September 29, 2025 • 55 mins
Looking for the real playbook behind franchise growth in a high-rate, AI-shaken market? We sat down with Aaron Harper—architect of Rolling Suds’ explosive rise—to unpack why niche, recurring service businesses are beating capital-heavy food brands and how honest expectations turn into better outcomes. From the Patch Boys turnaround during COVID to building the largest power washing brand by units nationwide, Aaron shares the decisions that mattered: targeting a service with commercial recurrence, claiming a category before an 800-pound gorilla forms, and funding support so franchisees can actually scale.
We get practical fast. Want to buy into an emerging brand? Ask about capitalization, headcount plans, field support ratios, and how much of your franchise fee funds support versus sales.
Hear why “hire a GM and keep your day job” is usually fantasy, how W-2 versus 1099 labor shapes resale value, and why private equity favors operators with predictable, commercial contracts.
We dig into fencing, roofing, and commercial cleaning as compelling categories, contrast execution advantage with first-mover advantage, and reveal the KPI mindset owners need to build real enterprise value.
There’s also a bridge for ETA searchers who’ve spent 12–18 months chasing unicorn acquisitions. High-quality franchises deliver speed to cash flow, proven systems, and full ownership without surrendering equity to a fund. The throughline is simple and strong: pick a focused niche, commit to active ownership early, and build recurring revenue that compounds. If you’re ready to stop hunting for “absentee” myths and start constructing a business worth buying—and one day, worth selling—this conversation lays out the path.
Enjoy the episode, then subscribe, share with a friend who’s exploring franchises, and leave a quick review so more builders can find this show.
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From your pals in franchise ownership, Jack and Jill Johnson.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_02 (00:00):
Hi everyone, welcome back to the We Bought a
(00:01):
Franchise podcast.
I'm Jack Johnson.
Joining us today, Aaron Harper,the CEO of Rolling Studs.
We also have Catherine Allen,MVP of Soccer Stars franchise
and one of our great franchiseconsultants.
Brian Gross, who was the topperformer of his system last
year and also has a successfulexit.
Then we also have David SanJuan.
(00:22):
David is number five in his pinkWindows system.
David continues to add units anddo all kinds of crazy things in
the entrepreneurial world.
I think you guys are going toreally enjoy this session today.
Listen, there is no one betterin the world of franchising at
bringing the brutal truth ofwhat business ownership is, the
highs and lows, than AaronHarper.
So, Aaron, welcome to the show.
(00:44):
Thanks for having me on.
I'm really excited for thisformat.
Yeah, Aaron, so you know, foryou, you've had kind of a wild
ride in franchising.
You I feel like we've workedtogether for a long time,
starting back in maybe 2017.
Um maybe, maybe share, if youwouldn't mind, a little bit
about your journey and whatbrought you to Rolling Suds.
SPEAKER_04 (01:07):
Sure.
Um, so I've been in franchisingum for a long time, uh, working
predominantly on home orcommercial service franchises.
And specifically growing thosecommercial or home service
franchises to become the largestbrand in the world in that
specific industry.
So first it was carpet and floorcleaning, um, then it was uh
(01:31):
drywall repair, um, and now uhdecided to venture out on my own
to become an entrepreneur andacquired a 35-year-old power
washing brand that wasnon-franchised and turned it
into um a franchise.
And um, you know, it's it'swe've now grown from a
(01:53):
single-location power washingbusiness in 2023 um to 326 units
operating in 35 states acrossthe country, um, becoming by by
a wide margin the largest powerwashing brand in the world.
And doing that through findinggreat franchise owners that
believe in our mission um andbuilding a team um that can uh
(02:17):
build truly like a world crapworld-class national
organization that um you knowpredominantly does commercial
power washing, but obviously westill do residential as well.
Um and uh and then recentlystepped into a chairman of the
board position by hiring aprofessional CEO to run my
(02:37):
company.
SPEAKER_02 (02:39):
Aaron, that's an incredible story, but knowing
you, I'm not at all surprised.
Anywhere Aaron goes, franchises,I mean, let's be real.
Aaron before Rolling Suds, andRolling Suds is a great
franchise, and and the the wholepremise with the bigger trucks,
doing the bigger jobs, gettingin and out of jobs faster, um is
(03:01):
is excellent.
Um, and it's it's a hugedifferentiation.
But prior to that, Aaron waswith a franchise called Patch
Boys.
Aaron, can we talk about thisfor a second?
Yeah.
SPEAKER_04 (03:11):
So Patch Boys was a wild ride too.
Um, so that was uh that wasbought by the company I was
working for.
Uh it was a 98-unit system.
And when they bought it, therewas one part-time employee that
came with the acquisition.
That was it.
And they're like, here you go,Aaron, grow this thing.
(03:32):
And I was like, Whoa, hold on.
Let me figure out what's goingon here.
So I did a listening tour andidentified that the franchisees
needed a lot of help, and weneeded to build something that
actually was a system that wassustainable and able to be sold
to prospective franchise owners,meaning that they could buy
(03:53):
something that was a predictableability to make money, and
that's what a franchise shouldbe, right?
And um, and so we did this bygoing out and listening to our
franchisees, hiring a brandpresident, building teams,
building training systems,building a marketing and a tech
stack, and then kind of going tomarket.
And that's when you and Istarted working together, and
(04:13):
basically I had identified thatthe brand um at the time, for a
variety of reasons, no onewanted to work with the brand
anymore.
And I had to essentially turnsentiment around within the
larger broker community, and Ihad never worked with brokers
(04:33):
before.
And it was the middle of COVID.
So I was literally cold callingyou guys until you either became
my friend or told me to go away.
Um, and uh, and we did that, Idid that defensively because I
don't like losing.
Um, and what ended up happeningis it became offensive.
(04:54):
We didn't have any time to doany organic lead gen at all.
Um, because we were able tobuild such great relationships
predominantly within Francer.
And since then, I've been ableto now grow.
I mean, we grew that from 98units, kind of a backward system
to 323 units in two years.
SPEAKER_02 (05:11):
Okay, now hold on a second.
So when I first saw Patch Boys,I looked at that and I said, I'm
not touching that thing with a10-foot pole, right?
It's patching, it's logo, it'sclip art.
Like Jill and I looked at thatand we're like, what franchise
is this?
And then here comes this guycalling me.
Aaron Harper's calling me.
And um, and like you said, atfirst, it's like, dude, come on.
(05:33):
But what I liked about Aaron wasthis.
Aaron has probably sold morefranchises than 99% of the
people on this planet.
But Aaron doesn't try and sell adamn thing.
If you if you get on a call withAaron about any franchise he's
representing, he's going to tellyou the good, the bad, the ugly.
And he's actually not going totry and sell you.
In fact, he's probably gonna,it's almost like it's the
(05:56):
opposite.
Um, but by doing so, by tellingpeople what it is like to be
successful, what they need todo, um, and making sure they
understand what's involved inbusiness ownership inherently
helped you find good owners.
And actually, Catherine and Ihave a client who bought a Patch
(06:17):
Boys from you, who is nowlooking to uh potentially
diversify to his portfolio andwho's doing really well.
He told us a great story abouthow he always, you know, wanted
he dreamt of having a certainkind of vehicle growing up and
he was finally able to buy it.
And look, while some people maysay buying cars is not the
smartest thing you can do withyour money, you know what?
(06:37):
This is America.
And if this is if that's whatmakes you more happy, exactly.
SPEAKER_01 (06:41):
So also Jack won't say this, but he he exclaimed,
Jack, you changed my life.
You like hearing that on thecall that we had together, just
he's like, I love you, man.
I love you.
You know, you changed my life,you changed my life.
Like that is the beauty of thisall.
(07:03):
And the beauty of us beingfranchise brokers, Jack being
able to present him withdifferent options that aligned
with what he was looking for.
And yeah, buying that car, thatstory was really cool.
SPEAKER_02 (07:15):
So and it can, it can really change lives.
So, okay, so this is a perfectthe reason why I wanted to set
all this up, Aaron.
Let's get into now what are youseeing out there?
You're a guy that's out there.
You were recently at aconference with a lot of brands
and things like that.
Where do you see the franchisemarket right now?
Like it statistically, if welooked at the last three months,
(07:37):
here's how the sales break down50% home services, 20% senior
care, and the rest everythingelse.
Yeah.
What what what are you seeing?
What are you what are yourthoughts on the franchise
market?
What's heating, what's cooling?
Like, what are your thoughts onwhere we are right now?
SPEAKER_04 (07:51):
I thought, yeah, so I thought the residential
commercial services would wouldreally cool after a while since
COVID.
I don't know if you guys areseeing this, but it seems to
like not be cooling at all.
And in fact, there there seemsto be even like more aggressive,
more interesting, more nicheservice businesses going to
(08:15):
market.
You know, you've got theaircraft deal detailing concept,
which is like super niche.
And if you know anything aboutme, you know I love niche
businesses.
Um, you're seeing like just likeservices making way more sense.
Like if you think about, if youthink about traditional
franchising, right?
People who are listening to thishave maybe never heard about
(08:35):
like they think it's McDonald's,they think it's Chick-fil-A,
they think it's Wendy's, theythink it's Taco Bell.
You invest, let's just call itbetween 600 to 1.5 million
dollars into one of thosebrands.
You're gonna net best casescenario, nine to eleven
percent.
So if you invest 1.2 million,you get that business up to 1.2
(08:56):
million, which by the way is noteasy, um, your net on that's
like$156,000,$7,000 or somethinglike that.
Whereas you could invest in aservice business, maybe be like
three to five hundred all in,and then net$150,000, let's just
say$120 or$100,000 per unit.
(09:17):
And so if you buy two, three,four, five units, and I'm just
talking in generalities, right?
Not specifically about any kindof brand, not about my brand,
but like it just the economicsmake more sense.
And in the in the market thatwe're in, there's a the lending
environment has the highestinterest rates we've had in
recent history.
(09:38):
Um, the SBA rates are nowbetween like 10 and a half and
12.5%.
Um home equity lines of creditare up.
Like, so like if you think aboutthe the opportunity relative to
like how much the like the costof capital, I think that's why
so many people are are aretrending towards services.
(09:58):
And I don't want to mention thethe brand, the the the portfolio
specifically, because I don'tknow if this is um public, but
there's about to be a a hugetransaction in our space.
Um a portfolio is going tomarket uh and it's gonna
(10:18):
probably be somewhere between abillion to a$1.3 billion
transaction.
And the last time thatResidential Commercial Services
has seen a transaction thatlarge was neighborly.
Um and when a transaction thatlarge happens, you have
(10:39):
significant institutionalcapital coming in and proving
out this thesis that Ioriginally had when I franchised
Rolling Suns is that residentialand commercial services are is
the hot thing and will continueto be.
And I think part of that has todo with like AI.
(11:01):
Like you people are like CPAs,lawyers, like white-collar
professionals are terrifiedright now.
Marketing companies areterrified because they're gonna
lose their job potentially inthe next two to three years.
We've already got coding that'sbasically gone.
Um, you know what I mean?
And so I don't think like robotsare gonna start power washing
(11:24):
houses anytime soon, or likefixing HVAC units, or like
installing electrical.
Now, maybe that's like way laterdown the line, but I think white
collar is going faster than bluecollar.
And I think institutionalcapital is is seen.
SPEAKER_03 (11:39):
Aaron, there's a lot to dig into with everything you
just said there, but I want togo back where you started
because you I think you have adifferent take than a lot of
people looking for franchises,even in home services, where you
said, I like a niche business,right?
And what you founded here is aniche business.
Um, you know, a lot of peoplelike services, they like
recession resistant, they'relooking for these big core
(11:59):
services, HVAC, roofing.
Yeah, you know, but you have abusiness here that's kind of an
afterthought, I think in a lotof businesses, right?
It's a kind of a secondaryservice for a window cleaning
business or other cleaning.
So if you're an investor andyou're looking at the franchise
space and you really want to gobig and you want to scale
substantial business, why wouldyou make the case for doing more
(12:23):
of a niche service, say likepower washing or you know, they
don't have a power washing, butother more specialized services.
SPEAKER_04 (12:30):
So I'll talk specifically about power washing
from the lens of why I chose it,and then I can talk about why a
niche is, I think, better.
So I chose it largely due to thefact that there's such a high
commercial uh element to this.
Like we're 60 to 70 percent ofour business is commercial,
(12:52):
which is generally recurring orrecurring in nature and
oftentimes contracted formultiple years.
Um there's still a residentialcomponent, it's just about 30 to
40 percent of our business.
So if you think about like how abusiness scales, at least in my
my you residential pays a lot ofthe like covers a lot of the
(13:12):
costs, and then when you get alarge commercial job, you can
buy more trucks or buy moreterritories or hire more people
or those types of things.
When you have an onlyresidential service business, it
can only grow so large.
Whereas if you have aresidential and a commercial
business, your total addressablemarket is larger.
(13:34):
I also chose it um because thereat the time wasn't a national
player in the space.
So I was like, it's a lot easierto become the 800-pound gorilla
than it is to steal market sharefrom the 800-pound gorilla,
right?
Like so um, if you think aboutlike SurvePro before there was
(13:55):
any restoration franchises, likethey became a multi-billion
dollar company.
If you think about 1-800 gotjunk before there were any junk
franchises, like they became abillion-dollar company, right?
So, like, and they didn't haveany proprietary way to clean
junk or to pick up junk, likethey just were first, right?
And so those were some of thereasons why I chose uh power
(14:18):
washing specifically, becausefranchise owners can can build a
sizable company in their localmarkets by servicing both
residential um and commercialdemand.
Now, why I like niche businessesspecifically is it is a lot
easier to stand out in the eyesof the consumers if you are
(14:40):
known for one thing.
So, like think of Kleenex,right?
Like Kleenex became the it'ssynonymous with tissue, right?
Like, let me grab a Kleenex.
It's it's because Kleenex wasn'tyou know a wipe for like your
you know your head or your arms.
It wasn't also a wipe for likethe counter, like it was
(15:02):
specific to one thing.
And so in the eyes of theconsumer, that that one thing
becomes synonymous with thething.
SPEAKER_02 (15:09):
And so Aaron, we're seeing it again now with Chat
GPT.
You know, you may use adifferent kind of AI, but you
say, oh, throw it into Chat GPT,even though you might be using
Gemini or Claude or somethinglike that.
If you're to market first andyou can sort of claim that that
sort of thing.
And it's actually, and I'm sorryto jump in, but if I forget, you
(15:30):
know what's so interesting about800 got junk?
They, I mean, that is a model.
That is a huge model for successin in you know services
franchising.
And then they roll out Wow OneDay Painting, which I would
argue is actually a super brand.
I mean, it's very smart, right?
WoW one day painting.
You mean I can get my housepainted in one day?
(15:51):
Well, turns out you call themand you tell them of the project
it may not be able to be done inone day.
Right.
The brand was different, andthen they come out with you move
me, and and they also hadanother one.
And so on its head, on thesurface, WoW One Day Painting is
a, in my opinion, and I loveResi Brands and I love that one
painter.
(16:11):
On it, on the surface, WoW OneDay Painting is a stronger
brand.
But that one painter probablyoutsold it 10 to one and did it
in a year versus, you know, WoWOne Day painters just kind of
you know going along.
And again, this is not at all umthrowing um, you know, mud at
that company.
They're a great company, butit's interesting to me that that
(16:33):
one painter comes along andessentially blows the doors off
of all these other paintingcompanies in terms of sales.
And how does that happen?
You know, but what go ahead.
SPEAKER_04 (16:45):
I think they execute better, right?
So like they clearly were ableto get units and get a national
footprint quickly by findinggreat franchisees and getting
them open.
Um, but Wound One Day Paintingis a perfect example of coming
out and not being and having thefirst mover advantage, right?
Because at that point there wasalready SergeiPro, there was
(17:06):
already, you know, um a varietyof other brands.
So you're coming in and and andnow you have to execute
considerably better versus justbeing first to market and having
to execute better than the localguy, right?
So when I was looking at brands,like I looked at roofing and
HVAC and plumbing and solar andlawn care, and like every brand
(17:26):
that I looked at had either an800-pound gorilla or five to ten
other brands that were allcapturing some some element of
market share.
It wasn't a hundred percentnecessary for me.
Like it was a nice to have to befirst to market.
It wasn't a need to have becauselike you don't you don't need to
be first to market in order tobe successful.
(17:48):
Uh Pinks is a perfect example,that one painter is a perfect
example, Voda is a perfectexample.
Like, none of those brands arefirst to market as the franchise
first franchise or but they'reexecuting better than the other.
SPEAKER_02 (18:00):
Pink's just had something, and I'll never
forget.
You probably you guys have allheard my story on this, but you
know, Jill and I are that wewere gonna buy that one painter,
and we're at the Discovery Day,and we see the Pink's logo, like
they were saying we just broughtthis brand on.
And I'm like, hold up, hold up,hold up.
Tell me about that.
Um, because Jill and I havealways been big brand people.
And I was like, you know what?
(18:21):
And I saw Brandon and Carterwith the hats.
Um, and I'm like, I guaranteeyou I could put one of those
pink hats on everyone in our inour town.
Um, and and that kind of drew mein on that.
And I think that's again, you'reright, that's a perfect example
of a brand.
I think Rezi had this culture.
Also, frankly, Kimber didexactly Kimber's one of their
franchise development people.
(18:42):
Kimber called me nonstop until Istarted showing.
She's like, You got to talk tous, you got to meet Steven.
So it's the same thing that youdid, where you kind of just roll
up your sleeves as a newfranchise and you go to work and
you start getting the brand outthere.
Um and now we have, and andbringing it full circle, guys.
Now we have real clean, which isas David well knows, he he has a
(19:04):
client that was recently lookingat it and lost out on a
territory.
You can't get real clean inFlorida, it's gone now.
And it's selling out across thecountry.
And it only started with likewith one or two units.
So it's not like they're sittingthere saying, hey, we've got a
hundred locations.
People are buying it.
Why?
Is it because it's different andin the service industry?
SPEAKER_04 (19:25):
Um, I think it's because it's niche.
I think that um, I think that'sa big piece of it.
I think it's also first tomarket.
It really highlights a couple ofthe things that I liked about my
brand um and just like aboutbusinesses in general.
Um, it's a lot easier to capturemarket share when you're not
competing against anyone otherthan local guys, right?
(19:46):
Um, and that's exactly wherethey're at.
Um, I think that's part of it.
I think, you know, obviouslythey're with franchise fast
lane, they know how to moveunits.
Um, I just read franchisesidekicks like franchise report
based on like 73,000 leads.
And they said 60% of the dealsthat are done in the broker
(20:08):
community are from uh franchisedevelopment organizations.
I believe that.
Which is wild.
And then 20% are done from likeneighborly's authority brands,
you know, home front brands,like these kind of portfolios.
So that basically means forbrands like mine, there's only
(20:29):
20% of the market share thatwe're capturing in terms of deal
flow.
I think one of my biggestconcerns um about franchising
currently, if we want to talkabout hot takes, yeah, is when a
brand when a brand goes tomarket, right, and they have one
to two units, they will go tomarket generally in the broker
(20:55):
community.
It's very hard to become a largeemerging brand in the broker
community, or excuse me, a largeemerging brand without going to
the broker community, right?
Like I don't I mean it'spossible, but it's it's
difficult.
SPEAKER_02 (21:10):
It's hard.
And you know, you can't like Ifought it too, and and it when I
was at home care assistants foryears, we didn't want to pay the
commission, right?
We were like, no, no, no.
And and then eventually it'slike we were getting lapped by
Bright Star, and it was like,okay, we gotta do it.
And so we hired someone um whohad broker connections and we
joined all the broker networksand boom, a hundred franchises.
SPEAKER_04 (21:31):
Yeah.
And and I I don't inherentlyhave any issues with franchise
development organizations goingto market, bringing a brand to
market.
Like I think that without that,a lot of these brands aren't
aren't going to um aren't goingto work.
My problem and my concern isthat a lot of these franchisors
(21:55):
are going to market and doingthat, and they don't have the
money to do it.
And so, like, I was talking to aum uh a brand that like because
when I go to these events, likepeople follow me online, they're
franchise ours, they want to dosomething similar to what
Rolling Suds does, and they'relike, How do you do it?
Right.
And so this woman's like, I ambeing pursued by every single
(22:18):
franchise development companyout there, and I heard you don't
like franchise developmentcompanies, and I need to know
why.
And I'm like, I don't not likefranchise development companies,
but before we talk about that,how much money do you have to go
towards franchising?
She literally says, None.
She says, none.
(22:39):
Like it's not like I have 10grand or I have a hundred grand,
like the answer is none.
So I'm like, okay, that's theproblem.
You're being pursued and youhave no money.
So like it's just with thediligence process.
Like, so when she's like, Well,how much money do I need?
I was like, at least five toseven hundred thousand dollars
(23:00):
on the high end two million.
And she's like, What?
I was like, that's how much itcosts.
And if you go with a franchisedevelopment organization, you
will have 10% of the franchisefee left over.
And that's not enough to openthe amount of units that they
will inevitably sell.
SPEAKER_02 (23:20):
But Aaron, don't you think honestly, this is the
crazy thing, by the way, is Ispend more time working with
funds and private equity.
This you think honestly, if youhave a good concept, raising
money for it should not be hard.
It really shouldn't be hard.
But they need to know that.
SPEAKER_04 (23:38):
Yeah.
And someone needs to tell themthat.
And it might not be in theirbest interest to tell them that
because then they might not signthem up as a brand.
Sure.
And that's my concern.
SPEAKER_02 (23:51):
Well, isn't that how you did it?
SPEAKER_04 (23:52):
You for with Rolling Century.
You raised money.
I raised capital and we diddevelopment in-house.
So we were able to keep a largerportion of the franchise fee
than if we outsourced it.
And I still raise capital.
And I have the experience in howto franchise a business.
And the less experience youhave, the more capital you're
going to need because you'regoing to burn cash without
(24:12):
experience.
So that's my concern is we havefranchise owners going to
market, selling a bunch ofunits, being told that they're
going to be able to sell toprivate equity if a bunch of
units are sold, but there's nodiligence, at least seemingly,
on like, do you have the moneyto support franchise owners?
And I think that without thenecessary diligence on that,
(24:33):
we're going to keep facingissues where franchise owners
can't support franchiseesbecause they don't have the
money or the infrastructure todo it.
And it was just her.
SPEAKER_03 (24:42):
Okay, we don't we talk about this from like the
viewpoint of a potentialfranchisee, right?
Especially the one that says,you know what, I get the risk,
right?
But personally, I was franchiseenumber three in a system.
Right.
And so you have to know there'sextra risk going into that.
You know, you don't have thevalidation, you don't have the
current financials across youknow, across the country.
(25:04):
So with these top brands thatare taking off just like you
mentioned, they're getting 60%of deal flow, right?
They're growing from two andthree units to 60, 100 units in
the course of a year.
What should a franchisee beasking?
Like from your viewpoint, whatshould they be thinking about to
mitigate that risk?
SPEAKER_04 (25:24):
I'm gonna give more hot takes.
You guys ready?
Oh, yeah, come on.
If that brand is saying, hey, Iknow we we have two units, we're
gonna grow nationally, and I'mgonna tell you exactly that you
can hire a general manager torun this thing and you can pay
him 80 grand and he'll run itand you can keep your job full
(25:45):
time.
What I would ask if I were afranchisee is I would say, why
don't you do it?
Why haven't you done it if it'sthat easy?
And if the brand is like, uh uhuh uh uh uh uh the answer is
it's not that easy.
Because if it was that easy,guys, let's just be real.
(26:08):
I wouldn't franchise mybusiness.
Instead of taking 8%, I'd keepthe entire economic benefit of
the business.
And I know that that's probablynot what people want to hear,
but if I were a franchisee, Iwould say, why don't you do it?
If it's that easy.
SPEAKER_02 (26:25):
Yeah, no, I I think Aaron, you're right.
And that's you know, that's thewhole premise of our company now
with franchise owners helpingfuture franchise owners, is that
when people ask these questions,you know, you go to hire a GM,
80,000, 60,000, 100,000.
Think of it this way (26:41):
could you imagine saying to someone, hey,
I've got a great idea.
We're gonna build amillion-dollar company.
All we need to do is hire thisguy for 60 grand and tell him
what he needs to do, and that'sit, million-dollar company.
Um, that's exactly the thinkinghere.
So now the the the line we walkis finding a way.
(27:04):
When franchise owners makefranchises special.
Take Catherine, for example.
We were having a conversationright before the podcast, and
Catherine just met with her CPAwho shared, and I'm not going to
say the exact number because youknow we don't want to make any
earnings claims here, butCatherine's margins are
fabulous.
They are better than anything Iever accomplished as a franchise
(27:24):
owner.
Um, but that's not system-wide,I guarantee you.
Um, Catherine is an excellentowner and she's managing her
margins well.
And that's where I think thepoint of all this is.
And if you go onto our website,you'll see this on our homepage.
It's not about finding theperfect franchise because that
doesn't exist.
It's about becoming as close toperfect a franchise owner as you
(27:45):
can.
And what is that?
That means understanding what'sinvolved.
I've always compared it to thefirst year of a franchise is
like the first year of a newbaby.
You really have to put a lot ofattention and care and effort
into that new baby.
SPEAKER_04 (27:57):
You can't even hold your losing sleep and you're
waking up multiple times in thenight, just like you have a new
baby.
I've got a three and a halfmonth old.
It's no different.
You're like waking up in a panicbecause the business is crying
and you need to give thebusiness a bottle, which is
money that you didn't want togive it originally.
I mean, I could go all day onthis metaphor, guys.
SPEAKER_00 (28:15):
Yeah.
That's where I'm at right now,even with a top five franchisee.
You know, my GM went down for alittle while, and I had to step
up, go down there and deal withup car accidents and and and
just kept me up all night forfor weeks, keeping me up, trying
to figure out what am I going todo next.
SPEAKER_04 (28:32):
And if you didn't if you had a full-time job that you
weren't able to leave the officefrom in that instance, you'd
have to quit your job or loseall your money.
And um, and I just don't, I justwant people to have success in
franchising so that all of us onthis this call have an industry
to invest our time and moneyinto for 20 years from now.
SPEAKER_01 (28:56):
When I so I was still at my old company when I
uh bought soccer stars, and I umwas was like, you know, I came
from franchising.
So I knew exactly what I wasgetting into.
And I was, but I was nervous,right?
I was really nervousfinancially.
My kids are in private school.
Uh we have a mortgage, like wehave all these bills, right?
(29:18):
Like we need my income.
And um I was at training in NewYork at the soccer stars
headquarter, and I got laid offuh at their headquarters.
I walk out, and there's Morgan,my best friend, who's also a you
know, a soccer stars owner and afranchise insider.
And they're like, okay, time toget officially known, and we're
(29:40):
doing our ceremony.
And sometimes God does for uswhat we can't do for ourselves.
And so I was like, there you go.
And I jumped right inimmediately because I knew if I
left training and I didn't jumpin and hit the ground running, I
needed that momentum to getgoing and I didn't stop.
And my whole thing with owning abusiness was you need to.
(30:00):
Lead by example.
And I need to understand everydamn aspect of this business in
order to hire a manager to trainto hire coaches to train to hold
accountable.
Like if you bring a manager infrom day one, in general, like
this is just my opinion.
Uh, how do you train them?
How do you hold themaccountable?
(30:20):
How do you build a culture ifyou are not completely involved?
I was coaching classes a week.
I was doing sales, I was doingHR, I was doing everything.
And did I burn myself out?
Well, but yeah.
But then, you know, I brought ina manager and I'm still uh
working every day of the week,uh, every minute I can, but but
(30:42):
less less, but less and able tofocus on other things.
SPEAKER_04 (30:45):
Because you've earned the right to do that
right by building a greatbusiness.
SPEAKER_01 (30:50):
And so, yeah, so my revenue I am at the top, and I
do have the best profitability,but that's that's why.
SPEAKER_02 (30:56):
So people say, they say to us, gosh, you know, when
you tell us about the realitiesof this, why why would I do
this?
Why would I go through this hardtime?
SPEAKER_01 (31:05):
Why because and I'll again it's on our time.
SPEAKER_02 (31:10):
Yes, you control your time.
You're building it's like youknow what it is, it's like when
you when you you know you wantto rebuild your your kitchen and
your closet in your home.
And you go through that sixmonths of rebuilding the kitchen
into the beautiful thing thatthat you want it to be.
And it sucks while you're doingit, but when it's done and your
home now, you know, if you needto sell that house and you got
(31:31):
the best kitchen in theneighborhood, you're gonna sell
fast.
And so the point of all this isthat putting in the work and
building the business, youultimately, as the franchise
owner, you're going to be theone that makes the business
special.
There's a reason why a couple ofyears ago, the crumble item 19
showed average franchiseesnetting like 250, but the median
netting at 85.
(31:52):
Um, because some people arebetter at running crumbles than
others.
And yeah, and what's great aboutfranchising is that ultimately
the more successful franchiseowners will buy the less
successful franchise owners.
So you have built-in acquisitionand exit.
So for all of you out there whoare sitting there who, you know,
you say, Oh, I don't want afranchise, I want a mom and pop
(32:12):
business because Cody Sanchez,and we love Cody Sanchez, but
Cody Sanchez says, buy the oldcouple at the laundromat, and
then the SBA is gonna pay forall of it.
No, that's not gonna happen.
Also, when you when you investin a franchise, you get all the
support, you get all theinfrastructure, you get all
these things to help you growthe business.
Um, that inherently makes it somuch more valuable.
SPEAKER_04 (32:33):
Yeah, it makes it more valuable and you get speed
to scale much quicker.
And I want to be clear, like,it's not impossible to hire
someone like David, you did it.
And you know what I mean?
So, like, I think that's wherethis gray area is is like, yeah,
it's possible.
Someone could do it.
But like a franchise is builtfor an average person.
(32:55):
David Barr says this an averageperson on an average day with
average skill set, with averagemarket conditions, like it has
to be built for the average.
And the reality is that theaverage person who's been
working at Oracle for 15 yearsas a VP of sales that has never
opened a business before,doesn't know the stress of
(33:16):
carrying payroll, doesn't knowhow to operationalize and
improve profit margins, doesn'tknow, and and and and most
managers aren't business owners.
And in order to get somethingoff the ground, you need the
stomach of a business owner,right?
And and so another trend I'mseeing, which is this is I'm
(33:38):
really excited about this one,is because of this interest,
this renewed kind of like almostrenaissance of interest in
business ownership.
I think a lot of it has to dowith like people like Cody
Sanchez, uh, people like AlexHermozzi who are talking about
like, hey, build something.
Like we're this is a this is ageneration of builders.
(33:59):
And then you have the generationunder us that is like does not
want to go to college and likedoesn't want to work for
someone, and they're startingbusinesses in college.
And then you've got people thatare Gen X and millennials who
are like, wait, I've worked forsomeone else for 12 years now.
(34:20):
I'm gonna go try to acquire anexisting business, and that's
this whole kind of likeentrepreneurship through
acquisition space, or it's beencalled ETA.
What happens is a lot of thesepeople who look for this unicorn
of a business for 18 monthsthat's doing a million in EBITDA
and it doesn't have a faxmachine, and there's just an old
(34:43):
guy that's just waiting forsomeone to just take their
business from them.
Like, all of a sudden, peopleare like, wait a minute, I've
wasted a year and a half of mylife, and I'm taking on a search
fund.
So now I'm not even gonna own100% of this business.
I'm actually gonna be a minorityowner, and I can't find
anything, and now I've wasted ayear and a half of my life.
(35:03):
Those people are now coming tofranchise ownership because
they're like, wait, the exactreasons that I would buy an
existing business, existingprocesses, quicker cash flow, a
team in place, like all of thethings that are in an existing
business can be produced quitequickly with the right franchise
(35:26):
brand.
And so part of my goal as Icontinue to grow my franchise is
to merge the franchise industryor help merge the franchise
industry to this like ETA HoldCo kind of like that kind of
niche community of likesearchers.
And so I'm going to an eventcalled Main Street Summit in
(35:49):
Columbia, Missouri, in November.
Any of you guys should come.
Um, last year I spoke at it.
I was part of the only franchisepanel at the conference.
It's all about capitalallocation, searching for a
business, which one to buy, andabout a thousand people go.
And that panel went so well thatthey have an entire franchise
(36:12):
track this year.
SPEAKER_02 (36:14):
I love that.
Well, Aaron, here's a quick,here's a quick little tidbit.
And I know the team wants tochime in on this, but to your
point.
So if you spend an entire yearand a half searching for that
perfect business versus justgetting started with the
franchise, let me let me tellyou what can happen in the
meantime.
Uh just last month, our clientsKevin and and um Kathy, who will
(36:35):
be in our podcast next week, um,they invested in an Action
Exteriors franchise, which isone of Resi Brand's newer
franchise concepts.
Um their business took off sofast, Cody Sanchez flew up to
meet with them.
Um they're in Tulsa, Oklahoma.
Uh they a year ago at this time,they they called me because they
(36:55):
couldn't buy Pinks.
Pinks was sold out in theirmarket.
So we had to find them somethingelse.
And I shared with them the storyof our client Harrison, who had
bought a roofing franchise.
And um Harrison's story is greatbecause he's 29.
He got an inheritance of like300 grand.
Um he buys two roofing units andtwo years later flips them for
like six million dollars.
(37:16):
Um that, that now that doesn'thappen.
Full disclaimer, it's not goingto happen to you, but it's like
these sorts of things happen.
Um, and so now here's Kathy andKevin.
In less than 12 months, theybuilt a business that is making
good money.
They're on being interviewed byCody Sanchez, where they could
have been doing exactly what yousaid, still searching on Biz by
(37:38):
Sell for the perfect business.
SPEAKER_04 (37:40):
Yeah.
Bringing it all full circle, myconcern is that there's the
stigma for franchising in thatcommunity.
Like, oh, I people don't knowthat they own 100% of the
business.
They hear the stories likeQuizno and Subway and um
Anchored Tiny Homes and PremierMartial Arts and these things,
(38:05):
and then they're like, oh no,no, no.
Like there was a post JohnWilson from the Wilson Company.
Uh, he has a$32 million HVACbusiness.
And he posted a thing that said,Would you rather take on a
minority partner and minoritycapital or be a franchisee?
And like the posts underneathwere like minority partner, cap
(38:27):
like blah, like, and it was justlike it sucked because I know,
and you guys know, and hopefullythe people who listen to this
know that franchising is a greatway to build wealth if you find
the right brand.
And so my concern is that likeif franchisers are coming to
market without the money,they're overselling territories,
(38:47):
they're not getting fullyinvolved, franchise owners.
Like, they my concern is thatthat stigma doesn't change.
And um, and I think it's ourduty to change the stigma.
Like, we're gonna we gotta takecare of this industry, we're
gonna be here 20 years later.
Like, boomers aren't likethey're retiring, they can maybe
keep doing what they've done forthe last 40 years.
(39:08):
Like, we can't.
SPEAKER_02 (39:10):
Well, and and let's be real, and this is the thing
everybody needs to acceptnothing's promised with business
ownership.
Okay, if you're going to takethat chance, as all of us have,
it you know, you have tounderstand it does fall on your
shoulders.
100%.
Um, and you have to make thebusiness go.
The franchise or is there tohelp you to provide support, but
(39:33):
you have to be the one likeBrian, like Catherine, like
David, like you, Aaron, who gotup, went to work, and built the
system and didn't, and there'sstill it amazes me, there's
still people to call me and say,you know, I want one of those
absentee franchises, you know,where they run the whole thing
for me.
And I say it's you're not gonnafind it in franchising.
You've tried.
(39:54):
People try.
SPEAKER_04 (39:55):
Yeah, it doesn't work.
I joke, I tell people when theyget on the phone with me, yeah,
I've got$250,000.
I've got about three hours aweek to dedicate to the
business, and I really want tobuild a multi-million dollar
enterprise.
What do you got?
And I'm like, hey, um I'm infranchising.
All my friends and I know allthe brands, right?
(40:16):
So we're we're got it the insidescoop.
We're the franchise insiders.
Like, we know what's going on.
There was a brand where youcould deploy$250,000 and work
three hours a week.
You wouldn't know about itbecause all my friends and I
would have bought all theterritories.
Like we would own them all.
We would just own them.
We'd just it'd be a mutual fund.
We'd all just be collectingcash.
We wouldn't, it wouldn't evencome to market because we would
(40:37):
all know.
And then they laugh and they'relike, Oh, okay.
Maybe I shouldn't buy afranchise.
No, correct.
You absolutely should not.
SPEAKER_00 (40:46):
Well that leads me right to my question because
that was one of the questionsI'd written down.
If you had 250k outside of yourbrand, where would you put it?
SPEAKER_04 (40:54):
Um in a mutual fund if I had no time.
SPEAKER_00 (40:56):
Okay.
SPEAKER_02 (40:59):
Come on, Aaron.
We're all in on Bitcoin now.
Let's go.
SPEAKER_04 (41:04):
Doge.
I put it into Doge.
SPEAKER_02 (41:06):
I'm just throwing on black at the You know, I just
got this Gemini card, and I dowant you to answer that
question, but this this and thisis not a promotion, but it's so
cool.
It's like everything you spend,it immediately invests in the
bit in the Bitcoin of yourchoice.
So, like you're out to dinnerand all of a sudden you get the
instead of you know gettingairline points, it goes into
Bitcoin.
I thought it was so cool.
SPEAKER_04 (41:25):
I saw that I need to do that.
SPEAKER_02 (41:27):
Yeah, it's the Gemini.
I was I've seen the Gemini boysbeing interviewed, and I was
like, dude, that's a great idea.
I'm doing that.
Um instead of getting points orlike cash back or whatever, it
just goes straight into Bitcoin.
It goes right into crypto, andyou can choose which which
Bitcoin, which crypto you want,and you see it, and it's cool.
Like, I have to admit,ignorance, I'm kind of late to
the party on on Bitcoin andcrypto, but it moves so much
(41:49):
faster than the stock market.
Like the the swings that you seeon it, it's really entertaining.
But yeah, so everything youspend on it, uh Gemini card, if
you're listening, I'll look formy royalty check.
Um immediately gets invested,which is like to me, was so fun.
So it's like you go out todinner, you spend your 150
bucks, boom, your portfolio justgot bigger.
(42:10):
Okay, Aaron, outside of rollingsuds, if you had 250k to invest
in a category, not a brand.
Yeah, where where would you go?
Um outside of services oroutside of the business.
No, in services.
That's any, you know, it couldbe painting, could be power
washing, or not power washing,but outside of those.
SPEAKER_04 (42:30):
Yeah, so I think um roofing is really interesting.
Um I think fencing is reallyinteresting.
Um I think commercial cleaningis interesting.
SPEAKER_02 (42:46):
Um Brian and I were talking about fencing the other
day.
Uh here's what's interestingabout fencing.
When we've got a client with toprail that is like blowing the
doors off of it, fencing'sreally interesting to me across
the three major brands.
Their averages are insane.
SPEAKER_04 (43:05):
Their averages are insane.
Here's what I would dodifferently than what a lot of
those brands are doing, though.
Bring it.
I would have all the employeesbe W-2 employees and not 1099.
I think the challenge with 1099employees, and you guys might
have more experience than I do,is if you go to sell the
company, you don't haveanything.
(43:26):
You have a sales and marketingperson who's just contracting
out stuff.
Yeah.
So it's like ultimately, like,we're all if you buy a business,
like your goals, you should bethinking about like when are you
gonna sell, like what's the endgame, right?
And so if you you have 1099employees and you don't have any
materials, like what do youhave?
(43:49):
You have a few sales guys andsome marketing dollars, right?
And um, and I think it's reallyimportant to set up an internal
engine, a lead gen engine, adelivery engine that's
predictable.
SPEAKER_02 (44:04):
Um you think that's why certain so painting is is
heavy uh subcontractor, but itsresale value is like there's a
there's right now on Biz by sella painting uh franchise in
Florida that's doing a millionseven and it's for sale for 200
grand.
I mean, a business doing amillion seven should be selling
for a million bucks at least.
(44:24):
That's exactly why.
SPEAKER_04 (44:28):
There's no predictability.
Like if you think about whatlike so you've got you've got
great tick average ticket onpainting, but once you've once
you've done the job, they'reprobably not gonna call you
again.
So like exactly Hermosy says youeither have a business where
customers never stop buying foryou, or you have sellers that
never stop selling for you,right?
(44:49):
Like those are the two, thoseare the two kind of things.
And ideally, a business has bothof those things, right?
SPEAKER_02 (44:54):
Well, and if we look at what the funds want, what
private equity when they'relooking for franchisees to to
recapitalize, and that's theother thing that does it does
provide hope for people who whowant to live this sort of
lifestyle of of running abusiness where they're you know
running it semi-involved.
(45:15):
Here's how it can here's whatprivate equity does.
They look for really strongoperators within a system,
right?
And they look for at least amillion to three million EBITDA,
and they say, let's recap thatstar franchise owner.
And then Aaron, and and certainsystems really embrace it and
certain and others don't, butthey come to Aaron and they say,
(45:37):
Look, Aaron, your topfranchisee, they're their
EBITDA's three million.
We're gonna we're gonna recapthem, we're gonna put four times
in their pocket, and then wewant to deploy another 20 into
your system and basically havethem go quarterback 20 more
units because they frankly theyknow what they're doing.
Yeah.
Um so you're right to, but whatthey want, they don't want
(45:58):
those, even though again youcould show them, hey, here's
this painting franchise that dida million seven.
Well, yeah, but they did this50, 50k here, 50k there.
Whereas, like, you know,Catherine, recurring revenue,
you've got recurring clients,David, you've got recurring
clients.
They want predictable recurringrevenue.
Um, and so for all of you guysthinking about a business,
(46:20):
that's really, and I think Aaronbrings up a great point.
If you're gonna put in all thiswork and you're gonna build
something, build to where youcan have the kind of exit that
will allow you to change yourlife.
And I and I don't, you know, andI'll tell you guys, my my father
at 62 years old, um, coming outof a uh BK, had to start all
(46:40):
over and had no money and had tostart a franchise, had to start,
he got turned down for avisiting angels franchise.
Catherine, I don't know if youknow this.
Um so he had to start home careassistance.
Um, and so but the point is herehe was 62 years old, three kids
in college, and he starts thisbusiness with 300k in his
pocket.
Um, so that's the beauty of why.
(47:03):
And it was hard, hard, hardwork.
He's in an office all byhimself, everyone in the family
doubting him, saying, Why onearth would you want to do this
senior care business?
And then two years later, all ofus begging him for a job.
Um, and it turned into thiswonderful company.
So, but the point of all thisis, and you guys, you guys on
this listening to the podcastare hearing a lot of the battle
scars.
But the point is, is thatthey're worth it if you can
(47:26):
build, you've got to have an endgoal.
You can't just go on aimlesslyand say, Well, I don't want any
employees and I don't want to dowork.
But I think it'd be cool to tellpeople I own a business.
If that's you, don't do it.
SPEAKER_04 (47:35):
I I mean, I I think we should make active income
cool again.
Let's make let's make activeincome cool again.
I mean, like every single personlike has that has ever built any
meaningful level of wealth wentall in on something for like a
serious like amount of time andthen diversified.
(47:57):
Like diversification is pro is aproblem for future you.
Like if you have a job right nowand you're looking for like
that's diversification, sevenstreams of income, like that's a
problem for future you to figureout.
And um, like I I have 24 teammembers.
I stepped into a chairman of theboard position three months ago.
(48:20):
And I'm six weeks into the posinto like chairman of the board,
you know, high-level contentcreation, broker strategy
relationships, like that.
Very high level things, and adepartment in my company, as you
guys know, needed attention.
And so I step back in.
So I have 24 team members andI'm not semi-absented.
(48:42):
So like I would say that thebusiness that someone's
considering buying should beworth not only your time, but
constant reinvestment of timeand capital.
Right.
So like if you buy a franchise,you should see a path to two,
three, four, five million plus.
(49:03):
Like, and and then what do wehave to do to get there?
If it's a B2B service business,if it's a staffing and
recruiting business, like acleaning business would be
basically a staffing andrecruiting business, right?
Like a B2B business is a salesbusiness.
Like, what do you like doing inyour normal life?
And typically, like if you'regood at sales and someone's
paying you$150,000 to$200,000 todo sales for their company, you
(49:27):
don't own anything of thatcompany.
What if you put that efforttowards your own business?
You would create enterprisevalue and then you'd be able to
change your life.
Um, so I would I would urgepeople to do that when they're
thinking about a business.
SPEAKER_02 (49:43):
I think something everybody on this podcast does
really well.
Um, Catherine, Brian, David,Aaron, you guys are all
excellent at selling withoutselling.
Meaning that you guys aren'ttrying to sell.
Personally, I think the day oflike the slick sales guy is
done.
Nobody wants it anymore.
People want realness.
(50:05):
People want, I'm gonna go on, Iwant to listen to people, I want
to hear real experiences.
And I think you guys are allgreat at that.
You're not trying to sell anyoneanything, but you're by your
sheer energy and honesty and andjust real experiences, um, that
draws people to you and wantingto work with you.
Thank you.
SPEAKER_01 (50:26):
I just want to help help people.
I mean, that's my approach.
Like I've been meeting withdifferent local businesses for
soccer stars, uh, like that havesimilar, you know, that have
young kids.
And it's like, how can I helpyou?
You know, how can I help growyour ballet business?
Like, is there anything I cando?
And they're like, Well, how canI help you?
It's just coming at it with um,I don't know, just the
(50:48):
reciprocity kind of approach ofbuilding business and just being
a connector, right?
Like Francesca did that so well,Jack.
She was one of our topsalespeople at our old company.
And she just comes from a placeof heart.
And I think that's what we weall come from, a place of heart,
and just wanting to make theworld a better place and to help
people, whether it's our our enduser or our employees, and like
(51:11):
that's authentic, and like thatis what sets that intention and
like grows a really powerful andsuccessful company.
SPEAKER_02 (51:19):
I love it.
Last last thoughts becauseAaron, I know we're against it.
Brian, uh, David, you guys wantto share some some last takes,
questions?
SPEAKER_00 (51:27):
You know, um, I came from law enforcement, and my
whole my whole life was justtrying to help people, and I'm
out of everybody on this panelright now.
I know I'm you know still at thebottom working my way up,
learning, and I'm just gratefulthat I've given this
opportunity.
But you know, all this wellgoing full circle, it's just
because I'm here just to helppeople.
Um, and that's that's my story,and that's why I'm you know
(51:50):
became an insider.
Love it.
SPEAKER_03 (51:53):
I think uh I'll just highlight something that Aaron
said, and I think again, it'sjust so important to be very
real when you're in your duediligence, you're looking,
listening to podcasts, doingyour search.
You know, when you're buildingsomething the way Aaron's
building it, or the way David'sbuilding or the way Catherine's
building, it's all in, right?
These are not part-time gigs,this is not a side hustle.
(52:14):
Um, you know, so you know thelevel of effort directly
correlates to to the size ofbusiness you build.
So I think you know, I justappreciate Aaron coming in being
very honest about what it takesto build a million-dollar
business.
SPEAKER_04 (52:29):
Thanks guys for having me.
It's been awesome.
SPEAKER_02 (52:31):
Aaron, we're gonna have Josh York on next week.
Have you ever met Josh from GymGuys?
Yeah, I have.
He's a cool dude.
You guys will get along, I feellike.
Yeah, yeah, yeah.
We haven't talked uh at length,but yeah.
Yeah, he's it's the same sort ofthing.
So, but no, I mean, I shouldn'tsay it like that.
Aaron, there's no one like you.
You're you're and you're youknew you would be a perfect
(52:53):
guest for our podcast becauseyou say it how it is, you want
to help people, you truly do.
You come at this from the rightplace.
Um, so all for all of youlistening, I think you just got
a gold mine worth.
I mean, we had a whole agenda,we didn't even get to like even
half of it because there was somuch good stuff.
Um, Aaron, anything that we'veleft unsaid?
Anything you want to just uhfinish up the podcast with?
SPEAKER_04 (53:14):
No, I think I think come to franchising as a
franchisee for the right reasonsto build something meaningful.
Um, as much as it's on us tohelp as a franchise or to help
you build your business, I'veput everything on the line to
build a great brand.
This is my everything.
And so I expect greatfranchisees to come in and give
(53:34):
their all to build a location.
And I can't do that withoutwithout franchisees putting
their effort towards it.
And um that's not just money,it's time, it's effort, it's
attention, it's care.
Um and uh and and you can'tbuild a great franchise brand
without franchisees puttingtheir all into it.
(53:56):
And so it's both there's bothsides to this, the franchisees
and the franchise or have towork together.
Um, it's a partnership.
SPEAKER_02 (54:04):
I think that's great.
Uh, Aaron, thank you so much forbeing our guest today.
This has been fabulous for allof you listening.
Um, if you'd like to have aconversation about franchising,
you want to speak to a realfranchise owner, go to
thefranchisinsiders.com.
I urge you to go to our teamsection, read the bios on
Catherine, on Morgan, on Brian,on David, on Jill, and myself.
(54:27):
Um, any of us would be delightedto help you with your franchise
search to get you in contactwith franchise oars, great
franchise oars like Rolling Sudsand Aaron Harper.
Uh, so again, visitthefranchiseinsiders.com.
And for all of you listening, weappreciate you greatly, and
we'll talk to you next time.
Hi everyone, welcome back to the We Bought a
(00:01):
Franchise podcast.
I'm Jack Johnson.
Joining us today, Aaron Harper,the CEO of Rolling Studs.
We also have Catherine Allen,MVP of Soccer Stars franchise
and one of our great franchiseconsultants.
Brian Gross, who was the topperformer of his system last
year and also has a successfulexit.
Then we also have David SanJuan.
(00:22):
David is number five in his pinkWindows system.
David continues to add units anddo all kinds of crazy things in
the entrepreneurial world.
I think you guys are going toreally enjoy this session today.
Listen, there is no one betterin the world of franchising at
bringing the brutal truth ofwhat business ownership is, the
highs and lows, than AaronHarper.
So, Aaron, welcome to the show.
(00:44):
Thanks for having me on.
I'm really excited for thisformat.
Yeah, Aaron, so you know, foryou, you've had kind of a wild
ride in franchising.
You I feel like we've workedtogether for a long time,
starting back in maybe 2017.
Um maybe, maybe share, if youwouldn't mind, a little bit
about your journey and whatbrought you to Rolling Suds.
SPEAKER_04 (01:07):
Sure.
Um, so I've been in franchisingum for a long time, uh, working
predominantly on home orcommercial service franchises.
And specifically growing thosecommercial or home service
franchises to become the largestbrand in the world in that
specific industry.
So first it was carpet and floorcleaning, um, then it was uh
(01:31):
drywall repair, um, and now uhdecided to venture out on my own
to become an entrepreneur andacquired a 35-year-old power
washing brand that wasnon-franchised and turned it
into um a franchise.
And um, you know, it's it'swe've now grown from a
(01:53):
single-location power washingbusiness in 2023 um to 326 units
operating in 35 states acrossthe country, um, becoming by by
a wide margin the largest powerwashing brand in the world.
And doing that through findinggreat franchise owners that
believe in our mission um andbuilding a team um that can uh
(02:17):
build truly like a world crapworld-class national
organization that um you knowpredominantly does commercial
power washing, but obviously westill do residential as well.
Um and uh and then recentlystepped into a chairman of the
board position by hiring aprofessional CEO to run my
(02:37):
company.
SPEAKER_02 (02:39):
Aaron, that's an incredible story, but knowing
you, I'm not at all surprised.
Anywhere Aaron goes, franchises,I mean, let's be real.
Aaron before Rolling Suds, andRolling Suds is a great
franchise, and and the the wholepremise with the bigger trucks,
doing the bigger jobs, gettingin and out of jobs faster, um is
(03:01):
is excellent.
Um, and it's it's a hugedifferentiation.
But prior to that, Aaron waswith a franchise called Patch
Boys.
Aaron, can we talk about thisfor a second?
Yeah.
SPEAKER_04 (03:11):
So Patch Boys was a wild ride too.
Um, so that was uh that wasbought by the company I was
working for.
Uh it was a 98-unit system.
And when they bought it, therewas one part-time employee that
came with the acquisition.
That was it.
And they're like, here you go,Aaron, grow this thing.
(03:32):
And I was like, Whoa, hold on.
Let me figure out what's goingon here.
So I did a listening tour andidentified that the franchisees
needed a lot of help, and weneeded to build something that
actually was a system that wassustainable and able to be sold
to prospective franchise owners,meaning that they could buy
(03:53):
something that was a predictableability to make money, and
that's what a franchise shouldbe, right?
And um, and so we did this bygoing out and listening to our
franchisees, hiring a brandpresident, building teams,
building training systems,building a marketing and a tech
stack, and then kind of going tomarket.
And that's when you and Istarted working together, and
(04:13):
basically I had identified thatthe brand um at the time, for a
variety of reasons, no onewanted to work with the brand
anymore.
And I had to essentially turnsentiment around within the
larger broker community, and Ihad never worked with brokers
(04:33):
before.
And it was the middle of COVID.
So I was literally cold callingyou guys until you either became
my friend or told me to go away.
Um, and uh, and we did that, Idid that defensively because I
don't like losing.
Um, and what ended up happeningis it became offensive.
(04:54):
We didn't have any time to doany organic lead gen at all.
Um, because we were able tobuild such great relationships
predominantly within Francer.
And since then, I've been ableto now grow.
I mean, we grew that from 98units, kind of a backward system
to 323 units in two years.
SPEAKER_02 (05:11):
Okay, now hold on a second.
So when I first saw Patch Boys,I looked at that and I said, I'm
not touching that thing with a10-foot pole, right?
It's patching, it's logo, it'sclip art.
Like Jill and I looked at thatand we're like, what franchise
is this?
And then here comes this guycalling me.
Aaron Harper's calling me.
And um, and like you said, atfirst, it's like, dude, come on.
(05:33):
But what I liked about Aaron wasthis.
Aaron has probably sold morefranchises than 99% of the
people on this planet.
But Aaron doesn't try and sell adamn thing.
If you if you get on a call withAaron about any franchise he's
representing, he's going to tellyou the good, the bad, the ugly.
And he's actually not going totry and sell you.
In fact, he's probably gonna,it's almost like it's the
(05:56):
opposite.
Um, but by doing so, by tellingpeople what it is like to be
successful, what they need todo, um, and making sure they
understand what's involved inbusiness ownership inherently
helped you find good owners.
And actually, Catherine and Ihave a client who bought a Patch
(06:17):
Boys from you, who is nowlooking to uh potentially
diversify to his portfolio andwho's doing really well.
He told us a great story abouthow he always, you know, wanted
he dreamt of having a certainkind of vehicle growing up and
he was finally able to buy it.
And look, while some people maysay buying cars is not the
smartest thing you can do withyour money, you know what?
(06:37):
This is America.
And if this is if that's whatmakes you more happy, exactly.
SPEAKER_01 (06:41):
So also Jack won't say this, but he he exclaimed,
Jack, you changed my life.
You like hearing that on thecall that we had together, just
he's like, I love you, man.
I love you.
You know, you changed my life,you changed my life.
Like that is the beauty of thisall.
(07:03):
And the beauty of us beingfranchise brokers, Jack being
able to present him withdifferent options that aligned
with what he was looking for.
And yeah, buying that car, thatstory was really cool.
SPEAKER_02 (07:15):
So and it can, it can really change lives.
So, okay, so this is a perfectthe reason why I wanted to set
all this up, Aaron.
Let's get into now what are youseeing out there?
You're a guy that's out there.
You were recently at aconference with a lot of brands
and things like that.
Where do you see the franchisemarket right now?
Like it statistically, if welooked at the last three months,
(07:37):
here's how the sales break down50% home services, 20% senior
care, and the rest everythingelse.
Yeah.
What what what are you seeing?
What are you what are yourthoughts on the franchise
market?
What's heating, what's cooling?
Like, what are your thoughts onwhere we are right now?
SPEAKER_04 (07:51):
I thought, yeah, so I thought the residential
commercial services would wouldreally cool after a while since
COVID.
I don't know if you guys areseeing this, but it seems to
like not be cooling at all.
And in fact, there there seemsto be even like more aggressive,
more interesting, more nicheservice businesses going to
(08:15):
market.
You know, you've got theaircraft deal detailing concept,
which is like super niche.
And if you know anything aboutme, you know I love niche
businesses.
Um, you're seeing like just likeservices making way more sense.
Like if you think about, if youthink about traditional
franchising, right?
People who are listening to thishave maybe never heard about
(08:35):
like they think it's McDonald's,they think it's Chick-fil-A,
they think it's Wendy's, theythink it's Taco Bell.
You invest, let's just call itbetween 600 to 1.5 million
dollars into one of thosebrands.
You're gonna net best casescenario, nine to eleven
percent.
So if you invest 1.2 million,you get that business up to 1.2
(08:56):
million, which by the way is noteasy, um, your net on that's
like$156,000,$7,000 or somethinglike that.
Whereas you could invest in aservice business, maybe be like
three to five hundred all in,and then net$150,000, let's just
say$120 or$100,000 per unit.
(09:17):
And so if you buy two, three,four, five units, and I'm just
talking in generalities, right?
Not specifically about any kindof brand, not about my brand,
but like it just the economicsmake more sense.
And in the in the market thatwe're in, there's a the lending
environment has the highestinterest rates we've had in
recent history.
(09:38):
Um, the SBA rates are nowbetween like 10 and a half and
12.5%.
Um home equity lines of creditare up.
Like, so like if you think aboutthe the opportunity relative to
like how much the like the costof capital, I think that's why
so many people are are aretrending towards services.
(09:58):
And I don't want to mention thethe brand, the the the portfolio
specifically, because I don'tknow if this is um public, but
there's about to be a a hugetransaction in our space.
Um a portfolio is going tomarket uh and it's gonna
(10:18):
probably be somewhere between abillion to a$1.3 billion
transaction.
And the last time thatResidential Commercial Services
has seen a transaction thatlarge was neighborly.
Um and when a transaction thatlarge happens, you have
(10:39):
significant institutionalcapital coming in and proving
out this thesis that Ioriginally had when I franchised
Rolling Suns is that residentialand commercial services are is
the hot thing and will continueto be.
And I think part of that has todo with like AI.
(11:01):
Like you people are like CPAs,lawyers, like white-collar
professionals are terrifiedright now.
Marketing companies areterrified because they're gonna
lose their job potentially inthe next two to three years.
We've already got coding that'sbasically gone.
Um, you know what I mean?
And so I don't think like robotsare gonna start power washing
(11:24):
houses anytime soon, or likefixing HVAC units, or like
installing electrical.
Now, maybe that's like way laterdown the line, but I think white
collar is going faster than bluecollar.
And I think institutionalcapital is is seen.
SPEAKER_03 (11:39):
Aaron, there's a lot to dig into with everything you
just said there, but I want togo back where you started
because you I think you have adifferent take than a lot of
people looking for franchises,even in home services, where you
said, I like a niche business,right?
And what you founded here is aniche business.
Um, you know, a lot of peoplelike services, they like
recession resistant, they'relooking for these big core
(11:59):
services, HVAC, roofing.
Yeah, you know, but you have abusiness here that's kind of an
afterthought, I think in a lotof businesses, right?
It's a kind of a secondaryservice for a window cleaning
business or other cleaning.
So if you're an investor andyou're looking at the franchise
space and you really want to gobig and you want to scale
substantial business, why wouldyou make the case for doing more
(12:23):
of a niche service, say likepower washing or you know, they
don't have a power washing, butother more specialized services.
SPEAKER_04 (12:30):
So I'll talk specifically about power washing
from the lens of why I chose it,and then I can talk about why a
niche is, I think, better.
So I chose it largely due to thefact that there's such a high
commercial uh element to this.
Like we're 60 to 70 percent ofour business is commercial,
(12:52):
which is generally recurring orrecurring in nature and
oftentimes contracted formultiple years.
Um there's still a residentialcomponent, it's just about 30 to
40 percent of our business.
So if you think about like how abusiness scales, at least in my
my you residential pays a lot ofthe like covers a lot of the
(13:12):
costs, and then when you get alarge commercial job, you can
buy more trucks or buy moreterritories or hire more people
or those types of things.
When you have an onlyresidential service business, it
can only grow so large.
Whereas if you have aresidential and a commercial
business, your total addressablemarket is larger.
(13:34):
I also chose it um because thereat the time wasn't a national
player in the space.
So I was like, it's a lot easierto become the 800-pound gorilla
than it is to steal market sharefrom the 800-pound gorilla,
right?
Like so um, if you think aboutlike SurvePro before there was
(13:55):
any restoration franchises, likethey became a multi-billion
dollar company.
If you think about 1-800 gotjunk before there were any junk
franchises, like they became abillion-dollar company, right?
So, like, and they didn't haveany proprietary way to clean
junk or to pick up junk, likethey just were first, right?
And so those were some of thereasons why I chose uh power
(14:18):
washing specifically, becausefranchise owners can can build a
sizable company in their localmarkets by servicing both
residential um and commercialdemand.
Now, why I like niche businessesspecifically is it is a lot
easier to stand out in the eyesof the consumers if you are
(14:40):
known for one thing.
So, like think of Kleenex,right?
Like Kleenex became the it'ssynonymous with tissue, right?
Like, let me grab a Kleenex.
It's it's because Kleenex wasn'tyou know a wipe for like your
you know your head or your arms.
It wasn't also a wipe for likethe counter, like it was
(15:02):
specific to one thing.
And so in the eyes of theconsumer, that that one thing
becomes synonymous with thething.
SPEAKER_02 (15:09):
And so Aaron, we're seeing it again now with Chat
GPT.
You know, you may use adifferent kind of AI, but you
say, oh, throw it into Chat GPT,even though you might be using
Gemini or Claude or somethinglike that.
If you're to market first andyou can sort of claim that that
sort of thing.
And it's actually, and I'm sorryto jump in, but if I forget, you
(15:30):
know what's so interesting about800 got junk?
They, I mean, that is a model.
That is a huge model for successin in you know services
franchising.
And then they roll out Wow OneDay Painting, which I would
argue is actually a super brand.
I mean, it's very smart, right?
WoW one day painting.
You mean I can get my housepainted in one day?
(15:51):
Well, turns out you call themand you tell them of the project
it may not be able to be done inone day.
Right.
The brand was different, andthen they come out with you move
me, and and they also hadanother one.
And so on its head, on thesurface, WoW One Day Painting is
a, in my opinion, and I loveResi Brands and I love that one
painter.
(16:11):
On it, on the surface, WoW OneDay Painting is a stronger
brand.
But that one painter probablyoutsold it 10 to one and did it
in a year versus, you know, WoWOne Day painters just kind of
you know going along.
And again, this is not at all umthrowing um, you know, mud at
that company.
They're a great company, butit's interesting to me that that
(16:33):
one painter comes along andessentially blows the doors off
of all these other paintingcompanies in terms of sales.
And how does that happen?
You know, but what go ahead.
SPEAKER_04 (16:45):
I think they execute better, right?
So like they clearly were ableto get units and get a national
footprint quickly by findinggreat franchisees and getting
them open.
Um, but Wound One Day Paintingis a perfect example of coming
out and not being and having thefirst mover advantage, right?
Because at that point there wasalready SergeiPro, there was
(17:06):
already, you know, um a varietyof other brands.
So you're coming in and and andnow you have to execute
considerably better versus justbeing first to market and having
to execute better than the localguy, right?
So when I was looking at brands,like I looked at roofing and
HVAC and plumbing and solar andlawn care, and like every brand
(17:26):
that I looked at had either an800-pound gorilla or five to ten
other brands that were allcapturing some some element of
market share.
It wasn't a hundred percentnecessary for me.
Like it was a nice to have to befirst to market.
It wasn't a need to have becauselike you don't you don't need to
be first to market in order tobe successful.
(17:48):
Uh Pinks is a perfect example,that one painter is a perfect
example, Voda is a perfectexample.
Like, none of those brands arefirst to market as the franchise
first franchise or but they'reexecuting better than the other.
SPEAKER_02 (18:00):
Pink's just had something, and I'll never
forget.
You probably you guys have allheard my story on this, but you
know, Jill and I are that wewere gonna buy that one painter,
and we're at the Discovery Day,and we see the Pink's logo, like
they were saying we just broughtthis brand on.
And I'm like, hold up, hold up,hold up.
Tell me about that.
Um, because Jill and I havealways been big brand people.
And I was like, you know what?
(18:21):
And I saw Brandon and Carterwith the hats.
Um, and I'm like, I guaranteeyou I could put one of those
pink hats on everyone in our inour town.
Um, and and that kind of drew mein on that.
And I think that's again, you'reright, that's a perfect example
of a brand.
I think Rezi had this culture.
Also, frankly, Kimber didexactly Kimber's one of their
franchise development people.
(18:42):
Kimber called me nonstop until Istarted showing.
She's like, You got to talk tous, you got to meet Steven.
So it's the same thing that youdid, where you kind of just roll
up your sleeves as a newfranchise and you go to work and
you start getting the brand outthere.
Um and now we have, and andbringing it full circle, guys.
Now we have real clean, which isas David well knows, he he has a
(19:04):
client that was recently lookingat it and lost out on a
territory.
You can't get real clean inFlorida, it's gone now.
And it's selling out across thecountry.
And it only started with likewith one or two units.
So it's not like they're sittingthere saying, hey, we've got a
hundred locations.
People are buying it.
Why?
Is it because it's different andin the service industry?
SPEAKER_04 (19:25):
Um, I think it's because it's niche.
I think that um, I think that'sa big piece of it.
I think it's also first tomarket.
It really highlights a couple ofthe things that I liked about my
brand um and just like aboutbusinesses in general.
Um, it's a lot easier to capturemarket share when you're not
competing against anyone otherthan local guys, right?
(19:46):
Um, and that's exactly wherethey're at.
Um, I think that's part of it.
I think, you know, obviouslythey're with franchise fast
lane, they know how to moveunits.
Um, I just read franchisesidekicks like franchise report
based on like 73,000 leads.
And they said 60% of the dealsthat are done in the broker
(20:08):
community are from uh franchisedevelopment organizations.
I believe that.
Which is wild.
And then 20% are done from likeneighborly's authority brands,
you know, home front brands,like these kind of portfolios.
So that basically means forbrands like mine, there's only
(20:29):
20% of the market share thatwe're capturing in terms of deal
flow.
I think one of my biggestconcerns um about franchising
currently, if we want to talkabout hot takes, yeah, is when a
brand when a brand goes tomarket, right, and they have one
to two units, they will go tomarket generally in the broker
(20:55):
community.
It's very hard to become a largeemerging brand in the broker
community, or excuse me, a largeemerging brand without going to
the broker community, right?
Like I don't I mean it'spossible, but it's it's
difficult.
SPEAKER_02 (21:10):
It's hard.
And you know, you can't like Ifought it too, and and it when I
was at home care assistants foryears, we didn't want to pay the
commission, right?
We were like, no, no, no.
And and then eventually it'slike we were getting lapped by
Bright Star, and it was like,okay, we gotta do it.
And so we hired someone um whohad broker connections and we
joined all the broker networksand boom, a hundred franchises.
SPEAKER_04 (21:31):
Yeah.
And and I I don't inherentlyhave any issues with franchise
development organizations goingto market, bringing a brand to
market.
Like I think that without that,a lot of these brands aren't
aren't going to um aren't goingto work.
My problem and my concern isthat a lot of these franchisors
(21:55):
are going to market and doingthat, and they don't have the
money to do it.
And so, like, I was talking to aum uh a brand that like because
when I go to these events, likepeople follow me online, they're
franchise ours, they want to dosomething similar to what
Rolling Suds does, and they'relike, How do you do it?
Right.
And so this woman's like, I ambeing pursued by every single
(22:18):
franchise development companyout there, and I heard you don't
like franchise developmentcompanies, and I need to know
why.
And I'm like, I don't not likefranchise development companies,
but before we talk about that,how much money do you have to go
towards franchising?
She literally says, None.
She says, none.
(22:39):
Like it's not like I have 10grand or I have a hundred grand,
like the answer is none.
So I'm like, okay, that's theproblem.
You're being pursued and youhave no money.
So like it's just with thediligence process.
Like, so when she's like, Well,how much money do I need?
I was like, at least five toseven hundred thousand dollars
(23:00):
on the high end two million.
And she's like, What?
I was like, that's how much itcosts.
And if you go with a franchisedevelopment organization, you
will have 10% of the franchisefee left over.
And that's not enough to openthe amount of units that they
will inevitably sell.
SPEAKER_02 (23:20):
But Aaron, don't you think honestly, this is the
crazy thing, by the way, is Ispend more time working with
funds and private equity.
This you think honestly, if youhave a good concept, raising
money for it should not be hard.
It really shouldn't be hard.
But they need to know that.
SPEAKER_04 (23:38):
Yeah.
And someone needs to tell themthat.
And it might not be in theirbest interest to tell them that
because then they might not signthem up as a brand.
Sure.
And that's my concern.
SPEAKER_02 (23:51):
Well, isn't that how you did it?
SPEAKER_04 (23:52):
You for with Rolling Century.
You raised money.
I raised capital and we diddevelopment in-house.
So we were able to keep a largerportion of the franchise fee
than if we outsourced it.
And I still raise capital.
And I have the experience in howto franchise a business.
And the less experience youhave, the more capital you're
going to need because you'regoing to burn cash without
(24:12):
experience.
So that's my concern is we havefranchise owners going to
market, selling a bunch ofunits, being told that they're
going to be able to sell toprivate equity if a bunch of
units are sold, but there's nodiligence, at least seemingly,
on like, do you have the moneyto support franchise owners?
And I think that without thenecessary diligence on that,
(24:33):
we're going to keep facingissues where franchise owners
can't support franchiseesbecause they don't have the
money or the infrastructure todo it.
And it was just her.
SPEAKER_03 (24:42):
Okay, we don't we talk about this from like the
viewpoint of a potentialfranchisee, right?
Especially the one that says,you know what, I get the risk,
right?
But personally, I was franchiseenumber three in a system.
Right.
And so you have to know there'sextra risk going into that.
You know, you don't have thevalidation, you don't have the
current financials across youknow, across the country.
(25:04):
So with these top brands thatare taking off just like you
mentioned, they're getting 60%of deal flow, right?
They're growing from two andthree units to 60, 100 units in
the course of a year.
What should a franchisee beasking?
Like from your viewpoint, whatshould they be thinking about to
mitigate that risk?
SPEAKER_04 (25:24):
I'm gonna give more hot takes.
You guys ready?
Oh, yeah, come on.
If that brand is saying, hey, Iknow we we have two units, we're
gonna grow nationally, and I'mgonna tell you exactly that you
can hire a general manager torun this thing and you can pay
him 80 grand and he'll run itand you can keep your job full
(25:45):
time.
What I would ask if I were afranchisee is I would say, why
don't you do it?
Why haven't you done it if it'sthat easy?
And if the brand is like, uh uhuh uh uh uh uh the answer is
it's not that easy.
Because if it was that easy,guys, let's just be real.
(26:08):
I wouldn't franchise mybusiness.
Instead of taking 8%, I'd keepthe entire economic benefit of
the business.
And I know that that's probablynot what people want to hear,
but if I were a franchisee, Iwould say, why don't you do it?
If it's that easy.
SPEAKER_02 (26:25):
Yeah, no, I I think Aaron, you're right.
And that's you know, that's thewhole premise of our company now
with franchise owners helpingfuture franchise owners, is that
when people ask these questions,you know, you go to hire a GM,
80,000, 60,000, 100,000.
Think of it this way (26:41):
could you imagine saying to someone, hey,
I've got a great idea.
We're gonna build amillion-dollar company.
All we need to do is hire thisguy for 60 grand and tell him
what he needs to do, and that'sit, million-dollar company.
Um, that's exactly the thinkinghere.
So now the the the line we walkis finding a way.
(27:04):
When franchise owners makefranchises special.
Take Catherine, for example.
We were having a conversationright before the podcast, and
Catherine just met with her CPAwho shared, and I'm not going to
say the exact number because youknow we don't want to make any
earnings claims here, butCatherine's margins are
fabulous.
They are better than anything Iever accomplished as a franchise
(27:24):
owner.
Um, but that's not system-wide,I guarantee you.
Um, Catherine is an excellentowner and she's managing her
margins well.
And that's where I think thepoint of all this is.
And if you go onto our website,you'll see this on our homepage.
It's not about finding theperfect franchise because that
doesn't exist.
It's about becoming as close toperfect a franchise owner as you
(27:45):
can.
And what is that?
That means understanding what'sinvolved.
I've always compared it to thefirst year of a franchise is
like the first year of a newbaby.
You really have to put a lot ofattention and care and effort
into that new baby.
SPEAKER_04 (27:57):
You can't even hold your losing sleep and you're
waking up multiple times in thenight, just like you have a new
baby.
I've got a three and a halfmonth old.
It's no different.
You're like waking up in a panicbecause the business is crying
and you need to give thebusiness a bottle, which is
money that you didn't want togive it originally.
I mean, I could go all day onthis metaphor, guys.
SPEAKER_00 (28:15):
Yeah.
That's where I'm at right now,even with a top five franchisee.
You know, my GM went down for alittle while, and I had to step
up, go down there and deal withup car accidents and and and
just kept me up all night forfor weeks, keeping me up, trying
to figure out what am I going todo next.
SPEAKER_04 (28:32):
And if you didn't if you had a full-time job that you
weren't able to leave the officefrom in that instance, you'd
have to quit your job or loseall your money.
And um, and I just don't, I justwant people to have success in
franchising so that all of us onthis this call have an industry
to invest our time and moneyinto for 20 years from now.
SPEAKER_01 (28:56):
When I so I was still at my old company when I
uh bought soccer stars, and I umwas was like, you know, I came
from franchising.
So I knew exactly what I wasgetting into.
And I was, but I was nervous,right?
I was really nervousfinancially.
My kids are in private school.
Uh we have a mortgage, like wehave all these bills, right?
(29:18):
Like we need my income.
And um I was at training in NewYork at the soccer stars
headquarter, and I got laid offuh at their headquarters.
I walk out, and there's Morgan,my best friend, who's also a you
know, a soccer stars owner and afranchise insider.
And they're like, okay, time toget officially known, and we're
(29:40):
doing our ceremony.
And sometimes God does for uswhat we can't do for ourselves.
And so I was like, there you go.
And I jumped right inimmediately because I knew if I
left training and I didn't jumpin and hit the ground running, I
needed that momentum to getgoing and I didn't stop.
And my whole thing with owning abusiness was you need to.
(30:00):
Lead by example.
And I need to understand everydamn aspect of this business in
order to hire a manager to trainto hire coaches to train to hold
accountable.
Like if you bring a manager infrom day one, in general, like
this is just my opinion.
Uh, how do you train them?
How do you hold themaccountable?
(30:20):
How do you build a culture ifyou are not completely involved?
I was coaching classes a week.
I was doing sales, I was doingHR, I was doing everything.
And did I burn myself out?
Well, but yeah.
But then, you know, I brought ina manager and I'm still uh
working every day of the week,uh, every minute I can, but but
(30:42):
less less, but less and able tofocus on other things.
SPEAKER_04 (30:45):
Because you've earned the right to do that
right by building a greatbusiness.
SPEAKER_01 (30:50):
And so, yeah, so my revenue I am at the top, and I
do have the best profitability,but that's that's why.
SPEAKER_02 (30:56):
So people say, they say to us, gosh, you know, when
you tell us about the realitiesof this, why why would I do
this?
Why would I go through this hardtime?
SPEAKER_01 (31:05):
Why because and I'll again it's on our time.
SPEAKER_02 (31:10):
Yes, you control your time.
You're building it's like youknow what it is, it's like when
you when you you know you wantto rebuild your your kitchen and
your closet in your home.
And you go through that sixmonths of rebuilding the kitchen
into the beautiful thing thatthat you want it to be.
And it sucks while you're doingit, but when it's done and your
home now, you know, if you needto sell that house and you got
(31:31):
the best kitchen in theneighborhood, you're gonna sell
fast.
And so the point of all this isthat putting in the work and
building the business, youultimately, as the franchise
owner, you're going to be theone that makes the business
special.
There's a reason why a couple ofyears ago, the crumble item 19
showed average franchiseesnetting like 250, but the median
netting at 85.
(31:52):
Um, because some people arebetter at running crumbles than
others.
And yeah, and what's great aboutfranchising is that ultimately
the more successful franchiseowners will buy the less
successful franchise owners.
So you have built-in acquisitionand exit.
So for all of you out there whoare sitting there who, you know,
you say, Oh, I don't want afranchise, I want a mom and pop
(32:12):
business because Cody Sanchez,and we love Cody Sanchez, but
Cody Sanchez says, buy the oldcouple at the laundromat, and
then the SBA is gonna pay forall of it.
No, that's not gonna happen.
Also, when you when you investin a franchise, you get all the
support, you get all theinfrastructure, you get all
these things to help you growthe business.
Um, that inherently makes it somuch more valuable.
SPEAKER_04 (32:33):
Yeah, it makes it more valuable and you get speed
to scale much quicker.
And I want to be clear, like,it's not impossible to hire
someone like David, you did it.
And you know what I mean?
So, like, I think that's wherethis gray area is is like, yeah,
it's possible.
Someone could do it.
But like a franchise is builtfor an average person.
(32:55):
David Barr says this an averageperson on an average day with
average skill set, with averagemarket conditions, like it has
to be built for the average.
And the reality is that theaverage person who's been
working at Oracle for 15 yearsas a VP of sales that has never
opened a business before,doesn't know the stress of
(33:16):
carrying payroll, doesn't knowhow to operationalize and
improve profit margins, doesn'tknow, and and and and most
managers aren't business owners.
And in order to get somethingoff the ground, you need the
stomach of a business owner,right?
And and so another trend I'mseeing, which is this is I'm
(33:38):
really excited about this one,is because of this interest,
this renewed kind of like almostrenaissance of interest in
business ownership.
I think a lot of it has to dowith like people like Cody
Sanchez, uh, people like AlexHermozzi who are talking about
like, hey, build something.
Like we're this is a this is ageneration of builders.
(33:59):
And then you have the generationunder us that is like does not
want to go to college and likedoesn't want to work for
someone, and they're startingbusinesses in college.
And then you've got people thatare Gen X and millennials who
are like, wait, I've worked forsomeone else for 12 years now.
(34:20):
I'm gonna go try to acquire anexisting business, and that's
this whole kind of likeentrepreneurship through
acquisition space, or it's beencalled ETA.
What happens is a lot of thesepeople who look for this unicorn
of a business for 18 monthsthat's doing a million in EBITDA
and it doesn't have a faxmachine, and there's just an old
(34:43):
guy that's just waiting forsomeone to just take their
business from them.
Like, all of a sudden, peopleare like, wait a minute, I've
wasted a year and a half of mylife, and I'm taking on a search
fund.
So now I'm not even gonna own100% of this business.
I'm actually gonna be a minorityowner, and I can't find
anything, and now I've wasted ayear and a half of my life.
(35:03):
Those people are now coming tofranchise ownership because
they're like, wait, the exactreasons that I would buy an
existing business, existingprocesses, quicker cash flow, a
team in place, like all of thethings that are in an existing
business can be produced quitequickly with the right franchise
(35:26):
brand.
And so part of my goal as Icontinue to grow my franchise is
to merge the franchise industryor help merge the franchise
industry to this like ETA HoldCo kind of like that kind of
niche community of likesearchers.
And so I'm going to an eventcalled Main Street Summit in
(35:49):
Columbia, Missouri, in November.
Any of you guys should come.
Um, last year I spoke at it.
I was part of the only franchisepanel at the conference.
It's all about capitalallocation, searching for a
business, which one to buy, andabout a thousand people go.
And that panel went so well thatthey have an entire franchise
(36:12):
track this year.
SPEAKER_02 (36:14):
I love that.
Well, Aaron, here's a quick,here's a quick little tidbit.
And I know the team wants tochime in on this, but to your
point.
So if you spend an entire yearand a half searching for that
perfect business versus justgetting started with the
franchise, let me let me tellyou what can happen in the
meantime.
Uh just last month, our clientsKevin and and um Kathy, who will
(36:35):
be in our podcast next week, um,they invested in an Action
Exteriors franchise, which isone of Resi Brand's newer
franchise concepts.
Um their business took off sofast, Cody Sanchez flew up to
meet with them.
Um they're in Tulsa, Oklahoma.
Uh they a year ago at this time,they they called me because they
(36:55):
couldn't buy Pinks.
Pinks was sold out in theirmarket.
So we had to find them somethingelse.
And I shared with them the storyof our client Harrison, who had
bought a roofing franchise.
And um Harrison's story is greatbecause he's 29.
He got an inheritance of like300 grand.
Um he buys two roofing units andtwo years later flips them for
like six million dollars.
(37:16):
Um that, that now that doesn'thappen.
Full disclaimer, it's not goingto happen to you, but it's like
these sorts of things happen.
Um, and so now here's Kathy andKevin.
In less than 12 months, theybuilt a business that is making
good money.
They're on being interviewed byCody Sanchez, where they could
have been doing exactly what yousaid, still searching on Biz by
(37:38):
Sell for the perfect business.
SPEAKER_04 (37:40):
Yeah.
Bringing it all full circle, myconcern is that there's the
stigma for franchising in thatcommunity.
Like, oh, I people don't knowthat they own 100% of the
business.
They hear the stories likeQuizno and Subway and um
Anchored Tiny Homes and PremierMartial Arts and these things,
(38:05):
and then they're like, oh no,no, no.
Like there was a post JohnWilson from the Wilson Company.
Uh, he has a$32 million HVACbusiness.
And he posted a thing that said,Would you rather take on a
minority partner and minoritycapital or be a franchisee?
And like the posts underneathwere like minority partner, cap
(38:27):
like blah, like, and it was justlike it sucked because I know,
and you guys know, and hopefullythe people who listen to this
know that franchising is a greatway to build wealth if you find
the right brand.
And so my concern is that likeif franchisers are coming to
market without the money,they're overselling territories,
(38:47):
they're not getting fullyinvolved, franchise owners.
Like, they my concern is thatthat stigma doesn't change.
And um, and I think it's ourduty to change the stigma.
Like, we're gonna we gotta takecare of this industry, we're
gonna be here 20 years later.
Like, boomers aren't likethey're retiring, they can maybe
keep doing what they've done forthe last 40 years.
(39:08):
Like, we can't.
SPEAKER_02 (39:10):
Well, and and let's be real, and this is the thing
everybody needs to acceptnothing's promised with business
ownership.
Okay, if you're going to takethat chance, as all of us have,
it you know, you have tounderstand it does fall on your
shoulders.
100%.
Um, and you have to make thebusiness go.
The franchise or is there tohelp you to provide support, but
(39:33):
you have to be the one likeBrian, like Catherine, like
David, like you, Aaron, who gotup, went to work, and built the
system and didn't, and there'sstill it amazes me, there's
still people to call me and say,you know, I want one of those
absentee franchises, you know,where they run the whole thing
for me.
And I say it's you're not gonnafind it in franchising.
You've tried.
(39:54):
People try.
SPEAKER_04 (39:55):
Yeah, it doesn't work.
I joke, I tell people when theyget on the phone with me, yeah,
I've got$250,000.
I've got about three hours aweek to dedicate to the
business, and I really want tobuild a multi-million dollar
enterprise.
What do you got?
And I'm like, hey, um I'm infranchising.
All my friends and I know allthe brands, right?
(40:16):
So we're we're got it the insidescoop.
We're the franchise insiders.
Like, we know what's going on.
There was a brand where youcould deploy$250,000 and work
three hours a week.
You wouldn't know about itbecause all my friends and I
would have bought all theterritories.
Like we would own them all.
We would just own them.
We'd just it'd be a mutual fund.
We'd all just be collectingcash.
We wouldn't, it wouldn't evencome to market because we would
(40:37):
all know.
And then they laugh and they'relike, Oh, okay.
Maybe I shouldn't buy afranchise.
No, correct.
You absolutely should not.
SPEAKER_00 (40:46):
Well that leads me right to my question because
that was one of the questionsI'd written down.
If you had 250k outside of yourbrand, where would you put it?
SPEAKER_04 (40:54):
Um in a mutual fund if I had no time.
SPEAKER_00 (40:56):
Okay.
SPEAKER_02 (40:59):
Come on, Aaron.
We're all in on Bitcoin now.
Let's go.
SPEAKER_04 (41:04):
Doge.
I put it into Doge.
SPEAKER_02 (41:06):
I'm just throwing on black at the You know, I just
got this Gemini card, and I dowant you to answer that
question, but this this and thisis not a promotion, but it's so
cool.
It's like everything you spend,it immediately invests in the
bit in the Bitcoin of yourchoice.
So, like you're out to dinnerand all of a sudden you get the
instead of you know gettingairline points, it goes into
Bitcoin.
I thought it was so cool.
SPEAKER_04 (41:25):
I saw that I need to do that.
SPEAKER_02 (41:27):
Yeah, it's the Gemini.
I was I've seen the Gemini boysbeing interviewed, and I was
like, dude, that's a great idea.
I'm doing that.
Um instead of getting points orlike cash back or whatever, it
just goes straight into Bitcoin.
It goes right into crypto, andyou can choose which which
Bitcoin, which crypto you want,and you see it, and it's cool.
Like, I have to admit,ignorance, I'm kind of late to
the party on on Bitcoin andcrypto, but it moves so much
(41:49):
faster than the stock market.
Like the the swings that you seeon it, it's really entertaining.
But yeah, so everything youspend on it, uh Gemini card, if
you're listening, I'll look formy royalty check.
Um immediately gets invested,which is like to me, was so fun.
So it's like you go out todinner, you spend your 150
bucks, boom, your portfolio justgot bigger.
(42:10):
Okay, Aaron, outside of rollingsuds, if you had 250k to invest
in a category, not a brand.
Yeah, where where would you go?
Um outside of services oroutside of the business.
No, in services.
That's any, you know, it couldbe painting, could be power
washing, or not power washing,but outside of those.
SPEAKER_04 (42:30):
Yeah, so I think um roofing is really interesting.
Um I think fencing is reallyinteresting.
Um I think commercial cleaningis interesting.
SPEAKER_02 (42:46):
Um Brian and I were talking about fencing the other
day.
Uh here's what's interestingabout fencing.
When we've got a client with toprail that is like blowing the
doors off of it, fencing'sreally interesting to me across
the three major brands.
Their averages are insane.
SPEAKER_04 (43:05):
Their averages are insane.
Here's what I would dodifferently than what a lot of
those brands are doing, though.
Bring it.
I would have all the employeesbe W-2 employees and not 1099.
I think the challenge with 1099employees, and you guys might
have more experience than I do,is if you go to sell the
company, you don't haveanything.
(43:26):
You have a sales and marketingperson who's just contracting
out stuff.
Yeah.
So it's like ultimately, like,we're all if you buy a business,
like your goals, you should bethinking about like when are you
gonna sell, like what's the endgame, right?
And so if you you have 1099employees and you don't have any
materials, like what do youhave?
(43:49):
You have a few sales guys andsome marketing dollars, right?
And um, and I think it's reallyimportant to set up an internal
engine, a lead gen engine, adelivery engine that's
predictable.
SPEAKER_02 (44:04):
Um you think that's why certain so painting is is
heavy uh subcontractor, but itsresale value is like there's a
there's right now on Biz by sella painting uh franchise in
Florida that's doing a millionseven and it's for sale for 200
grand.
I mean, a business doing amillion seven should be selling
for a million bucks at least.
(44:24):
That's exactly why.
SPEAKER_04 (44:28):
There's no predictability.
Like if you think about whatlike so you've got you've got
great tick average ticket onpainting, but once you've once
you've done the job, they'reprobably not gonna call you
again.
So like exactly Hermosy says youeither have a business where
customers never stop buying foryou, or you have sellers that
never stop selling for you,right?
(44:49):
Like those are the two, thoseare the two kind of things.
And ideally, a business has bothof those things, right?
SPEAKER_02 (44:54):
Well, and if we look at what the funds want, what
private equity when they'relooking for franchisees to to
recapitalize, and that's theother thing that does it does
provide hope for people who whowant to live this sort of
lifestyle of of running abusiness where they're you know
running it semi-involved.
(45:15):
Here's how it can here's whatprivate equity does.
They look for really strongoperators within a system,
right?
And they look for at least amillion to three million EBITDA,
and they say, let's recap thatstar franchise owner.
And then Aaron, and and certainsystems really embrace it and
certain and others don't, butthey come to Aaron and they say,
(45:37):
Look, Aaron, your topfranchisee, they're their
EBITDA's three million.
We're gonna we're gonna recapthem, we're gonna put four times
in their pocket, and then wewant to deploy another 20 into
your system and basically havethem go quarterback 20 more
units because they frankly theyknow what they're doing.
Yeah.
Um so you're right to, but whatthey want, they don't want
(45:58):
those, even though again youcould show them, hey, here's
this painting franchise that dida million seven.
Well, yeah, but they did this50, 50k here, 50k there.
Whereas, like, you know,Catherine, recurring revenue,
you've got recurring clients,David, you've got recurring
clients.
They want predictable recurringrevenue.
Um, and so for all of you guysthinking about a business,
(46:20):
that's really, and I think Aaronbrings up a great point.
If you're gonna put in all thiswork and you're gonna build
something, build to where youcan have the kind of exit that
will allow you to change yourlife.
And I and I don't, you know, andI'll tell you guys, my my father
at 62 years old, um, coming outof a uh BK, had to start all
(46:40):
over and had no money and had tostart a franchise, had to start,
he got turned down for avisiting angels franchise.
Catherine, I don't know if youknow this.
Um so he had to start home careassistance.
Um, and so but the point is herehe was 62 years old, three kids
in college, and he starts thisbusiness with 300k in his
pocket.
Um, so that's the beauty of why.
(47:03):
And it was hard, hard, hardwork.
He's in an office all byhimself, everyone in the family
doubting him, saying, Why onearth would you want to do this
senior care business?
And then two years later, all ofus begging him for a job.
Um, and it turned into thiswonderful company.
So, but the point of all thisis, and you guys, you guys on
this listening to the podcastare hearing a lot of the battle
scars.
But the point is, is thatthey're worth it if you can
(47:26):
build, you've got to have an endgoal.
You can't just go on aimlesslyand say, Well, I don't want any
employees and I don't want to dowork.
But I think it'd be cool to tellpeople I own a business.
If that's you, don't do it.
SPEAKER_04 (47:35):
I I mean, I I think we should make active income
cool again.
Let's make let's make activeincome cool again.
I mean, like every single personlike has that has ever built any
meaningful level of wealth wentall in on something for like a
serious like amount of time andthen diversified.
(47:57):
Like diversification is pro is aproblem for future you.
Like if you have a job right nowand you're looking for like
that's diversification, sevenstreams of income, like that's a
problem for future you to figureout.
And um, like I I have 24 teammembers.
I stepped into a chairman of theboard position three months ago.
(48:20):
And I'm six weeks into the posinto like chairman of the board,
you know, high-level contentcreation, broker strategy
relationships, like that.
Very high level things, and adepartment in my company, as you
guys know, needed attention.
And so I step back in.
So I have 24 team members andI'm not semi-absented.
(48:42):
So like I would say that thebusiness that someone's
considering buying should beworth not only your time, but
constant reinvestment of timeand capital.
Right.
So like if you buy a franchise,you should see a path to two,
three, four, five million plus.
(49:03):
Like, and and then what do wehave to do to get there?
If it's a B2B service business,if it's a staffing and
recruiting business, like acleaning business would be
basically a staffing andrecruiting business, right?
Like a B2B business is a salesbusiness.
Like, what do you like doing inyour normal life?
And typically, like if you'regood at sales and someone's
paying you$150,000 to$200,000 todo sales for their company, you
(49:27):
don't own anything of thatcompany.
What if you put that efforttowards your own business?
You would create enterprisevalue and then you'd be able to
change your life.
Um, so I would I would urgepeople to do that when they're
thinking about a business.
SPEAKER_02 (49:43):
I think something everybody on this podcast does
really well.
Um, Catherine, Brian, David,Aaron, you guys are all
excellent at selling withoutselling.
Meaning that you guys aren'ttrying to sell.
Personally, I think the day oflike the slick sales guy is
done.
Nobody wants it anymore.
People want realness.
(50:05):
People want, I'm gonna go on, Iwant to listen to people, I want
to hear real experiences.
And I think you guys are allgreat at that.
You're not trying to sell anyoneanything, but you're by your
sheer energy and honesty and andjust real experiences, um, that
draws people to you and wantingto work with you.
Thank you.
SPEAKER_01 (50:26):
I just want to help help people.
I mean, that's my approach.
Like I've been meeting withdifferent local businesses for
soccer stars, uh, like that havesimilar, you know, that have
young kids.
And it's like, how can I helpyou?
You know, how can I help growyour ballet business?
Like, is there anything I cando?
And they're like, Well, how canI help you?
It's just coming at it with um,I don't know, just the
(50:48):
reciprocity kind of approach ofbuilding business and just being
a connector, right?
Like Francesca did that so well,Jack.
She was one of our topsalespeople at our old company.
And she just comes from a placeof heart.
And I think that's what we weall come from, a place of heart,
and just wanting to make theworld a better place and to help
people, whether it's our our enduser or our employees, and like
(51:11):
that's authentic, and like thatis what sets that intention and
like grows a really powerful andsuccessful company.
SPEAKER_02 (51:19):
I love it.
Last last thoughts becauseAaron, I know we're against it.
Brian, uh, David, you guys wantto share some some last takes,
questions?
SPEAKER_00 (51:27):
You know, um, I came from law enforcement, and my
whole my whole life was justtrying to help people, and I'm
out of everybody on this panelright now.
I know I'm you know still at thebottom working my way up,
learning, and I'm just gratefulthat I've given this
opportunity.
But you know, all this wellgoing full circle, it's just
because I'm here just to helppeople.
Um, and that's that's my story,and that's why I'm you know
(51:50):
became an insider.
Love it.
SPEAKER_03 (51:53):
I think uh I'll just highlight something that Aaron
said, and I think again, it'sjust so important to be very
real when you're in your duediligence, you're looking,
listening to podcasts, doingyour search.
You know, when you're buildingsomething the way Aaron's
building it, or the way David'sbuilding or the way Catherine's
building, it's all in, right?
These are not part-time gigs,this is not a side hustle.
(52:14):
Um, you know, so you know thelevel of effort directly
correlates to to the size ofbusiness you build.
So I think you know, I justappreciate Aaron coming in being
very honest about what it takesto build a million-dollar
business.
SPEAKER_04 (52:29):
Thanks guys for having me.
It's been awesome.
SPEAKER_02 (52:31):
Aaron, we're gonna have Josh York on next week.
Have you ever met Josh from GymGuys?
Yeah, I have.
He's a cool dude.
You guys will get along, I feellike.
Yeah, yeah, yeah.
We haven't talked uh at length,but yeah.
Yeah, he's it's the same sort ofthing.
So, but no, I mean, I shouldn'tsay it like that.
Aaron, there's no one like you.
You're you're and you're youknew you would be a perfect
(52:53):
guest for our podcast becauseyou say it how it is, you want
to help people, you truly do.
You come at this from the rightplace.
Um, so all for all of youlistening, I think you just got
a gold mine worth.
I mean, we had a whole agenda,we didn't even get to like even
half of it because there was somuch good stuff.
Um, Aaron, anything that we'veleft unsaid?
Anything you want to just uhfinish up the podcast with?
SPEAKER_04 (53:14):
No, I think I think come to franchising as a
franchisee for the right reasonsto build something meaningful.
Um, as much as it's on us tohelp as a franchise or to help
you build your business, I'veput everything on the line to
build a great brand.
This is my everything.
And so I expect greatfranchisees to come in and give
(53:34):
their all to build a location.
And I can't do that withoutwithout franchisees putting
their effort towards it.
And um that's not just money,it's time, it's effort, it's
attention, it's care.
Um and uh and and you can'tbuild a great franchise brand
without franchisees puttingtheir all into it.
(53:56):
And so it's both there's bothsides to this, the franchisees
and the franchise or have towork together.
Um, it's a partnership.
SPEAKER_02 (54:04):
I think that's great.
Uh, Aaron, thank you so much forbeing our guest today.
This has been fabulous for allof you listening.
Um, if you'd like to have aconversation about franchising,
you want to speak to a realfranchise owner, go to
thefranchisinsiders.com.
I urge you to go to our teamsection, read the bios on
Catherine, on Morgan, on Brian,on David, on Jill, and myself.
(54:27):
Um, any of us would be delightedto help you with your franchise
search to get you in contactwith franchise oars, great
franchise oars like Rolling Sudsand Aaron Harper.
Uh, so again, visitthefranchiseinsiders.com.
And for all of you listening, weappreciate you greatly, and
we'll talk to you next time.
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