October 6, 2025 • 38 mins
Want a business that doesn’t just pay you—but can be sold for a multiple? We dive with Thomas Scott into the playbook behind low-investment, high-potential franchises and why home services are the quiet engine of real, sellable equity. From custom closets to dryer vents, Thomas breaks down how to “build the box”: modern marketing, a tight CRM stack, accessible SBA financing, and a category with durable demand. We talk strategy, not hype—how to win in crowded markets by studying the customer journey, undercutting legacy pricing, and delivering faster, cleaner experiences that today’s buyers expect.
We explore why closets deliver some of the highest ROI in home improvement, how Millennials and Gen Z are driving 24% industry growth, and what makes the business model so satisfying: one-hour design consults, clear proposals, and single-day installs that compound into referrals. Thomas opens the hood on support that actually moves the needle—intense onboarding, weekly group coaching, and specialist access with staff-to-owner ratios around 1:5 to 1:8. The message is simple: stop being the technician; step up as a small-business CEO. Track the right metrics, hire deliberately, and run the proven play.
We also map the path to liquidity. A top salary can’t be sold; a well-run franchise can. Learn how to structure territories around an EBITDA target, why month 18 is the turning point, and how resales move quickly—often inside the system—using creative structures like partial seller financing. You’ll hear the traits that define top performers (hint: they follow the system), why coachable Gen Z owners are surging, and the exact inputs for predictable growth: reps, consults, and disciplined marketing spend.
If you’re ready to trade rented income for real equity, press play, take notes, and choose one metric to own this week. Subscribe, share with a friend who needs this roadmap, and leave a review to help more builders find the show.
Visit www.weboughtafranchise.com to subscribe.
Send us your questions for an upcoming episode at 305-710-0050.
From your pals in franchise ownership, Jack and Jill Johnson.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_03 (00:00):
Hi everyone, welcome back to the We Bought a
Franchise Podcast.
I'm Jack Johnson.
SPEAKER_00 (00:03):
I'm Jill Johnson.
SPEAKER_03 (00:05):
And we've got an incredible podcast for you
today.
We've got, of course, our ourgreat group of franchise
consultant, franchise ownerexperts, Catherine Allen, Morgan
Noller, Brian Gross, David SamJuan, and we have a special
guest, Thomas Scott.
Now, Thomas, I've got to readthis because your background
here.
You're a multi-brand operator,founder of Clausitivity, Dryer
(00:27):
Vent Squad, Frost Shades, andnow home run franchises.
You've got 20 years of building,operating, and marketing
franchises across food, retail,and home services.
Thomas, thank you for joiningus.
SPEAKER_04 (00:38):
Yeah, thank you so much.
Um I've franchised ninedifferent brands, starting with
a company called Show Homes, theone of the original home staging
brands, and on up through upclosets, dryer vents,
superheroes, and lighting squadtoday.
And um I've been a multi-unitfranchisee in five systems and a
supplier, and I'm all in on thefranchise model.
I love this model.
I like what it can do to helppeople change their lives for
(00:59):
sure.
SPEAKER_03 (01:00):
I mean, it's like once you stop, you can't you
can't stop.
SPEAKER_04 (01:05):
Yeah, I have six kids and three of them are
franchise executives.
I've like, I made my ownfranchise executives.
Like that's what the joke is inour family.
We were generational franchiselawyers at this house.
SPEAKER_03 (01:14):
Isn't that awesome?
You know, I wonder how many kidswho are, you know, kids of
entrepreneurs, both Jill and Iare kids of entrepreneurs.
How many end up becomingentrepreneurs?
I don't know if there's a staton that, but I'd be very
curious.
I bet it's a high percentage.
SPEAKER_04 (01:29):
It's a really it's like in the 70, 80 percent.
It's a higher than normal.
You know, and you have somegenerational stuff going on in
the market now that makes iteven better.
But like, you know, I think Ihad somebody in yesterday who's
buying a dryer vent superherofor us in Atlanta, and he his
dad was a restaurant owned arestoration business.
Dad was a restorationfranchisee, I think was Serve
Pro or something, and he isgetting into service brands.
(01:51):
He played SEC football and was apro football player for a year,
and that didn't work out the wayhe wanted.
And he's been doing you know,medical device sales, very
successful at it, has a halfmillion dollar a year income.
And he's wanting to get backinto business ownership because
he there's some things aboutowning a business that you just
don't get when you're anemployee of somebody else.
And no matter how much money youmake, uh you can't replace that
(02:13):
kind of joy and feeling you getof having some control over you
know what you're worth and whatyour time's worth.
SPEAKER_02 (02:20):
I've always wanted to do my own thing, and my dad
owns his own business.
He's a builder, and he modeledthat from a very young age.
Uh, you know, he's worked, hestill works seven days a week,
which there's some unhealthyhabits maybe there.
But that's why that's why Ihustle so hard because I think
that's just what was modeled tome, and that's very important
for me to model for my children.
(02:41):
And I tend to work a little moreon the work-life balance that I
don't know if I saw growing up.
So that's where I'm gettingbetter, but I absolutely think
that's true.
And and I love that aboutbusiness ownership.
SPEAKER_04 (02:54):
Yeah, they they say that, you know, entrepreneurs
are the only people that'll work80 hours a week, so they don't
have to work 40, which I thinkis a funny kind of concept, you
know, that that's what it works.
But you know, the truth is ifyou're really if you learn to
not be a technician and toreally be a CEO of a small
business or medium business,like you you can work a lot
less.
You know, it's not nearly likethe grind that people make it
(03:15):
out to be.
You don't if you're grindingthat hard, you're doing
something wrong, usually.
You know, you need to developbusiness acumen skills.
SPEAKER_03 (03:21):
Well, I mean it you you know, Catherine, you were
just in in Italy for like twoweeks, right?
Sweet.
And then she then she comes backand we're talking the other day,
and she's she's showing her herprofit margins.
What are you in year two soccerstars, Catherine?
SPEAKER_02 (03:37):
Year three as of July.
Um, but yeah, my profit marginsare to 28%.
Um, so I'm really proud of that.
And that's where uh being partof a franchise is so great
because I have the hustle, Ihave the heart.
So that's where coming into afranchise gives you that
(03:58):
structure and that framework tohelp you succeed and people to
lean on and go to for those, youknow, questions.
Numbers is something I've had toget better at.
Uh, they're so important, yougot to look at all the data, but
it's going well.
SPEAKER_03 (04:10):
Sometimes you don't know until you get thrown into
the fire.
Okay, guys, let's let's kickthis off.
Can you build a low investmentfranchise into a big business?
SPEAKER_04 (04:18):
You can.
Um, you can for sure.
And when we design all of ourhome run franchise brands, and
this is my advice for any newfranchise or is you have to kind
of build a box first for thebusiness that you're gonna um
target.
You know, we build a businessthat has an investment that's
under 150, that has SBA lending,that has good marketing and CRM
and technology systems, that hasenough competition in the market
(04:41):
that there's demand for serviceand is sustainable and isn't a
fickle kind of trendy thingthat's gonna come and go.
And so I think you can, youknow, uh like closets, for
instance, the average ticket'saround 8,000 bucks.
You know, if you look at all thecloset FTDs for all the closet
franchises, you know, the youknow, mature ones after three
years are sometimes in the two,three, four million dollar
range.
Our upper 25%, according to ourFTD, or kind of in the million
(05:04):
and a half, closing on two.
I've got people doing three.
So, you know, we we have similarrevenue to just about any other
closet franchise, just likeone-third the investment cost,
because we built it to be amodern version of a closet
business.
And in our industry, most of ourcompetitions stuck in the 1990s,
so they just haven't evolvedwith the technology and the pace
and the way people buy thingsand changing demographics for
(05:27):
customer groups.
And so, yeah, I think you can dothat.
Um, I wouldn't start a businessif I didn't think there was a
path to get somebody to the halfmillion million dollar mark in a
year and get to, as Catherinewas saying, a 20, 30 percent net
when you're matured out andramped through the ramp up.
Like I think if you can't pullthat off, why are you
franchising it anyway?
That's the whole point.
That has more to do with thestructure and the the design of
(05:49):
the franchise offering and howit's supported and trained and
kind of what the ongoing supportis and less to do with what it
cost in the beginning.
I think for us, we just findthat there's not enough under
150 serious brands that you cando well in.
There just there aren't enoughof them in the market to satisfy
consumer demand.
SPEAKER_01 (06:06):
Thomas, I'm curious too, you know, you're talking
about not even just lower costs,but just this kind of area of
home services.
Yeah, looking at closets, right?
And we hear a lot of people loveservices, one that lower
investment, also being morerecession resistant.
Yeah.
Well, I know when I've broughtup closets with clients looking
at space, I hear two things allthe time.
(06:27):
One, hey, that space is reallycrowded, and there's a ton of
players in the closet space.
And two, hey, maybe that'sactually an area that, you know,
if the economy's down, peopledon't have to do that.
SPEAKER_04 (06:37):
Question.
And I'm a I'm a little bit I I Ilove competitive spaces and I
like down markets.
That's for me ideal workingconditions to start a business
in.
Like I'm like I go against thegrain on that.
We ran franchise coffee shopsfor a while here in Nashville
and have helped a few coffeebrands, and we would always put
our coffee shops across thestreet from a Starbucks.
Like I wanted to be able to lookout the window and see a
(06:59):
Starbucks, and we would by justbeing different than Starbucks
and offering the things thatthey weren't good at, we would
take 10 or 15% of their revenue,which isn't a lot to Starbucks.
It's a huge amount to a startupcoffee shop.
But the truth is, if youunderstand how people buy
things, what the customerjourney is, and where the
competition is strong and wherethey're not strong, then you
(07:21):
design the business around thoseholes.
You can do well, there's always,always room for a better
operator, better pricing, bettercustomer service, better
offering, all of those things.
Up closet sells the exact samecloset materials, hardware, and
lumber that California Closetsells, but we're 30, 35% less
expensive on a retailenvironment.
We just run circles around them.
(07:41):
We do 65% of our customers ormillennials are younger, like
they're much younger than thetraditional closet buyer because
millennials care a lot aboutmental health as a demographic
group, and you know, having anorganized life isn't like a
luxury item to them.
They think about closetsdifferently.
So that's one part of it is thatas long as you're going to
market and you differentiateyourself and your marketing is
(08:03):
different, your sales process isdifferent, your products are
priced differently, and you canprove out that you can succeed,
and we clearly are succeeding onthat front, then you can win.
On the other side, closetsspecifically is a really
interesting, and the reason wewanted to be in the closet
space, it's a really interestinghome improvement.
It's the highest ROI of all thehome, of anything you could
spend dollars on in your house,closets will get 110 to 120%
(08:26):
return typically on what youspend.
So there is there isn't anotherinvestment in a home like a
kitchen or a deck or so.
You just don't get that kind ofROI on it.
And even in the housing bus inthe mid 2000s, we didn't see
closets diminish down a lot.
It was one of the few thingsthat kind of had a steady point.
It's obviously slower in a downmarket than an up market.
But what happens is when themarket gets rough and you can't
(08:49):
sell your house, creating morespace in the closets, which is
the main reason somebody sells ahouse in most places, um,
becomes more of a priority.
So people invest in getting abetter quality of life in the
house they're kind of stuck in.
It's the same in today's marketwhere the interest rates are
high and people are stuck inthese 2% mortgages, and there's
no way they're gonna leave a 2%mortgage and get a 7% mortgage.
(09:11):
So they're just gonna spend alot on investing.
When the market's really good,people rip out the closets and
put new ones in.
There's lots of renovation workand people like join doing the
whole house when they move.
We see a lot of that in today'smarket too.
You know, it's just uh it's adifferent mindset.
But we'd find that it's Iwouldn't go as far as to say
it's recession resistant, butit's not as um impacted as say,
(09:32):
you know, you know, a three toeight thousand dollar closet
purchase isn't the same kind ofinvestment as a hundred thousand
dollar kitchen overhaul or youknow, even putting a roof on
your house or something, youknow, really dramatic.
And so, and if you've ever had,I don't know if any of you have
custom closets, if you ever putthem in your house, you will put
one in every house you own therest of your life.
You just you won't be able tolive comfortably without it.
(09:55):
So it's it's a kind of a coolbusiness.
We like it.
We like that it's an in and outservice.
Like we, you know, we design itin an hour and you get them a
proposal, it comes in four,five, six weeks, and we install
it in one day from zero to, youknow, we're finished by three in
the afternoon.
Like that part of it's prettycool.
Like it's just a kind of a cool,fun business.
People who operate them reallyenjoy it a lot.
Like it's a satisfying businessto run.
SPEAKER_00 (10:17):
I have a question for you, Thomas.
Um, since you have multiple homeservices brands, when it comes
to support for the franchisees,we were talking to one uh must
have been Sunday, I think, adifferent brand, a different
service.
And they were talking about afive to one ratio for support to
franchisee.
And I felt like that was prettygood.
Do you feel like between thedifferent home services brands,
(10:39):
do you need the same supportwith something like a dryer vent
superheroes versus up closets,or does it vary?
SPEAKER_04 (10:45):
Uh my philosophy, having been a franchise business
coach and of a franchisee, Ibuild my brands to treat people
the way I like to be treated asan owner.
You know, we treat people likeadults.
So part of it is franchisesupport is divided for us into
two different categories productand technical support.
How do I install a closet, howdo I design a closet, you know,
this the mechanical operationalpart of this business?
(11:08):
Like how do you train theinstallers, how do you manage
the salespeople?
The more important part ofcoaching uh kind of is
onboarding coaching.
Like when you sign an agreementwith us, we start really intense
virtual training and onboardingcoaching that culminates in a
one-week in-person thing.
But then we coach our people forfour months after they open on a
once-a-week and a peer group.
(11:29):
We call it a jump start program,and we're looking at every
design and every transaction andevery consult and every
marketing dollar spent.
And you're doing this in a groupof peers, and so every time
somebody makes a mistake, youlearn from it.
One in five, one in eight forstaff to people is about the
kind of that's about where weare in our systems.
Um, and you know, we haveadmins, we have marketing
(11:49):
managers, we have manufacturingsupport, you know, we've got
sales coaches, you know, we havepeople that do different things,
but at the end of the day, youknow, there's you need technical
help or there's somebody who'sholding you accountable to grow
your business.
Our whole view is that the bestreason to buy a franchise today,
and especially for youngerbuyers, is this a path of
professional development, tojust to learn how to run a
(12:12):
business.
Run, spend three years with us,you can run any business the
rest of your life.
I think that's an awesome giftto give somebody.
SPEAKER_00 (12:18):
Well, I love that.
And I was gonna uh just reallyquick because I was gonna do my
master's degree and I didn't doit.
And so I like that you're sayingthat you're they're teaching
people to be that person, be theCEO, because I initially was
turned off from home servicesbecause I didn't want to be the
one doing the work, going intoall the houses.
And I think I didn't understandthat very clearly.
So I love that that's whatyou're teaching.
SPEAKER_04 (12:39):
So you're building the business that you want to
run down the road.
We're trying to get people tothink three and four years down
the road.
What is it?
What are you what's the ultimategoal you're trying to get to?
You're trying to fire yourself,you're trying to build a team
that will operate without you soI can do what Catherine does and
go to Italy for two weeks.
That sounds super awesome.
You know, like but her businessdidn't go underwater when she
was there.
She probably has good systemsand support and structure and
(13:01):
technology to help her runthose.
SPEAKER_02 (13:02):
And that's great manager.
A great manager.
SPEAKER_04 (13:05):
A great manager.
You know, you know, it's kind oflike that cake box analogy.
You could bake a cake fromscratch and you can figure out
all the ingredients, and you canmake an amazing cake, and you
probably make a lot of errors.
Or you could buy a box cake mixand put water in it, and your
cake's gonna be there a lotfaster with a lot less waste.
I personally love cheap cake.
SPEAKER_03 (13:22):
Give me that, give me that good grocery store cheap
frosting.
Give it to me all day long overany fancy case.
SPEAKER_04 (13:31):
You don't look like you eat a lot of cake.
I on the other hand look like Ieat all the cakes in the room,
you know.
SPEAKER_03 (13:36):
Don't be fooled.
I eat a lot of cake.
But hey, okay, here's a couplequick things.
This is something I've beenthinking a lot about.
Um like most normal people don'tget to get equity in a company,
right?
You always hear about thesesmart people that got some
equity in Silicon Valley and butbut mainly that's not gonna be
me and it's not gonna be you.
(13:56):
And and the thing is, is thatand anyone that follows, you
know, any of us on social media,um, we we really try and tell it
how it is, and that the thefirst 12, 18 months, look,
you're gonna pay your dues.
And people will say to me, Well,gosh, why?
Why would I do that?
Why would I take a step backfrom my 150K a year job and go
(14:16):
do that?
Because you can't flip that 150Kjob for you know a million
bucks.
You can build such equity with afranchise, and it's actually
it's not as hard as you think.
It's like right now we've got aclient who's moving forward with
a recurring revenue homeservices franchise, and they are
in a great market for it.
They're looking at a uh poolservices franchise and they're
in in Arizona.
(14:38):
And the debate they're currentlyhaving is between two and three
territories.
And so they came to me as thefranchise consultant and said,
Look, what do you think?
One of them wants to do two, oneof them wants to do three.
And so basically, I said, Look,let's let's talk about what does
it do to your working capital?
Because if it if it's gonna killyour working capital, don't do
it.
But if we're trying to build amillion-dollar exit, then we've
(15:02):
got this tool called our exitpath calculator, where basically
you can take a servicefranchise, a retail franchise,
home care franchise, what haveyou, and you can aim towards,
hey, I want to get to a milliondollars EBITDA.
How many units should I have?
And so the calculator said heneeded four.
So I said, to me, it's an easyquestion now.
You've got the capital, you canstart with three, and I'll bet
(15:22):
you in 18 months, if you guysare really doing well with this,
we can find another franchiseewho's close by and you can buy
their location and get to four.
So I think building towards anexit, and Catherine, this goes
back to the point that you made,being on top your numbers from
day one, building your business.
Just to me, every day, I want tomake sure if anyone were to ever
call me and say, we've got afund, we want to buy the
(15:42):
franchise insiders, that I couldsend them my PL and everything
is dialed.
You could ask me in the middleof the night and I can send you
a PL and it's all up to date.
So build your business, eventhough you may never want to
sell, build your business tosell from day one.
SPEAKER_04 (15:56):
That's great advice.
Yeah, I I like that.
You know, we we don't I don'tlove selling people huge numbers
of units because you don't know,you know, and and it's a it's a
quirky counterintuitive thing,but some of the people with the
most capital fail at the highestrates in my franchising
experience.
Like it's kind of because theydon't want to do the work.
Like they they think, oh, I justgot all the capital.
(16:16):
That's a substitute for puttingthe hard work in.
And sometimes you got to kind offind a mix.
So it gets, you know, we like toget people two or three units
and then see how they canperform and get them to some
level and then let them expand.
But yeah, I think it's true.
That's a really cool calculator.
I'd love to see that.
SPEAKER_03 (16:30):
So sure, happy to send it to you.
Yeah, for anyone, by the way,who's interested in that
calculator, feel free to text305-710-0050.
SPEAKER_04 (16:38):
Yeah, in the first 12 to 18 months, is the hardest
part.
You're making investments in thebusiness and you haven't really
gotten to where it's smooth andyou haven't gotten to where
you're even if it's profitable,you haven't maximized your
profit.
You know, it's it's not untilthe second, third year,
typically, that it gets reallynice and calm waters and you can
really scale.
The appetite for resale servicebusinesses in the US is is
(16:59):
really insane right now.
Like there's just so much of amarket for resale stuff.
Like when we have resales, theysell quickly.
You know, it's not hard to findbuyers even in today's market.
SPEAKER_03 (17:09):
Brian, wouldn't you say?
I mean, that's that's wherewe're seeing so many people who
just scour biz by sell everysingle day looking for that
perfect business.
SPEAKER_01 (17:17):
They are.
You know, it's it's alwaysinteresting because you're
looking for that perfectbusiness one doesn't exist.
But when you talk about thisbringing criteria, when you ask
people, hey, what are youlooking for?
And what you know, what meetsthat that list?
It's all the same criteria.
Everyone's looking for the sameoperating history, you know, the
same length that's been opened.
They're looking for the sameSDE, you know, they're trying to
buy at the same multiple.
(17:38):
So it's just a really crowdedmarket.
But you know, Thomas, you justsaid something that's really
interesting, you know, and webrought this up before.
A lot of times these bestbusinesses they don't hit biz by
sell.
Right?
They're not being listed online,but they're going to other
people in the system, right?
So you know, one of the things Ialways find interesting, I
always ask people when I meetsomeone new, how long have you
been looking for a business?
(17:58):
And I'd say 18 to 36 months isprobably the average answer.
So when you start thinking aboutthat amount of time out you
know, kicking tires and lookingat listings and and you know,
trying to get more information,think about these home service
brands, what you could build intwo years time frame and then
have the inside edge to getlistings of your neighbors and
(18:21):
other you know, other businessesthat aren't even hitting the
market.
So the opportunity is just beingmissed by you know, really
looking for something that'sthat's not hitting Biz by sell.
SPEAKER_04 (18:30):
Oh, for sure.
Yeah, I would I had the um honorof being on the advisory council
for biz by sell for severalyears.
And last year their amount oftraffic they have on that site
was up three or four hundredpercent, like a really
significant increase.
And it's all people looking forthis, you know, unicorn boomer
selling a service business toyour point.
Like those don't really exist inany kind of mass quantity.
(18:51):
If there's anything good, I meanI've used Biz by Sell to sell my
personal businesses, and I'vesold every one I put on there in
48 hours.
Like it's just like if it'swe're if it's really a legit
business, like Jack says, andyou have a PL and it's the real
deal, it'll sell super, superfast.
And so, like, you know, I thinkone of the probably 60% of our
placements are people that werein that 18 to 24, like they were
(19:13):
coming up, they found us onBusiness by Sell or thought
about us because they saw asimilar business or something
and kind of did their research.
But I think it's fascinating tosee that people are going for
that.
And I think a good strategytoday is like maybe look to buy
out underperforming franchiseoperators because there are
some.
Like I'd love for people to takea stab at running a business,
but it doesn't mean that it'sfor everybody.
(19:33):
Not everybody has really takesto run a business, like it takes
a little bit of a larger.
SPEAKER_03 (19:38):
That's the advantage of franchise over mom and pop,
is you have built-in acquisitionand exit partners from day one.
If you go buy a mom and pop andmom and pop go retire, is
everyone likes to paint thepicture, right?
Mom and pop's got themillion-dollar business and
they're gonna sell it to you forzero-down seller financing.
When mom and pop leave and theyretire, they don't want to take
your phone call.
(19:59):
So that's a big thing to thinkabout is that built-in support.
And when you buy a franchise, Imean, you know, David, look at
Pinks.
I mean, there's people who areadding up Pink's locations like
yourselves, and there's peoplewho are divesting pink's
locations because that's justhow a franchise system goes.
I would be willing to bet thatif you're and franchise owners
tend to sell to franchiseowners, but on any given day,
five to 10% of every singlefranchise system is for sale.
(20:22):
And you can get great deals justby asking your franchise or hey,
who is within driving distanceof me that I could acquire?
Um, and in many cases, sellerfinancing, if you really
position it right to a seller,hey, look, we could we could buy
you for a couple hundred grandtoday, or we could pay you out
over the next 24 months with apromissory note, and your tax
(20:43):
burden is going to be so muchless.
And now you're getting that realmailbox money that you were
looking for.
I mean, that's the beauty offranchising.
SPEAKER_04 (20:50):
Yeah, for sure.
It's even with good franchisesystems like us, we'll have
three or four or five at anytime.
Like if you came to me and said,Hey, do you have any resales?
I said, I got three or four thatare good businesses that for
whatever reason the owner wantsto do something else.
Life happens to people and itputs them in situations where
they need to make a soft exit.
You know, I my advice is alwayslike if you're a franchisee, um,
(21:13):
try to sell it for you know,twice, you know, if you got
profitable, try to get it totwice what you invested in it
and owner finance half, like geta 50% down and carry a note for
the remainder.
You you can't really lose.
Like I it's really hard to dothat with a startup business,
right?
Impossible in most cases, butsuper common in franchise
systems.
You know, those are some of thepeople that you meet really
(21:34):
smart people in franchising andthe multi-unit guys that mop up
all the underunites like in foodconcepts, they'll buy all the
underperforming stores and turnthem into mega performing,
profitable.
You know, it's so much cheaperto do that than to build one
yourself.
It's a smart move.
SPEAKER_02 (21:48):
I love to hear, you know, you've been doing this a
long time across many, manybrands.
When you think of your topperformers, right, that you've
worked with over the years, whattraits do they have the the top
performers follow the system?
SPEAKER_04 (22:03):
Like at my top performing up closets, people
will say, look, I want to hit,you know, 200,000 a month or
100,000 a month, whatever thenumber is that they're trying to
hit.
What do I need to do to getthere?
And it's a math equation for us.
You need this many salesconsultants, you need this many
consultation appointments, youknow, marking budget of X, do
this, this, and this.
And the people that just do itgenerally hit if that's the
(22:25):
whole point of having provenkind of track record, is they
they hit it.
The people that really struggleon the other end um will come in
and want to reinvent the wheel.
Like they'll want to redesigneverything.
It's much more about how youfeel versus what actually works.
Like, I don't like that ad.
I don't like that vendor, Idon't like that account manager,
I don't like this CRM.
(22:45):
That doesn't work the way myother CRM worked.
And but like everybody in thetop performer list uses these
systems and they use themwithout any trouble.
Like, you got to ask yourself,like, why are you is it really
that do you want to lose 200,000over your feeling, or do you
want to just make 200,000 andthen hire someone to deal with
that?
Well, I mean, if you're afranchise or you'll have a lot
of people that becomemillionaires, you'll have a lot
of people that go out ofbusiness.
(23:06):
And the difference is the peoplethat go out of business maybe
will listen to 10 or 15% of whatyou try to get them to have
their help that you try to givethem the advice and they'll
reinvent stuff.
And the top performers generallywill listen to about 40%.
I think nobody listens to morethan 50% of what a franchise or
says, just it's just humannature.
To be an entrepreneur meansyou're wired to some level of
(23:28):
innovation, and that's normal,but you have to kind of tamp it
down in a franchise system alittle bit to get to the result.
SPEAKER_05 (23:34):
Yeah, I think you nailed it there, Thomas, is not
having any business backgroundand coming from blue collar for
being a police officer.
I just came into the system withPinks and just followed the
playbook.
And like we say at Pinks, justrun the damn ball.
And right now I'm a top fivefranchisee within the system.
Within the system, the peoplethat are struggling are those
that think they know better.
They had a business before andthey want to use their their
(23:57):
way, and it's not working quiteas bad.
SPEAKER_04 (23:59):
Uh my biggest group of top performers and all three
of the brands we have are Gen Zowners, people that are under
25.
Uh, they make up 60% of my topperformer group.
And I think it's they're justthey're raised on tales of
entrepreneurship.
Like they are veryself-learning, they're very
coachable, they don't have badhabits.
You know, you I tell them, like,look, you can take a lot of risk
(24:20):
when you're 22 or 24 or 25.
Like, you're not even gonnaremember what you were doing in
your 20s when you're my age.
So you might as well go for it,and they're not afraid to fail.
In fact, they not that theyfail, but they the idea that you
fail means you're doing stuffright, that you're learning.
Franchising needs a lot more ofthose people.
SPEAKER_03 (24:37):
And we actually saw it play out with a client of
ours who he invested in aroofing franchise.
He was 29 years old, he justcame in into an inheritance.
In under two years, he flippedit and sold it for six million
dollars.
That's awesome.
I won't name the concept becausewe don't want to break any FTC
rules, but you imagine he boughttwo units, his all investment
(24:57):
was$300,000, he had multipleoffers, and he flipped it and
sold it for six million dollarsat you know, 31 years old.
Um, and I would agree with youthat it's much better to do it
than 25, 30, 35 than the60-year-old that wakes up one
day and says, Oh, shoot, um, Idon't have anything for
retirement, and I probably haveat max 15 good working years,
(25:21):
assuming all goes well, butprobably 10.
And now I got to go build up andwhat do you think an average
person needs to retire thesedays?
At least$2 million.
Um, so now they come to us andwe're in the fourth quarter, and
we really so then it's like,okay, well, we can we can do
that, but you're gonna have tofocus on low investment, high
return, like senior care, thingslike that, home services.
(25:42):
Whereas if you could startyounger, if you could start at
25 with a with an up closet andyou get good at it and you start
stacking units, and then you're35 years old and you've got 10
units, I mean, then you could beliving the lifestyle that
Catherine is, like going off toItaly for a couple of days.
Right.
SPEAKER_02 (25:59):
Well, I had a client the other day, and one of the
concepts he really liked, andhe's like, if this had been me
10 years ago, I would have doneit.
But now that I'm a little older,I just am not I don't have that
hustle, you know, of that levelfor that specific concept.
So I love that.
SPEAKER_04 (26:18):
Your job isn't to do the work, your job is to become
an executive, develop leadershipskills, learn how to delegate,
have systems, follow the system,you know, run a business that
will run without you in as shorta period of time as you possibly
can, that one to two yearperiod.
You're gonna have to have threesalespeople.
Each salesperson needs 26consults a month, and it should
spend between two and threehundred dollars of marketing for
(26:41):
consults.
You know, that's that's whatyour PL is gonna look like.
You're gonna have to have thatkind of a marketing expense and
staff overhead for you to hitthe number you want to hit.
Back to closets, real quick.
SPEAKER_03 (26:50):
Yeah, you know, Jill, there was Jill upgraded
her closet and it was not cheap.
Um and but as I thought aboutit, I almost, you know, thought
of it as a defensive strategy inthat if the shit ever hit the
fan, that, and then we needed tosell our house and we wanted to
make it different than the otherones in our neighborhood, if we
could point to, hey, we've gotthe the biggest closet in the
(27:12):
neighborhood, that gives ussomething to kind of hang our
hat on.
And and so to me, and and Idon't know that that statement's
true, I'm just you knowexaggerating, but to me, I'm
like, it's exactly what yousaid.
When we go into houses, we lookat we want the kitchen, right?
And you need to have that closetbecause, you know, I don't know,
you know, Catherine Morgan, thiswas when Jill and I first got
(27:33):
serious and we would startlooking at houses.
I didn't give a I didn't give ayou know anything about the
closets, right?
I'm like, okay, there's a view,there's this, and Jill would
like shoot these houses down,say there's no way in heck that
closet's too small.
Now I understand it, and Iactually think you could make an
argument that a closet like upclosets could be pretty darn
recession um resistant because Ilook at where I'm gonna spend my
(27:55):
money, investing in somethinglike that's a really good move
to add value to your long-termvalue to your house.
SPEAKER_04 (28:01):
Oh yeah, and you know, we and my wife runs the
Nashville kind of Franklin upcloset, she's a franchisee
herself.
So we're you know, we runcompany stores of our operations
in several markets.
So I'm just a big believer inthat.
But we were out on a weekend andshe has some tools in her, she's
got like a little BMW M4.
It's not, doesn't look like atradescar, but she's what she
does her consults in.
(28:21):
She had some tools and some rodsin the back.
She got a call from a customerwho said, Hey, I just bought
this house.
I think you have it's one ofyour closets because there was a
label somewhere on a drawer thathe figured out it was something
that she installed two or threeyears prior.
And I want to move a rod around.
Like, can you help me with that?
She goes, Well, I'm not comingin that part of town, I'll just
drop by.
And so we went by and it was a$75 repair.
(28:43):
And he'd already had a pantryand a closet.
It didn't really need much more.
But you just, I think that's animportant customer service
thing.
But he said, I just want to tellyou this is a uh like an over 55
kind of neighborhood, one ofthose sale web kind of things.
Because there were seven housesfor sale on this street.
This one wasn't the best deal,but I bought it because the
pantry and the closet wereamazing.
(29:04):
And my wife, that's the only oneshe would let us put an offer in
on.
We paid more, I mean, I probablypaid more than the closet's
cost, which you did, you know.
And so I I see that story overand over and over again.
Your wife probably had anamazing closet in another house.
Like she's probably used tothat, and you don't want to
lower your lifestyle down, andit's a funny, it's a need, not a
(29:24):
luxury thing.
Like it's something you have tohave versus something you just
want to have, and it's a prettycool psychology thing.
If you understand how that allworks, it makes marketing and
sales pretty easy to kind of getto clients.
And it's the reason you know thecloset industry was up 24% last
year.
Like it's just it's gone throughsome like crazy levels of
growth, driven mostly bymillennials and Gen Zs who are
(29:46):
buying closets.
Like they may not buy a fiftythousand dollar closet, but they
get in and they have wireshelves, and we call it the
closet of shame.
You know, friends don't letfriends have closets of shame.
You know, you know, nobody likeswire shelves.
They're awful, they're hard tolive with, they waste space.
And you know, they might spendtwo or three thousand dollars on
a basic custom closet, but youknow, that's an entry point into
the rest of their lives, they'llbe a closet customer in every
(30:08):
house that they owe.
SPEAKER_02 (30:09):
Yeah, we do our closets.
My gosh, you're selling me.
SPEAKER_01 (30:12):
My first franchise was action home services, and we
did kitchen, bathroom,organization, accessibility.
And we would mention Dell Webb,55 plus communities is in the
state of Florida.
So a lot of these big newconstruction neighborhoods would
be in as people are moving in,or even the week or two before
they move in, and would alwaysbe in with closet companies.
(30:33):
Yeah.
But it'd be new constructionhomes with the white wire racks
and closets and pantries.
And that was first order beforepeople moved in, and a new
construction home was replacingand putting in a custom closet,
right?
Because these just they weren'tpart of even you know pretty
custom homes, high-end homesstill had very basic closets
(30:54):
that million-dollar housesometimes will have wire
shelves.
SPEAKER_04 (30:57):
A million-dollar house isn't a million-dollar
house anymore.
It's really a$350,000 house bywhat your standards are.
But uh, it just you know, a lotof younger buyers, millennials
in particular, will stretch tobuy the maximum amount of house
they can buy, and that's wherethat's where they skimp is it'll
have builder grade closets.
And so, yeah, the market forclosets is great.
I think it's just a testament,you know, when you see 15 or 20
(31:18):
brands in a competitive space,that just means there's that
much customer demand for what itdoes.
You know, I think that that'salways a good thing to be.
As long as your franchise or iscommitted to franchisee's
success and is innovative andcan articulate here's how we're
different, here's where we win.
You know, these are the this iswho our sweet spot customer is,
and this is why we delight themand how we price our things.
(31:39):
You just you have to have aclear roadmap.
You know, if they can't do that,don't buy it.
You know, like if you're gonnabuy window cleaning, Pinks is a
really slick brand.
I love all the branding.
I'm envious of some of theirbranding for our drivenet brand,
but they're uh we know thoseguys really well.
But you know, like like there'sa bunch of window cleaners.
Like uh there's a Pinx here inFranklin that you know that uh
Brentwood Franklin that he'ssuper I think Vin Kidney is his
(32:02):
name, super nice guy.
But they're you know, I likethat one better than all the
other ones.
And maybe it's branding, maybeit's customer service, maybe
it's pricing.
You know, like there's you know,just because there's a lot of
people in a space, thatgenerally means it's a good
business to be in.
SPEAKER_03 (32:15):
We believe validation is the key to all of
this, and that's why we wecreated a um uh franchisee
interview that anyone can get ifthey go to our website,
thefranchiseinsiders.com.
Um, you can get questions to askfranchisees, which we recommend
talk to five to ten.
And we actually have a clientwho's moving forward with enough
closets tomorrow.
And I know she talked to, Ithink right around there about
(32:35):
10 different franchisees.
At least 10.
She's analytical.
It's it's yeah, she's great.
We're we're super excited.
We make sure everyone does that.
We also have a um uh 27 redflags you should know about.
So again, go to thefranchiseinsiders.com.
All those resources are free,including the valuation
calculator.
Um, our aim for Thomas is toprovide everyone with as much
(32:56):
information as possible, and butthinking about it as franchise
owners.
And that's why our whole missionhere is franchise owners,
helping future franchise ownersis we want to help people who
are thinking about businessownership think about it the way
that an owner should think aboutit.
So, with that said, let's do aquick kind of like closing
thoughts, kind of going David.
I know you've got a hard stop,so let's start with you.
SPEAKER_05 (33:17):
Amazing podcast.
And coming, like I said, comingfrom blue-collar police officer
to now owning my business.
You know, if you want to reachout to me and just hear my story
and just talk all thingsfranchising, you know, I'll go
ahead and reach out.
My telephone number is305-496-4883, 305-496-4883.
But again, thanks for beinghere, Thomas.
Really appreciate all theinsight.
(33:37):
Thank you.
SPEAKER_01 (33:38):
Cool.
You know, Thomas, it's it'salways fun talking to people
like yourself who you've ownedmultiple franchises, you're for
a franchise or so you've seenall sides of this business.
And one of the things that youmentioned a couple of times
today was along the lines of,hey, I'll take a business with a
lot of competition, right?
There's always room to do thingsbetter, to have stronger
marketing, and really scale abusiness when there's consumer
(33:59):
demand.
You know, and I think we'reseeing that right now with with
your service businesses.
I think that's just a keytakeaway that anyone listening
should always keep in mind isthat don't shy away from
competition.
Competition just proves thatthere's there's enough uh space
out there for another player.
Yeah.
Morgan.
SPEAKER_00 (34:15):
Yeah, thank you, Thomas.
I I just my big takeaway wasjust being your own CEO with
home services.
I think I I shied away tooquickly.
So I hope people listening takeit seriously and go dive into
what's out there and understandthat it's a low buy-in and
there's huge success.
So I hope it I hope it helpssomeone.
SPEAKER_03 (34:30):
Awesome.
Thank you.
Thomas, your closing thoughts.
SPEAKER_04 (34:33):
Yeah, I I think, you know, thank you guys for having
me.
This is an awesome group.
We're excited to have aplacement with you guys.
And I really appreciate the workyou guys are doing to educate
people.
I think in all of yourmaterials, you're thoughtful.
Like I think that this idea thatyou can run an inexpensive
franchise that can get to reallylarge kind of multiples.
Like it's you know, you don'thave to have millions of dollars
(34:53):
to to build a business that'sworth potentially millions of
dollars.
I think the market is full ofpeople that you could help, and
I'm excited to kind of be partof that growth for sure.
You know, I just I think youknow, home services are where
the action's at today.
It's the smart money in afranchise purchase.
SPEAKER_03 (35:08):
Catherine.
SPEAKER_02 (35:09):
Yep.
Uh two thoughts.
One, you've sold me Thomas.
I need to get custom closets.
It's it's a done deal.
I'm talking to my husband afterthis.
Two, I love the just the Gen Zhearing you guys have kind of
figured that out and that youhave a cohort in your company
that's driving 60% of therevenue.
SPEAKER_04 (35:28):
You know, they're just they're just like they're
right out of business school orright out of college, and their
parents help them with an SBAloan, and that's really all it
takes.
Like that's that easy of a dealto put together.
Yeah, maybe you only buy one ortwo units, but it's the first
one I would say that.
SPEAKER_02 (35:41):
So I think that that's really for anyone
listening in that age group, umup closets would be a great, a
great concept for any of them.
SPEAKER_04 (35:51):
Behind every 22-year-old Gen Z is a
55-year-old Gen X who wantstheir kid to be entrepreneurial
and not follow the path thatthey followed.
So you'll find thatgenerationally those two
generations are prettyentrepreneurial and very
pro-risk oriented.
So they'll take chances onthings.
So I think if you're recruitingpeople, like that's not a missed
opportunity for a lot offranchise consultants.
(36:11):
They just they just assume thatsomebody young isn't gonna have
the drive or the capital, andit's a mistake.
You know, like they're some ofour best owners.
We'll take everyone you want tosend our way.
SPEAKER_02 (36:20):
I'm gonna go find them.
We'll do that.
SPEAKER_03 (36:21):
You're gonna see.
I I think now with the news thatopen AI, ChatGPT soon is gonna
have you know an advertisingplatform.
SPEAKER_04 (36:29):
Oh, so excited about that.
SPEAKER_03 (36:31):
Isn't that great?
I I think we are going to beable to find the right kind of
people.
I think this type of message,first of all, you know, it's
great, you know, for us.
I mean, I I I think the mostimportant thing is this for for
everyone, which is starts withone and have patience, right?
You you don't have to be a rockstar entrepreneur from day one.
(36:52):
You gotta get to month 18.
Get to month 18 and see whereyou are.
And that that really will tellthe story.
And then from there, if then ifyou're working with a franchise
consultant like anyone on ourteam here, um, we build that
into our process.
That at month 18, we're gonnacheck in and we're gonna just
discuss are we now going intoacquisition mode?
Um, or are we going into sellingmode?
(37:12):
What are we doing?
Or are we staying put?
But it it really is theadvantage of franchise versus
going out there and doing the MAstuff is that you've got this
built-in network, built-infranchisees, acquisition, exit,
it's all built in.
You just have to go take thesystems and execute.
So this has been great, Thomas.
Uh, we appreciate you being onthe podcast and and thank you
(37:34):
for joining us today.
All of you listening, if youwant help with your franchise
search, I recommend you go toour team page where you can
learn about Catherine, Morgan,Brian, David, and uh determine,
you know, who it makes sense foryou to work with.
We'd love to help you in any waythat we can.
And we thank you for listeningto our podcast.
We'll see you next time.
Hi everyone, welcome back to the We Bought a
Franchise Podcast.
I'm Jack Johnson.
SPEAKER_00 (00:03):
I'm Jill Johnson.
SPEAKER_03 (00:05):
And we've got an incredible podcast for you
today.
We've got, of course, our ourgreat group of franchise
consultant, franchise ownerexperts, Catherine Allen, Morgan
Noller, Brian Gross, David SamJuan, and we have a special
guest, Thomas Scott.
Now, Thomas, I've got to readthis because your background
here.
You're a multi-brand operator,founder of Clausitivity, Dryer
(00:27):
Vent Squad, Frost Shades, andnow home run franchises.
You've got 20 years of building,operating, and marketing
franchises across food, retail,and home services.
Thomas, thank you for joiningus.
SPEAKER_04 (00:38):
Yeah, thank you so much.
Um I've franchised ninedifferent brands, starting with
a company called Show Homes, theone of the original home staging
brands, and on up through upclosets, dryer vents,
superheroes, and lighting squadtoday.
And um I've been a multi-unitfranchisee in five systems and a
supplier, and I'm all in on thefranchise model.
I love this model.
I like what it can do to helppeople change their lives for
(00:59):
sure.
SPEAKER_03 (01:00):
I mean, it's like once you stop, you can't you
can't stop.
SPEAKER_04 (01:05):
Yeah, I have six kids and three of them are
franchise executives.
I've like, I made my ownfranchise executives.
Like that's what the joke is inour family.
We were generational franchiselawyers at this house.
SPEAKER_03 (01:14):
Isn't that awesome?
You know, I wonder how many kidswho are, you know, kids of
entrepreneurs, both Jill and Iare kids of entrepreneurs.
How many end up becomingentrepreneurs?
I don't know if there's a staton that, but I'd be very
curious.
I bet it's a high percentage.
SPEAKER_04 (01:29):
It's a really it's like in the 70, 80 percent.
It's a higher than normal.
You know, and you have somegenerational stuff going on in
the market now that makes iteven better.
But like, you know, I think Ihad somebody in yesterday who's
buying a dryer vent superherofor us in Atlanta, and he his
dad was a restaurant owned arestoration business.
Dad was a restorationfranchisee, I think was Serve
Pro or something, and he isgetting into service brands.
(01:51):
He played SEC football and was apro football player for a year,
and that didn't work out the wayhe wanted.
And he's been doing you know,medical device sales, very
successful at it, has a halfmillion dollar a year income.
And he's wanting to get backinto business ownership because
he there's some things aboutowning a business that you just
don't get when you're anemployee of somebody else.
And no matter how much money youmake, uh you can't replace that
(02:13):
kind of joy and feeling you getof having some control over you
know what you're worth and whatyour time's worth.
SPEAKER_02 (02:20):
I've always wanted to do my own thing, and my dad
owns his own business.
He's a builder, and he modeledthat from a very young age.
Uh, you know, he's worked, hestill works seven days a week,
which there's some unhealthyhabits maybe there.
But that's why that's why Ihustle so hard because I think
that's just what was modeled tome, and that's very important
for me to model for my children.
(02:41):
And I tend to work a little moreon the work-life balance that I
don't know if I saw growing up.
So that's where I'm gettingbetter, but I absolutely think
that's true.
And and I love that aboutbusiness ownership.
SPEAKER_04 (02:54):
Yeah, they they say that, you know, entrepreneurs
are the only people that'll work80 hours a week, so they don't
have to work 40, which I thinkis a funny kind of concept, you
know, that that's what it works.
But you know, the truth is ifyou're really if you learn to
not be a technician and toreally be a CEO of a small
business or medium business,like you you can work a lot
less.
You know, it's not nearly likethe grind that people make it
(03:15):
out to be.
You don't if you're grindingthat hard, you're doing
something wrong, usually.
You know, you need to developbusiness acumen skills.
SPEAKER_03 (03:21):
Well, I mean it you you know, Catherine, you were
just in in Italy for like twoweeks, right?
Sweet.
And then she then she comes backand we're talking the other day,
and she's she's showing her herprofit margins.
What are you in year two soccerstars, Catherine?
SPEAKER_02 (03:37):
Year three as of July.
Um, but yeah, my profit marginsare to 28%.
Um, so I'm really proud of that.
And that's where uh being partof a franchise is so great
because I have the hustle, Ihave the heart.
So that's where coming into afranchise gives you that
(03:58):
structure and that framework tohelp you succeed and people to
lean on and go to for those, youknow, questions.
Numbers is something I've had toget better at.
Uh, they're so important, yougot to look at all the data, but
it's going well.
SPEAKER_03 (04:10):
Sometimes you don't know until you get thrown into
the fire.
Okay, guys, let's let's kickthis off.
Can you build a low investmentfranchise into a big business?
SPEAKER_04 (04:18):
You can.
Um, you can for sure.
And when we design all of ourhome run franchise brands, and
this is my advice for any newfranchise or is you have to kind
of build a box first for thebusiness that you're gonna um
target.
You know, we build a businessthat has an investment that's
under 150, that has SBA lending,that has good marketing and CRM
and technology systems, that hasenough competition in the market
(04:41):
that there's demand for serviceand is sustainable and isn't a
fickle kind of trendy thingthat's gonna come and go.
And so I think you can, youknow, uh like closets, for
instance, the average ticket'saround 8,000 bucks.
You know, if you look at all thecloset FTDs for all the closet
franchises, you know, the youknow, mature ones after three
years are sometimes in the two,three, four million dollar
range.
Our upper 25%, according to ourFTD, or kind of in the million
(05:04):
and a half, closing on two.
I've got people doing three.
So, you know, we we have similarrevenue to just about any other
closet franchise, just likeone-third the investment cost,
because we built it to be amodern version of a closet
business.
And in our industry, most of ourcompetitions stuck in the 1990s,
so they just haven't evolvedwith the technology and the pace
and the way people buy thingsand changing demographics for
(05:27):
customer groups.
And so, yeah, I think you can dothat.
Um, I wouldn't start a businessif I didn't think there was a
path to get somebody to the halfmillion million dollar mark in a
year and get to, as Catherinewas saying, a 20, 30 percent net
when you're matured out andramped through the ramp up.
Like I think if you can't pullthat off, why are you
franchising it anyway?
That's the whole point.
That has more to do with thestructure and the the design of
(05:49):
the franchise offering and howit's supported and trained and
kind of what the ongoing supportis and less to do with what it
cost in the beginning.
I think for us, we just findthat there's not enough under
150 serious brands that you cando well in.
There just there aren't enoughof them in the market to satisfy
consumer demand.
SPEAKER_01 (06:06):
Thomas, I'm curious too, you know, you're talking
about not even just lower costs,but just this kind of area of
home services.
Yeah, looking at closets, right?
And we hear a lot of people loveservices, one that lower
investment, also being morerecession resistant.
Yeah.
Well, I know when I've broughtup closets with clients looking
at space, I hear two things allthe time.
(06:27):
One, hey, that space is reallycrowded, and there's a ton of
players in the closet space.
And two, hey, maybe that'sactually an area that, you know,
if the economy's down, peopledon't have to do that.
SPEAKER_04 (06:37):
Question.
And I'm a I'm a little bit I I Ilove competitive spaces and I
like down markets.
That's for me ideal workingconditions to start a business
in.
Like I'm like I go against thegrain on that.
We ran franchise coffee shopsfor a while here in Nashville
and have helped a few coffeebrands, and we would always put
our coffee shops across thestreet from a Starbucks.
Like I wanted to be able to lookout the window and see a
(06:59):
Starbucks, and we would by justbeing different than Starbucks
and offering the things thatthey weren't good at, we would
take 10 or 15% of their revenue,which isn't a lot to Starbucks.
It's a huge amount to a startupcoffee shop.
But the truth is, if youunderstand how people buy
things, what the customerjourney is, and where the
competition is strong and wherethey're not strong, then you
(07:21):
design the business around thoseholes.
You can do well, there's always,always room for a better
operator, better pricing, bettercustomer service, better
offering, all of those things.
Up closet sells the exact samecloset materials, hardware, and
lumber that California Closetsells, but we're 30, 35% less
expensive on a retailenvironment.
We just run circles around them.
(07:41):
We do 65% of our customers ormillennials are younger, like
they're much younger than thetraditional closet buyer because
millennials care a lot aboutmental health as a demographic
group, and you know, having anorganized life isn't like a
luxury item to them.
They think about closetsdifferently.
So that's one part of it is thatas long as you're going to
market and you differentiateyourself and your marketing is
(08:03):
different, your sales process isdifferent, your products are
priced differently, and you canprove out that you can succeed,
and we clearly are succeeding onthat front, then you can win.
On the other side, closetsspecifically is a really
interesting, and the reason wewanted to be in the closet
space, it's a really interestinghome improvement.
It's the highest ROI of all thehome, of anything you could
spend dollars on in your house,closets will get 110 to 120%
(08:26):
return typically on what youspend.
So there is there isn't anotherinvestment in a home like a
kitchen or a deck or so.
You just don't get that kind ofROI on it.
And even in the housing bus inthe mid 2000s, we didn't see
closets diminish down a lot.
It was one of the few thingsthat kind of had a steady point.
It's obviously slower in a downmarket than an up market.
But what happens is when themarket gets rough and you can't
(08:49):
sell your house, creating morespace in the closets, which is
the main reason somebody sells ahouse in most places, um,
becomes more of a priority.
So people invest in getting abetter quality of life in the
house they're kind of stuck in.
It's the same in today's marketwhere the interest rates are
high and people are stuck inthese 2% mortgages, and there's
no way they're gonna leave a 2%mortgage and get a 7% mortgage.
(09:11):
So they're just gonna spend alot on investing.
When the market's really good,people rip out the closets and
put new ones in.
There's lots of renovation workand people like join doing the
whole house when they move.
We see a lot of that in today'smarket too.
You know, it's just uh it's adifferent mindset.
But we'd find that it's Iwouldn't go as far as to say
it's recession resistant, butit's not as um impacted as say,
(09:32):
you know, you know, a three toeight thousand dollar closet
purchase isn't the same kind ofinvestment as a hundred thousand
dollar kitchen overhaul or youknow, even putting a roof on
your house or something, youknow, really dramatic.
And so, and if you've ever had,I don't know if any of you have
custom closets, if you ever putthem in your house, you will put
one in every house you own therest of your life.
You just you won't be able tolive comfortably without it.
(09:55):
So it's it's a kind of a coolbusiness.
We like it.
We like that it's an in and outservice.
Like we, you know, we design itin an hour and you get them a
proposal, it comes in four,five, six weeks, and we install
it in one day from zero to, youknow, we're finished by three in
the afternoon.
Like that part of it's prettycool.
Like it's just a kind of a cool,fun business.
People who operate them reallyenjoy it a lot.
Like it's a satisfying businessto run.
SPEAKER_00 (10:17):
I have a question for you, Thomas.
Um, since you have multiple homeservices brands, when it comes
to support for the franchisees,we were talking to one uh must
have been Sunday, I think, adifferent brand, a different
service.
And they were talking about afive to one ratio for support to
franchisee.
And I felt like that was prettygood.
Do you feel like between thedifferent home services brands,
(10:39):
do you need the same supportwith something like a dryer vent
superheroes versus up closets,or does it vary?
SPEAKER_04 (10:45):
Uh my philosophy, having been a franchise business
coach and of a franchisee, Ibuild my brands to treat people
the way I like to be treated asan owner.
You know, we treat people likeadults.
So part of it is franchisesupport is divided for us into
two different categories productand technical support.
How do I install a closet, howdo I design a closet, you know,
this the mechanical operationalpart of this business?
(11:08):
Like how do you train theinstallers, how do you manage
the salespeople?
The more important part ofcoaching uh kind of is
onboarding coaching.
Like when you sign an agreementwith us, we start really intense
virtual training and onboardingcoaching that culminates in a
one-week in-person thing.
But then we coach our people forfour months after they open on a
once-a-week and a peer group.
(11:29):
We call it a jump start program,and we're looking at every
design and every transaction andevery consult and every
marketing dollar spent.
And you're doing this in a groupof peers, and so every time
somebody makes a mistake, youlearn from it.
One in five, one in eight forstaff to people is about the
kind of that's about where weare in our systems.
Um, and you know, we haveadmins, we have marketing
(11:49):
managers, we have manufacturingsupport, you know, we've got
sales coaches, you know, we havepeople that do different things,
but at the end of the day, youknow, there's you need technical
help or there's somebody who'sholding you accountable to grow
your business.
Our whole view is that the bestreason to buy a franchise today,
and especially for youngerbuyers, is this a path of
professional development, tojust to learn how to run a
(12:12):
business.
Run, spend three years with us,you can run any business the
rest of your life.
I think that's an awesome giftto give somebody.
SPEAKER_00 (12:18):
Well, I love that.
And I was gonna uh just reallyquick because I was gonna do my
master's degree and I didn't doit.
And so I like that you're sayingthat you're they're teaching
people to be that person, be theCEO, because I initially was
turned off from home servicesbecause I didn't want to be the
one doing the work, going intoall the houses.
And I think I didn't understandthat very clearly.
So I love that that's whatyou're teaching.
SPEAKER_04 (12:39):
So you're building the business that you want to
run down the road.
We're trying to get people tothink three and four years down
the road.
What is it?
What are you what's the ultimategoal you're trying to get to?
You're trying to fire yourself,you're trying to build a team
that will operate without you soI can do what Catherine does and
go to Italy for two weeks.
That sounds super awesome.
You know, like but her businessdidn't go underwater when she
was there.
She probably has good systemsand support and structure and
(13:01):
technology to help her runthose.
SPEAKER_02 (13:02):
And that's great manager.
A great manager.
SPEAKER_04 (13:05):
A great manager.
You know, you know, it's kind oflike that cake box analogy.
You could bake a cake fromscratch and you can figure out
all the ingredients, and you canmake an amazing cake, and you
probably make a lot of errors.
Or you could buy a box cake mixand put water in it, and your
cake's gonna be there a lotfaster with a lot less waste.
I personally love cheap cake.
SPEAKER_03 (13:22):
Give me that, give me that good grocery store cheap
frosting.
Give it to me all day long overany fancy case.
SPEAKER_04 (13:31):
You don't look like you eat a lot of cake.
I on the other hand look like Ieat all the cakes in the room,
you know.
SPEAKER_03 (13:36):
Don't be fooled.
I eat a lot of cake.
But hey, okay, here's a couplequick things.
This is something I've beenthinking a lot about.
Um like most normal people don'tget to get equity in a company,
right?
You always hear about thesesmart people that got some
equity in Silicon Valley and butbut mainly that's not gonna be
me and it's not gonna be you.
(13:56):
And and the thing is, is thatand anyone that follows, you
know, any of us on social media,um, we we really try and tell it
how it is, and that the thefirst 12, 18 months, look,
you're gonna pay your dues.
And people will say to me, Well,gosh, why?
Why would I do that?
Why would I take a step backfrom my 150K a year job and go
(14:16):
do that?
Because you can't flip that 150Kjob for you know a million
bucks.
You can build such equity with afranchise, and it's actually
it's not as hard as you think.
It's like right now we've got aclient who's moving forward with
a recurring revenue homeservices franchise, and they are
in a great market for it.
They're looking at a uh poolservices franchise and they're
in in Arizona.
(14:38):
And the debate they're currentlyhaving is between two and three
territories.
And so they came to me as thefranchise consultant and said,
Look, what do you think?
One of them wants to do two, oneof them wants to do three.
And so basically, I said, Look,let's let's talk about what does
it do to your working capital?
Because if it if it's gonna killyour working capital, don't do
it.
But if we're trying to build amillion-dollar exit, then we've
(15:02):
got this tool called our exitpath calculator, where basically
you can take a servicefranchise, a retail franchise,
home care franchise, what haveyou, and you can aim towards,
hey, I want to get to a milliondollars EBITDA.
How many units should I have?
And so the calculator said heneeded four.
So I said, to me, it's an easyquestion now.
You've got the capital, you canstart with three, and I'll bet
(15:22):
you in 18 months, if you guysare really doing well with this,
we can find another franchiseewho's close by and you can buy
their location and get to four.
So I think building towards anexit, and Catherine, this goes
back to the point that you made,being on top your numbers from
day one, building your business.
Just to me, every day, I want tomake sure if anyone were to ever
call me and say, we've got afund, we want to buy the
(15:42):
franchise insiders, that I couldsend them my PL and everything
is dialed.
You could ask me in the middleof the night and I can send you
a PL and it's all up to date.
So build your business, eventhough you may never want to
sell, build your business tosell from day one.
SPEAKER_04 (15:56):
That's great advice.
Yeah, I I like that.
You know, we we don't I don'tlove selling people huge numbers
of units because you don't know,you know, and and it's a it's a
quirky counterintuitive thing,but some of the people with the
most capital fail at the highestrates in my franchising
experience.
Like it's kind of because theydon't want to do the work.
Like they they think, oh, I justgot all the capital.
(16:16):
That's a substitute for puttingthe hard work in.
And sometimes you got to kind offind a mix.
So it gets, you know, we like toget people two or three units
and then see how they canperform and get them to some
level and then let them expand.
But yeah, I think it's true.
That's a really cool calculator.
I'd love to see that.
SPEAKER_03 (16:30):
So sure, happy to send it to you.
Yeah, for anyone, by the way,who's interested in that
calculator, feel free to text305-710-0050.
SPEAKER_04 (16:38):
Yeah, in the first 12 to 18 months, is the hardest
part.
You're making investments in thebusiness and you haven't really
gotten to where it's smooth andyou haven't gotten to where
you're even if it's profitable,you haven't maximized your
profit.
You know, it's it's not untilthe second, third year,
typically, that it gets reallynice and calm waters and you can
really scale.
The appetite for resale servicebusinesses in the US is is
(16:59):
really insane right now.
Like there's just so much of amarket for resale stuff.
Like when we have resales, theysell quickly.
You know, it's not hard to findbuyers even in today's market.
SPEAKER_03 (17:09):
Brian, wouldn't you say?
I mean, that's that's wherewe're seeing so many people who
just scour biz by sell everysingle day looking for that
perfect business.
SPEAKER_01 (17:17):
They are.
You know, it's it's alwaysinteresting because you're
looking for that perfectbusiness one doesn't exist.
But when you talk about thisbringing criteria, when you ask
people, hey, what are youlooking for?
And what you know, what meetsthat that list?
It's all the same criteria.
Everyone's looking for the sameoperating history, you know, the
same length that's been opened.
They're looking for the sameSDE, you know, they're trying to
buy at the same multiple.
(17:38):
So it's just a really crowdedmarket.
But you know, Thomas, you justsaid something that's really
interesting, you know, and webrought this up before.
A lot of times these bestbusinesses they don't hit biz by
sell.
Right?
They're not being listed online,but they're going to other
people in the system, right?
So you know, one of the things Ialways find interesting, I
always ask people when I meetsomeone new, how long have you
been looking for a business?
(17:58):
And I'd say 18 to 36 months isprobably the average answer.
So when you start thinking aboutthat amount of time out you
know, kicking tires and lookingat listings and and you know,
trying to get more information,think about these home service
brands, what you could build intwo years time frame and then
have the inside edge to getlistings of your neighbors and
(18:21):
other you know, other businessesthat aren't even hitting the
market.
So the opportunity is just beingmissed by you know, really
looking for something that'sthat's not hitting Biz by sell.
SPEAKER_04 (18:30):
Oh, for sure.
Yeah, I would I had the um honorof being on the advisory council
for biz by sell for severalyears.
And last year their amount oftraffic they have on that site
was up three or four hundredpercent, like a really
significant increase.
And it's all people looking forthis, you know, unicorn boomer
selling a service business toyour point.
Like those don't really exist inany kind of mass quantity.
(18:51):
If there's anything good, I meanI've used Biz by Sell to sell my
personal businesses, and I'vesold every one I put on there in
48 hours.
Like it's just like if it'swe're if it's really a legit
business, like Jack says, andyou have a PL and it's the real
deal, it'll sell super, superfast.
And so, like, you know, I thinkone of the probably 60% of our
placements are people that werein that 18 to 24, like they were
(19:13):
coming up, they found us onBusiness by Sell or thought
about us because they saw asimilar business or something
and kind of did their research.
But I think it's fascinating tosee that people are going for
that.
And I think a good strategytoday is like maybe look to buy
out underperforming franchiseoperators because there are
some.
Like I'd love for people to takea stab at running a business,
but it doesn't mean that it'sfor everybody.
(19:33):
Not everybody has really takesto run a business, like it takes
a little bit of a larger.
SPEAKER_03 (19:38):
That's the advantage of franchise over mom and pop,
is you have built-in acquisitionand exit partners from day one.
If you go buy a mom and pop andmom and pop go retire, is
everyone likes to paint thepicture, right?
Mom and pop's got themillion-dollar business and
they're gonna sell it to you forzero-down seller financing.
When mom and pop leave and theyretire, they don't want to take
your phone call.
(19:59):
So that's a big thing to thinkabout is that built-in support.
And when you buy a franchise, Imean, you know, David, look at
Pinks.
I mean, there's people who areadding up Pink's locations like
yourselves, and there's peoplewho are divesting pink's
locations because that's justhow a franchise system goes.
I would be willing to bet thatif you're and franchise owners
tend to sell to franchiseowners, but on any given day,
five to 10% of every singlefranchise system is for sale.
(20:22):
And you can get great deals justby asking your franchise or hey,
who is within driving distanceof me that I could acquire?
Um, and in many cases, sellerfinancing, if you really
position it right to a seller,hey, look, we could we could buy
you for a couple hundred grandtoday, or we could pay you out
over the next 24 months with apromissory note, and your tax
(20:43):
burden is going to be so muchless.
And now you're getting that realmailbox money that you were
looking for.
I mean, that's the beauty offranchising.
SPEAKER_04 (20:50):
Yeah, for sure.
It's even with good franchisesystems like us, we'll have
three or four or five at anytime.
Like if you came to me and said,Hey, do you have any resales?
I said, I got three or four thatare good businesses that for
whatever reason the owner wantsto do something else.
Life happens to people and itputs them in situations where
they need to make a soft exit.
You know, I my advice is alwayslike if you're a franchisee, um,
(21:13):
try to sell it for you know,twice, you know, if you got
profitable, try to get it totwice what you invested in it
and owner finance half, like geta 50% down and carry a note for
the remainder.
You you can't really lose.
Like I it's really hard to dothat with a startup business,
right?
Impossible in most cases, butsuper common in franchise
systems.
You know, those are some of thepeople that you meet really
(21:34):
smart people in franchising andthe multi-unit guys that mop up
all the underunites like in foodconcepts, they'll buy all the
underperforming stores and turnthem into mega performing,
profitable.
You know, it's so much cheaperto do that than to build one
yourself.
It's a smart move.
SPEAKER_02 (21:48):
I love to hear, you know, you've been doing this a
long time across many, manybrands.
When you think of your topperformers, right, that you've
worked with over the years, whattraits do they have the the top
performers follow the system?
SPEAKER_04 (22:03):
Like at my top performing up closets, people
will say, look, I want to hit,you know, 200,000 a month or
100,000 a month, whatever thenumber is that they're trying to
hit.
What do I need to do to getthere?
And it's a math equation for us.
You need this many salesconsultants, you need this many
consultation appointments, youknow, marking budget of X, do
this, this, and this.
And the people that just do itgenerally hit if that's the
(22:25):
whole point of having provenkind of track record, is they
they hit it.
The people that really struggleon the other end um will come in
and want to reinvent the wheel.
Like they'll want to redesigneverything.
It's much more about how youfeel versus what actually works.
Like, I don't like that ad.
I don't like that vendor, Idon't like that account manager,
I don't like this CRM.
(22:45):
That doesn't work the way myother CRM worked.
And but like everybody in thetop performer list uses these
systems and they use themwithout any trouble.
Like, you got to ask yourself,like, why are you is it really
that do you want to lose 200,000over your feeling, or do you
want to just make 200,000 andthen hire someone to deal with
that?
Well, I mean, if you're afranchise or you'll have a lot
of people that becomemillionaires, you'll have a lot
of people that go out ofbusiness.
(23:06):
And the difference is the peoplethat go out of business maybe
will listen to 10 or 15% of whatyou try to get them to have
their help that you try to givethem the advice and they'll
reinvent stuff.
And the top performers generallywill listen to about 40%.
I think nobody listens to morethan 50% of what a franchise or
says, just it's just humannature.
To be an entrepreneur meansyou're wired to some level of
(23:28):
innovation, and that's normal,but you have to kind of tamp it
down in a franchise system alittle bit to get to the result.
SPEAKER_05 (23:34):
Yeah, I think you nailed it there, Thomas, is not
having any business backgroundand coming from blue collar for
being a police officer.
I just came into the system withPinks and just followed the
playbook.
And like we say at Pinks, justrun the damn ball.
And right now I'm a top fivefranchisee within the system.
Within the system, the peoplethat are struggling are those
that think they know better.
They had a business before andthey want to use their their
(23:57):
way, and it's not working quiteas bad.
SPEAKER_04 (23:59):
Uh my biggest group of top performers and all three
of the brands we have are Gen Zowners, people that are under
25.
Uh, they make up 60% of my topperformer group.
And I think it's they're justthey're raised on tales of
entrepreneurship.
Like they are veryself-learning, they're very
coachable, they don't have badhabits.
You know, you I tell them, like,look, you can take a lot of risk
(24:20):
when you're 22 or 24 or 25.
Like, you're not even gonnaremember what you were doing in
your 20s when you're my age.
So you might as well go for it,and they're not afraid to fail.
In fact, they not that theyfail, but they the idea that you
fail means you're doing stuffright, that you're learning.
Franchising needs a lot more ofthose people.
SPEAKER_03 (24:37):
And we actually saw it play out with a client of
ours who he invested in aroofing franchise.
He was 29 years old, he justcame in into an inheritance.
In under two years, he flippedit and sold it for six million
dollars.
That's awesome.
I won't name the concept becausewe don't want to break any FTC
rules, but you imagine he boughttwo units, his all investment
(24:57):
was$300,000, he had multipleoffers, and he flipped it and
sold it for six million dollarsat you know, 31 years old.
Um, and I would agree with youthat it's much better to do it
than 25, 30, 35 than the60-year-old that wakes up one
day and says, Oh, shoot, um, Idon't have anything for
retirement, and I probably haveat max 15 good working years,
(25:21):
assuming all goes well, butprobably 10.
And now I got to go build up andwhat do you think an average
person needs to retire thesedays?
At least$2 million.
Um, so now they come to us andwe're in the fourth quarter, and
we really so then it's like,okay, well, we can we can do
that, but you're gonna have tofocus on low investment, high
return, like senior care, thingslike that, home services.
(25:42):
Whereas if you could startyounger, if you could start at
25 with a with an up closet andyou get good at it and you start
stacking units, and then you're35 years old and you've got 10
units, I mean, then you could beliving the lifestyle that
Catherine is, like going off toItaly for a couple of days.
Right.
SPEAKER_02 (25:59):
Well, I had a client the other day, and one of the
concepts he really liked, andhe's like, if this had been me
10 years ago, I would have doneit.
But now that I'm a little older,I just am not I don't have that
hustle, you know, of that levelfor that specific concept.
So I love that.
SPEAKER_04 (26:18):
Your job isn't to do the work, your job is to become
an executive, develop leadershipskills, learn how to delegate,
have systems, follow the system,you know, run a business that
will run without you in as shorta period of time as you possibly
can, that one to two yearperiod.
You're gonna have to have threesalespeople.
Each salesperson needs 26consults a month, and it should
spend between two and threehundred dollars of marketing for
(26:41):
consults.
You know, that's that's whatyour PL is gonna look like.
You're gonna have to have thatkind of a marketing expense and
staff overhead for you to hitthe number you want to hit.
Back to closets, real quick.
SPEAKER_03 (26:50):
Yeah, you know, Jill, there was Jill upgraded
her closet and it was not cheap.
Um and but as I thought aboutit, I almost, you know, thought
of it as a defensive strategy inthat if the shit ever hit the
fan, that, and then we needed tosell our house and we wanted to
make it different than the otherones in our neighborhood, if we
could point to, hey, we've gotthe the biggest closet in the
(27:12):
neighborhood, that gives ussomething to kind of hang our
hat on.
And and so to me, and and Idon't know that that statement's
true, I'm just you knowexaggerating, but to me, I'm
like, it's exactly what yousaid.
When we go into houses, we lookat we want the kitchen, right?
And you need to have that closetbecause, you know, I don't know,
you know, Catherine Morgan, thiswas when Jill and I first got
(27:33):
serious and we would startlooking at houses.
I didn't give a I didn't give ayou know anything about the
closets, right?
I'm like, okay, there's a view,there's this, and Jill would
like shoot these houses down,say there's no way in heck that
closet's too small.
Now I understand it, and Iactually think you could make an
argument that a closet like upclosets could be pretty darn
recession um resistant because Ilook at where I'm gonna spend my
(27:55):
money, investing in somethinglike that's a really good move
to add value to your long-termvalue to your house.
SPEAKER_04 (28:01):
Oh yeah, and you know, we and my wife runs the
Nashville kind of Franklin upcloset, she's a franchisee
herself.
So we're you know, we runcompany stores of our operations
in several markets.
So I'm just a big believer inthat.
But we were out on a weekend andshe has some tools in her, she's
got like a little BMW M4.
It's not, doesn't look like atradescar, but she's what she
does her consults in.
(28:21):
She had some tools and some rodsin the back.
She got a call from a customerwho said, Hey, I just bought
this house.
I think you have it's one ofyour closets because there was a
label somewhere on a drawer thathe figured out it was something
that she installed two or threeyears prior.
And I want to move a rod around.
Like, can you help me with that?
She goes, Well, I'm not comingin that part of town, I'll just
drop by.
And so we went by and it was a$75 repair.
(28:43):
And he'd already had a pantryand a closet.
It didn't really need much more.
But you just, I think that's animportant customer service
thing.
But he said, I just want to tellyou this is a uh like an over 55
kind of neighborhood, one ofthose sale web kind of things.
Because there were seven housesfor sale on this street.
This one wasn't the best deal,but I bought it because the
pantry and the closet wereamazing.
(29:04):
And my wife, that's the only oneshe would let us put an offer in
on.
We paid more, I mean, I probablypaid more than the closet's
cost, which you did, you know.
And so I I see that story overand over and over again.
Your wife probably had anamazing closet in another house.
Like she's probably used tothat, and you don't want to
lower your lifestyle down, andit's a funny, it's a need, not a
(29:24):
luxury thing.
Like it's something you have tohave versus something you just
want to have, and it's a prettycool psychology thing.
If you understand how that allworks, it makes marketing and
sales pretty easy to kind of getto clients.
And it's the reason you know thecloset industry was up 24% last
year.
Like it's just it's gone throughsome like crazy levels of
growth, driven mostly bymillennials and Gen Zs who are
(29:46):
buying closets.
Like they may not buy a fiftythousand dollar closet, but they
get in and they have wireshelves, and we call it the
closet of shame.
You know, friends don't letfriends have closets of shame.
You know, you know, nobody likeswire shelves.
They're awful, they're hard tolive with, they waste space.
And you know, they might spendtwo or three thousand dollars on
a basic custom closet, but youknow, that's an entry point into
the rest of their lives, they'llbe a closet customer in every
(30:08):
house that they owe.
SPEAKER_02 (30:09):
Yeah, we do our closets.
My gosh, you're selling me.
SPEAKER_01 (30:12):
My first franchise was action home services, and we
did kitchen, bathroom,organization, accessibility.
And we would mention Dell Webb,55 plus communities is in the
state of Florida.
So a lot of these big newconstruction neighborhoods would
be in as people are moving in,or even the week or two before
they move in, and would alwaysbe in with closet companies.
(30:33):
Yeah.
But it'd be new constructionhomes with the white wire racks
and closets and pantries.
And that was first order beforepeople moved in, and a new
construction home was replacingand putting in a custom closet,
right?
Because these just they weren'tpart of even you know pretty
custom homes, high-end homesstill had very basic closets
(30:54):
that million-dollar housesometimes will have wire
shelves.
SPEAKER_04 (30:57):
A million-dollar house isn't a million-dollar
house anymore.
It's really a$350,000 house bywhat your standards are.
But uh, it just you know, a lotof younger buyers, millennials
in particular, will stretch tobuy the maximum amount of house
they can buy, and that's wherethat's where they skimp is it'll
have builder grade closets.
And so, yeah, the market forclosets is great.
I think it's just a testament,you know, when you see 15 or 20
(31:18):
brands in a competitive space,that just means there's that
much customer demand for what itdoes.
You know, I think that that'salways a good thing to be.
As long as your franchise or iscommitted to franchisee's
success and is innovative andcan articulate here's how we're
different, here's where we win.
You know, these are the this iswho our sweet spot customer is,
and this is why we delight themand how we price our things.
(31:39):
You just you have to have aclear roadmap.
You know, if they can't do that,don't buy it.
You know, like if you're gonnabuy window cleaning, Pinks is a
really slick brand.
I love all the branding.
I'm envious of some of theirbranding for our drivenet brand,
but they're uh we know thoseguys really well.
But you know, like like there'sa bunch of window cleaners.
Like uh there's a Pinx here inFranklin that you know that uh
Brentwood Franklin that he'ssuper I think Vin Kidney is his
(32:02):
name, super nice guy.
But they're you know, I likethat one better than all the
other ones.
And maybe it's branding, maybeit's customer service, maybe
it's pricing.
You know, like there's you know,just because there's a lot of
people in a space, thatgenerally means it's a good
business to be in.
SPEAKER_03 (32:15):
We believe validation is the key to all of
this, and that's why we wecreated a um uh franchisee
interview that anyone can get ifthey go to our website,
thefranchiseinsiders.com.
Um, you can get questions to askfranchisees, which we recommend
talk to five to ten.
And we actually have a clientwho's moving forward with enough
closets tomorrow.
And I know she talked to, Ithink right around there about
(32:35):
10 different franchisees.
At least 10.
She's analytical.
It's it's yeah, she's great.
We're we're super excited.
We make sure everyone does that.
We also have a um uh 27 redflags you should know about.
So again, go to thefranchiseinsiders.com.
All those resources are free,including the valuation
calculator.
Um, our aim for Thomas is toprovide everyone with as much
(32:56):
information as possible, and butthinking about it as franchise
owners.
And that's why our whole missionhere is franchise owners,
helping future franchise ownersis we want to help people who
are thinking about businessownership think about it the way
that an owner should think aboutit.
So, with that said, let's do aquick kind of like closing
thoughts, kind of going David.
I know you've got a hard stop,so let's start with you.
SPEAKER_05 (33:17):
Amazing podcast.
And coming, like I said, comingfrom blue-collar police officer
to now owning my business.
You know, if you want to reachout to me and just hear my story
and just talk all thingsfranchising, you know, I'll go
ahead and reach out.
My telephone number is305-496-4883, 305-496-4883.
But again, thanks for beinghere, Thomas.
Really appreciate all theinsight.
(33:37):
Thank you.
SPEAKER_01 (33:38):
Cool.
You know, Thomas, it's it'salways fun talking to people
like yourself who you've ownedmultiple franchises, you're for
a franchise or so you've seenall sides of this business.
And one of the things that youmentioned a couple of times
today was along the lines of,hey, I'll take a business with a
lot of competition, right?
There's always room to do thingsbetter, to have stronger
marketing, and really scale abusiness when there's consumer
(33:59):
demand.
You know, and I think we'reseeing that right now with with
your service businesses.
I think that's just a keytakeaway that anyone listening
should always keep in mind isthat don't shy away from
competition.
Competition just proves thatthere's there's enough uh space
out there for another player.
Yeah.
Morgan.
SPEAKER_00 (34:15):
Yeah, thank you, Thomas.
I I just my big takeaway wasjust being your own CEO with
home services.
I think I I shied away tooquickly.
So I hope people listening takeit seriously and go dive into
what's out there and understandthat it's a low buy-in and
there's huge success.
So I hope it I hope it helpssomeone.
SPEAKER_03 (34:30):
Awesome.
Thank you.
Thomas, your closing thoughts.
SPEAKER_04 (34:33):
Yeah, I I think, you know, thank you guys for having
me.
This is an awesome group.
We're excited to have aplacement with you guys.
And I really appreciate the workyou guys are doing to educate
people.
I think in all of yourmaterials, you're thoughtful.
Like I think that this idea thatyou can run an inexpensive
franchise that can get to reallylarge kind of multiples.
Like it's you know, you don'thave to have millions of dollars
(34:53):
to to build a business that'sworth potentially millions of
dollars.
I think the market is full ofpeople that you could help, and
I'm excited to kind of be partof that growth for sure.
You know, I just I think youknow, home services are where
the action's at today.
It's the smart money in afranchise purchase.
SPEAKER_03 (35:08):
Catherine.
SPEAKER_02 (35:09):
Yep.
Uh two thoughts.
One, you've sold me Thomas.
I need to get custom closets.
It's it's a done deal.
I'm talking to my husband afterthis.
Two, I love the just the Gen Zhearing you guys have kind of
figured that out and that youhave a cohort in your company
that's driving 60% of therevenue.
SPEAKER_04 (35:28):
You know, they're just they're just like they're
right out of business school orright out of college, and their
parents help them with an SBAloan, and that's really all it
takes.
Like that's that easy of a dealto put together.
Yeah, maybe you only buy one ortwo units, but it's the first
one I would say that.
SPEAKER_02 (35:41):
So I think that that's really for anyone
listening in that age group, umup closets would be a great, a
great concept for any of them.
SPEAKER_04 (35:51):
Behind every 22-year-old Gen Z is a
55-year-old Gen X who wantstheir kid to be entrepreneurial
and not follow the path thatthey followed.
So you'll find thatgenerationally those two
generations are prettyentrepreneurial and very
pro-risk oriented.
So they'll take chances onthings.
So I think if you're recruitingpeople, like that's not a missed
opportunity for a lot offranchise consultants.
(36:11):
They just they just assume thatsomebody young isn't gonna have
the drive or the capital, andit's a mistake.
You know, like they're some ofour best owners.
We'll take everyone you want tosend our way.
SPEAKER_02 (36:20):
I'm gonna go find them.
We'll do that.
SPEAKER_03 (36:21):
You're gonna see.
I I think now with the news thatopen AI, ChatGPT soon is gonna
have you know an advertisingplatform.
SPEAKER_04 (36:29):
Oh, so excited about that.
SPEAKER_03 (36:31):
Isn't that great?
I I think we are going to beable to find the right kind of
people.
I think this type of message,first of all, you know, it's
great, you know, for us.
I mean, I I I think the mostimportant thing is this for for
everyone, which is starts withone and have patience, right?
You you don't have to be a rockstar entrepreneur from day one.
(36:52):
You gotta get to month 18.
Get to month 18 and see whereyou are.
And that that really will tellthe story.
And then from there, if then ifyou're working with a franchise
consultant like anyone on ourteam here, um, we build that
into our process.
That at month 18, we're gonnacheck in and we're gonna just
discuss are we now going intoacquisition mode?
Um, or are we going into sellingmode?
(37:12):
What are we doing?
Or are we staying put?
But it it really is theadvantage of franchise versus
going out there and doing the MAstuff is that you've got this
built-in network, built-infranchisees, acquisition, exit,
it's all built in.
You just have to go take thesystems and execute.
So this has been great, Thomas.
Uh, we appreciate you being onthe podcast and and thank you
(37:34):
for joining us today.
All of you listening, if youwant help with your franchise
search, I recommend you go toour team page where you can
learn about Catherine, Morgan,Brian, David, and uh determine,
you know, who it makes sense foryou to work with.
We'd love to help you in any waythat we can.
And we thank you for listeningto our podcast.
We'll see you next time.
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