John Hewitt: Finding Purpose in Business

Well, I think that it starts— it's all about people. All of my challenges are about people. And I don't get asked this anymore, but when I was CEO of a public company, a lot—

and I guess this was a favorite question of investors and bankers— they would say, what keeps you up at night? What do you worry about?

And I always said the same thing. I worry about ourselves.

This is The Chris Project, where we discuss mental wellness, self-awareness, and mindset with entrepreneurs and experts. Set your perceived ideas and biases aside and let's go on our journey for yourself, for your family, for the world.

Welcome to another episode of The Chris Project. I am your host Christian Brim. Joining me today is John Hewitt of Loyalty Brands. Welcome, John.

Thank you.

My pleasure.

So you are infamous in certain circles— my circle— with the Jackson Hewitt Tax franchise, but I have a feeling that that's not the only part of your story. So tell us what you're doing now currently with Loyalty Brands.

We have 8 different brands and they're all franchisors, and we focus on 3 different industries. One is construction, led by our roofing, siding, and solar. Secondly is tax and accounting, and I've been taxes and accounting for 55 years, so I consider myself the great-granddaddy of tax preparation.

But the fastest growing is our pet division, led our 3-year-old Zoomin' Groomin' mobile grooming of pets, which is already the largest mobile pet grooming business in the country.

So when did you franchise Jackson Hewitt?

We bought Mel Jackson Tax Service in 1982 from 6 offices. We changed the name to Jackson Hewitt, and unfortunately I didn't day one start franchising. That was my— one of the biggest mistakes ever made there.

Uh, but 3 years later in 1986, sold our— begins offering our first franchises. So I've been franchising— Jack started franchising in '86 at Jackson Hewitt.

And you rode that train until you exited when?

Yeah, 10 years later. Okay. 11 years later we sold it for public company for $483 million.

Wow.

So That was a long time ago. I know that you didn't get all of that money, but you got a large chunk of money. What happened directly after that?

I did not compete, and we decided to open Liberty Tax.

Yeah, okay.

Liberty Tax—

my non-compete ended in 2000, and we were the fastest growing franchisor from 2000 to 2012. We opened 4,000 offices in 12 years, almost a new franchise a day. It was my second company worth $500 million public. And again, I sold out of Liberty Tax in 2018.

I know a lot of my colleagues, after they've built and sold a business, go into this wilderness because they don't know what to do with yourself— themselves. Doesn't sound like you had that problem.

No, when I was a kid, I consider it self-confident, but since I wasn't proven, you have to really realize it was cocky. As I grew up poor and somehow I knew I was going to make millions of dollars, and I thought when I was a teenager I was cocky and I thought I'd make some millions of dollars and retire.

And along the journey, I realized that this is so much fun. The journey is the joy. The check at the end of the rainbow, the treasure at the end of the rainbow is just anticlimactic. And the joy is in changing lives and improving lives and improving the world around us. So there's nothing that I like better. So really, they got to kill me to stop me. Most people want to retire and want to relax, and I just can't identify with that.

I'm, I'm at the peak of my wisdom and knowledge and ability.

To help others and to go sit on a beach somewhere. I don't think that's what God— I don't think God gave me all these blessings to go sit and waste away and not help other people.

I absolutely love that. I think for me, that's probably the most important thing an entrepreneur can do is to find their purpose, because if they're only chasing money, they're going to end up empty. They're going to end up unfulfilled. It may be in the process, but certainly in the exit, it's gonna be, well, now what? Because the money didn't give me what I thought it would. And I love the fact that you've identified your passion as helping others. So speak to that vis-à-vis the franchise model. So I have a feeling that that's part of it.

Absolutely. You know, I believe that the reason America is so great is capitalism and that we're a melting pot. Of every country in the world. And those two reasons made America. And it is the country where dreams can come true if you're willing to, but you virtually have to be self-employed to do that. And my job as a franchisor is to give you the best system in the industry. And I've been doing that for 55 years since I started working for H&R Block in 1969.

And I've changed, uh, I brought in over 5,000 franchisees and they've had hundreds of thousands of employees. We've done $100 million tax returns. So I've changed so many lives and done it in a way that either gave them a job or a company and just mentored so many people. And really, there's Christian Brim, there's no school in this country that teaches you to be a CEO.

No, there you can get your MBA, but that has nothing to do with being a CEO, right?

That's just theory.

You know, I learned how to be a CEO by the school of hard knocks. And I tell my people who I, I consider franchisees kind of akin to children, to having children.

And I tell them, you know, I didn't have me to help me. I'm here to help you.

I'm here to help you, but I can only help you if you listen.

I agree with that statement that entrepreneurship and owning a business, there's, you know, I know that there are programs at schools now that teach it, but I don't mean to discount those, but my experience has been, and that of my colleagues, and it sounds like you as well, is that there's a lot of learning and growth that has to happen by action. You can't read it in a book. So looking back on your journey, what were the most difficult lessons for you to learn? Maybe not as important, but what was most difficult, most challenging for you to learn?

Well, I think that it starts— it's all about people. All of my challenges are about people. And I don't get asked this anymore, but when I was CEO of a public company, a lot—

and I guess this was a favorite question of investors and and bankers, they would say, what keeps you up at night? What do you worry about?

And I always said the same thing.

I worry about ourselves. And Christian Brim, there are— of all the employees I've ever hired, and I'm a fanatic about looking for this type of person, less than 5% of them act like owners.

Yes. And those are incredible diamonds. In the rough. They're diamonds that, that you need to find and nurture, but you just, you just can't find them. And the beauty of franchising is that almost all of them act like owners, but yes, very, very few employees act like owners. So I've always found employees challenging, and one of the biggest mistakes I've made is trying to change their attitudes.

And I think I've certainly dozens of people I've worked with who I love their skills and their abilities, but I just couldn't change their attitude. And I was— I'm whatever it is, over 90 or over 100. I've never changed one person's attitude permanently. I've changed it for a day, a week, a month, but I've never changed someone's attitude. So we— I learned many decades ago that you hire for attitude. And, and Tom Watson Sr., founder of IBM, said Give me 100 people with great attitude or 100 great engineers. I'll take the people with great attitude because you can teach engineering. And boy, did I learn that lesson the hard way. So many disappointments in so many people, and it's just frustrating to see an incredibly talented person who just can't be all they can be because they just don't have the right attitude.

I would completely agree with you. I've experienced myself and I've seen it in other companies where the, the owner wants to, to to bring on an employee as a partner, and it never works because they don't think like we do. That's not a criticism, it's just a fundamental difference. And to your point, I don't think it can be taught. I think it's innate. I think there are skills you can learn. I don't know what it is, a mixture of drive, of self-determination, of self- belief, maybe delusion, I don't know, that I think you either are born with or you're not.

It's a combination of competitiveness and drive.

Yeah, that's true. Looking back on this storied journey, what are you most proud of?

Well, let me give you some of my accolades first, a couple. Okay. I founded a billion-dollar company. I'm one of only 9,000 people in the United States that have ever done that. I founded two companies that were worth over half a billion dollars. Even less people have done that. I brought in over 5,000 franchisees. I don't know anyone that's done that. So certainly not more than 5 or 10 people have done that. The only thing that, that is certainly unique that I've done that's clearly above everyone else is I founded two of the top 100 retail franchise chains in this country.

No one's ever done that. And by the way, I was— Zooming in on my, on my way to my third. So they say third time's the charm. But having said all that, the most thing that I'm proud of is, is changing lives.

Yeah. Is how many lives I've impacted. And, and Christian, when I change someone's life and they say—

I mean, I've changed many lives that didn't become millionaires, but, but think of a millionaire, right? And it's a husband and wife. And they have 4 children. Well, now they're changing their children's lives and then their children's lives. So generations of that family. And then they have employees, they have dozens of employees, and they're changing some of their, their employees' lives. So it's just a— I don't know if you ever saw the movie that's so well named, and it's so— they couldn't cost $200,000 to produce, it was so low-budget film, but it's called Pay It Forward.

I love this pay-it-forward concept, and I've helped so many people, and then they pay it forward. So, you know, I saw Elon Musk say the other day, and, and I have to think that it might be true, he said, of all the human beings most in the world, most impactful, most improved the human race, I think he said, it's me, it's Elon Musk.

And it may be, and it may be. I couldn't, I couldn't argue that with him. It's someone like Elon Musk that has made the world a better place. It's certainly, um, unlikely to be a, a king or a president or a queen, or—

right, it's much more of an entrepreneur than anyone else. But yeah, I've, I've contributed to the world. I've given back, and that's what I'm most proud of.

Speak to your children, your franchises, what is the most important advice that you give them?

I've said this phrase— well, I'll tell you the phrase at the end of my explanation, but I've said it more than any other phrase in the whole—

my whole life.

And that is, again, as I alluded to earlier, my job is to give you the best system in the industry.

I'm proven. When I was with HR Block, they were fastest growing. When I was with Jackson Newell, they were fastest growing. When I was with Liberty, they were fastest growing, and now my ATAX is fastest growing. So I've proven that I'm going to give you the best system. If I do my job, what's your job? Your job isn't to invent, create, isn't to be outsmart. It's to follow the proven model. And I've had people that were brilliant fail. I've had people that were incredibly experienced fail. I've had people credibly Educated that fail. It doesn't matter how experienced you are or educated or intelligent. All that matters is here's the proven system. It's proven in Virginia Beach, Virginia, in Juneau, Alaska, in Los Angeles, in Miami. It works. There are 9,000 H&R blocks that I will teach you to compete with, and you will be bigger than, better than them if you just listen. Now You would think that would be almost automatic. Why would you give me money to listen to me?

I mean, you cannot listen to me for free. Why would you give me money and share your proceeds? But out of the 5,000 people I brought in, no one's listened. Not a zippity-doo-dah have listened 100%.

The winners, the ones who become millionaires and very successful, they listen 98 or 99%.

And the losers— and I've had people go out of business— they just listen less than 90%. In my industry that I've been in for 55 years, I'm the best there is. And if you're not gonna listen, it's gonna cost you time or money or both. So the number one thing I need is follow the system.

Having been a franchise, when I started out, I, I bought a comprehensive business services franchise. I remember wrestling with that the age of 27 and 28 when I started of, should I do it this way? Doesn't seem right. I don't see how this could work. But I eventually did land on just what you said, like, if you're gonna— if you're gonna pay for something, you, you ought to listen to them. But I think that kind of extends beyond the franchise model in that I see this all the time. Like, you know, people go to the doctor and then they don't do what the doctor says, and it's like Why'd you even bother? You know, people, people hire us as accountants and then they don't listen to what we tell them to do. I've done it. Like, I, I'll hire marketing people and then I'm like, oh, they don't know what they're talking about, right?

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I guess that's part of the self-determination part of, of being an entrepreneur, but I think it can cloud our success. Like, you know, at some point you have to say, is my being self-determined, my doing it my way, really helping me? And that's a challenge sometimes.

Absolutely. And you're right, it's human nature. We learned that from a very young age. That you're told what to do and you think otherwise.

That's just human nature.

And I mean, Adam and Eve— Eve went and ate the fruit. I mean, yes, the first human beings, right? They violated what God said. If you're not gonna— I was in church 35 years ago and the minister said every one of us sins every day. And I said, wow, I get that I do, but he said he does. And I realized, and when you think about it in business, I didn't think about it in a business context right away, but about 3 months later I was driving down the street and I said, wow, in our company we have 10 principles.

And wait a minute now, if we're going to violate God's principles, aren't we going to violate our—

isn't everyone violating our company principles? I did things like started a culture committee, and we had a pad where all the principles were on a sheet of paper, and you would tear off that and the name of the person. And we would— if you honored a principle, you would get a plus principle, plus we call them mission moments, right? If you violated a principle, if you were rude and disrespectful or did something, uh, lied or cheated or something, then you were called out.

Now, two-thirds of them were good ones, right?

But we gave them out to people, and you know, when you went into people's offices, they were taped to their wall.

They, they love these mission moments.

But, um, yeah, following the principles, it's not human.

It's—

we're incapable of that.

That's a brilliant insight. I agree. We, we, in, in our company, uh, we only have 4 core values because that's all we can remember. I couldn't remember 10. It is a function of promoting and calling people out when they're not living those values. It's both. One of my colleagues who wrote a book on culture and is a speaker on culture, he, he calls them rules of the game. Like, if you came on to a basketball court and you started kicking the ball, uh, the ref's gonna blow the whistle, right? Like, we don't do that in this game. We don't. We dribble the ball, we'll pass the ball, we don't kick the ball. And It's important to celebrate the victories of when you put the ball through the hoop as a team, but pass the ball like you're exhibiting the values. But it's just as important to blow the whistle when you step out of bounds or you kick the ball.

Yeah, I have a different theory on that, that along those lines, that there are policies and there are principles. And so I'll give you an example of how In my company, I try to stress that policies are made to be broken and principles overrule policy. Yeah. So at one time in my career, I let my CFO make a rule that franchisees could only call and talk to his people between 2 and 4.

He said—

so I made the mistake of letting him do that. So one of his, his Employees, like an accounts receivable clerk, gets a call at 4:15 and she said, "Oh, it's after 4.

I can't talk to you," and hung up the phone.

And so one of my employees gave her a mission moment. Now you violated the principle, right? You can't treat people rudely just because we have this policy.

Person gets through.

By mistake, you have to talk to them, right? I mean, you can't just hang up the phone on them because we have this silly rule that we can only talk 2 to 4, right? So my CFO went crazy. And 3 years later, when I sold the company, he was still— he was still mortified that I had allowed that person to get a principal violation when it was his rule. His rule was they violated a rule. I mean, you can't get stuck on your silly rules. You have to decide whether this is a principle or a policy, and policies are made to be trumped by principles.

I 100% agree with that. And to continue the religious theme of that, I think that that was what was so beautiful and, and what resonates with people so much about Jesus's Sermon on the Mount is that He had that conversation with people, right? Like, you guys are following the rules and missing the point, right? And called us to that higher standard. The moral standard that he set out on the Sermon on the Mount are impossible, and they're clearly impossible. Like, you know, you can't even hate somebody in your head because then you've committed murder, right? But it doesn't mean that those principles go away. He's just showing you that you can't You can't get there by yourself. And I think that, you know, principles— people are going to violate them, right? Like, it's human nature. You're not going to always be your best self. And it's important to identify those things, not, not to shame or chastise, but to say, you are better than this. You know what our standard is. Do better next time.

Yeah, I think that my thought is— and I have different I have unique thoughts about dozens, a few dozen unique thoughts, and one of them is the most important thing is that God wants you to forgive.

Yes. And the, the biggest evidence I have of that is that we are all sinners, and I can't— I mean, and oftentimes forgiveness is the toughest thing to do.

Yes. You've been wronged or someone hurt your family or Yes.

I mean, there's my favorite book about that is called The Shack, but which was also a movie. But it's toughest person to forgive for what was done to his 8-year-old daughter.

Right. It's the toughest thing.

But I can't imagine going to face God and saying, please, please forgive me, I've sinned. And he said, but you didn't forgive Sally or Jim. George. So, I mean, what am I going to say?

What am I going to say? I'm at your mercy, God.

Forgive me.

He's going to say, why should I? You didn't forgive all these people. That's so—

it's—

and it's— I don't know much harder, harder things to do than forgive all the evil that has been done to me or to my family.

Yeah. And it's not about victimhood, right? So like you can say bad things have happened to you. But, but most of the time as adults, we played a part in it, right? What that forgiveness is out of that righteous anger, like something that is done to a child or even to an adult where they truly were not contributory to, to it. And I think that your statement, it— what came to mind was if you sit there and say I want forgiveness, but you're not willing to forgive, then, then what you have done is you've placed yourself above that person. You've said whatever you've done is not as bad as what they've done.

When you don't forgive someone or you hate someone, it doesn't hurt them. It only hurts you.

We're the ones that suffer, right?

So let's pivot that back to business. Has there been a time when you had to forgive somebody in the business environment that was extraordinarily difficult?

Oh yeah, many times. The reason I left both of my companies was first a mini civil war and then a major civil war.

People inside turned against me.

That had to be difficult.

Incredibly. And I mean, the first time it was just one guy who was greedy and a venture capitalist and tried to steal the company. But then, then he turned one of my one of my own people. He just turned one guy, and he, he turned him evil. And right alongside the second time, it was a combined 8 people. The good news was it took 15 years for that to happen at Jackson Hewitt, and it took 20 years.

So I had 14 great years, camaraderie and peace and working together before the one civil war. And then I had 20 years, 19 years at Liberty before I had that one civil war. So I had long time of greatness and building company and, and before people turned on them. But I mean, you always have your Judas.

Yes. So how have you worked with the isolation, or dealt with the isolation, that comes with being an entrepreneur and a leader?

I crave it.

Tell me more.

Yeah, I'm a, I'm an introvert by nature. Okay. And I only do things like this because to win.

Okay.

So on one hand, I'm an introvert. On the other, I'm a consummate competitor. The name of my book is I Compete.

I have to win. And I've decided to live my life to help others. And so I come out of my shell on every day at some point, but then I crave to get back in it. As an introvert and bringing in thousands of new franchisees, and over the last 25 years bringing in 200 new franchisees a year, I'm meeting thousands of people a year, right? And that's just against my nature.

It's uncomfortable, right? When I get my alone time, I just crave alone time.

So Do you have any trouble getting out of your— what I call getting out of your own head? Like, I find that I obtain a lot of clarity when I talk to other entrepreneurs, not seeking advice, but just like explaining the situation, my feelings around it, you know, my thoughts. Do you have trouble getting out of your own head? Obviously, from a success standpoint, you don't. So, like, but have you struggled with that, being in your own head, wrestling with your own thoughts?

I'm not sure exactly what you mean by that, getting out of my head. So what do you mean exactly by getting out of my head?

Is there a time where you were uncertain of the path forward, like you had a decision to make and you felt trapped in your own head, like the— you were arguing with yourself, you were like indecisive in, in what, how to move forward?

I'm not sure I use the word trap, but in, in every decision, I mean, think of it like I'm a life master chess player. Oh, okay. And so when you think about the way I think, and I think that's helped me in business, and I, I became extraordinary at 9 years old. So it's, I think it's helped me in business. So what I'm always thinking of is if they do that, then I'm gonna do this. If they do that, then I'm gonna do this.

And if they do that, then I'm going to do that, then they're going to do that, and I'm going to do that. So I'm always thinking in chess moves, in strategy, plan A, plan B, and so forth. So I'm always thinking. And there's— there are many decisions, especially tough decisions, that require a lot of thought. Yes. Sometimes it will take me days or weeks or months to decide how to handle something. So yes, I'm in a chess game. I'm always wrestling. And at the end of the day, I have to make the best move. And in some chess moves, I can make in 2 seconds, but in some I might wait 30 minutes. So in some business moves, I'm going to make in 2 seconds. In some, I'm going to, I'm going to take 6 weeks to decide. So yeah, I'm always wrestling with decisions. But only major decisions. If it's, you know, whether we're going to spend $3,000 or let's say we're a $500 million company and we're going to spend $3,000, don't waste my time.

I mean, I say to my people, if it's not $25,000 or more, don't even ask me a question, right? Just make the decision, please. Right. Keep me away from the minutiae. So, yeah, I only wrestle with the the big stuff.

And I mean huge opportunities.

That's great advice because as we grow as entrepreneurs and businesses, it's, it's easy to get trapped into the minutia because I think it's because we, we want to have that control. And the reality is you've hired people for a reason and they need to make those decisions for you, or otherwise you're just in the way. I haven't heard— I'm very intrigued by your answer to this. When you're making these strategic decisions, how do emotions play into it?

Like fear?

Yeah, you can't make a, a critical decision without some emotion, for sure, right?

But I think I was raised by two parents that were opposite. My dad was— had exhibited zero emotion Zero, nothing. When my, my mother would go to hug him and kiss him in front of the kids, he would like push her away. I mean, he was zero emotional. Okay.

My mother was exactly the opposite. She's told us she loved us every day, multiple times. She cried when she was happy, sad, or, or just because. Right. Yeah, just a wonderful, loving human being. And so I was raised— so I, I got a bit of emotion But I'm a male, so I'm less emotional than females just by nature. And I had this very stern father.

And so I've learned, and I learned very early in my career, that when you're in a situation, especially in a discussion, whoever gets emotional loses. The best you can do if you get emotional in an argument, the best you can do is break even. So I try to— I haven't shown emotion in my 55-year career maybe 5 times. I keep it all businesses. And, and the only time I get emotional is when someone starts yelling or screaming at me, then I can yell or scream back. But otherwise I never get emotional. So it's always there and I know that it's a weakness. So I sublimate it and try to take emotion out of the decision.

I try my best when I'm in a situation to, um, okay, that's an emotional thought, that's not a logical way to think about it. So I'm— I think one of the things I'm best at is keeping emotion out of business and decision-making.

I love that for a couple of reasons. One, I, I love that you acknowledge that you have those feelings because I've known people that just say, well, like, I'm completely rational. Like, I make decisions based on facts, not emotions. And those people always concerned me because I'm like, no, you're human, you have feelings. Like, that you're not a computer. So I would say probably this ability to be a critical thinker and manage the emotions and maybe ignore or set aside those emotions to make the decisions is probably your superpower.

Admitting weakness or understanding that you have weakness is critical to being a great leader. You know, Peter Drucker, one of my favorite business authors, said people with huge strengths have huge weaknesses.

Yes.

So if I admit that I have great strengths, then I have to admit I have great weaknesses. And yeah, there's nothing—

I'm certainly far from perfect.

And they also say that those that are most successful have made the most mistakes. So I've made more mistakes than almost anyone you've ever met.

You know, I'm 75 years old.

Think about—

and I've been incredibly successful. So think about all the hundreds of thousands of mistakes I've made. So I realize that and I acknowledge weakness and I fight it. I mean, I don't fight it. I try to use my strengths. Peter Drucker said, use your strengths.

Don't try to not be weak, but then you combine with others who have strengths that are your weaknesses.

Yes.

So, so I'm horrible at detail, just horrible. And I mean, I'll lose a credit card like every 6 weeks.

I mean, it just drives me crazy. So because the company has to get a new credit card, I mean, just, I mean, just crazy, just silly things like that. So I hire detailed people and give it to them. And they— so you have to hire, as a leader, you have to hire people that are good at your weaknesses.

That is brilliant advice. John, you said on before we started the show that, uh, the listeners could get a copy of your book. How do we do that?

Yeah, I'm at loyaltybrands.com, just— and there's a link to get a free copy of my book, I Can Beat Talks about the journey of how I built two of the top 100— only person— two of the top retail franchise chains in the country.

John, thank you very much for your time, your experience, and your insights. I, I very much appreciate it.

My pleasure, Christian.

Yes, listeners, if you like what you hear, please subscribe to the podcast, share the podcast. If you don't like John or me, uh, send me a message and tell us what you'd like to hear. And until next time, don't give up. You are not alone. Ta-ta for now.

Thank you for listening to The Chris Project. You are important. Your work is important. Do not give up.