July 1, 2025 • 46 mins
Today’s guest is Lauren Vermette, founder and CEO of Franchisee Insight.
Lauren has dedicated her career to bridging the gap between franchisees and franchisors, offering a unique perspective on the franchise industry.
She truly understands the challenges and rewards that come with franchise ownership, having successfully built and sold multiple units in her own portfolio.
Now, Lauren’s mission is to guide aspiring entrepreneurs through the journey of self-discovery—helping them take that first step toward business ownership and, ultimately, toward wealth and independence.
And just like a health insurance broker, Lauren’s services are completely free to you as the franchisee; she’s compensated by the franchisor for connecting the right people with the right opportunities.
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Website: https://www.annemcginty.com/
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
Welcome to how I Built my Small Business.
I'm your host, anne McGinty.
Today's guest is LaurenVermette, founder and CEO of
Franchisee Insight.
Lauren has dedicated her careerto bridging the gap between
franchisees and franchisors,offering a unique perspective on
the franchise industry.
(00:29):
She truly understands thechallenges and rewards that come
with franchise ownership,having successfully built and
sold multiple units in her ownportfolio.
Now Lauren's mission is toguide aspiring entrepreneurs
through the journey ofself-discovery, helping them
take that first step towardbusiness ownership and,
(00:52):
ultimately, toward wealth andindependence.
Just like an insurance broker,lauren's services are completely
free to you as the franchisee.
She's compensated by thefranchisor for connecting the
right people with the rightopportunities.
If you'd like to speak with herdirectly, there's a link in the
show notes.
(01:12):
Before we get started, don'tforget to follow the show.
I work hard to bring you alineup that is interesting and
unique, with hopes that you takeaway something meaningful from
every single episode.
I'm an indie show, andfollowing the show and sharing
episodes really helps me grow.
(01:34):
Let's get started.
Lauren, thanks so much forbeing here.
It's so great to see you.
You, too, thanks so much forhaving me.
I love your podcast.
Thanks, that's really sweet.
So can you take us back to yourcareer before franchising.
What made you want to startlooking for something else?
(01:55):
Yeah, happy to share.
Speaker 2 (01:57):
So after undergrad I got into the advertising
industry.
I worked at different agenciesand then I went into publishing
side, went into digital spaceand worked for larger publishers
.
So I was in kind of thecorporate advertising media
realm and loved the camaraderie,loved the industry, loved the
way the career was going andthen during my last tenure at
(02:19):
one of the companies one of mycorporate companies I got my MBA
and through that process Iunderstood the challenges of
building my own business.
And I'll step back for a minute.
I grew up in a family ofentrepreneurship where my dad
started his own business and youknow I was exposed to what it
takes, but as a kid you reallydon't know what to be on.
That Working in corporatepushed me into my MBA where I
(02:42):
wanted to understand a littlebit more about owning my own
business.
So I had that intrigue.
But through that process,ironically, I recognized that my
strengths were more as anoperator.
I didn't have the idea, Ididn't have the cool concept.
A lot of people say I have thisidea, I don't know how to
execute it.
I was kind of the opposite.
So it led me to theself-discovery of that and also
(03:04):
that I could lead a team andexecute on a playbook, which was
really what drove me into thefranchising world versus
starting my own business.
So that's kind of where itstarted.
And I got into my first twofranchises I still own them
today, 10 years later.
And then a couple of yearslater, I got into two different
modalities and multi-unitlocations, of which I sold a
couple of years later.
(03:24):
And then a couple of yearslater, I got into two different
modalities and multi-unitlocations, of which I sold a
couple of years ago.
Speaker 1 (03:29):
And for any of these were you still working full-time
?
Speaker 2 (03:33):
Yes.
So it's a great question and Iwork with a lot of people now
who said how do you straddle it?
And there are so manyopportunities in the franchising
world right now.
I mean the age old recognitionof a McDonald's or a Jiffy Lube
or a Taco Bell is kind of thereputation of what a franchise
is.
But there are so many differentmodalities and different levels
of involvement that you can beas an owner and I got into a
(03:57):
model.
It's called a executive model,sometimes it's called semi
passive and what that means isas an owner, you're not
necessarily the direct operatoror the day-to-day in the
business, you're more on thebusiness.
So I got into.
My first concept was a salonsuite concept and that is really
in essence like a.
We work for beautyprofessionals.
(04:19):
So whether it's a hairstylist,a barber, esthetician,
registered nurse, there's a lotof different fields within the
beauty industry and a lot ofthose people are extremely
talented in their profession butdon't necessarily have either
the capital or the businessacumen to get in and start their
own or have their ownstorefront.
So this is a model that allowedpeople to come in and rent
(04:41):
space while operating their ownbusiness and we took care of the
facility, but from a franchisemodel.
It was tested and it was theplaybook that I could follow and
have a manager on site withoutactually having to be there.
So I straddled my career at thetime and started these while
doing the same.
So there's a lot ofopportunities out there that
(05:01):
look similar or have anownership involvement like that.
Speaker 1 (05:05):
So you say you had a manager.
Did you hire the managerstraight off the bat, and how
much time does it take you tomanage those two franchises
today?
Speaker 2 (05:17):
Yeah, that's a great question.
Now there's always a build.
You know, sometimes theexecutive model is called
semi-absentee and I always shyaway a little bit from the word
absentee because the realitiesare that any business that you
own, you're going to have sometime and spend and you're
invested in it, right.
A lot of times you want tolearn the model before you
deploy it to management orstaffing and in this case I
(05:38):
didn't hire the manager rightaway.
It's because with a brick andmortar type of franchise there's
other components that you haveto get established first.
So I didn't want payroll beforewe actually even had a building
up and operating.
So you know that process andwith the franchisor support and
the franchisor playbook, there'sreal estate investigation,
finding the right spot,architecture, building it out,
(06:01):
construction.
So there's a window of timeanywhere between six and 18
months, depending on the size ofyour facility or the size of
your brick and mortar locationthat it takes to get that up and
going Towards the end of thatprocess.
When I knew, when I really hadan open date in line, I hired my
manager and oftentimes thefranchisor has a training
(06:22):
process that can help train themanager.
So it's not just on you totrain the staff and we got some
of the basics of the business upand going.
You know, llc established andpayroll company established and
some of those small pieces up.
But I still have this almost 10years later.
I still have the same districtmanager for my two locations and
she's wonderful.
I mean she's there on site onher normal business hour,
(06:46):
working hours and I visit onoccasion and talk to her on
occasion.
But we've gotten the machine,so to speak, well-oiled enough
that she really runs it andthere's different levels of
autonomy and ownership in someof these where you can structure
your salaries or yourincentives and things like that
with your staff.
So I love leading a team and Ilove mentoring and so that's
(07:07):
been really fulfilling.
And all while really looking atthe bigger picture of getting
into this was because I wantedto own something, I wanted to
build something, but I didn'twant it to take on so much more
of my time.
So fast forward, I was laid offby that corporate company,
which was interesting, and then,because I had established the
(07:29):
business and had it open, I wasable to stay home with my young
kids and work I mean a fractionof what I was working before and
, quite frankly, making moremoney than I made in corporate.
So I didn't sacrifice income, Ididn't sacrifice a level of
stimulation that I had from mycareer, but had the freedom and
(07:51):
flexibility that allowed me tobe home with my family at that
stage in my life.
Speaker 1 (07:56):
That sounds almost serendipitous the way that it
worked out.
Yeah, You're lucky that you hadput that in place.
So these salon suites, how manysquare feet are we talking?
Speaker 2 (08:07):
I have one location that has 47 suites and that's
about a 9,000 square footlocation, and then my other
location is about 6,000 squarefeet and that's about 33 suites
in there, so 33 separatebusiness owners.
Speaker 1 (08:20):
So it's like a combined franchise and real
estate play.
Speaker 2 (08:25):
Exactly.
I mean.
Some people say it's more oflike a glorified landlord.
We provide services and upkeepthe facility.
So it allows the suiteoperators to run their business
without the other components andoverhead of actually owning a
storefront or another businessor another location of their own
.
Speaker 1 (08:45):
And how many hours do you think that you work on this
?
Speaker 2 (08:53):
Oh, that's a great question.
The salon suite model is reallyat the other end of the
spectrum in terms of time spentin.
If you are early in it you canspend a lot more time because
it's set up involvement.
But as a real estate play, asalon suite is really light.
I mean a couple hours a weekWow.
At the end of the month I runthe QuickBooks and I make sure
you know my CPA has the enoughdata for income and tax
(09:13):
component of it.
But I have a really goodrelationship with my manager and
I believe in hiring the rightpeople and if the right people
are in place and with the rightstructure and the right
incentives and the rightrelationships, she has a level
of autonomy that I, you know,she has my full trust and and so
I don't have to be there.
I mean, there's times I'm therea couple of times a month.
There's times I'm not theremore than once every two months
(09:34):
Wow.
So it really depends, andthat's for two locations.
Speaker 1 (09:38):
So, and for those other two franchises which you
exited recently, were they inthe same industry or different
ones?
Can you tell us anything aboutthose so?
Speaker 2 (09:47):
ironically, I got into a boutique fitness concept
and similarly, I did not have afitness background nor a fitness
passion, but I loved the brand.
It's called Rumble Boxing andit's a really inspiring,
inclusive, fun boutique fitnessconcept.
And that was a big pivotbecause again, it was another
brick and mortar.
So we had to site select.
(10:08):
We had to look at, you know,the addressable market outside
of that.
That location cost to build allthose pieces that go into the
business.
But I ended up selling those.
It was interesting because inhindsight, while operationally
in the business itself was asuccess.
I don't necessarily deem it asa success because it took so
(10:29):
much more time and involvementthat it was kind of veering away
from my lifestyle goals andvalues.
So you know, fast forward nowand I'll get into that I'm now a
franchise consultant and whatthat is is really guiding people
to understand their personalgoals, their lifestyle goals,
their financial goals and reallyaligning brands with what
(10:52):
matches them.
And I didn't do a good job ofassessing myself and saying I
don't want to be up at 4amgetting to a shift or doing this
or that with my business andwhile it was manager led, I had
a fantastic manager.
It was not the lifestyle that Iwas looking.
So I was I wouldn't say burntout.
It was too much of a heavy liftto balance all the other
(11:12):
components of my life.
So I was able to successfullysell those.
They're still doing very well,but I'm no longer involved and
no longer the owner.
Speaker 1 (11:21):
And looking back on that, it sounds like you wish
that you had thought a littlebit more about your why behind,
why you wanted to purchase thisfranchise or that one instead of
just a profit play.
Is there anything else that youwish that you had known before
you jumped into any of these?
Speaker 2 (11:46):
components of a franchise that you have to
understand.
And in my second location thereare some variables that I
didn't pay too close attentionto, and some of that is cost of
construction.
You know, what does that looklike in your market, not just
countrywide, what does that looklike in your market?
And then, of course, there'sthe financial component.
If there is a larger investmentat stake, are you leveraging
loans and, if so, what do therates look like?
What does the current marketcondition look like?
(12:07):
So I think it's reallyimportant to look at current
market conditions before lookingat the model.
So there's so many businesscharacteristics that have to
align with making the rightchoice for you, for that time
and for your market.
Speaker 1 (12:21):
As you were mentioning financing, I wanted
to go ahead and just jump onthat one a little bit, because
listeners may be sitting heregoing okay, well, this sounds
all great and wonderful, but Idon't know if I can do that.
I don't know if I can afford it.
What does it really require asfar as a down payment goes?
And then as far as financinggoes, are there a wide plethora
(12:43):
of options available for thistype of a structure?
Speaker 2 (12:47):
Yes, there are, and that's a great question because
I think there's a misconception.
I mean, right, you seeShaquille O'Neal and he's huge
into franchising, but it'salmost unattainable to an
average person that is lookingto diversify their income.
In terms of funding.
There's a lot of options outthere.
It's important to recognizethere's a couple pieces the
(13:08):
investment in and your returnright.
So there's risk components ofwhat you're willing to put in
and how much a specificfranchise can require to build
out or to get it up and going,if your initial costs to get
going, and then there's a lot offunding options to support
those.
And then there's a lot offunding options to support those
.
So, because the franchisingindustry has evolved from those
(13:30):
just plain brick and mortarsthat you can associate with
franchising into other servicemodels, the investment levels
vary widely.
So it's a lot more accessible topeople that may not have either
lots of money or, you know,let's say, for example, a
million dollars to build out abig studio or something like
that.
Even if those loans are, even ifthey're leveraged with loans,
(13:50):
there's a lot of opportunitiesthat the initial cost to get up
and going is only a minorfraction of that, because it's a
service related business, whereyou don't necessarily need a
home office they refer to it ashome based and then financing
options.
There's so many out there nowthat are really great options.
I mean, some are small businessassociation, the SBA, so they
(14:11):
have small business loans.
Some of them are ROBS programsor ways that you can tap into
borrowing against yourretirement funds that you
already have and that'sbasically used as collateral.
And then you know, sometimes itjust makes sense to borrow
against a HELOC because you havethe equity in your home.
So every person is soindividual and what their risk
(14:33):
tolerances or what theirfinancial portfolio or outlook
looks like.
But I will say that there areso many opportunities out there
that have made it accessible topeople with either starting
their career or with notnecessarily the wealth or the
expendable liquid funds that itused to take to run a franchise.
So it's exciting because Ithink there's a there's a lot of
(14:55):
people with skill sets andaspiring business owners that
can enter into this world thatthey may not have known was was
possible.
Speaker 1 (15:05):
At a minimum?
Is it like purchasing a homewhere you need to have at least
10 or 20% down?
Speaker 2 (15:10):
Yeah, that's a great question.
So there's a couple componentsto going in in that initial
franchise fee.
So your franchise fee for lackof a better term in essence buys
your territory and it holdsyour spot within the franchise.
Now, oftentimes that franchisefee it can vary, but that's you
(15:31):
know, oftentimes well under ahundred thousand dollars.
There's ranges that varydepending on the number of
territories you purchase or thetype of business model that
you're purchasing.
But the franchise fee is justthat startup fee and holding
your territory.
Sometimes it also includes,like your initial training and
your training of your, yourstaff.
It could also includetechnology fees or software fees
for the first couple of monthsand some operational pieces in
there.
But beyond that, we look attotal project cost.
(15:53):
So total project cost is reallywhat does it take to get this
up and running?
So if it's a salon suite, it'sgoing to be more significant
than if it's just a service rungutter company, for example.
There's a lot of home services,there's a lot of other pieces
that are less required to haveinventory or a physical location
(16:13):
.
That's a lot lower of a barrierentry in terms of costs.
And then, beyond that, there'salways franchising is based on
royalties.
So royalties.
Percentages can vary based onbrand to brand but those are
ongoing fees that help keep thefranchisor support and team in
place that come off of yourgross revenues.
So the incentive for thefranchisor support is the better
(16:34):
that you do, the better thatthey do.
So there's a little bit of acollaboration team incentive to
keep things operationallyefficient and successful.
Speaker 1 (16:44):
And while we're just on this topic, I know you might
need to give us a wide range onthis, but what is the range of
cost to purchase and get thedoors open, or your total cost
in, as you were saying, from thevery low end, the lowest that
you've seen, to the high end?
Speaker 2 (17:02):
Yes, it will be a huge range depending on the
model.
The high end, yes, it will be ahuge range, depending on the
model.
I would say from 100,000 all into several million, okay, but
even that 100,000 can beleveraged too.
So there's opportunity, ifpeople don't have that 100,000,
to then take loans off of that100,000.
And there are some franchisorswho offer financing within the
(17:22):
franchisor.
So you're not going to, youknow, banks or other
institutions to borrow and itreally just depends on a quick
examination of your portfolio.
And the exciting part is is,even if you have the portfolio,
it doesn't necessarily mean thatthe multi-millions make sense
for you.
You know I work with people now,some that are towards the end
of their career and they'relooking for what's next and they
(17:44):
don't want to stop even thoughthey're done their career and
they want to still be involvedin something.
Some that you know keep theircareer and just want to
diversify their income beyondthe market volatility or beyond
other components.
Some that want to create legacywealth to pass on to their
family.
You know some, just like me.
It's an uncertain time in somecareers to their family.
(18:07):
You know, some, just like me,it's an uncertain time in some
careers.
Ai is getting a big attentionand there's technology that's
replacing labor costs, and sothere's layoffs and things and
they want to get into more of arecession proof or more a
business that can have longevityto it.
You know I have parents lookingto if their why is more of that
time, flexibility, it's whatkind of models will allow me to
have more time instead of, youknow, owner, operator or
(18:29):
anything like that, withoutsacrificing a career.
Some people you know are assimple as hey.
I commute into New York an hourand a half every day and I'm
sick of the commute.
I want something else.
What else is there?
And so we kind of explore that.
Some people are looking toreplace their income and some
people just want a side revenuestream to build on their wealth.
Speaker 1 (18:47):
So this is fascinating to me because I
personally have never consideredpurchasing a franchise.
Listening to you talk, I'm like, oh, maybe I should, but it
sounds approachable for people,maybe like a bridge between a
person who is full-time employedand maybe dreams of being an
entrepreneur, but like a planfor them to get them started in
(19:09):
a proven model like what you'resaying.
So are there any prerequisitesthat one needs to have before
being considered as a candidateto purchase a franchise, like,
do they need to take accountingclasses?
Do they need to have any sortof degree in a specific field?
Are there any that you know of?
Speaker 2 (19:28):
That's a great question.
There are certain franchisesthat require a certain skill set
, but there's skill sets forevery level.
You know there's people thatreally enjoy mentoring people.
There's people that can lead ateam.
There's people that wereengineers.
There's, you know, a number ofdifferent skill sets.
You don't need to have abusiness degree to get in, and
that's kind of the beauty of it.
(19:48):
You do have a tested model.
I would advise that one of thepieces that is is tends to be
somewhat natural is that peopletend to gravitate towards their
personal interests and, whilethat may work, it's not always
the best way to investigate if afranchise is going to be good
for you.
So, for example, I have somepeople I love to work out.
I go to all these classes, Idefinitely want a fitness brand.
(20:10):
That may work, but just becauseit's your personal interest
doesn't mean that's going to bethe best fit for you and those
business characters or any ofyour goals that you identify.
You know, inversely, there maybe someone who says I want
flexibility of time or I wantsemi-passive income I hear that
(20:31):
a lot but they don't care whatthe business model is, and so it
could be something that theyknow nothing about.
And the beauty of the franchiseis that you're not required to
know anything about thatindustry.
If you have the skill sets toeither run a team to operate a,
you know, it might be thatyou're in sales and you have a
great sales acumen and the ownerof this franchise, you're that
business development person.
(20:52):
You're making relationships inyour community and it's not
necessarily the intricacies ofyou know, looking at your P&L or
operating a business in thatway, because the system is set
up to understand that and theyhave controls and they have
guidelines on what your costsshould be and what your labor
pool should look like and whatthe pricing is of your services.
(21:12):
So there's things that havebeen tested and kind of iterated
on and improved and it's not tosay that some of those you
can't improve on yourself.
And there's certain franchisebrands that allow a level of
autonomy or uniqueness to yourmarket, let's say, but by and
large there's usually a generaloutline for it that doesn't
require you to know thatindustry.
Speaker 1 (21:32):
That is so interesting to me because I
again just have never thoughtabout the potential to own a
business that you knowabsolutely nothing about, and
hearing you speak about how it'spossible it shows that people
should really broaden theirperspectives on what they're
considering when wanting tomaybe dabble in business.
(21:55):
What inspired you to shift frombeing a franchise owner to a
franchise consultant?
Like, why not just keep onbuying more franchises?
Speaker 2 (22:06):
That is funny.
You say that because that isthe biggest challenge in my
current career as a franchiseconsultant is that I'm exposed
to a lot of these brands and alot of these models and it's you
know, everything in me to sayI'm going to try that, I could
do that, let me get into thatone, but I have to keep that,
that level head.
You know I love this role.
It's so fulfilling and it's sofun.
(22:27):
I speak to people at alldifferent stages of their life
and career and help theminvestigate the right way.
So I'm not aligned with anyparticular brand.
I am aligned with the candidateto really understand everything
about them, to be able to thenguide them through the process
of finding the right fit forthem.
So it's all about fit.
Some of it is understanding notonly what you're good at but
(22:51):
what you like doing.
You know some people say I'mfantastic at sales but I hate
doing sales.
So you don't want to get intosomething that's not going to be
, you know, aligned with whatyou want.
So it's really defining thoseattributes and the model that
can be the best fit for them.
So, and it's so individual, soit's it's inspiring to see
people make the leap fromcorporate, that comfort of, hey,
(23:16):
I have a paycheck, I havebenefits, I know this, this is
all I've known.
It's inspiring to see themyears later come back and say,
wow, what a lifestyle change.
I mean there's there's alwaysrisk.
There's risk in every business,you know.
I think only 35% of smallbusinesses survive past 10 years
.
So there's risk in smallbusiness.
Franchise at least has a littlebit more tested model.
I'm always transparent.
It doesn't guarantee success.
Right, there has to be thatlevel of involvement or it has
(23:38):
to be the alignment to make sureit fits with you.
But there's ways to validatethat with other franchisees and
say you know how did theyperform, what were their
struggles?
And so not only do you have thesupportive franchisor, but you
have a built-in network of otherowners that are non-competitive
, that use each other as asupport network to guide with
either challenges or successes,and they all learn from each
(24:00):
other.
So that's kind of the otherpiece that you're not buying or
paying into.
You're just all in the same.
You're on the same team andyou're representing a certain
brand or service or product.
So it really opens your doorsto have another level of support
.
So you're not in it on your ownas a small business.
Speaker 1 (24:15):
Yeah, that sounds ideal.
So if anybody was working afull-time job right now and
they're listening to this andthey're feeling inspired, they
want to know whether or not theyhave the potential to do this
on the side.
What are you going to advisethem to do next?
Speaker 2 (24:28):
Yeah, that's great.
There's I think there's a lotof people say I want to learn
more.
I just don't know if I can.
So I would welcome the chanceto talk to them and it starts
with learning about them and saywhat do you like and what are
your skill sets?
What are your goals?
Do you want to do you want toget into this?
Do you want to test the watersand grow it before you leave?
Do you have intentions ofeventually being in it?
And it's okay if you don't know.
(24:49):
It's just, let's explore that,let's get to know you and really
get to know your why.
And so then I can do researchon my end with my relationships
with hundreds of the franchisesout there to make sure it's a in
their territory, there'savailability and that those
business characteristics alignwith what they want.
So it's very possible and Iwelcome the chance to kind of
walk them through what it couldlook like and introduce them to
(25:12):
a couple brands that would beworth investigating.
Right, we're just investigating, we're just learning what it
means and then I can helpexplain the industry a little
bit more and what that means tothem and what it could look like
for them.
Speaker 1 (25:24):
Is there a fee to this investigation Like how do
you earn your income?
Speaker 2 (25:29):
The beauty of what I do is that I think of it like an
executive recruiter.
Right, so I will have acandidate and I am lock stock in
line with the candidate, notwith the franchisor.
I've worked with hundreds offranchisors.
Executive recruiter is thereference, because if I bring
that candidate along the processwhere they're investigating
them directly with the franchiseand they choose that franchise
(25:52):
to go into and that franchisoraccepts them into their model,
then part of the franchisor'smarketing fee goes to pay me a
commission.
So there's no cost involved.
It's really just a couple hoursof time for each business model
to really investigate and I'dsay the average is between four
and eight weeks should give youenough information with our
(26:13):
calls and your investigationwith the brands to get you to a
point to have enough informationto make an educated choice of
saying yes, this is for me, Iwant to dive deeper, I want to
go in, or no, this it doesn'twork for, for whatever reason.
So you know there's a lot ofpeople that say I've always
wanted to explore it but I don'tknow where to start.
Or they go on Google and saytop performing franchises, but
(26:34):
that's so hard to understandbecause you don't know the
criteria, that goes into thoselists.
You know you don't know whatthat means.
It could be top performing butthat just could mean they're
growing fast.
It doesn't mean theprofitability is good.
Or it could mean that you knowthey're great in profitability
but they don't necessarily havethe franchise or support and you
have to be an owner operator.
So those lists can be valuableand they can start you somewhere
(26:56):
, but you know you would have togo out and interview hundreds
of these franchises to evenunderstand if there's
availability in your territory.
The goal is really to make theprocess more efficient and fun.
I mean there are brands that wethrow out there that people are
like I would never have thoughtthat.
You know, I have a candidatewho really wanted to be involved
(27:18):
in the community and reallywanted to help people.
She ended up going into arestoration company and she
loves the feedback of you're inthat emergency situation and
you're helping people and you'reguiding them through the
process, you're taking care ofthe insurance, you're getting
the mold mitigation, taking careof the water cleanup, whatever
it is.
And she said I would have neverin a million years thought I'd
be in a restoration company andthis would give me the
(27:39):
fulfillment I was looking for,but so it's fun to see what you
know, what people end upaligning with, even though
that's nothing to where theywould have ever envisioned their
life going.
Speaker 1 (27:48):
That is so fascinating and fascinating.
Again, it's making me justwonder for myself.
I'm not in a point right nowwhere I feel like starting
another business or buying abusiness, but you never know.
You never know how manyfranchise systems exist across
the United States.
Speaker 2 (28:07):
Yeah, there's.
I don't know the exact number,but it's between 5,000 and 6,000
.
Okay, so there's a lot ofopportunities.
They don't all make sense andthey're not all attainable, or
some of them, you know, therefood even B2B, which is so
interesting because there's B2Bmodels that you wouldn't
(28:41):
necessarily assume it was afranchise, but they've got the
system in play the model down.
Speaker 1 (28:45):
Well, even like the one that you were mentioning,
the salons by JC I had neverheard of that type of a
franchise system before.
I would have assumed that itwas not a franchise and it was
more of a real estate situation.
So how realistic and I know wetouched on this before but how
realistic is it for someone tobe semi-absentee or fully
(29:06):
absentee?
Does that actually work?
Speaker 2 (29:10):
Yeah, that's a question I get a lot, because I
think if you're looking for apassive and I mean purely
passive way to invest ordiversify your income, I would
not recommend a franchise.
It's just like any businessthat does require your time and
attention on some level.
To what degree that level isdepends on the business model,
right, so there can be some.
I mean there's three different,really three different owner
(29:31):
involvements.
It's owner operator, whereyou're the actual operator and
you're in the business day today.
Then there's the semi absentee,as you mentioned, which is
called the executive model, andthat gives you a little more
flexibility and those can runfrom anywhere from 10 to 30
hours a week, depending on themodel.
And then there's the investormodel, and that's a little more
hands off, but it definitely canchange the dynamics of the
(29:54):
financials, because the morehands-off you are, the more you
require employees or staff tooperate and run it.
So you just and some of thoseare completely possible to get
decent margins and a good return, you just have to factor in if
you are not in it, someone elsehas to be.
So you know, on your expenses,your payroll is going up, but
depending on the margins anddepending on the model, that's
(30:14):
definitely possible.
Speaker 1 (30:16):
And then, what are some of the questions that
you'll ask somebody when theycall in and they say, hey, I
want to consider this.
What are some of the questionsthat you would ask them?
Speaker 2 (30:26):
Yeah, I usually try to get to their why.
I think it's really importantbecause, at the end of the day,
there's a lot of fear andanxiety into trying something
new or the unknown.
So why do you want to get intobusiness?
Is it something you've always?
You've always wanted to havethe pride of owning something?
Is it you're tired of thecorporate grind and you want to
build something on your own?
You want uncapped potentialwhere you're in a career where
(30:48):
you can't see yourself doingmuch more.
So really understanding the whyI mean, some of what I go
through is talk about theirbackground, talk about their
experience.
What is it about your currentjob and your past jobs that
you've loved?
So I try to get to that pointof it, to understand really what
their why is moving forward,like we talked about is it?
Is it they want a little moretime flexibility because they
(31:09):
may have young kids and orthey're at the end of their
career.
Like, what does your goal looklike?
And I always fast forward andsay what does your goal look
like?
And I always fast forward andsay what does your goal look
like in five to 10 years?
A fun question I ask about isdoes the status of the business
matter to you and you know,oftentimes people are like, oh
no, not at all.
And I said okay.
(31:30):
So you're at a college reunionfive years from now and someone
says, what are you doing?
And you say I'm a franchisee ofa port-a-potty company and I
use it as a joke.
We actually don't work with anyport-a-potty companies, but I
use it as a joke Cause somepeople say, ooh, well, not that,
I don't want to do that, andothers are like I don't care
what it is, that'd be fine, I'llsay it as long as it's making
money, you know.
So those are the fun pieces ofit to understand, like I don't,
(31:50):
I don't want to match them withsomething that good if that's
going to matter to them.
So we really kind of just getinto it and it's fun, it's.
It's really a self-discoveryprocess too, of what your life
could look like.
You know and, and what doesthis investment, how does it
change your life?
Speaker 1 (32:05):
I just can't believe that I never even did any
research on this.
On franchising, you know I wasmore of the idea person and more
of the initiate.
Get started, build the brandingand websites, you know.
So you and I are, we've we'vegot the opposite sort of skill
sets.
We can go into businesstogether.
Maybe we should.
So how do you evaluate?
(32:27):
You know you've got thesethousands and thousands of
franchises that probably passyour desk.
How do you evaluate whether oneis a good opportunity?
What are you looking at?
Speaker 2 (32:36):
Yeah, there's again a number of components there,
that and again, if it's allabout the alignment with the
candidate, one franchise couldnot be a good fit for one and
while the other, on a completelyother end of the spectrum, can
be a great fit.
So it's not that there's exactmeasures of what makes a
franchise good or not, it's whatmakes them good for that person
.
So you know we look intofranchisor support.
(32:57):
What does that look like?
What level of involvement doesa franchisor have?
What teams do they have inplace, whether it's a marketing
team, a financial.
You know there's a trainingcomponent.
So you look at the franchisorsupport.
You look at track record.
You look at track record ofprofitability, track record of
closings, track record offailures.
You know there are some peoplethat say, hey, I don't want to
(33:17):
go too much into an emergingbrand, I'd rather be with
something that's tested and trueand has been working for 10
plus years.
So you look at history,longevity, you look at growth
rates.
So there's a number really ofbusiness factors that go into it
from a financial and businessend, but also from a
psychographic end.
Is this the type of franchiseLike?
You have to make sure that,when you're evaluating a
franchise yourself is that arethese the type of people that I
(33:40):
want to work with?
Do I work well with them?
Is their style what I resonatewith?
And so those are kind of theintangibles that you could look
on paper or look at aspreadsheet and say, okay, these
numbers look good, but is thisthe type of type of business I
want to align with, based onwho's operating it, what the
founder story was and what itlooks like in the future?
Speaker 1 (33:58):
And I really like to keep the show approachable,
right?
So for I'm thinking in my mindokay, what about the listeners?
Again, they're more on thelower end.
They're looking at a hundredthousand dollar franchise all in
.
What could they really make ifthey're going all in on a
franchise and it's only ahundred grand before they open
their doors?
What kind of profit can theylook at?
Speaker 2 (34:18):
Yeah, I get.
I get this question a lot too,because the question is
sometimes people say, hey, Ihave a hundred, 200 grand, let's
say, and I want to make surethat this franchise gives me
more than what I can make in themarket and just wait my hands
of it and let it ride.
So it's about seeing if I canget a brand that would A cover
their return how quickly?
(34:38):
So there are models that take ayear or two to build and
there's others that can get toprofitability in 60 to 90 days.
So how quick is it to ramp?
And then what are the returnsbeyond that?
So sometimes that return couldbe exactly what you put into it
and sometimes there's scale thatyou can get into another or
another and now you havemultiple territories or multiple
locations.
(34:58):
That's triple, quadruple, 10xwhat you put into it.
So it's a combination ofunderstanding the time that it
takes you to get your returnback and then what your overall
ROI is long term.
So I really look at those twoand you know people have
different thresholds.
Some people say, hey, if I'mleaving my corporate career, I
understand it takes time tobuild, but I need to be, you
(35:22):
know, at a reasonable point inyear two to be able to cover my
income.
And then we look at models andwhile I don't guarantee success
because I can't, I don't becauseand I don't know how you're
going to operate the businessand while I can't guarantee
returns, I don't go into thefinancials they learn all of
that from the franchisor direct.
But I can align with businessesthat I've seen the track record
(35:42):
and understand what the historyof their profits are and I can
understand that they're in thatrange to get them to where they
want to be.
Does that help?
Speaker 1 (35:51):
Yeah, you're matchmaking on fit, and then at
that point the person is workingdirectly with the potential
franchisor.
Yeah, do you stay involved?
Speaker 2 (36:00):
at that point?
Yes, I do.
Great question.
So until the end, until theysign, I stay involved, and then
I'll stay involved afterwardsjust to check in, and you know I
have contacts in the industrythat can help with a variety of
things.
I can help introduce you tofunding components that could
really help them not even to gowith a bank, but just to really
assess what would make sense forthem.
(36:21):
So every step of the way, eventhrough their investigation with
the franchisor, I'm there.
What is your feedback?
I set expectations with them Onyour next call.
They're going to be goingthrough this, and so here's how
you can prepare for that andI'll give them guidelines.
I give them documents, I givethem cheat sheets, some articles
, things that would really helpthem understand and be prepared
for the next call, so that theirinvestigation isn't just about
listening.
(36:42):
It's about getting thequestions answered that they
really want to know.
And, again, the ultimate goalis to get them enough
information that allows them tomake a best decision.
So, every step of the way in thefranchisor investigation, I'm
with them and guiding them tomake sure that it's coming back
to hey, you said this, you saidthis was your goal.
Are we sure we're getting inthe right place and sometimes
(37:03):
those can pivot right.
Sometimes people can say, hey,I need to keep my career.
And then they come across anopportunity.
They're like I want it and Iwant to go in.
And sometimes it's the opposite.
They say, hey, listen, I may beowner operator, but I just want
to leave my options open and,you know, tell me what's out
there.
So we explore both scenariosand then they put themselves in
the seat of an owner and saydoes this look realistic for
(37:23):
what I want to do?
Speaker 1 (37:25):
When you're looking at the stats on the franchise,
what are you comfortable with asfar as their percentage of
closures?
Speaker 2 (37:33):
Yeah, that's an interesting one.
I think it depends on closurescan happen and there are times
where a franchisee closed butthe franchisor bought it back,
so it doesn't show that it was aclosure.
So while there may have beenclosures, it doesn't show
closures, so it doesn't looklike there's closures because
the franchisor has the right tobuy it back the right to buy it
(37:58):
back.
So you have to just look intothat and say if there are a
number of closures within acertain timeframe, was this five
years ago?
Was this last year?
You know, there's a couple ofthings you have to kind of
really dig into a little bitdeeper to understand what the
real story is.
But franchises are federallyregulated in terms of they have
to provide every year afranchise disclosure document.
It's called an FDD, and whatthat is is it's really the
entire history of the companyfrom bankruptcies which can be
(38:22):
funny because they have todisclose any bankruptcies of the
management team.
And sometimes there's one onthere and someone says, sorry, I
was 22 and that happened, butit's unrelated to the business,
right.
So it's just peeling back theonion a little bit and
understanding.
But that discloses a lot.
And then some states go beyondthat and they're state regulated
(38:43):
, so they have a different levelof disclosure and that's.
That's everything from style tomanagement, to placement, to
what ifs, to financials andbeyond.
So the beauty of that beingregulated in that way is that
everyone has a little bit of a Ican lift under the hood and see
what what it's made of, andthey're current and they're
updated, so you can look ataverages for last year, which is
more important than saying, hey, where was it 10 years ago?
Speaker 1 (39:01):
So it's not like they're going in blind.
They actually have all of thedata to make a great, educated
decision.
Speaker 2 (39:07):
Yeah, and like I said it, still takes work, it still
takes grit, it takesperseverance, it takes risk.
You know, I personally I alwayslook at the upside and the
downside and say what's my bestcase scenario, what's my worst
case scenario?
And if the worst case scenariois palatable and it's worth that
risk, then it's something thatI'm more likely to entertain or
move forward with.
In these you have a little bitmore of a crystal ball, if you
(39:30):
will, because you've seen ithappen repeatedly over different
markets that you can compare toyour market.
Speaker 1 (39:37):
Which models are you personally the most intrigued by
, right now that you have seenand thought maybe I should buy
this?
Speaker 2 (39:46):
Yeah, I mean some of those that I get so excited
about.
They're across differentsectors, but I would say right
now.
So if you're just asking meright now, I'd say the service
industry.
There's a lot of services outthere, you know think man in a
van that it's not necessarily Imean from pet grooming to home
services, you know anything inyour backyard to, I mean.
(40:09):
And it's not just consumerbased.
There's other B2B plays withthat too.
But the service industry isreally intriguing and I think it
opens a lot of doors and easierto crawl before you run, so to
speak, because you can startsmall with, you know, one
employee, one van, low overhead,easier barrier to entry and
then, as you get more business,you add another one, you add
(40:31):
another one, you scale to adifferent territory.
So it's easier than just saying,oh my gosh, I'm biting off so
much more than I can chew.
I have this huge team, I havethis fleet, I have this.
So the service industry rightnow is really interesting to me
personally.
Speaker 1 (40:44):
It's funny that you say that, because I was on a
walk with a friend the other dayand she asked me that question
If I had to, for some reason,start another business today or
tomorrow, what would I chooseand hands down?
I said service industry,something that.
Or tomorrow, what would Ichoose and hands down?
I said service industry,something that would have next
to no overhead because you couldrun it out of a truck.
Speaker 2 (41:03):
Yeah, and it's interesting.
I mean there are some modelsthat I work with.
It's a very simple businessmodel but if it's executed well
it stands out.
You know there's a lot ofindustries that are
differentiated and specializedbut they don't necessarily have
the process down so kind ofgetting into one of those.
A simple model, just execute itbetter than the next, and
there's an open, open door.
Speaker 1 (41:24):
Yes, yes, no.
I love service industrybusinesses.
So, just as a final questionhere for anyone who is in their
early twenties today, or evenlate teens maybe they are
graduating from high school orgraduating from college, or
didn't go Sure, what life wisdomwould you give to them?
Speaker 2 (41:44):
Oh, that's a big one, I would say.
Looking back now in my late 40s, I look back and think there's
more than the traditional path.
So you know, coming out of outof school I had to get a career.
I went to liberal arts, so yourcareer wasn't as defined as you
know, specializing in something.
(42:04):
So you get some internshipsperhaps, get experience in the
things, and then you get into acorporate job and you climb the
ladder and you you may pivot toa different company, et cetera.
But there's more opportunitiesin in the unconventional path
and I think it's worth exploringwith the right investigation
and I would say it's not justrisk but it's calculated risk
(42:25):
and it's exciting to see.
I think it's it could changethe trajectory of your, of your
life.
Speaker 1 (42:31):
I think that's very inspiring, especially for this
generation that is entering theworld at a time when jobs can be
scarce and the cost of livingcan be high, and so, yeah, make
your own path Exactly.
Well, lauren, it's been sogreat chatting with you, I have
learned so much from thisinterview and I'm very grateful
for your time, so thank you somuch.
Speaker 2 (42:52):
Thanks for having me and really, if anyone listening
is interested, reach out.
I'd be happy to chat and helpsee if there's something that we
can align with you.
Speaker 1 (43:04):
Today's key takeaways .
If you're less of an ideasperson but understand operations
, franchising might be theperfect fit.
Can you lead a team?
Can you execute on a playbookfit?
Can you lead a team?
Can you execute on a playbook?
Franchises come in three maintypes owner-operator,
semi-absentee and investor model.
(43:25):
But every model still takeswork.
Even with a semi-absentee setup, you'll need to stay involved,
especially at the start.
Brick-and-mortar franchises cantake 6 to 18 months to build
before opening.
You'll want to be hands-onduring that phase.
Once open, a good manager canhandle the day-to-day if you
(43:48):
have the right person in placewith the right incentives.
But don't rush to hire managersbefore the business is ready.
Timing matters and franchisorsoften help train staff.
Franchises offer tested modelswith proven processes, reducing
the guesswork compared tostarting from scratch.
(44:09):
There's a model for nearlyevery skill set.
You don't need a businessdegree.
Many franchises work well forpeople with leadership, sales or
community building experience.
Don't pick a franchise justbecause you love the product.
Passion is great, but make sureit fits your goals, time and
(44:29):
lifestyle.
Always know your why, aligningbusiness decisions with your
personal values and long-termgoals.
Always ask about closures.
Some are hidden as franchisorbuybacks.
Dig into the franchisedisclosure document, the FDD, to
understand the full picture.
(44:50):
Franchisors earn royalties fromyour revenue, so they're
motivated to help you succeed.
Royalties from your revenue, sothey're motivated to help you
succeed.
Startup costs vary from around$100,000 for service-based
franchises to several millionfor bigger locations.
Financing is available SBAloans, robs using retirement
(45:11):
funds and home equity can makeit accessible.
Profitability timelines varytoo.
Some franchises ramp up in 60to 90 days.
Others take longer.
Franchising can be a bridge fromcorporate life to
entrepreneurship, giving youmore freedom and flexibility.
Accept calculated risks it'spart of the process but always
(45:36):
weigh the best and worst casescenarios and make sure the risk
is worth it.
Franchise consultants likeLauren can help match your goals
and skills to the rightbusiness, usually at no cost to
you.
The other advantage offranchises is that they come
with a built-in network ofowners for support.
You can talk to them, learnabout the challenges and what
(45:59):
success looks like for them.
You're buying into a systemthat's been tested and refined,
giving you a head start.
Remember, fit matters more thanflash.
A franchise with less coolfactor might be a better fit
than a trendy brand.
Do your homework, talk toowners, review financials and
(46:20):
ask tough questions.
Franchising can open doors, butsuccess depends on finding the
right fit for you.
And finally, there's more thanthe traditional path.
Be open to unconventionalopportunities, take calculated
risks and explore what'spossible beyond the corporate
ladder.
It might change the trajectoryof your life.
(46:41):
That's it for today.
I release episodes once a week,so come back and check it out.
Have a great day.
Welcome to how I Built my Small Business.
I'm your host, anne McGinty.
Today's guest is LaurenVermette, founder and CEO of
Franchisee Insight.
Lauren has dedicated her careerto bridging the gap between
franchisees and franchisors,offering a unique perspective on
the franchise industry.
(00:29):
She truly understands thechallenges and rewards that come
with franchise ownership,having successfully built and
sold multiple units in her ownportfolio.
Now Lauren's mission is toguide aspiring entrepreneurs
through the journey ofself-discovery, helping them
take that first step towardbusiness ownership and,
(00:52):
ultimately, toward wealth andindependence.
Just like an insurance broker,lauren's services are completely
free to you as the franchisee.
She's compensated by thefranchisor for connecting the
right people with the rightopportunities.
If you'd like to speak with herdirectly, there's a link in the
show notes.
(01:12):
Before we get started, don'tforget to follow the show.
I work hard to bring you alineup that is interesting and
unique, with hopes that you takeaway something meaningful from
every single episode.
I'm an indie show, andfollowing the show and sharing
episodes really helps me grow.
(01:34):
Let's get started.
Lauren, thanks so much forbeing here.
It's so great to see you.
You, too, thanks so much forhaving me.
I love your podcast.
Thanks, that's really sweet.
So can you take us back to yourcareer before franchising.
What made you want to startlooking for something else?
(01:55):
Yeah, happy to share.
Speaker 2 (01:57):
So after undergrad I got into the advertising
industry.
I worked at different agenciesand then I went into publishing
side, went into digital spaceand worked for larger publishers
.
So I was in kind of thecorporate advertising media
realm and loved the camaraderie,loved the industry, loved the
way the career was going andthen during my last tenure at
(02:19):
one of the companies one of mycorporate companies I got my MBA
and through that process Iunderstood the challenges of
building my own business.
And I'll step back for a minute.
I grew up in a family ofentrepreneurship where my dad
started his own business and youknow I was exposed to what it
takes, but as a kid you reallydon't know what to be on.
That Working in corporatepushed me into my MBA where I
(02:42):
wanted to understand a littlebit more about owning my own
business.
So I had that intrigue.
But through that process,ironically, I recognized that my
strengths were more as anoperator.
I didn't have the idea, Ididn't have the cool concept.
A lot of people say I have thisidea, I don't know how to
execute it.
I was kind of the opposite.
So it led me to theself-discovery of that and also
(03:04):
that I could lead a team andexecute on a playbook, which was
really what drove me into thefranchising world versus
starting my own business.
So that's kind of where itstarted.
And I got into my first twofranchises I still own them
today, 10 years later.
And then a couple of yearslater, I got into two different
modalities and multi-unitlocations, of which I sold a
couple of years later.
(03:24):
And then a couple of yearslater, I got into two different
modalities and multi-unitlocations, of which I sold a
couple of years ago.
Speaker 1 (03:29):
And for any of these were you still working full-time
?
Speaker 2 (03:33):
Yes.
So it's a great question and Iwork with a lot of people now
who said how do you straddle it?
And there are so manyopportunities in the franchising
world right now.
I mean the age old recognitionof a McDonald's or a Jiffy Lube
or a Taco Bell is kind of thereputation of what a franchise
is.
But there are so many differentmodalities and different levels
of involvement that you can beas an owner and I got into a
(03:57):
model.
It's called a executive model,sometimes it's called semi
passive and what that means isas an owner, you're not
necessarily the direct operatoror the day-to-day in the
business, you're more on thebusiness.
So I got into.
My first concept was a salonsuite concept and that is really
in essence like a.
We work for beautyprofessionals.
(04:19):
So whether it's a hairstylist,a barber, esthetician,
registered nurse, there's a lotof different fields within the
beauty industry and a lot ofthose people are extremely
talented in their profession butdon't necessarily have either
the capital or the businessacumen to get in and start their
own or have their ownstorefront.
So this is a model that allowedpeople to come in and rent
(04:41):
space while operating their ownbusiness and we took care of the
facility, but from a franchisemodel.
It was tested and it was theplaybook that I could follow and
have a manager on site withoutactually having to be there.
So I straddled my career at thetime and started these while
doing the same.
So there's a lot ofopportunities out there that
(05:01):
look similar or have anownership involvement like that.
Speaker 1 (05:05):
So you say you had a manager.
Did you hire the managerstraight off the bat, and how
much time does it take you tomanage those two franchises
today?
Speaker 2 (05:17):
Yeah, that's a great question.
Now there's always a build.
You know, sometimes theexecutive model is called
semi-absentee and I always shyaway a little bit from the word
absentee because the realitiesare that any business that you
own, you're going to have sometime and spend and you're
invested in it, right.
A lot of times you want tolearn the model before you
deploy it to management orstaffing and in this case I
(05:38):
didn't hire the manager rightaway.
It's because with a brick andmortar type of franchise there's
other components that you haveto get established first.
So I didn't want payroll beforewe actually even had a building
up and operating.
So you know that process andwith the franchisor support and
the franchisor playbook, there'sreal estate investigation,
finding the right spot,architecture, building it out,
(06:01):
construction.
So there's a window of timeanywhere between six and 18
months, depending on the size ofyour facility or the size of
your brick and mortar locationthat it takes to get that up and
going Towards the end of thatprocess.
When I knew, when I really hadan open date in line, I hired my
manager and oftentimes thefranchisor has a training
(06:22):
process that can help train themanager.
So it's not just on you totrain the staff and we got some
of the basics of the business upand going.
You know, llc established andpayroll company established and
some of those small pieces up.
But I still have this almost 10years later.
I still have the same districtmanager for my two locations and
she's wonderful.
I mean she's there on site onher normal business hour,
(06:46):
working hours and I visit onoccasion and talk to her on
occasion.
But we've gotten the machine,so to speak, well-oiled enough
that she really runs it andthere's different levels of
autonomy and ownership in someof these where you can structure
your salaries or yourincentives and things like that
with your staff.
So I love leading a team and Ilove mentoring and so that's
(07:07):
been really fulfilling.
And all while really looking atthe bigger picture of getting
into this was because I wantedto own something, I wanted to
build something, but I didn'twant it to take on so much more
of my time.
So fast forward, I was laid offby that corporate company,
which was interesting, and then,because I had established the
(07:29):
business and had it open, I wasable to stay home with my young
kids and work I mean a fractionof what I was working before and
, quite frankly, making moremoney than I made in corporate.
So I didn't sacrifice income, Ididn't sacrifice a level of
stimulation that I had from mycareer, but had the freedom and
(07:51):
flexibility that allowed me tobe home with my family at that
stage in my life.
Speaker 1 (07:56):
That sounds almost serendipitous the way that it
worked out.
Yeah, You're lucky that you hadput that in place.
So these salon suites, how manysquare feet are we talking?
Speaker 2 (08:07):
I have one location that has 47 suites and that's
about a 9,000 square footlocation, and then my other
location is about 6,000 squarefeet and that's about 33 suites
in there, so 33 separatebusiness owners.
Speaker 1 (08:20):
So it's like a combined franchise and real
estate play.
Speaker 2 (08:25):
Exactly.
I mean.
Some people say it's more oflike a glorified landlord.
We provide services and upkeepthe facility.
So it allows the suiteoperators to run their business
without the other components andoverhead of actually owning a
storefront or another businessor another location of their own
.
Speaker 1 (08:45):
And how many hours do you think that you work on this
?
Speaker 2 (08:53):
Oh, that's a great question.
The salon suite model is reallyat the other end of the
spectrum in terms of time spentin.
If you are early in it you canspend a lot more time because
it's set up involvement.
But as a real estate play, asalon suite is really light.
I mean a couple hours a weekWow.
At the end of the month I runthe QuickBooks and I make sure
you know my CPA has the enoughdata for income and tax
(09:13):
component of it.
But I have a really goodrelationship with my manager and
I believe in hiring the rightpeople and if the right people
are in place and with the rightstructure and the right
incentives and the rightrelationships, she has a level
of autonomy that I, you know,she has my full trust and and so
I don't have to be there.
I mean, there's times I'm therea couple of times a month.
There's times I'm not theremore than once every two months
(09:34):
Wow.
So it really depends, andthat's for two locations.
Speaker 1 (09:38):
So, and for those other two franchises which you
exited recently, were they inthe same industry or different
ones?
Can you tell us anything aboutthose so?
Speaker 2 (09:47):
ironically, I got into a boutique fitness concept
and similarly, I did not have afitness background nor a fitness
passion, but I loved the brand.
It's called Rumble Boxing andit's a really inspiring,
inclusive, fun boutique fitnessconcept.
And that was a big pivotbecause again, it was another
brick and mortar.
So we had to site select.
(10:08):
We had to look at, you know,the addressable market outside
of that.
That location cost to build allthose pieces that go into the
business.
But I ended up selling those.
It was interesting because inhindsight, while operationally
in the business itself was asuccess.
I don't necessarily deem it asa success because it took so
(10:29):
much more time and involvementthat it was kind of veering away
from my lifestyle goals andvalues.
So you know, fast forward nowand I'll get into that I'm now a
franchise consultant and whatthat is is really guiding people
to understand their personalgoals, their lifestyle goals,
their financial goals and reallyaligning brands with what
(10:52):
matches them.
And I didn't do a good job ofassessing myself and saying I
don't want to be up at 4amgetting to a shift or doing this
or that with my business andwhile it was manager led, I had
a fantastic manager.
It was not the lifestyle that Iwas looking.
So I was I wouldn't say burntout.
It was too much of a heavy liftto balance all the other
(11:12):
components of my life.
So I was able to successfullysell those.
They're still doing very well,but I'm no longer involved and
no longer the owner.
Speaker 1 (11:21):
And looking back on that, it sounds like you wish
that you had thought a littlebit more about your why behind,
why you wanted to purchase thisfranchise or that one instead of
just a profit play.
Is there anything else that youwish that you had known before
you jumped into any of these?
Speaker 2 (11:46):
components of a franchise that you have to
understand.
And in my second location thereare some variables that I
didn't pay too close attentionto, and some of that is cost of
construction.
You know, what does that looklike in your market, not just
countrywide, what does that looklike in your market?
And then, of course, there'sthe financial component.
If there is a larger investmentat stake, are you leveraging
loans and, if so, what do therates look like?
What does the current marketcondition look like?
(12:07):
So I think it's reallyimportant to look at current
market conditions before lookingat the model.
So there's so many businesscharacteristics that have to
align with making the rightchoice for you, for that time
and for your market.
Speaker 1 (12:21):
As you were mentioning financing, I wanted
to go ahead and just jump onthat one a little bit, because
listeners may be sitting heregoing okay, well, this sounds
all great and wonderful, but Idon't know if I can do that.
I don't know if I can afford it.
What does it really require asfar as a down payment goes?
And then as far as financinggoes, are there a wide plethora
(12:43):
of options available for thistype of a structure?
Speaker 2 (12:47):
Yes, there are, and that's a great question because
I think there's a misconception.
I mean, right, you seeShaquille O'Neal and he's huge
into franchising, but it'salmost unattainable to an
average person that is lookingto diversify their income.
In terms of funding.
There's a lot of options outthere.
It's important to recognizethere's a couple pieces the
(13:08):
investment in and your returnright.
So there's risk components ofwhat you're willing to put in
and how much a specificfranchise can require to build
out or to get it up and going,if your initial costs to get
going, and then there's a lot offunding options to support
those.
And then there's a lot offunding options to support those
.
So, because the franchisingindustry has evolved from those
(13:30):
just plain brick and mortarsthat you can associate with
franchising into other servicemodels, the investment levels
vary widely.
So it's a lot more accessible topeople that may not have either
lots of money or, you know,let's say, for example, a
million dollars to build out abig studio or something like
that.
Even if those loans are, even ifthey're leveraged with loans,
(13:50):
there's a lot of opportunitiesthat the initial cost to get up
and going is only a minorfraction of that, because it's a
service related business, whereyou don't necessarily need a
home office they refer to it ashome based and then financing
options.
There's so many out there nowthat are really great options.
I mean, some are small businessassociation, the SBA, so they
(14:11):
have small business loans.
Some of them are ROBS programsor ways that you can tap into
borrowing against yourretirement funds that you
already have and that'sbasically used as collateral.
And then you know, sometimes itjust makes sense to borrow
against a HELOC because you havethe equity in your home.
So every person is soindividual and what their risk
(14:33):
tolerances or what theirfinancial portfolio or outlook
looks like.
But I will say that there areso many opportunities out there
that have made it accessible topeople with either starting
their career or with notnecessarily the wealth or the
expendable liquid funds that itused to take to run a franchise.
So it's exciting because Ithink there's a there's a lot of
(14:55):
people with skill sets andaspiring business owners that
can enter into this world thatthey may not have known was was
possible.
Speaker 1 (15:05):
At a minimum?
Is it like purchasing a homewhere you need to have at least
10 or 20% down?
Speaker 2 (15:10):
Yeah, that's a great question.
So there's a couple componentsto going in in that initial
franchise fee.
So your franchise fee for lackof a better term in essence buys
your territory and it holdsyour spot within the franchise.
Now, oftentimes that franchisefee it can vary, but that's you
(15:31):
know, oftentimes well under ahundred thousand dollars.
There's ranges that varydepending on the number of
territories you purchase or thetype of business model that
you're purchasing.
But the franchise fee is justthat startup fee and holding
your territory.
Sometimes it also includes,like your initial training and
your training of your, yourstaff.
It could also includetechnology fees or software fees
for the first couple of monthsand some operational pieces in
there.
But beyond that, we look attotal project cost.
(15:53):
So total project cost is reallywhat does it take to get this
up and running?
So if it's a salon suite, it'sgoing to be more significant
than if it's just a service rungutter company, for example.
There's a lot of home services,there's a lot of other pieces
that are less required to haveinventory or a physical location
(16:13):
.
That's a lot lower of a barrierentry in terms of costs.
And then, beyond that, there'salways franchising is based on
royalties.
So royalties.
Percentages can vary based onbrand to brand but those are
ongoing fees that help keep thefranchisor support and team in
place that come off of yourgross revenues.
So the incentive for thefranchisor support is the better
(16:34):
that you do, the better thatthey do.
So there's a little bit of acollaboration team incentive to
keep things operationallyefficient and successful.
Speaker 1 (16:44):
And while we're just on this topic, I know you might
need to give us a wide range onthis, but what is the range of
cost to purchase and get thedoors open, or your total cost
in, as you were saying, from thevery low end, the lowest that
you've seen, to the high end?
Speaker 2 (17:02):
Yes, it will be a huge range depending on the
model.
The high end, yes, it will be ahuge range, depending on the
model.
I would say from 100,000 all into several million, okay, but
even that 100,000 can beleveraged too.
So there's opportunity, ifpeople don't have that 100,000,
to then take loans off of that100,000.
And there are some franchisorswho offer financing within the
(17:22):
franchisor.
So you're not going to, youknow, banks or other
institutions to borrow and itreally just depends on a quick
examination of your portfolio.
And the exciting part is is,even if you have the portfolio,
it doesn't necessarily mean thatthe multi-millions make sense
for you.
You know I work with people now,some that are towards the end
of their career and they'relooking for what's next and they
(17:44):
don't want to stop even thoughthey're done their career and
they want to still be involvedin something.
Some that you know keep theircareer and just want to
diversify their income beyondthe market volatility or beyond
other components.
Some that want to create legacywealth to pass on to their
family.
You know some, just like me.
It's an uncertain time in somecareers to their family.
(18:07):
You know, some, just like me,it's an uncertain time in some
careers.
Ai is getting a big attentionand there's technology that's
replacing labor costs, and sothere's layoffs and things and
they want to get into more of arecession proof or more a
business that can have longevityto it.
You know I have parents lookingto if their why is more of that
time, flexibility, it's whatkind of models will allow me to
have more time instead of, youknow, owner, operator or
(18:29):
anything like that, withoutsacrificing a career.
Some people you know are assimple as hey.
I commute into New York an hourand a half every day and I'm
sick of the commute.
I want something else.
What else is there?
And so we kind of explore that.
Some people are looking toreplace their income and some
people just want a side revenuestream to build on their wealth.
Speaker 1 (18:47):
So this is fascinating to me because I
personally have never consideredpurchasing a franchise.
Listening to you talk, I'm like, oh, maybe I should, but it
sounds approachable for people,maybe like a bridge between a
person who is full-time employedand maybe dreams of being an
entrepreneur, but like a planfor them to get them started in
(19:09):
a proven model like what you'resaying.
So are there any prerequisitesthat one needs to have before
being considered as a candidateto purchase a franchise, like,
do they need to take accountingclasses?
Do they need to have any sortof degree in a specific field?
Are there any that you know of?
Speaker 2 (19:28):
That's a great question.
There are certain franchisesthat require a certain skill set
, but there's skill sets forevery level.
You know there's people thatreally enjoy mentoring people.
There's people that can lead ateam.
There's people that wereengineers.
There's, you know, a number ofdifferent skill sets.
You don't need to have abusiness degree to get in, and
that's kind of the beauty of it.
(19:48):
You do have a tested model.
I would advise that one of thepieces that is is tends to be
somewhat natural is that peopletend to gravitate towards their
personal interests and, whilethat may work, it's not always
the best way to investigate if afranchise is going to be good
for you.
So, for example, I have somepeople I love to work out.
I go to all these classes, Idefinitely want a fitness brand.
(20:10):
That may work, but just becauseit's your personal interest
doesn't mean that's going to bethe best fit for you and those
business characters or any ofyour goals that you identify.
You know, inversely, there maybe someone who says I want
flexibility of time or I wantsemi-passive income I hear that
(20:31):
a lot but they don't care whatthe business model is, and so it
could be something that theyknow nothing about.
And the beauty of the franchiseis that you're not required to
know anything about thatindustry.
If you have the skill sets toeither run a team to operate a,
you know, it might be thatyou're in sales and you have a
great sales acumen and the ownerof this franchise, you're that
business development person.
(20:52):
You're making relationships inyour community and it's not
necessarily the intricacies ofyou know, looking at your P&L or
operating a business in thatway, because the system is set
up to understand that and theyhave controls and they have
guidelines on what your costsshould be and what your labor
pool should look like and whatthe pricing is of your services.
(21:12):
So there's things that havebeen tested and kind of iterated
on and improved and it's not tosay that some of those you
can't improve on yourself.
And there's certain franchisebrands that allow a level of
autonomy or uniqueness to yourmarket, let's say, but by and
large there's usually a generaloutline for it that doesn't
require you to know thatindustry.
Speaker 1 (21:32):
That is so interesting to me because I
again just have never thoughtabout the potential to own a
business that you knowabsolutely nothing about, and
hearing you speak about how it'spossible it shows that people
should really broaden theirperspectives on what they're
considering when wanting tomaybe dabble in business.
(21:55):
What inspired you to shift frombeing a franchise owner to a
franchise consultant?
Like, why not just keep onbuying more franchises?
Speaker 2 (22:06):
That is funny.
You say that because that isthe biggest challenge in my
current career as a franchiseconsultant is that I'm exposed
to a lot of these brands and alot of these models and it's you
know, everything in me to sayI'm going to try that, I could
do that, let me get into thatone, but I have to keep that,
that level head.
You know I love this role.
It's so fulfilling and it's sofun.
(22:27):
I speak to people at alldifferent stages of their life
and career and help theminvestigate the right way.
So I'm not aligned with anyparticular brand.
I am aligned with the candidateto really understand everything
about them, to be able to thenguide them through the process
of finding the right fit forthem.
So it's all about fit.
Some of it is understanding notonly what you're good at but
(22:51):
what you like doing.
You know some people say I'mfantastic at sales but I hate
doing sales.
So you don't want to get intosomething that's not going to be
, you know, aligned with whatyou want.
So it's really defining thoseattributes and the model that
can be the best fit for them.
So, and it's so individual, soit's it's inspiring to see
people make the leap fromcorporate, that comfort of, hey,
(23:16):
I have a paycheck, I havebenefits, I know this, this is
all I've known.
It's inspiring to see themyears later come back and say,
wow, what a lifestyle change.
I mean there's there's alwaysrisk.
There's risk in every business,you know.
I think only 35% of smallbusinesses survive past 10 years
.
So there's risk in smallbusiness.
Franchise at least has a littlebit more tested model.
I'm always transparent.
It doesn't guarantee success.
Right, there has to be thatlevel of involvement or it has
(23:38):
to be the alignment to make sureit fits with you.
But there's ways to validatethat with other franchisees and
say you know how did theyperform, what were their
struggles?
And so not only do you have thesupportive franchisor, but you
have a built-in network of otherowners that are non-competitive
, that use each other as asupport network to guide with
either challenges or successes,and they all learn from each
(24:00):
other.
So that's kind of the otherpiece that you're not buying or
paying into.
You're just all in the same.
You're on the same team andyou're representing a certain
brand or service or product.
So it really opens your doorsto have another level of support
.
So you're not in it on your ownas a small business.
Speaker 1 (24:15):
Yeah, that sounds ideal.
So if anybody was working afull-time job right now and
they're listening to this andthey're feeling inspired, they
want to know whether or not theyhave the potential to do this
on the side.
What are you going to advisethem to do next?
Speaker 2 (24:28):
Yeah, that's great.
There's I think there's a lotof people say I want to learn
more.
I just don't know if I can.
So I would welcome the chanceto talk to them and it starts
with learning about them and saywhat do you like and what are
your skill sets?
What are your goals?
Do you want to do you want toget into this?
Do you want to test the watersand grow it before you leave?
Do you have intentions ofeventually being in it?
And it's okay if you don't know.
(24:49):
It's just, let's explore that,let's get to know you and really
get to know your why.
And so then I can do researchon my end with my relationships
with hundreds of the franchisesout there to make sure it's a in
their territory, there'savailability and that those
business characteristics alignwith what they want.
So it's very possible and Iwelcome the chance to kind of
walk them through what it couldlook like and introduce them to
(25:12):
a couple brands that would beworth investigating.
Right, we're just investigating, we're just learning what it
means and then I can helpexplain the industry a little
bit more and what that means tothem and what it could look like
for them.
Speaker 1 (25:24):
Is there a fee to this investigation Like how do
you earn your income?
Speaker 2 (25:29):
The beauty of what I do is that I think of it like an
executive recruiter.
Right, so I will have acandidate and I am lock stock in
line with the candidate, notwith the franchisor.
I've worked with hundreds offranchisors.
Executive recruiter is thereference, because if I bring
that candidate along the processwhere they're investigating
them directly with the franchiseand they choose that franchise
(25:52):
to go into and that franchisoraccepts them into their model,
then part of the franchisor'smarketing fee goes to pay me a
commission.
So there's no cost involved.
It's really just a couple hoursof time for each business model
to really investigate and I'dsay the average is between four
and eight weeks should give youenough information with our
(26:13):
calls and your investigationwith the brands to get you to a
point to have enough informationto make an educated choice of
saying yes, this is for me, Iwant to dive deeper, I want to
go in, or no, this it doesn'twork for, for whatever reason.
So you know there's a lot ofpeople that say I've always
wanted to explore it but I don'tknow where to start.
Or they go on Google and saytop performing franchises, but
(26:34):
that's so hard to understandbecause you don't know the
criteria, that goes into thoselists.
You know you don't know whatthat means.
It could be top performing butthat just could mean they're
growing fast.
It doesn't mean theprofitability is good.
Or it could mean that you knowthey're great in profitability
but they don't necessarily havethe franchise or support and you
have to be an owner operator.
So those lists can be valuableand they can start you somewhere
(26:56):
, but you know you would have togo out and interview hundreds
of these franchises to evenunderstand if there's
availability in your territory.
The goal is really to make theprocess more efficient and fun.
I mean there are brands that wethrow out there that people are
like I would never have thoughtthat.
You know, I have a candidatewho really wanted to be involved
(27:18):
in the community and reallywanted to help people.
She ended up going into arestoration company and she
loves the feedback of you're inthat emergency situation and
you're helping people and you'reguiding them through the
process, you're taking care ofthe insurance, you're getting
the mold mitigation, taking careof the water cleanup, whatever
it is.
And she said I would have neverin a million years thought I'd
be in a restoration company andthis would give me the
(27:39):
fulfillment I was looking for,but so it's fun to see what you
know, what people end upaligning with, even though
that's nothing to where theywould have ever envisioned their
life going.
Speaker 1 (27:48):
That is so fascinating and fascinating.
Again, it's making me justwonder for myself.
I'm not in a point right nowwhere I feel like starting
another business or buying abusiness, but you never know.
You never know how manyfranchise systems exist across
the United States.
Speaker 2 (28:07):
Yeah, there's.
I don't know the exact number,but it's between 5,000 and 6,000
.
Okay, so there's a lot ofopportunities.
They don't all make sense andthey're not all attainable, or
some of them, you know, therefood even B2B, which is so
interesting because there's B2Bmodels that you wouldn't
(28:41):
necessarily assume it was afranchise, but they've got the
system in play the model down.
Speaker 1 (28:45):
Well, even like the one that you were mentioning,
the salons by JC I had neverheard of that type of a
franchise system before.
I would have assumed that itwas not a franchise and it was
more of a real estate situation.
So how realistic and I know wetouched on this before but how
realistic is it for someone tobe semi-absentee or fully
(29:06):
absentee?
Does that actually work?
Speaker 2 (29:10):
Yeah, that's a question I get a lot, because I
think if you're looking for apassive and I mean purely
passive way to invest ordiversify your income, I would
not recommend a franchise.
It's just like any businessthat does require your time and
attention on some level.
To what degree that level isdepends on the business model,
right, so there can be some.
I mean there's three different,really three different owner
(29:31):
involvements.
It's owner operator, whereyou're the actual operator and
you're in the business day today.
Then there's the semi absentee,as you mentioned, which is
called the executive model, andthat gives you a little more
flexibility and those can runfrom anywhere from 10 to 30
hours a week, depending on themodel.
And then there's the investormodel, and that's a little more
hands off, but it definitely canchange the dynamics of the
(29:54):
financials, because the morehands-off you are, the more you
require employees or staff tooperate and run it.
So you just and some of thoseare completely possible to get
decent margins and a good return, you just have to factor in if
you are not in it, someone elsehas to be.
So you know, on your expenses,your payroll is going up, but
depending on the margins anddepending on the model, that's
(30:14):
definitely possible.
Speaker 1 (30:16):
And then, what are some of the questions that
you'll ask somebody when theycall in and they say, hey, I
want to consider this.
What are some of the questionsthat you would ask them?
Speaker 2 (30:26):
Yeah, I usually try to get to their why.
I think it's really importantbecause, at the end of the day,
there's a lot of fear andanxiety into trying something
new or the unknown.
So why do you want to get intobusiness?
Is it something you've always?
You've always wanted to havethe pride of owning something?
Is it you're tired of thecorporate grind and you want to
build something on your own?
You want uncapped potentialwhere you're in a career where
(30:48):
you can't see yourself doingmuch more.
So really understanding the whyI mean, some of what I go
through is talk about theirbackground, talk about their
experience.
What is it about your currentjob and your past jobs that
you've loved?
So I try to get to that pointof it, to understand really what
their why is moving forward,like we talked about is it?
Is it they want a little moretime flexibility because they
(31:09):
may have young kids and orthey're at the end of their
career.
Like, what does your goal looklike?
And I always fast forward andsay what does your goal look
like?
And I always fast forward andsay what does your goal look
like in five to 10 years?
A fun question I ask about isdoes the status of the business
matter to you and you know,oftentimes people are like, oh
no, not at all.
And I said okay.
(31:30):
So you're at a college reunionfive years from now and someone
says, what are you doing?
And you say I'm a franchisee ofa port-a-potty company and I
use it as a joke.
We actually don't work with anyport-a-potty companies, but I
use it as a joke Cause somepeople say, ooh, well, not that,
I don't want to do that, andothers are like I don't care
what it is, that'd be fine, I'llsay it as long as it's making
money, you know.
So those are the fun pieces ofit to understand, like I don't,
(31:50):
I don't want to match them withsomething that good if that's
going to matter to them.
So we really kind of just getinto it and it's fun, it's.
It's really a self-discoveryprocess too, of what your life
could look like.
You know and, and what doesthis investment, how does it
change your life?
Speaker 1 (32:05):
I just can't believe that I never even did any
research on this.
On franchising, you know I wasmore of the idea person and more
of the initiate.
Get started, build the brandingand websites, you know.
So you and I are, we've we'vegot the opposite sort of skill
sets.
We can go into businesstogether.
Maybe we should.
So how do you evaluate?
(32:27):
You know you've got thesethousands and thousands of
franchises that probably passyour desk.
How do you evaluate whether oneis a good opportunity?
What are you looking at?
Speaker 2 (32:36):
Yeah, there's again a number of components there,
that and again, if it's allabout the alignment with the
candidate, one franchise couldnot be a good fit for one and
while the other, on a completelyother end of the spectrum, can
be a great fit.
So it's not that there's exactmeasures of what makes a
franchise good or not, it's whatmakes them good for that person
.
So you know we look intofranchisor support.
(32:57):
What does that look like?
What level of involvement doesa franchisor have?
What teams do they have inplace, whether it's a marketing
team, a financial.
You know there's a trainingcomponent.
So you look at the franchisorsupport.
You look at track record.
You look at track record ofprofitability, track record of
closings, track record offailures.
You know there are some peoplethat say, hey, I don't want to
(33:17):
go too much into an emergingbrand, I'd rather be with
something that's tested and trueand has been working for 10
plus years.
So you look at history,longevity, you look at growth
rates.
So there's a number really ofbusiness factors that go into it
from a financial and businessend, but also from a
psychographic end.
Is this the type of franchiseLike?
You have to make sure that,when you're evaluating a
franchise yourself is that arethese the type of people that I
(33:40):
want to work with?
Do I work well with them?
Is their style what I resonatewith?
And so those are kind of theintangibles that you could look
on paper or look at aspreadsheet and say, okay, these
numbers look good, but is thisthe type of type of business I
want to align with, based onwho's operating it, what the
founder story was and what itlooks like in the future?
Speaker 1 (33:58):
And I really like to keep the show approachable,
right?
So for I'm thinking in my mindokay, what about the listeners?
Again, they're more on thelower end.
They're looking at a hundredthousand dollar franchise all in
.
What could they really make ifthey're going all in on a
franchise and it's only ahundred grand before they open
their doors?
What kind of profit can theylook at?
Speaker 2 (34:18):
Yeah, I get.
I get this question a lot too,because the question is
sometimes people say, hey, Ihave a hundred, 200 grand, let's
say, and I want to make surethat this franchise gives me
more than what I can make in themarket and just wait my hands
of it and let it ride.
So it's about seeing if I canget a brand that would A cover
their return how quickly?
(34:38):
So there are models that take ayear or two to build and
there's others that can get toprofitability in 60 to 90 days.
So how quick is it to ramp?
And then what are the returnsbeyond that?
So sometimes that return couldbe exactly what you put into it
and sometimes there's scale thatyou can get into another or
another and now you havemultiple territories or multiple
locations.
(34:58):
That's triple, quadruple, 10xwhat you put into it.
So it's a combination ofunderstanding the time that it
takes you to get your returnback and then what your overall
ROI is long term.
So I really look at those twoand you know people have
different thresholds.
Some people say, hey, if I'mleaving my corporate career, I
understand it takes time tobuild, but I need to be, you
(35:22):
know, at a reasonable point inyear two to be able to cover my
income.
And then we look at models andwhile I don't guarantee success
because I can't, I don't becauseand I don't know how you're
going to operate the businessand while I can't guarantee
returns, I don't go into thefinancials they learn all of
that from the franchisor direct.
But I can align with businessesthat I've seen the track record
(35:42):
and understand what the historyof their profits are and I can
understand that they're in thatrange to get them to where they
want to be.
Does that help?
Speaker 1 (35:51):
Yeah, you're matchmaking on fit, and then at
that point the person is workingdirectly with the potential
franchisor.
Yeah, do you stay involved?
Speaker 2 (36:00):
at that point?
Yes, I do.
Great question.
So until the end, until theysign, I stay involved, and then
I'll stay involved afterwardsjust to check in, and you know I
have contacts in the industrythat can help with a variety of
things.
I can help introduce you tofunding components that could
really help them not even to gowith a bank, but just to really
assess what would make sense forthem.
(36:21):
So every step of the way, eventhrough their investigation with
the franchisor, I'm there.
What is your feedback?
I set expectations with them Onyour next call.
They're going to be goingthrough this, and so here's how
you can prepare for that andI'll give them guidelines.
I give them documents, I givethem cheat sheets, some articles
, things that would really helpthem understand and be prepared
for the next call, so that theirinvestigation isn't just about
listening.
(36:42):
It's about getting thequestions answered that they
really want to know.
And, again, the ultimate goalis to get them enough
information that allows them tomake a best decision.
So, every step of the way in thefranchisor investigation, I'm
with them and guiding them tomake sure that it's coming back
to hey, you said this, you saidthis was your goal.
Are we sure we're getting inthe right place and sometimes
(37:03):
those can pivot right.
Sometimes people can say, hey,I need to keep my career.
And then they come across anopportunity.
They're like I want it and Iwant to go in.
And sometimes it's the opposite.
They say, hey, listen, I may beowner operator, but I just want
to leave my options open and,you know, tell me what's out
there.
So we explore both scenariosand then they put themselves in
the seat of an owner and saydoes this look realistic for
(37:23):
what I want to do?
Speaker 1 (37:25):
When you're looking at the stats on the franchise,
what are you comfortable with asfar as their percentage of
closures?
Speaker 2 (37:33):
Yeah, that's an interesting one.
I think it depends on closurescan happen and there are times
where a franchisee closed butthe franchisor bought it back,
so it doesn't show that it was aclosure.
So while there may have beenclosures, it doesn't show
closures, so it doesn't looklike there's closures because
the franchisor has the right tobuy it back the right to buy it
(37:58):
back.
So you have to just look intothat and say if there are a
number of closures within acertain timeframe, was this five
years ago?
Was this last year?
You know, there's a couple ofthings you have to kind of
really dig into a little bitdeeper to understand what the
real story is.
But franchises are federallyregulated in terms of they have
to provide every year afranchise disclosure document.
It's called an FDD, and whatthat is is it's really the
entire history of the companyfrom bankruptcies which can be
(38:22):
funny because they have todisclose any bankruptcies of the
management team.
And sometimes there's one onthere and someone says, sorry, I
was 22 and that happened, butit's unrelated to the business,
right.
So it's just peeling back theonion a little bit and
understanding.
But that discloses a lot.
And then some states go beyondthat and they're state regulated
(38:43):
, so they have a different levelof disclosure and that's.
That's everything from style tomanagement, to placement, to
what ifs, to financials andbeyond.
So the beauty of that beingregulated in that way is that
everyone has a little bit of a Ican lift under the hood and see
what what it's made of, andthey're current and they're
updated, so you can look ataverages for last year, which is
more important than saying, hey, where was it 10 years ago?
Speaker 1 (39:01):
So it's not like they're going in blind.
They actually have all of thedata to make a great, educated
decision.
Speaker 2 (39:07):
Yeah, and like I said it, still takes work, it still
takes grit, it takesperseverance, it takes risk.
You know, I personally I alwayslook at the upside and the
downside and say what's my bestcase scenario, what's my worst
case scenario?
And if the worst case scenariois palatable and it's worth that
risk, then it's something thatI'm more likely to entertain or
move forward with.
In these you have a little bitmore of a crystal ball, if you
(39:30):
will, because you've seen ithappen repeatedly over different
markets that you can compare toyour market.
Speaker 1 (39:37):
Which models are you personally the most intrigued by
, right now that you have seenand thought maybe I should buy
this?
Speaker 2 (39:46):
Yeah, I mean some of those that I get so excited
about.
They're across differentsectors, but I would say right
now.
So if you're just asking meright now, I'd say the service
industry.
There's a lot of services outthere, you know think man in a
van that it's not necessarily Imean from pet grooming to home
services, you know anything inyour backyard to, I mean.
(40:09):
And it's not just consumerbased.
There's other B2B plays withthat too.
But the service industry isreally intriguing and I think it
opens a lot of doors and easierto crawl before you run, so to
speak, because you can startsmall with, you know, one
employee, one van, low overhead,easier barrier to entry and
then, as you get more business,you add another one, you add
(40:31):
another one, you scale to adifferent territory.
So it's easier than just saying,oh my gosh, I'm biting off so
much more than I can chew.
I have this huge team, I havethis fleet, I have this.
So the service industry rightnow is really interesting to me
personally.
Speaker 1 (40:44):
It's funny that you say that, because I was on a
walk with a friend the other dayand she asked me that question
If I had to, for some reason,start another business today or
tomorrow, what would I chooseand hands down?
I said service industry,something that.
Or tomorrow, what would Ichoose and hands down?
I said service industry,something that would have next
to no overhead because you couldrun it out of a truck.
Speaker 2 (41:03):
Yeah, and it's interesting.
I mean there are some modelsthat I work with.
It's a very simple businessmodel but if it's executed well
it stands out.
You know there's a lot ofindustries that are
differentiated and specializedbut they don't necessarily have
the process down so kind ofgetting into one of those.
A simple model, just execute itbetter than the next, and
there's an open, open door.
Speaker 1 (41:24):
Yes, yes, no.
I love service industrybusinesses.
So, just as a final questionhere for anyone who is in their
early twenties today, or evenlate teens maybe they are
graduating from high school orgraduating from college, or
didn't go Sure, what life wisdomwould you give to them?
Speaker 2 (41:44):
Oh, that's a big one, I would say.
Looking back now in my late 40s, I look back and think there's
more than the traditional path.
So you know, coming out of outof school I had to get a career.
I went to liberal arts, so yourcareer wasn't as defined as you
know, specializing in something.
(42:04):
So you get some internshipsperhaps, get experience in the
things, and then you get into acorporate job and you climb the
ladder and you you may pivot toa different company, et cetera.
But there's more opportunitiesin in the unconventional path
and I think it's worth exploringwith the right investigation
and I would say it's not justrisk but it's calculated risk
(42:25):
and it's exciting to see.
I think it's it could changethe trajectory of your, of your
life.
Speaker 1 (42:31):
I think that's very inspiring, especially for this
generation that is entering theworld at a time when jobs can be
scarce and the cost of livingcan be high, and so, yeah, make
your own path Exactly.
Well, lauren, it's been sogreat chatting with you, I have
learned so much from thisinterview and I'm very grateful
for your time, so thank you somuch.
Speaker 2 (42:52):
Thanks for having me and really, if anyone listening
is interested, reach out.
I'd be happy to chat and helpsee if there's something that we
can align with you.
Speaker 1 (43:04):
Today's key takeaways .
If you're less of an ideasperson but understand operations
, franchising might be theperfect fit.
Can you lead a team?
Can you execute on a playbookfit?
Can you lead a team?
Can you execute on a playbook?
Franchises come in three maintypes owner-operator,
semi-absentee and investor model.
(43:25):
But every model still takeswork.
Even with a semi-absentee setup, you'll need to stay involved,
especially at the start.
Brick-and-mortar franchises cantake 6 to 18 months to build
before opening.
You'll want to be hands-onduring that phase.
Once open, a good manager canhandle the day-to-day if you
(43:48):
have the right person in placewith the right incentives.
But don't rush to hire managersbefore the business is ready.
Timing matters and franchisorsoften help train staff.
Franchises offer tested modelswith proven processes, reducing
the guesswork compared tostarting from scratch.
(44:09):
There's a model for nearlyevery skill set.
You don't need a businessdegree.
Many franchises work well forpeople with leadership, sales or
community building experience.
Don't pick a franchise justbecause you love the product.
Passion is great, but make sureit fits your goals, time and
(44:29):
lifestyle.
Always know your why, aligningbusiness decisions with your
personal values and long-termgoals.
Always ask about closures.
Some are hidden as franchisorbuybacks.
Dig into the franchisedisclosure document, the FDD, to
understand the full picture.
(44:50):
Franchisors earn royalties fromyour revenue, so they're
motivated to help you succeed.
Royalties from your revenue, sothey're motivated to help you
succeed.
Startup costs vary from around$100,000 for service-based
franchises to several millionfor bigger locations.
Financing is available SBAloans, robs using retirement
(45:11):
funds and home equity can makeit accessible.
Profitability timelines varytoo.
Some franchises ramp up in 60to 90 days.
Others take longer.
Franchising can be a bridge fromcorporate life to
entrepreneurship, giving youmore freedom and flexibility.
Accept calculated risks it'spart of the process but always
(45:36):
weigh the best and worst casescenarios and make sure the risk
is worth it.
Franchise consultants likeLauren can help match your goals
and skills to the rightbusiness, usually at no cost to
you.
The other advantage offranchises is that they come
with a built-in network ofowners for support.
You can talk to them, learnabout the challenges and what
(45:59):
success looks like for them.
You're buying into a systemthat's been tested and refined,
giving you a head start.
Remember, fit matters more thanflash.
A franchise with less coolfactor might be a better fit
than a trendy brand.
Do your homework, talk toowners, review financials and
(46:20):
ask tough questions.
Franchising can open doors, butsuccess depends on finding the
right fit for you.
And finally, there's more thanthe traditional path.
Be open to unconventionalopportunities, take calculated
risks and explore what'spossible beyond the corporate
ladder.
It might change the trajectoryof your life.
(46:41):
That's it for today.
I release episodes once a week,so come back and check it out.
Have a great day.
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