January 14, 2025 • 42 mins
Unlock the secrets to franchise success with insights from expert guest Kelly Krueger, a senior consultant at Benetrends. Discover how you can transform your retirement savings into a thriving business with the Rollover as Business Startups (ROBS) program. Learn how this innovative financing option lets you invest pre-tax retirement funds into your franchise without hefty taxes or penalties, offering immediate capital and a long-term retirement strategy.
Join us as we explore the benefits and complexities of franchise financing, from the tax efficiencies of ROBS to the nuances of setting up tailored retirement plans within your business. Kelly emphasizes the importance of being a W-2 employee in your franchise and how to manage your salary flexibly. We also navigate the world of SBA loans, debunking myths, and highlighting the key borrower responsibilities and the impact of economic factors like interest rates on these loans.
Finally, we shed light on diverse investment strategies for aspiring franchise owners. Whether you're considering an SBA loan, a HELOC, or borrowing against brokerage accounts, we discuss the advantages and limitations of each. We reflect on the role of economic trends in shaping franchise opportunities, particularly in blue-collar sectors. With Kelly Krueger’s guidance, this episode promises to inspire and equip you with the financial knowledge to turn your entrepreneurial dreams into reality.
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Episode Transcript
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Speaker 1 (00:01):
Hi everyone, welcome back to the we Bought a
Franchise podcast.
I'm Jack Johnson.
Speaker 2 (00:05):
I'm Jill Johnson.
Speaker 1 (00:06):
And we are here today with a very special guest.
We have Kelly Krueger, seniorconsultant at Benetrends.
Hey Kelly, what's up?
How are you?
Speaker 3 (00:14):
I'm doing well.
How are you two?
Speaker 1 (00:16):
Great, thank you, we're doing good.
So, for those of you that aretuning in for the first time,
we're Jack and Jill Johnson.
We are franchise consultantsand last year we bought a
franchise called Pink's WindowServices and we thought it would
be cool to sort of share ourjourney, our experiences, the
ups and downs of building afranchise, and so we want to
bring you guys a relevantcontent.
(00:38):
We try on a weekly basis to doso, just kind of sharing our
journey and what it's been likefor us, as well as bringing on
relevant guests to all of youout there that are thinking
about franchise ownership.
And, kelly, one of the mostrelevant things to buying a
business is seeking financing,and that's really where your
company comes in.
You've helped countless numbersof our clients, whether it be
(01:00):
with 1K rollovers or SBA loans.
But, kelly, what I like themost about working with you is
if you think a client has betteroptions to take equity out of
their home or some other option,you've always been very
straight with them.
Let's dive in and let's talkabout financing and franchise
financing and kind of maybe giveus an overview of what you guys
do and how you help people.
Speaker 3 (01:21):
Yeah, no thanks for that setup, jack.
I appreciate it.
I've been doing this for almost14 years and Benetrends has
been doing funding for smallbusinesses and franchising for
over four decades.
So Benetrends started in theindustry back in 1983, and they
started as a ROBS provider.
Many people don't realize thatBenetrends did the first ROBS
(01:41):
plan ever and they actuallypioneered it, kelly can I stop
you right there, yep, what is?
ROBS.
You know I get so used to usingthe acronym Thank you.
It stands for Rollover, isBusiness Startup and the gist of
it, and then I'll circle backand fill in the details later.
But the gist of ROBS is that itgives you the ability to take
pre-tax retirement funds andinstead of investing them in the
(02:03):
market and buying stock insomeone else's company like
Amazon or Coca-Cola, you cantake that money and invest it in
your own business withouttreating it as a distribution
and paying taxes and penaltieson the money.
So Rob's has literally donethousands of times a year within
franchising, Outsidefranchising many people don't
know it exists, which is bananasBecause, again, like we've been
(02:31):
doing it since 1983.
So the founder of Benetrends hisname is Len Fisher.
He's kind of famous for thisreally, because it was his
brainchild and he is an ERISAattorney.
He got this figured out.
He worked with the IRS todevelop the rules and
regulations to bring it topeople like you and I.
We did the first ROBS in 83.
And then over the years,Benetrends has expanded to be a
one-stop resource for ourclients.
So we offer SBA loans,equipment leasing, fleet leasing
(02:54):
, other types of financing.
When it comes to lending, we'renot actually the bank.
We have dozens and dozens ofbanks that we partner with, so
we've got a lot of capabilitiesthere when it comes to loan
packaging and shopping the bestrates and terms for people.
We can even write the businessplan and do the cashflow
projections if somebody wantsthat much help.
So it's really up to the clientto determine how much help they
(03:16):
want from us in thosesituations.
Speaker 1 (03:19):
So how cool is that?
So here you go.
Most people who have a okay,they're working at a you know
corporate America company andit's diversified into all these
companies that they don't own orthat they, you know, again,
have a very small piece of nowupon exit from your company
because you have to leave thecompany, right?
It can't be attached to acurrent employer, right?
Kelly.
Speaker 3 (03:39):
You know, not always.
Most of the time, that's true,jack.
I'd say about 70% of the time,that's true.
But, I run across probably 30%of the plans that will allow the
employee to roll out a certainportion of the plan while
they're still employed.
So that's called an in-servicerollover, by the way.
So I always tell them hey, it'sworth a quick phone call to
your 401k provider to find outif you can do an in-service
(04:02):
rollover, because that's not thesame as taking the distribution
, it's just rolling money out oftheir plan to like an IRA which
frees it up for us so that wecan use it for robs.
So about 30% of the plans allowthat.
And then the other twosituations are 99% of the time.
If somebody rolled money intothe employer plan from a
previous employer, they usuallycan roll that portion out at
(04:24):
least.
And if they're 59 and a half orover, they can typically roll
out also.
Speaker 1 (04:30):
Very cool.
So here's the thing, guys.
I mean, rather than putting itinto, you know, a Jeff Bezos
company now you can take your401k and put it into a company
that you own.
So you know, let's say, forexample, you're listening to
this podcast and you want to owna pinks franchise.
And let's just say, you knowwhat you're, you're thinking
that how great would life bestarting in the new year.
(04:53):
Instead of working for someoneelse, you can go lead your own
team out there, build your ownbusiness.
We can quit our job and takethat and roll it right into our
business.
Or I mean, kelly, there is awhole sort of thing happening
with white collar jobs and I'msure you're seeing this.
There's a lot of people who arevery talented and have great
resumes, but they're out of work.
Meanwhile, this whole bluecollar revolution with
(05:14):
businesses like Pink's and likeVoda, restoration and Rolling
Suds, just to name a few, arethriving, and so what a way to
kind of adjust with the marketand take your money and take
your time and put it intosomething that is so much more
relevant.
I just think the thought ofthat is so exciting.
But there's one other piece ofit, too, that I know you can do
Is it that if I have at least ahundred thousand dollars in my
(05:37):
401k that I can borrow up to$50,000 from myself while I keep
my job Is that?
Is that also something?
Speaker 3 (05:45):
Yeah, typically K-plans will allow that, or
403Bs.
Most employer plans will allowyou to borrow up to 50% of the
balance that you have in it, notto exceed $50,000.
Okay, so that's another.
You know there's lots ofcreative things, right, and
that's part of our job when wespeak to clients is to turn over
all of the stones.
(06:06):
You just can't take thingssometimes at first glance right.
At first glance it may looklike gosh, I'm not sure that
there's the liquidity hereneeded for an SBA loan or
something like that.
But if you keep looking and youget creative, then you say yes,
there might be enough money ina 401k that you can borrow
against to get the liquidityneeded for SBA or SBA or
different things.
So you've got to keep diggingsometimes because it's not just
(06:29):
one method, right.
A lot of people they combinedifferent funding options to get
to where they need to be.
And I agree with you so much,jack, with what you said a few
minutes ago about white collarpeople losing their jobs and
we've definitely seen that trend.
And truthfully, if I had toguess, I would say that 75% of
my clients are 50 and over andthey fall into one of two
(06:53):
categories they have either beendownsized from corporate
America and they're strugglingto find another position, or
they're in corporate America andthey can't stand it one more
day, and sometimes people fallinto both, and I've fallen into
both many times.
So it robs.
It gives people an entry intobusiness where otherwise maybe
they wouldn't have it becausethey don't have the liquidity
(07:15):
needed.
A lot of people don't have thecash sitting in the bank, but
they have retirement funds thatthey can use.
Speaker 2 (07:21):
I love that.
I think when we, you know, whenwe're talking to clients, I
mean a lot of people just don'tthink they have the money to do
this because they're justlooking at their savings and you
know they don't realize all thedifferent avenues and so we're
always so happy to send themover to you.
You know they're like you said.
There's so many options.
You can combine options.
There's things they probablyhave no idea that they've even
had, and it's so important toknow that that exists, because I
(07:43):
think a lot of people just shutdown the idea because they're
looking at, you know, they'rechecking in savings and saying I
just don't have the money, butthey might have it and have the
ability to do it elsewhere,whether it's through funding or
through like a okay or anythinglike that.
So it's so helpful to have youas a resource to do that,
because there's so much morepossible than most people think.
Speaker 1 (08:03):
Yeah.
So Kelly does a 401k then rollback After a certain amount of
time, do we have to roll thatmoney back into an account?
Speaker 3 (08:12):
Are you asking if it's a loan that has to be paid
back?
Speaker 1 (08:16):
Yeah.
So this is something that I'vealways been curious about.
If we do the 401k rolloverright let's say we've got 401k
in the 401k and we roll it overto fund our business After 10
years, does a certain amount ofthat have to go back into the
401k or once it's out, it's out?
Speaker 3 (08:32):
I love that question.
So ROBS is not a loan.
You're never required to paythe money back that you invested
into the business.
So that's one of the bigbenefits of it.
Also, right, because you're notstrapped with monthly payments
back to the bank.
The cost of capital is lessbecause you're not paying
interest rates, so you don'tever have to pay it back.
The only thing that you have todo is ROBS is not meant to be a
(08:55):
one and done, right.
The IRS doesn't want to thinkthat we set all of this up as
just a one-time transaction tofund the business.
So they want to see you use itas a retirement savings vehicle,
and I always want my clients tounderstand that.
Yeah, the purpose of ROBS it'sdual purpose.
So on the front end, it'sfantastic because you're gaining
(09:15):
access to money that hasn'tbeen taxed, so you get thousands
of dollars to invest in yourbusiness day one, instead of
just handing that over to UncleSam.
But on the back end, it'sreally intended to be a
retirement wealth buildingstrategy.
So, even though they don't haveto pay the money back, of course
everybody wants to rebuildtheir retirement plan and the
whole reason they go intobusiness ownership is they hope
they can build it back evenbetter, right.
(09:37):
So where we shine, we candesign any type of plan
traditional, traditional, fromcase we're all 401ks, profit
sharing plans.
So we will design the plan thathas the most tax benefits for
the client, based on what theirbusiness is going to be, how
many employees they're going tohave.
And then, as their businessgrows and their needs change and
they need to shelter more money, then we add plans or we shift
(09:58):
and we adjust with them, but wealways have the intent in mind
of developing the plan thatgives them the most tax
advantages.
So when they do start payingthemselves a salary which they
can do day one once we get thisset up if they need to take a
salary right away, they can.
But when they start contributingback to the plan and becoming
profitable any money that theyput back in the plan, they're
(10:20):
just going to work through the.
You know we set most of ourplans up at Fidelity, for
example.
So they'll work throughFidelity's platform to invest
that money back in the markethowever they want.
So that money that they'reputting in the market will be
growing in Amazon, coca-cola,whatever they want, and then
they're also holding theircompany stock within it as an
asset.
So as the value of theirfranchise increases, the value
(10:43):
of that stock held within theplan increases too.
If the business does as well asthey expect, then they should
get an excellent ROI invested intheir own business as opposed
to just being in the market.
Speaker 1 (10:55):
That's great.
So what happens if becausethere's different types of
franchise buyers, right?
So there are owner operatorswho I think you know, drawing a
salary from day one for an owneroperator makes a ton of sense.
But what if you're more likehow Jill and I run our pinks,
where we have a GM and we'rekind of scaling more towards the
(11:15):
long haul, meaning that youknow we're not using pinks in
your one or your two as a profitcenter.
We don't draw a salary.
We're not a C-corp or an S-corp.
Is there an option with ROBSfor me to say, listen, I'm going
to hire a GM and I'd ratherdedicate a salary to that GM
right away, or do you have topay yourself a salary when you
do ROBS?
Speaker 3 (11:42):
Well, when you do ROBS, you do have to be.
Robs is not meant for justpassive businesses, right For
completely absentee.
So we do want you to be a W-2employee of the C-Corporation
from day one, but you're notrequired to take a salary
immediately.
You can, and some people needto, right, because they don't
have any income.
So it's great for the peoplethat need it.
But for those that don't, youcan absolutely wait until the
business is profitable and canafford to start paying you.
So you can pay the GM first,right, and then you know, then
(12:05):
wait a little while and untilyou start paying yourself.
But we definitely do want theowners to start taking a salary
when we feel like the businesscan support it.
Something reasonable.
That makes sense, yep, becausewe're always thinking we're
always thinking about complianceright.
Everything that we do, it'swith our eye on it, making sure
that, if the IRS ever looks atanything, that we have every T
(12:27):
crossed, we have every I dottedand that we're not blurring any
lines.
Speaker 2 (12:32):
Yeah, I just think that's so helpful for new
business owners, you know,because it's such an unknown and
you know Jack pays way moreattention to the financial side
than I do, and so but you know,but I'm not, I'm the norm too.
You know, there's a lot ofpeople out there that don't know
all these things, so to haveyou as a resource is is amazing
because you know they're justthings that most, some of us
don't even really think about,so Most people don't, and I love
(12:57):
that you said that, jill,because the majority of my
clients they've never done thisbefore.
Speaker 3 (13:01):
They've never even thought about business ownership
.
They weren't thinking aboutbuilding an empire.
They found themselves often ina situation that they've been
downsized and then all of asudden they're starting to look
for other opportunities.
They don't know what fundingoptions are available.
They don't even know what theyhave, if they have an IRA or a
401k.
So I'm very used to that and Iwelcome those conversations
(13:24):
right, because for me I thinkthere's nothing more rewarding
than taking somebody who'snovice and kind of maybe a
little anxious and not sure thatthey can do this, and talking
through and helping educate themon all of the options that are
available to them so that theycan see that they actually do
have a path forward and thatwe're all going to be there
Benetrends myself, you, thefranchise that they've got a
(13:47):
very professional team in placeto help guide them every step of
the way, and it just makes itso much easier for them to just
focus on the business and theplan that everybody put in place
.
All they have to do is followall of the steps and then go
make a lot of money.
Speaker 1 (14:03):
Yeah, and the um, with the new old administration
coming back in, putting allpolitics aside.
But from a taxation standpointwe're all set up to do that.
Let's go make money becauseyou're going to get to keep so
much of it.
Um, and you know, kelly, I'm soglad you said you said it kind
of the way that you did becauseyou know there, there and this
(14:25):
is where you always need to makesure you have a good team, like
Benetrends, have a strong, youknow CPA and accountant, because
, you're right, you want to makesure that you're protecting
yourself from audits and thingsof that nature and making sure
that you are drawing a salary asan owner as it makes sense as
the business starts to get intothat zone of profitability.
But as we talk to most of ourclients about, that first year
(14:47):
or so is about building.
Now I say that and we justfound out that our client,
catherine, who owns a soccerstars, just won MVP for highest
system revenue and she's only ayear and a half in Wow.
So there are those fast starts.
Like we've got another clientthat did a um, a roofing
franchise, and he's already hadlike a huge you know seven
figure offer for his business.
(15:08):
So things can happen fast.
But our guidance to most to toour clients is expect that those
first 18 months are aboutbuilding and if you're going to
be in our shoes, where you'regoing to be kind of running the
business from the top end andempowering a GM to really help
you with the day to day, youknow you want to make sure that
that person is excited to workfor you and pay well.
Speaker 3 (15:28):
Well, to touch on something that you just touched
on, the 18 month thing, yeah, wealways want to overcapitalize
people, right?
We don't want anybody going injust by the skin of their teeth,
because you want to expect thebest but plan for the worst.
And so the one thing I tellpeople is that you know you can
fail in business for a wholeheck of a lot of reasons, right,
(15:49):
but having access to too muchworking capital isn't one of
them.
Speaker 1 (15:54):
Right.
Speaker 3 (15:55):
You're never going to fail because you've got too
much money for the business.
Speaker 1 (15:59):
No, no one ever went out of business for being
overcapitalized.
Speaker 2 (16:04):
We tell our clients the same thing.
It's a similar trend, but it'simportant to know.
It's important to know what youhave what you can do, and I
love that you err on that sidetoo, because it's the same
advice we give them.
We don't want you stretched toothin.
So if this isn't the time, thisisn't the time, that's right.
Speaker 3 (16:20):
That's right and you know that's an important thing
too, jill, because you knowpeople don't know what they
don't know and if this is thefirst time they've ever looked
into business ownership justlike if you're planning to buy a
home or different you knowthings.
You don't.
You don't just buy a homeovernight, right, some people
have to save, they have to workon increasing their credit.
(16:41):
You make a plan once you knowwhat's going to be required.
So franchising for some peopleis the same.
You know.
Once you know what's going tobe required, then you can put
the steps in place.
So, yeah, maybe six months or12 months down the road, or even
two years.
I have people come back two,three years later and then
they're ready.
You know it's all about, like Isaid, educating people and kind
(17:02):
of you know what their optionsare or what they will be if they
take these steps.
Speaker 2 (17:06):
Yeah, I love that.
We were guilty of that when wewere trying to buy our first.
We didn't know what was goingon and it took a good sit down
to figure out all the thingsthat we needed to plan for and
fix and it was like a hugelearning opportunity for us.
But you're right, I mean wekind of went in as young kids
Okay, we have some money, let'sbuy a house.
And we got a tough lesson.
Speaker 1 (17:29):
Yeah, they laughed at us.
Speaker 2 (17:32):
It was a combination of us with just things that we
didn't realize we needed.
I didn't realize they needed tohave more credit.
I was proud of myself forpaying off my credit card bills,
but I wasn't establishing anycredit by doing that.
That's an eye opener.
I had no, I thought I was doingeverything right.
So you know it was.
It was really important to havethat meeting and understand so
that we could then both of ustogether fix the things we
(17:56):
needed to fix and get to a pointwhere, when we bought that
house, we were fix the things weneeded to fix and get to a
point where, when we bought thathouse, we were, yeah, we we
hated this mortgage guy that wemet.
Speaker 1 (18:03):
He was such a he was not the nicest man on earth, but
he gave us some real hard math,as Jill says, but things to
sort of understand in terms ofhow people look at you, in terms
of approving you, and he gaveus some good guardrails that
have helped us as entrepreneurs,because sometimes you got to do
what you got to do to survive,to grow, to thrive, and so there
(18:23):
are always to your point, kelly, I think having those aiming
points.
We always need those aimingpoints.
What do I need to do to get thebusiness?
Now, once I get into business,where do I need to go?
I was just on a Pink's weeklysales call where they're
speaking to all the franchiseesand just saying, look, guys,
take the time to set your goalsfor next year.
Where do you want to go on arevenue standpoint?
(18:44):
And, of course, these arethings Jill and I have been
doing this for years.
We always know where we wantFranchise Insiders to go.
We know where we want ourPink's franchise to go.
But that's part of the value ofa franchise is whether you're
seasoned entrepreneurs like us,or your first time entrepreneurs
like the ones that you'vetalked about.
The franchise is going to helpcrystallize those things for you
, and I love that, because whenyou're talking to people and
(19:07):
experts like you or like ourmentors at pinks, they're there
to cover all the bases, justlike you do.
And so, to that end, kelly, Ihave another question for you,
which is, let's say, I fund myfranchise through a Rob's and I
do my 401k rollover and then,five years from now, I get an
amazing offer to sell mybusiness.
Are there any I's I need to dotor T's I need to cross if I'm
(19:29):
selling my business and I fundedit with my 401k rollover?
Speaker 3 (19:34):
Well, I mean it just depends on because when you sell
the business, the proceeds ofthe sale are going to go back to
the shareholders.
So if you fully funded, 100%with Rob's and in the retirement
plan, is still the onlyshareholder when you sell, then
the proceeds of the sale aregoing to go back to the
retirement plan.
So I think that is one keything to know because you know,
(19:55):
when you're my age and you'recloser to retirement age, closer
to 59 and a half, where you canaccess that money without
penalty, then for me I want itto go back into the plan.
But some people are younger,right, we've got young
entrepreneurs and maybe they're40 years old or 35 years old
when they sell the business, somaybe they want that money in
(20:16):
their pocket to do somethingelse to travel the world.
So I always tell people thatyou know you don't want to wait
until you're ready to sell thebusiness to start thinking about
how you're going to sell thebusiness and start thinking
about exit strategies.
I do think that once you get upand running, those are
conversations they want to starthaving with, like their CPA,
their legal counsel, todetermine what their five-year
(20:36):
plan is, what their 10-year planis and again, we know that the
best laid plans.
Yeah, you're planning for 10, 15years and you get an offer you
can't refuse at five.
But I think you make the planof what you expect to happen and
then you start putting a plan,you start working backwards
right With your kind of CPA toput a plan in place to get you
to where you want to be.
And for some people again, ifthey're young and then maybe
(20:59):
they want to start buying thestock back from the retirement
plan a little bit every year sothat they completely buy out
that investor called theretirement plan.
So when they sell, the proceedsgo to them right, because it's
easier to buy that stock backincrementally over time than it
is to buy it back all at once.
You've got to have the money todo it.
So those are the things.
(21:20):
I think you it's never tooearly to really kind of start
thinking about the end game andworking backwards.
Speaker 1 (21:27):
And so for all of you out there, when you do that
401k rollover, it's a mandated Ccorp, can't do an LLC or an S
right Kelly.
Speaker 3 (21:36):
It is a mandated C corporation but you can change
it along the way.
It was sort of like I was justsaying if you want to reverse
the structure you have to be a Ccorporation as long as the
retirement plan owns stock inthe company.
So if you want to reverse that,then the corporation buys back
the stock that is sold to thecompany and it has to buy it
back based on a current businessvaluation, which typically runs
(21:59):
somewhere between $750 and$1,250 to get one of those.
So whatever that comes back asthat's what their corporation is
paying back to the retirementplan to buy that stock.
So hopefully the business isdoing well and the corporation
has to pay more.
But it's going back to theclient's retirement plan and
they're rebuilding theretirement plan and at any point
(22:21):
the retirement plan no longerhas an investment in the
business.
Then they can revoke thatC-corp election if they want to
and they can change the entityto anything they want.
If they want to keep theretirement plan in place, we
will, and if they don't careabout it, then we shut it down
and anybody that has money in itjust rolls their money to an
IRA wherever they want.
Speaker 1 (22:39):
Great info, awesome info.
Okay, so I think we've covereda lot on the ROBS program, which
Kelly and her team areexcellent.
Kelly, I think every singleyear, we must help at least 10
people with you guys At least.
Yeah, very popular way to sortof fund a business and I feel
like, with what's going on inthe market, we'll probably see
quite a bit more in the comingyear.
(23:01):
So, for all of you out there,if you do want to connect with
Kelly, kelly, where can thefolks find I'm not ending the
podcast, but it'd be good forpeople to know where they can.
How can people reach you?
Speaker 3 (23:12):
The easiest way really is via email because I'm
typically always glued to mycomputer so I see emails and
respond to emails.
The fastest and the easiestemail I've got a couple of them.
Kelly K-E-L-L-Y atBennettTrendscom is the easiest
way to get me.
Speaker 1 (23:28):
Very cool and, for those of you longtime listeners,
if you'd like to start with usfirst, you can just text us
305-710-0050.
Kelly, let's switch gears andlet's talk about SBA loans,
because that's probably numbertwo.
Maybe it's number one overall,I don't know.
But in terms of when we worktogether and sometimes people
even do SBA 401k combos, let'smaybe just give people a quick
(23:53):
overview of what an SBA loan isand where you see the market
right now, and maybe we'll takeit from there.
Speaker 3 (23:58):
Yeah, no, I love that question, especially where I
see the market right now.
There's so many things I haveto say and I'm going to probably
forget half of them.
But SBA stands for SmallBusiness Administration, so that
is just a government agency.
Sba is not making the loan.
The banks make the loan.
Sba is just the governmentagency that guarantees the bank
(24:18):
that if you default as theborrower, they will reimburse
the bank a certain percentage ofwhat they lent.
So a lot of people have themisconception of oh, I want an
SBA loan because if I default Idon't have to pay it back.
It's government guaranteed, I'moff the hook.
It's like that's not the case.
The borrower has to personallyguarantee that loan.
Sometimes they have to put upcollateral, sometimes they don't
(24:38):
, but they're always personallyguaranteeing it.
Speaker 1 (24:41):
What's the guardrail?
Is it over?
It attaches to your assets ifit is over 500,000 or over,
correct?
Speaker 3 (24:49):
Yeah, the minute you hit 500,000, then the bank
doesn't have a choice.
Sba mandates to the bank thatif there's collateral available
they do have to capture it, andtypically they're looking at
equity and property to put alien on a property.
And if it's under $500,000,then it's up to the bank.
If they want to do the loanwithout collateral, they
certainly can, and some bankswill still require it.
(25:11):
Right, it just depends on thestrength of the borrower.
It depends on how wellestablished the franchise is,
and there's a lot of things thatgo into it.
But we see a lot of peoplethese days under 500 that are
getting away without collateralif they're strong borrowers.
Speaker 1 (25:26):
So yeah, go ahead.
Yeah, no, and I know you have alot you want to cover, but I
did have a question for you thatI may or may not be correct in
my assumption, but it feels tome like the SBA Express Loan,
which is a lower I think it's$150K.
Is that still a thing?
Is the Express Loan still?
Speaker 3 (25:42):
a deal.
Speaker 1 (25:42):
It is, yeah, it is still a thing Does that fund
faster than say the.
What is the $500K?
Is that a $500K?
Speaker 3 (25:52):
All of them and this is a big misnomer.
So I'm glad you asked Jack,because all of them are 7As,
even that express loan is stilla 7A.
The difference with it is thatit's really meant as a working
capital loan.
It's not intended forbusinesses that are brick and
mortar.
So when you don't have brickand mortar and you don't have
leases and renovations andthings, then yeah, it's not as
(26:12):
complicated and it typicallyfunds a little bit faster.
Speaker 1 (26:17):
So do you see a time because I feel like over the
last year, anytime we've doneany of those 4K loans for
multi-unit franchise owners thatthose have taken like three to
six months, whereas the DKSBExpress has been a lot faster,
maybe 12 weeks.
Am I right or wrong in thatsort of assumption?
Speaker 3 (26:37):
Yeah, you're completely right, because when
you have brick and mortar,oftentimes the biggest challenge
that creates delays is findinga great location right, and you
can't complete the process withthe bank until you have the
location and you know how muchyou're going to get in leasehold
improvements and what yourmonthly payments are going to be
.
So they can take you all theway up to it, but you're really
(27:01):
kind of stuck until you havethat figured out.
Speaker 1 (27:03):
And any of the Fed rate cuts do those affect the
SBA rates as well.
Speaker 3 (27:10):
They sure do.
Sba loans are adjustable rateloans that move with prime.
Prime right now is at 7.75%.
A few months ago it was at 8.5%.
So we've come down I thinkthree times, two or three times,
I can't remember.
It's all a blur now, but sinceI don't know, end of summer or
(27:30):
so, we started dropping a littlebit.
When the prime adjusts, theborrower's rate will
automatically adjust with it thefollowing quarter, like the
first of the following quarter.
So all of our clients that haveSBA loans, yeah, they've come
down like three-fourths of apercent here recently.
Speaker 1 (27:50):
Yeah, Okay.
So let's and I hope you don'tmind me kind of bouncing around
a little bit- here.
Speaker 3 (27:55):
Go right ahead, it's your party.
Speaker 1 (28:02):
I mean, listen, I'm trying for our, for our people
out there, our clients who arethinking about buying a
franchise or adding anotherfranchise.
Let's take pinks, for example.
Oh, their estimated investment,hang on, let me make sure I get
this number right.
I'm just Kelly, I'm moving overto my screen here where I can
look at total investment for andit's not working.
So we're just going to, let'ssay so, let's say all in
investment for PINX is 150K, 60kof it for a franchise fee and
(28:28):
then 90K for working capital.
That's what they're saying.
And let's say their item six,right, so that fits neatly with
an SBA Express loan of 150K,what are the minimums I should
have in terms of if I want to dothat credit score, cash on hand
and any other sort ofparticulars.
What are you guys looking forto approve someone?
(28:48):
And I know it's not just astraight line, but maybe just
some basic guardrails there.
Speaker 3 (29:00):
Yeah, and I would say it definitely isn't a straight
line because we have so manybanks that we partner with and
our SBA team is constantlybringing on new partners and I
can't even keep them straight.
We'll be on a meeting andthey're talking about this loan
and that loan and I'm like, whendid we get that?
And so they're constantlytesting out things before they
roll it out on a big scale.
But you know, in general ifyou're doing that 150 Express
loan, they require about an 11%cash injection.
(29:24):
So it's easier to say 10%, buttechnically I think it's about
an 11% cash injection.
The client they'll loan you thefull 150, but the client is
injecting just over 16,000 oftheir own cash and that goes
towards the franchise fee.
It's not in addition to it.
Anytime you're dealing with anSBA loan they don't fund 100% of
(29:45):
it.
The client always is going tohave some skin in the game, so
the first thing their skin inthe game goes towards is the
franchise fee.
Speaker 1 (29:53):
Okay, and therein lies just the beauty of the
current franchise system,because here you have our
friends at the FTC that put alot of very sort of strong rules
in place to what we can andcan't say in terms of helping
franchisees figure out what abusiness will actually make
right?
I was just talking to a newfranchisor about this yesterday,
which is you've got to live anddie on that item 19 and you
(30:15):
cannot go outside of it.
And then you want to go getyour loan and the poor
franchisee is saying, well,here's the item 19 and the item
six, and this is what I got togo off of.
So it's an interesting part ofthe whole franchise landscape
where the franchisee sometimeshas to figure some things out on
their own.
Speaker 3 (30:35):
Indeed, and that is where I would say, our SBA
department really brings a wholeheck of a lot to the table in
situations like that Because,like I said, we've got different
packages we offer.
You can even go a la carte overhere if you want to use your
own bank, but you want us towrite your business plan or do
your cashflow projections.
So we're experts in that?
I'm not, clearly, I think we'veestablished that but but our
(30:56):
team is experts when it comes tocashflow projections and things
, and you know they can.
They can completely do them,like they can provide guidance
or they can completely do themfor the client.
So I think you know we offer anelite package where they do the
cashflow projections and thebusiness plan and it's like a
beautiful 35, 40 page businessplan.
They do the demographics, theresearch, everything super
(31:18):
professional.
So that's not everybody needsthat, right, but some people,
they have the knowledge to dothat themselves, but they don't
have the time, they don't havethe bandwidth, they're in
corporate America, they'reworking a lot of hours, and so
for the people, that it's abenefit and we can take that off
their plate and give them theirtime back.
It.
Um, it reduces some of the kindof stress that you may feel
(31:41):
while you're trying to juggleall of these things getting the
business up and running, gettingfunding, working a job.
So you know there's there's alot of different things that we
offer, based on how much helpthe client wants.
Speaker 1 (31:52):
Yeah, well, and what's cool is we talked about
this on the podcast.
I've talked about it a lot.
We did a a, a figure, a homeequity line of credit from
figure lending, which is nowthis online deal where you can.
You can fund in like two weeks.
Speaker 3 (32:06):
Yeah, you told me about that one.
Speaker 1 (32:08):
Yeah, and and I think we had a client just recently
do it a couple of clients and,by the way're not affiliated
with figure lending we just usedit.
We personally used it, we likedit.
I'm I'm a person that prefer,you know, speed and less phone
calls, and so when, when wefound out about, I'm like and
they say they can fund in assoon as five days in some cases,
but the the difference here isthat with figure, they mandate
(32:31):
that you, if you're taking out,sayk, you can't just take 20K of
it.
You got to draw the whole 200Kdown, but you could then put
that 200, let's say, or youcould put 100K back and then
draw from it.
So, kelly, I know a lot oftimes you recommend that people
also consider utilizing theirhome equity.
I don't know if you have anyother thoughts on that, but I
(32:52):
thought that was really cool.
Speaker 3 (32:53):
Well, I think that is really cool and I am 100% on
the same page.
I always look for what is goingto be the fastest, the easiest
and the most economical, andit's not always working with us
right.
It's just, you know, becauseSBA loans they have a place and
sometimes it's the only option,but sometimes it's not the best
(33:15):
options.
You know, a HELOC when it's anappropriate option for someone,
it's either usually going to geta little bit better rate, it's
going to be faster and easier.
And then another option that alot of people don't even know
about if you have an after-taxbrokerage account right, we're
not talking 401ks or IRAs, butjust a Robinhood account like
money in the market, after taxbrokerage funds and you have
(33:37):
over 100,000.
Oftentimes you can borrowagainst those, take a line of
credit or a loan against them,and what I like about that is
that they don't make you selloff your investments so you can
keep the money in the marketworking for you.
They're just going to use youraccount as collateral and lend
you against it, and that is fastand easy too.
Your account as collateral andlend you against it, and that is
fast and easy too, and the ratesometimes is much better than
(33:58):
SBA.
Sometimes it's a little higherif they don't have a lot of
money and they count it.
It really just depends, butit's fast and easy and it's one
of my favorite ways for peoplethat need to borrow money to get
it.
And, like you said earlier too,jack, oftentimes people are
combining options right.
It doesn't just have to be onething and you had mentioned
trends earlier the trend thatI've seen over the last three
(34:20):
years, since the rates have goneup so much, I've seen a lot
more people either funding 100%,fully with ROBS if they have
the ability to comfortably do sowithout feeling like they're
tapping out all of theretirement funds or using more
in retirement funds than theywould have so that they can
minimize what they're borrowingand minimize the monthly loan
payment and minimize whatthey're paying in interest.
(34:43):
Five years ago, when they weregiving away HELOCs at two and a
half percent, everybody wasdoing them right.
Why wouldn't you?
So it is definitely interestingthrough the years to see the
trends, because how people arefunding their business is a
direct correlation of theeconomic climate and one of the
things that I am super excitedabout with yeah, not to get
(35:04):
political, but when you talkabout the new administration and
the kind of the differences intaxation that we can expect.
We've heard them say thatthey're going to reduce the
corporate tax rate to 15%, andright now so that affects Rob's
clients because Rob's with a Ccorporation it's a flat 21%.
Right now.
(35:24):
Across the board Federal taxrate is 21%.
If they reduce that to 15%,that's massive and it was
massive for industry when theyreduced it the first time, right
From, I think and this is along time ago, so my memory may
be failing me, but it seems likethey reduced it from 38% down
to 21% and now to go down evenfurther.
(35:45):
I'm, like I am I'm prettyexcited about that.
Speaker 1 (35:48):
I mean, yeah, I think you've got the numbers right.
I was actually just talking toour son about this.
Yesterday we were driving toschool.
Yeah, we had this wholeconversation about you know.
Republicans you know, I mean,look it's, it's, it's for those
of us that are small businessowners, those types of things.
I was telling him.
I said, look, we can take that,that money we're saving now on
taxes and we can, we can empower, we can add more jobs.
(36:10):
Right, we can give more peoplejobs.
We can pay our team more money.
I think it just creates forbusiness owners just a great
thing and a great way tocontinue to grow for those
business owners.
And, let's face it, the mostsuccessful business owners are
going to continue to reinvest intheir companies.
They're going to advertise,they're going to put that money
back into the um, into the intothe.
Speaker 3 (36:31):
It's so true, and there's a lot of optimism right
now.
I don't know about you, but Ijust feel.
I feel that people areextremely optimistic about
what's to come right and aboutthe future of of business and
people thriving, and I thinkwe're running, we're rolling
into some very exciting timesand I can't wait to see 2025,
(36:52):
2026, how this all plays out.
Speaker 1 (36:55):
Yeah, Well, think about this, Kelly.
Right now houses are reallyexpensive and the rates are
still pretty high, and it usedto be.
You know, when I was a kid,when you'd hear about that one
guy that had an uncle that owned50 McDonald's, you know it was
like, oh my God, you have to berich to be a franchise owner.
Now you can fire up a homeservices franchise for 150 K.
Speaker 2 (37:15):
You can't buy many houses.
There's not a lot of options at150 K right now Right, but
there are so many friends.
Speaker 1 (37:22):
Let's just take the home care industry, for example.
Most of those items across theboard, from senior helpers to
Hallmark home care to you know,home well care services, they're
all a million and above ontheir item 19s.
And, by the way, this is not anoffer to sell a home care to
you know, home well careservices.
They're all a million and aboveon their item 19s.
And, by the way, this is not anoffer to sell a home care
franchise.
But like, look at that and mostof their and you know you
(37:43):
probably fund a lot of of homecare businesses.
It's a super low investment.
It's a highly scalable business.
Speaker 3 (37:50):
What we do is so fun, right, To be able to help
people realize their dream, andI think that there's nothing
that gives me more delight thanhelping somebody get out of
corporate America, because Icame from corporate America,
like you did, and I couldn'tstand it.
I was not cut out for it, Ididn't.
I mean, it served me well for awhile, but I found that you
(38:11):
know, when you're, when you're avery hard worker which all
business owners are it needs tomake sense, right?
If I'm going to put in 12 hoursa day, it needs to be sensical.
It can't.
You can't just be burying mewith reports to justify your job
and then I'm so tired I can'teven do mine.
Speaker 1 (38:29):
So, yeah.
I mean Kelly, there's so muchthat we've covered and there's
probably so much more.
I, I mean Kelly, there's somuch that we've covered and
there's probably so much more.
I'll tell you what I, what,what Jill and I tell our clients
, which is when we have aninitial consultation with them.
We always make a very strongrecommendation that they talk to
a professional like you.
One of the questions we ask isyou know well, what do you think
you can invest in?
A franchise?
(38:49):
Some people know and somepeople don't.
Some people don't want to getinto that with us.
They want us to work on thematch, right On the on the
franchise match, and so whatI'll say to them is look, let's
connect you with Kelly.
You guys can have aconfidential conversation with
Benetrends, it doesn't cost youanything and you can figure out
what your investment universe is, because, kelly, you're always
so honest and transparent withour clients.
(39:10):
You can figure out what yourbest resources are, and then
Kelly then typically comes backto us and says look, from a top
level, here's kind of theuniverse, and so it's a nice way
for you to stay really sort ofsafe and confidential with us.
You can learn from an expertand together, between us and
Benetrends and Kelly, we canfigure out what the right
franchise investment strategy isfor you based upon your
(39:31):
personality, your strengths, andwhat you can invest while
keeping you safe is for youbased upon your personality,
your strengths and what you caninvest while keeping you safe.
Speaker 3 (39:36):
Well, I think that's exactly right, jack, because we
all use this analogy.
But when you go to buy a home,you get pre-qualified right.
You don't want to look atmillion-dollar homes if maybe
the most you can afford is a$500 home.
And I use this analogy with myclients a lot too because, like
we spoke about, a lot of themare doing this for the very
first time.
They're out of their element.
(39:57):
They've got a lot of you knowdifferent things coming at them
and they don't know how to makesense of all of it.
And I tell them I said hey,like your process.
Right now you're exactly whereyou should be.
It's like dumping a thousandpiece puzzle on the floor and
you don't know how that pictureis ever going to come together.
But every conversation theyhave with someone like myself or
you or a franchise or existingfranchise owners, they put a
(40:21):
couple more pieces of thatpuzzle together and eventually
that picture starts to becomeclear and they just naturally
move more towards it if it's theright fit for them, or they
start to go.
You know what?
I don't think franchising isfor me, but the picture does
become clearer as they have theconversations.
Speaker 1 (40:41):
I think that's so perfectly said, Kelly.
I think that's the great way toend this for those of you out
there who want to talk to Kellyagain.
Kelly, would you mind sharingthat email address one more time
?
Speaker 3 (40:50):
I will.
It's kelly K-E-L-L-Y atBenetrendscom.
I'll give you my phone numbertoo.
I just have to read it off thewall because I don't ever
remember it.
I don't call myself.
Direct line is 267-328-1296.
Speaker 1 (41:08):
And for those of you that are listening it's true
she's actually looking at thewall right now as she reads it.
But yeah, no, kelly, that'sgreat.
And, of course, for those ofyou that would like to start
your journey with us 305-00050.
You can text that, you can callit, but I know I'm speaking for
Jill and for Kelly when I saywe'd all love to help you just
figure out first, is franchisingthe right thing for you?
(41:28):
And two, if it is, what's yourbest strategy?
Speaker 3 (41:40):
What's your best strategy, what's the best
franchise, what's the best pathfor funding?
And we're all here to help.
Well, I appreciate your time somuch.
Thank you for having me.
It was an absolute blast.
I think the world of you twoand your little guy is probably
going to build the biggestempire of everybody, right?
Speaker 2 (41:49):
Because, yeah, I can't wait to see you, we'll
connect him with you when he'sready.
Okay, I don't think he's goingto need me.
Speaker 1 (41:57):
Kelly, thank you so much, great spending time with
you Happy holidays, thank you.
Speaker 3 (42:01):
Happy holidays to you too.
Take care Bye.
Hi everyone, welcome back to the we Bought a
Franchise podcast.
I'm Jack Johnson.
Speaker 2 (00:05):
I'm Jill Johnson.
Speaker 1 (00:06):
And we are here today with a very special guest.
We have Kelly Krueger, seniorconsultant at Benetrends.
Hey Kelly, what's up?
How are you?
Speaker 3 (00:14):
I'm doing well.
How are you two?
Speaker 1 (00:16):
Great, thank you, we're doing good.
So, for those of you that aretuning in for the first time,
we're Jack and Jill Johnson.
We are franchise consultantsand last year we bought a
franchise called Pink's WindowServices and we thought it would
be cool to sort of share ourjourney, our experiences, the
ups and downs of building afranchise, and so we want to
bring you guys a relevantcontent.
(00:38):
We try on a weekly basis to doso, just kind of sharing our
journey and what it's been likefor us, as well as bringing on
relevant guests to all of youout there that are thinking
about franchise ownership.
And, kelly, one of the mostrelevant things to buying a
business is seeking financing,and that's really where your
company comes in.
You've helped countless numbersof our clients, whether it be
(01:00):
with 1K rollovers or SBA loans.
But, kelly, what I like themost about working with you is
if you think a client has betteroptions to take equity out of
their home or some other option,you've always been very
straight with them.
Let's dive in and let's talkabout financing and franchise
financing and kind of maybe giveus an overview of what you guys
do and how you help people.
Speaker 3 (01:21):
Yeah, no thanks for that setup, jack.
I appreciate it.
I've been doing this for almost14 years and Benetrends has
been doing funding for smallbusinesses and franchising for
over four decades.
So Benetrends started in theindustry back in 1983, and they
started as a ROBS provider.
Many people don't realize thatBenetrends did the first ROBS
(01:41):
plan ever and they actuallypioneered it, kelly can I stop
you right there, yep, what is?
ROBS.
You know I get so used to usingthe acronym Thank you.
It stands for Rollover, isBusiness Startup and the gist of
it, and then I'll circle backand fill in the details later.
But the gist of ROBS is that itgives you the ability to take
pre-tax retirement funds andinstead of investing them in the
(02:03):
market and buying stock insomeone else's company like
Amazon or Coca-Cola, you cantake that money and invest it in
your own business withouttreating it as a distribution
and paying taxes and penaltieson the money.
So Rob's has literally donethousands of times a year within
franchising, Outsidefranchising many people don't
know it exists, which is bananasBecause, again, like we've been
(02:31):
doing it since 1983.
So the founder of Benetrends hisname is Len Fisher.
He's kind of famous for thisreally, because it was his
brainchild and he is an ERISAattorney.
He got this figured out.
He worked with the IRS todevelop the rules and
regulations to bring it topeople like you and I.
We did the first ROBS in 83.
And then over the years,Benetrends has expanded to be a
one-stop resource for ourclients.
So we offer SBA loans,equipment leasing, fleet leasing
(02:54):
, other types of financing.
When it comes to lending, we'renot actually the bank.
We have dozens and dozens ofbanks that we partner with, so
we've got a lot of capabilitiesthere when it comes to loan
packaging and shopping the bestrates and terms for people.
We can even write the businessplan and do the cashflow
projections if somebody wantsthat much help.
So it's really up to the clientto determine how much help they
(03:16):
want from us in thosesituations.
Speaker 1 (03:19):
So how cool is that?
So here you go.
Most people who have a okay,they're working at a you know
corporate America company andit's diversified into all these
companies that they don't own orthat they, you know, again,
have a very small piece of nowupon exit from your company
because you have to leave thecompany, right?
It can't be attached to acurrent employer, right?
Kelly.
Speaker 3 (03:39):
You know, not always.
Most of the time, that's true,jack.
I'd say about 70% of the time,that's true.
But, I run across probably 30%of the plans that will allow the
employee to roll out a certainportion of the plan while
they're still employed.
So that's called an in-servicerollover, by the way.
So I always tell them hey, it'sworth a quick phone call to
your 401k provider to find outif you can do an in-service
(04:02):
rollover, because that's not thesame as taking the distribution
, it's just rolling money out oftheir plan to like an IRA which
frees it up for us so that wecan use it for robs.
So about 30% of the plans allowthat.
And then the other twosituations are 99% of the time.
If somebody rolled money intothe employer plan from a
previous employer, they usuallycan roll that portion out at
(04:24):
least.
And if they're 59 and a half orover, they can typically roll
out also.
Speaker 1 (04:30):
Very cool.
So here's the thing, guys.
I mean, rather than putting itinto, you know, a Jeff Bezos
company now you can take your401k and put it into a company
that you own.
So you know, let's say, forexample, you're listening to
this podcast and you want to owna pinks franchise.
And let's just say, you knowwhat you're, you're thinking
that how great would life bestarting in the new year.
(04:53):
Instead of working for someoneelse, you can go lead your own
team out there, build your ownbusiness.
We can quit our job and takethat and roll it right into our
business.
Or I mean, kelly, there is awhole sort of thing happening
with white collar jobs and I'msure you're seeing this.
There's a lot of people who arevery talented and have great
resumes, but they're out of work.
Meanwhile, this whole bluecollar revolution with
(05:14):
businesses like Pink's and likeVoda, restoration and Rolling
Suds, just to name a few, arethriving, and so what a way to
kind of adjust with the marketand take your money and take
your time and put it intosomething that is so much more
relevant.
I just think the thought ofthat is so exciting.
But there's one other piece ofit, too, that I know you can do
Is it that if I have at least ahundred thousand dollars in my
(05:37):
401k that I can borrow up to$50,000 from myself while I keep
my job Is that?
Is that also something?
Speaker 3 (05:45):
Yeah, typically K-plans will allow that, or
403Bs.
Most employer plans will allowyou to borrow up to 50% of the
balance that you have in it, notto exceed $50,000.
Okay, so that's another.
You know there's lots ofcreative things, right, and
that's part of our job when wespeak to clients is to turn over
all of the stones.
(06:06):
You just can't take thingssometimes at first glance right.
At first glance it may looklike gosh, I'm not sure that
there's the liquidity hereneeded for an SBA loan or
something like that.
But if you keep looking and youget creative, then you say yes,
there might be enough money ina 401k that you can borrow
against to get the liquidityneeded for SBA or SBA or
different things.
So you've got to keep diggingsometimes because it's not just
(06:29):
one method, right.
A lot of people they combinedifferent funding options to get
to where they need to be.
And I agree with you so much,jack, with what you said a few
minutes ago about white collarpeople losing their jobs and
we've definitely seen that trend.
And truthfully, if I had toguess, I would say that 75% of
my clients are 50 and over andthey fall into one of two
(06:53):
categories they have either beendownsized from corporate
America and they're strugglingto find another position, or
they're in corporate America andthey can't stand it one more
day, and sometimes people fallinto both, and I've fallen into
both many times.
So it robs.
It gives people an entry intobusiness where otherwise maybe
they wouldn't have it becausethey don't have the liquidity
(07:15):
needed.
A lot of people don't have thecash sitting in the bank, but
they have retirement funds thatthey can use.
Speaker 2 (07:21):
I love that.
I think when we, you know, whenwe're talking to clients, I
mean a lot of people just don'tthink they have the money to do
this because they're justlooking at their savings and you
know they don't realize all thedifferent avenues and so we're
always so happy to send themover to you.
You know they're like you said.
There's so many options.
You can combine options.
There's things they probablyhave no idea that they've even
had, and it's so important toknow that that exists, because I
(07:43):
think a lot of people just shutdown the idea because they're
looking at, you know, they'rechecking in savings and saying I
just don't have the money, butthey might have it and have the
ability to do it elsewhere,whether it's through funding or
through like a okay or anythinglike that.
So it's so helpful to have youas a resource to do that,
because there's so much morepossible than most people think.
Speaker 1 (08:03):
Yeah.
So Kelly does a 401k then rollback After a certain amount of
time, do we have to roll thatmoney back into an account?
Speaker 3 (08:12):
Are you asking if it's a loan that has to be paid
back?
Speaker 1 (08:16):
Yeah.
So this is something that I'vealways been curious about.
If we do the 401k rolloverright let's say we've got 401k
in the 401k and we roll it overto fund our business After 10
years, does a certain amount ofthat have to go back into the
401k or once it's out, it's out?
Speaker 3 (08:32):
I love that question.
So ROBS is not a loan.
You're never required to paythe money back that you invested
into the business.
So that's one of the bigbenefits of it.
Also, right, because you're notstrapped with monthly payments
back to the bank.
The cost of capital is lessbecause you're not paying
interest rates, so you don'tever have to pay it back.
The only thing that you have todo is ROBS is not meant to be a
(08:55):
one and done, right.
The IRS doesn't want to thinkthat we set all of this up as
just a one-time transaction tofund the business.
So they want to see you use itas a retirement savings vehicle,
and I always want my clients tounderstand that.
Yeah, the purpose of ROBS it'sdual purpose.
So on the front end, it'sfantastic because you're gaining
(09:15):
access to money that hasn'tbeen taxed, so you get thousands
of dollars to invest in yourbusiness day one, instead of
just handing that over to UncleSam.
But on the back end, it'sreally intended to be a
retirement wealth buildingstrategy.
So, even though they don't haveto pay the money back, of course
everybody wants to rebuildtheir retirement plan and the
whole reason they go intobusiness ownership is they hope
they can build it back evenbetter, right.
(09:37):
So where we shine, we candesign any type of plan
traditional, traditional, fromcase we're all 401ks, profit
sharing plans.
So we will design the plan thathas the most tax benefits for
the client, based on what theirbusiness is going to be, how
many employees they're going tohave.
And then, as their businessgrows and their needs change and
they need to shelter more money, then we add plans or we shift
(09:58):
and we adjust with them, but wealways have the intent in mind
of developing the plan thatgives them the most tax
advantages.
So when they do start payingthemselves a salary which they
can do day one once we get thisset up if they need to take a
salary right away, they can.
But when they start contributingback to the plan and becoming
profitable any money that theyput back in the plan, they're
(10:20):
just going to work through the.
You know we set most of ourplans up at Fidelity, for
example.
So they'll work throughFidelity's platform to invest
that money back in the markethowever they want.
So that money that they'reputting in the market will be
growing in Amazon, coca-cola,whatever they want, and then
they're also holding theircompany stock within it as an
asset.
So as the value of theirfranchise increases, the value
(10:43):
of that stock held within theplan increases too.
If the business does as well asthey expect, then they should
get an excellent ROI invested intheir own business as opposed
to just being in the market.
Speaker 1 (10:55):
That's great.
So what happens if becausethere's different types of
franchise buyers, right?
So there are owner operatorswho I think you know, drawing a
salary from day one for an owneroperator makes a ton of sense.
But what if you're more likehow Jill and I run our pinks,
where we have a GM and we'rekind of scaling more towards the
(11:15):
long haul, meaning that youknow we're not using pinks in
your one or your two as a profitcenter.
We don't draw a salary.
We're not a C-corp or an S-corp.
Is there an option with ROBSfor me to say, listen, I'm going
to hire a GM and I'd ratherdedicate a salary to that GM
right away, or do you have topay yourself a salary when you
do ROBS?
Speaker 3 (11:42):
Well, when you do ROBS, you do have to be.
Robs is not meant for justpassive businesses, right For
completely absentee.
So we do want you to be a W-2employee of the C-Corporation
from day one, but you're notrequired to take a salary
immediately.
You can, and some people needto, right, because they don't
have any income.
So it's great for the peoplethat need it.
But for those that don't, youcan absolutely wait until the
business is profitable and canafford to start paying you.
So you can pay the GM first,right, and then you know, then
(12:05):
wait a little while and untilyou start paying yourself.
But we definitely do want theowners to start taking a salary
when we feel like the businesscan support it.
Something reasonable.
That makes sense, yep, becausewe're always thinking we're
always thinking about complianceright.
Everything that we do, it'swith our eye on it, making sure
that, if the IRS ever looks atanything, that we have every T
(12:27):
crossed, we have every I dottedand that we're not blurring any
lines.
Speaker 2 (12:32):
Yeah, I just think that's so helpful for new
business owners, you know,because it's such an unknown and
you know Jack pays way moreattention to the financial side
than I do, and so but you know,but I'm not, I'm the norm too.
You know, there's a lot ofpeople out there that don't know
all these things, so to haveyou as a resource is is amazing
because you know they're justthings that most, some of us
don't even really think about,so Most people don't, and I love
(12:57):
that you said that, jill,because the majority of my
clients they've never done thisbefore.
Speaker 3 (13:01):
They've never even thought about business ownership
.
They weren't thinking aboutbuilding an empire.
They found themselves often ina situation that they've been
downsized and then all of asudden they're starting to look
for other opportunities.
They don't know what fundingoptions are available.
They don't even know what theyhave, if they have an IRA or a
401k.
So I'm very used to that and Iwelcome those conversations
(13:24):
right, because for me I thinkthere's nothing more rewarding
than taking somebody who'snovice and kind of maybe a
little anxious and not sure thatthey can do this, and talking
through and helping educate themon all of the options that are
available to them so that theycan see that they actually do
have a path forward and thatwe're all going to be there
Benetrends myself, you, thefranchise that they've got a
(13:47):
very professional team in placeto help guide them every step of
the way, and it just makes itso much easier for them to just
focus on the business and theplan that everybody put in place
.
All they have to do is followall of the steps and then go
make a lot of money.
Speaker 1 (14:03):
Yeah, and the um, with the new old administration
coming back in, putting allpolitics aside.
But from a taxation standpointwe're all set up to do that.
Let's go make money becauseyou're going to get to keep so
much of it.
Um, and you know, kelly, I'm soglad you said you said it kind
of the way that you did becauseyou know there, there and this
(14:25):
is where you always need to makesure you have a good team, like
Benetrends, have a strong, youknow CPA and accountant, because
, you're right, you want to makesure that you're protecting
yourself from audits and thingsof that nature and making sure
that you are drawing a salary asan owner as it makes sense as
the business starts to get intothat zone of profitability.
But as we talk to most of ourclients about, that first year
(14:47):
or so is about building.
Now I say that and we justfound out that our client,
catherine, who owns a soccerstars, just won MVP for highest
system revenue and she's only ayear and a half in Wow.
So there are those fast starts.
Like we've got another clientthat did a um, a roofing
franchise, and he's already hadlike a huge you know seven
figure offer for his business.
(15:08):
So things can happen fast.
But our guidance to most to toour clients is expect that those
first 18 months are aboutbuilding and if you're going to
be in our shoes, where you'regoing to be kind of running the
business from the top end andempowering a GM to really help
you with the day to day, youknow you want to make sure that
that person is excited to workfor you and pay well.
Speaker 3 (15:28):
Well, to touch on something that you just touched
on, the 18 month thing, yeah, wealways want to overcapitalize
people, right?
We don't want anybody going injust by the skin of their teeth,
because you want to expect thebest but plan for the worst.
And so the one thing I tellpeople is that you know you can
fail in business for a wholeheck of a lot of reasons, right,
(15:49):
but having access to too muchworking capital isn't one of
them.
Speaker 1 (15:54):
Right.
Speaker 3 (15:55):
You're never going to fail because you've got too
much money for the business.
Speaker 1 (15:59):
No, no one ever went out of business for being
overcapitalized.
Speaker 2 (16:04):
We tell our clients the same thing.
It's a similar trend, but it'simportant to know.
It's important to know what youhave what you can do, and I
love that you err on that sidetoo, because it's the same
advice we give them.
We don't want you stretched toothin.
So if this isn't the time, thisisn't the time, that's right.
Speaker 3 (16:20):
That's right and you know that's an important thing
too, jill, because you knowpeople don't know what they
don't know and if this is thefirst time they've ever looked
into business ownership justlike if you're planning to buy a
home or different you knowthings.
You don't.
You don't just buy a homeovernight, right, some people
have to save, they have to workon increasing their credit.
(16:41):
You make a plan once you knowwhat's going to be required.
So franchising for some peopleis the same.
You know.
Once you know what's going tobe required, then you can put
the steps in place.
So, yeah, maybe six months or12 months down the road, or even
two years.
I have people come back two,three years later and then
they're ready.
You know it's all about, like Isaid, educating people and kind
(17:02):
of you know what their optionsare or what they will be if they
take these steps.
Speaker 2 (17:06):
Yeah, I love that.
We were guilty of that when wewere trying to buy our first.
We didn't know what was goingon and it took a good sit down
to figure out all the thingsthat we needed to plan for and
fix and it was like a hugelearning opportunity for us.
But you're right, I mean wekind of went in as young kids
Okay, we have some money, let'sbuy a house.
And we got a tough lesson.
Speaker 1 (17:29):
Yeah, they laughed at us.
Speaker 2 (17:32):
It was a combination of us with just things that we
didn't realize we needed.
I didn't realize they needed tohave more credit.
I was proud of myself forpaying off my credit card bills,
but I wasn't establishing anycredit by doing that.
That's an eye opener.
I had no, I thought I was doingeverything right.
So you know it was.
It was really important to havethat meeting and understand so
that we could then both of ustogether fix the things we
(17:56):
needed to fix and get to a pointwhere, when we bought that
house, we were fix the things weneeded to fix and get to a
point where, when we bought thathouse, we were, yeah, we we
hated this mortgage guy that wemet.
Speaker 1 (18:03):
He was such a he was not the nicest man on earth, but
he gave us some real hard math,as Jill says, but things to
sort of understand in terms ofhow people look at you, in terms
of approving you, and he gaveus some good guardrails that
have helped us as entrepreneurs,because sometimes you got to do
what you got to do to survive,to grow, to thrive, and so there
(18:23):
are always to your point, kelly, I think having those aiming
points.
We always need those aimingpoints.
What do I need to do to get thebusiness?
Now, once I get into business,where do I need to go?
I was just on a Pink's weeklysales call where they're
speaking to all the franchiseesand just saying, look, guys,
take the time to set your goalsfor next year.
Where do you want to go on arevenue standpoint?
(18:44):
And, of course, these arethings Jill and I have been
doing this for years.
We always know where we wantFranchise Insiders to go.
We know where we want ourPink's franchise to go.
But that's part of the value ofa franchise is whether you're
seasoned entrepreneurs like us,or your first time entrepreneurs
like the ones that you'vetalked about.
The franchise is going to helpcrystallize those things for you
, and I love that, because whenyou're talking to people and
(19:07):
experts like you or like ourmentors at pinks, they're there
to cover all the bases, justlike you do.
And so, to that end, kelly, Ihave another question for you,
which is, let's say, I fund myfranchise through a Rob's and I
do my 401k rollover and then,five years from now, I get an
amazing offer to sell mybusiness.
Are there any I's I need to dotor T's I need to cross if I'm
(19:29):
selling my business and I fundedit with my 401k rollover?
Speaker 3 (19:34):
Well, I mean it just depends on because when you sell
the business, the proceeds ofthe sale are going to go back to
the shareholders.
So if you fully funded, 100%with Rob's and in the retirement
plan, is still the onlyshareholder when you sell, then
the proceeds of the sale aregoing to go back to the
retirement plan.
So I think that is one keything to know because you know,
(19:55):
when you're my age and you'recloser to retirement age, closer
to 59 and a half, where you canaccess that money without
penalty, then for me I want itto go back into the plan.
But some people are younger,right, we've got young
entrepreneurs and maybe they're40 years old or 35 years old
when they sell the business, somaybe they want that money in
(20:16):
their pocket to do somethingelse to travel the world.
So I always tell people thatyou know you don't want to wait
until you're ready to sell thebusiness to start thinking about
how you're going to sell thebusiness and start thinking
about exit strategies.
I do think that once you get upand running, those are
conversations they want to starthaving with, like their CPA,
their legal counsel, todetermine what their five-year
(20:36):
plan is, what their 10-year planis and again, we know that the
best laid plans.
Yeah, you're planning for 10, 15years and you get an offer you
can't refuse at five.
But I think you make the planof what you expect to happen and
then you start putting a plan,you start working backwards
right With your kind of CPA toput a plan in place to get you
to where you want to be.
And for some people again, ifthey're young and then maybe
(20:59):
they want to start buying thestock back from the retirement
plan a little bit every year sothat they completely buy out
that investor called theretirement plan.
So when they sell, the proceedsgo to them right, because it's
easier to buy that stock backincrementally over time than it
is to buy it back all at once.
You've got to have the money todo it.
So those are the things.
(21:20):
I think you it's never tooearly to really kind of start
thinking about the end game andworking backwards.
Speaker 1 (21:27):
And so for all of you out there, when you do that
401k rollover, it's a mandated Ccorp, can't do an LLC or an S
right Kelly.
Speaker 3 (21:36):
It is a mandated C corporation but you can change
it along the way.
It was sort of like I was justsaying if you want to reverse
the structure you have to be a Ccorporation as long as the
retirement plan owns stock inthe company.
So if you want to reverse that,then the corporation buys back
the stock that is sold to thecompany and it has to buy it
back based on a current businessvaluation, which typically runs
(21:59):
somewhere between $750 and$1,250 to get one of those.
So whatever that comes back asthat's what their corporation is
paying back to the retirementplan to buy that stock.
So hopefully the business isdoing well and the corporation
has to pay more.
But it's going back to theclient's retirement plan and
they're rebuilding theretirement plan and at any point
(22:21):
the retirement plan no longerhas an investment in the
business.
Then they can revoke thatC-corp election if they want to
and they can change the entityto anything they want.
If they want to keep theretirement plan in place, we
will, and if they don't careabout it, then we shut it down
and anybody that has money in itjust rolls their money to an
IRA wherever they want.
Speaker 1 (22:39):
Great info, awesome info.
Okay, so I think we've covereda lot on the ROBS program, which
Kelly and her team areexcellent.
Kelly, I think every singleyear, we must help at least 10
people with you guys At least.
Yeah, very popular way to sortof fund a business and I feel
like, with what's going on inthe market, we'll probably see
quite a bit more in the comingyear.
(23:01):
So, for all of you out there,if you do want to connect with
Kelly, kelly, where can thefolks find I'm not ending the
podcast, but it'd be good forpeople to know where they can.
How can people reach you?
Speaker 3 (23:12):
The easiest way really is via email because I'm
typically always glued to mycomputer so I see emails and
respond to emails.
The fastest and the easiestemail I've got a couple of them.
Kelly K-E-L-L-Y atBennettTrendscom is the easiest
way to get me.
Speaker 1 (23:28):
Very cool and, for those of you longtime listeners,
if you'd like to start with usfirst, you can just text us
305-710-0050.
Kelly, let's switch gears andlet's talk about SBA loans,
because that's probably numbertwo.
Maybe it's number one overall,I don't know.
But in terms of when we worktogether and sometimes people
even do SBA 401k combos, let'smaybe just give people a quick
(23:53):
overview of what an SBA loan isand where you see the market
right now, and maybe we'll takeit from there.
Speaker 3 (23:58):
Yeah, no, I love that question, especially where I
see the market right now.
There's so many things I haveto say and I'm going to probably
forget half of them.
But SBA stands for SmallBusiness Administration, so that
is just a government agency.
Sba is not making the loan.
The banks make the loan.
Sba is just the governmentagency that guarantees the bank
(24:18):
that if you default as theborrower, they will reimburse
the bank a certain percentage ofwhat they lent.
So a lot of people have themisconception of oh, I want an
SBA loan because if I default Idon't have to pay it back.
It's government guaranteed, I'moff the hook.
It's like that's not the case.
The borrower has to personallyguarantee that loan.
Sometimes they have to put upcollateral, sometimes they don't
(24:38):
, but they're always personallyguaranteeing it.
Speaker 1 (24:41):
What's the guardrail?
Is it over?
It attaches to your assets ifit is over 500,000 or over,
correct?
Speaker 3 (24:49):
Yeah, the minute you hit 500,000, then the bank
doesn't have a choice.
Sba mandates to the bank thatif there's collateral available
they do have to capture it, andtypically they're looking at
equity and property to put alien on a property.
And if it's under $500,000,then it's up to the bank.
If they want to do the loanwithout collateral, they
certainly can, and some bankswill still require it.
(25:11):
Right, it just depends on thestrength of the borrower.
It depends on how wellestablished the franchise is,
and there's a lot of things thatgo into it.
But we see a lot of peoplethese days under 500 that are
getting away without collateralif they're strong borrowers.
Speaker 1 (25:26):
So yeah, go ahead.
Yeah, no, and I know you have alot you want to cover, but I
did have a question for you thatI may or may not be correct in
my assumption, but it feels tome like the SBA Express Loan,
which is a lower I think it's$150K.
Is that still a thing?
Is the Express Loan still?
Speaker 3 (25:42):
a deal.
Speaker 1 (25:42):
It is, yeah, it is still a thing Does that fund
faster than say the.
What is the $500K?
Is that a $500K?
Speaker 3 (25:52):
All of them and this is a big misnomer.
So I'm glad you asked Jack,because all of them are 7As,
even that express loan is stilla 7A.
The difference with it is thatit's really meant as a working
capital loan.
It's not intended forbusinesses that are brick and
mortar.
So when you don't have brickand mortar and you don't have
leases and renovations andthings, then yeah, it's not as
(26:12):
complicated and it typicallyfunds a little bit faster.
Speaker 1 (26:17):
So do you see a time because I feel like over the
last year, anytime we've doneany of those 4K loans for
multi-unit franchise owners thatthose have taken like three to
six months, whereas the DKSBExpress has been a lot faster,
maybe 12 weeks.
Am I right or wrong in thatsort of assumption?
Speaker 3 (26:37):
Yeah, you're completely right, because when
you have brick and mortar,oftentimes the biggest challenge
that creates delays is findinga great location right, and you
can't complete the process withthe bank until you have the
location and you know how muchyou're going to get in leasehold
improvements and what yourmonthly payments are going to be
.
So they can take you all theway up to it, but you're really
(27:01):
kind of stuck until you havethat figured out.
Speaker 1 (27:03):
And any of the Fed rate cuts do those affect the
SBA rates as well.
Speaker 3 (27:10):
They sure do.
Sba loans are adjustable rateloans that move with prime.
Prime right now is at 7.75%.
A few months ago it was at 8.5%.
So we've come down I thinkthree times, two or three times,
I can't remember.
It's all a blur now, but sinceI don't know, end of summer or
(27:30):
so, we started dropping a littlebit.
When the prime adjusts, theborrower's rate will
automatically adjust with it thefollowing quarter, like the
first of the following quarter.
So all of our clients that haveSBA loans, yeah, they've come
down like three-fourths of apercent here recently.
Speaker 1 (27:50):
Yeah, Okay.
So let's and I hope you don'tmind me kind of bouncing around
a little bit- here.
Speaker 3 (27:55):
Go right ahead, it's your party.
Speaker 1 (28:02):
I mean, listen, I'm trying for our, for our people
out there, our clients who arethinking about buying a
franchise or adding anotherfranchise.
Let's take pinks, for example.
Oh, their estimated investment,hang on, let me make sure I get
this number right.
I'm just Kelly, I'm moving overto my screen here where I can
look at total investment for andit's not working.
So we're just going to, let'ssay so, let's say all in
investment for PINX is 150K, 60kof it for a franchise fee and
(28:28):
then 90K for working capital.
That's what they're saying.
And let's say their item six,right, so that fits neatly with
an SBA Express loan of 150K,what are the minimums I should
have in terms of if I want to dothat credit score, cash on hand
and any other sort ofparticulars.
What are you guys looking forto approve someone?
(28:48):
And I know it's not just astraight line, but maybe just
some basic guardrails there.
Speaker 3 (29:00):
Yeah, and I would say it definitely isn't a straight
line because we have so manybanks that we partner with and
our SBA team is constantlybringing on new partners and I
can't even keep them straight.
We'll be on a meeting andthey're talking about this loan
and that loan and I'm like, whendid we get that?
And so they're constantlytesting out things before they
roll it out on a big scale.
But you know, in general ifyou're doing that 150 Express
loan, they require about an 11%cash injection.
(29:24):
So it's easier to say 10%, buttechnically I think it's about
an 11% cash injection.
The client they'll loan you thefull 150, but the client is
injecting just over 16,000 oftheir own cash and that goes
towards the franchise fee.
It's not in addition to it.
Anytime you're dealing with anSBA loan they don't fund 100% of
(29:45):
it.
The client always is going tohave some skin in the game, so
the first thing their skin inthe game goes towards is the
franchise fee.
Speaker 1 (29:53):
Okay, and therein lies just the beauty of the
current franchise system,because here you have our
friends at the FTC that put alot of very sort of strong rules
in place to what we can andcan't say in terms of helping
franchisees figure out what abusiness will actually make
right?
I was just talking to a newfranchisor about this yesterday,
which is you've got to live anddie on that item 19 and you
(30:15):
cannot go outside of it.
And then you want to go getyour loan and the poor
franchisee is saying, well,here's the item 19 and the item
six, and this is what I got togo off of.
So it's an interesting part ofthe whole franchise landscape
where the franchisee sometimeshas to figure some things out on
their own.
Speaker 3 (30:35):
Indeed, and that is where I would say, our SBA
department really brings a wholeheck of a lot to the table in
situations like that Because,like I said, we've got different
packages we offer.
You can even go a la carte overhere if you want to use your
own bank, but you want us towrite your business plan or do
your cashflow projections.
So we're experts in that?
I'm not, clearly, I think we'veestablished that but but our
(30:56):
team is experts when it comes tocashflow projections and things
, and you know they can.
They can completely do them,like they can provide guidance
or they can completely do themfor the client.
So I think you know we offer anelite package where they do the
cashflow projections and thebusiness plan and it's like a
beautiful 35, 40 page businessplan.
They do the demographics, theresearch, everything super
(31:18):
professional.
So that's not everybody needsthat, right, but some people,
they have the knowledge to dothat themselves, but they don't
have the time, they don't havethe bandwidth, they're in
corporate America, they'reworking a lot of hours, and so
for the people, that it's abenefit and we can take that off
their plate and give them theirtime back.
It.
Um, it reduces some of the kindof stress that you may feel
(31:41):
while you're trying to juggleall of these things getting the
business up and running, gettingfunding, working a job.
So you know there's there's alot of different things that we
offer, based on how much helpthe client wants.
Speaker 1 (31:52):
Yeah, well, and what's cool is we talked about
this on the podcast.
I've talked about it a lot.
We did a a, a figure, a homeequity line of credit from
figure lending, which is nowthis online deal where you can.
You can fund in like two weeks.
Speaker 3 (32:06):
Yeah, you told me about that one.
Speaker 1 (32:08):
Yeah, and and I think we had a client just recently
do it a couple of clients and,by the way're not affiliated
with figure lending we just usedit.
We personally used it, we likedit.
I'm I'm a person that prefer,you know, speed and less phone
calls, and so when, when wefound out about, I'm like and
they say they can fund in assoon as five days in some cases,
but the the difference here isthat with figure, they mandate
(32:31):
that you, if you're taking out,sayk, you can't just take 20K of
it.
You got to draw the whole 200Kdown, but you could then put
that 200, let's say, or youcould put 100K back and then
draw from it.
So, kelly, I know a lot oftimes you recommend that people
also consider utilizing theirhome equity.
I don't know if you have anyother thoughts on that, but I
(32:52):
thought that was really cool.
Speaker 3 (32:53):
Well, I think that is really cool and I am 100% on
the same page.
I always look for what is goingto be the fastest, the easiest
and the most economical, andit's not always working with us
right.
It's just, you know, becauseSBA loans they have a place and
sometimes it's the only option,but sometimes it's not the best
(33:15):
options.
You know, a HELOC when it's anappropriate option for someone,
it's either usually going to geta little bit better rate, it's
going to be faster and easier.
And then another option that alot of people don't even know
about if you have an after-taxbrokerage account right, we're
not talking 401ks or IRAs, butjust a Robinhood account like
money in the market, after taxbrokerage funds and you have
(33:37):
over 100,000.
Oftentimes you can borrowagainst those, take a line of
credit or a loan against them,and what I like about that is
that they don't make you selloff your investments so you can
keep the money in the marketworking for you.
They're just going to use youraccount as collateral and lend
you against it, and that is fastand easy too.
Your account as collateral andlend you against it, and that is
fast and easy too, and the ratesometimes is much better than
(33:58):
SBA.
Sometimes it's a little higherif they don't have a lot of
money and they count it.
It really just depends, butit's fast and easy and it's one
of my favorite ways for peoplethat need to borrow money to get
it.
And, like you said earlier too,jack, oftentimes people are
combining options right.
It doesn't just have to be onething and you had mentioned
trends earlier the trend thatI've seen over the last three
(34:20):
years, since the rates have goneup so much, I've seen a lot
more people either funding 100%,fully with ROBS if they have
the ability to comfortably do sowithout feeling like they're
tapping out all of theretirement funds or using more
in retirement funds than theywould have so that they can
minimize what they're borrowingand minimize the monthly loan
payment and minimize whatthey're paying in interest.
(34:43):
Five years ago, when they weregiving away HELOCs at two and a
half percent, everybody wasdoing them right.
Why wouldn't you?
So it is definitely interestingthrough the years to see the
trends, because how people arefunding their business is a
direct correlation of theeconomic climate and one of the
things that I am super excitedabout with yeah, not to get
(35:04):
political, but when you talkabout the new administration and
the kind of the differences intaxation that we can expect.
We've heard them say thatthey're going to reduce the
corporate tax rate to 15%, andright now so that affects Rob's
clients because Rob's with a Ccorporation it's a flat 21%.
Right now.
(35:24):
Across the board Federal taxrate is 21%.
If they reduce that to 15%,that's massive and it was
massive for industry when theyreduced it the first time, right
From, I think and this is along time ago, so my memory may
be failing me, but it seems likethey reduced it from 38% down
to 21% and now to go down evenfurther.
(35:45):
I'm, like I am I'm prettyexcited about that.
Speaker 1 (35:48):
I mean, yeah, I think you've got the numbers right.
I was actually just talking toour son about this.
Yesterday we were driving toschool.
Yeah, we had this wholeconversation about you know.
Republicans you know, I mean,look it's, it's, it's for those
of us that are small businessowners, those types of things.
I was telling him.
I said, look, we can take that,that money we're saving now on
taxes and we can, we can empower, we can add more jobs.
(36:10):
Right, we can give more peoplejobs.
We can pay our team more money.
I think it just creates forbusiness owners just a great
thing and a great way tocontinue to grow for those
business owners.
And, let's face it, the mostsuccessful business owners are
going to continue to reinvest intheir companies.
They're going to advertise,they're going to put that money
back into the um, into the intothe.
Speaker 3 (36:31):
It's so true, and there's a lot of optimism right
now.
I don't know about you, but Ijust feel.
I feel that people areextremely optimistic about
what's to come right and aboutthe future of of business and
people thriving, and I thinkwe're running, we're rolling
into some very exciting timesand I can't wait to see 2025,
(36:52):
2026, how this all plays out.
Speaker 1 (36:55):
Yeah, Well, think about this, Kelly.
Right now houses are reallyexpensive and the rates are
still pretty high, and it usedto be.
You know, when I was a kid,when you'd hear about that one
guy that had an uncle that owned50 McDonald's, you know it was
like, oh my God, you have to berich to be a franchise owner.
Now you can fire up a homeservices franchise for 150 K.
Speaker 2 (37:15):
You can't buy many houses.
There's not a lot of options at150 K right now Right, but
there are so many friends.
Speaker 1 (37:22):
Let's just take the home care industry, for example.
Most of those items across theboard, from senior helpers to
Hallmark home care to you know,home well care services, they're
all a million and above ontheir item 19s.
And, by the way, this is not anoffer to sell a home care to
you know, home well careservices.
They're all a million and aboveon their item 19s.
And, by the way, this is not anoffer to sell a home care
franchise.
But like, look at that and mostof their and you know you
(37:43):
probably fund a lot of of homecare businesses.
It's a super low investment.
It's a highly scalable business.
Speaker 3 (37:50):
What we do is so fun, right, To be able to help
people realize their dream, andI think that there's nothing
that gives me more delight thanhelping somebody get out of
corporate America, because Icame from corporate America,
like you did, and I couldn'tstand it.
I was not cut out for it, Ididn't.
I mean, it served me well for awhile, but I found that you
(38:11):
know, when you're, when you're avery hard worker which all
business owners are it needs tomake sense, right?
If I'm going to put in 12 hoursa day, it needs to be sensical.
It can't.
You can't just be burying mewith reports to justify your job
and then I'm so tired I can'teven do mine.
Speaker 1 (38:29):
So, yeah.
I mean Kelly, there's so muchthat we've covered and there's
probably so much more.
I, I mean Kelly, there's somuch that we've covered and
there's probably so much more.
I'll tell you what I, what,what Jill and I tell our clients
, which is when we have aninitial consultation with them.
We always make a very strongrecommendation that they talk to
a professional like you.
One of the questions we ask isyou know well, what do you think
you can invest in?
A franchise?
(38:49):
Some people know and somepeople don't.
Some people don't want to getinto that with us.
They want us to work on thematch, right On the on the
franchise match, and so whatI'll say to them is look, let's
connect you with Kelly.
You guys can have aconfidential conversation with
Benetrends, it doesn't cost youanything and you can figure out
what your investment universe is, because, kelly, you're always
so honest and transparent withour clients.
(39:10):
You can figure out what yourbest resources are, and then
Kelly then typically comes backto us and says look, from a top
level, here's kind of theuniverse, and so it's a nice way
for you to stay really sort ofsafe and confidential with us.
You can learn from an expertand together, between us and
Benetrends and Kelly, we canfigure out what the right
franchise investment strategy isfor you based upon your
(39:31):
personality, your strengths, andwhat you can invest while
keeping you safe is for youbased upon your personality,
your strengths and what you caninvest while keeping you safe.
Speaker 3 (39:36):
Well, I think that's exactly right, jack, because we
all use this analogy.
But when you go to buy a home,you get pre-qualified right.
You don't want to look atmillion-dollar homes if maybe
the most you can afford is a$500 home.
And I use this analogy with myclients a lot too because, like
we spoke about, a lot of themare doing this for the very
first time.
They're out of their element.
(39:57):
They've got a lot of you knowdifferent things coming at them
and they don't know how to makesense of all of it.
And I tell them I said hey,like your process.
Right now you're exactly whereyou should be.
It's like dumping a thousandpiece puzzle on the floor and
you don't know how that pictureis ever going to come together.
But every conversation theyhave with someone like myself or
you or a franchise or existingfranchise owners, they put a
(40:21):
couple more pieces of thatpuzzle together and eventually
that picture starts to becomeclear and they just naturally
move more towards it if it's theright fit for them, or they
start to go.
You know what?
I don't think franchising isfor me, but the picture does
become clearer as they have theconversations.
Speaker 1 (40:41):
I think that's so perfectly said, Kelly.
I think that's the great way toend this for those of you out
there who want to talk to Kellyagain.
Kelly, would you mind sharingthat email address one more time
?
Speaker 3 (40:50):
I will.
It's kelly K-E-L-L-Y atBenetrendscom.
I'll give you my phone numbertoo.
I just have to read it off thewall because I don't ever
remember it.
I don't call myself.
Direct line is 267-328-1296.
Speaker 1 (41:08):
And for those of you that are listening it's true
she's actually looking at thewall right now as she reads it.
But yeah, no, kelly, that'sgreat.
And, of course, for those ofyou that would like to start
your journey with us 305-00050.
You can text that, you can callit, but I know I'm speaking for
Jill and for Kelly when I saywe'd all love to help you just
figure out first, is franchisingthe right thing for you?
(41:28):
And two, if it is, what's yourbest strategy?
Speaker 3 (41:40):
What's your best strategy, what's the best
franchise, what's the best pathfor funding?
And we're all here to help.
Well, I appreciate your time somuch.
Thank you for having me.
It was an absolute blast.
I think the world of you twoand your little guy is probably
going to build the biggestempire of everybody, right?
Speaker 2 (41:49):
Because, yeah, I can't wait to see you, we'll
connect him with you when he'sready.
Okay, I don't think he's goingto need me.
Speaker 1 (41:57):
Kelly, thank you so much, great spending time with
you Happy holidays, thank you.
Speaker 3 (42:01):
Happy holidays to you too.
Take care Bye.
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