Trading Secrets - 162. More Than Money: ResiBrands’ CEO & founder Steven Montgomery breaks down the misconceptions, successes, and secrets behind being a franchisee and $$$ behind it

Episode Date: May 2, 2024

This week, Jason is joined by entrepreneur and franchisor, Steven Montgomery! Steven is the founder and CEO of ResiBrands based out of Austin, TX. ResiBrands helps build outstanding home service brands and is the parent company for franchises That 1 Painter, Garage Up and Pinks Window Services. In addition to his work with ResiBrands, he also founded ResiCreative, a cutting edge marketing agency and ResiConnect, an appointment center that helps connect franchisees with potential customers. Steven reveals the secrets to what consumers should know about the trades, where he feels like consumers are getting taken advantage of, clearing up franchisee misconceptions, what investing looks like in a franchise to make passive income, what characteristics make a great franchisee, understanding the consumer mindset, and utilizing the natural buying pool with a franchise. It’s an episode you can’t afford to miss!  Host: Jason Tartick Co-Host: David Arduin Audio: Declan O’Connell ResiBrands founder & CEO Steven Montgomery: @stevenjmonty @resibrands  www.resibrands.com @that1painter @garageupteam @pinkswindows  Stay connected with the Trading Secrets Podcast!  Instagram: @tradingsecretspodcast  Youtube: Trading Secrets Facebook: Join the Group All Access: Free 30-Day Trial 

Welcome back to another episode of Trading Secrets. Today we are joined by entrepreneur and franchisor, Stephen Montgomery. Stephen is the founder and CEO of Rezi Brands based out of Austin, Texas. Rezi Brands helps build outstanding home service brands and is the parent company for franchises, That one painter, garage up, and pink's window services. In addition to his work with Resi brands, he also founded Resi Creative, a cutting-edge marketing agency, and Resi Connect an appointment center that helps connect franchisees with potential customers. Man, you got all the angles figured out there. Growing up as the son of a professional painter, Stephen gained a love and passion for painting and home services from a young age.

So much that he decided to drop out of college to start his entrepreneurial, career and that very space on his own terms. Now, the leader of a multi-million dollar business, Stephen is the definition of an entrepreneurial success. Today, we are going to discuss how Stephen made it his mission to help others succeed through entrepreneurship and to provide them with the tools and support they need to build a successful business from the ground up. Stephen, thank you so much for being on Trading Secrets. Hey, thanks. I'm excited. This is like the perfect guest to have, guys. We have someone that was learned from his dad, saw some of the inefficiencies through that, created a business, dropped out of school

to do it your way, and then help others along the process. So this is the quintessential. But here's what I want to, you know, we're going to get into all the franchisees, how it works, the cost, the money. But I'm just thinking myself, like, I'm about to buy a home. I had lived in a home in my prior life. And I think about some of these franchises, like the painter, the garage issues, and especially the window services.

I had some guy come in and quote us, like, it was like $100,000 when we had one chip in a window. So I think from a consumer perspective, from my listeners at home, what are some things, whether it's hiring a painter or hiring someone to help us with our garage services or even our window services, we should know. Give us the trading secrets for like consumer space of digesting into this stuff. Yeah, there's a lot of things I think you should know. I think that reputation matters more than anything, right? I think when people are looking at a home service business, I always say homeowners are sick and tired of playing Russian roulette when they hire a contractor. Yes. And that could be any home service, not just like a GC, but any of those trades. I think it's your electrician,

you're worried your plumber might take advantage. And there's a lot of trades where it's like, I know what needs to be done and I just don't want to do it. And there's trades where you're like, I have no idea what needs to be done. And I'm really trusting your advice as a professional. Yeah. Right? And so the first thing that everybody should do is always get multiple quotes. Okay. It doesn't matter how good the sales guy is. We always encourage our customers to get multiple quotes. And that they should also know that like price within a certain reason is a little bit negotiable. So, like, if you really like a certain contractor or a painting company or or somebody's going to clean your windows or replace your windows or whatever, and you like

them, they seem to have a good reputation, the price wasn't quite what you thought. It's at least we're trying to have the conversation. Don't go with the other guy that you're not comfortable with just because of price. At least have the conversation. Because one of the things that I've noticed a lot is that price isn't just about how much they're charging, but what's included. Okay. Interesting. Right. And so, like, people will look at, like, a paint quote and they'll have one of our competitors, and they'll say, hey, yours is a little higher. And I'm like, let's talk about that. And when you actually compare apples to apples, it's not apples to apples. Interesting. You get what I'm saying? They're not including the same product. They're not, they left out some of the

items. They're not offering some of the same prep services, that kind of stuff. So it's really important to get multiple quotes and then actually make sure that they're offering the same thing. Okay. And not miss those details, because sometimes it's going to be more expensive because they're actually using better products. Yeah. That's interesting. Like it almost like we think about going to the doctor and dentist's office and sometimes they speak a foreign language. Right. And then even like an electrician, like they're speaking their own language that I don't know anything about. So understanding the breakdown in what it's worth and how it's worth is important. I also think the idea of getting quotes and making sure that's apples to apples because we've even learned that

in like in every industry. Let me ask you this. Where is like if I'm getting ready to get a new window treatment or I need an area painted. Where do you think it is that most consumers are taking advantage of because of the lack of information they have? I think they're taking advantage of in a few different ways. One is there's not enough options, right? So they feel stuck. So like I call five people nobody pick up the phone. So sometimes they're just getting even getting multiple quotes as hard because they don't feel like it's very easy. The other part is I really think that people use like not great products, right? So for us, there's always a painter who will do it for less, but then they're using paint that will fade in three years. Interesting. They're using, so like you might have,

you could pay a little bit less, but that fade, that paint will fade in three years and look like crap and you need it to repaint again. Okay. Whereas you go a high quality paint. All they're actually doing all of the prep work the right way so that it sticks, and then also that high quality paint will actually look really good a long time. Okay. I think that's super important. I think it's just those, those details. And then it's also, like I'm, I'm not an electric or a plumber. I know any of that stuff i don't know where people are taking advantage of there either but i do know that you know getting multiple quotes talking to multiple people and actually reading the quote you'd be shocked at how many people don't actually read what's actually read it they just look at the price

take the time if it's two three pages yeah read the whole thing compare i think that's really the key i think where people are advantage of as well is in the deposit process so there are there are people who kind of take the deposit and then leave town right and so that's why you need to make sure that you're using a contractor or a company that's actually had, has been in business a long time that's actually got a good reputation. And that's online, but also, you know, word of mouth. Yeah. And I think we'll get into the franchising. When I think about franchising too is that it kind of has that small business feel, but you might get some of the larger benefits like insurance and credibility should that painter decide to go away. While we're still on the painting topic,

because I know it's in your bread and butter. Your dad did it. You've done it. You created that one painter, which is a franchisee. Like, with high-quality paints, if you ask me, Jason, make sure it's a high-quality paint, I would tell you, Stephen, I don't have a damn clue where to start. Like, how do I know of a paint is quality? Do I actually ask the painter to, like, tell me the exact brand, and then I can shop the quality?

Like, how would an average consumer know if the quality of what they're using is legitimate? Yeah, because it should all be listed out. Okay. So we should be able to show you, hey, this is the product we're using from the brand. This is the specific one. And then you as a homeowner can go and actually look at that, look it up online, make sure that it's actually a good product. I think that's a huge part. The other part of you mentioned that as well is making sure that whoever you're hiring for any home service is insured properly.

A lot of the trades require licenses, but there's a lot of people who offer services that aren't licensed. And so there's a lot of states where that's the case. And so people are getting kind of screwed there because if there's any warranty work or issues, you're not going to be able to actually hold them accountable. And they don't have the insurance. They didn't have the license. They're not even really should be operating. Yeah.

That's a huge one right there. I think that's a huge one. Some of those small micro startups, they don't have those, right? All right, let's get into this. So we've talked a lot about the idea of franchising. And I think as consumers, sometimes we have misconceptions, right? Because we've seen the, we've seen dental practices that have become franchisees. We have seen, you know, of course, the chain restaurants that we refer to as like,

oh, I don't want to eat at a franchise today or whatever. So there are misconceptions, I think, as we consume. And there's also misconceptions about investing into franchisees. Like, I've heard people say, like, well, if you go with Chick-fil-A, it'll take you 5,000 years to get approved. And then if you do get approved, if you're not working there 80 hours a week, like, they won't allow you to do it. Like, it's just extensive. So you are the franchise guy. Tell me some of the biggest misconceptions that are in this space and things that you have,

that you could respond with to like overcome those objections. Love it. Yeah. So the biggest misconception is that a franchise brand, just because it's a national brand, is some large corporation that's taken over. The truth is that it's small business owner. Small business is in each city. And so those are local business owners that you're interacting with who own, you know, that one painter of Round Rock or that one painter of Nashville or New York City or New Jersey, wherever. That's a local business owner. And most people don't. realize that. And because, you know, we think of franchise and we think of like McDonald's and stuff like that. But most of the franchising throughout the United States aren't large corporations

and PE firms that own all the locations. They really are local business owners who are using a franchise brand to build a small business in their city. Yeah, that's an interesting take right there. It's like those people that are owning and operating probably have kids, you know, on your kids sports team or are involved in the community. They just have, the legitimacy behind the brand behind that person. Exactly right. Now, for most of your franchises, are the owners also always operating, or is it a mixed of silent owners?

How does that work? So we have a mix. So we have owners who are owner operators that are running the day to day of their business. We have owners who have hired like a general manager or like, or even we have some owners who've owned a whole lot of locations and have a regional director that oversees that for them. And so it's a mix. say it's really about where that franchisee is as far as their capital goes. Because if they're

coming in with this and they're just, they want to buy one location, run it themselves, they can do that. But if they have a lot of capital to invest, they can own several locations and hire a management team to take care of the whole thing for them. Interesting. Okay. So I imagine you have a mix of both. You have some owners that are operating and then some have capital that redeploy like an operation. About 50% of our owners are owner operator and about 50% of our owners are in a like a semi-passive role where they still have to care a lot about their business. They still have to pay attention to it, just like you would with any investment. But they do have a team that runs the day-to-day. Okay. Interesting. I'm going to name some misconceptions. I think that people

might assume with a franchise and then you could tell me true or false. Like this misconception is true or false. We'll play like a little bit of game here. First misconception is that with home services like a painter, garage, et cetera, that's going to be more expensive if I use a franchise True or false? False. Okay, tell me a little bit more. There are plenty of local businesses, mom and pop, who aren't offering crazy discounts on their prices either.

And so you can actually sometimes get a better price even with a franchise or at least market range. Okay. Another one that touches prices is I've always heard that because it's a franchise and it's controlled by the franchise owner, they actually can't negotiate their prices. Is that true or false? They have the freedom to do that within certain guardrails.

So it's not like with home services. it's not as strict as like, hey, the hamburger has to always be $4.99 or whatever it is, right? It's not quite that strict. Typically, within home services, it's very regionalized. And so we just have guardrails so that they're not too high where they're not winning any business and not too low where they won't make any money. Okay. Let's go into an investor.

Some of the misconceptions. If I invest in a franchise, I don't have any creative control or control over decision-making. True or false. When it comes to the overall brand, yeah, you have no control. But when it comes to all of the things you can do inside of the brand, you can do. You can have your own social media, you can interact with your customers, you can post, you can, there's a lot of things that you can do that you still have a lot of creative control over as long as it falls inside of the brand guidelines. Okay, very cool. I like that.

So, like, of course, the brand that's owning the franchise, they're going to control the colors they use and the font. But like, we have certain do's and don'ts, but inside of those parameters, they can have a lot of fun. And I think that's what like, make it their own. Right. And there's probably a lot of people listening right now that own franchises. That's how you differentiate, right? That's why one McDonald's is better than the other. or one Arby's better than the other, whatever it might be.

It's because those owners are using the strategies that they can to redeploy that. Okay, those are some good ones. The last one I ask you is an investor, misconception. Okay, I have to put a bunch of money up front, and it's going to take me years and years to get a return because franchises are tough on returning cash flow back to an investor. True or false? That's false. That was a capital, F-A-L-S-E out of you.

That was the hardest one you're like, no, that's not true. Look, ultimately there's absolutely no guarantees because it is their business. Sure. How they manage their money and their business is ultimately their decision and they could be doing things that could cost them a lot of money and make it to where they're not profitable. But you can get in a franchise system, I actually think cash flowing positively quicker than you could starting your own business up front because you're learning from systems that have already been proven.

These are systems that are being used all over the country by many business owners who are all making money. And so if you follow that system, you're getting a playbook towards success, right? And so following that system as going to allow you to make money faster. And then the other thing is like, this is home services, at least for us. This is not a retail space that you're paying and all this equipment you're buying that you're going to take, it's going to take forever to make any money, right? This is home services.

You can start making money in the first month. Now, there's no guarantee that how quickly you'll be profitable. But we've seen our franchisees become profitable very, very, very quickly. Okay. Okay. And it's kind of up to your description. So yeah, they have to manage their business. Yeah. Okay. I'm going to ask you questions as soon here. So my people that are looking for passive income is like an investor. One thing I am curious about is if I invest in one of these franchises, what it would look like. How could I get a painting company, a garage up or Pink's window services up and running and kind of set it and forget it to create additional cash flow? So I'm going to get to that. But before I get to that, I'm not a painter and I'm not in the garage space and home services is not my forte. I'm sure people. at home. The Money Mafia probably can laugh at that and say, yeah, no shit. But I want to get to

the people that know someone who is, okay? So someone listening to this right now, they know a great painter. They know someone in home services, whatever it may be, any industry. And specifically, you know, they're thinking of telling them or they're listening to this and thinking about starting their own franchise, the big question I have to imagine the business owners should ask themselves, or at least I would ask myself, is should I start my own, just do my own boutique, or should I partner with someone like Resi Brands? And I'm curious what the advantages are to that person sitting at home thinking through, do I go on my own or do I use a franchise like Resi Brands to help me?

What's your answer to that? Yeah, so I'll answer kind of two things there. The first one is, yeah, somebody maybe they want to be in that business. They want to be in that trade. And they're looking at it. Should I do it on my own or should I go with a franchise system? When I look back to when I was 21, I dropped out of college. I wanted to work for myself.

It would have been so much easier to just buy a franchise and learning everything myself. I mean, when you're getting into a good franchise, and now there's some out there that are not great. That's interesting, though, because you, that's a good point you just said. You've done it by yourself. Yeah, and it would be a significantly easier. You've seen both. Yeah.

It would have been way easier to just have bought a painting franchise when I was 21. Okay. And because when you buy into a good franchise system, you're getting, you're getting, like, you know, we have 70 hours of online training before you want. launch. Then you're launching, you're getting three days of an in-person training. Then you're getting a coach who's walking you through everything. And it's not just on the paint stuff. We have sales training. We have a training on profitability, building out your pro forma, managing a budget, like how you should track things for accounting. Like we have all of this stuff

laid out for you that most business owners don't know what to do, basically learn by trial and error. Somebody's already done all their error and they're just giving you the playbook. And so there's so many things that make it easier. And so I think I think many people should do a franchise. I don't think everyone should. I think some people are those entrepreneurs who really want to have control over the brand. Yeah. And those people should start their own thing. If that's what's really important to you, hey, I want my own brand. I want to develop my own brand, then that really is where you should avoid a franchise. But if you're the type of person who says, I want coaching, I want help, I want systems that work, but I want to build a business for myself, then that's a great person for

franchising and a lot of people in the franchising world say it's business for yourself but not by yourself so if you're also the type who want a community to be around people to bounce ideas off of people who are going through the same thing as you that's where franchising is really powerful because entrepreneurship is a very lonely place yeah and if you have other entrepreneurs around you and then in a franchise not just other entrepreneurs around you they're literally doing the exact same thing you're doing in another city or whatever yeah and so they actually it's more of camaraderie than it is a competitive spirit. Interesting. And so they're helping each other out. They're sharing best practices, all that. I think those, I think a lot of people should get

into it. But one of the things I also wanted to share is like 95% of the people that have bought into one of our brands and resi brands had no prior experience in that trade. Oh, interesting. Yeah, most people. That's a really good statistic. Most people, like we only have a few. So are they trying those as a side hustle or are they investing in it? Both. Yeah. So we, yeah. So we like 95% of people Like we have people that came from medical sales and bought into that one payment. We have people that came from insurance. We have a, you know, all sorts of military guys who just came out of the military and wanted to do something and bought into a franchise. We have all sorts of backgrounds.

We have people in our franchise system that are, you know, already really successful franchisees and other brands and they're just looking to expand their portfolio. And so there's a big mix. I think home services used to be the franchise was kind of four people who already in the trades. Yeah. That's not the case anymore. Interesting. What's really the case is that people of any background can take advantage of what I'm calling like a home service revolution, which is where there's a professionalization of these trades.

And so that professionalization is making it to where you can buy into a system, build a business that's already got everything you would need ready to go, and you can actually build something pretty awesome. Yeah. And so, you know, we have franchisees who had zero background in painting and now have the highest-reviewed, largest painting company in their city. Interesting.

Yeah, I think about as an possible investor into a Rezi franchise. One thing I would think about is where is the space of home services and how is it moving? And I remember it was probably five years ago I read a case study on Home Depot. It was probably longer than honest.

It was probably 10 years ago. I read this case on, it was a Harvard business case study with Home Depot. Home Depot went to expand into China. Obviously, everyone knows Home Depot is do it yourself, right? So you have to have that customer base. They thought they would blow up, given the economy. What they totally missed and failed to realize was the consumer.

The consumer in China actually doesn't do it themselves. They outsource because of their schedules, because of their demanding, just overall, I think it's like workloads is what I read. So I want to connect that to the United States. That was a decade ago. As we moved forward in the United States, I have a feeling, and I haven't read a case study, but I have to assume that home services now, industry, is growing by the second.

Why? Because our phones keep us connected 24-7. Because jobs are paying more, but they're becoming more demanding. Because there's more pressure on work-life balance. There's more visibility into what we're all doing because of social media. So I feel like this industry is a space that is blowing up.

It's a hundred percent true. Okay. Like what you said is really good there is that consumer mindset and understanding that. Yeah. Like there is a shift happening in how homeowners think. Now, there's still a lot of DYIRs, right? I love DYRs because they'll do one project,

but not the next one. Yeah. Right. So they still end up coming to us. Or they get stuck on, yeah. Or they're halfway through. And they call. It's ultimate progressive.

You've been to the house. You've been to the house. There's like, you know, and it's half the walls are being halfway up and we've got to finish the rest. Right. And so I would be that guy.

And so I loved you, I'd like you hire. So if you want to paint three bedrooms yourself, but you still want to hire us to paint all the high walls in the living room or whatever. We'll take care of that for you. But I think that overall, there's like a new generation of homeowners

who are not as interested in doing the work themselves. They do have higher demanding jobs sometimes. Or it's just simply that they value their time. They value their time and they actually want to have a weekend instead of working all day on the weekend on the house. Right. And so I think that that shift is happening. Okay. And so I think there's a more, there's a higher demand than ever before for home services. Okay. It's really cool. I agree with that. The also stat that blew me away is 95% of your franchise owners didn't have a background in this space. This connects me to, I know there's a lot of people listening to this that are real estate investors. They have Airbnbs. They have all different projects with owning these homes.

Of course, there's huge advantages, but maintenance is a massive issue. So I'm thinking if you're a real estate owner, possibly investing in a franchise like this is brilliant because you can utilize your own business while also producing income. But I'm going to go into my shoes. I'm not the painter. I'm not the garage guy. I'm not the window guy. But I do have an interest in investing in one of these to create passive income. And I kind of want to learn about this as I get into real estate more and more. So the first question I would ask you then is the CEO who's built this top down, what is my risk?

Today I come to you and I say, I want to invest in one of your franchises. Let's say I want to do that one painter. What is the risk, what capital I have to put up from, what does it look like from an investor standpoint? Yeah. So your risk on this is ultimately going to be the team that you develop, especially if you're going to be in a more passive sort of role. You're not going to be in the day-to-day ops all the time.

Because ultimately this is a people business. Sure. So it's working with customers. It's working with painters. who are typically subcontractors, and then it's a building and management team. So your risk is just making sure that you have a team that can actually execute and actually run the system. Okay.

That's where the real risk is. As far as a financial risk, it's way lower financial risk than you would have in a lot of any other retail or restaurant franchise because you're looking at, I think it's like $2 million to open up at McDonald's. Yeah. And it's like $100,000 roughly to open up at that one painter. And so $100,000 and you can, for $100,000, we've seen some go up to $2,000. million dollars on a single territory. Okay, so talk to me about it. So if you want to invest in that one

painter, it would be a hundred grand up front. And like what is the process? Yeah, it's a little over $100,000. There's a, like in our, we have a disclosure that shows you what the range could be in your investment and all that kind of stuff. But just roughly, it's around $100,000 a little more. And what you're getting in that is you're buying that territory, right? You're going to get, that's upfront marketing expenses. You're getting a wrapped vehicle. You've got like a lot of print and, you know, swag you're giving out and all that kind of stuff. And then digital marketing that you're doing as well. And then some operating cash flow for that first 90 days where you can have a manager running that business even. And what we have a lot of our franchisees do is something we call

the CEO model. The CEO model is where we have people who have a decent amount of capital. Maybe they're experienced business owners or they have really high paying jobs. And so they're looking to expand their portfolio. They want to invest in something. And so what they're doing is they're buying five territories. And they hire a regional director to oversee that. And there's a manager in each territory. The regional director oversees them and they're building out that system that's really popular right now. Interesting. So that's going to typically it's costing people about a half million to do five territories. Okay. Interesting. Yeah. If you do have someone who is a painter or they're in the window service business, they're a boutique or they've had some experience working for someone

else, but they want to start their own business. They don't have a hundred grand up front today. Do you guys do any type of internal financing or is there any way you can help people get the money to start up? We don't do internal financing at all, but we do have. a lot of vendors that we can work with that can help franchisees get funded, whether that's through SBA, but there's also like a ton of other ways to get funded. Totally. And so we have multiple vendors that they can work with on that to get financing. Cool. Guys, stay tuned to the recap. I'll go over all the vendors they do have and kind of break down how that works. Because I know one of the biggest hurdles for people to actually get into business is that cash

up front, but there are ways to do it. So stay tuned to recap. I'll review all the ones that Rezi brand offers. And I'll break down kind of the upside and downside are things to think about with that type of funding. Talk to me about success rate. So I think about, okay, I scratch up 100K and I want to invest in that one painter. I'm going to start my franchise. When you look at the success of those who have gotten into the franchise you've created that one painter, what do the numbers look like? Yeah. So when we have franchisees come in, their ramp up period is about 60 days to get launched, maybe 90 days. Then they launch and we're seeing franchisees very quickly generate revenue in the first 90 days. Okay. And so our franchisees, we're seeing franchisees do, you know, on a territory,

anywhere from 500,000 to 2 million on a single territory. Wow. Some of these franchisees own multiple. So in an annual basis, that's what they're grossing? Yeah, it's a gross. Right. And so from there, it's all about how well they manage their expenses and all that. And of course, it can be very profitable. If you can mis-management, you can lose money every month and not do well. Of course. It's like any other business. Yeah. And so we don't go super deep into that, but we have a disclosure document that shows them as well as like what they can net potentially on a location and all of that as well. Yeah. So if I'm investing into it and say we do a million bucks, now, if you own a franchise right now, do not hold Stephen accountable to this. This is just, I'm just trying to gauge like

an average. If you do a million bucks in revenue in a space like this, just around, not holding you to it, but like around what are profit margins, 5, 10%, 20%, if managed correct. Yeah. So we have a location that we're disclosing and it's 17. It's basically 18%. Okay. Yeah, okay. It was net, and that was on $3 million, so it neted $17.9. Yeah, okay, gotcha. So if you're doing a location that has about a million bucks in revenue and you're

taking, if managed properly, a net income of $180K, and the franchise cost to get in our $80K, you've paid that off and then one year spent a cash flow. It is completely possible. Okay. Interesting. Now, a big thing are like, in businesses we talk about on this podcast, a lot are like the exit strategy. So if you build up a franchise and stuff, is it possible you could sell to another franchise owner within this space?

Or like, if suppose there's like two people that owns that one painter and I want his territory. I'm just trying to think exit. Like, can I sell it to him? How does that work? I love the way you're thinking. So like, I think you should always start a business thinking about how will I eventually exit. Yeah, exactly. When you're in a franchise brand, it's actually easier to sell your business than I would be if it was just kind of a mom and pop shop.

Did not know that. Because there's a natural buying pool. so not only do you have the current franchisees in the system who are doing well who might hey you want to exit all by you out you also have new owners that are coming in and maybe the territory they want or whatever is already taken and you're like oh no I'm actually ready to put it up for sale and you so you have this natural pool of people that want to buy okay interesting all right we talked about that one painter garage up and pink's window services I know my money mafia will yell at me if I don't ask what's the franchise cost if they wanted to get involved in one of those so the garage up and the the pink's window service are slightly more because there's a little bit they have a little bit more equipment and whatnot but they're also around 130 i think there's a range so okay so somewhere somewhere and if after two if you want for your recap i can give you the exact numbers okay so stay tuned to the recap we'll get the exact numbers to start the franchise and all three of those that one painter garage up and pink's window services and pink's windows since it's mostly

window washing gutter cleaning that kind of stuff is really low material margin so net profits even It's a little bit lower revenue because it's easier to scale a painting business to a million or whatever. But it's definitely really profitable in window cleaning. So you can do really well there as well. Okay. What I have to imagine, if I'm starting the business from scratch, trying to get customers is got to be tough, right? Because you've got to get your SEO up. You have to have your Yelp reviews, your Google reviews.

You got to be calling people, social media. Is there something naturally that you guys do or we should know if we're interested in any type of franchising? that you guys establish a customer base before we even get going? Or how do you guys assist with things like that? Yeah. So that's why we started some of the stuff that we have with Resi Brands. And so we have a marketing agency that does all the marketing for all of our franchisees. And so that's a marketing agency that I own and only services our franchisees.

And it's called ResiCreative. And so we do all of that up front. We start your ads before you even launch. You're launching with a calendar that has leads on it already. And then we continue to put leads on it. And then the other thing is a lot of business owners or management, managers get very stuck in the day-to-day, and they're not answering the phone in time. They're not responding to leads fast enough.

And so what we created was we call ResiConnect. That is a lead answering service and booking service, right? And so a lot of owners are, they're busy or the manager's busy. They're talking to a customer. They're talking to a painter. They're running the day-to-day of the business. And that speed to lead with a customer who wants their estimate now or wants to make an appointment right now is really important because if we don't pick it up, we don't get to it,

they're going to go to the next. You know, there might be going through Google, right, and just call them. whoever's available or filling out forms or whatever. And so getting to that quickly, that speed delete is really critical. So we have Rezi Connect. So we take every inbound lead for them and then book it onto their calendar for their managers and stuff to do the estimate. And we even do some routing for them. Yeah. When I see what I hear things like this, especially as a small business owner myself, the biggest thing I think about is foundation and infrastructure. The best thing I know what I could do every day is the activities for all my businesses

that drive revenue. That's my number one skill set, right? My number five, number seven, number 30, number 554 skill set is setting up infrastructure for customer support and email management and operations and payroll and stuff. But I do believe, especially through my expertise and just the research I've done, I think that's probably in the number one reason why small businesses fail. Yeah. Because they don't have system. They don't have foundation. They don't have infrastructure. And so they can do everything they want, run 100 miles an hour, but it doesn't matter how much revenue you generate.

When everything else is a mess, even like tax burden, imagine these things. you're not going to be able to be profitable. And so I think, you know, as we're talking, the more I think about this and franchisees, like this is especially, especially for your individual like yourself who dropped out of college. Yeah. Right?

Like, you had to probably teach yourself how to watch a P&L and a balance sheet. I always joke around like we weren't taught shit in college, but still you do get some of those basic things of like how to finance the company, things like that. And you probably learn through the heart. And you have somebody to talk to. Not only because the systems and the training and all that,

you also have a coach to talk to you. You get a business coach in the franchise that's assigned to you that's helping you every day or you're having regular meetings. They're really there to help you out. And so that's a huge piece. And then not only that. So a lot of businesses are like, I can figure it out? I'm like, okay, but can you build the system to where your employee and the next level

can all do it as well? And that's where a lot of business owners struggle is. They're like, I could do it. Yes, but can you build it well enough with a system that works well enough that your employees can be trained and your employees can train other employees. And that's where our system is like literally we train their employees and we have a system for the online training for all of their future employees as well. Yeah. Interesting. And then also I think when you hear this type of stuff for someone like me who would be an investor in a franchise like this, there's the comfort. I don't have the time, right? I can't be operating it, but I can hire someone that does have the time. And then if you guys have those systems in place, they can be working with you to make sure it's all squared away. So I can kind of set it and forget it. Okay, fastest growing painting franchise in the nation. You guys offer 18 different services.

We like to have fun with money conversations here. So I've got to ask you a fun one. The fun one would be when you've seen in any of your franchises, like you've seen the guy or girl who is the number one, like they absolutely crush it. Not asking for names, but roundabout numbers. Like what are they doing in revenue? How much are they making per year?

Give me some of the fun things there. Fun things. So I have to be super careful with our FED on, like, I can only share certain stuff. So I can't talk about like franchisees net. right now we're only talking about corporate location nets okay okay okay sorry okay that is fun but i can talk about i can talk about i can talk about i can talk about what some of them done in their first year okay because that is disclosed okay all right i'm i'm gonna rephrase a question okay just so we'll edit that

out yeah okay all right we like to have fun with money talk here and we've learned all about the ins and outs and i just think for me as an investor it makes sense because i could hire someone with infrastructure with a franchise that's fully supported and i even think like when i invest into a franchise. One thing I want to make sure is insurance protection, right? Like, obviously your franchise has all that to reduce liability on myself. So that's all there. But I always like the fun talk. And some of the franchisee that you've seen do this very successfully, just give me a roundabout number in the first year. Like, what's the biggest number you've seen from a revenue perspective? So I've seen in the first year as much as $2 million on a single territory.

Yeah, that's impressive. I mean, starting up ground and $2 million, 18%. You know, I'm doing the math myself you know you guys figure it out that's impressive and that franchisee then bought two more locations and this year did a and those ones are still ramping up but he did a total of love in last year he did a total of three million okay then i want to grab some trading secrets from this guy and then i want to grab one from you but this guy who's absolutely crushing it does two million in revenue with one franchise first year and then grows what is it about his skill sets what are his trading secrets that he's doing it differently than other owners out there so he did an amazing job at becoming what we call the politician of paint.

Okay. And so he really embraced that part as the owner of just like talking to everybody he knew about it. He just made a statement within his city that he was the painter. And so everybody just kind of knew that that was the painting company to hire. And he did an amazing job at that. Plus, of course, the marketing, all the things we did for him. But he did an amazing job of just becoming the go-to guy.

And his team became the go-to team for that. And so he really became what we like to call a politician of paint. the other thing that I think a lot of that makes a successful franchisee is they have a strong attention to detail right and so you if you're going to look you have to learn the system and then you have to train a team to run the system and then you have to hold accountable to that system and it's really hard to do that if you don't have a strong attention to detail yeah I love that I mean attention to detail being meticulous no matter what you're doing and how you're doing it is so important well it's just like when you came in here like yeah you didn't just casually sit down you made sure the lighting like you made sure the angles on the camera looked good the audio is right like you There was a lot of attention to detail, right? Right. As you came here. That's why you're good at what you do. Yeah, yeah, yeah.

If you don't pay attention to stuff, things fall through. Things fall through. Yeah, even the picture we took. Are we right on lighting? Right, yeah, exactly. I'm not even thinking through it. No, it's just natural. That's because you have a good attention to detail.

Yeah, exactly. And I think that is, anybody that's listening, attention to detail and meticulous planning is so big. I love the politician of paint because I think someone could be a politician of anything that they do. I could be the politician of financial transparency. Like you are naming what you do so that, When people are talking about you and you're not there, they know what to brand you as.

And I think, you know, you coming on this is like you have become the politician of franchising, whether it's a painter, garage services or window services, you're putting it out there. And now my brain's moving in a hundred different directions of like, how can I invest in that? How can I use even my social media platform to say, wait, now I own this type of company, go check it out. And I think so many people that are listening to this within their respective communities are a politician of something or they have friends or they have a community that they can start this tomorrow which is pretty cool and it's like and then you can also train your team to build

connections yeah so we we have a marketing agency that services our franchisee yeah and then when they sign up and they get into it we then teach them how to never need it if they don't if they want got right like i show them how through referral marketing yeah and through building relationships they could do a million dollars in revenue with a zero dollars in ads and then when you put ads on top of that you can really blow something up but if you're going to only rely on marketing and not do any of the referral networking. It's harder. But we also teach managers how to do networking, sales techniques. We have something called a hundred list. You build a list of a hundred people in the trades. You can refer you work and you'll have a guaranteed million dollars in revenue.

Just because if you have a hundred people, whether that's a real estate agent, interior designer, property management company who are referring you every time they hear the word paint or garage floors or window cleaning or whatever, you will get a ton of business. That's cool. And I even like the idea networking with other owners. I think like in other areas to say, hey, what are you guys doing? How can we help? I'll say this. And I'll end with this. And LinkedIn, back in the day, I used to have my title as my job was an over, overpriced MBA gone entrepreneur. My MBA was $100,000. Based on what I'm hearing right now, I should have thrown my $100,000 in a franchise. I would have gotten the MBA experience through your marketing department, through your financial

education, through all that, and had an opportunity to get a return. And I think now more than ever is the cost of education has gotten so assinide. We have had doctors come on here and literally say 95% of my doctor friends tell their kids not to get into the industry because there are so many issues with it and the income earnings. And I think about an industry like yours, home services is a space that is not the sexiest. It's not what everyone's talking about, but it is growing. And more people are moving into this space because of the profitability without having to get college education will put you so far into debt.

And that's what you did, which I think is pretty darn. to that, like something that I've thought about a lot is because there's a lot of people who they have this big idea for something they want to do in business. I would encourage them, start with a franchise, buy into a franchise, build it up for three years and sell it. And in that three years, you will get more education like you just said from a franchise system, from business coaches, from people who are doing it well. You'll learn everything you need to know about business. Then you can sell it to that buyer's pool, right, of other franchisees or whoever. You can sell it off, have some additional capital now.

to go start your big idea. And you're going to do that with all of this, like, fuel and experience that you wouldn't have had otherwise. But I think sometimes people want to jump into business with this new, unique idea that they don't have any experience in business yet. And franchising could give that to you. I think it's pretty cool. And you also think about the price of homes, everyone.

Like, you look at like a half million dollar home or a million dollar home. Imagine if you just naturally assumed you have to buy the whole thing up front. You don't. That's a lot of these franchises, too. Like, there are ways to finance them. So if you hear 100K, but you do like the idea, don't get worried, because you could just get three people, three partners, come up with 30K, 10K each, finance the rest of 70, and you're off and running. So I think it's really cool. Stephen, what you've done is awesome.

This is all about franchising, which is what everyone has asked about. And it's all about, of course, the home services franchisee space. But I think there's a lot of lessons that anyone can take if they had questions about franchising in any direction. But, Steve, you got to leave us with a trading secret. It's one lesson. I think my trading secret already. I know what it is. It's the politician painter. That's great. But your trading secret can't learn in a textbook, can't learn in a TikTok tutorial or even a podcast, only given your experience. It could be a professional trading secret, it could be a financial trading secret,

or it could be a personal trading secret. All right, Stephen, your trading secret. What can you leave us with? I think ask a lot of questions of everyone that you respect. I tried so many times to figure things out myself. And then I would just call a business owner who knew. how to do it and then they would give me the free information sometimes. So franchise gives you that as well. But even if you don't get into a franchise, I would 100% encourage you ask for help and ask often. And you would be shocked at how many people are willing to give you advice or even give you tools or resources that'll help you grow your business. Yeah. I mean, I think that trading secret is exactly like the thesis of this podcast. Right. Exactly. It's like bringing these

huge people on who have created multi-million dollar businesses or billionaires or celebrities or big, you know, Hall of Fame athletes and be like, listen, I don't want to learn from TikTok or YouTube or my professor. I want to learn from you. I think that's being on. Ask questions. Be curious. And I always say like the older generations, you know, Gen Z years and millennials, we kind of, we always think we know everything. Yeah. But like, go sit down with your grandparents. Talk to him for an hour. Just shut the hell up and listen. Let them talk. They've been through hell back, hell back in heaven again. And listen to them. We could learn so much from that. So this has been an unbelievable episode. If someone is interesting learning more about

Resby Brands or not has an interest in investing in one of the franchises, where do they go? Yeah, so they can go to Resby Brands.com and you can fill out the form there, but you can also read all about our brands. There's actually a lot of financial details in there. There's kind of breakdown of what everything is. There's a lot of information that you can learn right there on on Resybrands.com. Cool. And you guys can also go to show notes. We'll make sure to link it. And then on the Trading Secrets, YouTube and Trading Secrets Podcast, we will always link it there. So you can check out Resi Brands if you're interested in starting a franchise or the show links. And you can find it.

Stephen, thank you so much for being on this episode, Traying Secrets. Awesome. Thank you.