Escaping the Drift with John Gafford - From Hollywood to Franchising: Aaron Harper's Journey with Rolling Suds

Starting point is 00:00:00 Obviously, your business is AI-proof. AI is not going to show up in power, watch the roof of the Superdome. How are you using AI in your business to improve it? And now, escaping the drift, the show designed to get you from where you are to where you want to be. I'm John Gafford, and I have a knack for getting extraordinary achievers to drop their secrets to help you on a path to greatness. So stop drifting along, escape the drift, and it's time to start right now. Back again, back again, in time for another episode of like it says in the opening, the podcast that gets you from where you are to where you want to be.

Starting point is 00:00:37 And today, if you have an interest and maybe potentially owning your own business at some point, I got a guy that is well versed. I mean, he's an expert in the subject matter. It's the idea of franchising, not just buying a franchise, but also how to franchise your own business, because this is a guy that bought a small regional power washing. company and turned it into a franchise that now has over 100 locations nationwide called rolling subs. Ladies and gentlemen, welcome the program. This is Aaron Harper. Aaron, how are you, man? I'm good. Thanks for having me on, John. I'm excited to talk with you today. Yeah, thanks for joining

Starting point is 00:01:15 us, dude. So, you know, what did you, so you weren't always obviously in the pressure washing business. What did you do before this? I'm a recovering Hollywood executive that grew up in South of Los Angeles and went into Hollywood after college trying to make it as like a talent agent and realized I didn't want the life that a lot of my people I was working for had and didn't know what I wanted to do. And so I reached out to some buddies that I knew from college and one told me you should get into franchise development. And I was like, what's franchise development? Because like I really don't want to develop Wendy's locations or like I'm not a real estate development. And that was kind of my understanding of franchising. And he told me he kind of opened my eyes to like this whole world of franchise ownership in, you know, two men in a truck, 1,800 got junk, like, Roto or Mr. Router. Like I didn't know any of these brands were franchises and I didn't know that franchisees were independent business owners that own 100% of their business. And so ultimately I was just excited about the idea of being able to help people become business owners. And so that's that's how I got into it.

Starting point is 00:02:26 and I started working at a carpet cleaning franchise. So you went from Hollywood to working at a carpet cleaning franchise. Correct. It's interesting, you know, because it's funny. One of the reasons I wanted to have you on was because a lot of dudes that I have, a lot of dudes that I'm connected with that have a lot of money. When I say a lot of money, I mean a lot of money, are all diving headfirst into the trades businesses. They're all can't get at HVAC, plumbing, flooring, roofing, anything.

Starting point is 00:02:56 that is hyper trade specific because obviously AI is not going to come roof your house. AI is not going to come and clog your toilet. So these are technology proof businesses that go that go forward. So if you are someone that is out there and you're thinking about maybe starting your own business, what's the advantage of buying a franchise versus just start your own? What do you think? Yeah. I mean, well, when you start your own business, you have to figure out a lot of things. You have to figure out which website provider to use, which marketing companies that are going to produce revenue for you, how to figure out systems, SOPs, and all of that takes time. And time is money.

Starting point is 00:03:36 And oftentimes you could spend all that time and still not get the systems right and therefore stall revenue and not grow as fast. Whereas I found a 35-year-old power washing company out of Philadelphia that has perfected a process of power washing that no one else can do we you know build the trucks ourselves and ultimately when you buy into a franchise you're buying all of that knowledge you're buying all those years of experience and trial and error so you just don't have to make those on your own now there's always going to be hiccups in business no matter what but it's kind of like putting guardrails um on on those on some of those risks well it's funny i saw i saw a meme

Starting point is 00:04:22 I don't know it was a meme or whatever you want to call it the other day, but it was showing like the differences in franchise restaurants. And it had jack in the box and it had Chick-fil-A. And it was saying like a jack-in-the-box that does $500,000 a year makes more money for the franchisee than the Chick-fil-A that does like $5 million because they just take so much more of the top-line dollar and then the bottom-line revenue of the profit. So when you're looking at, you know, is there a place, I don't even know, dude, is there like a website that does comparison of like and like businesses like this? Yeah. So you can, you can go online and you can download what's called the franchise disclosure document. These are all public documents that each franchise has to file every single year. And then in a certain item of that, which is called item 19, you can see the representations of all the locations that are reported from the year prior.

Starting point is 00:05:19 So revenue, whatever the franchisor decides to disclose profit, everything like that. Ultimately, the absolute best way to determine the health of a franchise business is to talk to existing franchisees. But it's funny you mentioned Chick-fil-A. Every single person thinks that Chick-Fleigh is like this gold standard of a franchise. They aren't a franchise. Like the person who comes in to run a Chick-fil-A is effectively a general man. So Chick-fil-A owns the dirt.

Starting point is 00:05:51 They own the building. They own 50% of the profit. Yeah. And they take a royalty off the top. So essentially the general manager, which is the franchisee, he makes good money or she makes good money because it'll do maybe $8 million and, you know, it's called a 10% net. So, you know, they split that 50-50. So now they're making 400 grand a year. But like they're just a really high paid employee essentially.

Starting point is 00:06:18 They can't sell the business. for a multiple of its earnings, but everyone's like, oh, I want to get into a chick flake because it's only 10 grand down. It's like, yeah, you're paying 10 grand to, like, be an employee. You're paying to get hired as where you know. Now, also, you know, I remember, and again, my previous life to real estate was in the restaurant industry. I did that for many, many moons. And I know that, you know, we sold franchises with the restaurant company that I was with. And part of my job was to go take them back over when the franchisees failed. Yeah.

Starting point is 00:06:47 of my job, which was always a fun, fun part of the job because they were failing for a reason, and they weren't run very well. What, let's say, let's talk about Roland Suds. Like if you're looking for somebody that wants to buy a franchise from you, right? What characteristics are you looking in that person that you think is going to make them a successful operator? Yeah. So we were very intentional about this when we launched that we were going to have a really high

Starting point is 00:07:13 bar for people that come into our system. A lot of home service franchisors will decrease the amount of capital required to come in just so they can get more people. They'll kind of sign up whoever wants to come in. It's a gold rush. Yeah, we did the opposite. So we said you need to have 250 to 300 grand like liquid or in retirement assets ready to go for the business. You'll need to buy a minimum of two territories. We don't even do a single unit deals because we're not looking for single.

Starting point is 00:07:45 unit operators. And you have to be willing to reinvest in the business for the first two years so that you can get to truck two and truck three, which means you're not taking, you know, you're not replacing your $150,000 a year salary from Oracle that you have year one. Like you're coming in and you're grinding and you're going to build a valuable pressure washing business. And a lot of the reason for that is is we're predominantly commercial. So we do really large jobs, $30,000 our hospitals, you know, we've done jobs in the multi-six figures that are all commercial buildings, which is what we're built for. And in order to do that work, you have to have the capital to be able to support the staff and the sales cycle to win the work and then the AR cycle to get

Starting point is 00:08:33 paid. And so it's like this kind of big thing. The AR cycle being the most important part. Being the most important part, sure. So we're looking for people who want to build large businesses like they don't want a three four hundred thousand dollar your power washing business like they want three four five ten trucks on the road I call our franchisees goal post movers they're gonna set a goal and then they're gonna hit that goal and they're gonna move the goal post and so they're coming in and they want to build like a sizable company and so a fun stat is about 30% of our operating franchisees or former C level executives and they left that job that

Starting point is 00:09:14 that they were running full time to go and open a commercial and residential power washing franchise because they saw the upside of what happens when I build this to three, four, five, six trucks with a ton of recurring commercial revenue. Yeah, and they're not out there actually pressure washing. They are not. And in fact, if they tell me they want to, I'm like, this isn't the opportunity. Because you're looking for business people, not. We're looking.

Starting point is 00:09:39 Yeah, we're not. Yeah. I tell them there are times way more valuable than the $20 an hour. to pay someone to do the cleaning so we require they hire a general manager in training and a junior technician prior to going to training and they bring them with them to training a friend of my jeff fencer owns a company called everbole i know jeff well you know jeff okay there you yeah yeah i say a business exploded with franchisees and probably some of them i'm in full disclosure i'm an investor at the corporate level of everball um but some of the franchisees that were selected drop the ball pretty

Starting point is 00:10:14 quick. Some of the stores were a little bit of a mess, including the one right down the street for me, which was always drove me nuts. So, and Jeff was pretty quick to pull the plug on those guys. So what, like, it's a little different with you because you're, you're not really a brick and mortar location. What KPIs are you looking for out of people that like, you're like, dude, I'm going to pull the plug on these people. This is not good. Yeah. So we have, we have a very aggressive development schedule. And what, what that means for your listeners is when they buy, let's say three units that means that they are opening three trucks within 18 months so during that time they're going to have benchmarks that they're going to need to hit in terms of revenue where

Starting point is 00:10:53 they're going to open those trucks the trucks are about $155,000 all in but they're huge 16-foot box trucks two machine two to three machines on every truck like we can do a 3,000 square foot house in 20 minutes we can hit five stories from the ground so like you end up making it up the value of the truck in the jobs you're doing yeah But if they don't open those trucks, we have the right to take the territories back that they have not opened. Now, fortunately, we haven't had to do that. But that's why we have the development schedule written in there is to show, hey, like, you got to reinvest and you got to grow these areas. What I can say is like, we try to treat people with the same amount of grace on the way out, the same amount of grace and help on the way out as we.

Starting point is 00:11:43 do on when they're launching their business so if someone comes to me and says hey this isn't working out i actually want to go back and get a job we have a very robust resale program and we can get their territories resale sold really quickly i mean we've we've done 320 units in 28 months um in resale no in total sales from zero units to 320 on the road that's That is territories sold. We have about 112 trucks on the road. So we have 112 territories open out of like, because we're just the nascent. We're just very early.

Starting point is 00:12:23 I mean, we launched in 2023 in the beginning of 23. So franchisees are still very early on. So we've had to do a handful of resales, but all of those have been purchased almost all of them by existing franchise owners in the system who are crushing it. There's only been two that we've done external. assign this system why do they why do people fail with what you're doing were they just not good operators i mean they couldn't operate anything yeah so two two of them were like i'm buying this for my wife and both of their wives didn't want to do it um so those were those were those were

Starting point is 00:13:01 where it was like yeah it's like yeah and then um another one just wanted to go back into brick and more to retail. He was more comfortable with like showing up to a place every day and like having customers walk into the door, which is what he was doing before. I mean, service business is going back to like your your wealthy friends going into it. Like you still got to go out. You're a hunter. You know what I mean? Like you are a hunter. Like you go out like you go get the customers. You go get the relationships. And so if a franchise owner isn't comfortable with that, they want to maybe sit behind their computer and analyze data or spreadsheets, like this. is just isn't the business for them they got to be out in their community shaking hands kissing

Starting point is 00:13:45 babies every single day and uh is there is there a personality test that goes into into your qualification i'm just curious about that yeah that's a good question we've considered doing like a zorical um we're looking into that right now um which would basically just say here's what the zorical of our top franchise owners who are doing you know high revenue volume within six to 12 months um because because my my my get my guess my guess is the people that are doing incredibly well are great salespeople and then they have good operators that are running the numbers behind them that that would be my guess that is part of it here's why personality tests become risky is some of our best franchise owners are ones that we let in that we weren't a hundred percent

Starting point is 00:14:34 like we were like 80 percent on and we're like and then they come in and they just crush it And you can't figure out why. We don't figure out why. And so, like, it's really hard to measure the most important ingredient in business ownership, which I know you know is grit. Like, are they going to give up? Are they going to give up when things get hard or are they going to continue to push through during tough times?

Starting point is 00:14:58 And if the answer is that they're going to continue to push through during tough times, there are leaps and bounds ahead of a lot of business owners that just want to give up and say, hey, this is too hard. Well, if you don't wake up in a, if you don't wait a, up in a cold sweat once a month and want to burn it all down you're not entrepreneurial hard enough i don't care what level you're at totally totally and you know we've seen we've seen you know the people who have extreme ownership meaning like everything in their business is dependent upon their

Starting point is 00:15:25 ability to execute like they're just happier franchise owners they um they feel better about their business they have more levers that they personally can pull on their business and no matter what in any system especially when the grows fast, like Everbull, which is an awesome investment for you, or rolling studs. Like, not everyone's cut out for business. You know what I mean? However, those that come in and follow the model and execute on like what our founders have done for 35 years, like it clearly works.

Starting point is 00:15:58 You know what I mean? Like we're in 35 states. There's a lot of franchisees. The majority of our franchisees are killing it. So it's like, just do what the other people have done before you. and it will work. You know, like if you try to reinvent the wheel and tweak things, like, don't buy a franchise. Like, that might be interesting when you, but don't buy a franchise.

Starting point is 00:16:20 You know, the flip side of the coin, if you will, like you look at me in our business, you know, prior to, we have the largest independent real estate brokerage in Las Vegas. We're number two in the market, but it's close to a 7% market share. We've got 580 agents that work here. I mean, we're humming. We've been doing this for 16 years. And I used to own two Keller Williams franchises. I was a partner in two Keller Williams franchises.

Starting point is 00:16:46 And me personally, what I found, and it's just a lot, probably my personality type, it made me lazy. And what I mean by that is for that statement that you just made, it was like, don't think, just to execute, just follow the plan, just do this. And you become so dependent on the ideas and the execution and the processes and you're just sitting around waiting for something new to come down the pipe. And I found when I went independent on my own and built this company, the thing that gave me the most juice was, I guess a good story is my son when he was like eight years old. I said to him, I said, what do you want to do when you grow up?

Starting point is 00:17:21 He's like, I want to do what you do? And I said, okay, what do I do? He goes, you're the boss. I said, okay. What's the best part about being the boss? He goes, nobody tells you what to do. I said, okay. You know what the hardest thing about being the boss is?

Starting point is 00:17:36 And he said what? And I said, nobody tells me what to do. Yeah. Every day I got to wake up and cast off and figure out a new way. So, I mean, there's a fine line between just shut up and execute and it'll work and it's just how it is. And then there's the innovation that comes from the other side of got to figure this out. Yeah. And let me let me make sure I'm super clear so your listeners understand.

Starting point is 00:18:00 Like initially when you launch a business, most people don't know anything about this. like they're going out and they're figuring out they might have some elemental knowledge about like the product or whatever but like if it's their first business they're going out and they're figuring it right so that that's anyone who launches a business that's a chef a chef is not going to go buy a McDonald's right that's the line that's the point so you're going out regardless of whether you started from scratch you buy a franchise you got to go out and figure figure these things out now what i what i tell our franchisees is is imitate before you iterate. So do the systems, get it down, and then come up with new ideas, bring them to

Starting point is 00:18:44 us, and then, because the best ideas come from franchise owners in the field. And so then when you have a great idea, come to us, we'll see it's working there, we'll create trainings and systems around it, and then we'll roll it up to the rest of the system. So it comes the collective genius of the. Yes. Yeah, some people have called it the zinius, because franchisee, zineas. So you have to basically, like, it is a balancing act. But like in your first six months of a business, let's just call it six to 12 months, like, and you have all these tools in a franchise, like this is how you sell, this is how you

Starting point is 00:19:21 talk to customers, this is the technology you use, this is the website, this is like all the stuff that you don't have to figure out so you can go out and execute. But inevitably, you're going to get better at running this business because you're already 35 years ahead of where the original owners were because you have all that knowledge right out the gate. Then let's kind of like tweak things. So like we've rolled out door to door programs which came from a franchise owner in South Carolina. We've rolled out technology and AI programs that came from another franchise owner. So those those things are really, really important to the growth of a brand. Do you have a recruiting office in Salt Lake City yet for your

Starting point is 00:19:58 door to board? Oh, a franchise owner? Yeah, we had a franchise owner. No, I'm saying for door to door, you should have a recruiting office in Salt Lake City. Yeah. And believe it or not, the franchise owners who helped create the door to door program grew up in Salt Lake City. Like it's just like, it's just like what they do, you know? So like they built all these other businesses. They spent two years of their life knocking on doors trying to sell, trying to sell the Book of Mormon. I mean, they're, they have zero fear of knocking on a door to sell anything, let alone power washing. They don't care. Easiest, easiest thing in the world for them to do. That's why literally I've talked to people that they're like, yeah, we just recruit straight out of Utah for nationwide door to door.

Starting point is 00:20:37 And I'm like, those guys make so much money, by the way. Great. They do great. Yeah. And it's what you train for. Totally. Yeah. So if I'm somebody and I'm thinking about looking at a friend, talk me through,

Starting point is 00:20:52 what we think of the biggest mistakes that somebody would make if they're thinking about purchasing a franchise or getting in that business. What do people screw up? biggest mistakes in the selection process or biggest mistakes they've selected here I am I'm sick of the man I want to quit my job at MGM I want to own my business from that moment where do we screw up the biggest screw up that I see in franchising in general is franchise a lot of franchise owners come to franchising and think the systems are so dialed I can keep my full-time job, and this business will run itself. And it can run itself out the gate. All I got to do is find this great manager, pay the manager $60,000 a year. The manager will build me a multi-million dollar business and get me a return on my investment while I keep my cushy $175,000 a year job with health insurance that pays all of my bills. That is single-handedly the biggest mistake that I see franchise owners make regardless of which brand they go into.

Starting point is 00:22:01 Now, we do not allow that clearly, which is why I'm talking about it. Many franchise owners, many franchisors in my position aren't as selective as I am and aren't as good as finding franchisees as we are. So they take whatever they can because maybe they're undercapitalized, maybe they need the franchise fee, whatever reason there is to bring that franchise owner in. And then they're sitting there and competing for that franchise owner's time. And they have some general manager that isn't the franchise owner, that doesn't have skin in the game, that could go get another job at any point in time. And that entire territory that they just sold is at risk.

Starting point is 00:22:44 And that franchise owner's capital and investment is at risk. And so that's the biggest mistake that people make going into franchise ownership. You know, starting out, you can't, you just don't have enough, you just don't have enough bandwidth to create redundancy in jobs. If you lose a key person, it's your, you know, your quarterback, you're screwed. You know, you're going to have a real problem. And I can see where people would be like, I'm just going to hire somebody to deal with it. And then that person quits. And it's also like, I don't even know where anything is.

Starting point is 00:23:13 I don't even know where the door and the lights which are. Yeah. I don't have a key to the back. $4,000 a month lease that like an entire buildout. And like, I can't leave. my job because, like, I won't be able to pay bills. So now I've got this unit sitting here, bleeding cash. And that is the demise of so many franchise systems, is franchisors allow franchisees to come in that want absentee businesses. Franchisees expect that the systems

Starting point is 00:23:42 are so dialed that they can be absentee. And here's the reality of it, John. If the business was so dialed that the franchisor could run it absentee, there'd be absolutely no need. be absolutely no need for a franchise for franchisees. Like they're just-Ras and Keyes. Todd Graeme is just owning everything. That's all they would do. Yeah, we just own everything. None at all.

Starting point is 00:24:04 Yeah. There's such a, like we talked a little bit of earlier about it, but there's such a wide price range of franchises. Does the amount of money that you got to come up with up front, is that indicative of potential future success? I mean, it seems like there really, here's a really low barrier of entry to get in. That just kind of screams turn and burn to me. Is it the more expensive, the better the opportunity probably really is?

Starting point is 00:24:29 Typically, the investment you're going to make, the size investment is going to be relative to the potential return you can make. So, and this is generally, right? Like there could be franchises that just charge a bunch and it costs a lot and they don't get a return on it. But generally speaking, like if a franchise is going to cost, let's call it 250 to 3. 350 grand to get in, like they should be able to within a reasonable amount of time get to that kind of net profit from their business to, to get a return on that initial capital investment. If that takes too long. What do you think the runway should be? What runway should you look at? Ideally, it should be three years to get to like to get to the net profit of the original investment.

Starting point is 00:25:21 like and it could be less than that it could it also depends on how aggressive that franchise owner is if they're investing everything back in but ideally like for us we want franchise owners to get to three trucks within 18 months it's in our FDD you know currently it's 2025 like a truck does over $400,000 a year in revenue so three trucks at $400,000 a year in revenue is $1.2 million business by 18 months they're going to have three trucks on the road. Like if they're opening all three territories, which most of our franchisees buy three territories. Well, now they're on a run rate for a $1.2 million business by year three. And we've seen a lot of our franchise owners far exceed those

Starting point is 00:26:02 development schedules. I mean, like I said, most of our franchise owners launched last year and we've got like 35 second or third trucks on the road right now. Right. So like, that's a significant portion. So you do have to be wary of the franchises. that are like, hey, the franchise fees 25 grand and it's only $5,000 for equipment. And so you're in for 30 grand and you can do this on the side and like, you know, wait till your job, you know, wait until it ramps up before you leave your job to be safe. It's like, okay, this is like kind of weird, you know, like I don't know. In any business that you go into, whether it's mosquito, whether it's like food, whether it's, you know,

Starting point is 00:26:49 business services like it's going to take everything you've got to make it work and if it doesn't then it's not going to be worth it like it just really isn't like the price of like building something great is challenge it's funny one of my favorite quotes is if you have a choice if there's a fork in the road and you have a choice the right path is normally the one that produces the most short term pain yeah that's normally going to be the better of the two choices so yeah it's Look for that short term pain, right? Look for that stuff. It's part, it's the price of admission for building.

Starting point is 00:27:25 I mean, like, I was, we have three franchise owners at training that are launching. I'm here in Nashville and I went to lunch with him yesterday. And I was like, guys, like, your number one job when you launch. I got a commercial building in Nashville. Oh, do you? Which, uh, 805 Leah. It's a, it's a high-rise apartment building. Oh, nice.

Starting point is 00:27:45 We just, yeah, we just built it like four years ago. We can absolutely clean it for you. So just like that. This is getting in the podcast. Look at that. Look at that happening. Look at that. But yeah.

Starting point is 00:27:57 So, I mean, it was like your number one job is revenue generation. Like, and I shared my experience with them. I was like, listen, like, we raised capital to build this the right way. But from 8 a.m. to 6 p.m. every single night for the first, every single day for the first 16 months, I was doing sales for the business, like finding franchisees and bringing people in. And then from 5 a.m. to 8 a.m.m. I was running the business. And from 8 p.m.m. 12 p.m. I was running the business. And so like, and I, we had capital in the bank. We had team

Starting point is 00:28:24 members. Like, it doesn't matter. Like, this is going to take everything you've got. But, like, now I'm the chairman of the board. We have a full C suite in place. Like, it's, you know, I went and put the short term pain in so that I can have, you know, an outstanding outcome. You know, and I think she's really done a good job at putting this at the forefront of American thought, which is buying an existing business, which is Cody Sanchez has done a great job of this. And a big part of her pitch and what she talks about is getting seller financing from boomers that are retiring is what she talks about, which is smart. So if you're somebody that's, I mean, you're in the business of saying, hey, you've got to come up with $250,000 worth of, you know, racks that I can see that we can do this straight away versus Cody's like, find somebody that's been the pressure washing business in Kentucky that you can walk in and sell or finance that thing. Yeah, I mean, if you ask Cody how long it takes.

Starting point is 00:29:19 takes someone to typically find that kind of personal business like and Cody and I have we recorded some content together last year like she's awesome. She's great. I think everything she does is incredible. And if you ask her, if the people in her business buying course, how long it typically takes to find this business, it's like 18 to 24 months. And some people find it sooner than that. But ultimately, you're spending most of your time vetting these businesses and private

Starting point is 00:29:49 equity is now playing more downstream. They'll go buy a million EBITDA business, whereas a year ago it had to be two million or, you know, two million in EBITDA or more. Yeah. So they're playing more downstream. So this kind of demand for these like existing unicorn businesses is really high and the supply is is not getting bigger. The demand is getting bigger. And so a lot of the franchisees that have signed up were former searchers, meaning they were searching for an existing business for 12 months. They had burned a lot of their cash on due diligence. They had gotten out bid, and they were like, wait a minute, what's the opportunity cost of waiting a year and a half when I can buy a really hot brand, get in and execute? And then, like, potentially in a year

Starting point is 00:30:45 and a half or two years be to a point where I'm like pretty set if I work hard at it. So what's cool about what Cody's doing is it's opening up a lot of opportunities for people those same interests, those people that are interested in business ownership that are interested in a less risky option because it's an existing business to then consider franchise ownership because it really checks a lot of the same boxes, right? like oh we want proven systems check we want quick quickness to cash flow and ramp check you know what i mean like those are the very similar things and i think that's evidenced by her investing in a franchisor she invested in my buddy's business um who owns resi brands which is that

Starting point is 00:31:30 one painter and pink's window cleaning and like and so she knows that this is a great uh path for wealth um and and and you know people are still getting SBA loans with us. They put 54 down on the SBA loan. They get a half a million dollar SBA loan. We just don't want someone leveraging all of their assets. Sure, to buy a business. So do you allow seller find, like say you have a franchisee that wants to get out to you allow seller financing or is it got to be that's between the franchise owner and whoever's buying their territory. So there's nothing in your paperwork that prohibits that. No, and that's fine with me. We've done deal. We've done deals with like that with a couple resales. I mean, it makes a ton of sense

Starting point is 00:32:18 because that franchise owner gets the majority of their cash back. The new franchise owner that's buying that territory doesn't have to outlay that cash right off the gate so they can invest it in marketing and additional trucks to scale. So I think that works great. Yeah. Well, let's shift gears, man. Let's talk about your business, the business of franchising. because I we have been down that road we went down that road briefly and we thought we might want to sell franchises of our business briefly we went down that road and just the siege that is the attorneys and the filings and all of that stuff is insane so let's go back when you bought your business did you always intend to franchise it was you walk into it with that intention that's exactly what is my intention so um there's this whole push what what you're talking about with with Cody is on entrepreneurship through acquisition, ETA, for your audience that doesn't know. That's what it's called as ETA. What I did was franchise through acquisition.

Starting point is 00:33:20 So I didn't actually buy a power washing business that now I'm going to go run that power washing business. My intention was always to buy the systems, processes, trademarks, rights. You bought the franchise rights. Yep, everything. You didn't buy the business. You bought the franchise rights. I create a separate business, which is the franchise business.

Starting point is 00:33:41 I raise capital for that business. The founders of the original business get to keep their location. They become, nope, they essentially are a royalty-free affiliate franchise location. Yep, that's the way I did it with the deal. I mean, there's a ton of different ways you can do it. That's a great deal. It's a great deal for them. And then they get upside in the franchisor.

Starting point is 00:34:07 So they're minority partners in the franchisor. And so they have this great business, which they would have had to sell her finance if they wanted to sell it to someone because of the way their business works and stuff like that. But they didn't want to do that. They want to keep running their great business that's done over $2 million a year for the last handful of years, which is a great business. They love it. And so I'm like, cool, keep your great business.

Starting point is 00:34:32 In fact, it's so great. Why don't I take that and put it in every single major market? it across the country. And you don't know anything about franchising. I don't know much about power washing. So why don't you do the power washing part and I'll do the franchise part. And so we partnered, created this new company, the franchise company, and we went from zero franchise units to 320 franchise units in two and a half years. What's your bandwidth like to do that again? I mean, that's my question. I mean, look, because

Starting point is 00:35:07 Yeah, that's the play, man. I mean, like, I talked early about the restaurant chain I worked for, which is now pretty much to talk, but it was Hooters of America. And the same story, right? So you had these six dudes that like to get drunk and sit on bar stools and look at women in Clearwater, Florida, who had a damn gold mine had no idea.

Starting point is 00:35:23 Inwalks Bob Brooks, who owned Naturally Fresh, the salad dressing company that was providing them their salad dressing and says some of the rights to sell the franchises. And they just handed it over to him. Yeah. He turned that into a damn empire. I mean, it's the same thing. that Ray Crock did with McDonald's.

Starting point is 00:35:39 Yeah. With the McDonald's brothers. I mean, it's not a new concept, but it is still pretty niche. Because you really have to understand franchising. I think in order to do it the right way, you have to really understand franchising. And franchising is a completely different business than power washing. And where a lot of franchises... It's completely different than everything.

Starting point is 00:36:01 And so where a lot of franchises are getting trouble, they're like, hey, I have this great, like, salad concept. and six people told me I should franchise it. So I'm going to go franchise it. And then they franchise it. And they're like, oh, wait, now I'm a coach. I'm a therapist. I'm a marketer. I'm like all those things in under an hour on a Tuesday morning.

Starting point is 00:36:20 And they're like, I just liked running my salad business. And but this has been an incredible partnership with the Wenling family who are my business partners. There's the dad and son are the senior and junior or the second and third largest shareholders in the company. And then I raise capital from people who have franchised businesses before to thousands of locations that could provide guidance in addition to it. So to answer your question on bandwidth, I could very simply do this again as probably faster than I did this time. However, I'm heavily focused on making sure that the franchisees that sign and become Rolling Sutschies have the resources they need. I mean, of course. But even though SPACs have kind of lost their sizzle a little bit, I mean, the word roll up is still pretty sexy.

Starting point is 00:37:08 And it seems like you could roll up a lot of little, a lot of home services businesses under this little umbrella. And it would be a little, you know, a bunch of them are worth a lot more than a few of them. Yeah. And I have thought about it. And I have thought about it. And I've got friends that do it. Where I'm really focused right now, have you read Sahil's Bloom's book, the Five Types of Wealth that he released. recently. Nope, but I'm going to write it down right now. What was it? Five types of wealth.

Starting point is 00:37:36 Five types of wealth. And the thesis of the book is like the financial, there's four other types of wealth other than financial. It's like time wealth, social, fitness. And, yeah, yeah, I've heard the concept. Yep. Yeah. So, you know, basically like most of people's decisions are designed, at least in the United States, are designed around like accomplishing financial wealth. Well, we've done really well with rolling suds we're very fortunate and um and my goal was always to get it to 300 units and then hire a professional CEO that can take it into like a more mature brand stage well i've done that now uh he's uh he's a month into to to running the company that's i stepped into a chairman of the board role i spent about 10 hours a week roughly on the business

Starting point is 00:38:24 um and the rest of my can ask you this because i have this i have this experience every time Every time I do what you just said, when I hire somebody better than me to take over a seat at one of our companies and I watched that first month unfold, I'm like, how did I even get it to where I got it? This person is so much better than me. Are you experiencing that right now? Yes. Yes. I mean, like, you're you're a founder. I'm a founder. Like to be a founder, you got to like break a lot of stuff and create a really big fire. And then like that fire turns. into revenue and employees and like a great business then at a certain point someone needs to come in and maintain the fire and make sure it doesn't keep growing and create systems to optimize the fire and like the founder's job is very different than that person's job in terms of like how their mind is wired and we're just at that stage where like we need someone who's like going to optimize and professionalize and this guy's been doing it 22 years with serve pro puricle

Starting point is 00:39:29 restoration one like his resume's insane i think one of my favorite ways to put it is it's one thing to make it's one thing to make a baby it's a whole other race children it's two completely different skill sets and we've got 90 franchise owners who are in the beginning of their business that's that's a whole other that's a whole other deal so okay so you acquire the franchise rights you get this done you go through the filings which were which were disaster what's your filings cost you if you're remember ballpark just like you understand how expensive that's it 10 to 15 grand a year roughly no no no no I'm talking about your initial franchise filings what did that package where the attorney cost you've charged you for that oh so um so if you don't know what you're doing yeah so if you don't know what

Starting point is 00:40:15 you're doing yeah so if you don't know what you're doing right like you don't like you'll go so like it'll be between 50 to 150 thousand dollars yeah yeah I because I worked at a franchise company prior to this i just did it like i had a lawyer i paid the lawyer 25 grand and i but i came to him with a templated fdd that i had used for other brands wow i like i had done this before we had incubated brands at a larger company i had reformed brands prior to this kind of the whole reason to buy a franchise you were just repurposing what was already done that worked i so i just basically took what i so We didn't pay, in fact, the founders of ruling suds, like the original OG location, they paid a company a hundred grand to, like, franchise their business.

Starting point is 00:41:08 And I basically had to start from scratch because the stuff that they gave me wasn't usable. And so, like, what they didn't tell my founders is that they would need another million dollars and 150% of their time. to actually grow the business and franchise it. And so they just were like, wait, this is like way more. We bit off way more than we even knew we needed to chew. So what if I just kept running my great power washing business and a partner with the franchisor who did the franchise part? Yeah.

Starting point is 00:41:46 What's your marketing plan look like to get franchise. Franchisors? What's the marketing plan? Franchisees. Yeah, yeah, no problem. So we work with franchise brokers. predominantly, which are kind of like real estate agents for franchises. So you'll go to a franchise broker and say, hey, I'm looking for a concept where I can make

Starting point is 00:42:07 this amount of money and, you know, I have this much to invest. And they do kind of an assessment on you, personality assessment, whatever, and determine, hey, these are some brands that I think would work for you, for you to dig into. So the majority of our franchisees come from really solid relationships that I've got, I have within the franchise community. I've become kind of a, I hate to say it, but like an influencer in that franchise world. You're saying, I don't hate it at all.

Starting point is 00:42:36 Yeah, I mean, the reality is, is like if you have influence, like that's a good thing. But like that word has been negatively impacted by those who have abused it in other industries and therefore people think it's not a good thing. but I actually think to do something great and have influence is like actually a really positive thing. But yeah, so I've kind of become like a known entity in that space. And so franchise brokers trust me and therefore they trust that we're building great

Starting point is 00:43:09 systems for franchise owners. So they present our brand to a lot of prospective franchise owners. Do you have an affiliate program that runs through your existing franchisees? Yes. And then we pay then. we'll pay franchise owners if they refer someone to us as well. And then I put out a lot of content online and do stuff like this that I really enjoy to talk about the brand so that we're able to find franchise owners organically.

Starting point is 00:43:39 And so like Cody, like I was saying, Cody Sanchez and I recorded a video where we break down the whole business. So what the business looks like from a franchisee perspective, from franchisee perspective, from franchise or perspective. It was an episode of Main Street Millionaire on her YouTube channel. So like a lot of, we've had a handful of franchise owners who watch that and they're like, I know you, Aaron, like we're good. Like let's move forward. You know what I mean? So like I put out multiple pieces of content per day on all the channels that actually last year was around 40, a little over 40% of our franchise sales revenue came from content. Yeah, it's always a win when

Starting point is 00:44:16 that first conversation, they already feel like they know like and trust. to you. It makes things so much easier when that happens. Whenever somebody sits in my office and I'm like, I feel like I know you. I'm like, oh, this is easy. Whatever we're doing, I'm like, yeah, I know where this is headed. This is going to be good. So what's the long-term play, man? What's the, what's the? Rolling Seds will be a billion dollar company. There's absolutely no reason it can't be. I've done the math. It's about 2,400 trucks. I think we can get there in about 15 to 18 years, depending on how well our franchisees do.

Starting point is 00:44:54 2400 trucks ends up being $960 million in system-wide sales. 1-800 got junk, got to like 760 million in system-wide sales in about 20 years. They didn't have any systems in place for the first five from what I understand and did not have experience in franchising either, just kind of had a great junk business. But they really professionalized the junk industry. And there was no one prior to that that did that. And we are doing the same thing to the power washing industry. Prior to us, there was no one that was professionalizing it.

Starting point is 00:45:34 There's no PE roll-ups of power washing companies. There's only a handful of like two plus million dollar power washing companies nationwide. There's like no national brand other than us. We're in 35 states now. And so what's happened is, is like we're really penetrating this kind of like commercial market because the majority of your power washers

Starting point is 00:45:57 are going to have like a small machine and they're going to be able to do driveways. We have big trucks. We did the top of the Super Dome before the Super Bowl. Like literally, that's the kind of jobs that we do. And so we're servicing this kind of like underserved part of the like exterior cleaning industry.

Starting point is 00:46:17 and our franchisees are seeing like really quick wins as a result of that unmet demand. And so really it's just making sure we continue to reinvest in the business and reinvest in helping our franchisees be successful so that we can achieve that. And then my goal as the chairman of the board is to make sure that the proper resources that my CEO needs are allocated to him. And then holding him accountable to really, like, aggressive initiatives that allow us to take these massive steps forward every quarter. Well, let me ask you this, because, like, my friend also, you probably know him, Tommy Mello, where they were in Garage. You know, Tommy is insane about the customer experience when dealing with garages.

Starting point is 00:47:04 And I've had his people at my place, and it's insane how on top of it they are with their their SOPs for how they deal with customers. are just so far beyond. Is that some? Because again, this is like, it's pressure washing business, right? Same thing.

Starting point is 00:47:20 Yeah. So what are you doing to ensure that elite customer experience? What SEPs have you baked into your people that make sure that happens? So every franchisee uses the same technology. So that's one piece of the business that otherwise they'd have to figure out on their own, meaning the field management tool, the CRM, that follows up with the,

Starting point is 00:47:42 the outstanding leads that you have, the field management tool that manages the customers that you've already booked, they get text messages when their technicians are on their way with a picture of the technician, like they get reminders afterwards, like days before, they get thank you emails, they get like the customer, we obsess over the customer because the customer ultimately is going to be the best salesperson for that franchisee to get more customers And so what we've done is basically, like, before we even launched this business, I sat with like a blank piece of paper or a blank document on my, on my computer. It was one of those like, it's Friday at like 8 o'clock.

Starting point is 00:48:28 And I'm like, Sarah, like I tell my wife, like, I can't watch another episode of Bridgeton. Like, I have to go sit in front of my computer for like an indefinite period. I can't watch a single episode of Bridgeton. That's where I draw the line, my friend. One. Never seen an episode. Yeah. Well, so I'm like, I got to go and I sit there from like eight o'clock till like three a.m. And just rode out the customer journey.

Starting point is 00:48:53 So like what I want the call center to say, because we've got a call center that answers calls for our franchise owners. What are the objections that you might get? What are the how do you overcome them all the way down to like what text and messages are the, are the customers getting on the way? when are the reminders coming in, how do we personalize those reminders, and then also did a separate document that was the customer, like the franchisee kind of journey. So the franchisee knows what steps are happening at the same time. And then basically I took that document to a handful of CRM companies in the franchise industry, and there were only three that could build it for me. I'm guessing Salesforce was probably one of them.

Starting point is 00:49:39 So, yeah, so there was service tighten, and then there were two others. And service tighten is insanely expensive. And for our business, it's not as complex as like HVAC or plumbing or like restoration. So we didn't go with service tight limits or anything. Yeah, I think I get it. Yeah. So we went with one of the more like niche options. But anyways, like I did that before we even launch this business.

Starting point is 00:50:06 Well, that's an, so it was, so you're using outside tech, but at what point? do you say we've got to get some proprietary stuff within the company um that's always an option from my experience talking to other franchisors and i run a mastermind with other service franchisors we meet once a month is that it becomes incredibly expensive to maintain an upkeep um there's always bugs with with custom stuff at least initially so then there's a staff internally. Yeah, but you've got a mastermind. Why don't you just turn into an S-A-S-play and then sell it to them? Hey, there's a lot of directions I can go, John. I'm trying to find every nickel I can squeeze out of you. I know. And I think the same way. I'm just like, I'm so exhausted from the

Starting point is 00:50:55 last two and a half years that I'm like, I don't want any other businesses right now. I got a I got a big enough one now to figure out. Yeah, I tell people all the time, that's my, they say like what's your toxic trait is I can talk to anybody and they can talk about their business that I know nothing about it within five minutes I'm like I could do that and I'll go down some black hole and have to bring myself back like no no no no stay in your lane do what you do you're doing well because you're an entrepreneur man that's just the way we're wired that's the way we think like I have conversations with people and I immediately start thinking about ways they could they can make money starting a business and they're like do you want to invest do you want to do it with me

Starting point is 00:51:33 And I'm like, no. No, you know what I finally started doing, dude? Okay, so I have a friend named Josh. And my buddy Josh, like every time I see him, no matter what product is in his vicinity, right? If it's sunglasses or if it's this or if it's that, whatever it is, he's like, oh, yeah, I got a piece of that company. I got a piece of that. Because he's like, finally, and I'm that guy that I'll go to dinner with somebody.

Starting point is 00:51:59 And I'm not smart enough, I guess, to see that maybe they invited me. because they want my expertise in a particular area that I am very well versed in. And then they'll be like, hypothetically, how would you do this? And I'll spend the next 40 minutes like, oh, you know what you could do? And then you do this and then, oh, but know what?

Starting point is 00:52:16 You should attach it to this. But if you brought this, it would make it better. And then over a 45 minute meal that costs them $30 to buy me a bad steak. I've now given them a $20 million playbook. Yeah, yeah, yeah. As you're talking to Josh, I'm finally now when people start that, I'm like, oh, you want to, you know, you want to, this property you want to market this product into the real estate industry to either loan

Starting point is 00:52:37 officers or realtors or had them help you sell to their to their customers yeah i can consult for equity on that of the upside yeah what i do consult for equity and yeah yeah i'm done be i'm done being the free advice guy man i'm done with that now it's all going to be consult for equity from now my wife was like stop doing this you got to make this look harder than it is yeah totally i and i think that makes a ton of sense it does let me ask you one more question which is this so So obviously your business is AI proof. AI is not going to show up in power, watch the roof of the, of the Superdome. How are you using AI in your business to improve it?

Starting point is 00:53:11 So a handful of ways. We do a lot of, so we do a lot of lead generation for our franchise owners, particularly around commercial outreach to customers for commercial work via email, via direct message. And a lot of that is AI generated. and it's personalized to whoever is receiving that email and across the country we send out thousands of emails per day across you know hundreds of different domains and property managers property managers facility maintenance managers general contracts h0As people who own restaurants and we have national accounts for our franchisees as well so we do it on the national level and on the local levels We've generated work with like Starbucks and Panda Express and Popeyes. So we're kind of like taking the same approach that we do locally and we're doing it nationally as well. Okay.

Starting point is 00:54:09 And so that that kind of allows us to really speed up a lot of lead generation for franchise owners through these different kind of efforts. Additionally, we've taken our operations manual, which is all of the 35 years of knowledge that our original location has. and we've uploaded it into its own large language model so that instead of them having to go to the founders and say, hey, how do I do this one thing? Or, hey, how do I clean breezeways? Or, hey, how does this happen? Or what chemical do I use for this?

Starting point is 00:54:42 They just plug it in. They just literally ask the AI and it answers. And then if there's a question that is not being answered, they send it to their business coach. We answer the question. We upload it back into AI. So it's like this constant, constantly like strengthening knowledge base for our franchise owners. And then there's a lot of GPT.

Starting point is 00:55:06 I like it. Exactly. And then there's some other stuff that we do on the kind of operations level for onboarding. That's AI generated, which takes a lot of heavy lifting off of my team, like the follow-up of have you connected with this supplier, have you signed up with your insurance, have you done this piece, like all things. like all the kind of nitty-gritty stuff that has to happen before launch, but it used to be like my team sending out individual emails to every single franchise owner. And now we don't do that. So you're doing marketing nationally for those guys.

Starting point is 00:55:43 I'm guessing there's a call center on the back end. Do you see in the near future being able to automate that call center or you always want to maintain that personal touch? So we outsource it to the best call center that's in Utah. in the home service space. So we don't do it internally. We have a vendor that we've held accountable to make sure that they have metrics. 9-9-9-5-5-0.

Starting point is 00:56:08 Yeah, one less thing to worry about. And if they don't perform, you can replace them. I get it. Correct. Whereas if you do it internally and you invest in a call center and it doesn't work, now you're out all this cash. Yep. And franchisees aren't happy.

Starting point is 00:56:19 So you try to keep it lean, keep it simple, and hand off as many problems as you can. it. I think it's a smart way to do business. It's about leverage, right? Like, what is the highest leverage thing that my team should be doing on a daily basis? And we have 24 team members and a full executive team in place. But like, what should they be doing? They should be supporting franchise owners to help them understand how to make their business economically sound. And they need to be working hand in hand with franchise owners to do that. Not creating call centers, not creating chemical plants not creating all these other things helping franchise owners be be successful now as we

Starting point is 00:56:59 grow and we have 250 franchisees operating does that does that change because we have more cash and we get like potentially but right now it's like we're working to help our franchise owners get off the ground i love it man well if they want to find more you what do they find jaren uh so rolling sleds franchise dot com they can request information if people want to become a franchisee um additionally i just put out a ton of content online that is about franchising. And so you could follow me on Twitter. It's Aaron Harper, CEO, Aaron T. Harper on Instagram. Admittedly, a lot of the content I'm putting out right now is me training for an Iron Man

Starting point is 00:57:38 and then whatever business stuff comes up in my mind. Yeah. So it's kind of a different vibe. But anyways, that we, and then there's a bunch of like resources online. Like you can type in my name and there's a ton of articles and stuff that have been written just about franchising in general. Cool. I love it. Well, thanks, brother. If you're ever in Vegas, man, you're more than welcome to come by and see us. Thanks, John. I appreciate it. So, dude, if you, if you're somebody that's aspiring to open your own business, I mean, that was kind of

Starting point is 00:58:06 eye-opening. I mean, there's a lot of pitfalls. And trust me, is somebody that has opened businesses that have highly succeeded and opened some that have highly failed. I think the one thing I'm taking away from this is this. Number one, if you don't have expertise. And when I say expertise, I mean you absolutely know what to do. Don't go at your own, don't go at your own way and try to open your own business because the amount of mistakes that you will make and the time that it will take to get the education will probably eat up all your capital and you go on a business. This is probably a much safer route for you. Find a franchise that resonates with something that you want to do. Understand that you've got to work. You're going

Starting point is 00:58:40 to have to put effort in, but I like that three years. I like that idea of what Aaron said me said, you know what, try to choose a franchise. You're going to be making that amount of money whatever you put in within three years. So anyway, we'll see you guys next week. Thanks for listening. What's up, everybody? Thanks for joining us for another episode of Escaping the Drift. Hope you got a bunch out of it,

Starting point is 00:59:04 or at least as much as I did out of it. Anyway, if you want to learn more about the show, you can always go over to escaping thedrift.com. You can join our mailing list. But do me a favor. If you wouldn't mind, throw up that five-star review. Give us a share. Do something, man.

Starting point is 00:59:16 We're here for you. Hopefully you'll be here for me. us. But anyway, in the meantime, we will see you at the next episode.

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Escaping the Drift with John Gafford - From Hollywood to Franchising: Aaron Harper's Journey with Rolling Suds

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