My First Million - The Most Hidden Path to Financial Freedom in America

Episode Date: December 30, 2025

Get 200 business ideas here: https://clickhubspot.com/fda Episode 779: Sam Parr ( ⁠https://x.com/theSamParr⁠ ) and Shaan Puri ( ⁠https://x.com/ShaanVP⁠ ) talk to Alex Smereczniak( https://x.com/AlexfromFranzy ) about one of the most overlooked paths to wealth creation.  Show Notes: (0:00) Intro (2:21) Turning $2K into $400K revenue (8:48) A case for franchising (10:56) The blueprint (16:02) How one operator opened 100 franchises (23:43) Another Nine (30:19) Waterloo Turf (33:47) PopUp Bagels (36:36) Red Flags (41:10) Nothing Bundt Cakes, Crumbl Cookie, home services (46:06) Garage Kings (50:15) Senior care (51:52) Funeral homes, crime scene clean up, pet cremation (55:24) Red flags (1:02:21) The Flynn Group — Links: • Franzy - https://franzy.com/  • List of Top Franchise Brands - https://go.franzy.com/download-franzys-top-ten-franchises-of-2026 • WakeWash - https://wakewashwfu.com/  • Dave’s Hot Chicken - https://daveshotchicken.com/  • Another Nine - https://anothernine.com/  • Waterloo Turf - https://waterlooturf.com/  • PopUp Bagels - https://www.popupbagels.com/  • Roark Capital - https://www.roarkcapital.com/  • Nothing Bundt Cakes - https://www.nothingbundtcakes.com/  • Benjamin Franklin Plumbing - https://www.benjaminfranklinplumbing.com/  • Garage Kings - https://garagekings.com/  • Bio 1 - https://bio1sd.com/  • Aftermath - https://aftermath.com/  • Flynn Group - https://flynn.com/  — Check Out Shaan's Stuff: • Shaan's weekly email - https://www.shaanpuri.com  • Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents. • Mercury - Need a bank for your company? Go check out Mercury (mercury.com). Shaan uses it for all of his companies! Mercury is a financial technology company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N.A., and Evolve Bank & Trust, Members FDIC — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano //

Franchising is one of the most overlooked paths to wealth in America. That's a very bold statement. They said the most overlooked. There are more millionaires generated from franchising than all combined players ever in the NFL. And there's a number of private equity family offices starting to get further and further into franchising. And they're buying both large franchisees or they're doing roll-ups. You made this bold claim and I want to fight you about it now. I'm totally on your team.

Traditionally, franchising gets looked at as like, all right, it's either McDonald's and something. Subway and you've got to have $3 million to do it. So only the wealth you can actually do it. But there's 4,000 franchise brands. And if you're willing to do the research, willing to do the work, there are a lot of hidden gems of brands and industries that are really taking off. So explain the path. What's the game plan?

This is such a good hidden gem. I don't want to talk about how I did this. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. All right. All right. What's up?

Welcome Alex. Alex is the franchise. guy that we have invited on the pod. So I don't know if that's what you normally get called, but that's what we're calling you. So this podcast called My First Million, and one of the reasons we originally called it that was because there was all these different ways people made a million dollars. And in my first 10 episodes, I think I had a guy who did it in real estate, a guy who did it with Amazon FBI, a guy who did it playing poker. And I was very fascinated just to hear all the different ways you can win in business. For two reasons. One, I wanted a menu of options I could

go choose from. How can, you know, which one sounds most appealing to me, which one sounds like it fits me. And the second is, I like just hearing that you could be doing it in all these different ways because it makes the impossible feel extremely possible. I remember when I was sort of pre-success, it felt like winning was like just this needle in a haystack. I couldn't find it. And then as I've been doing this podcast, I realize it's a haystack full of needles. There's so many to choose from. There's so many different ways to win. You're going to talk about kind of retail and franchising. Did I do you justice there setting that up? Yeah, absolutely. I honestly, up until four or five years ago was a bit of a, I think, franchise hater and thought,

oh, you know, that's, is that really entrepreneurship or is that, you know, are there viable paths there? The more I've gotten into it, the more I've realized it's probably the most overlooked path to wealth creation in America. And I've become a big, big fan of it. That's a very bold statement. That's a very bold statement. But he's the most overlooked. All right. Yes. Well, let's start with who you are. So you're a guy who made your initial wealth in laundry, in the laundry business. So can you give us the fast-forwarded, quick version of your story? Yeah, I'll try to be short. So I'm originally from small town, Minnesota, town of 15,000 people, ended up in North Carolina for college,

went to Wake Forest, studied finance, was about to have a pretty kind of boring plain life, and then bought a laundry business my freshman year of college, did seller financing, had to learn what that was at 18, learn what a discounted cash flow analysis was at 18. just talking to business school professors before I got into the biz school. And I ended up buying that business and learned more doing that than any class I took at Wake. We ran it, we grew it, we sold it for

a little over 10 times what we bought it for and had an exit our senior year for about 10 times what we bought it for. And that set the path to complete addiction. Why did you buy a laundry business as a college freshman? Who does that? So I was working for them.

I was working for them. is a way to make a little extra beer money and was hooked. I was like, this could work at Duke and Chapel Hill and Vanderbilt and you guys are graduating. I want to buy it and they asked for 30 grand and my jaw hit the floor. I was like, that's the most money I've ever heard of. And I had maybe two grand saved up. So I had to get creative and figure out how are we going to buy this and structure it. Well, that's sort of like one of the three businesses college kids starts.

It's usually like some type of like app or something where like college kids could sell stuff to other kids or a roommate matching app, which I did. or like a laundry map, a laundry business. I know Blake Mioski, I think that's his name, the guy who started Tom Shoes. That was his first business, was laundry business. What were you doing? You just go pick up the laundry from students' dorm rooms. You said, like, hey, you know, I remember when I went to college.

I didn't know how to do laundry. I had, like, you know, grown up and my parents did my laundry, and so by the time I got to school, I was a little confused. My roommate had to teach me, like, what is a dryer sheet? And, like, why do you use this? What are all these different components? How long do you leave this in? Yeah, so Tuesday.

was pickup day. You'd leave your stuff outside your dorm room door. We'd have runners, you know, mostly football players that could hold like 200 pounds of laundry at a time. They would just, you know, run up and down the hallways, grab your bag. We'd partner with vendors off campus. They would clean it. We'd return it Thursday. But the big unlock for us was kids aren't paying for this. You know, it's a bunch of broke college kids. It's their, you know, affluent parents or your parents that are worried about them, you know, being at college not known how to do laundry. And so the big thing that changed it for us that allowed us to go from, call it 30-ish-thous-thousand in revenue when we first bought it to just under 300 grand

a school year in revenue was get a booth at orientation week. And for whatever reason, Wake gave us a booth next to where you got your meal plan, where you got your parking pass, where you got your keys to your dorm, like all the like marquee things you need to do. And we went full sham wow guy. I was like, step right up. We're the premier laundry service at Wake. You got your kids got to have it.

You don't want them to go, you know, clothless. You got to sign up for this. Yeah, and they loved it. They thought it was like the cutest thing. And they're like, yeah, that's true. My kids, you know, screwed going here and not know how to do laundry. And I want them studying or, you know, having fun or whatever it was. And so we went from, yeah, 30K a year and school year to like 280,000 our first year.

Is this still a business that any college kid could do today? Like, has this been a solved problem? Or does every campus just have kind of like a version of you who hustles and makes? the campus, the freshman laundry service. Yeah, I think Sam's right. Like, the number of people I've met that have gone on to be serial entrepreneurs that were like, oh, I did that in college too. Like, I thought it was so cool and special and unique.

Then I meet like 30 other college kids that had a laundry business at their school. So I don't think it's been like systemically or like at a scale, you know, solved. It's just, you know, the business that we had was called Wakewash. And it's been owned by nine other groups of college kids. it's changed hands that many times, and it's been such a cool launch pad for all these other entrepreneurs, because it's this safe, fairly simple business model,

but you do learn so much how to hire people, manage them, fire people, work with universities on your contracts and agreements, market to customers, sell to people. Again, it changed my life entirely. I don't think be an entrepreneur at the level that I am and have the level of obsession I have over it

if it wasn't for that college laundry experience that I had. How old do you know? Just turned 34. And so you sold that for what? Six or $700,000. You said mid-six figures? Yeah, it was like a little over $400,000. Oh, that's badass.

So in college, you sold a business for $400,000. I thought I could retire. Well, you know. No, I was a 21-year-old. You're like, oh, my God, I don't have any college debt. You didn't pay attention to finance class. So good thing you did go out of the finance career path. Well, the funniest thing is,

Like any good laundry man, he ran another cycle. He goes and he starts another laundry business right afterwards, right? Well, I sold out for a little bit. I wouldn't work for Ernst & Young. I thought, as far as corporate jobs go, consulting's got to be entrepreneurial. You're jumping from project to project. You're working with different teams.

And again, love the people I worked with, did learn a lot. But it was like soul-crushing work. I hated the type of work I was doing. And in 2014, 2015, is when all the Uber for Ex-Berry businesses were taking off so Instacart and shipped and Wagon, Rover and Drizzly and DoorDash and all of these. And I thought, someone's going to do this for laundry and dry cleaning. And if it's not me, I'm going to hate myself.

And I need to go at least throw my hat in the ring. So quit my job at EY, started a company called 2U laundry in January of 2016. And we had a pretty wild roller coaster of a ride from there. And the story is still being written to a degree there. Hey, real quick. If you like this episode and you want more ideas on overlooked businesses, I have something you might like. A while back, Chris Corner came on MFM,

and we called him the Side Hustle King because he built so many businesses. Well, he ended up giving us a list of 200 ideas and the blueprints to build them. It's a great resource and totally free. If you want it, just click the link in the description to get it now. All right. Now let's get back to the episode. You made this bold claim. You said that franchises are, what did you, can you phrase it exactly?

Because I'm going to, I'm going to try and prove you wrong, but we're going to have a fun debate. Tell me the exact phrase. Yeah. So I think franchising is one of the most overlooked paths to wealth in America. And I think it deserves more attention and people giving it a shot. Great. I want you to be right. But we're going to, we're going to like have a cool conversation about that.

And the reason you know this is you have a software company where you, it's like a marketplace for franchises. So you have perhaps one of the best bird eyes view of the industry. Where are the numbers that would make you make that claim? Yeah, so franchising is a business model. First of all, I think a lot of people think franchising is an industry. It's a business model that spans food to hospitality, health and wellness, early childhood development. Most of us probably don't even realize we're using franchises on a daily, for sure, a weekly basis. Hotels, Marriott Hilton, franchise businesses.

There's all the food that we all know, McDonald's, Subway, Chick-fil-A, etc. But then gyms that we all go to, Orange Theory, F-45, berries, some form or fashion of a franchise. And then you talk about your home, gutter cleaning, painting, pest control, etc., all franchise. It is 8% of our country's GDP is produced from franchise business models. And I think traditionally franchising gets looked at as like, all right, it's either McDonald's and Subway and you've got to have $3 million, to do it, so only the wealthy can actually do it well. Or it's these like kind of slimy ones that

are just popping up and they don't have systems and they're telling you, they're going to sell you a dream. But there's 4,000 franchise brands. And if you're willing to do the research, willing to do the work, and willing to look, there are a lot of hidden gems of brands and industries that are really taking off and have valuable systems and a valuable peer group that the everyday average, you know, entrepreneur could benefit from. If it's the person that doesn't have the original tech idea or wants to go raise venture capital but wants to build a business and build wealth. Franchising, I think, again, is one of the most underrated, overlooked paths to doing that. So explain the path. All right. So I'm a person and, you know,

explain a blueprint or a model that you could see. So, you know, you take X dollars that you have saved up or you raise from somebody. You buy what type of franchise and then what type of returns do you get? What's the game plan? So I always use analogies and I think a good one for, for franchising. It's akin to real estate. You could buy a trailer, you know, one lot trailer and rent that out, or you could buy a hundred-door multi-unit deal, and there's everything in between. And franchising is no different. Of those 4,000 brands, there's some as affordable as $10,000 to get into. Chick-fil-A actually is only a $15,000 franchise fee because they want to pick from the best crop of operators, but they're a lot more restrictive on how many units you can actually open,

how you operate, how involved you need to be in the business, et cetera. Isn't Chick-Fle, you can only have one, right? Yeah, you can only have one. There's unicorns they allow to do two, three more, and then brands like R-Mark or these food service providers that do stadiums and campuses. They've got dozens, if not hundreds,

because they have those agreements on those venues. But some of these franchises will be 10K all the way up to, there's $4 million-plus-dollar swim schools where you've got six pools you're building, and it's a much higher stakes but higher reward opportunity. Is the franchise fee the same thing as what the build-out is? So let's say you said Chick-fil-Ey. like 15K, but then you have to build the restaurant, right?

So the franchise fee every brand will have, and that can range from 10K to 70K in some instances, and that's basically your ticket in line. It's your, I now own the rights to this territory or this 10-mile drive radius, et cetera. And then there's the build-out cost. Just like if you were to do it on your own, how much is this going to cost to upfit the location,

buy equipment, you know, boilers or, you know, stoves and all the stuff that you need for a restaurant, there's that investment costs as well. Chick-fil-A is a little bit of a pseudo-franchise. It's 15K for the franchise fee, but then Chick-Fleigh actually buys the site. They pay for all the build-out, but they're taking a 15% royalty instead of 6%, which is standard. So 6% on your revenue is standard. Chick-Fleys taking 15, but then they take 50% of your profits as well, which no other franchisor does.

They take 0% of your profits. So you're effectively with Chick-Flea buying yourself a high-paying job. Did you guys read about this? This article went viral, or not viral, but maybe in the business world that was popular. I think it was in the Wall Street Journal, and it was March 1st, 2007. It was about the friends. These two buddies, I think they're only 35, to be honest. And they started a business called Garnett Station Partners.

Did you read about this? No. Yes. Okay, so correct me in the story, but two guys, I think they looked like 35, 37, two buddies who raised a fund and bought a bunch of franchises and now have a multi-billion dollar fund. and I think they've taken out, you know, hundreds of millions of dollars out of the business. Yeah, so they, and there's a number of private equity family offices starting to get further and further into franchising. They're one good example of it. And they're buying both large franchisees, or they're doing roll-ups essentially of, all right, Sam, Sean and Alex own five Jersey mics,

and they find six of us, and they go buy all 30 of them. You know, they're doing these kind of one-off deals, but now they own a 30-unit portfolio that's doing, you know, an average of two and a half million per location. and now have close to $100 million a year revenue business via acquisition, and it was five acquisitions or six acquisitions. So there's a lot of that happening. And so they, the Wall Street Journal phrased it so differently because when I think of a franchise, I think of a little bit blue-collarie or an ex-MBA basketball player. That's what I think about.

The headline was, Meet the Best Friends, who are private equity's newest young stars. And it said that they bought, they've so far have raised $3.5 billion. They're only 38 years old, and they bought everything from gyms, funeral homes, car washes, and they bought hundreds of these, and they've just operated it really well. And I think their big win was betting on Little Caesars. I think they bought a bunch of Little Caesars, like maybe eight years ago. Now it's been really popular. But the way that they've rebranded this was actually amazing.

What do you mean rebranded it? What's the rebrand? The rebrand is like, it's just like they made it a lot more white collar. So when I think a franchise, I think like a mom-and-pop business who just wants to get into it and they got. They put $40,000 together and they work for 15 years and slowly acquire one or two at a time. And hopefully they have their, it's almost in the same category as like a dentist. Right. You know, like the middle America wealthy people who have done it, you know, year after year and been very consistent.

These guys were 38-year-old Manhattanites who raised a billion dollars and they've just crushed it. And it kind of reminded me, I think there's been a handful of things like this, Sean, where it's like things that serious operators don't take serious. And that is how I kind of read it about these franchises where it was like, yeah, mom. and pops have done well owning three or four of them, what would happen if you own 3,000 of them? And that's what there's, there's a lot more smart money coming in and using that real estate example again, it's, there's all these folks that might own five doors or a duplex or a quadplex and private equity and family offices or ex-investment bankers are saying, what if I go roll up 100 of these, 200 of these? That's exactly what Cal did, the story that I shared with you guys.

Tell that story. Who's Cal? Yeah. So Cal Gulipali, he's a franchisee based in Florida. former investment banker, I think he worked up in New York or in the Northeast, and decided he wanted to do something for himself. He's like, I know how to put deals together. I know how to structure and analyze a business. And so he bought a few butcher shops at first. So independent businesses, more like ETA or a search fund of seven years ago, eight years ago. And that went okay.

Like he learned a lot how to be an operator and, you know, learn some retail. But then he was at his orange theory, his gym that he goes to. And he's a curious guy. He asked, you know, the manager, you know, is the owner around or can I get in touch with? him, gets in touch with the owner, ask the owner, how much money are you making? The owner was fourth ride,

shared his financials, and I think he was making four or five hundred grand for that, you know, profit from that one location. Cal's like, you make that from one gym? And he's like, yeah,

I own three of them. He's like, so you're making over a million dollars a year off of three locations. And so he goes and buys two orange steer. He's like immediately. That was in 2018.

Dude, an ex-banker doing this is sort of like a young gay couple gentrifying a neighborhood. You're like, you're like, like, and outsiders are like, something's up. Like, it's starting. It's happening. Yeah, this is like that story.

A retired New York banker in Florida who's on his second thing. Well, so he starts doing this in 2018. Seven years later, at the peak, he's had 120 locations open in seven years. Of Orange Theory or of other things? Eight different brands. Markos, Pizza, Restore Hyper Wellness, European Wax Center, Pop-up Bagels. Did he raise money?

So what he's done, so I have a podcast as well called How I Franchise This, and he talks through exactly how he finances it, how he structures the deals. And a lot of the times he owns 30 to 60% of the equity in these kind of like sub-deals that he's doing. So he's using private equity, family office, independent investors. But he's the operator and are owning 30 to 60% of a system that likely does over half a billion a year in revenue across all of his units in seven years. Who the hell can operate a hundred different franchises?

That's so difficult. How is he doing this? What is the model that lets this happen? So he, as he was scaling, and usually it's going from six to ten is the really challenging part because you start having district managers, you know, managing a unit. But he's so far removed from the day to day now that he's got this, you know, the system and line of defense where each brand has basically a COO over it. Within that organization, there's multiple district managers, and then underneath them,

they manage four to five stores each, and GMs and assistant GMs. Once that system is in place, there's so much redundancy that, you know, you've got people calling out and all the headaches you'd worry about with a business like this. He's got a couple thousand, you know, hourly employees across the system, and that sounds like a massive headache, but because of the system and, you know, the things that come with franchising, it is much easier for him to have these places, for training and how do you handle employee turnover and how much profit would it make a year or cash flow and how would it be do you value it is the value in the equity value that you build up or is it

just the profitability so so both franchising and this is you know something that open my eyes a bit is a real estate investor would be jumping up and down about 12 to 16 percent iR a franchisee is upset if they're not north of 25 percent iR so the cash on cash return is you know double in many cases or the expectation of the floor. Yes, there's more risk. Yes, there's more, or in some cases there's more risk, and there's more... Well, you're running the business.

Right. But as you get these systems in place, it becomes similar to owning a portfolio of 100 doors in a commercial real estate. And so the cash on cash return from the cash flow of the business is north of 25%. That's not factoring in the enterprise value

when you go to sell. And franchises trade at 1 to 2x, more of EBITDA, than an independent business because it's de-risk across the thousands of units or hundreds of units in the brand. Banks de-risk it that way. Investors de-risk it that way. And you have this peer group again and this franchisor to rely on.

25% cash on cash. What was the cash? I don't even know what it would cost to have 120. Well, just do it in a simple. Do one, right? So one location. Let's walk through the economics of a single location of pick your favorite franchise. If you were advising your little brother or your cousin.

to go do one of these. Where would you guide them? And then let's walk through a one location economics. Yeah. So it's, and I know people hate the answer, it depends, but there really is a franchise for everyone. So I'll pick, you know, let's just pick Dave's Hot Chicken, a brand that a lot of people know has had this kind of viral growth the last few years. The average Dave's Hot Chicken, you know, is anywhere from 650K to 1.8 million to build. And that depends on size, the market you're in. I know it's a big range. But the average revenue of a Dave's Hot Chicken is, is over $3 million with 20-ish percent, you know, cash flow margins. So we're talking about $600K and profit.

Okay, but we got to slow down. So you tell them, hey, Dave's Hot Chicken, great brand. Yep. Your little brother says, okay, what am I going to need to go build this to start a Dave's Hot Chicken? So I got to apply, and then I have to pay a fee, and then I have to come up with a million or $1.5 million to build this thing. How am I going to do that?

Yep. Yeah. Yeah, so in Dave's hot chicken case, they now require you to do at least five. And so in this case, this is one of those examples where you do need two and a half million liquid, $5 million net worth or to have raised that money from investors. So if there was little brother and he didn't have that cash, I'd say, hey, we got to go find some investors. You're going to be the operating partner, just like what Cal does today across his system.

So little brother, can we prove that you're a good operator that you have experience, managing a Chipotle or whatever it may be to go raise this capital if he wasn't capitalized? So he's got to go raise $5 million? Yeah, so to get started, he would need $2.5 million liquid, in this case, to build the first one or two. SBA is a great option as well. So Cal, even someone at his scale,

is still using SBA because it's designed and meant for buying small business like this. For getting us all to eat hotter chicken. That's what the SBA. Do you also have to be good at spotting a trend? Because, for example, if Dave's Hot Chicken was a thing 20 years ago, I lived in Nashville when however hot chicken got started and was like not that popular.

And then something happened on TikTok where hot chicken got cool. But then, I don't know, is it a phase? Like, do you have to be, do you have to get good at picking what a winner is? Yeah, absolutely. So one of the things that I think about a lot is what makes some of these wildly successful franchisees versus the ones that aren't. And I think like picking an independent business, whether it's trash or, you know, these other unsexy businesses, you need to find something that, you know, I think carries long

term value unless you know it's a trend and you're like as long as I get in early I can build a substantial business and ride the wave and ride the trend. I think it's very similar to buying an independent business as well. But Cal is an example, spotted Dave's early. He spotted pop-up, you know, bagels early and they're taking off right now. So let's redo this. Because you gave us Dave's Hot Chicken and now your little brother needs $5 million. And I think we've hit a wall. So let's do something that's not going to require that. Let's take it more realistic. I don't have friends and family that will give me, you know, two to, two and a half to five million dollars liquid, and I don't have the operating experience of running a Chipotle for three years yet.

So what else would I do? European WAC Center, what are we thinking? So let's do another nine. That's one that I'm in full disclosure. I'm developing five another nines in Minnesota right now. It is an indoor. What's an other nine? Another nine.

Another nine. Is that the name of a franchise? It is a fully unattended. So no employees, no food and bev indoor golf simulator franchise. Golf is very trendy and popular right now. It's making a comeback. You got the Netflix effect with full swing. This past year, actually,

more Americans played off-course golf, so like top golf, simulators, et cetera, than actual green grass golf for the first time. That sounds substantial. Okay, so you basically say, hey, there's this trend and this movement, indoor golf simulators. You said yourself, you're building five of these out.

Okay, so let's walk through. Again, the one-unit example. But does little brother need some special sauce to do this? Or what does he need? What's the steps? Yep. So in this case, you are going to need an SBA loan. That's what we're using to finance some of these.

The build-out's substantially lower than a dave's, and they don't require you to build five of them. So you can get into one or two of these. When you go to get that SBA loan, do they need you to have proven anything yourself? Or can you just say, look, this is a franchise? I'm going to operate it. I've had this corporate job and I'm ready to go do this. Do you need something to qualify?

for that SBA loan. Yeah, so typically depending on the brand you're getting into, you need 50K, I'd say, liquid, and over 150K net worth. So, again, I think attainable for a lot of people wanting to go escape corporate or add onto their real estate portfolio, et cetera. SBA will borrow you up to $5 million across multiple loans over time, and they will make you sign personal guarantees. So you are, if you own a house, that's collateral.

They're looking for, does the individual have enough collateral, and does the brand have enough data and proof points that this is a concept we want to back and be involved in. And most banks, like I think a lot of opportunities, some love food and that's what they do. They're the food lenders. There's others that love fitness and they're the fitness lenders. And so you've got to find the right lender that is comfortable with the concept you're looking at. So how much does it cost to build one of these? Yeah. So one of these is anywhere from, you know, 320-ishk to 800,000, depending on the number of private bays you want. So another nine is different than these social experiences you see,

it's food and Bev and staff. This is like anytime fitness. You fob in with your phone. You can go at three in the morning if you want. They're 24-7. And you go play, you know, sim golf on some of the nicest equipment out there. You know, the guys that started this out of Cincinnati,

they said they got surgeons that go three times a week at three in the morning when they're off shift and they go play Pebble Beach for an hour before they go home and, you know, call it a day because that's their routine. And that's when they can get away and do it. But they don't have five hours to go play an actual round. So I'm on another nine.com. It looks really fun.

I don't even golf, but this looks like it would be really fun. But it looks very new. Like I think their headline says, just two dads are going to play more golf. That's who founded it. It's got pretty funny language. It actually says, like, did we mention that we're B-Y-O-B? Like, it seems cool. But it seems like, why would I need them?

Why would you pay them money versus going doing it on your own? Yep. So one thing I always tell people of their thinking franchising And again, here's another analogy. It's like a lot of brokers or people will say, like, I know Sam and Sean, they just assume they want ice cream. So it's like, which flavor do you want? And I say, we got to take a step back. Maybe they don't even want ice cream.

Maybe they want cookies or cake and the dessert type being franchised versus real estate versus buy your own business. And so I usually tell people, if you're going to do franchising, you need to think about this over a 10-year period because most franchise agreements are 10 years. You need to say in five years, what value is this brand going to be providing me that justifies this. this ongoing 6% royalty. And so in food, it makes a lot of sense. McDonald's is going to give you 10 cent per pound burger meat versus a dollar that you get on your own. You're getting more value in the bulk purchasing power

of the brand, the menu innovation, the marketing, et cetera, then you are keeping that 6%. And so a brand like another nine, because a lot of the value is front loaded, they're getting breaks on equipment and build out and helping you with site selection and design, how do they create value over time? And for me, it was, I'm doing, you know,

franzi full-time. They are going to provide resources on an ongoing basis, training. They're building software that I don't want to spend time building or investing that allows better scheduling and easier marketing and lessons to go partner with existing golf courses to drive volume from that channel. They're building this really cool league software where Sam could be in New York and Alex is in Charlotte and we could be doing a fantasy football type league where all of your high school or college buddies could play against each other in your respective markets and have this like fun ongoing competition. So they're investing in technology that I think creates stickiness within the consumer base. They make the operations a little bit easier. Maintenance contracts. And that's probably

one of the least value add five years from now, kind of examples versus a restaurant. But even then, it's worth it to me to not have to think about all that. Okay, so finish up the economics for me. So you said, you're going to go, you're going to build this thing out for let's just round it to 500 grand. And you're going to franchise this from these guys. They have a 6% royalty. What are you And you got that 500 grand from the SBA. 10% down. Yeah, 10% down. So you put 50K down and you're going to get the rest as a loan.

So what are you looking for and how do you, why, you know, I guess you're trying to do five locations. Maybe it takes five for this to really like be meaningful. Is that, is that right? So I always tell Bill, if you're going to try to replace your income or have, you know, kind of like a side hustle or some side income, you can do that with one or two units. If you're really looking to fully replace, if you have, if you're a higher earner or 250, you know, K-plus and salary, you're going to need three-plus locations to replace your income and eventually

build wealth beyond that. So for me and my partner was, let's do five. They're very passive. There's no employees. There's no food and be dev. We can run five as essentially a side hustle without having to be super involved in the day-to-day. One unit, on average, is doing just under 300k a year in revenue, which might not sound like a lot, but they have 55% margins because there's no labor. There's no food and dev. It's just the build-out cost and rent. Essentially, you don't need high occupancy to get to a meaningful amount of profit. So we're expecting each one to do 150K and profit. After all expenses, you get to five of those, generate 750K and relatively passive income. A lot of work for us up front to find sites and build, but meaningful cash flow in the long term.

And Sam had a good point a second ago where he was like, do you have to almost think like an investor and spot things a little earlier than the curve and figure out what's going to have staying power. And you had this interesting thing. You texted us. You said turf businesses. And I think of this one, you were saying, there's almost like a regulation that you will benefit from.

You said, like, Vegas, for example, is prohibiting new homeowners from growing grass. So they have to go turf. Can you talk a little bit about that idea and how you would capitalize on it? Yeah, so Waterloo Turf is the brand. He's a former private equity guy. And this is a big thing that I look for.

too, just like Sam said, find trends. You're betting on people as well because this is a partnership. I think another thing people might discount in franchising is I'm not just buying Sean's old business. We shake hands and Sean and Alex don't really interact beyond that. No, I'm looking at Sean as a 10-year partner. We're going to work together. You guys are going to make investments in the brand, help me with marketing and problems that I have and build a system of other franchisees that hopefully can all benefit from and learn from one another. And I think people maybe take that part for granted. So I just wanted to stress that. The founder of Waterloo Turf is phenomenal. Former Cal-like guy, very deal-driven investment banker, very analytical. And he's looking for this

trend and seeing the turf industry in the United States is $4 billion today. It's going to grow by another half a billion next year. And there's no clear winner. There's no national brand. No one's dominated this. Why don't I go build a franchise brand around it and do that and build capabilities in bulk purchasing power on an ongoing basis for the material? There's ongoing maintenance to kind of re-turf and make sure the grass is still enjoyable for young kids. And it's not wearing out quickly. And it's another pretty affordable business to get into. It's only 105 to 150,000 to get into because you don't have the overhead of a retail store.

There's no physical location. You don't need a lot of equipment. And so for 100 to 150K grand, you can own a business that on average is generating $1.3 million in annual revenue with profits around $270,000 a year. So again, one location in this example, could replace a lot of higher earner incomes, but now you're your own boss, you're an entrepreneur with a playbook and a team behind you

versus having to have this completely original idea to convince you or make that push for you to leave your corporate job. Why are you selling software to this? Why don't you just go buy a bunch of these? That sounds great. So I'm trying to do both. Which maybe sounds like a not great idea,

but I have partners on the franchise side that are my version of Cal. I'm being more capital, a capital partner. I have operating partners in the franchises because I can't physically build a software company and operate a franchise portfolio. But the goal is to get to 50 to 100 unit portfolio just like Cal's doing.

And let's just say, hypothetically, let's say you get to 50 to 100, what are you telling yourself? You're like, oh, I'll make $5 million a year off of that? Yeah, at least. And then the enterprise value. So like Cal with Papa Bagels or Dave's Hot Chicken, And the exit multiple for him will be 6 to 10x on EBITA compared to 3 to 5X if he just owned Cal's chicken shop.

Orange Theory at its height was trading for 21x EBITA. It was insane. I mean, it was like a software business multiple on a gym. But because it was part of a system, they had some recurring revenue. Investors and private equity groups rolling them up treated it like a software business. Sean, have you heard of Papa Bagels? No. They were started in this little town that I used to live in Westport, Connecticut, and they have this crazy model where you can only buy 12 bagels at a time.

I think you have to pre-buy, or sometimes they're like changing their rules, but it was like you had to pre-buy 12 bagels in advance. And now I live in Manhattan. And two things. One, they're better than like the normal mom and pop bagels. They are phenomenal. And two, every time you see one, there's a line. The pop-up bagel phenomenon is incredible. I've never seen anything like this.

And I think it's just like a husband and wife started making bagels during COVID times and it kind of turned into this like they could have been a billion-dollar-plus brand at this point. But what's your, Alex, what's like the calculus here both in terms of like emotion, work, and money on starting pop-up bagel or starting Orange Theory versus owning a bunch of them as a franchise? see. So you're saying starting as, you know, like the franchisor, like what the husband and wife did with pop-up? Sam saying, should I shoot to own 45 of someone else's chain? Or should I shoot to create the franchise and then franchise it to a thousand people, right? Sam, is that kind of what you're asking about? Exactly. Exactly. Yeah, exactly. For example, we had Brian Scudamore on MFF a while ago. Brian started this thing called 1-800 got junk. It was a horrible bit of business for, like,

I think, 14 years. I think it took him 14 years. I had to a million revenue. And then, he was like year five after we decided to franchise. It took off and now he's one of the, he's a multi, he's a multi-billionaire. And I'm like, that sounds cool. But you're advocating towards the other stuff of owning someone else's franchises. Yeah, I think it goes back to like the entrepreneur archetype. Like if you're like that builder, you know, creator type or like, you know, you are the less than probably one or two percent of the population that thinks that way and has those types of

aspirations and doesn't want to have a boss. You're likely the kind of tech software entrepreneur or creator type. But I think 99% of the population is not like that, but they want to do something entrepreneurial. They just don't know what. They don't know how. That's why I'm such an advocate is, you know, had I not had that small college entrepreneurial experience, I might not have learned things to go be a successful entrepreneur later on. And the more people we can get getting some of these reps in of like, all right, go build a team,

go have to find a location, go have to solve these problems real time and have some of the shitty stuff. that happens to you as an entrepreneur happened to you so you learn how to take, you know, those punches and, you know, become, you know, an operator and an entrepreneur. That's why I'm an advocate for it. As me as an individual, I like the creator, like higher risk, high reward. Let's go try to build this system to a thousand locations. And I, you know, I started that. The reality is I don't think that's the majority of America or the majority of people. What do you think is the thing to look out for? Who's lying to me? So in any legitimate way of making money. There's always going to be, if there is a legitimate way of making money, there's going to be a

bunch of people who come in and say, you know what, let me ride the back of that legitimate way of making money and I will over promise, I will under-deliver, I will try to, you know, sell a lemon to somebody. And this happens in real estate. I could tell you, hey, you know, tech investing, startup investing, that sounds great, right? You can invest in the future of entrepreneurs. Well, I can tell you the people who are going to basically, it's not a scam, but it's like, dude, you're going to lose your money if you do it that way. And I can tell you the people who do it in a certain way where you have a good shot of making money. And there's a clear difference when you're on the inside, you know. You know who's who, right? And so in every industry, I think this exists. In the franchise world,

what are the red flags? Who's lying to me? Who's out there trying to take advantage of you? And what should you look out for that would be those sort of signs to run away? Yeah, the reason I was kind of smirking is there are so many. And it is one of the main drivers behind in francy is that regulation, and I'm not a big proponent or over, you know, over-regulation, but it is the wild west in business brokering and especially in franchising. So there's no licensure to become a franchise broker. You know, like real estate, you have to go get license and you're registered in the state. You have to take coursework.

You have to disclose your commissions and fees and how you make money. In franchising, it is absolutely insane about what's allowed. So the three of us, boom, we're all franchise brokers in this moment. you're done. That's it. You don't have to go get registered in a state. You don't have to take a course or an exam. And then you can go charge a 60% commission on the franchise fee, 6-0. And for anyone that's ever done sales, I mean, outside of insurance, does anyone else know a sales commission that's that high and that incentivized? No, I can't think of anything else that's that high of a commission. And so what does that attract? A lot of people who are going to say

what they need to say to get a huge payday. If they close a couple deals a year, it's two, three, 400 grand. Some of these brokers are making a million dollars a year, not having to run anything other than convincing someone to buy the right business. It's always the brokers. It's like a time share presentation. So like I hope some regulation happens and pushes it, at least tell people how you make money and how much so that you know, because half the time they're not telling you and you think as the person receiving their services, this person's smart, they're going to help me, this is great, it's free for me. And you know, you know they're making some money on the back end, but you don't realize just how much. The bigger issue on top of it is,

they might only be showing you the 15 to 20 brands that they have an agreement with. And so there's 4,000 brands and you're being shown this universe of 15 to 20, having no idea what's happening out in the background. It'd be like buying a house from a real estate agent that's also the listing agent on the house. And then they're only showing you the listings that they're also the listing agent. How do the brokers work? So are they where do they sit in this ecosystem? So are they cold calling people?

Are they running like webinars? What are they doing to even get in the main? middle of the transactions. How are they generating the transactions? You guys probably both get a lot of LinkedIn messages and I'm sure you've got a bunch of franchise brokers in your inbox saying, hey, Sean, have you ever thought about owning a car wash franchise or this? You'd be a great entrepreneur, great operator in this business. And a lot of LinkedIn outreach, yeah, webinars, some of them make YouTube channels. Right. Telling it how easy it is. Wait, and is this Franzi's business model? You get 60%. No. So I wanted to build Franzy to just. I just. I wanted to build Franzy.

Yeah. These fucking brokers, except me. They suck. They're trying to disrupt that broker model. I'm trying to disrupt the broker model and democratize it. So, hey, instead of the 20 brands that a broker might show you, here's 4,000. Here's all of them, because we scraped what are called FD's franchise disclosure documents. It's like what Zillow did with the MLS.

So now every brand is out here. The good, the bad, the ugly. Which ones have failed, shut down locations, have declining AUVs and revenues. And then we charge a flat dollar amount to the brand. So instead of 60%, it's about half of that. It's flat across all brands, and we disclose that up front to our clients. So think of us as more of a franchise fiduciary. So here's how much we make.

Here's how it works. We have AI that's matchmaking you with the right brands based on all these unique things about you. And then we just help you find the right fit, get financing, get your entity formed, get the right franchise CPAs, franchise attorneys involved, et cetera. What brands would I have bought 15 or 20 years ago that just crushed it today? Like what can we look back on and put together some dots for the, you know, 10.50 years. Yeah. Yeah. Nothing bun cakes is still one of the best unit economic businesses there was. I mean, Rourke Capital is also kind of hidden behemoth that owns the majority of brands that most people don't realize. They own driven brands, which is Mainke-Maco, Take Five. They own Inspire brands, which is Antian, Sinabon.

So Rourke Capital, according to Wikipedia, has 1.4 million employees. employees and $37 billion under management. So it's just a huge company that owns tons of franchises. So when I'm on their site and I see Duncan, like Duncan Donuts, what does that mean? They own some locations or they own part of Duncan? They are the franchisor. So Rourke's playbook is, let's go buy up the franchisors. And now they have that 6% royalty stream into perpetuity across all of these brands.

So they have Splash Swim School, they got Jimmy Johns, Duncan Donuts. Sean, are you going to let these guys come after the Patel mob? Everything you worked for. They're coming out. No, everybody needs exit liquidity, and this is ours. You guys love Indians. Okay, so which other businesses were cool 10 or 15 years ago? Nothing blunt cakes?

I've never heard of that. That was hilarious. What? You got to try it. It is really good. And again, the economics. I mean, low food costs, very good AUVs. I think it's $3 million or so.

The box is small and simple. There's one near me. This location, on average, would do $3 million in revenue? Yes. Selling these cakes? Selling cakes. I'm telling you, it's something disgusting. Yeah, I don't even know what a bun cake is.

It looks so horrible. It looks disgusting. Don't knock it until you try it. I'm telling you. They just changed the name from Buntcake to something else. I would be so in. Today's episode is brought to you by HubSpot. Did you know that most businesses only use 20% of their data?

That's like reading a book, but then tearing out four-fifths of the pages. Point is, you miss a lot. And unless you're using HubSpot, the customer platform that gives you access to the data you need to grow your business, the insights that are trapped in emails, call logs, transcripts, all that unstructured data makes all the difference. Because when you know more, you grow more. And so if you want to read the whole book, instead of just reading part of it, visit HubSpot.com. Okay, but nothing. Bunt Cakes.

That one was a winner. What else was a winner? A lot of home services, like Benjamin Franklin plumbing, Mr. Sparky, your electrician. Oh, wait. You could just use

Benjamin Franklin's name? Apparently. Yeah, the home services businesses. George Washington's gutter suckers. You guys talked about 1-800, you know,

junk as well. And then Omar Solomon from college hunks moving junk. They did really well. Same thing as very similar to 1-800 junk. Obviously hotels, Marriott Hilton have done incredibly well. We had this guy named John Morgan. He's a billionaire. He is Morgan and Morgan law firm. He kind of like, you know, he's a billionaire. So he owns just crazy amounts of stuff and he's got all these stories. And like two or three times he said, I don't know if you remember this, Sean. He was like, yeah, we own some Marriott

hotels. Like he just like made these comments that were fairly offhanded. But it was probably like an eight or nine figure like thing. It was like probably a pretty big deal. I'm shocked at how many like ballers are in on this. It's pretty amazing. They I've found like with the podcast, the ones that have more than 50 units open, they don't want to come share what they've done because they're like, this is such a good, good hidden gem.

I don't want to talk about how I did this or that it's out there because again, it is substantial wealth creation. I know a guy that owns, when I first met him, he was at 47 McDonald's. And he was producing, I want to be able to. to say it was like 35 or so million a year in cash flow. He's paid like an NFL quarterback. And he told me, he's like, I don't remember the last time I stepped foot inside of McDonald's unless it was one I was looking at buying. But I haven't eaten here. I haven't worked here. I've got one COO who runs the whole thing for me. I've got two private planes because one's not

enough, I guess. And he just does whatever he wants and has this thing, you know, cash flowing. I talked to him recently. He's up to 90 McDonald's now. And you know, the math on that's probably close to 70 million or so in cash flow a year. You're doing a good job of proving your thesis to be true. What's the nothing bun cake but today? Oh, but today. So like the one that's just taking off. I mean, we mentioned it earlier,

but just the pop-up bagel has this cult-like following of phenomenal brand, great revenues, simple business model. Is food the best? Most of all the best ones you've mentioned is food, but food seems a little bit more fatty. Yeah, exactly. It seems like I would want to own plumber type of business or like, you know, home services or turf or whatever. Those things,

naturally I would try to go to the unsexy, maybe recurring, maybe higher ticket, maybe kind of local monopoly. It's not a fashion choice. It's not a trend. I don't need to be able to keep coming to the gym and stay motivated. I don't need people to change their diet habits, you know. Am I wrong in that? Is that the wrong lens for this sort of thing? No, I think, you know, home services does phenomenally well. Food is tough too. Like if you don't get the right brand and hit the right trend at the right time. It's very expensive. It's harder to get in and out of. But if you find the right one, they're highly profitable. There's a lot more systemization and tools that the franchise doors are providing that peer network. But if you're looking as like, hey, I'm the everyday kind

average person that wants to get into franchising and still have pretty significant upside. You're right. Home services, because you're not building a retail location. You're not constrained by, what if I picked the wrong location and now I'm stuck here with this huge investment and I can't move this box. It's a million dollar, $2 million investment. But if I own Benjamin Franklin plumbing or there's one called Garage Kings that I think Damon John from Shark Tank

was hyping up at one point, but they go epoxy your garage and like kind of pimpe out your garage, custom shelving and epoxyed floors and racking and all this stuff, they'll do 1.3, 1.4 million a year in revenue and very high margin because again, not a lot of variable costs or fixed costs either.

And you're just going around pimping out garages. and cash flow half a million dollars a year. Dude, Sean, we have this guy named Tommy Mello

coming on. Have you ever Googled Tommy Mello? Tommy Mello. Sounds like a gangster. So, yeah, he is gangster. Wait until you talk to him.

He's cool. I think he's coming on in a couple weeks. A1 Garage. A1 Garage. I think all they do is garage doors. And he sold

half the business, give or take. I think at a, for sure, it was in the billion-dollar-plus valuation. And his garage doors, I think they do

something, he shares everything. I think it was like 250 or $300 million a year in garage door replacement. That was the thing with Garage Kings too. The average unit volume was $1.3 million and they're like, we're not even doing garage doors or other fixtures yet and that's going to add another half a million

per territory annually. So it's just these like unsexy overlooked things that if I... But I do think that a lot of people make a mistake there. So I have a friend named Chris who took over his father's HVAC company and he scaled it from 10 million to 200 million in revenue. And he was, he was, yeah, it's called Hoffman Bros. And it's in St. Louis, now in Nashville. And he was telling me, he was like, you know, all the, he was like,

making fun of me. He was like, all you tech bros think that it's so cool to get in this business. He's like, you don't know the half of it, what I have to deal with, when you're working with a blue color HVat guy. But what he said, what he was like, my competitors, they're a lot smarter now because it's a lot of the young guys have taken over. But he was like, we give our guys iPads and we teach them, like we literally have a checklist for them. So when you go to the door, pet the dog, ask permission, say, may I come inside here? I've got these things I'll put on my feet. When you leave, you say something like, hey, I'll get a $50 bonus if you leave me a Google review here. Like, just this checklist of things that allow them to mom and pop businesses, they just don't

do. And so on one hand, I do think that, like, people like us are like, yeah, it's just an overlook thing. Like, you're so smart. You went to a good college. Just go start a garage store business when in reality, it's way more challenging than that. But also at the same time, I do think that There are a lot of people who don't sweat the details like maybe a little bit more of a militant operator would. Yeah. No, that's completely fair. But I think whether it's a corporate job, a tech startup, or one of these unsexy blue-collar, you kind of base things, there is no shortcut. It is all going to be hard work. And for me, it's that person that's willing to work hard. They're smart, they're capable, and they have capital or they have access to capital. You can go do this. Most people can go figure this out. It's not going to be this cakewalk and it's completely downhill. But if you've got the work ethic and you're willing to do it,

franchising is a great way that's de-risk. What is this? This should be the only thing in the MFM merch shop, this giant flag you put up on your wall and says, we do this not because it is easy, but because we thought it would be easy. The story of my life. All entrepreneurial ventures for me start this way.

We get dozens of people that come through. they're like, well, it's like a good business I could invest in, where I don't really have to do anything. I'm like, not this. So go, I don't know, go maybe buy Bitcoin. I don't know. I'm unique in that I want a lot of money with the least amount of work, but I really don't want to take a lot of risk either.

So what do you got for me? I'm like, nothing. Sean, I was thinking of another, I was thinking of another one when we were talking. You're like, what other kind of trends? And I think one that we haven't talked about is, you know, seniors, aging population, baby boomers. there is a ton of demand, pent-up demand right now for senior care that you'd think would be,

everyone else has this idea, they're going to go build other facilities and in-home care. But we'll like every once in a while for market kind of validation. We'll call places up and say, hey, my grandmother, my mom, et cetera. And like, oh, we're booked out. We have a list that's eight months long, 12 months long. And this is in most markets. So there is not enough supply for the amount of demand there is. And so there's another one that's been around for a while.

It's called HomeWatch Caregivers. Total investment, 120K. to 177K, 2.5 million average yearly revenue doing senior care. What about funeral homes? Are funeral homes franchises? Sounds like, well, we're just going to... We're just going to let the whole thing. Cremation is so hot right now. Well, I was asking for a bunch of reasons. One, baby boomers are at that age, but also, Sean has

this thing called OneSharp businesses, and a few years ago, he, he, showed us the charts of cremation. And it was just like astronomical. How many people preferred being cremated now versus 20 years ago? It went from like 10% to 50% of the market. Wow. And you said that everything,

or you said that a large percentage of the stuff that we work with that everyone we know about is a franchise, are funeral homes? I haven't actually seen, and I'm sure there is one, but I haven't seen a funeral home franchise. But if you're trying to do your vertical play here,

there is crime scene cleanup franchises so you could start there. and it's called Bio1 is one of them. There's a few. I think we talked about that. Yeah, they're going and cleaning up crime scenes and everything that comes with that. Wow, that's incredible.

Yeah, there definitely are franchises for this in both funerals and cremation. There's also the pet. Isn't the pet cremation one like a big one now? It's everywhere. I don't think there's any space where you're like, is there a franchise? The answer is pretty much always yes.

It's just a question of. Check this out. How good is. Go to after. Aftermath.com, Alex. Aftermath. Oh, God. You know this business is doing really well if they bought Aftermath.com.

This is the crime scene? Crime scene cleanup? Yeah. Oh, wow. This is for the folks out there who have a business that does at least $3 million a year in revenue. Because around this point, that's when you're able to look up after being heads down for years building your company. And you realize two things.

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By the way, you said you scrape the data, so they have these disclosures, and the disclosures basically have to say the good and the bad, right? So it's like basically there's a required set of financial reporting that these franchises have to do, similar to like how public companies have to report their numbers, but almost more structured, right? Because you specifically, like I've seen this with MLMs. MLMs also have to publish all of their data

about how they're, you know, whatever their associates are doing. and it's basically, you know, you look at this table and it's like, well, so 98% generate less than $1,000. And then after that, you know, the rest of these people do well. And so all the data is very structured because they're legally, you know, they're legally required to do that. Is it the same thing with franchises? Like, can I go get very clear pictures? Because I tried, I looked into this one activity place and I was like, oh, this is great. This is going to crush.

And so I was thinking about buying a franchise for my sister or for my trainer, like, you know, a business in a box that they could run. and they were so evasive. I shouldn't say evasive, but like it was not easy to just get clear answers to like three questions. You know, what is the range of revenue to expect? What is the range of profit to expect? And how many of the locations are, you know, profitable or unprofitable? Like, you know, is the average, you know, is it 2% of the locations are unprofitable or, you know, 50%.

And, you know, just general questions like that, it was like, well, you know, it all, you know, it all, be in the packet. And I was like, it's not in the packet, you know, because they're not required to report in certain ways. So I guess what have you found in scraping all this data? Yeah, so every brand is regulated by the FTC, the Federal Trade Commission. They are required to have this 200-page legal document called an FDD. It's a franchise disclosure document. And it's very structured to your point. But kind of like a public company's filings, there's little tricks and adjusted EBITDA and you've got to read 30 footnotes to figure out what the hell is going on. Brands are doing the same thing.

And so we help people navigate those. The reason we built Fransy again was, just like Zill, you can go here and see what's this going to cost. Is there bankruptcy? Is there litigation? How many have shut down? I tell people to go look at the item 20. It's where they show how many units they've sold, how many are open, and how many stores have shutdown? Because it's the best way to go see.

Is the system relatively healthier? A bunch of people selling, are they actually opening the units that they've sold? Or is there a huge delta? It's a good indicator of do they have their systems and their shit together, basically, to go sustain this and do this. well. And then the best validation is just go talk to other franchisees, people who are actually doing it, who are in it. And what you described is a red flag. If a brand is not willing to share certain things that they're allowed to share, it's a red flag. What's the best practice for contacting? Is it just you cold called? You say, hey, I'm looking into franchising in a totally different

territory. Yeah, I look at it like hiring someone. Like, you know, you ask them for their references and they're going to give you like their mom and their best boss they've ever had and they're going to say all these great things. But then you should go talk to their bosses or employers. that they didn't give you, but they mentioned in the interview. And that's really how you get validation. Same thing here. The brand is going to serve up their top two performing franchisees. They're going to say all these great things,

and you're going to feel like I have conviction now. You should go on LinkedIn and find two or three others that they didn't list and just go cold outreach. People, if you reach out thoughtfully, they will spend 20 to 30 minutes with you telling them, you know, you the good, the bad, and the ugly. Let's say you got a 20-minute phone call with them and you got to ask three questions.

What are the three questions you would ask one of those other franchisees? Yeah, immediately, would you do this again knowing everything you know now? And that should be pretty telling because they're either like knee deep in it at that point. Like, this sucks. I'm spending way more time. I've lost money. This is brutal. Or they're like in the hard part still. They're in the J curve and they're coming out. They're like, I see light. I'm super bullish on this and yeah, I would do this again. Or they're killing it and they love it. So like that question usually you get a lot out of. I then would ask about support and what it's like working with the brand.

because a lot of the reason you're franchising versus going on your own is, is the team actually providing values at 6% worth it? Or would you have been better off doing this on your own? And so that's a good indicator of should I franchise this or not, or be a franchisee of this or not. Lastly, I'd ask how much money you're making, how profitable is this? Is it what you expected?

Is the juice worth the squeeze? Because they might be making some money, but it was a lot of investment. It was a lot of time for something that could have produced in the stock market or in real estate or something else. I'm just looking for the pain in their voice, regardless of what they're saying. I just trying to detect the underlying pain that I can sense.

Well, the good thing about doing these validation calls is, yes, while they have an interest in the brand, you aren't going to compete directly with them. You aren't going to add necessarily value to their location. And so they have no incentive to protect the brand in line, like, Sean, I would do this in a heartbeat all over again because it doesn't actually directly benefit them. So you are going to get real raw responses most of the time

because they don't want someone else to go make, if it was a mistake, the mistake that they made. They want to help you out. They're hopefully not vindictive people for the most part. And if they're doing well, they're going to be happy to share that too. The franchise industry seems kind of cool to us as content people because we have these guys that are kind of these cowboys. They're like these Midwestern or Southern guys who are really wealthy.

And it's like that meme of like when you get on an airplane, if you see a guy with like baggy blue jeans and loafers and like a fat Rolex that, he's like reading like, you know, like prospects reports just like on paper. You know what I'm saying? Like do you meet a lot of people like that? Because that seems like it seems like there's like a lot of really cool stories here. There are so many. And that's part of what we're doing with our show is like how do we highlight these?

And it's trying to just get them comfortable to even tell it because it's such a, They've got such a good thing going. They don't want to mess it up and attract more private equity than is already flooding the franchise model today and is only growing. But yeah, there is a lot of stories like Cal's where five years ago they weren't doing this and now they've got a business doing a couple hundred million a year in revenue. And that's where I flipped. I used to be, again, franchise model hater and I should just go do this myself.

And everyone should just go do it themselves. You can extract 6%. And then you realize how many corners, not the, that you're cutting, but just how much value is created in that system and bulk purchasing power, branding, et cetera, I've become a believer for the right person and the right brand. I mean, there's a lot of ifs still and things you need to check off and make sure it's the right fit. But, yeah, there's a lot of these cowboys out here that are kind of unassuming and running massive businesses. One of my favorite franchisers was the dad in the movie, The Blindside. Do you

remember that, Sean? Wait, what was your franchisor up? The joke in the movie was Tim McGraw's character, and it was based on a real character, and he ended up selling this for nine figures. But he was like, you know, the kid with dad brag, he goes, my dad owns 50 Taco Bales. I was just say it was like Jack in the Box or Taco Bell. I think it was Taco Bell, like Domino's Pizza or Pizza Hut. Are they the same like Yom Brands? Yeah, Young Brands, KFC. Oh, you know, it was Pizza Hut, Pizza Hut, Taco Bell, and KFC.

Yeah, like, bragged about it. And I thought that, like, in my head, that has been what the franchiser is basically a, um, A franchisee is an ex high school quarterback who married the high school sweetheart, and is a good guy with kids, and he owns about 10 KFCs and three Taco Bells. And he brings it to school for his kids to make up the class like him. You guys should get, if you can get them on, I think his name's Greg Flynn, but it's the Flynn Group. They own thousands of franchise locations and their system. This is like a family run business.

They're, and don't hold me exactly to these numbers, but a report came out in the last couple months. The Flynn Group did, I think it was $6.3 billion in revenue last year, owning franchise. Like, they're franchisees. And so that was more revenue than KFC, Domino's, Popeyes, like huge brands. This group of franchisees is doing more revenue

than the whole parent, the whole franchisor of, you know, very well-known, very large, large brands. their homepage when you go to the website, the hero banner is just onion rings falling from the sky. Who doesn't want that? Who doesn't want onion rings falling from the sky? Now that I think about it, there are so many more ballers than I thought,

Sean, do you remember Lorenzo Fetita, the guy who was the founder and CEO of the UFC? Well, he came from a wealthy family, so they've been ballers for forever. But before he was the CEO or founder of the UFC, see, he was the CEO of Gordon Beersh. If you remember those guys, it's a brewery, it's a franchise, I believe, but it's a brewery and bar is all it is.

I didn't know that. I thought they were like hotels and Vegas. They were. The mom and dad, the family was rooted in that. And then also, for some reason, he, in 1995, he bought controlling interest in the Gordon Beers Brewing Company, and I think they had franchises. Here's an interesting one I saw the other day. It was there are more millionaires generated from franchising.

than all combined players ever in the NFL. Dude, you made this bold claim and I wanted to fight you about it. Now I'm totally on your team. My first mentor in college, when I was in college, we entered a business plan competition and we were trying to win, and they assigned you a mentor.

So the first team, they got matched with this guy who was like a biotech entrepreneur sold his company for like $4 billion. The second team that got up, they got matched with the guy from Mint.com, Aaron, Pat, whatever his name is. And, you know, so he's a tech entrepreneur, you know, hundreds of millions of dollars.

And they were like, you guys are going to be with Michael. And we were like, who's Michael? And they're like, Michael owns the number one. And I'm like, what is it going to be? He's like, largest chain of Applebee's in North Carolina. And I was like, oh, womp, and so I was expecting, I was like. And Michael pulled up at a Rolls Royce. Exactly.

We go outside. Michael's got the best car. Michael's got the freest schedule. He's like, oh, meet whenever you guys want to meet. This guy owned, I think, like 13 or 30 Applebee's or something like that. And I know exactly who you're talking about. I'm in Charlotte. That's Michael.

I didn't even know the last name. This is last name. Yeah, that's right. Yeah. He was such a good guy. And he had like such a, his story was so cool. And it was kind of inspiring because up till then, my frame of like, well, if you want to make it as an entrepreneur, like you need genius invention. And here was this guy who was clearly living this wonderful life, who was soon.

super successful. And what was his genius invention? He basically was just like, I will take what to me was the most boring food franchise. You could, like, literally Applebee's would have been like if I was coming up with the joke, that's what I would have said. And I just noticed on this Flynn group, there is

on their timeline. It says, 1999, our journey begins with eight Applebee's. And now they have 5,000 plus units or whatever. They have like, you know, thousands of units and they're like expanding into New Zealand as territories because they're just like, you know, dominating the whole globe. And I just remember, like, kind of that guy broke my frame because he really had, like, built this wonderful life without doing what felt like, you know, pulling a rabbit out of a hat or catching lightning at a bottle and coming up with the new invention, the new product that just, you know, like sets the world ablaze.

And, you know, because there's so many different ways to win. It just kind of depends what you're, what you're suited for. You know, he was a great executor. He was a great manager. And he was great at building up and developing people so that they could run the locations. And that's what he needed to be great at. So it's not like it was so easy. He didn't do anything.

But he was great at those things rather than coming up with the game-changing concept. Sam, you asked me earlier, like, why don't you just go open 100 of these and why are you building a tech company? And what Sean just said is the tempting part of it. It's like all these tech entrepreneurs I meet, I think they sound smarter, they sound more sophisticated than the multi-init franchisee people I meet. They're working way harder. But maybe we got it all wrong because 90% of them go to fail. and they're wasting all this hard work and talent and brain time on this thing that has such a small chance of outside success. And then I'm meeting the Wild West Cowboys on the plane and they're like, yeah, I just followed the playbook.

Again, not to make it sound like it was all a cakewalk, but they're like, yeah, I just followed the playbook. I am good at finding real estate and making deals with the landlords. And I started with one, and now I got 50. And I make 20 million a year. And I don't really do like. Yeah, but look, the grass is always greener on the other side. Like, as someone who worked in fast food, it worked one of these jobs. Yeah. You don't want to hang out with me. Like, you know what I mean? Like, you would not have wanted to, like, managed me when I was a kid. And so, like, there's, the grass is always greener. It sounds dope. My brother-in-law owns a moving company, and I hear the numbers, and I'm like, that's awesome. He's like, dude, I had a fire guy the other day because he was doing heroin. Yeah. Like, on the job. Like, so, like, you know, pros and cons. Pros and cons. But I tell you what, there seems like a lot of pros right now. Where do you live?

Charlotte, North Carolina. Are you building the company there or remote? Yeah, building it in Charlotte. We have, no, we have team members in South America, Philly, but the majority of us are here in Charlotte. How much did you raise? We raised three and a half million at our seed round to go, and we launched January of this year. We're up to 35,000 unique visitors a month coming to the site and starting to build out a second product within. Our goal is to basically sales force, but for the franchise model.

help you buy a business, we help you operate your suite of franchises or your portfolio of franchises, and then we help you sell those back on our marketplace. What's your revenue range now? Have you crossed eight figures? Not yet. No, we're less than 11 months in. So we'll do seven figures this first year, which for a startup, in the first year, we're happy with. Sorry, I thought you said you'd started a while back. I didn't mean, it'd be like, you just have a month ago. You don't have 10 million. I was like, wait, where are you finding these companies because I want to invest in them?

this is pretty cool. I didn't know what we were getting into when we got into this. I thought, A, you were just going to pitch your company, and in which case, that was it going to be great, and you didn't do any of that. And B, I was like, franchises, I don't want to hear about this. And it turns out it was actually one of my favorite episodes. Like, this is the type of people you get to hang out with and the stories you get to hear, and frankly, you, the type of personality you have. These are some of the stories that Sean and I like uncovering. maybe people that aren't in the SF New York scene, which Sean and I both are in. And so it's really fun to hear your perspective on stuff.

It's pretty cool. Thank you. That goes a long way. I know you guys see a ton of business models and people. And I felt the same way. And sometimes I still even feel a little crazy about what we're doing. Is this something that can really help people? And I want them to have the same entrepreneurial experience I had.

They just might not want to do a tech company from scratch. So like, how do I show people and educate people that this is a past if you want to walk down it. Again, I know I'll probably overuse analogies, but when you think about the financial housing crisis, like people are, who's to blame? Is it the banks? Is it the administration?

And I think, you know, using that as an example, banks started originating a ton of mortgages because Fannie Mae and Freddie Mac said, we'll take the risk off your balance sheet. And so, of course, the bank's going to go originate a ton of mortgages. And was it unethical? Yes, but their incentive got taken away. And I look at franchise brokers the same way.

It's like, is it their fault? I don't know. Like, no one's regulating them. They're, you know, everyone else. is doing it and so there's no cap on it. So they're going to go sell businesses and make 60%. But my thought is let capitalism do what it's good at and level the playing field and democratize things. And hopefully, that's what we're able to do here at Franzy. Well, sick, dude. Great stories. You're a great guy. You got a great goatee. Great podcast.

This is it. That's the pod. All right, everyone, if you're listening to MFM, you probably want to make more money. Well, I want to tell you about a podcast you might want to check out. It's called The Sales Evangelist and it's hosted by Donald Kelly. Each week, Donald interviews the world's best sales experts who share their strategies to succeed in sales. They share actionable insights and stories that will encourage, challenge, and motivate you to hustle your way to the top. If you're someone looking to raise your income level, check out the sales evangelist. can find it wherever you get your podcasts.