Heroes in Business - Bennett Maxwell, Founder & Chairman of Dirty Dough, Produced World's First 3-layer Cookie, 450 Franchises sold dirtydoughcookies.com

Episode Date: October 9, 2024

Watch Bennett Maxwell, Founder & Chairman of Dirty Dough, Produced World's First 3-layer Cookie, 450 Franchises sold, Member of Forbes Business Council, Real estate investor, as he's interviewed by David Cogan, Founder of Eliances, at Eliances Heroes Show. dirtydoughcookies.com

Welcome back to Alliances Heroes, where heroes in business align. To be part of our super community and find out more about Alliances, visit www.alliances.com. That's right. And we're back. And again, it's always just amazing. I just look amazing at all the things that we've done during this radio show. And I appreciate all of our listeners. And I really appreciate the continued feedback we have on some of the past interviews, like

when I recently interviewed the founder of E-Entertainment. So make sure that you go to E-Entertainment.com. As you know, it's E-L-I-A-N-C-E-S.com. It is the only place where entrepreneurs align. And I couldn't be more excited today. I do need to reveal to you something very unique. Well, maybe not so unique, but something that many people don't know about me. While I'm definitely a health nut, I eat a lot of chocolate cookies. They are my favorite.

The issue that I have is always trying to find one that is amazing and one that I'll really enjoy. that is amazing and one that I'll really enjoy. And I'm excited because I'm a big fan of his place. And welcome to the show, Bennett Maxwell. And for those of you that don't know, he is the founder and chairman, CEO of Dirty Dough. That's right. And you can reach him by going to DirtyDough.com. So welcome to the show, Bennett. Super excited to have you. And you've got places all over the place. You made it so convenient for me to eat them. So convenient or so hard. Yeah. I like the, anytime you own a cookie shop, you do get a build rapport instantly with a lot of people. And it's a happy place. You know, like who's not happy eating a cookie?

Absolutely. Now, how did this all come to be and stuff? And what did your dorm room have to do with it? Yeah. So it wasn't my dorm room, but I grew up here in Utah and it was a buddy of mine that I went to high school with. He moved to Arizona to go to ASU and he saw cookies blowing up in Utah with companies like Chip or Crumble. And he's like, I want to bring the gourmet cookie to Arizona before any of these other cookie companies came. So anyways, he just started selling cookies out of his apartment, posted on Facebook that he was looking for an investor to open up the first storefront. So that's when I came in and he opened up that first storefront at the end of that year. So I guess it was open

for about eight months. I was like, dude, let's franchise it. I'm going to be your first franchisee. And he's like, no, actually I want to get out of it. It's I'm working a hundred hour weeks. I live in the store. Um, and it's just not worth it for me anymore. So I purchased it from him and it was one store and then franchised it. And then I have been trying to figure it out ever since. You know what? Congratulations. And that's a big move. I mean, here you are taking over something that you already know is well over a hundred hours and you're going into territory unknown because I assume that you have never done franchise prior to this, right? Correct. Yeah. Prior to that, I was in San Diego running a residential solar company.

So yeah, I think I'd been to the store one time before I purchased it because I was kind of like, what the hell? Business is business. You know, sales are sales, whether I'm selling a cookie or a franchise or a solar system. It all comes back to kind of the same fundamentals. So yeah, no previous experience with food or franchising, which has made it a little bit more difficult, but at the same time, you kind of see everything with fresh eyes. Right. So Bennett, how do you do that though? How do you, how do you, our listeners, watchers want to know, how do you do that when you know nothing about the industry?

You've never done franchising before. You're getting into a business where someone's selling it because they're working over 100 hours, which was probably on the conservative side per week. And here you are now with how many locations do you have now? 80 some odd locations that we have open right now. How many? 80, I think 85, somewhere around there. And more sign that just haven't opened up yet, right? Correct.

Yeah. We've been opening up a store a week't opened up yet, right? Correct. Yeah. We've been opening up a store a week for quite some time, sometimes two stores a week. A week. So, I mean, okay. So you sign the contract, you take it over, then what's going through your mind? Like, where do you even start? That's a good question. I started by just asking any and everybody what to do.

One of the first major milestones, I guess, of that was here's my model. David, you just disappeared. Do I keep going? You keep going. Yep. Okay. Here's the model that I want to do. I want to take this cookie company. I want to franchise it, but I know I wanted to centralize the production. So each franchisee didn't have to make cookies from scratch. So you can get your cost of goods lower, your labor lower, all of your startup costs lower and all of that. Anyways, I hit up some guy on Instagram who was the owner of a concept called Everbull. Same dessert acai in the franchising space. And I just said, hey, I have this one store location. Love to tell you about it, basically. And he met up with me and told me all the things that I was

doing right and all the things I had to change. And I just found that extremely valuable. So it was really, one, having the mindset of what is anybody else doing in food or franchising that I can't learn? And then two, the things that I don't have time to learn, I'm going to go hire people and build a really good team. And that started with a board of advisors. We had the owner of the largest property management franchise or in the nation on our board of advisors, the former CEO of Jimmy John's on our board of advisors. And it was just trying to surround myself with these types of people that have kind of been there, done that to bridge that learning

gap. Right. That's amazing. So now you look back and just imagine all of those stores now and more and more to come. Yeah. My mom actually asked me this yesterday. She's like, what would your old self looking at you right now? I mean, if we just relate it to Dirty Dough, my goal is 30 locations within five years. From the time we opened our first franchise, which was two summers ago, you know, in the first two years we hit 80. So it's definitely growing a lot quicker than what I ever imagined, which brings up a lot of good, but also a lot of bad as far as like, you're always just trying to keep up with the sales. Excellent. And again, you're listening, watching me, David Kogan, host of the Alliance's Hero Show. And we have with us Bennett Maxwell. He is the founder, CEO of Dirty Dough, a gourmet cookie franchise. So you mentioned, Bennett, in regards to competitors in that.

I mean, certainly there have been other there are other cookie stores, shops, various franchises in that space or that have that as an added space. But, you know, and this may, it's kind of like that typical thing, but how do you truly differentiate yourself? Not only to the franchisee, potential franchisees, but also the customers. I like that you separated those because those are the two customers. The primary customer is that franchisee. So how do you differentiate ourselves? How do we differentiate ourselves? And the pitch, I guess, is we will make all of the cookies, pre-portion them, and we do multi-layered cookies, three-layer cookies, stuffed cookies. We'll ship them out to the stores frozen. And then the stores, you need one employee, 500 square feet with an oven. Every cookie cooks for the same time, temperature, and fan speed, and the ovens are programmed. So it's very simple and easy to operate the store. So the simplicity of the operation is definitely the value add to the franchisee that separates

us from like a crumble or a crave cookie, something like that. On the consumer end, our cookies, dirty dough means the dough is dirty. So we focus on the inside of the cookie, which is more chocolate chips, more stuffing. And then I mentioned a three layer cookie, which is no one else has right now that I've seen. But imagine looking at a cookie, it's a peanut butter cookie. You break it open, there's a chocolate dough in the middle with a hot fudge center. So Dirty Dough, again, geared towards the consumer is all about what's on the inside matters most. And that's really comes back to a mental health messaging that

I'm trying to get out, which is don't wait for life to be perfect in order for you to enjoy it. So anyways anyways those are kind of the two different differentiations that that set us apart yeah i mean it's incredible and i think the thing too is is when somebody walks in first of all they got to be happy just from the smell of the cookies baking how do you though keep things so fresh and the point is is okay i mean it's a timely product right i mean how long can you keep a cookie out is, is, okay, I mean, it's a timely product, right? I mean, how long can you keep a cookie out? Is it hours? Is it days?

It's just a few hours. I mean, they're being baked fresh, yeah, every hour or two. So how do you do that? It's been a little difficult in doing that and mitigating waste. What we did earlier this year is we partnered with a management company, and it was that former CEO of Jimmy John's. Him and his group came on, and at the beginning of the the year he came on as ceo full-time ceo one of the first things that they did is that they said hey instead of having 60 different cookie bases we're going to go down to 13 and build different flavor profiles off of that so now when you have

a limited amount of cookies that you're carrying in your freezer but you can still make 60 70 different flavor profiles you're not as worried about, you know, did I buy too much or did I buy enough? Because those cookies will always come back in rotation. And then as far as making sure the cookies are fresh, but not too old, it's really just having your minimums and maximums per hour based on, you know, your store's volume.

Yeah. I mean, again, what you've done and that, I mean, and you've got what now 400, is it 450 franchises sold? Yeah. I mean, again, what you've done and that, I mean, and you've got what now 400, is it 450 franchises sold? Yeah. 450 territories sold. So maybe 200 ish franchisees and then they're, you know, some of them will buy like five and then you give them five years to open. So that's why we, you know, it feels like we're opening a million at a time, but yes,

we still have a long ways to go to open up all the other ones that we've sold. So I think the thing is, is important and what we've learned from many that have been on our show the way in which it starts out is never the way in which things kind of progress to it so what are some of the things that maybe surprised you most of hey this is what we're gonna do but this is now what we're doing because it works best right from the beginning i'm like i want to vertically integrate i want to own all the machines and produce the dough and then the trucks, and then we're going to ship out. And we did that for a year and a half and I lost my shorts on it because it was

way too expensive when it, you know, two years ago we had one store. So how do you kind of gear up to be prepared to produce cookies and deliver cookies for 450 franchises, but you only have seven today. So my flawed thought was, well, if we own it all, then we could slowly grow, but it was just too expensive. So the first thing that this other group came in and did was outsource that. They're like, nope, we're getting rid of the warehouse. We're going to sell our machines to this co-packer. The co-packer is going to give us a flat price. We're not dealing with waste. It's a lot more predictable. And then we're going to use a third

party logistics company. So the whole business model changed in January of this year, and I feel like that was the fifth time that it changed. There's always so many things that you think are going well, and then some other information happens, and you're like, okay, that actually wasn't the best strategy. How do we now move forward with whatever we think the best strategy is? Excellent, excellent. All right, and this is a question from one of our listeners too,

and that is, based upon the factors of location, price, the various other things that go into it, what's kind of the most important and how do you even figure it out? How do you figure out like what the best location? Do you tag on others that have been in a location, pricing and so on? I expanded a little on that. The data that is out there is scary. You can buy data from cell phone providers that will tell me where you spend eight hours a night at. So it's like, okay, now I know where you're sleeping and now I know what your home value is. And then it also will tell you, I mean, when I say tell you, I think it's doing all this in the background. Then it says, here's the target demographic, but it tells you where they were two hours before two hours after they ordered your product or and you can also do this based on any of your competitors so you can like what makes a really good crumble store here are the metrics um we got down we had anyway some company rated every shopping mall from one to two hundred and it got down as granular as household cookie spending per month, you know, and it's like, holy crap, the data's out there. So a lot of it is just finding the correct data

and pushing it hard and making sure that you're really following the data rather than like, oh, I've lived here. This is a good shopping mall because of X, Y, Z. And you get that a lot, you get that emotional connection. And if you're going to sign a 10-year lease based off an emotional connection with a spot, that's probably not the best idea. It's a lot better to look at it more objectively and say, here is the data, the customer, the drive-by traffic, the walk-by traffic, and all of the other data points that are available. And now that you're, again, franchising, and that, is there requirements of how many franchisee now is required to open up or purchase from you? No. So beginning when I was telling you that story, my original plan when I talked with the Everbull guy was I was going to sell five at a time.

You have to buy one franchise and then you're going to make your own little mini production facility. And then you're going to deliver to your next four franchises. That completely changed. Again, he told me that's going to fail. You don't want franchisees having to operate machines. You want to make it a lot more simple for them. So I just forgot what I was going with that one. But yeah, I mean, what you mentioned, it's important in that. And just imagine, I mean, again, looking back going, gosh, how many locations i've already sold like that's listen to cell one is a miracle um my background has been sales i did cutco knives out of high school i served a two-year mormon mission in

tijuana mexico which is all sales and follow-up and then i did door-to-door pest control satellite so that's what I like doing is really packaging like, okay, what is the market want and how do I build that rather than let me build a product and kind of shove it down people's throat. It was, it's nice to be a sales person and also the owner of the company. Cause I could go get feedback like from that Everbull guy and say, that's not going to work. I would only buy it if you did X, Y, Z. And then I go back and kind of create that model. So before franchise i talked to not exaggerating at least 100 people like this is my idea what would you change or what would you not change what do you like what do you not like and

then i went back and built that and when i franchised it i already had all these interested parties and not only them then i asked them for referrals again all all kind of sales training back from cutco days but that that really boosted our sales. Nice. And I don't know if you could share or not, whether you would share or not, but I'm sure you have other things that maybe perhaps you'll be adding to Dirty Dough shops. What would those be? Or what are those?

We have, I think 22 stores are launching with soda, dirty sodas. So like sodas with different creams and things like that. I think it's next week, actually. We just piloted over the summer for a few stores that went good. Well, most stores have edible cookie dough. They're not serving it, but they have all the equipment installed. So really, as we see the market pivot in the restaurant space, it's moving away from a cookie company and towards a cookie inspired dessert company. Wow, absolutely fantastic. So, all right, hold on, we've got another question. What's your question over here?

Ah, okay. We've got a special fan of yours that's over to my left. How did you come up with the name? Okay, the name was Tyler Peer. They got him and his wife, Kina. They just came up with it because it sounded good. Now, what I explained before of dirty dough means the dough is dirty is after I purchased it, I showed up to the store and a customer just asked an employee, why is it named dirty dough? And that's what the employee said.

I'm like, the dough is dirty because we focus on the inside of the cookie. I'm like, OK, how many chocolate chips do we put in per batch? Six. Let's up it to nine. And that was kind of the differentiation at that point. So it was just a catchy name, but now it means the dough is dirty. And that's why we do these three-layer cookies, stuffed cookies, which just happens to be the complete opposite of a crumble. They focus on top of the cookie, we focus on the inside of the cookie. Excellent. And what you've done is you've helped consumers get high quality, great tasting cookies, and you've given an opportunity for people to own a location. Truly amazing. CEO of Dirty Dough, gourmet cookie franchise, Bennett Maxwell, thank you so much again for being on the Alliance's Hero Show.

Thanks, David. Now you're going to dance a little bit.