Top 100 CEO Interviews
Issue No. 25 - October/November 2005
Top 100 VIP negotiates the China syndrome
VIP Home Services started in 1972 in Adelaide, when Bill Vis started a lawn mowing round as a second income to help save money for a house. When he was later retrenched, the lawnmowing round became the main income earner and the business began to grow.
Bill & Rose Vis purchased other rounds and built a business. Firstly with employees, and in 1978, by selling franchises as VIP Lawnmowing Service. As the first Home Services Group, many hard lessons were learned over the years, but with the support of the franchisees, the franchise system developed and spread around all states of Australia and into New Zealand.
New Services were later added to the lawnmowing base, including Residential Cleaning, Commercial Cleaning, Carpet Cleaning, Fencing, and more.
VIP is in the final stages of negotiating a joint venture with a Chinese human resources company operating in Shanghai. It's a joint venture rather than a master franchise arrangement because Chinese law doesn't allow foreign investors to take capital out of the country for several years.
"They came to us," says VIP founder and director, Bill Vis, who still seems a bit incredulous. "It's a human resources firm with a million people on their books. A million!"
The Chinese firm, driven by young people in their 30s, was instrumental in bringing 30,000 construction workers to help in Shanghai's building boom. Government has tasked it with finding employment for China's less affluent citizens, which made the cleaning side of VIP's setup attractive — as did the Australian franchising award VIP won in 1998.
Austrade helped with negotiations, which Bill likened to negotiating a treaty, due to language barriers.
Meanwhile, in Australia, VIP has been buying back its master franchises from regional operators as an exercise in focusing.
“The master franchisees had the rights to sell all services, not just one service, and we felt we would have better results...
