Success Story

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About the company
HomeVestors of America, Inc. (HVA), is the first franchise company of its kind. Best known for the phrase, “We Buy Ugly Houses,” HVA trains and supports franchisees who specialize in buying properties in need of repair. After purchasing a home, franchisees can employ one of several strategies, including rehabbing and selling the property to a new owner, rehabbing and adding the property to their own rental portfolio, or selling the home to an investor.

Today, HomeVestors of America, Inc., has over 250 franchised offices in 33 states and plans to expand to 500 franchised offices nationwide by 2010. In the eleven years that HomeVestors has operated as a franchise company, its franchisees have bought and sold over 30,000 homes.

What was changing?
As most people know, the U.S. real estate market has changed dramatically during the past two years. Notes HomeVestors vice president David Hicks, “We’ve been in business almost 12 years. For the first 10 years, it was a seller’s market. Over this period, houses in most markets increased significantly in value.”

Now, however, for the first time in a decade, many houses are losing value. For example, notes David, one market that had 5,000 houses on the market a year ago now has 30,000 houses available. In some regions, the value of homes has decreased 40-50%.

Another related change has taken place in the finance and mortgage market. Many HVA franchisees work regularly with certain investors. A year ago, it was much easier for investors to get home loans than it is now. As a result, some franchisees have found that their regular investors can no longer obtain financing.

With home sales slowing and available money tightening, HomeVestors franchisees in much of the U.S. have had to shift their focus from buying to selling. The franchisees who have rapidly adapted to this changing market have continued to be successful—in fact, some have made more money in this challenging new real estate market than they did in the old one.

What did they do?
HVA management wanted to help all their franchisees improve their ability to deal with these market changes and remain successful. David had read Who Moved My Cheese? by Spencer Johnson, M.D., as had the CEO of HomeVestors, John Hayes. David and John had both liked the book and thought their franchisees could benefit from learning more about the change management principles described in the book.

HomeVestors management first contacted Spencer Johnson Partners (SJP) and invited an SJP partner to speak as part of a management staff meeting. David notes, “This was a great way to introduce the training, because after the presentation, people had a chance to talk about what they’d heard.”

This event was followed by a “leadership invitational” at which HVA’s top franchisees received the training. Finally, other franchisees participated in the training at the company’s annual franchisee event. All participants received a copy of Who Moved My Cheese? before their training.

As of December 2007, 80% of the company’s franchisees—over 200—have now taken the training. David recalls, “During the training, people began to see that their issues are not unique to them, and that they really do have control over their circumstances. The SJP training helped people understand that, instead of waiting for their cheese to come back, they needed to look for new cheese. It also helped them develop the confidence to go find that new cheese instead of hesitating.”

What results have they seen?
David and the rest of the HVA management team first began to realize how well the training had worked when they received no negative feedback—only positive. Also, requests began coming in for additional help in using the workbook—a sign that people were really interested in applying the principles they had learned.

Another important result has been the way in which franchisees have begun working together more closely. Notes David, “The training really helped people stop playing the ‘blame game.’ It’s easy to blame changing trends and shifting markets. But when people really look hard at their circumstances, they realize that they need to work together to begin changing those circumstances. For example, our Ad Councils—groups of franchisees in the same market who advertise together—are working together much more closely now.”

And what’s ahead? Says David, “One thing we know in this industry, is that change is a constant. We’ll continue to help our franchisees learn to deal with these changes so that we can all continue to succeed.”