How Paul Porter Built The World’s Largest POOL COMPANY

BY JOE TRUSTY | PHOTO CREDITS: PFM

Paul Porter, CEO of Premier Franchise Management, connected with us on the Pool Magazine podcast to discuss how he built the world’s largest pool company.

Paul Porter is the CEO of Premier Franchise Management (PFM) the largest pool company in the world. The firm he first founded with Keith Harbeck in 1988 as a single office in Sacramento, has grown to a nationwide franchise with several subsidiary brands. Today Premier Pools & Spas have locations across the country. Consequently, they’ve grown into the largest pool construction franchise in the industry. Its sister brands, Pinnacle Pools & Spas, Premier Pool Service, and Pinnacle Pool Service help comprise over 175 offices coast to coast. In addition to running PFM,

Paul Porter appeared on three seasons of the hit cable tv show Pool Kings co-starring with his son Brian Porter. Together, they traveled all over the United States building one over-the-top resort-style pool after another while at the same time working to propel Premier Pools & Spas as a household name in the minds of consumers.

Recently I caught up with Paul Porter after the Pool & Spa Show in Atlantic City and had the opportunity to interview him on the Pool Magazine Podcast. In the course of our conversation, he opened up and shared details about his journey. Suffice it to say, his story is one that is truly remarkable.

Pool Magazine (PM): Paul, your story is a unique American success story. I’m eager to try and get you to share some of that with us today.

Paul Porter (PP): I think I relate so much to the pool industry because so many of us have a humble beginning. We don’t have the necessary college pedigree.

For instance, there is no college that graduates pool builders. We all learn through osmosis and really I was no different than anyone else.

I grew up with a single mother on welfare and the only reason I share that is that when you’re just trying to survive in the world, you really have no idea what you’re going to do after school. My idea of people owning a pool when I was growing up is that only rich people own swimming pools. When I had an opportunity back in the mid-eighties to go to work for a pool builder, I thought I just hit the jackpot.

My first experience in sales was selling vacuum cleaners door to door. You get ten doors slammed in your face before you get one person that wants to let you in the house. This is the first opportunity I had of selling anything where somebody actually said, you know what I’ve been dreaming about a swimming pool for years and years and I’d like to have you come into my home and show me what you can do to create and fulfill my dream. All I had to do was convince them that I was the right person to shepherd their dream and that I had a better value proposition.

Before I started Premier Pools, I worked for another pool company where I was doing really well. They asked me to go and open up an office for them in another area so I went into the San Francisco Bay area and started building pools. In nine months, I became the largest pool builder in that marketplace.

One day I got a call from my boss Ed in Sacramento and he said, ‘I need you to come in, the business is in trouble.’ At the time, I’d been in Antioch, California for nine months. We had a home and were building a pool. I was doing really well, but he held the license.

He said, ‘I’m done. I’m either going to close down the business or you can come in and try to pull this thing out.’ So we put our house up for sale and moved back to Sacramento. We sold our house and got $70,000 equity. That was more money than I’d I’ve ever had in my life and maybe some folks can relate out there. My boss at the time said, ‘Paul, you have been so doggone loyal that I’d like to sell you some stock in the company. Matter of fact, I’d like to sell you 10% of the stock.’’

I’m sure you know as well as everybody else does how the next part of the story goes. He sold me 10% of the stock for the $70,000 on my life savings at the time. I thought, here’s this kid from the wrong side of the tracks, raised by a single mother, gets an opportunity to do something he loves and gets an ownership stake in the business. So I went ahead and did it. His company at the time was about $250,000 in debt and we started paying back the debt.

We bought a house in Folsom and started building pools in my neighborhood. I actually had about 18 pools going in my neighborhood at the time. One day Keith Harbeck and I showed up to work and there was a paddle lock on the front door. Ed was gone. He left in the middle of the night with my life savings.

PM: You must’ve felt incredibly defeated at that point. What did you do from there?

PP: We really didn’t know what to do at that time. I had 23 pools in construction. I think the company had around 50 or 60 pools in total. The people that I thought were rich at that time, I realized they weren’t rich, they were just hardworking people. All their life they had dreamed about pool ownership and I saw the anguish on their face when I said the company was going out of business.

We saw their dreams being dashed and we decided we had to figure out some way to make those customers as whole as we possibly could. So Keith and I did everything we were capable of doing for no charge to try and finish these pools and managed to get every single pool finished in ten weeks.

I remember thinking as people were pounding on my door in the middle of the night, yelling through the door, ‘We’re going to kill you!’, I asked myself how can this be? At the time, I was only 27 years old. How could I be so stupid to trust somebody that much? My wife was at the time nine months pregnant with our third child and we’d had our cars repossessed right out of our driveway.

Keith came up to me one day and says, ‘Paul, what are you going to do now that we finished all these pools?’, and I said, ‘You know what, I cannot leave on this note. We’ve got to do this right.’ We had a responsibility to our employees. I actually had to borrow $50 at the time from my mom.

My wife drew a picture of a pool on a flyer and we went down to Kinkos and got 5,000 flyers. Keith and I and the rest of our family started passing out flyers door to door. We did that for two weeks, going out every day, 8 hours a day. Finally, on the third week, we came home and our answering machine was blinking that red light.

I showed up and went through the presentation. He liked what he saw and then he asked me, do you have any referrals that I could talk to? I said, ‘No, not anyone who would say anything you’d like to hear.’

He said, ‘Do you have any pools you can show me?’, I said, ‘Probably not too many people want me in their backyard right now.’ I said, ‘Here’s the deal. This is my story and nobody needs to work harder for you. Nobody understands what you’re looking for more than I do. If you want to pay the subcontractors directly, this is the price that you pay. This is how much money I’m going to make on this.’

He looked at me and said, ‘You know what? There’s something about you that I believe and I trust. I’m going to go ahead and give you the job’. I think way back then in 1988, the pool was around $15,000. It was a small pool, but it was everything to this guy. To say that we exceeded expectations would probably be the understatement of my life.

We did everything we possibly could to make sure that he was pleased. We said, we’d build a pool in six weeks and completed it in three. He was delighted. Fortunately, the next-door neighbor saw what we did and hired us to do her pool. The third pool we built was for a swim coach at the local high school, and he sent us 13 jobs. That was 35 years and about 100,000 pools ago.

By 2003, we were doing over $100 million a year in business in Sacramento and then the Great Recession hit us in 2008. We went without a salary for two years. Through that period of time, we just borrowed against our houses and did whatever we could do to hang on to every employee we possibly could.

In 2010 the market began to recover a bit. Keith and I kind of just looked at each other and said, ‘We made this, how do we want to finish our career?’ I saw so much plight in that period and we lost 70% of our industry during that timeframe.

So many people that had put their entire lives into the industry had to leave because they had only themselves to rely on. There were so many things that I had learned from the previous 20plus years I had in the swimming pool industry. I learned how to survive by making sure that we had visibility of our numbers to have an efficient business. I realized that the industry had to transform. Mom and Pops were going away and you had to consolidate just because you had to create scalability.

I just thought that this was a great opportunity to start consolidating the industry. To help out existing pool builders as well to elevate the experience for the customer simultaneously. In 2010, I started licensing, and I just started knocking on doors and calling people. I told them what we were doing and explained to them how with consolidation we could stand together shoulder to shoulder and that if we had a commitment to creating a great experience for the customer that the consumer was ready.

PM: When did you switch from a licensing model to a franchising model?

PP: In 2014, we started to roll out our franchise model. Again, it was a model that most people in the industry weren’t very familiar with or why they needed it.

The franchises we brought on saw a tremendous amount of success. So many of our guys had been in business for a long time. I always tell the Jeff Boyer story (owner of the Premier Pools & SpasTemecula franchise). His family was in the business for 30 years and was only doing $500,000 a year in business. Today, Jeff’s doing $30 million a year in business with us because he’s adopted not only the philosophy of our organization but the contributions he brought to it.

As a collaborative group, we figured out ways to scale. We knew how to do it because we started in our garage and grew that to a $100 million dollar business. Along the way, we taught builders how to scale their businesses, how to recruit people, how to bring on salespeople, schedulers, and construction people, and then how to fix their costs so that they could afford those things.

PM: Is that when you started to get mass acceptance in the industry?

PP: The more that the industry saw that we were growing, the more acceptance we had in the marketplace. We grew that for the first seven years to about 45 or 50 offices.

About three or four years ago, we started to go out into the marketplace and find business people. We said it’s more important that we look for people with character and business acumen. We could teach them what we know, and our business started to grow.

From 2016 through 2017, we added about 70 new franchises and in 2021, we opened up another division called Pinnacle Pools. That division was going to be part of our franchise business that just focused on fiberglass pool construction. In the last two years, we brought on 22 Pinnacle franchises.

We wanted to complete the experience with the customer. We spent all this time creating a relationship with the customer. What we wanted to do is support what we sold. So two years ago we started a pool service division. We wanted it to be dynamic, not just somebody that took care of the maintenance of the pool but someone protecting that experience and associated with the builder. We’ve been doing that for two years, and now have 35 Pinnacle and Premier pool service companies, and we’re growing those pretty quickly.

Because of scalability, we generated $750,000,000 in revenue last year. Now we can afford to do these things at scale and give our people a better presence and also offer them things like sophisticated websites and brochures, as well as continuous onboarding and training cycles through our system.

Ultimately, what we’re doing, is we’re trying to build a generational business. We’re trying to make sure the brand means something to the consumer when they look at that brand it stands for quality, integrity, value, and is something that they can trust.

PM: Your franchisees are highly profitable and have a dominant and visible presence in some of the largest pool markets. What kind of growth has your organization seen over the past few years?

PP: We’re growing at about a 40% clip a year right now. So we were up $250,000,000 in revenue last year. You would think that would be from some of these bigger markets, but it’s actually from some of the secondary markets. That is what is so extraordinary. We have so many people that achieve the highest level, and they have tenured, longterm staff there, and they continue to grow and create market share each and every year. Sacramento alone did $130,000,000 of business last year between Sacramento and Modesto. Over 1,300 pools, just absolutely extraordinary.

PM: We look at your map now and it appears that there is a Premier Pools or Pinnacle office in almost every state in America. How much bigger can you get?

PP: We think we have a lot of opportunity. We think that our roadmap leads to about 500 Premier and Pinnacle franchises and unlimited service franchises.

We think there’s an opportunity for hundreds and hundreds of service franchises and a need for consolidation.

PM: Do you feel like this is something that you could extend to places outside of the United States into maybe countries like Canada, Mexico or maybe even Australia?

PP: Well, we’re going into Canada this year with the new brand, Premier was too generic under Canadian trademark law. We’ve already licensed and we’re moving into Canada this year.

We’ve set our sights on Australia and Mexico and a few other places, but we have to duplicate the process and we think we have a real opportunity with fiberglass to go global. That’s something that we’re going to focus on.

PM: Starting at the beginning of 2022 we began to notice a shifting trend in consumer behaviors heading out of Covid. How is your organization best positioned to weather a changing market?

PP: We were up actually in 2022. I know that the industry as a whole was down 20 plus percent. It was a pretty devastating fourth quarter, but we ended up actually with our best year ever. We drew a lot of leads, over 130,000 last year.

Leads this year are more expensive. We’re driving more people to our website, but it’s not converting. We’re actually driving actually about 33% more people to our site, but we’re converting 40% less. Clearly, there’s still a desire to own a swimming pool, but right now, because lack of conviction or confidence in the marketplace, they’re not converting to a lead and they’re not getting estimates. I think a lot of this has been because consumers have heard that pools have risen to over $70,000 a pool. I still believe the desire is out there so what we’re trying to do is reach the customer in different ways.