Showhomes’ Matt Kelton on Franchise Operations

Founded in 1986, Showhomes has established a rather unique franchise model, combining interior design, remodeling, home staging and property managing to provide a one-stop-shop for realtors looking to turn a vacant property into an attractive investment. That model has proven successful for the Nashville-based franchise, which now operates more than 60 units across 20 states.

That unique service offering requires a unique franchise model and a creative approach to operations. We talked to Showhomes’ chief operating officer, Matt Kelton, to learn how he’s built a team to support Showhomes’ growth.

What are some of the key operational concerns for any franchise brand?

Kelton: Franchisee profitability. That’s the key. If you don’t have profitable franchisees, you are going to have a lot of unhappy people, and you will have a very hard time validating and selling new franchises. Sales cures all ills.

Staffing is another big concern. If you aren’t staffing appropriately, both in terms of quality and quantity, you won’t be able to scale your business.

Franchisee and customers satisfaction are both crucial as well. At Showhomes, we dedicate a number of resources to tracking both. A lot of that comes down to relationships. We work very hard to build strong, trusting relationships in our system.

What are some operational concerns that are unique to Showhomes?

Kelton: We are a unique model. We’re a hybrid of property management, interior design, home remodeling, home staging and other services, so running a Showhomes requires a number of skill sets. There’s project and finance management as well as creative elements, so it takes a unique personality.

When I joined the system, it was mainly creative types who didn’t have much of an operational background, so we had to implement some operational models to help them with that side of the business and make sure they remain profitable.

Are you focused more on individual unit operations or on the operations of the system at large?

Kelton: We look closely at both, but at the end of the day, when you are looking at the system at large, you have to look at it one unit at a time. It’s a bottom-up thing. You start by looking at the customer in the field, then track up and get a picture of the system as a whole.

What do you wish you knew about franchise operations before you got into the industry?

Kelton: There’s more psychology and politics than I realized, and it’s extremely important to be able to navigate those things. You have to wear a number of hats in this role, and you have to be able to keep your cool. Franchisees need to vent, and that’s a good thing. But you need to be able to listen and respond appropriately and effectively. At the same time, you need to be a cheerleader for the brand, so you have to take different approaches to different tasks and groups of people. There are a lot of waters to navigate.

If a franchise brand is struggling, where should they look first to improve their operations?

Kelton: Typically, sales. As I mentioned, sales cures all ills. But if someone in the system is having trouble, more often than not there’s a process available to address their issue. We have a sales and marketing checklist, and we can go through that checklist with our owners to make sure their operation is firing on all cylinders. Usually if something isn’t going well, they are missing a box on that checklist.

We also put a lot of effort into personal assessments. We have a pretty good idea of whether an owner is going to be better at sales finance, for instance. And if they are better at sales, we’ll set them up with a good finance person, and vice versa.

What does Showhomes’ operations team look like?

Kelton: We take a slightly different approach than most franchises. Our home office is in Nashville, but most of us work remotely. I have directors in three different states and support teams in two. So we’ve decided to find highly experienced people who can wear a lot of hats — A-players who don’t need a lot of management. We have an extremely strong team. Most of us have been around for over a decade, so we don’t see much turnover. Typically, a franchise of our size would have triple the size staff we have, but we decided to invest in a strong team rather than a big team.

What’s the most important part of your job as COO?

Kelton: I believe the most difficult job in franchising is operations. You can go from the hero to the village idiot very easily. You need to do a lot of things, and you need to do them all right. The biggest thing, though, is you have to listen. Listen to franchisees, and listen to all of the teams you support