Meet Dave Labus, an Epcon Franchise Builders in West Chester, Ohio.
Dave Labus became an Epcon Franchise Builder in 2004. He left his corporate life behind and decided to take control of his own destiny through this unique opportunity.
Host: Today I’d like to welcome Dave Labus. He’s the owner of Foundation Development Group outside of Cincinnati, Ohio. Thank you, Dave, for joining us. So starting off, you have an architectural background and was that in home building primarily?
Dave Labus: My partner and I both met in an architecture firm. We were both out of school and got one of the first jobs out of college and it turned out we were working for a company that specialized in retail work. Their major client was The Limited, here in Columbus. I don’t think either of us really knew what we were getting into and we really didn’t know each other.
We spent most of our careers in retail design, designing stores inside and out. Eventually, being a little bit more involved in the construction real estate side for me, as well. My background is architecture and I practice primarily in the commercial retail industry. My partner, Karl, his background was interior design and he had done private residential design as well as the retail side.
We actually got involved with Epcon, I won’t go into the details of the long version, but Karl actually met Kathy Fankhauser, Phil Fankhauser’s wife, and through that he became acquainted with Epcon and eventually started doing the models and clubhouses for Epcon, here in Columbus. Then regionally for Franchisees.
He kind of pulled me into that loop in terms of understanding what Epcon is doing and I had left a private architecture firm and went to work for one of my clients, which happened to be Gaylan’s Training Company, a sporting goods store. They were acquired by The Limited – one really nice big client we had acquired by the really big client we had.
So I worked for The Limited and then eventually they spun Gaylan’s off to become a publicly traded company. For better or for worse, I had remained in Columbus pretty much that entire time. When Gaylan’s went public, they were headquartered in suburban Indianapolis, Indiana. It was sort of a good news, bad news story – you get a promotion, you’re in charge of everything, and you get to move to Indianapolis.
I had just finished renovating a home and wasn’t real crazy about that part. So I did that for a few years. I decided I had had enough of working for the large corporate entity and had become much more familiar, through Karl, with Epcon. We decided maybe this is the next step in our career path that we wanted to do. Something we could control our own destiny a little bit. We eventually made the decision to become a Franchisee.
Host: So there’s an entrepreneurial component to franchising with Epcon. What were you expected getting involved as a Franchise home builder?
Dave: First of all, given my partner and I’s backgrounds in architecture and interior design, certainly you buy and sell your own homes and maybe renovate. We were very well-acquainted in home building. Maybe not in running a business, but from personal experience, and certainly with those professional backgrounds, we’ve been around the industry for a long time.
I think what both of us have done in our careers, prior to considering becoming an Epcon Franchisee, was really move toward more and more entrepreneurial area of the field that we were in. You start out of college, you’re basically a draftsman. Somebody says, “draw this.” And you prepare working drawings. And then, depending on your particular area of expertise, in my case, I moved up and started doing design of stores. Then it involved management of people designing and doing the construction documentation on stores.
I eventually became a partner in a retail design firm in Columbus. It was a tough decision to leave and go work for The Limited, but I knew that it was a very interesting career opportunity. One thing I really enjoyed about that was the focus on a singular client rather than managing a dozen different clients. It really allowed you to focus and take ownership.
With the Gaylan’s Trading Company, I had really been hired by Pat Gaylan himself, the founder of the company, when we began doing design work for their business. It was a very entrepreneurial experience in my niche. I think I had a fairly sizable contribution to branding and what Gaylan’s Trading Company became to the public. I’ve always appreciated that.
I was afforded the opportunity to get involved more in managing, not only in the design, but very involved in the construction side and budgeting and really the whole picture of what goes behind building a $10-15 million store and multiple ones across the country. I got a lot of management experience through that.
Eventually, I got involved in the real estate side to a large degree, as well. I was kind of building a foundation that I could use – I didn’t know how I would use it in the future, but it really did provide a nice foundation for doing something a little bit differently. I was very involved in the zoning process and commercial industry. Much like in our current Epcon business, zoning is part of the process. Land acquisition, zoning and following that through to the completion of a project.
I think after a while, and part of mine was the geographic issue of moving out of Columbus and wanting to get back to Columbus, you’ve been in corporate life for long enough and you want to set out and do something on your own. This was a unique opportunity. We didn’t necessarily seek it out, but in some cases it was almost like it was meant to be. There was a next step, we just didn’t really know what it was and the dominos fell in a certain way and it seemed to make a lot of sense.
Host: When that idea was brought to you, to become a franchise home builder, were you interested?
Dave: You know what’s interesting? When I first saw an Epcon Community and then homes that Karl had been working on models and clubhouses, I had to admit I was a little snotty about the whole thing. It was very vanilla to me and not high-end design. Not to demean it by any means, but I was on a bit of a high horse because I was fortunate enough to work for a business that was considered top of glass for it’s industry from a design perspective. So coming from a design background, I was like, “They’re nice, but doesn’t seem that exciting.”
Then having met Phil Fankhauser and eventually Ed Bacome, I started to learn more and more about the business side of it. One of the reasons, for me personally, that I strived and enjoyed the retail industry is a combination of the architectural design skills with business. Retail is a really interesting marriage of those things.
So although we’re not really involved as much on the design side of what we do today, it’s a continuation of that same evolution in a career and the way you go about life. Just tying the business in to something a little bit different than what we were doing, but it gives you the same sort of challenges. Constant learning and evolution of your career.
Host: You stepped into home building just before the recession. How was that experience for you?
Dave: We do joke a lot about our impeccable timing. Leaving lucrative careers that we were doing very well in and could have continued doing well in and jumping into this.
We had about a 2-year run of pretty decent business. That first community was 84 homes. I think we managed to get about 75 percent through before things really started to crater around us and that was challenging. Working for somebody else, and particularly a larger publicly traded company, the financial reality of such a terrible recession – you might lose your job, you may have your salary cut, you may have your hours pulled back or something of that nature. But when it’s you, and you’re the bottom line, it is definitely a different experience and one that we had not been through before.
We made it through. As a matter of fact, we closed our last home a few weeks ago in that community. We’ve learned a lot. It was a terrible experience. On one hand, I wish we never had to experience it. But you can’t control everything in life and it happened. We made it through. There was not a clear path, I think for us or anyone else in any industry.
But the great news is we made it through. We live to see another day. We did have the second project that we had closed on the ground, did infrastructure work, but when the market crashed we had not yet started building anything. We were able to put that on hold for awhile.
I think the water level is about right here. We’ve learned a lot from it. I think the way that we operate our business today is very different because of what we’ve been through. I would like to think if something like that happened again, let’s hope it doesn’t, or if we hit a recession, let’s hope its not quite the magnitude of what we just experienced. I believe that the lessons that we learned will not be forgotten and we’ll be able to address it even better the next time around.
It’s just one of those hard knocks of life. You get through it and you keep moving on. Everybody hasn’t been as fortunate as us to make it through as cleanly. We took our lumps and here we are, hoping to start another community or two here soon.
Host: So you’re moving on as a person and business. What was the motivation behind continuing on with Epcon?
Dave: From strictly the business standpoint of it, we didn’t get into this business for fun. There’s an element of that for sure and it’s interesting industry that we enjoy, however, we got into it to run a business.
It is a business that can be quite financially rewarding. Epcon has proven that over the years, both at the corporate level or franchisor level, as well as with the franchisees or builder partners. And we started to experience that. Unfortunately, it was short lived for a few years and then things really changed, but I think the model of what we do from a business perspective has certainly changed and we’re approaching new deals quite differently than when we first started.
The fundamental aspects of that business model are still there. Epcon has provided tried and true product, in terms of the home designs. They are very well received about everywhere in the country.
That’s really the foundation of all of this. Then, you couple that with the process that we get from Epcon. The sharing experiences, like at the sales conference this week. We all get to talk amongst ourselves and share experiences. I often joke that I feel it’s more of a cooperative than a franchise. Sometimes, some of the greatest value comes from talking to your peers, doing the same thing in a different market.
The business model remains very sound. We can’t control the economy. We can’t control the housing market, but we can make sure that we have the best products and the best processes to succeed in the marketplace. That’s really worth it. Epcon franchise system comes into play. If we follow the recipe, we should be successful.
Host: You’ve jumped headfirst into leadership positions here with Epcon, as far as the Marketing Co-Op among other things. Why did you become so involved?
Dave: I think in part it’s probably inherent to my DNA; I enjoy being involved. But clearly I really enjoy being involved with other Epcon Franchisees, and certainly corporate or the franchise, and having the opportunity to be part of change or evolution of what we’re doing at Epcon Communities.
In regard to the Marketing Co-Op, I definitely sought out the opportunity to become involved in that because I really thought that we could do bigger and better things and I’ve found that it’s a very interesting piece of the business. I don’t think that we have reached the level of what the Marketing Co-Op could provide.
However, I think we have a solid foundation and I think if we continue working in the right ways, we’ll bring greater and greater value to the Franchisees for the money that they commit to the Marketing Co-Op. That was a little of my desire to be involved, just because I like that, and also to be involved to make change.
Host: Has being an Epcon Franchise Builder met your expectations? Have there been many surprises?
Dave: Yes, there’s been a lot of surprises along the way. Many of them good surprises, some of them not so good. Like what happens when the banking industry changes it’s whole method of operating with you as a builder? Those are thing that’s some of us that weren’t involved in the industry prior probably didn’t fully appreciate. But one thing that I think we had a sense of, but not fully, we are a small business. We’re operating two communities at one time. That’s our goal. It’s to have two going at any one time.
We are on site a lot, if not every day. You really do get to know the home owners. There’s all kinds of things that they come along with that. It does become and part of a large family. I think particularly because we’ve been through the recession, we were in our Hamilton community much longer than we would have anticipated because of that, so we probably got to know people even better by spending so much time.
We’ve actually had four weddings performed in the clubhouse for our Hamilton community, over about seven year period. My partner and I were actually invited to go to one last Saturday night. It’s just how close you become to people. You follow their lives. They’re following you because you’re around there for a while. We find that quite rewarding.
If it’s not personal, and it doesn’t mean something, I don’t think it would have nearly the value. I don’t know that everybody has to approach it that way. For my partner and I, that’s certainly something that we appreciate. I can tell you 100 percent, that our home owners are going through the buying process really appreciate us being involved.
We clearly make sales that wouldn’t happen if we’re a faceless entity. It’s interesting in that way. We have benefitted from certainly the scope of buying power that we have as being a franchisee, and securing materials and labor for our jobs. We’re also still a small business. We’re there interfacing with a customer on a regular basis. I find that quite rewarding.
Host: So Dave, a question I always like to ask is what would you say to a potential home owner? Why should a home owner buy from you?
Dave: I think a lot of it started with the home designs that we offer, which really goes back to Epcon as the Franchisor. I really, truly believe that we have some of the best floor plans out there. People recognize that when they walk in. That is a step in the right direction.
If we didn’t have those quality floor plans that were better than a lot of our competitors, we would be on a different playing level. So you take that advantage and you marry that with the fact that we are a dedicated small company that’s very personally involved in the process.
We care about what we are doing for these homeowners. I think when they go to some of the larger builders, nothing against them, it’s just a different process. Buying a home becomes more of a commodity.
I think when you’re buying from a small builder who has personal involvement in the process there is trust. There is a certain expectation that you are watching out for them, You have their best interest in mind. They build a rapport with your sales associates and maybe you personally that, “you know what, I trust these folks to build a quality home for me. I think if I had a problem, I could go directly to them and they would help take care and make sure that problem got resolved.” I don’t think that’s something that you get with all builders.
Host: I’ll ask one final question here today. What would you say to a potential Epcon Franchise Builder?
Dave: I’ve talked to a number of prospective Franchise Builders over the years. Everybody comes at it from a little bit of a different background. When you’re buying a franchise, you know that you are going to get a package of things that maybe allows you to be an accountant and come into the business, or some other career.
I think they have to look long and hard at how they want to operate a business. In a recent conversation I had with someone, I shared that you have to very cognizant of the risk and reward side of getting into this business. And you need to make sure you’re comfortable with that. That’s something I didn’t quite know getting into this business. It would not have changed my decision. But it was something I wasn’t as cognizant of when we came into the business.
So I think for somebody today, understand what the capital or cash requirements might be for you to be involved in this business. Some of those sorts of things are important elements. I think it’s a great fundamental model. You have kind of look at who you want to be as a Franchisee.
If you want to come in, and maybe you’re a builder already, and you like the floor plans but you come in and you decide, “I just wanted those floor plans and I’ve been builder this my whole life. I don’t need the rest of it.” I don’t think that’s a very good fit. I think that there is not only the floor plans, but an entire process in place.
It involves the lifestyle that we provide in these communities that goes beyond just building homes. It’s a multifaceted thing and I try to have that conversation and touch on those sort of elements when I have the opportunity to speak to somebody that’s considering it. At the end of the day, if it’s the right fit and you understand what you’re getting into, it can be quite rewarding.