On this week’s episode, we had the pleasure of speaking with Les DeFelice, a standout franchisee from top-rated senior care and home care services franchise, Visiting Angels. Les describes his professional journey through a multitude of successful entrepreneurial endeavors and explains how he first got started with Visiting Angels. In this conversation with FBR's own founder and CEO, Eric Stites, Les shares some of his keys to success and gives advice to prospective franchisees.
Visiting Angels was just recently named as one of 2020's Franchisee Satisfaction Award winners and has regularly been recognized by Franchise Business Review for their outstanding franchise satisfaction. Les and Eric discuss how Visiting Angels leadership and company culture has contributed to that success.
Listen to the full conversation here or read the transcript below.
Les DeFelice: What's interesting is, you look in the mirror and you're looking at the biggest challenge, okay. You look in the mirror and we all have our strengths and weaknesses. Your performance in a business, in a franchise, whatever you're doing. That performance is going to be a direct reflection of what you're looking at. All the good, bad and the ugly. I believe it takes a while to understand that. You can blame it on the industry, blame it on the economy, blame it on your franchisor, blame it on the competition in the market. When you really look inside and you look at who you are as person and what your objectives are. And if you're internally focused person, more of a taker, and then externally focused person, more of a giver. If you happen to be the latter, you're lucky cause you can do that. But it's great if you're naturally that way. But if you harness that and you end up trusting person after person, you burned and burned and burned and you persevere until you're finally surrounded with like minded people. Then you've really got a shot at happiness.
Eric Stites: Over the last 20 years. One of the questions I'm frequently asked is, 'Eric, what's the hot concept and franchise?' And I have to say one of the concepts, or at least one of the industries that keeps popping up on my radar is the senior care space. Many people don't realize that senior care businesses can even be franchised and yet there are dozens of successful franchise companies delivering in home services to seniors every day. The industry has been steadily growing over the last couple of decades and with our population getting older, the senior care industry is showing no signs of slowing down anytime soon. I had the pleasure of spending some time today with Les DeFelice, who's a multiunit franchise owner with a company called Visiting Angels, one of the leading senior care franchise brands. Les is based in Wheeling, West Virginia and his career has spanned sales, commercial marketing, capital markets, civic service, you name it. He's a true entrepreneur and leader and Les has built his franchise business into a large, multimillion dollar enterprise. I think you'll really enjoy his story today and learn more about his path to success in franchising.
Eric Stites: So Les many of our listeners may not be familiar with the Visiting Angels brand. I wondered if you could just tell us a little bit about the franchise and what you guys do exactly.
Les DeFelice: Visiting Angeles was founded 21 years ago by Larry Meigs and Jeffrey Johnson. Larry is the CEO, Jeffery is presently retired. Larry is arguably one of the best CEOs in the country. He's built a nationwide system of over 600 franchises. Number one, number two brand usually with a franchise review survey, which I personally really enjoy doing. And it's Larry's, it's Larry's culture that he's developed, that makes it so attractive for the franchisees. When you're in nonmedical home care, private pain or medical home care, you're serving individuals, consumer paying on medical home care. So Larry's drawn franchisees that are like minded in terms of not only wanting a business opportunity but that enjoy serving people.
Eric Stites: Yeah. That's awesome and just to be clear, I guess because a lot of people think of the senior care business as, I think they think of more medical related services. So, you guys are providing all sorts of things that are really nonmedical correct?
Les DeFelice: Yeah, Eric we're really like the family members that can't be there. Okay. So doctor in Chicago, daughter in Charlotte, family lives in Pittsburgh. We go in, cook a meal, companionship, medication reminders, we can drive the client in their car, shopping, appointments. The companionship is huge. It's a major factor there. So we really are the family members that can't be there anywhere from four hours up. We've got clients that are 24/7 because they understand that fantastic family, a homestead. There's been in their family forever.
Eric Stites: Right, right. So just to talk a little bit about you, and you're based in Wheeling, West Virginia, which for folks that aren't familiar with West Virginia. That's that kind of like tiny little part of West Virginia that sticks up in between Ohio and Pennsylvania out near the Pittsburgh area, correct?
Les DeFelice: I'd say we're about an hour from Pittsburgh and you get, it's really interesting because you get the Western PA influence, a little bit of Midwestern influence from Ohio. You go 30 miles south, we have the Charleston, West Virginia office, and you might as well be in Nashville. So it's so different.
Eric Stites: Right, right. You're probably crossing state lines constantly in your work.
Les DeFelice: Yeah, we do, we'll cover northern West Virginia, eastern Ohio, western Pennsylvania. When you get down to the Southern part of the state, we cover an area in Charleston, West Virginia, west to Huntington, which is on the Ohio border, so. I'm a native West Virginia and it was a dream to come back to the area years ago and eventually become a franchisee.
Eric Stites: Right. Right. Well, that's a great lead into my next question, so I know you went to school in West Virginia. Tell us a little bit about graduating from school out there and kind of your early career and then how that led into finding ultimately a passion, a Visiting Angel system.
Les DeFelice: Sure, I got very fortunate coming out of a little space in West Virginia during the 70s when it really high inflation severe recession. I really lucked into getting a sales job with Continental Can, old Continental Can, which was sort of a like the IBM of packaging. So I was in Chicago. It was a terrific boss, transferred to Dallas with a boss that was there, the guy that got you ready to become a regional manager. And yeah, after a while I realized I really didn't want his job or his bosses job.
Les DeFelice: So I ended up going to West Texas to manage a wholesale paper distributor, Stanley Macio. He has a tremendous company. They are now, but I was in my early twenties while getting an MBA at this small regional family business. And as it turned out ended up going to work for a local bank in West Texas after there were some family issues and a non family member working in the business. We've all had that. It was a disappointment to Stanley, but we all moved on and I ended up in a hot oil bank in West Texas in the early eighties and I saw guys my age with a black Rolls Royce and a helicopter and three drilling wells and the controller and I would look at each other and say, what do we do wrong? It all came crashing down it was astounding. So it all came crashing down when the oil, when inflation started getting...
Les DeFelice: So I had looked at a brokerage in West Virginia that we called once in a while and say Les how's it going after you guys were doing hedging, big wall street firm, I said, you don't understand. They want 90 day money to lend out on drilling rig. So it's, it's an asset mismatch of the greatest proportion. So after everything crashed and burned, I get a job offer for Donaldson Lufkin Jenrette, Dallas. Get hired on the spot. So I became an institutional government bond salesperson. I did that with DLJ. DLJ is a big equity firm. So when we saw a lack of support, I went to Houston with EF Hutton where I had a tremendous career working with a great guy down there. He and I, and then there was two guys doing bonds time and I'll tell you from a humble background in West Virginia we really did a lot of business. And then at that point I asked if I could transfer to New York city, some guys from city Corp would come over from EF Hutton. So they said sure.
Les DeFelice: So I went to New York, moved my family back to West Virginia. Commuted all of '86 all of '87 from the Pittsburgh area to Wall Street. And after Shearson Lehman bought Hutton. I said had to pack up and go home. So after going home, I tried bond, trading bonds futures for two years. Did not take enough risks. And then I got lucky to get a job in a home medical equipment company. Got me in health care. So I went from being a Wall Streeter to getting kids new pediatric wheelchairs, which could not be more diverse, got totally hooked on that. About four years later, Jim Whycan, a tremendous entrepreneur in Western PA, he decided to get out of that part of the business, do more home oxygen business. He sold his business to Lincare the giant. So I started my own company, age 41 in a basement. It turned out to be a regional home medical equipment provider like Jim had built not quite as big.
Les DeFelice: So along the line, about 14 years in, I knew that massive cuts were coming for home oxygen therapy, sleep therapy. So in a entrepreneur magazine I saw Visiting Angels, and that just really appealed to me. I didn't know what synergies there would be. I bought the first franchise in '09 and then the next five years I kept buying franchises based on the credit capacity I had with my former company, sold that company to Lincare in 2014 and I've been a Visiting Angels' franchisee for 10 years now.
Eric Stites: Wow. That's quite a story and quite a path. It's not unlike, I think a lot of franchisees that don't necessarily have a clear straight path into franchise ownership. It's more a, I guess, diverse like yours. I imagine that background, in finance and sales and business really helps you in your business today.
Les DeFelice: Undoubtedly, I started out with a sales career and it really did because I look at our business. So in this industry, you've got caregivers, hourly wage caregivers, they do the heavy lifting, they do the job, you build a leadership team to hire and motivate caregivers. You hire account executives. And it really did prepare me for this career.
Eric Stites: Yeah. I guess, break that down a little bit for us. I mean, you're a multi territory franchisee, you've got seven offices, correct?
Les DeFelice: Yeah there's seven franchises grouped into three LLCs. So I can have equity, I can get equity to keep people.
Eric Stites: Great. Great. And so I think a lot of people when they first maybe look it up opportunities in senior care think, Oh, you know I'm not really passionate about caring for people. And they see the services that you're providing and not necessarily looking at it from the business owner perspective. And I'm imagining you have built a very large team with multiple offices and many managers and support staff and you're obviously not in the business day to day providing care to many seniors yourself.
Les DeFelice: Yeah. That's the thing. Because when I was with Liken Home Medical, the regional home oxygen company at Disney pediatric rehab, I was in the schools on the floor helping a family get a new wheelchair for their child. It was incredible. And, I knew, like you said when I went into home oxygen and that company grew, you get further away from the customer. So all of my coworkers all 250 caregivers, leadership team members, they're my customers every day. And what's interesting is I feel like I spent the first 19 years of my career and the home oxygen business, sleep therapy, pharmacy business and overlapped the last five of that with our 10 years in Visiting Angels. So see I felt like I made so many mistakes with the first company, the biggest mistake, is too nice and trusting when you're encountering toxic people making very good livings, leadership team members.
Les DeFelice: So I was able to carry some of those lessons over to Visiting Angels where in our five offices, the three are staff, the other two are satellites. We for example, for 15 team members, actually 16 plus me. It took us in 10 years hiring approximately 70 people to get the 15 okay. Hiring slow firing fast. Yeah, because I knew that it is a direct relationship when if you're tolerating a single person on the team, the toxic whatever you want to call that, it is going to hold you back. It's going to really be a wet blanket on your company. So I learned the hard way. We grew quickly, nine, 10, 11, 12. Had a bit of a lull with needing more management firepower, more leadership. So then in 15 we really started to find the right people in the right places. In 15 through 19 and that's where the revenue went right back up again.
Eric Stites: What do you think for somebody just starting out when they look at someone like yourself who's obviously been very successful, that took you, as you describe, I mean it many years to kind of build that and that's obviously the best part of buying into a franchise system is you don't have to figure it all out yourself. So can you talk a little bit about that first year or two when you got in and were just kind of learning the ropes and how Visiting Angels supported you through that process?
Les DeFelice: Yeah, that's interesting because I really realize that if I would've somehow been directed to the franchise industry earlier on, it's not like I regret what I've done, but it is unbelievable when there's a national brand with a system with tremendous support. And the key thing when you become a franchisee, especially great brands, like Visiting Angels, is there's so many other franchisees that you can commiserate with. You go to the conferences, you talked to them, you have a drink at the bar, ask them questions. If you're an independent practitioner of anything, nobody's going to tell you anything. Your competitors aren't going to tell you anything and you're in that silo. But when you're a franchisee in any industry, I'm sure. That's what's unbelievable is the resources you have talking to people in the same boat. Whether you're starting out or you're not at their level, there's always someone more successful.
Les DeFelice: So I would really recommend if someone found an industry that they liked, look up the top brand in that industry and try to get a share for it. Is it available and do the best you can to get the industry you want, the territory you want. And apply just good business practices with the support of your peers and you can be successful.
Eric Stites: Yeah. I love that point about the franchise community. And we often tell people that's kind of the greatest asset of any franchise company that you're investing in is that your fellow franchisees and the culture of the company and every company is a little bit different. When you were first looking at it, Visiting Angels, I mean, did you do a lot of due diligence to really look at the company that hard? And did you explore the relationship with the franchisees or were you just kind of, Hey, let's go, this looks good. And I know you had other business on the side, so...
Les DeFelice: I'm somewhere in between because that's, somewhere in between, because I saw entrepreneur magazine [inaudible 00:17:28] and so I contacted several franchisor of nonmedical home care. So one brand, you get a prospective franchise agreement that's an inch thick and another one you get a cover letter of all these other franchises they've started that you've never heard of but they also are nonmedical. Then you get Visiting Angels. You could tell thought went into the document. It was clear, it was concise it was to the point. So I went to an open house, Columbus, Ohio. Drive over, you start meeting the staff and you see the magic that Larry created and it's game on. It was just game on.
Eric Stites: So what's been the, I guess the hardest part? There's no silver bullet in franchising. And I think a lot of people come to franchising thinking that it's, I don't have the time and the resources or the energy to start my own business. So I'll buy this franchise thing because it's so much easier. And the reality is it's a lot of work. I mean, any owning any businesses, it's a lot of work what have been kind of your biggest challenges along the way?
Les DeFelice: What's interesting is, you look in the mirror and you're looking at the biggest challenge, okay. You look in the mirror and we all have our strengths and weaknesses. Your performance in a business, in a franchise, whatever you're doing. That performance is going to be a direct reflection of what you're looking at. All the good, bad and the ugly. Okay. So it takes a while to, I believe it takes a while to understand that. You can blame it on the industry blame it on the economy, blame it on your franchisor, blame it on the competition in the market.
Les DeFelice: When you really look inside and you look at who you are as person and what your objectives are. And if you're internally focused person, more of a taker, and then externally focused person, more of a giver. If you happen to be the latter, you're lucky cause you can do that. But it's great if you're naturally that way. But if you harness that and you end up trusting person after person, you can bond and bond and bond and you persevere until you're finally surrounded with like minded people. Then you've really got a shot at happiness.
Eric Stites: So what do you think, I mean Visiting Angels as you mentioned, is on the top of our awards list for franchisee satisfaction. We've surveyed the franchise owners many, many years and satisfaction is off the charts. What do you think it is that's unique about Visiting Angels? That really puts them in that and not franchising's not easy. And I think there's a lot of franchise companies that have come and gone. Doing it right. I guess you can kind of map it out and it looks so simple, but obviously it's not. And so what do you think has been the secret to Visiting Angels and I guess on top of that, what advice would you have for candidates looking at whether it's visiting angels or other franchise systems? What should they be looking for?
Les DeFelice: Yeah, well the company was founded, Jeffery Johnson, who's retired, was a psych social worker in Boston or Baltimore. And here, just by nature, you've got a person's whose going to heaven. Right. And how could he not. He found, he could not find a home care company and don't want to, he was going to sell it. Larry comes from the business background, the franchise background. So they teamed up, right. Jeffery was happily retired in Connecticut. What I find is astounding is if I can put it into words, Larry, really gets the franchise, who's the franchisees. You let them be individuals. He lets them run their business the best that they know how. With really minimum set of you must do, call your leads back within 15 minutes, answer the phone. I mean it's such a simple set of rules that people that have come in to this and they've realized the kind of leadership they have versus the heavy handed buy from the supplier must have the system franchising where the franchisor will say, here's your vendors. Period. Right, Eric.
Eric Stites: Right, right.
Les DeFelice: Okay. Larry is choose your software system. Choose the way you want to do things. We're here to help. Jim Collins has the five levels of leadership, right? And you don't see it very often, but the fifth level is humility. Okay. So like minded people that have joined Visiting Angels, just see Larry and see what he's about and see where his heart is and see what can be accomplished. That's the culture of Visiting Angels.
Les DeFelice: In June, I took three weeks off. I was out West for three weeks. I roll up to the annual conference in Nashville, walk right up to Larry. I said, well, I've been off for three weeks. I made up my mind. I'm never selling this business. He said, I'm glad to hear that. I said, by the same token, most of the nonmedical Hunter companies have sold to private equity, which changes culture. And Larry had a response. It was pretty much over my dead body, they can do, but they want to when I'm gone. So, when you see that continuity, when you see the ability to be yourself, take care of the customer, call people back with the freedom you want to do it without that heavy hand. Who wants that heavy hand? People in corporations, big institutions they come into franchisee to be their own business person. He gets it. You can be your own person.
Eric Stites: I think that's great advice. And I think to your point, I mean, I think that is rare in many franchise organizations to have that kind of freedom. I think that we're coming into the holidays. January is always a big time of self reflection for people and there's a lot of people that are going to be looking at starting their own business in 2020. Well what advice do you have for somebody that maybe on the fence. I mean, I think your point earlier about looking in the mirror, is great advice. What advice do you have for somebody that's just maybe just needs that little bit more incentive to stop what they're doing and come to a franchise business.
Les DeFelice: Okay. Once you've looked at your strength and what you enjoy and you've looked at an industry and you looked at the brands in the industry, call up, go about three hours from where you're at and look up and start calling franchises. Call three, four, five. The first one I called, she was in York, PA. She's incredible. She started in 2001 and had, she was the first one in town. Now she has 22 competitors. She's got a monster business. Call the franchisees that are, that have been with that franchisor for a while and get to know them more, see what they think about their franchise or their industry, the competition.
Les DeFelice: And what you have to do is knowing yourself. Some of us are risk takers, some of us are not. It doesn't mean it's an off on switch, but if you're way risk averse, this is going to be more difficult. If you're in the middle there's a shot for you to take that risk, do some good financial planning. Make sure you've got the operating, the working capital to get through the first, yeah. three, six, nine months, a year of no revenue while you're building the business that's, I think that's the best shot you have.
Eric Stites: So Les, you've obviously grown a successful business and have gotten to a point where you've, probably have a little bit more flexibility. Tell us a little bit about, I know you do some work with your Alma mater. Tell us a little bit about what you do outside of your business and giving back.
Les DeFelice: Yeah, yeah. What's interesting about that, as I was thinking about our call, one thing we started truthfully years ago, it was sort of an outgrowth of Mark Prior company, but we formalized it. So we have a, let's say 16-17 person leadership team. Every week, the GM who's now COO, we spend a half an hour face to face with each leadership teammate. Okay. They walk in, slide the agenda across the table. They talk uninterrupted for about 10-15 minutes. We're scribbling notes. The GM, Sheila responds, I respond all of our ideas grow up from that. Okay. So we've gotten to the point where I do those half a day, Wheeling, Charleston, Pittsburgh. It's a little unsettling because I'm looking at 2020 and we want to more control in the hands of our directors, COO, a hundred percent control. So I was very active in my Alma mater.
Eric Stites: You had the thrill of a lifetime the commencement speech, appointed to the board of governors, the committee to hire a new president.
Les DeFelice: What's interesting is I was a wall streeter. So I'm going back to studying macro economics very deeply. I'm studying the Great Depression very deeply. I love the business cycles. So Eric I have to stay out of the hair of my people. I have to let them do what they're doing and I don't want to start any other businesses. So I'm at that crossroads where I'm letting go but I still have those one to ones. We have one 4-hour meeting a month with the whole team. We have zero meetings other than that, we have a half hour call on Monday with half hour with each person once a week, zero meetings. It all gets through that, it all gets done through that pipeline.
Les DeFelice: So based on your question, I'm still looking for what am I going to fill that time up with? Because you never stopped thinking about your business. I told everybody in 20, for 2020 we're going to stop pushing initiatives through the pipeline in a frantic pace. Because we're where we need to be. Let's execute and we pulled back a little bit along on the lightning fast change. We'll slow down to normal rate of change to grow this business.
Eric Stites: Right? Yeah, I guess, fishing, hunting are out of the question?
Les DeFelice: It really is. I mean, it's funny if you grow up working since you're 14 I'm 66 grow up working since you're 14 you're not going to stop. I mean, when you look at our industry, you listeners out there. You look at this and go, I'm too late in that industry. Well guess what? No, you're not. Because the boomers, our clients are 80 and above. We haven't even gotten in we've barely gotten into the first of the boomers. So the next five, 10, 15 years are going to be super exciting in this business.
Eric Stites: Yeah. Well that's been, it's been great chatting with you and so much. It's so interesting to see how you've grown the business into such a substantial business and yet you're still optimistic obviously about how much more it's going to grow in the coming years, which is great to hear as well. So Les I really appreciate you taking some time and chatting with us today.
Les DeFelice: Well, and I'm going to congratulate you. Franchise business review 2005 leader in the industry. I love the surveys. Thank you for what you do for our industry Eric.
Eric Stites: Well thank you. I appreciate that. And it's been fun and franchising I think has gotten better certainly in the last 15 years and I'm looking forward to the next 15 as well. So I wish you the best and success.
Les DeFelice: Same here. Bye bye.
Eric Stites: That's it for today's show. If you have any franchise related questions, simply drop us an email at infoatfranchisebusinessreview.com. You can also follow us on LinkedIn, Facebook, or tweet us @franchisereview. Special thanks this week to Will Zimmermann for production help. I'm Eric Stites and you've been listening to Franchising Review. See you next time.