love how you walked us through that math. It was very clear to me, and I think that makes a lot of sense for our audience also.

John

Yeah. And that's not typical way people think. They think like your boss did that. Ooh, that's costing me money. That's costing me money. Right? I have another example, if I can take a minute. In our industry there, you can have your fee deducted from the refund, and then you don't pay us anything upfront. And what happens is about two or 3% of the time, the IRS holds that money. And so that $250 that I was talking about, the IRS holds that your refund because you have student debt or back taxes or child support and you didn't pay it. And so they catch up with you when they hold your refund. So now the customer has an outstanding $250 liability. And so the major companies and even the companies I've left have changed their policy. What I say is you give it to 'em for free.

And so this is the way that I think of it. The average office does a thousand returns, and let's say you're going to have 30 customers that fall into this situation. The other customers say, well, that's Mr. Franchisee. That's 30 customers at $250 a piece. You have an accounts receivables, $7,500, you need to go collect that money. And because they want their royalty too, the franchisor wants their royalty. So you've got to collect that money. And the way I explain it is, no, it didn't cost you $250. It cost you the incremental cost to do each tax return during the year is less than 30 even when it's busy. And so it costs, it costs you only $900. Now, they even give you a collection agency to try to go get that money. And what I train my people is that's horrible customer service. If you have 30 people that didn't get your refund and you try to collect from them how many are ever going to come back to you and pay you in the future, you go to them and say, you know what, Mr. Smith, you didn't get your $4,000 refund and now you owe me $250.

But if you go to the customer and say, you know what? I'm sorry you didn't get your refund. We're not going to charge you. We're not going to charge you a fee. So our fee, we're going to waive our fee this year. And so it cost you $900. Now, what I say is if you want to chart, that's going to happen upfront. This is January. You know that you're going to have 30 people that aren't going to pay. So with a thousand customers, it's going to cost you 900 to prepare the returns for those 30, charge 90 cents extra per customer, and you cover the whole cost. It costs you nothing, and you don't lose customers. You don't turn off customers. You get the goodwill of and appreciation and respect of the people you did a great gesture for and it cost you $0.

Jason

Yeah, I love that. So a dollar more per return, nobody's going to notice. Nobody's going to complain about that. No one's going to not buy from you over a dollar probably. And you also, for lack of better expression, you didn't kick somebody while they were down.

John

And how many people are they going to tell?

Jason

Yeah, that's right. That's right. Or in the modern era, John, not go online and vent and post a negative review or go to social media and say, those guys, they didn't even give me my money or whatever. Because I'm sure there was a lot of misunderstanding when that happened. And you need to be gentle and help those people understand exactly what happened.

John

Exactly. People count on that money, and most of our customers live paycheck to paycheck, and that's a month of paychecks for them. Absolutely. And they're looking forward to it, and they're brokenhearted when they don't get that money. They've already got it spent in their mind when they come into the office.

Jason

Right, exactly. So, John, we agreed we were going to talk about H&R Block today and three ways franchisors can use PR to grow their company. I feel like we've done two of them. We've talked about building credibility, we've talked about generating journalist interest. Do you agree we've covered those two so far? Well, I think so. Is there anything else? Okay, perfect. So then you wanted to share your story about the Wall Street Journal's success in other national publications?

John

Yeah, the Wall Street Journal took me a long, long time to get into –– a long, long time. When I was at H&R Block back in the late seventies, I saw a mistake that there was an author that on every Wednesday there was a one column in the Wall Street Journal on the front page was devoted to taxes, income tax. One time I saw an error, so I saw an error in the column and it was in the Wall Street Journal was headquartered in New York. I went and had lunch or many times after that with this particular writer. But I saw an error that he had made. He gave an advice on a federal situation that affected New York state, and he got it wrong. So I reached out to him, and they're surprisingly not that difficult to contact. You would think if I've contacted the New York Times USA today, Wall Street Journal, and C-B-S-N-B. My people have reached out.

I've been on every major, every major public or newspaper or radio TV. And so I reached out and said that you made a mistake. And he said, well, I'm going to check that. He said, if you're right, he said, so he called back and he said, you were right. I'm going to issue it a change on next Wednesday. He said, I'm either going to cite you in the column or I'm going to call Henry Block and tell him he's got an employee in Omaira New York that does a great job. And sure enough, he didn't cite me in. He did not cite me in the paper the next week, but he did call Henry Bach and tell him I was doing a great job. And funny thing, later, a year later I was promoted. So that may have something to do with it, but what did happen even better is that when I started Jackson Hewitt, we started a relationship that I would go and have lunch with him at least once a year.

And in fact, one time I took him to, it was so, I guess I shouldn't tell the whole story, it take too long, but I took him to a Yankee game and I was going up to have lunch with him. The plane was delayed. I wasn't going to get on time. And I said, but I can meet you on the way to the Yankee game tonight. And it was a World Series. Oh God. And I said, I can take it, or you can come to the game with us. He said, well, let me check my ethics committee. And he called back and said, if I pay for the ticket, I can go with you to the game. He said, so I'll meet you at the hotel. Well, I was going to scalp tickets. I always scalp tickets to big events like that, but I always do it outside the stadium.

And he came to the hotel to meet myself and my director of marketing. And so I said, what are we going to do? I don't have the tickets and I'm going to have to tell him that we're going to scout the tickets and he's only going to pay the hundred dollars. So while we were talking, the desk clerk overheard us and she said, I think they have over at whatever desk that is there, the service desk, concierge, concierge, and I think the concierge has some tickets. So I went over there and I had to buy four tickets at $800 apiece. The worst tickets I ever had to get my marketing director and him and myself into the game, and the face value was a hundred. But that relationship where we got publicized in the Wall Street Journal every once a month or two, just because of our relationship over the years was invaluable.

Jason

Yeah, nice, nice. That's a good story. I like that a lot. And I guess as we've covered the three items, what I want to point out is we talked about how to build credibility to generate journalist interest. And then the third thing was really in my mind about relationships, right? Building relationships with people and not rushing into the relationship, but just building it slowly over time. And I'm often saying to people, we need to put relationships back into public relations because everyone's thinking PR is just about exposure and visibility, but the truth is, it's really important that we're focused on the people and the relationship-building.

John

Exactly. And that I didn't say the timeframe. I called him in about 1978. I didn't get it listed. My name didn't get in the Wall Street Journal for five or six years later.

Jason

Yeah, yeah. I love that. And in my experience, I've owned this agency for 20 years now. I find the clients that stay with us the longest are the ones that get the most visibility year over year because it's a long-term endeavor. It's not instant and overnight. And the other thing I found is that it's about paying it forward. And like you did, you kind of helped out a journalist out of a sticky or whatever situation, and they didn't forget that and they remembered you. And so at least with my experience with my clients is when we help out a reporter in that way, they call on you again. And that next call may not be to have you be in a story, but it might be, Hey, I'm writing a story about a topic I'm not really familiar with or this nuance I've never heard of.

Could you guide me and make sure I'm covering this properly? And that is the icing on the cake to building that relationship is to pay it forward. 

And I was reading recently this idea that people don't mind doing favors for other people. And in fact, if you do them a favor, they feel indebted to you. So of course that's very valuable and a good step to take. I think so many people miss that because they want that instant gratification. John. In fact, just recently somebody called me and they're like the chief strategy officer for this tech company. And so PR follows under their role and responsibility, but they've never practiced PR before. They don't have a lot of PR experience and familiarity. So they were doing some PR outreach and they were getting some mentions of their experts in the organization, but those expert mentions were not mentioning the company or if they were, they were just brief. And so the guy made a foolish mistake and he started calling these reporters saying, Hey, I've helped you out on three stories and not once have you featured our company yet. I'm not going to help you on stories anymore until you start featuring our company. Well, John, I know you know how those conversations went, right?

John

Exactly. Unpleasant.

Jason

They didn't go very well. The reporter basically just said, Hey, I appreciate your help, but I don't need you to be able to do my job. And so he had that conversation with several reporters, I guess on the same day he was frustrated or whatever, had a little ax to grind. And that's when he said, it's time for us to hire a PR firm because now we've got to do reputation and damage control in addition to just trying to get mentioned again. But he just thought if he answered a few questions one time, the journalist would automatically like him and want to do a whole story about their company. 

And I had to explain to him that it's about a relationship building, trust it helping each other out, and maybe they'll do something about you, but I don't know about you, but I've gotten more comments when I provided substantive commentary and expert helpful advice. When I'm quoted in the news, I've gotten more leads and more business from that than when I'm featured about winning an award or growing and expanding because people want to know, you know what you're talking about, and you might be growing quick and having accolades, but they really want to hear from an expert when you say something that's provocative, contrarian has a unique point of view that gets people interested.

John

Exactly. I've never dared say to a reporter, you must listen me in your radio show or TV. I've never dared to say such thing. I have a very interesting one that happened in Albany. We had a sign-off from with a lady Liberty and the local, the franchisee of Liberty Tax had worked with Jackson Hewitt and the Jackson Hewitt manager came by and was berating him in for heaven for competing with Jackson Hewitt. And while he was doing that, someone picked up the cardboard sign costs $60 or $80, the cardboard six-foot high Statue of Liberty, and put it in the pickup truck, and they drove away. Well, he didn't know that that had happened, but the next door neighbor had a camera and they caught them on camera. So we called the manager and said, you pay us or we're going to report you to the police. So we reported it. And so I heard about it and I said, call the TV station, call the radio. And we were on two news that night, two 11 o'clock news, and one of them did a full five minutes about how the Jackson Hewitt manager had stolen the Statue of Liberty Cardboard cutout from Liberty. And I said to Jackson, you, we should do this all over the country.

Jason

John, I love how opportunistic you are about leveraging these PR opportunities and wish more of our clients thought the same way. I think this is great. So hey, as we're wrapping up, any other closing thoughts on how franchisors could leverage PR for their brand?

John

What we do at training, we go through the local paper and look for events that are happening. It might be a strawberry festival, it might be a parade. We're in parades. We have booze at festivals oyster festivals and so forth. So we teach them to look and think differently. Look at what's happening in your community, see how you can participate. Because it's all about building a brand name. You can't get a customer if they've never heard of you. The first thing that starts is a brand name. And then when you add the goodwill that by doing good things in the community add to your brand name, I mean, it's priceless.

Jason

Yeah, I totally agree. I often tell people, how can someone do business with you if they've never heard of you or if your name is obscure or they just don't understand who you are and what you do and what you offer. So if you're hoping that someone might hear of you and do business with you, it's probably not going to happen. But if you hire a PR agency or agent or PR person, you should start to generate some visibility in the marketplace, some understanding, trust and consideration for your services. John, just in closing, because our topic here is about how to grow or how to franchisors can use PR to grow their company. I think one of the mistakes a lot of franchisors make, and what I love about what we've talked about today, John, is this idea of using PR to build up your local locations.

And that's something I think a lot of franchisors overlook. And at the end of the day, most franchisors are trying to do two things, attract more franchisees and ultimately grow franchisees' sales. And the two can work together very, very well, especially when you give your franchisees an opportunity to look good, sound good, and demonstrate and promote their success as a franchisee that attracts other people who say, I think I could do that too, or I want something like this for myself. And too often I find that franchisors are just focus on our brand, just focus on our story. But their story and their story of success extends to the success of the franchisees that are out in the field that are, for lack of a better word, kind of the micro business that is really successful because of the parent company. John, what are your thoughts on that?

John

I think that's clear. Jason. In this country, there are 4,000 franchise stores that belong to an international franchise association. To be in the top 50% of all franchisors, you only need 20 locations. So most franchisors are failures, and it's due to this one simple thing that you just described. They do not understand this simple concept. The concept is simply this: happy, successful franchisees. That's our mantra. If the franchisees are happy and successful, you can't stop growing by leaps and bounds. If they're not, you can't grow by any large measure. So it comes down to simply understanding your success as a franchisor is happy, successful franchisees.

Jason

I love that, and I totally agree with that idea and that concept. I've worked with franchisors that have great meteoric success, but then they don't deliver on taking care of their franchisees. And next thing you know, they're getting either sued or people are defaulting or just operating in breach of that contract because they don't feel like there's any good faith. So John, I appreciate you sharing that. I know we're going to talk about how somebody can get ahold of your book. I'm going to give you the opportunity to do that, but at the same time, tell our audience what you do and how you can help them. Or maybe somebody's listening to this and thinking about starting a franchise or whatever. Just kind of enlighten our audience on how you can be helpful and then tell them how they can get a free copy of your book.

John

Well, at my age, Jason, most people are retired. And to me, I can't even imagine retiring, they got to kill me to stop me when I was a kid. I thought I'd make millions of dollars. I was cocky when I was in high school and I said, I'm going to make some few million dollars in retirement. And then I realized, what would I do after that? There's nothing more fun than changing lives and improving lives. 

And so that's what I've done my entire career, and that's what keeps me going. I can't imagine at my level of after 54 years of business success and building two of the top 100 retail chains in this country, I had founded a billion-dollar company and a half-a-billion-dollar company. And I can't imagine going, sitting on a beach somewhere and just wasting away. I am at the peak of my knowledge and my expertise. I'm here to help people improve. People can reach out and get my advice. It's pretty simple. That's one of the reasons I do podcasts is to give back. I think it's obvious and it's biblical to whom much is given, much is expected, and it's all about giving back. And so that's what I'm about giving back, changing lives.

Jason

Excellent. John, I think this has been a great episode and really glad that we connected for this. So I want to say thank you to Mary Jane for connecting us and introducing us. John, real quick, so if somebody wants a copy of your book, what action do they take?

John

All they have to do is send me an email at john@loyaltybrands.com, J-O-H-N at loyalty brands dot com.

Jason

Okay. And you'll want their shipping address, right?

John

Then I'll ask, I'll have my assistant get their address first thing, and then we'll send them a book.

Jason

Okay. Excellent. Excellent, excellent. Alright, John, again, it's been great, great pleasure talking to you. I love how we've got some synergies and similar thinking on how PR can be valuable to growing a franchise. And I think if somebody just takes a little bit of the advice they heard today, they'll probably enjoy much success. And it's been a real pleasure connecting with you. Congrats on all your success and your desire to keep going and your desire to give back to others. And like you said, for much has been entrusted, you have to be responsible and give back as well. And that's one thing I've always wondered. When people have incredible success like you and others, how they just keep it to themselves and they're not out there proactively trying to help other people the same way you and I have both been successful, obviously you've been quite a bit more successful, but we all know we didn't do it on our own right.

It was people who gave us a shot or were there along for the journey. And I think people forget that too often. So I'm glad that you have that position in life. So good for you and good for our audience today to have this opportunity to connect with John Hewitt to talk about his story. And I hope you liked this episode, and if you did, take a moment to share it on social media or with a colleague or friend who you think would benefit from it. We're not alone in this world, and we really should take the opportunity to ask for help from others and take advice and recommendations from others to help us grow. So with that, I hope today you felt like we helped you stay on top of PR. This is Jason Mudd with Axia Public Relations signing off and wishing you much success. Be well.

Announcer

This has been On Top of PR with Jason Mudd, presented by ReviewMaxer. Be sure to subscribe so you don't miss an episode. Check out past shows at ontopofpr.com.

Sponsored by:

• On Top of PR is produced by Axia Public Relations, named by Forbes as one of America’s Best PR Agencies. Axia is an expert PR firm for national brands.
• On Top of PR is sponsored by ReviewMaxer, the platform for monitoring, improving, and promoting online customer reviews.

About your host Jason Mudd

On Top of PR host, Jason Mudd, is a trusted adviser and dynamic strategist for some of America’s most admired brands and fastest-growing companies. Since 1994, he’s worked with American Airlines, Budweiser, Dave & Buster’s, H&R Block, Hilton, HP, Miller Lite, New York Life, Pizza Hut, Southern Comfort, and Verizon. He founded Axia Public Relations in July 2002. Forbes named Axia as one of America’s Best PR Agencies.

Find more On Top of PR episodes on: