November 10, 2024 • 40 mins
Imagine owning a franchise with little competition and puts client appointments on your schedule as an owner?
Meet Cabinet IQ and it's visionary founder Michael Hartel.
Michael shares the scrappy beginnings of Cabinet IQ, from a small office to a Disney-like showroom that captivates clients. He emphasizes the power of understanding consumer behaviors and forming strategic partnerships as key elements in the company's growth. By differentiating themselves from the big-box stores with personalized consultations and building strong relationships with contractors and designers, Cabinet IQ has carved out a unique space in the market. Michael also provides insights into effective marketing strategies that have driven the company's success, including innovative approaches like Facebook retargeting, PPC, and neighborhood marketing.
The episode culminates in a discussion about the core values that underpin Cabinet IQ's achievements and its potential for aspiring franchisees. Michael highlights the importance of community engagement, continuous improvement, and networking, with real-life success stories illustrating these principles in action. As we explore the exciting opportunities Cabinet IQ offers, Michael invites listeners to learn more about the brand's distinctive niche and how his visionary approach is reshaping the cabinet industry. Whether you're interested in franchising or simply seeking inspiration for your own business endeavors, this episode offers valuable lessons from a trailblazer in the industry.
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 1 (00:01):
Hi everyone, Welcome to the we Bought a Franchise
podcast.
I'm Jack Johnson.
Speaker 2 (00:05):
I'm Jill Johnson.
Speaker 1 (00:06):
And today we have a very interesting guest.
We have Michael Hartel, thefounder and CEO of Cabinet IQ.
Michael, welcome to the show.
Speaker 3 (00:15):
How are you?
Thanks, guys, I'm great.
Thanks for having me.
Speaker 1 (00:20):
So I have to say we've been talking about this
episode coming up for weeks.
We're so excited because you'vegot such a unique concept
that's so different.
It's rare in franchising whenyou can have something so
differentiated.
Michael, let's dive right inand let's talk about Cabinet IQ,
what it is, what makes itdifferent and why someone might
want to consider it if they'rethinking about franchise
(00:40):
ownership.
Speaker 3 (00:41):
Sure.
So Cabinet IQ is a high-techcabinet and countertop company,
so our industry is veryfragmented and outdated.
The biggest problem with ourindustry is people who go in to
remodel their kitchen.
They've never done it beforeand contractors are typically
very bad at explaining what'shappening next.
(01:03):
And you know even the wholeprocess from start to finish,
from initial budgeting, designrenderings and then the actual
execution of the Kitchener modelis just done really poorly in
our industry.
So you know, starting on thebudgeting end, a lot of people
come to us with misinformationaround how much Kitchenerodeling
(01:24):
actually costs.
Maybe they find a blog articlefrom 2018 and think they can
remodel their kitchen for$15,000 and it's just not
possible.
So when they come to us, wehave very unique ways of setting
budgets for principal,signature and masterpiece types
of cabinetry.
At the end of the day, it's notour kitchen, it's our clients,
(01:45):
and we set a really good budgetfor them based on what the
lifestyle is, the cost of theirhome.
We have some guidance on howmuch they should be spending.
And then, as far as theexecution goes, we have created
almost what's similar to a pizzatracker from Domino's.
So imagine you have an app thatyou can look at and, from start
(02:09):
to finish, you know what'shappening next and when it's
going to happen and who's goingto be in your home.
So there's the peace of mindfor a customer to understand
that you know it is a processand they understand what the
steps are.
We actually have more five-starreviews in Austin and our local
market here than all of ourcompetitors combined.
So we get a five-star reviewfrom almost everyone we work
(02:29):
with and that's just a testamentfor the process from start to
finish, and that's just nottypically done in our industry.
Speaker 1 (02:38):
That's really fascinating, and so how did you
begin this journey?
Like what told you, this issomething, I'm onto something
and I should I should franchisethis.
Speaker 3 (02:47):
Yeah, awesome question.
I'll start by saying that I gota PhD in engineering.
I studied material science,basically nanotechnology.
That's what I studied in gradschool for my master's and PhD.
Grad school for me was anamazing time in my life.
I got to learn how to learn anddo creative research, publish
(03:08):
papers, give conference talks.
It was an amazing part of mylife where I got to push the
current scientific communityforward and make a big impact.
All of that came to an end whenI graduated.
I was really excited to finallybe done with school.
I was done with that chapter ofmy life.
I was excited to go out andmake really good money.
(03:29):
I got hired by one of the topcompanies in the nation, the
Intel Corporation, so I ran adivision of their research and
development at theirheadquarters in Portland Oregon.
It all sounds great working onnanotechnology, working at a
great company.
But about two years in I justfelt so unfulfilled and I was
(03:49):
just sitting at the lunch tablewith our coworkers and everyone
was just complaining Very longhours, stressful work,
environment, very demanding andI just knew it wasn't for me.
I had this epiphany where Ikind of looked and scanned the
cafeteria and I just said Idon't fit in.
I just feel different.
So that led me to leave.
(04:10):
I actually just left Intel andtook a job with Samsung, which
is basically their competitormore responsibility but less
work, if that makes sense,better pay.
I got to move to Austin, texas,where I currently live so more
(04:33):
sunshine, it just was a good fit.
But literally within six monthsof starting, I thought a fresh
start would be what I needed.
That same feeling kind of creptin.
So I found a real estateseminar on Facebook.
I got hit with a Facebook adfor a real estate seminar.
I went to this free seminar andthey explained.
I got hit with a Facebook adfor a real estate seminar.
I went to this free seminar andthey explained how to flip
houses.
And when I heard about, you cantake a house, put some money
into it, sell it for this andmake a profit.
(04:54):
That's what I did.
So I dove into house flippingin 2014, 2015 in Austin, texas,
and I just loved it.
I love taking a home.
That needed a lot of love.
The design process, theconstruction, seeing a physical
product get built, is just sucha contrast to working at
(05:14):
computer chips, where you can'tsee anything that you're doing
and it's just a bunch of graphsand paperwork.
So for me, it was a reallyrefreshing, different pace for
me.
So that led into construction.
I became a general contractor,started building houses,
remodeling houses for otherpeople, and I noticed the only
product in a home that Icouldn't control was cabinets
and countertops.
It's the one thing that youknow.
(05:36):
You have to do it the right wayand it has to be a process,
just like you know, just likeengineering.
But I was cutting these bigchecks to these cabinet
companies and they were showingup with the wrong cabinet color.
They'd bring 20 feet ofcabinets for a 19 foot wall.
They'd say they'd be thereMonday and then they would no
call, no show until Fridayafternoon to tell me they'd be
(05:57):
there the next Thursday, and itwas extremely frustrating.
In 2016, I locked myself in myoffice, I taught myself kitchen
design and I figured out whereto buy cabinets on my own, and
that was just initially to helpmy own projects.
But then people started seeingthe product I was producing.
Fast forward, you know, eightyears of just engineering.
(06:19):
The ideal cabinet company herewe are.
The ideal cabinet company herewe are In 2021,.
You asked why franchising In2021, both of our corporate
stores were pretty much runningthemselves, which is obviously
an entrepreneur's dream, and Iwas ready for the next step, and
that was how do we open up 10of these at a time, or 20?
But in noticing, in Googlingbusiness growth methods, I
(06:46):
actually stumbled uponfranchising.
I feel like most peopleunderstand the word franchise
from fast food.
They don't know the innerworkings of the franchisor
franchisee relationship and allthe beautiful win-win parts of
the business.
And as soon as I read that, itjust sounded so much more
attractive to build teams andsee people win and to see
someone live life on their ownterms with a model that I've
(07:08):
created.
That just really stuck with me,as opposed to owning 200
cabinet stores.
It just didn't seem like fun.
So that's why franchising it'sfun to allow someone to be an
entrepreneur, to give them aplaybook, to support them and
see them do well.
It's been really gratifying forme.
Speaker 1 (07:29):
Yeah, I mean what's better?
I mean when you get to reallychart your future as an
entrepreneur and have supportand have something that is so
different, right, have somethingthat sets you apart, that
offers the service and to have areal story behind it, like what
you have, I mean that's anincredible win for a franchisee.
How many locations do you guyshave at this point?
Speaker 3 (07:50):
We have two corporate stores and then 24 franchisees.
What year did you startfranchising?
Well, I did franchisedevelopment by myself, with my
business partner in 2023, and Ijust learned the industry.
I have tremendous respect forfranchise consultants and for
(08:15):
people on their journey.
That role just wasn't for me.
I was probably on a lot ofcalls that I shouldn't have been
, spending probably thousands ofhours with people that maybe
weren't a good fit, and I shouldhave recognized that earlier on
.
So I tried to do franchisedevelopment on my own.
It wasn't really until I metFranchise Fastlane that we
really started picking this up,so that was in March April of
(08:39):
this year.
Actually, we joined theFranchise Fastlane inventory.
Actually, we joined thefranchise Fastlane Inventory.
They're obviously experts atwhat they do to identify great
candidates and work them throughthe system.
So we've been adding aboutthree franchisees per month
right now, which is good, stablegrowth for us, and that's the
hiring plan that we have for thenext 12 months is based on
(09:00):
three franchisees per month.
Speaker 1 (09:02):
That's great.
Yeah, joel and I were justtalking.
I think you know we own a um,uh, a pink's window services
franchise, which is actuallybased there in Austin.
Um, and we um, we actually werejust recording an episode where
where we were talking about ourexperiences running the
business.
A lot of times we'll share aninterview with a franchise, or
like yourself, or franchisee andthen we'll do another episode
(09:23):
where we just talk about ourexperiences and we were just
talking about the highs and lowsof being a first-year
franchisee.
Um, so we just set a record forpink's franchisee revenue,
which is, you know, that's great, but it was preceded by or,
excuse me, so that was foroctober and september was, you
know, awful.
(09:43):
So it's like that's the life ofa franchisee, especially in the
first few months.
You know Jill was talking about, you know accounts receivable
and with corporate accounts andhow much that can take.
So you know, I think it'simportant and that's why we do
this podcast is to let peopleknow that, yeah, you can go out
there, you can chart your future, you can have all that great
support, but you've got to beready for the first year, first
(10:07):
few months.
So maybe, if you don't mind,take us back to when you first
started Cabinet IQ.
What were the first 18 monthslike?
Was there ever a moment whereyou're like, oh man, I don't
know if this is going to work?
Speaker 3 (10:18):
Yeah, I mean obviously me starting a business
from scratch, not knowinganything about it, is different
than the journey of a franchisee.
For me, starting my business,it was just me with some samples
in my truck and I would drivearound to areas of town that I
knew had a lot of constructionactivity and I would just walk
into these houses being builtand ask you who's the decision
(10:39):
maker?
And just straight up hustling,trying to figure out who to talk
to and how to sell cabinets.
My showroom was a 15 by 15 footoffice inside of a real estate
office and I rented it for $200a month.
I had a six foot white tablethat I draped with a black
(11:02):
tablecloth that I neatly placedfour different cabinet samples.
That was my showroom back then.
Obviously, fast forward to nowwe have just a beautiful
showroom design.
Our vice president of sales wasmy mentor for about 18 months
the last 18 months and he joinedus recently.
So he's designed hundreds ofshowrooms across the country and
(11:25):
really understands what thatideal shopping experience is
like for a consumer.
Showrooms typically look likeBurlington Coat Factory in our
industry and nothing againstthat company.
They have their own niche.
But I think inspiring isprobably the last word you would
use at Burlington Coat Factoryif you were to shop there.
So you know you don't walk intoour showrooms, you just get
(11:47):
overwhelmed by a chaos of choiceand samples all over the place.
It's more of an inspirationaldesign studio.
So around every corner there'ssomething neat to look at, just
like Disney, that hits all thesenses the colors, the looks,
the smells.
That's the shopping experiencewith our company.
It's just completely night andday different than other cabinet
(12:07):
companies.
So a franchisee now they get towalk into the ideal showroom
layout from someone that built a$70 million a year kitchen and
bath business in Florida andobviously understands consumer
buying behaviors and how to sellcabinets, quite frankly,
behaviors and how to sellcabinets, quite frankly.
But yeah, starting up thebusiness is really.
(12:28):
I'll say that I made a mistake,honestly, to be vulnerable.
The first couple of franchisees.
It was a very linear path toopen the real estate's involved.
Then you come to training onceit's almost done and then you go
home and open up your store andit does take some time.
Obviously it's a brick andmortar location.
It's needed for our industry.
But I started realizing thatwhen I started my company I
(12:51):
didn't have a showroom and I didpretty well.
So we basically broke apartthat linear chain of opening
into operating like a normalhome service business, a
home-based business with all thesamples you need, taking
in-home consultations.
We separated that from theactual showroom build-out so now
you do them in parallel.
We're basically able to getpeople open in half the time.
(13:16):
So our goal is for franchiseesand we tell them this it's 100
days from the time the franchiseagreement is signed.
We'd like to see them maketheir first sale and that was an
initiative we set in thebeginning of the year and we
just set that record and ourfranchisee I'll give him a shout
out in Salt Lake city did it in94 days, which is you know.
(13:36):
Obviously I can't talk aboutthe the number, probably because
of FTC regulations, but he did.
He's doing really well forhimself.
He's out selling big ticketitems without a showroom
completed yet.
So that's the experience.
We ask them to go out and meetcontractors, designers, flooring
stores, appliance stores.
(13:58):
Our ideal franchisee isenergized by forming these
relationships.
They like dressing up nicely,presenting the brand well,
walking into these locations andinforming business partnerships
.
I want to share one thing withyou too.
We actually have an outboundcall center.
I know a lot of brands haveinbound call centers.
Ours is actually outbound andwe're calling the types of
(14:22):
people I just mentioned andgetting between five to 10
appointments per week set withfranchisees.
So the call center's job isn'tto sell cabinets, it's just to
get the franchisee on the phonewith someone who raised their
hand and said, yes, I'minterested to talk to the newest
cabinet company in town.
And that's been extremelyeffective.
It's probably the best ROI formarketing spend that we have
(14:43):
right now is this outbound callcenter.
Speaker 1 (14:46):
Wow, yeah, that's cool.
What questions do you have?
Speaker 2 (14:50):
What sets you guys apart from working with another
cabinet company?
So, cabinet company, so youknow we work with contractors
when we've done it and they'vekind of referred out, you know
we want to work with this guy.
So what makes what sets youguys apart?
Like what?
What do you focus on to getpeople to work with you versus
their, their cabinet guy?
Speaker 3 (15:10):
Yeah, it's a great question.
I'll start with the big boxstores.
You know, and I'll tell you.
What is a myth in the industryis that Home Depot and Lowe's
sell a lot of cabinets.
They actually have less than 5%of the market share.
This is something I learnedfrom one of the higher up
executives at Home Depot.
He shared that with me.
So even if someone does go toHome Depot or Lowe's, that
(15:33):
designer is actually not evenallowed to visit the home of the
customer.
It's all done completelysubcontracted.
So imagine a designer whoreally to do a good job, needs
to feel the space, the naturallighting, talk to someone in
their own home how they use thekitchen, how it functions.
So they just do, in my opinion,a poor job of giving someone a
(15:54):
really nice functional kitchen.
Home depot and lowes typicallyare stepping stones for a
designer to work up to more of aboutique cabinet company like,
like ours.
So it's kind of an entry-leveltype of company to go you'll
work with.
As far as custom cabinetbuilders, most of them don't
produce beautiful 3D renderingsof the space.
(16:16):
So we have computer softwarethat we design in and it's
almost like taking a virtualreality tour through your new
home.
Imagine being able to look atyour home before making that
purchase.
So we actually use Oculusgoggles.
It connects to our computer andyou can almost sit on your
kitchen island and spin yourselfaround and look to see how
(16:37):
everything's going to look andfunction.
That's just not done in theindustry for custom cabinet
builders.
And the other thing too, like Isaid, is not knowing what's
next and how things work isreally a problem in our industry
.
So I know it sounds simple, butjust showing up on time and
doing a good job I'm having,like I said, a piece of tracker,
like dominoes, to understandwhat's happening next.
(16:59):
That's just typically not donein our industry.
I went out and spent.
We invested I don't want to sayspent, but invested a ton of
money in a customized CRM fornot just our industry but for my
company.
For our company, we had sevendifferent individual pieces of
software to run our company andwe went to all the
(17:20):
out-of-the-box CRM companies outthere all the big ones you can
name.
I had conversations with all ofthem.
Every one was missing a verykey component of our industry.
So we built a platform that isnot only good for customers but
also the employees of thecompanies to run their business
effectively.
We don't use paper in ourindustry or in my company.
(17:43):
In our company, everything'sdigital, you know, instead of
having folders on the walls andpapers falling all over the
place.
Everything's completely digital, which is obviously unique to
our company as well.
Speaker 1 (17:56):
I think that's great and that's you know.
Again, you want to be a moderncompany.
You know it's like we were justtalking about Elon Musk's
robots, and what will that looklike 10 years from now?
For you know the home servicesindustry.
I don't think they're going toget to the point where they can
handle the kind of specializedjobs just yet.
Yet that we would, we wouldneed our you know our workforce
(18:16):
for.
But it's an interesting thought, um, and I do think,
streamlining and usingtechnology, utilizing ai, uh,
making sure that you can providethe kind of transparency and
customer support like you'retalking about.
Like we all, when we order agordash, we want to know where
our food is.
I want to know how close thepizza is to our house.
Speaker 2 (18:36):
Well, I mean, we redid our master bathroom last
year and you know, seeing thetimeline, it was like, oh, it'll
be done by Halloween and it wasdefinitely not done by
Halloween, so you know, but itwould be good to see that
progress and we worked with agreat designer and contractor.
So no, I'm not saying they didanything wrong, but you know
(18:57):
it's that tracking is reallyimportant.
When you're waiting, you know,when you want to know when
something's done, you want tosee that progress.
And then it holds you guysaccountable too, because you
know the customer can see whereyou're at.
So if there's questions theycan ask about them, or you know
if you're supposed to be at acertain place and not.
So I really like that.
I think bringing in that pieceof technology is actually really
(19:18):
important.
So that's very cool that youguys have that.
Speaker 3 (19:20):
Yeah, thanks for sharing that.
I'll share with you too inbuilding the CRM from scratch.
We're able to send out textmessages and emails in a timely
manner when a new thing istriggered.
So instead of someone callingus saying, hey, what's happening
next, they're already beforethey even ask the question.
They're getting whatever formof communication they prefer.
(19:42):
They're knowing what'shappening next.
Imagine if you guys went onlineand made a payment for $60,000
for your cabinets on Sundaynight.
You're most likely going tocall them Monday morning and ask
what's happening next.
So we don't have that issuebecause as soon as they pay, we
let them know exactly wherethey're at in the process and
what happens next and when we'llreach out to them.
So when we launched thissoftware last year, the amount
(20:05):
of phone calls to our operationsphone got cut by 75%.
So now we're receiving 75% lesscalls from customers, meaning
we have 75% more time to buildour businesses and not field
questions that should have beenanswered ahead of time.
Speaker 1 (20:22):
So how much have you incorporated AI into your
customer support?
Speaker 3 (20:27):
Right now we're using it for marketing.
I have a really cool tool whereyou can take a picture of your
existing kitchen and choose fromdifferent cabinet colors and
door styles and it basicallytakes your space and changes the
door style and the color.
This is for top of funnel.
This is for people who maybearen't interested in speaking to
(20:47):
someone yet, but they're out inthe information gathering stage
.
So in order to use this tool,you actually need to give us
your first name, last name,email address, phone number and
then zip code so it can route tothe correct franchisee.
We do zip code routing for ourfranchisees, so that's a nice
top of funnel tool.
(21:08):
This was created by two PhDs,one at Harvard and one at Yale,
and I can talk really nerdyabout the AI dissociative
modeling and how it's justdifferent than everything else
that's out there.
Most AI you just kind of put afilter on something else.
This actually deconstructs akitchen.
It deconstructs a 3D objectthat is made into a 2D image and
(21:33):
then puts it back together withnew parameters.
It's super high tech, it'scutting edge right now and
that's pretty neat.
We have an AI chat bot thatwe're training right now to
answer any generic questionsabout our company and that's
just going to be nice forcustomers to be able to at any
time ask a company a questionand get what answer a human
(21:54):
would write back.
So that's going to be anotherfeature as well.
Speaker 1 (21:59):
That's awesome.
And then, as far as marketinggoes for your franchisees,
what's the main platforms foryou guys right now?
Is it?
Is it Google, is it Facebook?
Is it both?
Speaker 3 (22:07):
Yeah, it's a.
It's really an omnipresentstrategy.
I hate to you know, I'm notgoing to tell you that.
You know we get all of ourleads from Facebook.
We hired a CMO back in April.
She came from American Appareland after that she was at
Francesca's, who she helped growfrom 50 million to 500 million
through a billion dollar IPObillion with a B.
(22:29):
I'm extremely intelligentstrategist and marketer.
So you know we've begun workingwith each other this last, you
know, basically in thesummertime, just doing a slight
brand refresh, really talking toour customers the right way,
elevating the brand to the pointwhere you know it needs to be.
But as far as outlets for leads,it's the Outbound Call Center
(22:51):
is a really, really goodresource to get in front of
people who literally needcabinets.
It's not like you run aFacebook ad and hope that you're
going to hit someone with aFacebook ad when they're going
to do something once or twice intheir lifetime.
It's less than a needle in ahaystack type of odds.
We do do Facebook retargeting.
If someone does land on ourwebsite, we retarget them with
(23:12):
ads.
Our pay-per-click strategy isvery dialed in and we've spent a
lot of money on nationalkeywords for search engine
optimization.
So our websites when theylaunch, I'd say the majority of
them are already in the top 10for the keywords we need to be
in.
So it's an omnipresent strategy.
When they actually start jobsand have a job in progress, we
(23:35):
have really nice yard signs thatsay we made the smart choice
for our kitchen remodel.
Scan here for a consultation.
So we get leads from neighborsand a part of our CRM is when we
schedule a job at that location, automatically a hundred of the
nearest houses that are ownerget postcards that reflect.
(23:56):
You know.
It says your neighbor made thesmart choice scan here.
So now we're hitting theseneighborhoods, we're canvassing
these neighborhoods and it's notuncommon for us to do, you know
, four or five homes at a timeand in the same neighborhood,
just because of the presence.
And there's no better marketingthan just doing a really good
job for the customer Cause thatthat message gets out in the
mom's chats, the group chats,the group me's and things like
(24:19):
that in the world.
So doing a good job andintroducing the brand to
neighbors is a really costeffective way to get new
customers too.
Speaker 1 (24:27):
Do you have a goal?
I mean you guys obviously have.
I mean, our window washingpower.
Washing jobs are fast, right,so we can rack up Google reviews
pretty quick, whereas you guyshave a bit of a longer cycle.
Is there any best practices youdon't have to answer if it's
proprietary, but any bestpractices for new franchisees in
terms of, hey, at the end ofthree months in business, you
(24:48):
want to have X amount of Googlereviews in place.
What about that?
Speaker 3 (24:51):
Yeah, we do have some guidance.
We'd like to see them have 20reviews even before their
business launches.
We don't ask them to get fakereviews.
We ask for what we consider acharacter review.
You know a past co-worker oryou know family friend?
I think it's totally okay tohave someone write something
nice about you on the Internet,even though you didn't do
business with them.
So we have, you know, characterreviews, that we have Our grand
(25:18):
opening party.
We have, you know, characterreviews, that we have our grand
opening party.
We have a QR code that is outand it says if you love the
showroom, you know we'd love tohear about it, and it links to
the google page.
So, you know, out of the 100guests you know, maybe 15 or 20
will say beautiful showroom.
You know Nick's a great owner.
Go see him for cabinets.
So that actually boosts youinto the 20, 30 review realm.
(25:38):
And most cabinet companiesactually don't even have that
many.
Some may even have less thanthat, even though they've been
in business for 30 years, 20years.
So before the business evenlaunches, we're already kind of
on par review-wise.
I keep going back to our CRM,our CRM.
When a job is finished, we havea series of three text messages
(26:06):
and two emails that go out overthe course of two months.
So obviously you're only goingto ask someone that had a good
experience.
Most people, when you ask themto leave you a review, they
forget you know they have goodintentions but they get busy.
They're not going to do it.
Then If they don't do it rightthen, and there they typically
don't do it.
So our installers leave themwith a QR code and it has their
name and it says we love youknow.
(26:28):
We, you know.
I forgot what it says.
We, you know, appreciate yourfive-star review.
This is a quick QR code scan togo to the Google review page.
So that's the first part, andthen it's a series of emails and
text messages.
The last one literally says I'mso happy, you had a great
experience.
This is the last time I'm goingto bug you about leaving the
review.
(26:48):
We'd really appreciate it ifyou can.
And we see when, in thosechains of emails or texts, when
people leave it, it's usuallywhen you have to ask them four
or five times, which is just thebusy lives that we live these
days.
So I think we're really good atif someone says they are going
to leave us a review.
(27:08):
We ask them enough for them toleave us a review.
Speaker 1 (27:11):
Yeah, that's great.
I mean listen, this is did youname the company, by the way?
Speaker 3 (27:17):
I did.
You want to hear the story?
It's a.
It's pretty short.
Uh, so the company when Ifounded it I named it investor
Depot, right?
So basically I was a houseflipper, investor, um, slash
contractor.
I thought investor Depot is anice plan, home Depot kind of a
one-stop shop for house flippers.
(27:37):
But six months into owning thebusiness I was getting phone
calls to my business phone andthey're asking me if I sold
cabinets.
They were just confused by thename Investor Depot.
Like, are you a bank?
Are you like a lending company?
My neighbor told me you sellcabinets, but I don't know what
you do.
Obviously a marketing faux paswhen you don't know what the
company does.
I changed it to Cabinets Plus.
(27:59):
Batteries Plus is obviously alarge company and I said, hey,
we do cabinets, we also do otherthings too.
So Cabinets Plus was ascreative as I could get as an
engineer back then to form thecompany Cabinets Plus.
So we rebranded all the apparel, all the signage, all the
trucks, all the website, all thethings Very expensive and
(28:20):
time-consuming endeavor.
Two years go by and then Idecided to franchise and our
franchise attorney realized thatCabinets Plus is already
registered in 27 states and thatI can't use it if I want to be
a national brand.
And when I got that phone callmy heart sunk and I said man,
that's a bummer.
I just spent tens of thousandsof dollars to rebrand this
(28:41):
company.
Now I got to start over and Isat down and I just meditated
for weeks and it came to meCabinet IQ.
Our slogan is the smart choicefor cabinets and countertops.
Having a PhD, I felt like IQ iskind of a nice touch on my
personal touch to the brand.
But just cabinet IQ, the smartchoice for cabinets and
(29:02):
countertops, is where we landedand I'm glad it all happened.
Obviously a pretty painfulendeavor to rebrand again, but
it really is the essence of ourbrand.
It is the smart choice forconsumers to come to us for
their cabinets and countertops.
Speaker 1 (29:18):
I think it's perfect.
I mean, as I'm sitting heretalking to you and you and I you
know we had a conversation afew weeks ago but I feel like in
this podcast, as we've reallygotten a chance to listen to you
and learn about, I think it's,it's perfect, it's almost a
perfect personal andprofessional brand fits you, it
fits the product.
I think it's really cool and itstands out.
(29:39):
I mean again for me, my, mytakeaways on this jill and tell
me what your thoughts are.
I mean, again, you're kind ofowning a space that not many
people own, but it's pretty darnnecessary, especially with so
many of us out there who havethese homes.
We have low mortgage rates, wewant to make improvements, we
got a lot of equity in ourhouses, hopefully, um, and so
(30:02):
it's a great sort of needservice, high ticket, I would
imagine, pretty good, prettydecent ticket for a job.
Speaker 3 (30:07):
Yes, our franchisees are launching in a $25,000 to
$30,000 average ticket.
So you can do the math andthink about how many sales you
need per month to own amillion-dollar business.
You're not running around towntrying to sell three jobs a day.
You need one job a week to owna $1.2 million business.
So, right out of the gate,selling a high ticket they can
(30:30):
do really well for themselves.
Speaker 1 (30:32):
Yeah, that's the ticket, yeah.
Speaker 3 (30:38):
The business is pretty light too.
The business owner, thefranchisee they only have one
employee and that's anexperienced kitchen and bath
designer that we're going tohelp them find and vet and train
as well.
So just two people can launchthe business?
Speaker 1 (30:51):
How long does it take to do the average job that you
mentioned?
Speaker 3 (30:54):
When someone comes to us and they pay what we
consider a 5% design retainer,we normally have their design
ready for them next week and ifthere's no changes then we can
order the cabinets.
They take, you know, four tosix weeks to come in, depending
on the brand.
We have some that can comesooner, but most of our lines
are four to six weeks.
We're actually only in thecustomer's home for about two or
(31:17):
three days doing a kitchen forthe cabinets and then the
countertops were only there forabout 45 minutes total with the
pieces we need to install.
So we're not marrying acustomer for 18 months like a
home builder does.
We're really in and out, youknow, and doing the highest
margin and highest gross ticketproducts in the space.
So it just makes the businessfeel lighter and more.
Speaker 1 (31:42):
And is it?
Do you guys like do 50% depositdown and get the job going?
Speaker 3 (31:46):
So 5% to do the design.
We don't touch our designprogram and spend 15, 20, 30
hours designing anything foranyone.
You know if they like us, theylike our reviews, they like the
product, the budget we set forthem works, they pay a 5% design
retainer to start the process.
We actually take 100% of thematerials up front and 50% of
(32:08):
the labor as the deposit.
That's about an 85% of thetotal ticket as the deposit.
The remaining 15% is done orpaid for when the project's
finished.
So, that means you're cash flowpositive from the first job you
sell, which is really nice.
You're not laying out a ton ofcash and hoping you get the rest
in your bank account when thejob's done.
Speaker 2 (32:28):
Right.
Speaker 1 (32:31):
No, as a home services business owner, it's
music to our ears.
We were just talking about cash.
Yes, I mean, when we docorporate jobs, it's great, we
love having commercial business,but when you've got a front
payroll for a couple of weeksbefore you get paid, that can
cause some sleepless nights.
So that's very cool.
I mean, listen folks again, bigjobs, majority of the money for
(32:54):
the job, up front,differentiated service with
fragmented mom and popcompetition, smart people to
support you franchise.
That's selling pretty quick,but the franchisor recognizes
that they don't want to sell amillion units a month, so you
put somewhat of a governor on it, which is that's very smart.
It is.
(33:14):
It's, I mean again, the bestthing you can do as a franchisor
.
And it's hard right, Becausewhen a million people want to
buy your franchise, of courseyou want to sell that to them,
but you want to grow at ameasured pace if you can.
Okay, All right.
So we've covered all thosethings that make you guys
different.
What about, before we close theshow, tell us about what are
(33:39):
the similarities you're seeingin your high performing
franchisees.
Who are they in terms ofpersonality, in terms of
similarities that you've seenwith them?
That's led to the moresuccessful franchise owners.
Speaker 3 (33:47):
Yeah, awesome question.
I'm going to quickly go throughour core values, because this
is who we look for, and thepeople that identify them,
resonate with them and followthem are definitely our high
performers right now.
Create a positive impact isnumber one.
That's the number one corevalue in our company.
I find that you make money bycaring about people and solving
(34:10):
their problems, but you're notgoing to make money if you don't
care about people.
So it starts with caring aboutsomeone's home, respecting them.
That vibe just comes off.
So we want to bring in people.
That I mean.
Obviously, profits matter and Icompletely agree, but it starts
with caring about people.
So we have some questions forprospective franchisees around
creating a positive impact.
(34:31):
We do community service projectsin Austin.
I won't get into that, but wedefinitely give back to our
communities in big ways doingfree remodels for people that
are in need.
It feels good to have theresources to help people in need
.
But create a positive impact.
Be a lifetime student.
Mind the details, takeaccountability for your actions
(34:52):
and inactions and do what'sright Now.
It's easy.
So those are the five.
The last two are prettyself-explanatory.
Mind the, you know this is a atype of business where you just
have to follow the process and,uh, you know.
Obviously we want people thatfeel good about learning and
growing being a lifetime student, so those are the five core
(35:13):
values.
I would say, um, the topperformers right now get
energized by walking in toappliance stores and saying, hey
, I'm opening up a five-starcabinet company, I'm looking to
give referrals to appliancecompanies that are also five
stars.
Can we sit down and chat abouthow we can work together?
You don't go in asking forcabinet leads If you lead with
(35:36):
value.
Obviously people's ears perk upwhen they hear that they can
grow their business by sittingdown and talking to that person.
Appliance stores, tile stores,plumbing and lighting fixture
stores there's a lot ofperipheral industries around our
business and I tell ourfranchisees this during training
(35:57):
the more friends you make inthis industry, the bigger your
business will be.
I could literally chart a graphof how many industry
professionals you're friendswith that actually like you and
how much revenue you bring in.
It's a linear relationship.
So it goes back to the topperforming franchisees.
They enjoy forming thoserelationships and going in and
(36:17):
meeting people.
I had a franchisee justcompletely smash it one month
and they actually had to turntheir leads off.
They said I can't fulfill allthese leads right now.
They actually had to turn themarketing down, which is a sales
and marketing person.
That's like my happy place.
It felt really good and I askedhim what are you guys doing?
(36:39):
And she literally wrote back,just following the process, and
that made me just so happy andjust really validating what
we're doing and letting thefranchisees run a playbook.
So you know outgoing, you knowsome sales professional
experience if possible, andsomeone that is dedicated to
following the process andtrusting you know their franch,
(37:02):
or that's probably the top threefor me.
Speaker 1 (37:05):
That's great, that's great, and I think again it's
when we look at all this.
It's having the ability to goout and execute.
What else do you have?
Speaker 2 (37:15):
No, I mean, I love hearing that, I love that you
guys have those core values andyou're seeing success.
You know, I think that that'sreally important because a lot
of times people think they couldcome in and do it their own way
or you know.
But if they're kind of heldaccountable to that and then
you're seeing the success, youcan actually say you know, this
is proven.
You know, just follow whatwe're suggesting and
(37:36):
recommending and then you'reseeing that transpire.
So I love that.
And you know, it gives themsome stability as well too.
Speaker 1 (37:42):
So it's awesome.
Speaker 2 (37:44):
Yeah.
Speaker 1 (37:44):
This has been really good.
Speaker 3 (37:45):
Our COO came from a continuous improvement, six
Sigma black belt and we're just,we're never done.
You know everything is is beingimproved as we speak and it
feels really good to have thatmindset of just always.
You know, understanding whatthe next, you know what does
cabinet IQ 2.0, 3.0, 4.0 looklike?
And pushing to get there.
Speaker 1 (38:10):
It's really fun to see the brand grow so clearly.
For those of you that like towork with Jill and I and get
introduced to cabinet IQ, youknow the drill text is at
305-710-0050.
But if you'd like to go viewthe website or anything else
pertinent, where do you suggestthey go?
Speaker 3 (38:22):
Yeah, cabinetiqcom is our corporate location.
They can start there and justunderstand.
You know the types of projectsthat we work on, a little bit
about the team, but yeah, I mean, obviously you guys will have a
lot of the information thatwill answer the question.
Speaker 1 (38:40):
So I'd suggest that they reach out to you and learn
more about the brand, but if youcan't help yourself from
filling out the form on theCabinet IQ website, I just
mentioned that Jack and Jillsent you.
Well, this has been fabulous,michael.
We really enjoyed having you onthe show.
Michael and I have been tryingto get this together now for a
couple of months, so thanks forhanging with me.
You know it's weird, michael.
You know, when we started thepodcast I couldn't have imagined
(39:01):
people would want to.
You know, join us.
But they do.
So thank you for hanging withus and this has really been very
I think, for those of you outthere.
So many times, michael, peoplecome to us and they say I want
something different, I wantsomething where I don't have a
lot of competition.
Usually my answer is dude,there's always a lot of
competition, so you've got to bespecial, but I think you may
(39:23):
have found.
You may have found a nichewhere there's not as much, but
as people see you succeed, don'tbe surprised if there's someone
else that comes in.
But listen, you're kind oftrailblazing this thing.
So, michael, thank you so muchfor joining us on the.
We Bought a Franchise podcast.
We really appreciate it.
Uh, for all of you out thereagain, if you want more
information, text us305-710-0050.
(39:46):
And for this episode, I'm jackI'm jill and we bought a
franchise.
Hi everyone, Welcome to the we Bought a Franchise
podcast.
I'm Jack Johnson.
Speaker 2 (00:05):
I'm Jill Johnson.
Speaker 1 (00:06):
And today we have a very interesting guest.
We have Michael Hartel, thefounder and CEO of Cabinet IQ.
Michael, welcome to the show.
Speaker 3 (00:15):
How are you?
Thanks, guys, I'm great.
Thanks for having me.
Speaker 1 (00:20):
So I have to say we've been talking about this
episode coming up for weeks.
We're so excited because you'vegot such a unique concept
that's so different.
It's rare in franchising whenyou can have something so
differentiated.
Michael, let's dive right inand let's talk about Cabinet IQ,
what it is, what makes itdifferent and why someone might
want to consider it if they'rethinking about franchise
(00:40):
ownership.
Speaker 3 (00:41):
Sure.
So Cabinet IQ is a high-techcabinet and countertop company,
so our industry is veryfragmented and outdated.
The biggest problem with ourindustry is people who go in to
remodel their kitchen.
They've never done it beforeand contractors are typically
very bad at explaining what'shappening next.
(01:03):
And you know even the wholeprocess from start to finish,
from initial budgeting, designrenderings and then the actual
execution of the Kitchener modelis just done really poorly in
our industry.
So you know, starting on thebudgeting end, a lot of people
come to us with misinformationaround how much Kitchenerodeling
(01:24):
actually costs.
Maybe they find a blog articlefrom 2018 and think they can
remodel their kitchen for$15,000 and it's just not
possible.
So when they come to us, wehave very unique ways of setting
budgets for principal,signature and masterpiece types
of cabinetry.
At the end of the day, it's notour kitchen, it's our clients,
(01:45):
and we set a really good budgetfor them based on what the
lifestyle is, the cost of theirhome.
We have some guidance on howmuch they should be spending.
And then, as far as theexecution goes, we have created
almost what's similar to a pizzatracker from Domino's.
So imagine you have an app thatyou can look at and, from start
(02:09):
to finish, you know what'shappening next and when it's
going to happen and who's goingto be in your home.
So there's the peace of mindfor a customer to understand
that you know it is a processand they understand what the
steps are.
We actually have more five-starreviews in Austin and our local
market here than all of ourcompetitors combined.
So we get a five-star reviewfrom almost everyone we work
(02:29):
with and that's just a testamentfor the process from start to
finish, and that's just nottypically done in our industry.
Speaker 1 (02:38):
That's really fascinating, and so how did you
begin this journey?
Like what told you, this issomething, I'm onto something
and I should I should franchisethis.
Speaker 3 (02:47):
Yeah, awesome question.
I'll start by saying that I gota PhD in engineering.
I studied material science,basically nanotechnology.
That's what I studied in gradschool for my master's and PhD.
Grad school for me was anamazing time in my life.
I got to learn how to learn anddo creative research, publish
(03:08):
papers, give conference talks.
It was an amazing part of mylife where I got to push the
current scientific communityforward and make a big impact.
All of that came to an end whenI graduated.
I was really excited to finallybe done with school.
I was done with that chapter ofmy life.
I was excited to go out andmake really good money.
(03:29):
I got hired by one of the topcompanies in the nation, the
Intel Corporation, so I ran adivision of their research and
development at theirheadquarters in Portland Oregon.
It all sounds great working onnanotechnology, working at a
great company.
But about two years in I justfelt so unfulfilled and I was
(03:49):
just sitting at the lunch tablewith our coworkers and everyone
was just complaining Very longhours, stressful work,
environment, very demanding andI just knew it wasn't for me.
I had this epiphany where Ikind of looked and scanned the
cafeteria and I just said Idon't fit in.
I just feel different.
So that led me to leave.
(04:10):
I actually just left Intel andtook a job with Samsung, which
is basically their competitormore responsibility but less
work, if that makes sense,better pay.
I got to move to Austin, texas,where I currently live so more
(04:33):
sunshine, it just was a good fit.
But literally within six monthsof starting, I thought a fresh
start would be what I needed.
That same feeling kind of creptin.
So I found a real estateseminar on Facebook.
I got hit with a Facebook adfor a real estate seminar.
I went to this free seminar andthey explained.
I got hit with a Facebook adfor a real estate seminar.
I went to this free seminar andthey explained how to flip
houses.
And when I heard about, you cantake a house, put some money
into it, sell it for this andmake a profit.
(04:54):
That's what I did.
So I dove into house flippingin 2014, 2015 in Austin, texas,
and I just loved it.
I love taking a home.
That needed a lot of love.
The design process, theconstruction, seeing a physical
product get built, is just sucha contrast to working at
(05:14):
computer chips, where you can'tsee anything that you're doing
and it's just a bunch of graphsand paperwork.
So for me, it was a reallyrefreshing, different pace for
me.
So that led into construction.
I became a general contractor,started building houses,
remodeling houses for otherpeople, and I noticed the only
product in a home that Icouldn't control was cabinets
and countertops.
It's the one thing that youknow.
(05:36):
You have to do it the right wayand it has to be a process,
just like you know, just likeengineering.
But I was cutting these bigchecks to these cabinet
companies and they were showingup with the wrong cabinet color.
They'd bring 20 feet ofcabinets for a 19 foot wall.
They'd say they'd be thereMonday and then they would no
call, no show until Fridayafternoon to tell me they'd be
(05:57):
there the next Thursday, and itwas extremely frustrating.
In 2016, I locked myself in myoffice, I taught myself kitchen
design and I figured out whereto buy cabinets on my own, and
that was just initially to helpmy own projects.
But then people started seeingthe product I was producing.
Fast forward, you know, eightyears of just engineering.
(06:19):
The ideal cabinet company herewe are.
The ideal cabinet company herewe are In 2021,.
You asked why franchising In2021, both of our corporate
stores were pretty much runningthemselves, which is obviously
an entrepreneur's dream, and Iwas ready for the next step, and
that was how do we open up 10of these at a time, or 20?
But in noticing, in Googlingbusiness growth methods, I
(06:46):
actually stumbled uponfranchising.
I feel like most peopleunderstand the word franchise
from fast food.
They don't know the innerworkings of the franchisor
franchisee relationship and allthe beautiful win-win parts of
the business.
And as soon as I read that, itjust sounded so much more
attractive to build teams andsee people win and to see
someone live life on their ownterms with a model that I've
(07:08):
created.
That just really stuck with me,as opposed to owning 200
cabinet stores.
It just didn't seem like fun.
So that's why franchising it'sfun to allow someone to be an
entrepreneur, to give them aplaybook, to support them and
see them do well.
It's been really gratifying forme.
Speaker 1 (07:29):
Yeah, I mean what's better?
I mean when you get to reallychart your future as an
entrepreneur and have supportand have something that is so
different, right, have somethingthat sets you apart, that
offers the service and to have areal story behind it, like what
you have, I mean that's anincredible win for a franchisee.
How many locations do you guyshave at this point?
Speaker 3 (07:50):
We have two corporate stores and then 24 franchisees.
What year did you startfranchising?
Well, I did franchisedevelopment by myself, with my
business partner in 2023, and Ijust learned the industry.
I have tremendous respect forfranchise consultants and for
(08:15):
people on their journey.
That role just wasn't for me.
I was probably on a lot ofcalls that I shouldn't have been
, spending probably thousands ofhours with people that maybe
weren't a good fit, and I shouldhave recognized that earlier on
.
So I tried to do franchisedevelopment on my own.
It wasn't really until I metFranchise Fastlane that we
really started picking this up,so that was in March April of
(08:39):
this year.
Actually, we joined theFranchise Fastlane inventory.
Actually, we joined thefranchise Fastlane Inventory.
They're obviously experts atwhat they do to identify great
candidates and work them throughthe system.
So we've been adding aboutthree franchisees per month
right now, which is good, stablegrowth for us, and that's the
hiring plan that we have for thenext 12 months is based on
(09:00):
three franchisees per month.
Speaker 1 (09:02):
That's great.
Yeah, joel and I were justtalking.
I think you know we own a um,uh, a pink's window services
franchise, which is actuallybased there in Austin.
Um, and we um, we actually werejust recording an episode where
where we were talking about ourexperiences running the
business.
A lot of times we'll share aninterview with a franchise, or
like yourself, or franchisee andthen we'll do another episode
(09:23):
where we just talk about ourexperiences and we were just
talking about the highs and lowsof being a first-year
franchisee.
Um, so we just set a record forpink's franchisee revenue,
which is, you know, that's great, but it was preceded by or,
excuse me, so that was foroctober and september was, you
know, awful.
(09:43):
So it's like that's the life ofa franchisee, especially in the
first few months.
You know Jill was talking about, you know accounts receivable
and with corporate accounts andhow much that can take.
So you know, I think it'simportant and that's why we do
this podcast is to let peopleknow that, yeah, you can go out
there, you can chart your future, you can have all that great
support, but you've got to beready for the first year, first
(10:07):
few months.
So maybe, if you don't mind,take us back to when you first
started Cabinet IQ.
What were the first 18 monthslike?
Was there ever a moment whereyou're like, oh man, I don't
know if this is going to work?
Speaker 3 (10:18):
Yeah, I mean obviously me starting a business
from scratch, not knowinganything about it, is different
than the journey of a franchisee.
For me, starting my business,it was just me with some samples
in my truck and I would drivearound to areas of town that I
knew had a lot of constructionactivity and I would just walk
into these houses being builtand ask you who's the decision
(10:39):
maker?
And just straight up hustling,trying to figure out who to talk
to and how to sell cabinets.
My showroom was a 15 by 15 footoffice inside of a real estate
office and I rented it for $200a month.
I had a six foot white tablethat I draped with a black
(11:02):
tablecloth that I neatly placedfour different cabinet samples.
That was my showroom back then.
Obviously, fast forward to nowwe have just a beautiful
showroom design.
Our vice president of sales wasmy mentor for about 18 months
the last 18 months and he joinedus recently.
So he's designed hundreds ofshowrooms across the country and
(11:25):
really understands what thatideal shopping experience is
like for a consumer.
Showrooms typically look likeBurlington Coat Factory in our
industry and nothing againstthat company.
They have their own niche.
But I think inspiring isprobably the last word you would
use at Burlington Coat Factoryif you were to shop there.
So you know you don't walk intoour showrooms, you just get
(11:47):
overwhelmed by a chaos of choiceand samples all over the place.
It's more of an inspirationaldesign studio.
So around every corner there'ssomething neat to look at, just
like Disney, that hits all thesenses the colors, the looks,
the smells.
That's the shopping experiencewith our company.
It's just completely night andday different than other cabinet
(12:07):
companies.
So a franchisee now they get towalk into the ideal showroom
layout from someone that built a$70 million a year kitchen and
bath business in Florida andobviously understands consumer
buying behaviors and how to sellcabinets, quite frankly,
behaviors and how to sellcabinets, quite frankly.
But yeah, starting up thebusiness is really.
(12:28):
I'll say that I made a mistake,honestly, to be vulnerable.
The first couple of franchisees.
It was a very linear path toopen the real estate's involved.
Then you come to training onceit's almost done and then you go
home and open up your store andit does take some time.
Obviously it's a brick andmortar location.
It's needed for our industry.
But I started realizing thatwhen I started my company I
(12:51):
didn't have a showroom and I didpretty well.
So we basically broke apartthat linear chain of opening
into operating like a normalhome service business, a
home-based business with all thesamples you need, taking
in-home consultations.
We separated that from theactual showroom build-out so now
you do them in parallel.
We're basically able to getpeople open in half the time.
(13:16):
So our goal is for franchiseesand we tell them this it's 100
days from the time the franchiseagreement is signed.
We'd like to see them maketheir first sale and that was an
initiative we set in thebeginning of the year and we
just set that record and ourfranchisee I'll give him a shout
out in Salt Lake city did it in94 days, which is you know.
(13:36):
Obviously I can't talk aboutthe the number, probably because
of FTC regulations, but he did.
He's doing really well forhimself.
He's out selling big ticketitems without a showroom
completed yet.
So that's the experience.
We ask them to go out and meetcontractors, designers, flooring
stores, appliance stores.
(13:58):
Our ideal franchisee isenergized by forming these
relationships.
They like dressing up nicely,presenting the brand well,
walking into these locations andinforming business partnerships
.
I want to share one thing withyou too.
We actually have an outboundcall center.
I know a lot of brands haveinbound call centers.
Ours is actually outbound andwe're calling the types of
(14:22):
people I just mentioned andgetting between five to 10
appointments per week set withfranchisees.
So the call center's job isn'tto sell cabinets, it's just to
get the franchisee on the phonewith someone who raised their
hand and said, yes, I'minterested to talk to the newest
cabinet company in town.
And that's been extremelyeffective.
It's probably the best ROI formarketing spend that we have
(14:43):
right now is this outbound callcenter.
Speaker 1 (14:46):
Wow, yeah, that's cool.
What questions do you have?
Speaker 2 (14:50):
What sets you guys apart from working with another
cabinet company?
So, cabinet company, so youknow we work with contractors
when we've done it and they'vekind of referred out, you know
we want to work with this guy.
So what makes what sets youguys apart?
Like what?
What do you focus on to getpeople to work with you versus
their, their cabinet guy?
Speaker 3 (15:10):
Yeah, it's a great question.
I'll start with the big boxstores.
You know, and I'll tell you.
What is a myth in the industryis that Home Depot and Lowe's
sell a lot of cabinets.
They actually have less than 5%of the market share.
This is something I learnedfrom one of the higher up
executives at Home Depot.
He shared that with me.
So even if someone does go toHome Depot or Lowe's, that
(15:33):
designer is actually not evenallowed to visit the home of the
customer.
It's all done completelysubcontracted.
So imagine a designer whoreally to do a good job, needs
to feel the space, the naturallighting, talk to someone in
their own home how they use thekitchen, how it functions.
So they just do, in my opinion,a poor job of giving someone a
(15:54):
really nice functional kitchen.
Home depot and lowes typicallyare stepping stones for a
designer to work up to more of aboutique cabinet company like,
like ours.
So it's kind of an entry-leveltype of company to go you'll
work with.
As far as custom cabinetbuilders, most of them don't
produce beautiful 3D renderingsof the space.
(16:16):
So we have computer softwarethat we design in and it's
almost like taking a virtualreality tour through your new
home.
Imagine being able to look atyour home before making that
purchase.
So we actually use Oculusgoggles.
It connects to our computer andyou can almost sit on your
kitchen island and spin yourselfaround and look to see how
(16:37):
everything's going to look andfunction.
That's just not done in theindustry for custom cabinet
builders.
And the other thing too, like Isaid, is not knowing what's
next and how things work isreally a problem in our industry
.
So I know it sounds simple, butjust showing up on time and
doing a good job I'm having,like I said, a piece of tracker,
like dominoes, to understandwhat's happening next.
(16:59):
That's just typically not donein our industry.
I went out and spent.
We invested I don't want to sayspent, but invested a ton of
money in a customized CRM fornot just our industry but for my
company.
For our company, we had sevendifferent individual pieces of
software to run our company andwe went to all the
(17:20):
out-of-the-box CRM companies outthere all the big ones you can
name.
I had conversations with all ofthem.
Every one was missing a verykey component of our industry.
So we built a platform that isnot only good for customers but
also the employees of thecompanies to run their business
effectively.
We don't use paper in ourindustry or in my company.
(17:43):
In our company, everything'sdigital, you know, instead of
having folders on the walls andpapers falling all over the
place.
Everything's completely digital, which is obviously unique to
our company as well.
Speaker 1 (17:56):
I think that's great and that's you know.
Again, you want to be a moderncompany.
You know it's like we were justtalking about Elon Musk's
robots, and what will that looklike 10 years from now?
For you know the home servicesindustry.
I don't think they're going toget to the point where they can
handle the kind of specializedjobs just yet.
Yet that we would, we wouldneed our you know our workforce
(18:16):
for.
But it's an interesting thought, um, and I do think,
streamlining and usingtechnology, utilizing ai, uh,
making sure that you can providethe kind of transparency and
customer support like you'retalking about.
Like we all, when we order agordash, we want to know where
our food is.
I want to know how close thepizza is to our house.
Speaker 2 (18:36):
Well, I mean, we redid our master bathroom last
year and you know, seeing thetimeline, it was like, oh, it'll
be done by Halloween and it wasdefinitely not done by
Halloween, so you know, but itwould be good to see that
progress and we worked with agreat designer and contractor.
So no, I'm not saying they didanything wrong, but you know
(18:57):
it's that tracking is reallyimportant.
When you're waiting, you know,when you want to know when
something's done, you want tosee that progress.
And then it holds you guysaccountable too, because you
know the customer can see whereyou're at.
So if there's questions theycan ask about them, or you know
if you're supposed to be at acertain place and not.
So I really like that.
I think bringing in that pieceof technology is actually really
(19:18):
important.
So that's very cool that youguys have that.
Speaker 3 (19:20):
Yeah, thanks for sharing that.
I'll share with you too inbuilding the CRM from scratch.
We're able to send out textmessages and emails in a timely
manner when a new thing istriggered.
So instead of someone callingus saying, hey, what's happening
next, they're already beforethey even ask the question.
They're getting whatever formof communication they prefer.
(19:42):
They're knowing what'shappening next.
Imagine if you guys went onlineand made a payment for $60,000
for your cabinets on Sundaynight.
You're most likely going tocall them Monday morning and ask
what's happening next.
So we don't have that issuebecause as soon as they pay, we
let them know exactly wherethey're at in the process and
what happens next and when we'llreach out to them.
So when we launched thissoftware last year, the amount
(20:05):
of phone calls to our operationsphone got cut by 75%.
So now we're receiving 75% lesscalls from customers, meaning
we have 75% more time to buildour businesses and not field
questions that should have beenanswered ahead of time.
Speaker 1 (20:22):
So how much have you incorporated AI into your
customer support?
Speaker 3 (20:27):
Right now we're using it for marketing.
I have a really cool tool whereyou can take a picture of your
existing kitchen and choose fromdifferent cabinet colors and
door styles and it basicallytakes your space and changes the
door style and the color.
This is for top of funnel.
This is for people who maybearen't interested in speaking to
(20:47):
someone yet, but they're out inthe information gathering stage
.
So in order to use this tool,you actually need to give us
your first name, last name,email address, phone number and
then zip code so it can route tothe correct franchisee.
We do zip code routing for ourfranchisees, so that's a nice
top of funnel tool.
(21:08):
This was created by two PhDs,one at Harvard and one at Yale,
and I can talk really nerdyabout the AI dissociative
modeling and how it's justdifferent than everything else
that's out there.
Most AI you just kind of put afilter on something else.
This actually deconstructs akitchen.
It deconstructs a 3D objectthat is made into a 2D image and
(21:33):
then puts it back together withnew parameters.
It's super high tech, it'scutting edge right now and
that's pretty neat.
We have an AI chat bot thatwe're training right now to
answer any generic questionsabout our company and that's
just going to be nice forcustomers to be able to at any
time ask a company a questionand get what answer a human
(21:54):
would write back.
So that's going to be anotherfeature as well.
Speaker 1 (21:59):
That's awesome.
And then, as far as marketinggoes for your franchisees,
what's the main platforms foryou guys right now?
Is it?
Is it Google, is it Facebook?
Is it both?
Speaker 3 (22:07):
Yeah, it's a.
It's really an omnipresentstrategy.
I hate to you know, I'm notgoing to tell you that.
You know we get all of ourleads from Facebook.
We hired a CMO back in April.
She came from American Appareland after that she was at
Francesca's, who she helped growfrom 50 million to 500 million
through a billion dollar IPObillion with a B.
(22:29):
I'm extremely intelligentstrategist and marketer.
So you know we've begun workingwith each other this last, you
know, basically in thesummertime, just doing a slight
brand refresh, really talking toour customers the right way,
elevating the brand to the pointwhere you know it needs to be.
But as far as outlets for leads,it's the Outbound Call Center
(22:51):
is a really, really goodresource to get in front of
people who literally needcabinets.
It's not like you run aFacebook ad and hope that you're
going to hit someone with aFacebook ad when they're going
to do something once or twice intheir lifetime.
It's less than a needle in ahaystack type of odds.
We do do Facebook retargeting.
If someone does land on ourwebsite, we retarget them with
(23:12):
ads.
Our pay-per-click strategy isvery dialed in and we've spent a
lot of money on nationalkeywords for search engine
optimization.
So our websites when theylaunch, I'd say the majority of
them are already in the top 10for the keywords we need to be
in.
So it's an omnipresent strategy.
When they actually start jobsand have a job in progress, we
(23:35):
have really nice yard signs thatsay we made the smart choice
for our kitchen remodel.
Scan here for a consultation.
So we get leads from neighborsand a part of our CRM is when we
schedule a job at that location, automatically a hundred of the
nearest houses that are ownerget postcards that reflect.
(23:56):
You know.
It says your neighbor made thesmart choice scan here.
So now we're hitting theseneighborhoods, we're canvassing
these neighborhoods and it's notuncommon for us to do, you know
, four or five homes at a timeand in the same neighborhood,
just because of the presence.
And there's no better marketingthan just doing a really good
job for the customer Cause thatthat message gets out in the
mom's chats, the group chats,the group me's and things like
(24:19):
that in the world.
So doing a good job andintroducing the brand to
neighbors is a really costeffective way to get new
customers too.
Speaker 1 (24:27):
Do you have a goal?
I mean you guys obviously have.
I mean, our window washingpower.
Washing jobs are fast, right,so we can rack up Google reviews
pretty quick, whereas you guyshave a bit of a longer cycle.
Is there any best practices youdon't have to answer if it's
proprietary, but any bestpractices for new franchisees in
terms of, hey, at the end ofthree months in business, you
(24:48):
want to have X amount of Googlereviews in place.
What about that?
Speaker 3 (24:51):
Yeah, we do have some guidance.
We'd like to see them have 20reviews even before their
business launches.
We don't ask them to get fakereviews.
We ask for what we consider acharacter review.
You know a past co-worker oryou know family friend?
I think it's totally okay tohave someone write something
nice about you on the Internet,even though you didn't do
business with them.
So we have, you know, characterreviews, that we have Our grand
(25:18):
opening party.
We have, you know, characterreviews, that we have our grand
opening party.
We have a QR code that is outand it says if you love the
showroom, you know we'd love tohear about it, and it links to
the google page.
So, you know, out of the 100guests you know, maybe 15 or 20
will say beautiful showroom.
You know Nick's a great owner.
Go see him for cabinets.
So that actually boosts youinto the 20, 30 review realm.
(25:38):
And most cabinet companiesactually don't even have that
many.
Some may even have less thanthat, even though they've been
in business for 30 years, 20years.
So before the business evenlaunches, we're already kind of
on par review-wise.
I keep going back to our CRM,our CRM.
When a job is finished, we havea series of three text messages
(26:06):
and two emails that go out overthe course of two months.
So obviously you're only goingto ask someone that had a good
experience.
Most people, when you ask themto leave you a review, they
forget you know they have goodintentions but they get busy.
They're not going to do it.
Then If they don't do it rightthen, and there they typically
don't do it.
So our installers leave themwith a QR code and it has their
name and it says we love youknow.
(26:28):
We, you know.
I forgot what it says.
We, you know, appreciate yourfive-star review.
This is a quick QR code scan togo to the Google review page.
So that's the first part, andthen it's a series of emails and
text messages.
The last one literally says I'mso happy, you had a great
experience.
This is the last time I'm goingto bug you about leaving the
review.
(26:48):
We'd really appreciate it ifyou can.
And we see when, in thosechains of emails or texts, when
people leave it, it's usuallywhen you have to ask them four
or five times, which is just thebusy lives that we live these
days.
So I think we're really good atif someone says they are going
to leave us a review.
(27:08):
We ask them enough for them toleave us a review.
Speaker 1 (27:11):
Yeah, that's great.
I mean listen, this is did youname the company, by the way?
Speaker 3 (27:17):
I did.
You want to hear the story?
It's a.
It's pretty short.
Uh, so the company when Ifounded it I named it investor
Depot, right?
So basically I was a houseflipper, investor, um, slash
contractor.
I thought investor Depot is anice plan, home Depot kind of a
one-stop shop for house flippers.
(27:37):
But six months into owning thebusiness I was getting phone
calls to my business phone andthey're asking me if I sold
cabinets.
They were just confused by thename Investor Depot.
Like, are you a bank?
Are you like a lending company?
My neighbor told me you sellcabinets, but I don't know what
you do.
Obviously a marketing faux paswhen you don't know what the
company does.
I changed it to Cabinets Plus.
(27:59):
Batteries Plus is obviously alarge company and I said, hey,
we do cabinets, we also do otherthings too.
So Cabinets Plus was ascreative as I could get as an
engineer back then to form thecompany Cabinets Plus.
So we rebranded all the apparel, all the signage, all the
trucks, all the website, all thethings Very expensive and
(28:20):
time-consuming endeavor.
Two years go by and then Idecided to franchise and our
franchise attorney realized thatCabinets Plus is already
registered in 27 states and thatI can't use it if I want to be
a national brand.
And when I got that phone callmy heart sunk and I said man,
that's a bummer.
I just spent tens of thousandsof dollars to rebrand this
(28:41):
company.
Now I got to start over and Isat down and I just meditated
for weeks and it came to meCabinet IQ.
Our slogan is the smart choicefor cabinets and countertops.
Having a PhD, I felt like IQ iskind of a nice touch on my
personal touch to the brand.
But just cabinet IQ, the smartchoice for cabinets and
(29:02):
countertops, is where we landedand I'm glad it all happened.
Obviously a pretty painfulendeavor to rebrand again, but
it really is the essence of ourbrand.
It is the smart choice forconsumers to come to us for
their cabinets and countertops.
Speaker 1 (29:18):
I think it's perfect.
I mean, as I'm sitting heretalking to you and you and I you
know we had a conversation afew weeks ago but I feel like in
this podcast, as we've reallygotten a chance to listen to you
and learn about, I think it's,it's perfect, it's almost a
perfect personal andprofessional brand fits you, it
fits the product.
I think it's really cool and itstands out.
(29:39):
I mean again for me, my, mytakeaways on this jill and tell
me what your thoughts are.
I mean, again, you're kind ofowning a space that not many
people own, but it's pretty darnnecessary, especially with so
many of us out there who havethese homes.
We have low mortgage rates, wewant to make improvements, we
got a lot of equity in ourhouses, hopefully, um, and so
(30:02):
it's a great sort of needservice, high ticket, I would
imagine, pretty good, prettydecent ticket for a job.
Speaker 3 (30:07):
Yes, our franchisees are launching in a $25,000 to
$30,000 average ticket.
So you can do the math andthink about how many sales you
need per month to own amillion-dollar business.
You're not running around towntrying to sell three jobs a day.
You need one job a week to owna $1.2 million business.
So, right out of the gate,selling a high ticket they can
(30:30):
do really well for themselves.
Speaker 1 (30:32):
Yeah, that's the ticket, yeah.
Speaker 3 (30:38):
The business is pretty light too.
The business owner, thefranchisee they only have one
employee and that's anexperienced kitchen and bath
designer that we're going tohelp them find and vet and train
as well.
So just two people can launchthe business?
Speaker 1 (30:51):
How long does it take to do the average job that you
mentioned?
Speaker 3 (30:54):
When someone comes to us and they pay what we
consider a 5% design retainer,we normally have their design
ready for them next week and ifthere's no changes then we can
order the cabinets.
They take, you know, four tosix weeks to come in, depending
on the brand.
We have some that can comesooner, but most of our lines
are four to six weeks.
We're actually only in thecustomer's home for about two or
(31:17):
three days doing a kitchen forthe cabinets and then the
countertops were only there forabout 45 minutes total with the
pieces we need to install.
So we're not marrying acustomer for 18 months like a
home builder does.
We're really in and out, youknow, and doing the highest
margin and highest gross ticketproducts in the space.
So it just makes the businessfeel lighter and more.
Speaker 1 (31:42):
And is it?
Do you guys like do 50% depositdown and get the job going?
Speaker 3 (31:46):
So 5% to do the design.
We don't touch our designprogram and spend 15, 20, 30
hours designing anything foranyone.
You know if they like us, theylike our reviews, they like the
product, the budget we set forthem works, they pay a 5% design
retainer to start the process.
We actually take 100% of thematerials up front and 50% of
(32:08):
the labor as the deposit.
That's about an 85% of thetotal ticket as the deposit.
The remaining 15% is done orpaid for when the project's
finished.
So, that means you're cash flowpositive from the first job you
sell, which is really nice.
You're not laying out a ton ofcash and hoping you get the rest
in your bank account when thejob's done.
Speaker 2 (32:28):
Right.
Speaker 1 (32:31):
No, as a home services business owner, it's
music to our ears.
We were just talking about cash.
Yes, I mean, when we docorporate jobs, it's great, we
love having commercial business,but when you've got a front
payroll for a couple of weeksbefore you get paid, that can
cause some sleepless nights.
So that's very cool.
I mean, listen folks again, bigjobs, majority of the money for
(32:54):
the job, up front,differentiated service with
fragmented mom and popcompetition, smart people to
support you franchise.
That's selling pretty quick,but the franchisor recognizes
that they don't want to sell amillion units a month, so you
put somewhat of a governor on it, which is that's very smart.
It is.
(33:14):
It's, I mean again, the bestthing you can do as a franchisor
.
And it's hard right, Becausewhen a million people want to
buy your franchise, of courseyou want to sell that to them,
but you want to grow at ameasured pace if you can.
Okay, All right.
So we've covered all thosethings that make you guys
different.
What about, before we close theshow, tell us about what are
(33:39):
the similarities you're seeingin your high performing
franchisees.
Who are they in terms ofpersonality, in terms of
similarities that you've seenwith them?
That's led to the moresuccessful franchise owners.
Speaker 3 (33:47):
Yeah, awesome question.
I'm going to quickly go throughour core values, because this
is who we look for, and thepeople that identify them,
resonate with them and followthem are definitely our high
performers right now.
Create a positive impact isnumber one.
That's the number one corevalue in our company.
I find that you make money bycaring about people and solving
(34:10):
their problems, but you're notgoing to make money if you don't
care about people.
So it starts with caring aboutsomeone's home, respecting them.
That vibe just comes off.
So we want to bring in people.
That I mean.
Obviously, profits matter and Icompletely agree, but it starts
with caring about people.
So we have some questions forprospective franchisees around
creating a positive impact.
(34:31):
We do community service projectsin Austin.
I won't get into that, but wedefinitely give back to our
communities in big ways doingfree remodels for people that
are in need.
It feels good to have theresources to help people in need
.
But create a positive impact.
Be a lifetime student.
Mind the details, takeaccountability for your actions
(34:52):
and inactions and do what'sright Now.
It's easy.
So those are the five.
The last two are prettyself-explanatory.
Mind the, you know this is a atype of business where you just
have to follow the process and,uh, you know.
Obviously we want people thatfeel good about learning and
growing being a lifetime student, so those are the five core
(35:13):
values.
I would say, um, the topperformers right now get
energized by walking in toappliance stores and saying, hey
, I'm opening up a five-starcabinet company, I'm looking to
give referrals to appliancecompanies that are also five
stars.
Can we sit down and chat abouthow we can work together?
You don't go in asking forcabinet leads If you lead with
(35:36):
value.
Obviously people's ears perk upwhen they hear that they can
grow their business by sittingdown and talking to that person.
Appliance stores, tile stores,plumbing and lighting fixture
stores there's a lot ofperipheral industries around our
business and I tell ourfranchisees this during training
(35:57):
the more friends you make inthis industry, the bigger your
business will be.
I could literally chart a graphof how many industry
professionals you're friendswith that actually like you and
how much revenue you bring in.
It's a linear relationship.
So it goes back to the topperforming franchisees.
They enjoy forming thoserelationships and going in and
(36:17):
meeting people.
I had a franchisee justcompletely smash it one month
and they actually had to turntheir leads off.
They said I can't fulfill allthese leads right now.
They actually had to turn themarketing down, which is a sales
and marketing person.
That's like my happy place.
It felt really good and I askedhim what are you guys doing?
(36:39):
And she literally wrote back,just following the process, and
that made me just so happy andjust really validating what
we're doing and letting thefranchisees run a playbook.
So you know outgoing, you knowsome sales professional
experience if possible, andsomeone that is dedicated to
following the process andtrusting you know their franch,
(37:02):
or that's probably the top threefor me.
Speaker 1 (37:05):
That's great, that's great, and I think again it's
when we look at all this.
It's having the ability to goout and execute.
What else do you have?
Speaker 2 (37:15):
No, I mean, I love hearing that, I love that you
guys have those core values andyou're seeing success.
You know, I think that that'sreally important because a lot
of times people think they couldcome in and do it their own way
or you know.
But if they're kind of heldaccountable to that and then
you're seeing the success, youcan actually say you know, this
is proven.
You know, just follow whatwe're suggesting and
(37:36):
recommending and then you'reseeing that transpire.
So I love that.
And you know, it gives themsome stability as well too.
Speaker 1 (37:42):
So it's awesome.
Speaker 2 (37:44):
Yeah.
Speaker 1 (37:44):
This has been really good.
Speaker 3 (37:45):
Our COO came from a continuous improvement, six
Sigma black belt and we're just,we're never done.
You know everything is is beingimproved as we speak and it
feels really good to have thatmindset of just always.
You know, understanding whatthe next, you know what does
cabinet IQ 2.0, 3.0, 4.0 looklike?
And pushing to get there.
Speaker 1 (38:10):
It's really fun to see the brand grow so clearly.
For those of you that like towork with Jill and I and get
introduced to cabinet IQ, youknow the drill text is at
305-710-0050.
But if you'd like to go viewthe website or anything else
pertinent, where do you suggestthey go?
Speaker 3 (38:22):
Yeah, cabinetiqcom is our corporate location.
They can start there and justunderstand.
You know the types of projectsthat we work on, a little bit
about the team, but yeah, I mean, obviously you guys will have a
lot of the information thatwill answer the question.
Speaker 1 (38:40):
So I'd suggest that they reach out to you and learn
more about the brand, but if youcan't help yourself from
filling out the form on theCabinet IQ website, I just
mentioned that Jack and Jillsent you.
Well, this has been fabulous,michael.
We really enjoyed having you onthe show.
Michael and I have been tryingto get this together now for a
couple of months, so thanks forhanging with me.
You know it's weird, michael.
You know, when we started thepodcast I couldn't have imagined
(39:01):
people would want to.
You know, join us.
But they do.
So thank you for hanging withus and this has really been very
I think, for those of you outthere.
So many times, michael, peoplecome to us and they say I want
something different, I wantsomething where I don't have a
lot of competition.
Usually my answer is dude,there's always a lot of
competition, so you've got to bespecial, but I think you may
(39:23):
have found.
You may have found a nichewhere there's not as much, but
as people see you succeed, don'tbe surprised if there's someone
else that comes in.
But listen, you're kind oftrailblazing this thing.
So, michael, thank you so muchfor joining us on the.
We Bought a Franchise podcast.
We really appreciate it.
Uh, for all of you out thereagain, if you want more
information, text us305-710-0050.
(39:46):
And for this episode, I'm jackI'm jill and we bought a
franchise.
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Introducing… Aubrey O’Day Diddy’s former protege, television personality, platinum selling music artist, Danity Kane alum Aubrey O’Day joins veteran journalists Amy Robach and TJ Holmes to provide a unique perspective on the trial that has captivated the attention of the nation. Join them throughout the trial as they discuss, debate, and dissect every detail, every aspect of the proceedings. Aubrey will offer her opinions and expertise, as only she is qualified to do given her first-hand knowledge. From her days on Making the Band, as she emerged as the breakout star, the truth of the situation would be the opposite of the glitz and glamour. Listen throughout every minute of the trial, for this exclusive coverage. Amy Robach and TJ Holmes present Aubrey O’Day, Covering the Diddy Trial, an iHeartRadio podcast.
Betrayal: Season 4
Karoline Borega married a man of honor – a respected Colorado Springs Police officer. She knew there would be sacrifices to accommodate her husband’s career. But she had no idea that he was using his badge to fool everyone. This season, we expose a man who swore two sacred oaths—one to his badge, one to his bride—and broke them both. We follow Karoline as she questions everything she thought she knew about her partner of over 20 years. And make sure to check out Seasons 1-3 of Betrayal, along with Betrayal Weekly Season 1.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.