The Most Hidden Path to Financial Freedom in America

franchising is one of the most overlooked paths to wealth in america that's a very bold statement you said most overlooked there are more millionaires generated from franchising than all combined players ever in the nfl and there's a number of private equity family offices starting to get further and further into franchising and they're buying both large franchisees or they're doing roll ups you made this bold claim and i wanna to fight you about it now i'm totally on your team traditionally franchising gets looked at is like alright it's either mcdonald's and subway you gotta have three million dollars to do it so only the wealthy can actually do it but there's four thousand franchise friends and if you're willing to do the research willing to do the work they're either a lot of hidden gems and brands and industries that are really taking off so explain the path what's the game plan but this is such a good gem i don't wanna talk about how i did this i feel like i could rule world i know i could be what i want to from at all in it like a day's all on rolling alright what's up welcome alex alex is the franchise guy that we have invited on the pod so i don't know if that's what you normally get called but that's what we're calling you so this podcast called my first one of the re reasons we originally called it that was because there was all these different ways people made a million dollars and in my first ten episodes i think i had a guy did it in real estate a guy who did it with amazon fba a guy who did it playing poker and i was very fascinated just to hear all the different ways you can win in business for two reasons one i wanted a menu of options i could go choose from how can you know which one sounds most appealing to me which one sounds like it fits me and the second is i like just hearing that you could be doing it in all these different ways because it makes the impossible feel extremely possible i remember when i was sort of pre success it felt like winning was like just this needle and a haystack stack i couldn't find it and then as i've been doing this podcast i realized it's a haystack full of needles you there's so many to choose from there's so many different ways to win you're gonna talk about kind of retail and franchising i do did i do you justice there setting that up yeah absolutely i honestly up until four or five years ago was a bit of a i think franchise hate and thought oh yeah know that's yeah is that really entrepreneurship or is that yeah are there viable past there and the more i've gotten into it the more i've realized it's probably the most overlooked path to wealth creation and in america and i've become a very big candidate that's a very bold statement he's said the most long overlooked alright yes but well let's let's start with who who you are so you're you're a guy who made your initial wealth in laundry in the laundry business so can you give us the fast forwarded quick version of your story yeah i'll try to be try to be short so i'm originally from small town minnesota town of fifteen thousand people ended up in north carolina for college went to to wake for us studied finance was about to have a pretty kind of boring plain life and then bought a laundry business my freshman year college did seller financing had to learn what that was at at eighteen learn what a discounted cash flow analysis was at eighteen just talking to you business school professors before i got into the business school and ended buying that business and learned more doing that than any class i took at wake you know we ran it we grew it we sold it for a little over ten times what we bought it for and and had an exit our senior year for like at about ten times what we bought it for and that set the path to complete addiction why why did you buy a laundry business as a college freshman who does that so i was i was working for them i was working for them as a way to make a little extra beer money and and was hooked i was like this could work at duke in chapel hill and van build and you guys are graduating i wanna buy it and yeah for thirty grand and my jaw hit the floor floral i was like that's the most money i've ever heard of and i had maybe two grand saved up so had to get creative and figure out how are we gonna buy this and structure it and well that's sort of like one of one of the three businesses college could start it's usually like some type of like app or something where like college kids could sell stuff to other kids or a roommate matching app which i did or like a like a laundry map a a laundry business i know blake my i think that's the name the guy who heard tom shoes that was his first business was laundry business what were you doing you just go pick up the laundry from students dorm rooms you said like hey you you know i remember what i to college i didn't know how to do laundry i had like you know grown up at my parents at by laundry and so by the time i got to school i a little confused my roommate had to teach me like what is a dryer sheet and like why do you use what are all these different components how long do you leave this in yeah so tuesday was pickup day you'd leave your stuff outside your dorm room door we'd have runners you know mostly football players that could hold like two hundred pounds of laundry at a time they're just you know run up and down the hallways grab your bag we'd partner with vendors off campus they would clean it we'd return it thursday but the big unlock for us was kids aren't paying for this know has a bunch of broke college kids it's their you know of a affluent parents or your parents that are worried about them you know being at college not knowing how to do laundry and so the big thing that changed it for us that allowed us to go from you know call it t ish thousand in revenue when we first bought it to just under three hundred grand as a school year in revenue was get a booth that orientation week and for whatever reason wake gave us a booth next to where you got your meal plan where you got your parking pass where you got your keys to your door like all the like marquee things you need to do and we went full sham wow guy like i was like step right up where the premier laundry service that wake you got your kids gotta have it you don't want them to go you know close you got usually sign up for this yeah and they loved it they thought it was like the cutest thing and they're like yeah that's true my kids you know screwed going here and not know how to do laundry and i want them studying or know having fun or whatever it was and so we went from yeah at thirty k a year and yeah school year to like two hundred and eighty thousand or first year is this still a business that any college kid could do today like has this been a solved problem or does every campus just have kind of like a version of you who's who hustle and makes the the campus the freshman laundry service yeah i think sam right like the number of people i've met that have gone on to be serial entrepreneurs that were like i did that in college too like i thought i was so cool and special and unique that i meet like thirty other college kids that had a laundry business at their school so i don't think it's been like systemically or like at a scale you know solved it's just you know the the business that we had was called wake wash and it's been owned by nine other groups of college because it's changed hands that many times and it's been such a cool launch pad for all these other entrepreneurs because it's this like safe fairly simple business model but you do learn so much how to hire people manage them fire people work with universities on your contracts and agreements market the customers sell the people again it changed my life entirely i wouldn't i don't think be an entrepreneur at the the level that i am and have the level of obsession i have over if it wasn't for that college laundry experience that it i had hell now just turned thirty four you and so you sold that for what six or seven hundred thousand dollars you said mid six figures sue yeah it's like four flew over four hundred thousand oh that's badass so in college you sold a business for four hundred thousand dollars thought it i could retire well you know i'm that that you didn't as a twenty one year old you're like oh like god i don't have any college debt and i you didn't pay attention to finance class so good thing you did go to the pioneer finance career path well the funniest thing is like any good laundry man he ran another cycle he goes and he starts another laundry business right afterwards right well i i sold i sold out for a little bit i wouldn't work for ernst and young i thought as far as corporate jobs go consulting gotta be entrepreneurial jumping from project to project you're working with different teams and again i love the people i worked with did learn a lot but i it was like soul crushing work i i hated the type of work i was doing and in twenty fourteen twenty fifteen is when all the uber for x businesses were taking off so insta cart and shipped and wag get rover and dr and door and you know all of these and i thought someone's gonna do this for laundry and dry cleaning and if it's not me i'm gonna hate myself and i need to go at least throw my hat in the ring so quit my job at why so started a company called tu laundry in january of twenty sixteen and we had a you know pretty wild roller coaster of a ride from there and the story is still being written to a degree there hey real quick if you like this episode and you want more ideas on overlooked businesses i have something you might like a while back chris corner came on m m and we called him the side hustle king because he built so many businesses well he ended up giving us a list of two hundred ideas and the blueprints to build them it's a great resource and totally free if you want it just click the link in the description to get it now alright now let's get back to the episode you made this bold claim you said that franchises are what did could you phrase it exactly because i'm gonna i've gonna try and prove you wrong but i want we're gonna have a friend we're gonna have a fun debate well it's it tell me you're the exact phrase yeah so i think franchising is one of the most overlooked paths to wells in america and i think it deserves more attention and people given it a shot great i want you to be right but we're gonna we're gonna like have a c conversation about that and the reason you know this is you have a software company where you it's like a marketplace or franchises so you have perhaps one of the best like birds eyes view of like the the industry where are the numbers that would make you make that claim yeah so franchising as it's it's a business model first so i think a lot of people think franchising an industry it's a business model that spans food to hospitality health and wellness early childhood development most of us probably don't even realize we're using franchises on a daily you know for sure a weekly basis hotels marriott hilton franchises businesses you know there's all the food that we all know mcdonald's subway you know chick f a etcetera but then gyms that we all go to orange theory you have forty five berries they're some form or fashion of a franchise and then you talk about your home gutter cleaning painting you know pest control etcetera all franchise it is eight percent of our country's gdp is produced from franchise business models and i think traditionally franchising gets looked at is like alright it's either mcdonald's and subway you gotta have three million dollars to do it so only the wealthy can we do it well or it's these like kinda slimy ones that are just popping up and they don't have systems and they're telling you they're gonna sell you a dream but there's four thousand franchise brands and if you're willing to do the research willing to do the work and willing to look there are a lot of hidden gems of brands and industries that are are really taking off and have valuable systems and a valuable peer group that the everyday average you know entrepreneur could benefit from if it's the person that doesn't have the original tech idea or wants to go raise venture capital but wants to build a business and build wealth franchising i think again is one of the most you know underrated overlooked paths to doing that so explain the path alright so i'm a person and you know explain a blueprint or a model that you could see so you know you take x dollars that you have saved up or you raised from somebody you buy what type of franchise and then what type of returns do you get what's the game plan so i always use analog and i think a good one for for franchising it's a kinder real estate you could buy a trailer you know one lot trailer and rent that out or you could buy a hundred door multi unit deal and there's everything in between and franchising is no different of those four thousand brands there's some as affordable as ten thousand dollars to get into chick f a actually is only a fifteen thousand dollar franchise fee because they want to pick from the best crop of operators but they're a lot more restrictive on how many units you can actually open how you operate how involved you need to be in the business etcetera isn't like you can only have one right yeah you only have one the there's unicorns they allow to do two three more and then brands like rm mark or these you food service providers that do stadiums and campuses they've got dozens if not hundreds because right they have those you know agreements on those those those venues but some of these franchises will be ten k all the way up too there's four million plus dollar swim schools where you got six pools you're building and yeah it's a much higher steaks but higher reward it's franchise fee the same thing as what the build out is so let's say you you said chick f like fifteen k but then you have to build the restaurant right so the franchise fee every brand will have and that can range from ten k to know seventy k and some instances and that's basically your ticket in line it's your i now own the rights to this territory or this you know ten mile drive radius etcetera and then there's the build out cost just like if you were to do it on your own how much is this gonna cost to up fit the location by equipment you know boilers or you know stove and all the stuff that you need for a restaurant there's bad investment cost as well chick f a is a little bit of a pseudo franchise it's fifteen k for the franchise fee but then chick f actually bill you buys the site they pay for all the build out but they're taking a fifteen percent royalty instead of six percent which is standard so six percent on your revenue standard chick place taking fifteen but then they take fifty percent of your profits as well which no other franchise or does they take zero percent of your profits so you're effectively with chick f a buying yourself a a high paying job did you guys read about this this article went viral or not viral and maybe in the business world that was popular i think it was in the wall street journal and it was march first sheldon twenty five it was about the friends these two buddies i think they're only thirty five to be honest and they they had started a business called ga station partners did you read about this no yes okay so correct from the story but two guys i think they looked like thirty five the thirty seven two buddies who raised a fund and bought a bunch of franchises and now have a multi billion dollar fund and i think they've taken out you know hundreds of millions of dollars out of the business yeah so they and there's a number of private equity family offices starting to get further and further into franchising and they're one good example of it and they're buying both large franchisees are they're doing roll ups essentially of alright sam shawn and alex own five jersey mike's and they find six of us and they go buy all thirty of them you know they're doing these kinda one off deals but now they own a thirty unit portfolio that's doing you know an average of two and a half million per location and you know now have close to a hundred million dollar year revenue business the acquisition and it was five acquisitions or six act acquisitions so there's a lot of that happening and so they the wall street journal phrase it so differently because when i think a franchise i think of a little bit blue collar or an ex nba basketball player that's what i think about and the the they're tied the the headline was meet the best friends who are private equities newest young stars and it said that they bought they've they've so far have raised three point five billion dollars they're only thirty eight years old and they bought everything from gyms funeral homes car washes and they bought hundreds of these and they've just operated it really well and i think their big win was betting on little caesar's i think they bought a bunch of little caesar's if i like maybe eight years ago and now it's been really popular but the way that they've rebranded this was actually amazing what do you mean rebranded it what's the brand the rebranded is like it's just like they made it a lot more white collar so when i think a franchise i think like a mom and pop business who just wants to get into it and they got they put forty thousand dollars together and they work for fifteen years and slowly acquire one or two at a time and hopefully they have they're it's almost in the same category as like a dentist right you know like the middle america wealthy people who have done it you know year after year and been very consistent these guys were thirty eight year old manhattan nights who raised a billion dollars and they've just crushed it and it kind of reminded me i think there's been a handful of things like this sean where it's like things that sirius operated operators don't take serious and that is how i kind of read it about these franchises where it was like yeah mom and pops have done well owning three or four of them what would happen if you don't own three thousand of them and that's what there's there's a lot more smart money coming in and using that real estate example again it's there's all these folks that might own five doors or duplex or quad duplex and private equity and family offices or ex investment bankers are saying what if i go roll up a hundred of these two hundred these that's that's exactly what cal did the story that i'd you know shared with you guys oh that story who's cal yeah so kyle gu poly he's a a franchise based in florida former investment banker i think you worked up new york or in the northeast and you know decided you wanted to do something for himself because i how to put deals together i know a to structure and you know analyze a business and so he bought a few butcher shops at first so independent businesses more like eta or search fund of seven years ago eight years ago and that one went okay like he learned a lot how to be an operator and you know learned some retail but then he was at his orange theory jim that he goes to and he's a curious guy he asked you know the manager you know the owner around or can i get in touch with him get in touch with the owner ask the owner how much money are you making the owner was forthright rides shares financials and i think he was making four or five hundred grand for the you know profit from that one location kelsey you make that from one gym and he's like i own three of them he's like you're making over a million dollars a year off of three locations and so he goes and buys his too orange he's like immediately a thousand twenty eighteen dude fact an ex banker doing this is sort of like a young gay couple with firing a neighborhood you're like you're like like at outsiders are like something's up like it's starting it's like happening yeah this is like that's story our a retired new york baker in florida who's on his second second thing well so he he starts doing this in twenty eighteen seven years later at the peak he's had a hundred and twenty locations open in seven years of orange theory or of other things eight different brands marco pizza restore hyper wellness european wax center papa bagels did he make his money so what he's done and so i have a podcast as well called how i franchise this and he talks through exactly how he finances and how he structures the deals and a lot of the times he owns thirty to sixty percent of the equity and these kinda like sub deals that he's doing so he's using private equity family office you know independent investors us but he's the operator and are owning thirty to sixty percent of a system that likely does over half a billion a year in revenue across all of his you know his his units in seven years oh who the hell could operate a hundred different franchises way what like that's so difficult how was he doing this what is the model that lets this happen so he as he was scaling and usually it's going from six to ten is the really challenging park because you start having district managers you know managing a unit but he's so far removed from the day to day now that he's got this you know the system in line of defense where each brand has a basically a coo over it within that organization there's multiple district managers and then underneath them they manage you four to five stores each and gm and assistant gm once that system is in place there's so much redundancy that you know you've got people calling out and all the headaches you'd worry about with a business like this he's got a couple thousand you hourly employees across the system and that sounds like a massive headache but because of the system and you know the the things that come with franchising it is much easier for him to have these playbook for training and about how do you handle employee turnover and how much profit would it make a year or cash flow and how would it be do you value it is the value in the equity value that you build up or is it just the profitability so so both franchising and this is you know something that open my eyes a bit is a real estate investor would be jumping up and down about twelve to sixteen percent irr a franchise z is upset if they're not north of twenty five percent irr so the cash on cash return is you know double in many cases of the expectation of the floor yes there's more risk yes there's more or in some cases there's more risk and there's more well you're running the business right yeah because you get these systems in place it becomes similar to owning a portfolio of hundred you know doors in a in a commercial real estate and and so that the cash on cash return from the cash flow of the business is twenty north of twenty five percent that's not factoring in the enterprise value when you go to sell and franchises trade at one to two x more of eb than an an independent business because it's d risked across the thousands of units or hundreds of units in the brand banks der risk it that way investors der risk it that way and you have peer group again in this order to to to rely on twenty five percent cash on cash what was the cash i don't even know what it would cost to have a hundred twenty well just do it and do it in a simple do one right so yeah one location let's walk through the economics of a single location of pick your favorite franchise if you were advising your your little brother or your cousin to go do one of these where would you guide them and then let's walk through a one location economics yeah so it and i know people hate the answer it depends but there really is a franchise for everyone whole pick you know let's just pick dave's hot chicken and a brand that a lot of people know has had this kind of viral growth the last few years the average dave's hot chicken you is anywhere from six hundred fifty k to to one point eight million to build and that depends on size the market you're in i know it's a a big range but the average revenue of a dave chicken is is over three million with you know twenty ish percent you know cash flow margins so we're talking about six hundred k in in profit okay but we gotta slow down so dave you you you tell hey dave's hot chicken great great brand yep your little brother says okay what am i gonna need to go build this to to start a dave's hot chicken so i gotta apply and then i have to pay a fee and then i have to come up with a million or one point five million dollars to build this thing how am gonna do that yep yeah so in dave's hut chicken case they've now require you to do at least five and so in this case this is one of those examples where you do need two and a half million liquid five million dollar net worth or to raise that money from investors so it his little brother and he didn't have that cash i'd say hey we gotta go and find some investors you're gonna be the operating part partner just like what kyle does you know today across his system a little brother can we prove that you're a good operator that you have experienced you know managing a chipotle or whatever it may be to go raise this capital if he wasn't capitalized so he's gotta go raise five million bucks yes yeah so to get started he would need two and a half million liquid in this case to build the first you know one or two spas is a great option as well so cal even so at his scale is still using sba because it's designed and meant for buying small business like this for getting a how to eat hotter chicken that's what the nba do you also have to be good at spotting a trend because for example if dave's hot chicken you know was a thing twenty years ago i lived in nashville when how hot chicken got started and was like not that popular and then something happened on tiktok where hot chicken got cool but then i don't know is it a phase like do you have to be do you have to get good at picking what a winner is yeah absolutely so one of the things that i think about a lot is what makes some of these wildly successful franchisees versus the ones that aren't and i think like picking an independent business whether it's trash or you these other un sexy businesses you need to find something that you i think carries long term value unless you know it's a trend and you're like as long as i get in early i can build a substantial business and ride the wave and and ride the trend i think it's very similar to buying an independent business as well but cal is an example spotted dave's early he spotted pop up you know bagels early and they're taken off right now okay so let's redo this so because you you gave us dave chicken and mean now your little brother needs five million dollars and i think we we've got wall so let's do something that's not gonna require that and let's take it more realistic i don't have friends and family that will give me you know two two and a half to five million dollars liquid and i don't have the operating experience of running a chipotle for three years yet so what what what else would i do european wax center what are we thinking so let's do let's do another that's one that i'm in full disclosure i'm developing five and other nines in minnesota right now it is a indoor what's an other nine another nine another nine is that the name of a franchise it is a fully unattended so no employees no food and bev indoor golf simulator franchise golf is very you know trendy and popular right now it's making gonna comeback back you got the netflix effect with full swing this past year actually more americans played off course golf so like top golf simulators etcetera than actual green grass golf for the first time that sounds substantial okay so you you basically say hey there's this trend in this movement indoor golf simulators you said yourself you're building five five of these out okay so let's walk through again the one unit example do i does his little brother need some special sauce to do this or what does he need what's the steps yep so this case you are gonna need you know an sba loan that's what you know we're using to finance some of these the build that's substantially lower than a days and they don't require you to build five of them so you can get into one or two of these when you go to get that sba loan do they need you to have proven anything yourself or can you just say look this is a franchise i'm gonna operate it i've had this corporate job and i'm ready to go do this do you need some something to qualify for that yeah so typically depending on the brand you're getting into you need fifty k i'd say liquid and over a hundred and fifty k net worth again i think attainable for you know a lot of people wanting to go escape corporate or add onto their real estate portfolio etcetera sba will borrow you up to five million dollars across multiple loans you know over time and they will make you sign personal guarantees so you are if you own a house that's collateral you know they're looking for does the individual have enough collateral and does the brand have enough data and proof points that this is a concept we wanna back and be involved in and most banks like i think a lot of opportunities some love food and that's what they do they're the food lenders there's others that love fitness and they're the the fitness lenders and so you gotta find the right lender that is comfortable with the concept you're looking at so how much does it cost build one of these yeah so one of these is anywhere from you know three hundred and twenty ish k to eight hundred thousand depending on the number of private base you want so another nine is different than these social experiences you see where it's food and bev and staff this is like anytime fitness you fob in with your phone you can go at three in the morning if you want their twenty four seven and you go play you know sim golf on some of the nicest equipment out there you know the guys that started this out of cincinnati they said they got surgeons that go three times a week at three in the morning when they're off shift and they go play pebble beach for an hour before they go home and you know call it a day because that's their routine and that's when they can get away and do it but they don't have five hours to go play an actual round so i'm on on another nine dot com it looks really fun i i don't even golf but this looks like a it'd would be really fun but it looks very new like it i think their headline says just just two dads are gonna play more golf that's who founded it and that it's a it's got pretty funny language which actually says like did we mention that we're by like it seems it seems cool but it seems like why would i need them why would why would you pay them money versus going and doing it on your own yep so one thing i always tell people they're thinking franchising again here's another analogy it's like a lot of brokers or people say like i know sam and sean they just assume they want ice cream so it's like which flavor do you want and i say we gotta take a step back maybe they don't even want ice cream maybe they want cookies or cake and and you know the dessert type being franchise versus real estate versus by your own business and so i usually tell people if you're gonna do franchising you need to think about this over a ten year period because most franchise agreements are ten years you need to say in five years what value is this brand gonna be providing me that justifies this ongoing six percent royalty and so in food it makes a lot of sense mcdonald's is gonna give you ten cent per pound broker meat versus a dollar that you get on your own you're getting more value in the bulk purchasing power of the brand the menu innovation the marketing etcetera then you are keeping that six percent and so brand like another nine because a lot of the value is front loaded they're getting brakes on equipment and and build out and helping you with site selection and design you know how do they create value over time and for me it was i'm doing you know fran full time they are gonna provide resources on an ongoing basis training they're building software that i don't wanna spend time building or investing that allows better scheduling an easier marketing in lessons to go partner with existing golf courses to drive volume from from that channel their building this really cool league you know software where sam could be in new york and alex in charlotte and we could be doing a fantasy football type league where all of your high school or college buddies could play against each other you know in your respective markets and have this like fun ongoing competition so they're investing in technology that i think creates stickiness within the the consumer base they make operations a little bit easier maintenance contracts right and that's probably one of the least value add five years from now kind of examples versus a restaurant but even then it's worth it to me to not have to think about all that okay so finish up the economics for from so you said you're gonna go you're gonna build this thing out for let's just round it to five hundred grand and you're going to franchisees this from these guys you have a six percent royalty what are you and you got the you got that five hundred grand from the sba ten percent down yeah ten percent down so you put fifty k down and you're gonna you're gonna get the rest as a loan so what are you looking for and how do you what why are you know i guess you're trying to do five locations maybe it takes five for this to really like be meaningful is that is that right so i always tell if you're gonna just try to replace your income or have you know kinda like a side hustle or some society come you can do that with one or two units if you're really looking to fully replace if you have if you're a higher earn or two hundred and fifty you know k plus and and and and salary you're gonna need three plus locations to replace your income and eventually build wealth beyond that so for me and my partner was let's do five they're very passive there's no employees there's no food and bev we can run five as essentially a side hustle without having to be super involved in the day to day one unit on average is doing just under three hundred k a year in revenue which might not sound like a lot but if fifty five percent margins because there's no labor there's no food and bev it's just the build out cost and rent essentially you don't need high occupancy to to to get too meaningful amount of of of profit so we're expecting each one to do hundred and fifty k and and profit after all expenses you get to five of those you know generate seven hundred fifty k and relatively passive income you know it's a lot of work for us upfront to find sites and build but meaningful cash flow in the long term and sam had a good point a second ago where he was like do you have to almost think like an investor and spot things a little earlier than the curve and figure out what's gonna have staying power and you had this interesting thing think you texted us you said turf businesses and i think of this one you were saying there's almost like a regulation that you will benefit from you said like vegas for example is prohibit new homeowners from the growing grass so they have to go turf can you talk a little bit about that like that idea and how you would capitalize on it yeah so waterloo turf is the brand he's a former private equity guy this is a big thing that i look for to just like sam said fine trends you're betting on people as well because this is a i think another thing people might discount in franchising is i'm not just buying sean's old business we shake hands and sean and alex don't really interact beyond that no i'm looking at sean as a ten year partner we're gonna work together you guys are gonna make investments in the brand help me with marketing and you know problems that i having and you know build a system of other franchisees that hopefully can all benefit from and and learn from one another and i think people maybe take that part for for granted i just wanna to stress that the founder of water the turf is phenomenal former cal like guy you know very deal driven investment banker are very analytical and he's looking for this trend in seeing the turf industry in the united states is four billion dollars today gonna grow by another of half a billion next year and there's no clear winner there's no national brand no one's dominated this why don't i go build a franchise brand around it and do that and build you know capabilities in bulk purchasing power on ongoing basis for the materials there's ongoing maintenance to kinda turf and make sure the grass is still enjoyable for young kids and you know it's not you know wearing out quickly and it's another pretty affordable business to get into it's only a hundred and five to a hundred and fifty thousand to get into because you don't have the overhead of a retail store there's no physical location you don't need a lot of equipment and so for a hundred to a hundred and fifty k grand you can own a business that on average is generating one point three million dollars in annual revenue with profits around two hundred and seventy thousand dollars a year so again one location in this example could replace a lot of hiring incomes but now you're your own boss you're an entrepreneur with a playbook and a team behind you versus having to have this completely original idea you know to convince you or make make that push for you to leave your corporate job why are you selling software to this ent just go buy a bunch of these that sounds great so i'm trying to do both which make sounds like a not great eye i idea but i have partners on the franchise side that are you know my version of cal i'm being more capital a capital partner i have operating partners in the franchises because i can't physically build a software company and operate a franchise portfolio but the goal is to get to fifty to a hundred unit portfolio just like cal doing and and you feel here let's just say hypothetically let's say you get to fifty to a hundred what are you telling yourself you're like oh that i'll make five million a year off of that yeah at least and then the the enterprise value so like cal with papa bagels or dave hut chicken you mean the exit multiple for him will be six to ten x on on eb compared to three to five x if he just owned cow chicken shop orange theory at its height was trading for twenty one x eb it was picking insane i mean it was like a software business multiple on a gym but because it was a part of a system they had some recurring revenue they you know investors and private equity groups rolling them up treated it like a software business sean have you heard of pop up bagels no they they were started in this little town that used to live in west connecticut and they have this crazy model where you can only buy twelve bagels at a time i think you have to pre buy or some sometimes they're like changing their the rules but it was like you had a pre buy twelve bagels in advance and now i live in manhattan and two things one they're better than like than normal mom and pop bagels they are phenomenal and two every time you see one there's a line the the pop up bagel phenomenon is incredible i've never seen anything like this and i think it's just like a husband and wife started making bagels like in during covid times and kinda turned into this like they could've be a billion dollar plus brand at this point what's but what's your a what's like the calculus here both in terms of like emotion work and money on starting pop up bagel or starting orange theory versus owning a bunch of them as a franchise see so you're saying starting as you know like the fran franchise are like what the husband and wife pop up sam saying should i shoot to own forty five of someone else's chain or should i shoot to create the franchise and then franchise it to thousand people right sam is that kind of what you're asking about like exactly difference yeah exactly for example we had brian scott on m mfa a while ago brian sort of this thing called one eight hundred got junk it was a horrible bit of business for like i think fourteen years i think it took him fourteen years had a million revenue and then he was like year five after we decided to franchise it took off and now he's one of the he he's a he's a multi he's a multi billionaire and i'm like that sounds cool but you're advocating towards the other stuff of owning if someone else's franchises yeah i think it goes back to like the entrepreneur arc archetype like if you're like that builder you know creator type or like you know you are the less than probably one or two percent of the population that thinks that way and has those types of aspirations and doesn't wanna have a boss like you're likely the kind of tech software entrepreneur or yeah creator type but i think ninety nine percent of the population is not like that but they wanna do something entrepreneurial just don't know what they don't know how that's why i'm such an advocate it is you know had i not had that small college entrepreneurial experience i might have learned things to go be a successful entrepreneur later on and the more people we can get getting some of these reps in of like alright go build a team go have to find a location go have to solve these problems real time and have some of the shitty stuff that happens to you as an entrepreneur happened to you so you learn how to take you know those punches and you know become you know an operator in an entrepreneur that's why i'm an advocate for it as me as an individual i like the creator like higher risk high reward let's go try to build this system to a thousand locations and i you know i started that the reality is i don't think that's the majority of america or the majority of people what do you think is the thing to look out for who's lying to me so in any legitimate way of making money there's always going to be is a legitimate way of making money there's gonna be a bunch of people who come in and just and say you know what let me ride the back of that legitimate way of making money and i will over promise i will under deliver i will try to you know sell a lemon to somebody and this happens in real estate this i could tell you hey you know tech investing start up investing that sounds great gonna invest in the future of entrepreneurs while i could tell you the people who are gonna basically it's not a scam but it's like dude you're gonna lose your money if you do it that way and i could tell you the people who who do it in a certain way where you have a good shot of making money and there's a clear difference when you're on the inside you know you know who's who right and so in every industry i think this exists in the franchise world what are the red flags who's lying to me who's who out who's out there trying to take advantage of you and what should you look out for that would be those sort of signs to run away yeah there the reason kinda sm is there so many and it is one of the main drivers behind fran is that regulation and i'm not a big proponent you know over you know fan of of over regulation but it is the wild west in business broker and especially in franchising so there's no license licensure to become a franchise broker you know like real estate you have to go get license and you know registered in the state to take coursework work have to disclose your commissions and fees and how you make money in franchising it is absolutely insane about what's allowed so the three of us boom we're all franchise brokers in this moment you're you're done that's it like you don't have to go get registered in the state you don't have to take a a course or an exam and then you can go charge a sixty percent commission on the franchise fee six zero and for anyone that's ever done sales i mean outside of insurance does anyone else know sales commission that's that high in that incentivized no it i can't think of anything else that's that that high of a a commission and so what does that attract a lot of people who are gonna say what they need to say to get a huge payday if they close a couple deals a year it's two three four hundred grand some of these brokers are making a million dollars a year not having to run anything other than you know convincing someone to buy the right business so was the brokers yes it's like it's like a same time so like i i hope some regulation happens and and pushes at least tell people how you make money and how much so that you know because half the time they're not telling you and you think is the person receiving their services person smarter they're gonna help me this is great it's free for me and you know you know they're making somebody money on the back end but you don't realize just how much the big issue on top of it is they might only be showing you the fifteen to twenty brands that they have an agreement with and so there's four thousand brands and you're being shown this universe of fifteen to twenty having no idea what's happening on the background i'd be like buying a house from a real estate agent that's also the listing agent on the house and then them only showing you the listings that they're are also the the listing workers works so are they where do they where do they sit in this ecosystems are they cold calling people where are they running like webinars like what are they doing to even get in the middle of the transactions how are they generating the transaction you you guys probably both get a lot of linkedin messages and i'm sure you've got a bunch of franchise brokers in your inbox saying hey sean have you ever thought about owning a car wash franchise or this you'd be a great entrepreneur great operator in this business and a lot of linkedin outreach yeah webinar some of them make youtube channels right telling you how easy it is wait is it and is this fran he's business model you get sixty percent no so i wanted to build frame just yeah i wanted to brokers except they suck i'm trying to defeat that broker model i'm trying to disrupt the broker model and democrat ties so hey instead of the twenty brands at a broker my show here's four thousand here's all of them because we scraped what are called ftd franchise disclosure documents it's like what zillow did with the ml so now every brand is out here the good the bad d ugly which ones have failed shutdown locations have declining au and revenues and then we charge a flat dollar amount to the brand instead of sixty percent it's about half of that it's flat across all brands and we disclose that up front to our clients so think of us as more of a franchise fiduciary so we're here's how much we make here's how it works we have ai that's match making you with the right brands based on all these unique things about you and then we just help you you find the right fit at financing get your entity formed get their right franchise cpa franchise attorneys involved etcetera what brands would i have bought fifteen or twenty years ago that just crushed it today like what can we look back on and and and and put together some dots for the or you know managers yeah yeah yeah not nothing bun cakes is still one of the best unit economic businesses there was i mean roar roar capital is that this also kinda hidden behemoth if that owns the majority of brands that most people don't realize they own driven brands which is minor key take five they own inspire brands which is ot ci so more capital according wikipedia has one point four million employees and thirty seven billion dollars under management so it's just a huge company that owns tons of franchises so when i'm on their side and i see dunkin like dunkin donuts what does that mean they own some locations or they own part of dunkin they are the fran are so ro playbook is let's go buy up the fran franchise and now they have that six percent royalty stream into perpetuity across all of these brands so they have splash swim school like a jimmy john's dunkin and donuts no you gotta let are you gonna let these guys come after the patel mob everything you weren't for they're coming out no everybody needs exit liquidity and this is ours you guys love indians okay so what what which other businesses were cool at ten or fifteen year ago nothing bun cakes i've never heard of that that was hilarious watch choice and you gotta you gotta you gotta try it it really good and again the the economics are in low food cost very good au i like it's three three million or so the box is small and simple there's one here near there's this this location could on average would do three million in revenue yes selling these cakes selling cakes tell you very disgusting cake what hell yeah i don't even know what a blanket cake is it's looks horrible it looks disgusting the don't knock it tell you try i've telling you they're if they just change the name from bun cake to something else would be again today's episode is brought to you by hubspot did you know that most businesses only use twenty percent of their data that's like reading a book but then tearing out four fifth of the pages point is you miss a lot and unless you're using hubspot the customer platform that gives you access to the data you need to grow your business the insights that are trapped emails call logs transcripts all that unstructured data makes all the difference because when you know more you grow more and so if you wanna read the whole book instead of just reading part of it visit hubspot dot com okay but nothing bun cakes that one was a winner what else was a winner a lot of home services like benjamin franklin plumbing mister smart mister spark your electrician oh wait you could just use benjamin franklin's name apparently yeah the the the home services business george washington's gutter suckers mean you guys talked about one eight hundred you know junk as well and then omar solomon from college moving junk they did really well same thing as one very similar to one eight hundred junk obviously hotels marriott hilton have done incredibly well we had this guy named john morgan he's a billionaire there he is a morgan morgan law firm he kinda like you know he's a billionaire so he owns just crazy amounts of stuff and he's got all these stories and like two or three times he said i don't know if you remember the sean he was like yeah we own some marriott hotels like he just like made these comments that were fairly off handed but it was probably like eight or nine figure like thing it was like probably a pretty big deal i'm shocked at how many like baller are are in on this is it's pretty amazing they i've found like with the podcast the ones that have more than fifty units open they don't wanna come share what they've done because they're like this is such a good good hidden gem i don't wanna talk about how i did this or that it's out there because again it is substantial wealth creation i know a guy that owns when i first met him he was at forty seven mcdonald's and he was producing i wanna say it was like thirty five or so million a year in cash he's paid like an nfl quarterback he told me he's like i don't remember the last time i stepped foot inside of mcdonald's unless was it was one i was looking at buying but i've haven't eaten here i haven't worked here i've got one coo who runs the whole thing for me i've got two private planes because one's not enough i guess and he just does whatever he wants and has this thing you know cash flowing i talked to him recently he's up to ninety mcdonald's now and i you know the math on that's probably close to seventy million or so in cash flow but you're you're you're doing a good job of proving your thesis to be true what what's the nothing bun cake but today oh but it's like the one that's just taking off mean we mentioned it earlier but just the you know the papa bagel has this cult like following a phenomenal brand great revenues simple business model is food the best most all the best ones you've mentioned as food but food seems a little bit more fatty yeah exactly it seems like i would wanna own the plumber type of business or like you know home services or turf or whatever though those seem naturally i would try to go to the un sexy maybe recurring maybe higher ticket maybe kinda of local monopoly it's not a fashion choice it's not a trend i don't need to be able to keep coming to the gym and stay motivated i don't need people to to change their their diet habits you know am i wrong in that is that is that the wrong lens for this stuff sort of thing no i think you know home services does phenomenally well food is tough to too like if you don't get the right brand hit the right trend at the right time like it's very expensive it's harder to get in and out of but if you find the right one they're highly profitable there's a lot more customization and you know tools at the franchise or they're providing that pure network but if you're looking as like hey the ever everyday kinda average person that wants to get into franchising and still have you know pretty significant upside you're right home services because you're not building a retail location you're not constrained by what if i pick the wrong location and now i'm stuck here with this huge investment and i can't move this box it's you know million dollar two million dollar investment but if i owned benjamin franklin plumbing or there's one called garage kings that you know i think damon and john from shark tank was h up at one point but they go epoxy your garage and like kinda pi out your garage custom shelving and epoxy floors and racking and all this stuff they'll do one point three one point four million a year in revenue and very high margin because again not a lot of variable costs or or or fixed costs either and here's going around pi out garages and cash flow half a million dollars a year dude sean we have this guy named tommy mellow coming on have you ever really googled tommy mellow tommy mellow sounds like he's showed here so yeah he's is k he's is gangster wait you talk to him he's cool i think he's coming on a couple of weeks one tommy a one garage i think all they do is garage doors and he sold a half the business give or take i think at a for sure i it was in a billion dollar plus valuation and his garage doors i think they do something he shares everything i think it was like two hundred fifty dollars or three hundred million dollars a year in garage door replacement that that was the thing with the garage kings too like you the average unit volume was one point three million and they're like we're not even doing garage doors or other fixed yeah and that's gonna add another half a million you know per territory annually so just these like un un sexy overlooked things that you know i i do think that a lot of people make a mistake there so i have a friend named chris who took over his father's h zeke hvac company and he scaled it from ten million to two hundred million in revenue and wow he was he was yeah it's it's called hoffman bros and it's in saint louis now nashville and he was telling me he was like you know all the he was like cup making in front of me he was like all you tech bros think that it's so cool to get in business is like you don't know the half of it what i have to deal with with when you're working with the blue color hvac guy but what he said what he was like my competitors they're a lot smarter now because it's a lot of the young guys have taken over but he was like we give our guys ipads and we teach them like we you literally have a checklist for them so when you go to the door pet the dog when ask permission say may i come inside here i got these things i'll put on my feet when you leave you say something like hey i'll get a fifty dollar bonus if you leave me a google review here like just a checklist of things that allow a mom and pop businesses they just don't do and so on one hand i do think that like people like us are like yeah it's just an overlooked thing like you're so smart you went into a good college just go start a garage your business but in reality it's way more challenging than matt but also at the same time i do think that there are a lot of like people who don't sweat the details like maybe a a little bit more of a militant operator would yep no that's completely fair but i think whether it's a corporate job a tech startup up or one of these un sexy blue collar you know kinda of base things there is no shortcut it is all gonna be hard work and you know for me it's that person that's willing to work hard they're smart they're capable and they have capital they have know access to capital like you can go do this most people can go figure this out it's not gonna be this cake walk and it's you know completely downhill but if you got the work ethic and you're willing to do it franchising is a great way that's der risked and what this neat this is this is the this is this should be the only thing in the m merch shop of this giant flag you put up on your walls says we do this not because it is easy but because we thought it would be easy like the story of of my life and all entrepreneurial ventures for me start this way we we get dozens of people that come through they're like what's like a good business i could invest in i really have to do anything and like not this so go i don't know i'll go maybe buy a bitcoin i don't know like i unique in that i want a lot of money with the least amount of work but i really wanna take a lot of risk there so what do you got for me i like nothing sean i was thinking of another i was thinking of another one when we were talking you're like what other kind of trends and i think one that we haven't talked about is know seniors know aging population baby boomers there is a ton of demand pent up demand right now for senior care that you'd think would be oh everyone else has this idea they're gonna go build other facilities and in home care but will like every once in a while for market kind of validation we'll call places up and say hey my my grandmother grandfather my mom etcetera and like oh we you know we're we're booked out or have a list that's eight months long twelve months long and this is in most markets so there is not enough supply for the amount of demand there is and so there's another one that's been around for a while it's called home watch caregivers total investment hundred and twenty k a hundred and seventy seven k two and a half million average yearly revenue doing senior care what about a funeral homes our funeral homes or franchises it sounds like we're just gonna here give it few go the whole thing cremation right now well i was asking for a bunch of reasons one baby boomers are at that age but also sean has this thing called one chart businesses and a few years ago he showed us the charts of cremation and it was just like astronomical how many people prefer being cr now versus twenty years away from like ten percent to fifty percent of the market wow and and you said that everything or you said that a large percentage of the stuff that we work with room we know about is a franchise our funeral homes i haven't actually seen and i'm sure there is one but i haven't seen a funeral home franchise but if you're trying to do your vertical play here there is crime scene cleanup franchises so you could start there and that's called bio one is one of them there's a few they literally talked about that yeah they're they're going and cleaning up crime scenes and everything that comes with that wow that's incredible yep there there definitely are franchises for this in both funerals and cremation and there's also the the pet it isn't the pet cremation one like a big one now it's everywhere there's not there's i don't think there's any space for you like is there a franchise like the answer is pretty much always was yes this just a question out how good go to after maths dot com alex after aftermath oh gosh do you know this business is doing really well if they bought aftermath dot com there's the crime scene crime scene cleanup yeah oh wow this is for the folks out there who have a business that does at least three million dollars a year in revenue because around this point that's when you're able to look up after being heads down for years building your company and you realize two things one you've done something great but you're do a long way from your final destination and two you look around and he realize i am all alone i've out run my peers which means you're now making ten million dollar decisions alone by yourself and that is when mediocrity can creep in my company hampton we solve this problem by getting a room of vetted peers of other entrepreneurs who are gonna hold you accountable call you out on your nonsense and help show you the way because the fact is is that there's only a tiny number of people in your town who know what you're going through and who have been there and they're hard to find the biggest risk is not failing you have a company and it's working you're gonna be fine but the biggest risk is waking up ten years from now and saying shit i barely grew in business and in life and for people like you who are ambitious wasted potential and regret is what we want to help you to avoid we have made so many of these groups and we have a thousand plus members and i know this stuff actually works it can change your life the change mind and i know it will change yours so check it out join hampton dot com by the way you said you scrape the data so they have these disclosures and the disclosures basically have to say the good and the bad right so it's like basically there's a required set of financial reporting that these franchisees have to do similar to like how public companies have to report their numbers but almost more structured right because you like i i've seen this with ml m's ml m's also have to publish all of their data about how they're you know whatever their associates are doing and it's basically you know you look at this table and it's like well so ninety eight percent generate less than a thousand dollars and then after that you know the rest of the people do well and so all the number all the data is very structured because they're legally you know they're legally required to do that is it the same thing with franchises like can i go get very clear pictures because i tried i looked into this one activity place and i was like oh this is great this is gonna crush i was thinking about buying a franchise for my sister for my trainer like you know a business at a box that they could run and yep they were so eva i shouldn't say eva it but like it was not easy to just get like had clear answers to like three questions you know what is the range of revenue to expect what is the range of of of profit to expect and how many how many of the locations are you know profitable or unprofitable like you know is the average you know is it two percent of the locations are profitable or or you know fifty percent and you know just general questions like that it was like well you know it it'll all be in the packet and i was like it's not in the packet you know because they're i'm not required report in certain ways so i guess what have you found in scraping all this data yeah so every brand is regulated by the ftc the federal trade commission they required to have this two hundred page legal document called an ftd it's a franchise disclosure document and it's very structured to your point but kinda like a public you know companies filings there's little tricks and adjusted eb you gotta read thirty footnotes to figure out what the hell going on brands are doing the same thing and so we help people navigate those we the reason we built fran again was just like zillow you can go here and see what's this gonna cost is there bankruptcy is their litigation how many have shut down i tell people to go look at the item twenty it's where they show how many units they've sold how many are open and how many stores have shutdown because it's the best way to go see is the system relatively healthier a bunch of people selling are they actually opening the units that they've sold or is there a huge delta it's in a good indicator or do they have their you know systems and their shit together basically to go sustain this and do this well and then the best validation is just go talk to other franchisees people who are actually doing it who are in it and what you described is a red flag if a brand is not willing to share certain things that they're allowed to share it's a red flag what's the best practice for contacting is it just you cold called and you say hey i'm looking into franchising in a totally different territory yeah i look at like hiring someone like you you know you asked them for their references and they're gonna give you like their mom and you know their best boss they've ever had and like they're gonna sell all these great things but then you should go talk to their bosses or employers that they didn't give you but they mentioned in the interview and that's really how you get validation same thing here the brand is gonna serve up their top two performing franchisees they're gonna say all these great things and you're gonna feel like i've conviction now you should go on linkedin and find two or three others that they didn't list and just go yeah cold outreach people you know if you reach out thoughtfully they will spend twenty to thirty minutes of you telling them you know you the good the bad and the ugly let's say you got a twenty minute phone call with them and you got to ask three questions what are the three questions you would ask one of those other franchisees these yeah immediately you know would you do this again knowing everything you know now and that should be pretty telling because is they're either like knee deep it at that point like this sucks i'm spending one more time i've lost money this is brutal or they're like in the hard part still they're in the j curve and they're coming out they're like i see light i'm super bullish on this and yeah i would do this again or they're killing it and you know they love it it's like that question usually you get a lot out of i've been would ask about support and when it's like working with the brand because a lot of the reason you're franchising versus going on your own is is the team actually providing values at six percent worth it or or would you've been better off doing this on your own and so that's a good indicator of should i franchise this or not or you'll be a franchise of this or not lastly you know i'd i'd ask how much money you're making you know how how profitable is this you know is it what you expected is the juice worth of squeeze because they might be making some money but it was a lot of investment it was a lot of time for something that could have produced in the stock market or in real estate or something else i'm just looking for the pain and their voice regardless of what they're saying i just trying to detect the underlying pain that that i i could sense well the the the good thing about doing this these validation calls is yes while they have an interest in the brand you aren't gonna compete directly with them you aren't gonna add necessarily value to their location and so they have no incentive to protect the brand in line like sean i would do this in a heartbeat all over again because it doesn't actually directly benefit them so you are gonna get real raw responses most of the time because they don't want someone else to go make if it was a mistake the mistake that they made they know they wanna help you out they're hopefully not people for the most part and if they're doing well they're gonna be happy to share that too this sound the the franchise industry seems kind of cool to us as content people because we have these guys that are kind of these cowboys they're like these midwestern or southern guys who are really wealthy and you know it's like that meme of like when you get on an airplane if you see a guy with like baggy blue jeans and loafers firms of like a fat rolex at he's like reading like you know like prospects reports just like via on paper if you know what i'm saying like do you meet a lot of people like that because that seems like it seems like there's like a lot of really cool stories here there are so many and that's you part of what we're doing with our show is like how do we highlight these i'm gonna gotta trying to just get them comfortable to even tell because it's such a guess a such a good thing going they don't wanna mess it up and you know attract more private equity than is already flooding the franchise model you know today and is only growing but yeah there is a lot of stories like cows were five years ago they weren't doing this and now they've got a business doing a couple hundred million a year in revenue and that's where my eye flipped i used to be like again franchise model hate and i should just go do this myself and everyone should just go do it themselves you can extract six percent and yeah then you you realize how many corners not that you're cutting but just how much value is created in that system and bulk purchasing power branding etcetera i've become a you know believer for the right person in the right brand i mean there's a lot of if still and things you need to check off and make sure it's the right fit but yeah there's a lot of these cowboys out here that or kind of una assuming and running massive businesses one of my favorite franchises was the dad in the movie the blind side you remember that sean what one what was your franchise out the joke in the movie it was tim mcgraw character it was based on a real character and you ended up selling this for nine figures but he was like you know the kid with debt brag he was my dad owns fifty taco bell kid i'll was just say it was like jack in the box or taco bell i think it was taco bell like domino's pizza or pizza are they the same like yum brands yeah young brands kfc pizza pizza hut pizza hut taco bell and the kfc yeah like brag about it and i thought that like in my head that has been with the franchise is basically a a franchisees an x high school quarterback who married the high school sweetheart and is a good guy with kids and he owns about you know ten kfc in three taco bells and he brings it to school for his kids to make up the class like him you should you guys should get if you can if you can get them on is i think it seems greg flynn but it's the flynn group they own thousands of franchise locations and their system they're and this is like a family run business they're and don't hold me exactly to these numbers but they a report came out in the last couple months the flynn group did i think it was six point three billion in revenue last year owning franchise like their franchisees and so that was more revenue than kfc domino's popeyes like huge brands this group of franchisees is doing more revenue than the whole parent the whole franchise or of very well known very large large brands their homepage when you go to say the the hero banner is just onion rings falling from the sky just the first thing who doesn't want that who does it work onion rings falling from the stock not that i think about it there are so many more baller than i thought sean do you remember lorenzo fat nikita the guy who is the founder and ceo of the u well he came from a wealthy family so they've been baller for forever but before he was the ceo or founder of the u he was the ceo of gordon bi if you remember those guys it's a brewery it's a franchise i believe but it's a brewery and bar is all it is i know that i thought they were like hotels in vegas they were they the the mom and dad the the family was rooted in that and then also for some reason he in nineteen ninety five he bought controlling interest in the gordon beers brewing company and i think they had franchises here's an interesting one i saw the other day it was there are more millionaires generated from franchising than all combined players ever in the nfl dude you you made this bold claim and i wanna to fight you about it now i'm i'm totally on your team my first mentor in college when i in college we entered a business plan competition and we're were trying to win and they they assigned you a mentor so the first team they got matched with this guy who was like a biotech entrepreneur sold a company for like four billion dollars the second team that got up they got matched with the guy from mint dot com aaron pat whatever name is and and you know so he's a tech entrepreneur you know hundreds of millions of dollars and they were like you guys are gonna be with michael and we're were like who's michael and they're like michael owns the number one and i'm like what is it gonna be like largest chain of apple b's in north carolina i was like who want water and so i was fact i was like michael pulled up at a rolls royce we pulled exactly we go outside michael's got the best car michael's got the free schedule like meet whenever you guys wanna to meet this guy owned i think like thirteen or thirty apple b's or something like that and know exactly who you're talking about i'm in charlotte that's michael even last name yeah that's right yeah he was such a good guy and he had like such a his story was so and it was kind of inspiring because up till then my frame of like well if you wanna make it as a entrepreneur like you need genius invention and here was his guy who was clearly living this wonderful life who was super successful and what was his genius invention not like he basically was just like i will take like what to me was the most boring food franchise you could like literally apple beans would have been like if i was coming up with the joke that's what i would've have said and i just noticed on this flame group there is a on their timeline it says nineteen ninety nine our journey begins with eight apple and now they have five thousand plus units or whatever they have like you know thousands of units and they're like expanding into new zealand as territories because they're just like you know dominating the whole globe and i just remember like kind of that guy broke my frame because he really had like built this wonderful life without doing what felt like you know pulling a rabbit out of a hat or catching lightning at a bottle and coming up with the new invention the new product that just say you know like sets the world ablaze and you know there's because there's so many different ways to win it just kinda depends what you're what you're suited for you know he was a great executor great manager and he was great at building up and developing people so that they could run the locations and that's what he needed to be great at so it's not like it was so easy he didn't do anything but he was great at those things rather than coming up with you know the game changing concepts once you saying you asked me earlier like why why don't you just go open a hundred of these and why are you building a tech company and what sean just said you is is the tempting part of it it's like all these tech entrepreneurs i meet i think they they sound smarter they sound more sophisticated than the multi franchise eat people i meet they're working way harder but maybe maybe we got it all wrong because ninety percent of them go to fail and they're wasting all this like hard work and talent and brain time on the thing that has such a small chance of outs outside success and then i'm meeting the wild west cowboys on the plane and they're like yeah i just followed the playbook but not again not to make it sound like it was all cake walk but yeah i just followed the playbook i am good at find in real estate and making deals with landlords and started with one and now i got fifty and i make twenty million a year and i don't think think the grass is always greener on the other side like as someone who worked in fast food and worked toward of these jobs yeah you don't wanna you didn't wanna hang out with me like you know what mean like you you will not have one to like manage me when i was a kid and so like there's the grass is always greener it sounds dope my brother owns a moving company and i hear the numbers and i'm like that's awesome he's like dude i had a fire guy the other day because he was doing heroin yeah like on the job like so like you know traded cons pros cons but i tell you what there seems like a lot of pros right now where do you where do you live charlotte north carolina are you building the company there or remove yeah building it in charlotte we have no we have you know team members in south america philly but the majority of us are here in in charlotte how much did you raise we raised is three and a half million at our seed round diego ago we launched january of this year we're up to thirty five thousand unique visitors a month coming to the site and starting to build out a a second product within it our goal is to basically salesforce but for the franchise model so we help you buy a business we help you operate your suite of franchises or your portfolio franchises and then we help you sell those back on our our marketplace what's your revenue range now have you crossed any figures not yet now we're we're less than eleven months in so we'll do you know seven figures this this first year for a startup up in the first year we're we're happy with sorry i thought you said you'd sort a while i didn't maybe be like just have them said you don't have you don't have ten million i was like wait where are you finding these companies because i don't invest on them this is pretty cool i i didn't know what getting into when we got into this i thought hey you were just gonna like pitch your company and in which case that was it gonna be great and you didn't do any of that and b i was like franchises i don't wanna hear about this and it turns out it was actually one of my favorite episodes like this is the type of people who you get to hang out with and the stories you get to hear and frankly you the type of personality you have that's the these are some of the stories that sean and i like uncovering maybe people that aren't in the s f new york scene which sean and i both aren't and so it's really fun to like hear your perspective on stuff it's pretty cool thank you know that that goes a a long way i know you guys see a ton of business models and people and i felt the same way and sometimes i still even feel a little crazy about what we're doing is like is this something that can really help people and you know i want them to have the same entrepreneurial experience i had they just might not wanna do a tech company from scratch like how do i show people and educate people that this is a past if you wanna walk down it again i know you i'll probably use analogy but when you think like the financial housing crisis like people at whose to blame is that the banks is it the administration and i think you know using that as an example banks start originating a ton of mortgages because fannie mae and freddie max will take the risk off your balance sheet and so what course the bank's gonna go originate a ton of mortgages and was it unethical yes but their incentive got taken away and i look at franchise brokers the same way it's like it's not real is it their fault i don't know like no one's regulating them they're you know everyone else is doing it and so there's no cap on it they're gonna go sell businesses and make sixty percent but my thought is let capitalism doing what it's good at and level the playing field and democrat things and and hopefully you know that's what we're able to do here at at fran well sick dude great stories you're a great guy you got a great goatee great podcast this is it that's odd i feel like i could rude world i know i could be what i want to from all in it like a day's off on a less travel never looking back alright everyone if you're listening to m you probably want to make more money well i wanna tell you about a podcast you might wanna check out it's called the sales evangelist and it's hosted by donald kelly each week donald interviews the world's best sales experts who share their strategies to succeed in sales they share actionable insights and stories that will encourage challenge and motivate 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