The Entrepreneur DNA - The Franchise Gold Rush How To Build Wealth Cash Flow And Real Estate Through Franzy Alex Smereczniak

Episode Date: January 11, 2026

In this episode of Entrepreneur DNA, I sat down with 33-year-old serial entrepreneur Alex Smereczniak, the founder of Franzy.com — what he calls the Zillow of franchising. Alex walked me through how franchising really works, why it’s far more accessible than people think, and how everyday entrepreneurs can build serious wealth through franchises, cash flow, and real estate. We talk about the hottest industries, the best opportunities, how to choose the right brand, and how the franchise + real-estate model can create multiple streams of income and even multi-million-dollar exits. This conversation opened my eyes to opportunities I didn’t even know existed — and it might do the same for you. About Alex Smereczniak Alex Smereczniak is a serial entrepreneur and the Co-Founder & CEO of Franzy, the platform known as the “Zillow for franchising.” Before building Franzy, Alex launched and scaled 2ULaundry and LaundroLab, raising over $30M in venture capital and expanding the brands across multiple markets. His experience as both a founder and franchisor gives him unique insight into business ownership, franchise systems, operations, and scaling. Today, Alex is on a mission to democratize entrepreneurship and help create the next one million business owners through accessible franchise opportunities and transparent data. Connect With Alex Website: https://franzy.com Instagram: https://www.instagram.com/alexfromfranzy LinkedIn: https://www.linkedin.com/in/alex-smereczniak Podcast: How I Franchised This (search on all platforms) About Justin: After investing in real estate for over 18 years and almost 3000 deals done, Justin has created a business that generates 7 figures in active income through wholesaling and fix and flipping as well as accumulating millions of dollars of rental properties including 5 apartment buildings, 50+ single family homes, and 1 storage facility Justins longevity in real estate is due to his ability to look around the corners, adapt to changing markets, perfecting Raising private capital, and focusing on lead generation which allows him to not just wholesale and fix & flip, but also accumulate wealth through long term holds. His success in real estate led him to start The Entrepreneur DNA podcast and The Science Of Flipping podcast and education company, and REI LIVE where he’s actively doing deals with members. He has coached and mentored thousands of aspiring and active investors over the last decade. Connect with Justin: Instagram: @thejustincolby YouTube: Justin Colby TikTok: @justincolbytsof • • LinkedIn: Justin Colby Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

What is up, entrepreneur DNA family? I am here with a really special guest. This individual is only 33 years old and is a serial entrepreneur. He's had three businesses and already exited two of them. He's on his last, what I think, Swan Song Exit with Franzy.com. We have Alex Smersnack. Nails it. Yeah.

That was going to be a tough one. Thanks for having me. All right, dude. Well, excited to have you here. You know, you're 33, as I was just giving you a little bit of a hard time. already built this incredible resume with two exits you're working on a third franzi.com is phenomenal but let's jump into franzi to start what is franzi what's your mission what are you thinking about moving forward in the next three to five years with it yeah so our mission with franzi is to help

enable the next one million entrepreneurs starting in the u.s and the way that we're going to do that is through democratizing access to ownership and in businesses starting with franchising so think of Franzy is the Zillow for buying and selling small businesses. So you have all this data, 4,000 brands, investment cost, average revenue, who's the executive team behind it, what territories are available, does this match my risk tolerance, all the stuff that you need to do, just like Zillow has square footage, bedroom school district. Yeah. Franzy has that for small business. All at your fingertips, don't have to talk to a broker unless you want to. Don't have to commit to anything unless you want to. It's all just the data and the information that you need. And

and the support that you need to get lending and finding the right brand. No kidding. So when you think like mergers and acquisitions is such a big topic right now. I've had a more and a handful of people here as guests with that. Does this play into that realm of merger and acquisitions? Is this just the franchise model? How are we looking at franzi.com? Yep.

So for now it's just de novo units or territory. So new net new development of, you know, a Jimmy Johns or a gutter brother's franchise. as a service business where you don't need retail, you would buy the territory for Fort Lauderdale or for Miami and then go develop that out and start it from scratch. Yeah. We are starting to work towards a resale marketplace where Justin could come on and also buy the existing Jimmy John's franchisee

in Miami or the existing Gutter Brothers territory. Yeah. Depending on, you know, where you want to jump in. Some people like an existing business. Yeah. Other people want to have their stamp on it and build it up from scratch with the franchisor. So we are talking to any and all entrepreneurs here.

because at the end of the day, I, today, Justin Colby, can go to franzy.com and I can say, you know what, I want to get into the restaurant business. Yes. You have a list of restaurants, let's just use Jimmy Johns, but you'd likely would have more. Maybe you can name them, but like, 4,000 brands on the pop. Four thousand brands. It's almost every franchise concept that exists in the United States. Or is on franzi.com. Right now, go check out franzi.com. I mean, I was so excited about this because I just think, as I'm a serial entrepreneur. Like, I got to be careful with our conversation right now. Because next you know, I'm going to be on Fray and you're like,

what's the next industry I'm going? Sorry, right. And a few times. People we've met have bought a business with us. Yes. As us having a conversation like this. And three months later, they're like, well, now I own this operating company. Right.

And now I got to go do this thing. I'm reading a great book. Big shout out to The Road. That's stupid. If you've ever heard or read that one. It just is kind of the fundamentals of business where people just react and make emotional decisions. Like I get all fired up here.

and I go buy a franchise. Like, is that really the best thing I should be doing right now? So this is exciting because I think, well, let's jump into what I believe is a great industry sector, home services. I'm a real estate guy. We all know that, right? We're listening to me because that platform. But how many of those, I mean, do you have a number of how many, you know, home services

type companies, roofing? Like you just mentioned gutters, windows, flooring, HVAC, like, I just, I think that's a major play for a lot of individuals. It has been increasingly popular because there's average unit volumes of revenue of these service businesses, you know, well over a million dollars. But the startup costs are 150K, 200K, 250K versus a retail restaurant or health and wellness franchise could run you half a million, a million, two million. and two million in some restaurants cases or more for not too dissimilar of revenues. I mean, restaurants, Chick-fil-A, McDonald's will have kind of gold standard revenues.

But these home services brands, again, seven-figure revenue for a low six-figures investment. And so there's a lot of money in people, you know, moving into home services because, one, it's cheaper. Revenue upside is still there. Plus, AI is likely not to disrupt, you know, people washing windows or reading, you know,

sidewalks or, painting houses for for a while. I mean, it's probably going to happen at some point. At some point. These are safer for a little bit longer. What is, okay, so do you ever get excited about a business or an industry that you get on Fransy? All the time. I mean, I'll see things. I'm like, if I had endless money in time, I would buy one of those, buy one of those. And so I have a podcast, too, called How I Franchise this, where I'm interviewing people that have gone from everyday corporate America or they were at Tesla or they were, they were born into it, whatever their story,

was before franchising, then how they got into it, how they specifically found the right brand, how they financed it. So it's tactical, you know, storytelling. But I've interviewed a few people that started, you know, seven years ago with zero franchise locations and now have 100 plus across six or seven brands. They've got Orange Theory. They've got restore hyper-wellness. They've got Dave's Hot Chicken, Pop-up bagels. And I see that and I hear their stories and exactly how they did it. Yeah. And to me, it's like if you're willing to work hard, If you're willing to go raise some capital and bring on, you know, private equity or private debt partners, anyone can literally go do this.

It's the American dream. If you're willing to go and do it, and franchising just provides this platform that I think is unlike anything else. The playbooks are there. The brand is there. The recipes are there. The training, the marketing's all there. You just need to be willing to go do the work and operate. And I've seen this story over and over and over again.

And the same consistent theme across all of them is they're willing to do the hard work. they found the right capital partner and then they went all into the franchise model and six, seven years in like a diamond, you know, they put the pressure in and so what I think is the key is most franchises and I don't know a lot about franchises, right, but you hear the stories of McDonald's, right? Just the concept of like there's a book, they give you the book, you run the play, rinse and repeat every day, it works, right? And that is in large part. I'm the real estate guy, right? And so are there real estate people or is there a real estate sector to francy? So a lot of these big multi-unit franchisees

will also go in and buy the underlying asset that they're developing on. Unless the franchise or McDonald's kind of does a lot of that corporately, they're one of the largest, you know, real estate businesses in the world. People don't think about it that way. They're disguised as a burger shop. Right. But some franchise concepts, a lot of them actually aren't thinking about that because they're not at that scale yet. In fact, most franchise brands are considered emerging. 75% of them have less than 100 locations open. Over 100 is more mature and that's their 25%. But if you get in with an emerging brand that you like

that has the upside, Dave's Hot Chicken early, pop-up bagels early, you can go develop the real estate yourself and have this owner-operator player where you've got cash-flowing operation on top of an asset that you own. I've heard of some franchisees purposely paying themselves higher than market rent

because then they can go borrow against that cash flow on the real estate side to go over in their second and third one. And so there is a whole strategy for those interested in, commercial real estate and a real estate play on top of the operating business. That's a really smart angle. That's a real estate guy. I'm really, that way you just hit, like, you buy the, whether it is a current location

or maybe even develop one, right? You buy that corner. That's just this rundown thing, tear it down, build your new Dave's Hot Chicken, right? Whatever the franchise. guys, you pay yourself higher in market rent. The income shows strong finances. Banks love it. Banks love it.

They go give you more money to do it again. Yep. It's almost like that like Burr method for residential. I mean, different. I love that you know there's a, you're not a real estate guy and you're throwing out real estate terms. This is good. Yeah.

No, it is. I mean, this is where I go as a real estate play. We could even be the McDonald's, right? I don't have an allegiance to name me three. You said Papa Bagels, Dave's Hot Chicken in Orange Theory. Yep. Besides working out, which I do love. But I wouldn't have an allegiance to any of those brands as a brand.

But what I do know and what I do love is the business model of buying the real estate, understanding the economics of that, getting higher than market rent, understanding bankability. Yep. And now I have real businesses that have real operations. It was a formula. running a real estate play, the bigger play is the McDonald's real estate play. Yep. And again, when you get to 100 units, this is real, real scale. Wow, that's...

And you get to five, that's significant for people. I mean, there's everywhere in between there's an opportunity to run both of those plays if you have the capital and the desire to go structure it that way. The issue I think a lot of people run into is they're not capitalized well enough to be thinking about, you have to develop five net new locations plus not going to buy the real estate, which could be, you know, six figures, high seven, or mid-seven figures. And so they're trying to navigate, you know, how do I finance all this? Franchises are five times more likely to succeed in the first five years than traditional startups. But finding a franchise ownership opportunity can be overwhelming

with over 4,000 brands to choose from and brokers with misaligned incentives. That's why my friend, Alex Smearsnik, co-founder and former CEO of 2U Laundi, Derry built Franzy. Whether you're interested in fitness, home services, automotive, or food, Franzy make it simple to find your perfect match. When you visit franzi.com and answer a few simple questions about your goals, lifestyle, and budget, and get access to hundreds of personalized opportunities plus free top-of-the-line coaching that will never cost you a dime. Franzy is completely free to use from start to finish. You'll never have to pay them.

If you're ready to take the next step towards franchise ownership, visit franzi.com. That is, F-R-A-N-Z-Y dot com to get started today. So the real estate individuals listening to this right now, they come up with the same challenge, right? They say, okay, I want a single-family burr, right? I want a fix and flip. I want an apartment. I want a fourplex. Whatever those things are, the secret of raising capital that I found and I've raised tens and tens and tens of millions of dollars, the secret's always this.

Give the opportunity out there. Someone's going to like that opportunity, right? What I believe for most real estate investors and business owners, if you are in need of capital and you don't actually let anyone know there's an opportunity, it's very hard. Like, everyone goes to the bank to let the bank know I'm in need of capital. There's no difference in running a business, being a real estate investor, needing capital, and not going outwardly, like posting on Facebook or Instagram, not, hey, can I get a loan everybody? It's, hey, there's an opportunity I have. Would you like to be a capital partner? There's a lot of money out there.

I literally had one yesterday. And I think he owns a Dave, because he talked about this chicken. I swear to God, he was like, I had a buddy who had this operation. He needed some capital. It's a chicken spot. I threw 150 grand at it. And the revenue is incredible. It could be one of those, which is funny.

But the point being is that individual I came across because I have apartments. And he's thinking about lending on the apartments, but he also lends in partners on this operation. And so I would tell anyone out there listening to this, like, this is very real. Like, in my world, the upside, I have no genuine want to own a, like a Dave's chicken or like, but the real employees. Right. But if I could just put it together, let the booklet run itself, right, but have the upside of the real estate, there's a very exciting play for those individuals. Especially if you do more than one location, you start to get these local economies of scale where you can have one general manager, one GM, run the business for you essentially. Like, you still have to be involved as far as site selection. Yeah. You get build out costs and modeling it out. But if you're willing to do that work, find the right capital partner and operate to some extent, you can hire GM. And there's a story I tell a lot of a guy that I know met him five, six years ago.

I don't want to name his name because he likes to be under the radar. But he, when I met him, owned 43 or so McDonald's. McDonald's on average do four to five and a half million in revenue with like an individual location and then do 600, 800K in cash flow. So you do the math on his 43 locations. Makes a couple bucks. He's paid almost like an NFL quarterback. And since I'd last, you know, I talked to him about a year ago or recently.

and he's up from 43 to like 90 or so McDonald's now because he's just he's got this cash machine he's just going to buying up three over here just in six you know in greensboro yeah and here yeah and you can just you know that momentum doesn't stop and I asked him I was like how do you manage all this he's like I have one COO that I think he pays 350 grand a year so not it's you know not insignificant but also not a crazy amount for that large of a business yeah and that individual runs the whole thing. I haven't been in a McDonald's from an operation, you know, operating perspective in a long time. And so like to go buy a McDonald's. I mean, that's on a huge scale. Like, imagine now you have three of some new concept. You can take the same lessons, hire a GM,

pay them well. Yeah. They'll run that business. Give them some profit sharing. Yeah. And you're, you're now, you know, the one operating two, three steps ahead. You're looking for location four, five, and six, or a group of five that you can bundle up and, and buy together becomes an acquisition game. as long as you have that operating team that's properly incentivized and how much you may not know this answer but how much would a what's an average income for the owner operator of a of a franchise I'm sure they vary but like if if people are thinking like I'm tired of my nine to five I don't want to do this thing I'm looking for something else like what could you consider if you go buy a franchise and again I'm sure it varies and I'm not going to hold you to it and neither should they don't

holding to it. What are you talking about? Whether it's McDonald's, maybe that's the most known or Dave's chicken or Orange Theory, what would you consider? So I'll give a couple answers because I think the common misconception is like you think McDonald's, you think Subway when you think of franchising? And immediately one or two things happen. You think that's too expensive.

I could never own that. This franchising isn't for me. But they're wrong because they don't realize there's a franchise that costs $10K to get into. It's not going to replace your income, but it can kick off 20 to 30. grand a year and cash flow and not and that's a great return on investment just a return just depends on how much you have to work for that investment but great returns all the way on that end of the spectrum and chick flay even is only 10 grand to get into because they

it's not really like a full franchise they make you work 40 50 hours a week you're more buying a job and they get 50% of the profits which is not normal for franchises so even a chickfilet you can get into if you're the right operator and willing to do their work and then it goes all the way up to you know some of these swim school franchises where you're building seven pools and you're teaching kids how to swim. It's an expensive investment. The average unit volumes are very high. That's more like three, four million to get into. Yeah. And there's everything in between. I always, you know, people think I'm joking when I say it, but there really is a franchise for everybody. Everybody. If you want to go do this and depending on what your goals are,

I think you have to have, I'd say to do this right, 30K minimum in cash and then go borrow. You know, an SBA loan is meant for businesses like this if you're just getting started. So it really is accessible to, you know, your kind of, I don't know, middle class working person can go do this if they're wanting to be entrepreneurial and to go take some of that ownership back all the way up to the more sophisticated. Maybe they've got entrepreneurial experience. They've got a little bit more capital saved up. There's the opportunity to take bigger swings and do the real estate play or do a multi-unit deal. And so there truly is an answer for everyone in their goals. And there's a certain group that, you know, they may be just getting started and they don't have more

than five grand saved up. Like I, you know, my advice to them is work and save like you would to pay off debt and then go buy the business when you've got a little bit of a nest egg to go invest in, you know, a services business that you can start. It's interesting because I,

I'm just such a serial entrepreneur. Like the, the other side of this is being, making sure you are in a financial place. I think that was a great point. Like, maybe don't push all your chips in if you're going to go quit your job and, like every last dollar you have, you're going to go start X franchise.

Like maybe give yourself some level of a bridge, right? Yep. And I am just more curious from my own interest. What is the more expensive level of franchise? Like what's a McDonald's franchise? What else would be considered expensive? So some of the QSRs, a quick service restaurant franchises, because there's so much build out, there's all this equipment,

massive refrigerators and freezers that are sure you're already 50 grand to pop. Yeah. Those can be two, three, in some cases, four million. dollar developments depending on where it is. And then you're leaving 10% to get into it, I would guess. Yeah. And so the franchise fee typically is, it's not crazy, 30 grand to 50 grand to get the rights to a territory or location.

It's really just the buildout cost. I mean, mining the site, developing it, getting the right gas line in, electrical. What do you see is the newest, hottest franchise that on the market right now? I mean, you have 4,000 of them. Yep. So there's a few categories. One is golf right now. I was just taking off.

I think it's with the Netflix effect of them having the swing and swing. Tiger Woods and Rory doing the stadium golf stuff. Right. Live even, you know, creating that kind of more like, I don't know, entertainment approach or version of golf. It's kind of like what Netflix did the F1. There's just a lot more interest now. And so these indoor golf simulator franchises are taking off.

It's almost like any time fitness. Do you remember that? I do. You can fobbin. Yeah. It was a great franchise model. I worked in these really special. small markets across the United States has no employee.

It never happened. They're crushing. It's theirs. And the low ticket thing is huge in terms of the clientele. So if you service the clientele that doesn't need to spend a lot of money for you, I would assume that's got to be huge. And so this, there's no employees. There's no inventory of private golf simulator bays, you know, room a fourth of the size of this.

This is why I do. There's a own station. And the investment cost isn't high. It is a good real estate play because you put them in these smaller, you know, out parcels, etc. They're 200 to 400k to fully develop and then they cash flow 100 to 150k a year. No way. But no employees and it's B-Y-O-B so people can bring a six-pack and play Pebble Beach in an hour when the kids go down.

So I'm going to bring this back to real estate. So storage facilities versus apartments, people will always make the argument. And by the way, I own both. I tend to support this argument. No tenants, no headaches versus apartments, which is always something tenants. etc, right? This is the equivalent in the franchise world, right? And I'm sure there's a couple of them, but like, that's exciting.

You go put 100, what did you say to start it? It's like 200 to 400K. Again, depending on size, how many things you put in? The build out, that's also the franchise fee, like you're somewhere in there. Yep. And you'll spit out 150 grand gross or net? No. Stop it.

That return is insane. Yeah. A lot of these franchises you want to look for should have the ability to generate revenue. news, you know, at least one times the cost to put in. And then you want a payback period of, you know, ideally as little as possible at two to three years, you know, ideally is what you're made whole now. Yeah, and three can work, five can work, but you start to get into this longer. Yeah.

The time frame, there's a little bit more risk there and things have to be executed better. But if you can get to three years or so, that's usually a good. Something like that could you, I mean, what's the locale? Like, what is the typical location for like a golf indoor golf simulator type of? So it's kind of like middle class, upper middle class, households, dual income families with kids. It's their busy families. They can't go golf for six hours. I mean, because realistic, let's be honest.

That's right. How long it takes. I love to go go high weekend. Play on back home. You can go play Pebble Beach in an hour, you know, at 10 p.m. when the kids go down or what, you know, you can do it whenever you want. One of the brands that I, you know, we work with, they have an example of, they've got these surgeons. that play every day at 3 a.m.,

they get off their shift, and they go to the location, go play around and then go home. Well, where are these locations? Like, what kind of facility would it look like? Is it a more like a rural area? Like, is it big? Like, what is that?

Well, like, in the bourbon areas, like, by, you know, near a target, in a strip center. Yeah, okay. Their center? Development could work. Okay. You're in, like, Class B property.

I'd say you're not in, like, the Barry's boot camp or the, like, Remo real estate, which is great. Yeah. You can be in class B, maybe even class C in some instances, as long as you're backed up to a neighborhood that has, you know, a few thousand households that fit that demographic of busy family, you know, enough income to like golf and enjoy it, but don't have the time to go. For all my entrepreneurs are aspiring at, like, you got to look at this, right?

Even if you're the real estate guy like me, this is something that, like, I'm genuinely now, you have 4,000 opportunities. He's like this one now is intriguing to me because I actually was thinking this weekend I want to play more golf. By more, I mean any at this point because I just have two kids in life, right? This is a big real estate player.

Like that one would probably be hard to own the asset, right? You'd probably have to do a lease, I'm guessing. Yeah, because if you're in a strip center unless you take down the whole center and put two or three different concepts, they could put two or three. I mean, I see people do that. Yeah, absolutely.

They'll buy a strip center and they put three, your, complimentary franchise businesses next to each other. And we have a few hospitality groups. that are developing hotels and different mixed use development. I asked me like, hey, we got six open, you know, spots or bays. What concepts, what franchises can we put in? They're going to own and then operate the franchise.

That's phenomenal. Like, I hadn't heard of. I almost feel like this is only a real estate play at this point. Maybe because, like, you go buy a strip mall, which is right now, like, on the cheap relative. Lending is not perfect, but that's why it's on the cheap. You now have the businesses you can put into the strip mall. Everyone's concerned about strip mall is because of COVID obviously changed the game for a lot of different things. But like lending's not great.

But if you actually occupy the units with your own businesses, you are your own tenant. You increase your rents to pay down the loan and you rinse and repeat. Like I just feel like now here's the key. Operations systems. Like I'm on a big push. processes, principles, people, procedures, right? And then you can profit. Yep.

But if you don't have these processes, principles, people, and procedures, like, dialed, your profit is going to either suck or go the other way and you won't profit, right? You're going to lose. Are most of these franchises extremely dialed in? So someone like myself that doesn't have a lot of time or maybe someone that doesn't and have the business acumen and is going to learn this, are they pretty dialed in with these books and game plans and processes? Like, can you literally, people think about it this way.

So I want you to kind of tell me, is this like a plug and play and you just follow the recipe and it'll come out as a beautiful cake? The honest answer is it does depend on the stage of the brand. This is where Franzy comes in to help. We do give free coaching from folks at our franchisees themselves. So if you came through and you said, this is kind of my background, this is my operational experience my risk tolerance my capital situation and here my goals we go match of the 4,000 specific brands partially using AI so we've indexed 26,000 what we're called FDDs franchise disclosure

documents and then we pair it up against Justin's unique set of criteria interest goals etc because while there's some different similar flavors to what people are looking for you have very different hobbies passions like that is an important part you don't want to buy a business that in a year you're like, I don't really align with that or have time for it or agree with it. And so it is important that it's something that you can get excited about five years from now, 10 years from now, and you're not going to be like, I own the, you know, gutter cleaning thing and people are complaining all the time. I'm just not passionate about it.

So we help you do that. And to answer your question about, you know, how plug and play is it, it does depend. Some brands, over 50 units especially, have full-blown teams, training, marketing playbooks, technology that they've built out for procurement and their CRM and their point of sale is all just dialed in. But these emerging brands are not as dialed in. It's more entrepreneurial. So when we get clients that come through, they're like, I want to do this because I want to be entrepreneurial. I want to have a say in what gets built.

We actually tell them to not join like a Chick-fil-A or mature brand because you're basically buying cash flow and or a job at that stage. They're like, Justin, here's what you do. Don't sneeze this. You know, this is how you sneeze. This is like, they'll probably exactly what you. you need to do. Totally. And you have to do it.

And for some, that's great. Some people love that. Other people are like, I don't want that. I'm doing this. Their purpose, their why is I want to be an owner. I want to be entrepreneurial. I want to let my creativity run. Yeah.

And we tell those individuals, you should take an earlier brand because you're not going to get to let, that's not going to scratch your it fully. You might be your own boss. You might have cash flow coming in. But you're not, you're going to be miserable just like you might be now in this nine to five. And so go take the additional risk of joining a brand early. And with that comes other ups. side. You get an influence on the franchisor. You might get to negotiate franchise fees,

royalties because they're earlier. You get the ability to white space territory, you add a fourth unit, a fifth unit, it's six territory, et cetera, as you go versus Dave's hotchick and McDonald's. They're mostly sold out. So now it becomes an acquisition game for that. Yeah, you got to buy up to you. Resellers and all that. And you guys are getting into that space at some point here. Yeah. So we've started building a prototype of the resale marketplace. The reason we didn't start there is with deno. We have structured financials.

That FD, that franchise disclosure document I mentioned, is a standard document that the Federal Trade Commission regulates across all franchises. It's easily indexable, scrapeable, and so we can give you accurate, clean data. Yeah. As soon as we get into resales, Justin's books look different than Alex's books,

even though both owned at Jimmy Johns, and your definition of seller discretionary areas is different than mine, and Florida's different than North Carolina, and there's all these things that come into play. Yeah. And so AI allows us to get, you know, kind of more apples to apples faster and not needing as much human underwriting and modeling. But that's the interesting problem we're trying to solve with technology is how do we build

a resale marketplace that has clean, accurate data and is still, you know, mindful of people's sensitivity around their financials. And when do we show Justin's book to a seller? How much do we verify the seller? Why much friction do we? And all this goes through frenzy. Yep. So let's talk a little bit more in fancy because I just geeked out on this opportunity.

describe Fransy for everyone and the understanding what it is and then where is what the trajectory is. Yeah. So I know I use this almost maybe too much, but the way I describe it just to get it clear quickly as possible is honestly what Zillow did for real estate buying for franchise. It's a platform that has and houses

every brand you can imagine with all this data and information on them, the revenue, the cost to get in, what the royalties you're going to pay are, who the executive team is, there's there been any bankruptcy or litigation so that you can see those red flags and we're starting to pull in more third party data what do consumers of this brand the customer going to go buy the dave's hot chicken sandwich what do they think about it in each region in the country um what are you know commercial rents and leases so we start pulling in just more and more so that you have the

information you need to make a smart thoughtful diligence decision so that's all the data piece there's also this very emotional part of this some people aren't doing it purely as an investment. So I had one guy come through, he's like, just show me the business that makes the most money. Like, some people, that's what they want. They don't care what it is. There's a franchise called Bio1. It's a bio one. They clean up crime scenes and like dead bodies and like, oh, that could make the most money. And like, all right, guy, that this one's for you. But other people are like, I want to build a business with my kids. And it's a legacy thing. We're probably not going to send you to buy a one. We're going to send you to a milkshake or a

dessert concept. It's still can cash flow. But it's something you're kids could work out in high school and could be a part of, you know, as you've built. And some people come. They've made more money than, you know, they need. And they're doing this because it's intellectually stimulating. They want to show their kids entrepreneurship. There really is all these different reasons people do it. And think of Franzy is the, again, database and diligence information with that kind of softer coaching where we talk you through. What is Justin's why? What can you afford? How do we think about all these different brands? Does it actually solve your goals, your financial picture, and then what's your operational?

operationally good at. Yeah. And that's that, like, nuanced piece that I think a human does need to stay involved in because people buy from people. That's right. I can give you all the data in the world, but after a while, you're like, now what do I do? I like these three, I think, but I'm not really sure what to do next. Bransy answers that question, too, with human interaction, we'll meet you in person.

We'll jump on Zoom calls as much as you want to use it. It's free for you. We get paid by the brands a flat dollar success fee so that we have no incentive to promote one brand over another. I'm going to keep it that way from here on out because this is such a critical life decision. It would be, I think, morally and ethically wrong to allow brands, oh, I'll pay you triple the amount. And now we're showing Justin brands that might not actually be the best fit. And that's what's happening today in the kind of franchise brokerage world is they're making a 60% commission on the franchise fee, 6.0.

So if one brand's franchise fee is 60 grand and another is 30, it's, you just have the wrong incentives. It would be hard for a lot of individuals to say, I'm going to show you the 30K one, even though this one will share you double if you buy that. Right, right. So we're just trying to flip that on its head, make it fully transparent about how this whole world has worked and why. How long has the brains you've been around for?

So we started last summer. Took about six months to really get all the data. Last summer. Last summer. And you were able to onboard and basically sell all these franchises to be able to use you as a platform to go come on and talk. That is how it was. of a pain point this is for the brands because there's so much of the franchise fee they're

hemorrhaging out to all these different middlemen and commissions right you know fees so they're desperate for another solution to get high quality you know potential franchisees for much lower cost and that's our goal of francies how do we can democratize this whole process power empower the brand if we do that they're going to reinvest into the franchisee use the franchisee have a higher chance of success because you're getting more and more capability resources support being invested in versus 60% going out to a broker two days later. So that's the one of the end goals here is how do we enable and support again the next million entrepreneurs?

So I'm going to have two questions. One, how did you come up with this concept? Like just no one wakes up one days. Like man, I need to solve for this problem about franchising. That doesn't happen, right? But then two, like, how did, I want to get the order. story of like how did you push into it because that's what a lot of entrepreneurs struggle with right they found the pain point they found the solution they realize they have some gold and they go now what

right and then and i guess let's even take one step before that and then we'll get to the other two you've already done two businesses you've exited your business let's talk about those what what vertical were they in um why did you exit and then why are we here now with franzi yeah so i'll give you the the origin story because the first one for me started my freshman year of college. So I went to Wake Forest and from Minnesota originally. And I grew up with a dad that was, you know, 100% sales, 100% commission, he what you kill. So entrepreneurial, you know, in a big way. I remember, you know, in the summer, he'd golf all summer long and then fall, winter, spring, especially in Minnesota, was busting his ass. And I was like, how are you able to do

this? All my friend's parents are constantly working, nine to five. And you have, it seems to all this kind of flexibility and freedom to work when you want. And his advice that has always, you know, stuck with me is there's three kinds of career you know careers you can have Alex you can work for someone else you can work for yourself we can have people working for you he's like I'm in the second bucket I work for myself I can you know some months I make zero commission other months that's you know half of someone someone's annual salary right and he's like but it gives me it affords me that that time and that flexibility and so it's just always stuck with me is I know I need to go do something either sales working for myself or you know some sort of like subject matter expert or working

or having people, you know, working for me. And so when I got to college, I was looking for entrepreneurial things to do. And I worked for this laundry and dry cleaning, pickup and delivery. Oh, man. Business in college. Yeah.

This is fascinating. This could work at Duke and Chapel Hill and Vanderbilt. I want to buy this thing. And so they were selling it for 30 grand. My jaw hit the floor of 18. This is the most money in the world. Yeah, and I'm thinking how cheap. Oh, my God.

How can we get 20 of those now? Well, so I had 18. I thought this is, right. I have quiet eyes. Two grand maybe saved you. Yeah, maybe. And so I found two other partners. We got to like 11 grand, still not enough.

So then I'm going to the business school, before I'm in the business school at Wake, asking finance professors, I want to buy this business. How do I structure it? So they're teaching me about seller finance or out. And like, they're 18 year old. It's like, sure, I'll help them. So like professors, you know, from Wake, thank you. Like they didn't have to do any of that. They started to work this hours before I was even in the business school helping me.

figure out this deal. So we figured out the deal. We did seller financing and paid them a percent of revenue over the course of a few years. You mean the owners or the that we bought it from? Okay. No, not the professor. Not the professor. Oh my God. I was like, good for you, professor. So we bought the business. We immediately went to the university and said this needs to be a checkbox option for your incoming freshmen and parents, et cetera. We took the business for like, it was like 26,000 in revenue it was doing, but high margin, 80% margin or so. And we 10x the revenue our first year. It was like 250K

because they gave us a booth at orientation week. So all the parents are coming through like, get your meal plan, gets your food parking. Oh yeah, get the laundry service too. Brilliant, bro. And so we sold that business when we graduated and sold it for about 10 times what we bought it for. Good for you.

I was like, we can retire. Yeah, right. Yeah, right. Oh, very many. But then I went and worked for Ernst and Young doing consulting for a year and a half. And I really wanted to keep growing to other colleges, but my partners at the time wanted to go do investment banking, marketing for Pepsi. I didn't want to be the laundry guy, even though that was probably the best time in our life to go do it. I still give a crassel. We could be here. Right now, I'm like, bro, you should have leaned in. You should have

I kind of did. I kind of came back. I went to EY for a year and a half. And I hated it. I was like, this is not as entrepreneurial as I thought. I love the people. I mean, very smart people. I learned a lot. but it just wasn't, it was not fulfilling. Like, going into Wells Fargo and how do we squeak out a tenth of a percent of efficiency? And things moved slower. And I just was hooked from that college laundry thing. I would obsess over it. It was this game almost.

Yeah. And I saw all these Uber for X businesses pop up. This was 2014, 2015. So you're seeing Instacart shipped, Wag, Rover, Postmates, DoorDash, Uber for anything. And I thought, someone's going to do this for laundry and dry cleaning. It's not just college kids, like there's busy families. No one likes doing laundry. It's time consuming.

People outsource lawn maintenance all the time. Why wouldn't they pay us to do their laundry? Let's take what we learned in college and do this on a larger scale. So we started in Charlotte and over the course of eight years, we ended up raising 33 million in venture capital, scaled to a dozen markets or so. And then realized, unlike DoorDash and, you know, ride sharing, which is 0.8 to 0.5.5. B, you need, you know, go to the airport, you need it now. Oh, Justin's where going. Now we're going, A, to B, to split it up into dry cleaning and laundry, then, you know, run a process.

And so it's way more logistically complex. Sure. And so we did route-based instead of on-demand. So, we'd go to your neighborhood and pick up 30 orders. We started vertically integrating and building physical laundromats to support all the volume. And it was through that process that, you know, eventually we got to the franchise piece was And these stores aren't cheap. They're a million dollars with all the equipment.

They're very profitable because we have a delivery business coming in as well as a walk-in customer base now using the same asset base. And we needed to scale more medications. And so we thought, well, why don't we franchise the brick and mortar, layer the technology platform on the delivery piece on top? And that's how we got into franchising. In 2021, started franchising a subsidiary called Laundra Lab. And we sold 118 locations in 14, 16,000. months. Franzy did.

Maybe it wasn't. It wasn't a frenzy. I thought this was an English as the franchisor. Like we were the, we were the Dave's Hot Chicken. We were the company selling franchise licenses. And part of that was we worked with franchise brokers and we worked with what's called

an FSO, a franchise sales organization. And that's where this idea for Fransy was born on it. We were the brand paying out 60% commission, that's 80% conditions. They were like, we need this money to invest in site selection support and construction support and marketing, but we're just like hemorrhaging out, you know, cash. And we'd also raised venture. So we had this unique advantage that most brands never have. If you and I franchise this podcast studio, or we franchise, you know, a run club or whatever the concept is.

Yeah. We don't have venture capital behind us typically. And so even more so, these brands need that franchise fee to invest in themselves and their capabilities and support of their franchisees. And that's when the light bulb went off and I was like, if we're having a hard time, scaling the team appropriately with the amount of stores we have to open. How does anyone else ever do this? And the answer is they end up giving up way more equity to like friends and family or like maybe more, not predatory, you know, VC or private equity, but Grush's like really good valuations. Or they take 30 years and they go very, very slow.

Or they don't scale. They don't, they, you and I stock cap it at three or four corporate stores and they're like, honestly, they don't want to go down this path. Right. So I think there's a lot of really good brands that should be national and don't because they, you know there's not the right resources and tools out there and i think there's some brands conversely that get propped up by the broker networks that have no business being as big as they were because the underlying financials aren't sound or proven out but you know the networks are just

pushing these concepts down everyone's you know throat essentially and so long answer short franzi was you know born from this idea of how do we put the control and the cash back into the brand's you know pockets so that they can reinvest in the franchisee ultimately creating this more kind of positive self-fulfilling loop versus today, which I think is kind of the Wild West unregulated. So you have, what was that original dry cleaning laundry brand? So it's called 2U laundry was the delivery piece. And then Laundra Lab is the physical brick and you owned them and then you franchised them. Yeah. Right. So you went through the whole process of franchising. Then you were the company paying all these brokers. 40, 60% commissions, 80% commissions at times.

found the pain of like this sucks. We're not capitalizing the way to grow that we need because we pay it all out. And then you said, I could help other brands. Technology can do a lot of what the brokers are doing. It's top of funnel lead gen. It's light matchmaking and it's light qualifying. You buy a house this way through bank rate and more hash companies.

You buy a caravan. We're not saying society's ready to go buy a half a million dollar business just online. Sure. Right. But if you think about franchising, it's not as pure of a brokerage play as you buying a car wash or a house. There's a buyer and a seller.

You kind of need someone in the middle to help negotiate and play nice. And then you transact, and you're probably done interacting with each other. Yeah. In franchising, if you think about it, you're like, hey, maybe a golf thing, maybe a restaurant.

You need some advising and coaching. And then the relationship you're building with that brand is going to be a five to 10 year relationship. So it's not this transactional. I found the one, fine, and I'm done. Right. It's dating.

It's matchmaking more than anything. And so traditional business brokering doesn't make as much sense because the relationship in the situation is very different. We're more of a matchmaker. Yeah. Franzy should be a matchmaker, not a broker. Yeah. Like you're true.

So like you're not a dating site that's very transactional where you're swiping left and hit it and quit it. You're more like one of those matchmakers. Come sit down. 100 people in a room, get to know each other, spend some time with, like, that's the difference. Yep. Because you're on a creditory transactional.

One thing else for a five to 10 year. commitment with that brand. So you better like the team you're working with. You better like the brand. You better like what their mission and their core values are because it's going to be a part of your life, whether you're the hands-on operator or just the investor type. It's still a big part of your life and you need to believe in the team behind it and who you're going to be working with. So you have a team that can hold someone's hand and help them understand all this. I mean, that's the brilliance. So that's what led to Franzy. Yep. Right. So you actually exited your first franchise? So I'm still on the board of that business. I sold some of my equity.

rolled the rest and had a decent liquidity. Now you've got a startup and now he's going in. Yeah. I'm back to square one. I love that stage, zero one, zero to ten million. Yeah. And I love the scalability of this, but also the mission behind it is entrepreneurship has drastically changed my life. It's the most fulfilling thing I've ever done.

I work most weekends because I want to. I have a four and a half month old at home, so I'm trying to balance, you know, family time. but I you know this is my hobby like people what do you do outside of work work because I this is it's fun to me I genuinely love doing it and I think a lot of people go throughout life not having found that kind of purpose or that thing that you know lights them up fills them up every morning and so if we help even a hundred people 10 people find that through franzi like that's the that's the goals like show someone who's been this has been tugging at them their whole life it's been eating at them they've been successful in their own right but it's been for someone else it hasn't been for

them. How do we champion that person? De-risk it for them. Find the right fit. Find the right financing program and structure and really give them the tools they need to go take that risk that they're more than capable of doing operationally and, you know, intelligence laws. So your avatar to come see franzi.com. You would like them to have some level financial means. They don't need to be affluent. 50K in cash is ideal because then you can bar, you can basically get into most franchise concepts 250kkk in cash yeah 150k net worth 150k net worth some level like above 700 credit or is credit not credit yeah i think above 700 is good above 650 can still can still work but and you are do you have a way for can people from this episode or wherever they're seeing this can

they get a hold of you in the sense of like book a call or find out more what's the path to do that yeah if you if you email me at alex at franzi dot com it's my dream direct email. We can set up time, whether with me or other franchisees, you know, other franchise experts on our team. Otherwise, we're all over social media. So Alex from Franzy on Twitter, X, Instagram, TikTok, LinkedIn. There's all sorts of ways for us to engage. We have a newsletter or a podcast. We're pushing a ton of educational information out there because, again, I think most people are capable of doing this that they want to. The issue is most people just don't know where to start. They don't have someone to help them. They don't have any resources.

And so our goal, again, is let's give you that so you can take that push to jump and start building the plane. And there are no way people knowing what I, so I have the science flipping podcast, I have the entrepreneur DNA podcast, I have these podcasts that I know there's a lot of people hungry to be entrepreneurs, right? Some like the real estate play. Like to me, this is a real estate play. This is a business play. This is a lifestyle play, right? Like you were going to solve for a lot of it. I obviously lean into this real estate play because then you have multiple exits.

It's not only a income on the way in and through. You have an exit on the franchise if you want, and you can resell it through franzi.com if you want. You have an exit on the actual property, or maybe that's the legacy play that you gift to your kids and you exit the business ownership and you just allow someone else to lease that property. I mean, I just genuinely should not be doing this podcast.

Now I'm going to be eyeballed. You've been iron. That's right. Well, the other thing to make it even more excited, I think someone like you especially is going to love this. So one of the reasons I like franchising now is if you get into the right system, the right brand, and you do scale three, four, five locations, I mentioned these bigger fish, we're constantly looking to buy up.

Oh, yeah. Those three to five pack people. There's exits alone. The multiples are higher in franchising because it's almost like a AAA rated bond. It's like you've got, it's not just Justin and Alex's coffee shop, it's Starbucks or it's Ziggy's coffee or it's this thing that has a brand behind it, a franchisor behind it, the stop gap so the risk is less so we can actually sell for instead of a you know two to three x multiple four to six sometimes seven eight nine ten x multiples on you but uh so you're talking two to three

x on your exit then you would have had if it was independent and so there's like the exit opportunities are bigger um so all these there's all these it goes back to the principles tillons processes principles practices these are the peas i talk about like that's a business principle go into a business that you can have an exit with like no one wants to work forever So what is your exit? Go into it thinking what your exit is. Yep. This is phenomenal.

So franzy.com's where they want to go. I'm going to, and by the way, if you follow me, I'm going to be tagging him all over everywhere, right? So you're going to be seeing that everywhere. What would be one of the bigger misconceptions regarding franchises? Either outright lies, like people just don't know that that is an outright incorrect fact. Like, it's not a fact. Or a misconception of a franchise. Yeah, I think the number one is that, you know,

Franchising is just these big brands. McDonald's Subway, there is truly a franchise for just about any concept you can imagine. Gutter cleaning, window cleaning, health and wellness. Most people don't realize hotels, most of them are franchises. Hilton Marriott, a lot of them are owned by individuals. A lot of them are owned by individuals. It's not just food. So there are franchises truly.

Could be franchises podcast. I think there is a franchise podcast studio that's starting to expand. Look at this. Like there is, I mean, the crime. scene cleanup. Again, there is franchising for everything. And within that, there's also franchising, I think, for just what everyone. Again, it's not for those that are, you know, just starting to get started in their career or just starting to squirrel money away. Like, you know, do take a risk, but very, very calculated. But for most people that have 30K even

saved up, you can get into a franchise business. I think that's the other misconception is you think, oh, the rich are just going to get richer. It's really wealthy people buying another McDonald's. Like, there definitely is some of that. But there's also. And I think that's Also the guy who I talked about on our podcast, he had zero seven years ago, and he's up to 120, and he just went one at a time. And then those started cash flowing, and he built onto those. And then he got connected with family offices and some private lenders and brought partners on. And when they went to 30, went to 50. And it's the American dream.

You can do it and go after it if you're willing to take that risk, surround yourself with the right people, and be thoughtful about the brands you get into. So, yeah, that'd be my answer. There's franchising is way bigger, more encompassing than way broader. And people realize it's not just Starbucks or McDonald's. It's not these big brands. There's also. And maybe you want a franchise.

Maybe you reach out and say, hey, I have an idea that I don't want a franchise. Yes. How did you like 4,000 franchise? Like, is that just call by call? Was it once the word got out, they started coming to you? How did you build that out? That is really impressive. So very similar.

We took the playbook from Zillow. Zillow immediately had all the inventory because they pulled it from the MLS. I don't even know what MLS stands for, but it was essentially... Multiple listing services. Okay, multiple listing services. I don't even know how MLS allowed them to do this or if they did allow them to do it, but Zillow, day one, had every house, all this price data. And so they wrote in New York, there was a Wall Street Journal article about Newside Zill,

they'll tell you what your house is worth. And so all of us are curious, right? It's probably the biggest investment a lot of people are making. Of course. And so, of course, they want to see, well, what is it? this thing worth? And so all this traffic was coming in, claiming their houses. We took a similar tact where we have all the data, just like the MLS and these SDs. So we scraped and took us six months to build this whole data set and platform out. So get all this information. We now have all the

brands on the platform. And similar tactic, we went to the brands that, hey, we have your brands on here. All this traffic is coming to look at it. They're wanting to buy it. But we're only sending the leads to people that have become verified. So we have all these people looking at you. So you're verifying them, not the franchise. We're, yeah, we as the platform are verifying Dunkin' Donuts, like make sure it's someone that actually works at the company. They get on board. They sign a legal agreement with us to basically take ownership of that page, just like you and I can claim our house on Zillow. Yeah. Or are you verifying the potential franchisee? Both, but to get all the brands verified on the platform, we propped it up on the, you know, went live with all those brands.

All this traffic started coming in, looking at sites. And then we go back to the brands and say, hey, we have all these people that have favoreded your page or whatever. Connect with you. We want to pass them on, but we can't connect you with them until you've claimed and verified your profile. And so they then all started signing the agreements and take it on your short of them. Yeah. Well, is it 4,000 different franchises or are you just talking about locations? Different brands. Wow.

Yeah, so within those brands, some of them have thousands of locations, you know, nugging, Taco Hill, etc. Then there's the newer brands that might just have five. And so, again, I keep saying it, and I don't mean to be cliche, but there really is something for everyone. If you want more mature, we've got. If you want emerging and, you know, more entrepreneurial, we've got it. If you want, $4 million investment, we've got it. If you want, 20K investment, we've got it.

Wow. Service versus retail versus 15 employees versus two employees. And you can really filter on every bit of criteria you want. This is incredible. Franzy.com. Who would have thought? I should not have found this episode. This is going to drive.

I'm going to go into a wormhole because of you and call you all in like, bro, what about this one? Should we do this one? Who should I be talking to? This is going to be great. Guys, this is Alex. I am Justin. This has been the entrepreneur DNA. Make sure you look up Fransy.com.

Make sure you look up Alex. Is Alex Franzy or is Alex from Franzy? Alex from Franzy all over all platforms. This has been incredible, dude. This is a real estate play. It's an entrepreneur play. It's a young person, an old person, a legacy play. I mean, this is, I'm genuinely excited about this because I just think this way, right?

This is why people become like. entrepreneurs. Appreciate you being here. Yeah, thanks for having me again. Guys, I am Justin. This is Alex. This has been Entrepreneur DNA. If this was pretty cool, share it with two friends. See on the next episode.