Inside The Franchise Playbook: From Startups to Scalable Empires

Speaker 1 So, franchisors typically operate at scale when you get to a certain amount of units and royalties are coming in. So, remember, you know, my franchisees, what's great is they're going to compound.

Speaker 1 Their business is going to grow year over year, right? So, our 7% grows with them.

Speaker 1 What's nice about franchising, it is somewhat like a technology where, you know, as our, you know, if you want to call them cohorts, cohorts, as franchisees join us, they need a lot of support, right, when they first buy.

Speaker 1 And so, you know, I've got 12 people on the team for 30 franchisers. owners.
It's unheard of. There's brands at 300 locations that don't have 12 success coaches and people.

Speaker 1 Our franchise owners, because we're adding so many so quickly, they all have immediate problem fires every day, three, four times a day. Six months in, they have different problems.

Speaker 1 A year in, they don't call as much. Right.
And we still support them, but in a different way. And so for us, it's a pretty capital intensive business.

Speaker 1 You know, you mentioned, I mean, I went into this with, you know, several millions of dollars in infrastructure before we ever even saw a dollar come in.

Speaker 2 Welcome to the Home Service Expert, where each week Tommy chats with world-class entrepreneurs and experts in various fields like marketing, sales, hiring, and leadership to find out what's really behind their success in business.

Speaker 2 Now, your host, the Home Service Millionaire, Tommy Mello.

Speaker 2 Before we get started, I wanted to share two important things with you. First, I want you to implement what you learned today.

Speaker 2 To do that, you'll have to take a lot of notes, but I also want you to fully concentrate on the interview. So I asked the team to take notes for you.
Just text notes, N-O-T-E-S to 888-526-1299.

Speaker 2 That's 888-526-1299. And you'll receive a link to download the notes from today's episode.
Also, if you haven't got your copy of my newest book, Elevate, please go check it out.

Speaker 2 I'll share with you how I attracted and developed a winning team that helped me build a $200 million company in 22 states. Just go to elevateandwin.com forward slash podcast to get your copy.

Speaker 2 Now let's go back into the interview. All right, guys.
Welcome back to the Home Service Expert. And

Speaker 2 I fired my boss podcast. I got Dan Clapps with me.
Dan is an expert in franchising, lead generation, marketing, and he also has a business.

Speaker 2 He's the founder and executive officer of Franchise Playbook. And he's the co-host of the Franchise Founders podcast.

Speaker 2 Dan Clapps is the CEO and co-founder of Voda Cleaning and Restoration, a franchise playbook brand, and experienced serial entrepreneur in the franchise space.

Speaker 2 He got a start franchising in 2014 at the age of 22 when he joined Murphy Business and Financial Corporation as the franchise system's youngest business broker.

Speaker 2 Today, Dan is also the co-host of his own podcast. And here we are.
So here's the story, guys. Dan wanted me to be on his podcast.
I wanted him to be on my podcast.

Speaker 2 He came recommended from the famous Ellen Rohr.

Speaker 2 And so we're going to try to do the first ever two podcasts at once. And I was just doing a shop tour here at A1, and Dan was in the audience.

Speaker 2 And I'm like, dude, my assistant walked in and I go, Allison, I'm supposed to sit down with a guy and do a full hour podcast and then do another hour on his.

Speaker 2 And I didn't know Dan was sitting in the room, but great guy. So here's how I usually start, Dan, is just talk us through your journey, where you're at, how you got here, and where you're going.

Speaker 1 Yeah, absolutely. Well, thanks for thanks for having me.
And you're welcome for joining mine since this is ours together. Dual.

Speaker 1 I think it's going to be cool. Yeah, I got into business.
I've been probably similar to you. I've been an entrepreneur since I was out of the womb.

Speaker 1 You know, I was selling lemonade as a lemonade stand. And then lacrosse balls when I was in high school, I would buy them for cheap and sell them.

Speaker 1 And I actually had a business where I was selling bourbon. My dad had a bunch of bourbon down in the basement.
I thought he forgot about it.

Speaker 1 Turned out it it was really expensive stuff, but I was selling it. And, you know, as a teenager, probably not my best business, but

Speaker 1 he made me pay all the money back that I made, which rightfully so. But in college, I started a staffing and recruiting business to kind of pay my, you know, beer tab, if you will.

Speaker 1 And it started out as a side hustle, but it grew and it became really my livelihood. I started focusing on that a lot more than I did at school.
And I was building that business.

Speaker 1 And in my early 20s, I wanted to sell that business and do something else. And I learned a valuable lesson, which was how to not build an asset.

Speaker 1 So I built the opposite of an asset because not only could I not sell the business because it was so dependent on me. And, you know, the customers only knew me, the employees only knew me.

Speaker 1 I couldn't even pay you to take the business. Right.
So it was truly like Robert Kirosaki and Rich Dad, Poor Dad talks about it.

Speaker 1 I was self-employed, not a business owner. And if you think about the quadrants.
So anyway. That led to, you know, my dad actually saying, you know, why don't you look at franchise opportunities?

Speaker 1 They're all about systems and processes and when i was in my late teens i sold kirby uh vacuum cleaners door to door you know knocking my dad did that your dad did that yeah yeah all right well so you know it's uh you know it's a grueling door-to-door kind of job and i knew that home services was all about building a tighter mousetrap and really good customer service and so i started looking at home service franchise opportunities back in 2014 i was in my my early 20s long story short i was probably just a bit undercapitalized to do a franchise at that size investment.

Speaker 1 So Murphy was the first franchise I joined, which was actually a franchise for helping people buy a business.

Speaker 1 So I went out, joined the franchise, started helping people buy and sell existing businesses in my market in New Jersey, where I'm originally from. And that's kind of how I got into franchising.

Speaker 2 I love that.

Speaker 2 And I talked to a guy. There's this franchise software.

Speaker 2 Guy's name is Keith. Keith Connect.

Speaker 2 Yeah. Fran Connect? Fran Connect.
Yeah. And there's like 2,500 franchises in the country.
And he did Jack in the Box. Like he says there's not that many franchises.
Like I know most of them.

Speaker 2 And he, he did the Jack in the Box originally wrote the script for that. And he was involved in,

Speaker 2 I just was on the phone with him yesterday. But I do and I don't love franchises.
Do I think franchises in the future? Probably. You know what I hate the most though, Dan?

Speaker 2 Is everybody goes, they come into my office, they do a shop tour, and they go, we're thinking about franchising our business.

Speaker 2 You know what I tell them i go wow you must have training the marketing you must be in at least four different markets you must have 20 bottom line you built out the all the slps what i find is everybody goes it's hard to do business

Speaker 2 it's so hard so they they say if somebody pays me and i could just take seven percent

Speaker 2 And everybody thinks franchising is like, I got a good business that makes pretty good money. No one's doing it like me.
I'm going to do a franchise. And I'm like, do you have $500,000?

Speaker 2 You got the right lawyers? Do you understand?

Speaker 2 And if I ever franchise, one out of 100 people that applied with the money would actually get the franchise.

Speaker 2 My deal is you're going to be part of this business. And if one franchise, think about what happened.
It's happened to so many franchises. One bad franchise could ruin everything.

Speaker 2 And you got to put the right bylaws and all the stuff in there so you could take that franchise back. Do I love the franchise model? I mean, Michael Gerber changed my life, the E-Myth.
Yeah.

Speaker 2 I mean, the franchise playbook is its systems, its processes. And during the shop tour, we talked a lot about this.
Yeah.

Speaker 2 And dude, it's so funny because I didn't realize I'm an idiot. But what did you think of that shop tour?

Speaker 1 I thought it was great. You know, I mean, I didn't help that.
I didn't really introduce myself. I kind of was just a fly on the wall.
Yeah.

Speaker 1 Usually, and if I, you know, obviously I'm an avid listener of your content. So it was like, there's no reason for me to talk here.
I'll just listen.

Speaker 2 Yeah. we went for, I don't know, a few hours there.

Speaker 1 It's amazing, man. You know, I was thinking about like, you know, I know you love to help people and give back, but I was thinking about like, you do this a few times a month.

Speaker 1 And like, it was not, I thought like, you know, maybe it'd be like 30 minutes or like an hour. And we were in there for like three, four hours.
And you just spent time teaching a bunch of people.

Speaker 1 I don't know if, you know, I know you said you got something, some things out of it, but it seems like you're really just helping people, which is great.

Speaker 2 You know,

Speaker 2 so many people took the time when I was in my early 20s, all the way up till my 30s, to open their doors, sit me down.

Speaker 2 I'd take a spiral notebook like this, and they'd say, sit down with my CFO. Why don't you go to my trainer, talk to them? Why don't you take some time to talk to my VP of marketing?

Speaker 2 And I was like, why are you doing this? But I walked in super humble. I'd smile.
I'd be a big fan of theirs.

Speaker 2 literally show them I read every page of their book. And they just said, hey, you're a Grasdra draw guy.
Whatever. You're nothing even.
We're not getting into garage drawers.

Speaker 2 You're probably not going to get into this industry. So do what you want, man.
You're young, hungry, ambitious. So they opened up the door.
And I'll tell you, I get text messages all the time.

Speaker 2 Like, I've never been to one of my son's baseball games. Now I'm his coach.
I was this close to getting a divorce. I was this close to literally committing suicide.
I've gotten a couple of those.

Speaker 2 And you think the money is this destination, but the destination is just saying you did good on on earth and just saying, like, there's probably a lot of people out there that maybe I've affected because a lot of people affected me in a positive way.

Speaker 2 So I think it's important that when you become successful, I'll never change. I'm never going to stop giving.
It's hard for me, though, when somebody doesn't want to help themselves.

Speaker 2 It's hard for me when they come in and they got every reason why they suck. Yeah.
And they're excuse makers and they just, they drain my energy. They pull it all out.
I don't mind dumb questions.

Speaker 2 I just mind questions like, poor me, poor me. You don't understand my dad abused me and mom smoked crack.
Okay, sorry. You know what I mean? Like, what is it, Jocko? He's like, good.
Good, yeah.

Speaker 2 Yeah, good.

Speaker 2 So

Speaker 2 I just enjoy this stuff. What do you think is going to happen in franchising? Do you think it's going to get easier?

Speaker 2 You think it's going to get, there's the FTC, there's all these things compliance things. Yeah.

Speaker 1 Well, you know, I definitely agree with you on the money thing. I sold after that Murphy business, I went on to build a lead gen company for about seven years and built it from the ground.

Speaker 2 Lead generation. Lead generation.
And what kind of leads?

Speaker 1 In the franchise space. So if I'm the franchise lead gen guy, so my company, we would generate people that wanted to buy a franchise all over the country.

Speaker 1 We're the largest and most known for generating like franchise buyers, people who want to buy a franchise, and franchise companies would pay us for that connection of that data.

Speaker 1 And then also we got into lead generation for, you know, for franchises.

Speaker 2 For B2C? Correct. Correct.

Speaker 2 Like Google?

Speaker 1 Yeah. So we did a lot on Facebook and Google.
And I'll be the first to tell you, like, where I've learned my skill was when I first sold, couldn't sell that first business. I was the guy.

Speaker 1 I was the recruiting guy. And now I am so much on the opposite end.

Speaker 1 Like, right now, I'm in the cleaning restoration space and I know a good amount, but not, I'll be the first to tell you, like, I was thinking about like, oh, shit.

Speaker 1 I hope Tommy doesn't ask me some really technical, you know, restoration question that you probably know the answer to that I may not.

Speaker 1 I'm very good at finding the right people and putting them in the room.

Speaker 1 So with the lead gen, we had, you know, I'm a big believer like i would bring in the expert on facebook the expert on google the expert and we would essentially provide a really great customer service experience and and really great leads but there's only so many things you do at lead gen like there's you know all the best practices you can do on you know on a google my business or local service ad there's only so much you can do and so for us like where we really won a lot of business was the same way that a good home service company does we would answer the phone we provide good customer service we provide a credit when it was legitimately not a good lead i don't know if if you've had experiences.

Speaker 2 I've done a lot of lead jet in my previous life. Yeah.

Speaker 1 And, you know, like, so I did that business. But anyway, after exiting that business, something I agree with you on is,

Speaker 1 I mean, I haven't reached the same level of success, but I've had some success so far. And what's interesting is because my bar is up here anyway, I'm never at that bar.

Speaker 1 And so it never really brings me any happiness. The happiest day of my life, one of my happiest days was the day I sold my business to private equity.
It was a Friday.

Speaker 1 Got the money, the money, went in the bank. I was all excited.
I didn't even do anything exciting. I had pizza and wine at my house with my girlfriend at the time.

Speaker 1 And then the saddest day of my life was Saturday morning. It was like the worst hangover.
Like I just sold my purpose, you know?

Speaker 2 Oh, no. A lot of people think their business is their identity.
I go, you're planning on selling in the next five years. And then they go, well, then what would I do? And I'm like,

Speaker 2 wait a minute. You signed a non-compete for this area of the city.
Yeah.

Speaker 2 You could take the millions of dollars you just got, go on vacation with your kids, help your parents out, buy a house, pay it off, buy two rentals. And

Speaker 2 too many people let their business be their identity. Yeah.
And I understand.

Speaker 2 It's like, I got to tell you, I went through the process. I still retain half the company.
You hear this story one out of 10 times. Nine out of 10 times is like a horror story.

Speaker 2 Like, dude, I sold and I didn't do the paperwork right. And like, I thought I had a lot of money and I spent it all.

Speaker 2 And it's like, because making money and keeping money are completely two different things. Yeah.

Speaker 2 And I don't know. I don't share the same because I guess because I'm lucky, I'm still involved.
I'm still the CEO. So you walked out completely.

Speaker 2 A lot of people have a chance to roll their business, continue to be the main person, and they just got a boss now.

Speaker 1 Well, I mean, in my scenarios, it's different in the sense that I had a partner. He wanted to sell.
He had a little bit more equity than me. And so we sold.

Speaker 1 And I didn't feel like I was really, I didn't feel like I was done yet with what I was doing. And so that was kind of the challenge.

Speaker 1 But, you know, I felt, I'll never forget my best friend saying to him, like, oh, dude, I'll never make, you're going to not like this. And I'm not, I don't have this mindset.

Speaker 1 But in this moment, I was like, you know, what was me? I'm not going to have another business idea. I won't be, it must have been my partner.
It might be it was luck. Maybe it was, you know, whatever.

Speaker 1 And I was like, I'll never build a business as big as this one. And I was so right.
I can't build a business as big as that one because it's way too small, like compared to what I can do now.

Speaker 1 You know what I mean? And so I was, I was obviously wrong in when I'm building my vote. But I heard Jamie Dimon Dimon say this, the CEO of Chase, and I think it's a great thing.

Speaker 1 He got fired once before he ever went on this amazing career he's had as a CEO of a giant bank.

Speaker 1 And he said, when he got fired, he reminded himself that his business and his career is his net worth, not his self-worth. And so I definitely did what you're talking about.

Speaker 1 I attached my identity to my last business. With Voda, I don't do that.
Voda is its own business and has a whole executive team that runs the business. And it's not my identity.

Speaker 1 I got a whole other side of my life. You know what I mean?

Speaker 2 But I think that that's important. I think a lot of people,

Speaker 2 I said this to you earlier when you were in the shop tour.

Speaker 2 I said, a lot of people, they literally went into business for freedom and time and to be able to spoil their kids and do all the things they were never able to do as a kid.

Speaker 2 And they told themselves, and they continue to lie to themselves. And then another year goes by and two more years.
And they always say the same thing. I'm reinvesting in the company.

Speaker 2 I'm reinvesting in the company. And all of a sudden, 10 years go by.
And as a business owner, especially when the business is small, you don't really truly get a vacation.

Speaker 2 You don't truly get a holiday. You don't truly get really anything.
You don't get the nights to yourself. It's like we go from morning to nights 24-7.

Speaker 2 And the nice thing about taking some chips off the table when the company starts to grow is like,

Speaker 2 you know, we got our pinnacle trip coming up, taking all my executive staff and all my top technicians and quite a few other people.

Speaker 2 And people are like, Well, what's how the business is going to run?

Speaker 2 And I'm like, The business won't miss us. Like, the business runs itself.
Like, we're there commandeering the growth and the structure and the reporting.

Speaker 2 But that's what's nice when you hit a certain threshold is like

Speaker 2 people do not. I don't know how to give people PTO.
I don't even know my login of the payroll system. I don't know how to even get into intact.
People are like, Well, you're the CEO.

Speaker 2 I'm like, Exactly. Yeah.
That means other people are doing it for me. Right.
You think the best use of my time is trying to do a pivot table, trying to just scramble some payroll issue?

Speaker 2 I mean, I had to do stuff at a certain point. And I'm like, the first thing you do as a business owner, I think, is you write down all the bubbles of everything you do and what you hate the most.

Speaker 2 And then you hire for that position. Some people might love payroll.
They might love dealing with the lawyers. They might love inventory.
Well, then don't hire for that right away.

Speaker 2 Do the things you love to do. That's your superpower in the business.

Speaker 1 Yeah.

Speaker 1 I think that's, I mean, it seems your superpower seems like like getting amazing people too, into the company.

Speaker 2 Oh, I think I do a good job of motivating. My superpower is asking for help.
My superpower is not waiting, not one minute. I don't wait till we're going the wrong direction.

Speaker 2 I literally, if I even get a whim,

Speaker 2 I contact the top person. Like you said, I got the top.
All I do is ask for help. The billionaires I know, they know who to call when.
They're not the smartest guy in the room.

Speaker 2 They don't get up at 4 a.m. and do a thousand push-ups.
And like, everybody's like, yeah, you got to be disciplined. I'll outwork everybody.

Speaker 2 And I, you you know i will outwork the world and i'm like yeah no not the guys that i know not the uber successful they're good communicators and they're very very good at networking yeah i was thinking about like you know when you watch shark tank and the person gets shot down about their business and the worst ones is when the person goes I worked really hard.

Speaker 1 Like, I worked hard and I gave up everything. And it doesn't matter at all whether the business, like, that's a good product or not.
And I think entrepreneurs, I heard this thing.

Speaker 1 It was like, you know, you're a second-time entrepreneur when you don't focus as much on the product. You actually focus on the distribution channel.

Speaker 1 And so to answer your question on franchising, so franchising is an incredible place right now.

Speaker 1 You know, I got in the space 10 years ago and I would go to, I'm actually here for the IFA, the International Franchise Association.

Speaker 2 I'm going to meet the COO of Neighborly.

Speaker 1 Nice. Yeah.

Speaker 1 Amazing company and a lot of great companies here. And I've been coming in.

Speaker 2 She's going to be the president of that.

Speaker 1 Of Neighborly? Yeah.

Speaker 2 No, no, no. Of the franchise thing.

Speaker 1 Oh, of IFA.

Speaker 2 IFA. Yeah.

Speaker 2 She's dropping down from Neighborly to be the president of that.

Speaker 1 Neighborly is an amazing brand. It's sad.
Mike Bidwell, the yeah, it's crazy that he passed away. Yeah, kind of, I mean, I didn't know him personally, but it seemed out of nowhere.

Speaker 2 Something happened. It was a house accident.
They're keeping it under wraps. I'm not sure what happened exactly, but yeah.

Speaker 1 Yeah, great company, amazing person.

Speaker 1 He did a lot in franchising, but I came here for that event, and I've been coming for 10 years. And when I first came, there was maybe one private equity guy hanging out in the corner.

Speaker 1 Then the next year is two. And now I come and there's a whole mirage of them.
Yeah. And so the space is growing.
And there's a lot more of a professionalism in the space.

Speaker 1 But unfortunately, the negative that I see, and to your point around, so I have 66 locations in Voda. And every single franchise owner, we have hand-picked.
And we often turn away people.

Speaker 1 And that's not easy. You know, they want to write us a check for $100,000, $135,000.
And how much? Well, our franchise fee for one territory is $60,000.

Speaker 1 And then if you do two, there's there's a scale and it's discount if you do three, you know.

Speaker 1 But anyway, we've people that want to write us a check, and if we don't feel like they match every single core value, they don't you know, if somebody comes to me and says, I want to buy this business, I never owned a business, right?

Speaker 1 But I want to own a business, I don't want to work at all, I want to make this much, I don't want that person. I want someone who this is going to be their.

Speaker 1 I'm not saying they can't have other things going on, but this has to be their focus. This has to be their so anyway.

Speaker 1 So, we've been really intentional around turning away people that don't fit our mold. And so that's the way to do it.

Speaker 1 But unfortunately, a lot of franchise brands that have the ability to sell territory, they'll sell to anyone.

Speaker 1 And one of the reasons is they know that right now in private, in the franchise space, there's so much private equity money that if they just sell a bunch of units for two years, even if it's a dumpster fire, private equity can come in and buy them out.

Speaker 1 And they do, and they can ride off into the sunset. So unfortunately, that's the negative I see in franchising.
It's like kind of like the dot-com era where, you know, it's a bubble.

Speaker 1 A bit of a bubble. Yeah.
And so that's that's the negative I see. The positive is that provides opportunity for the people that are going the other way.

Speaker 2 So if you were sitting here and you had a good business, people always ask me, why didn't you ever franchise? And I remember buying four books on franchising.

Speaker 2 And then I talked to a couple of people with franchises and I heard the good, the bad, and the ugly.

Speaker 2 And I'm like, I want full control because once you go into the franchise, you're no longer in whatever business you're in. I'm in the garage door business.

Speaker 2 I'm actually in the technology business and happen to do garage doors. But I've heard once you go into franchises, no longer are you in that field.
You're in the people business.

Speaker 2 You're in the franchisee business. You are literally hand-holding these guys want to turn key business.

Speaker 2 And so you might be really, I'm pretty passionate about garage drawers. Yeah.
If I went into

Speaker 2 all I know is one of the gals I have, she's running the call center. Her name's Amy Spence.
She dealt with everything at authority brands. Yeah.

Speaker 2 And she's like, Tommy, it was a nightmare.

Speaker 2 She's like, different people doing different things, even precision. And I'm not going to talk bad about them.

Speaker 2 They're my competitor, but they sold to Neighborly. Yeah.
And at the time when they sold, half the company was on service tight and half of them were on Opal.

Speaker 2 Different wraps, different price books, different hiring styles, different websites, different signatures on their email. different structure.
And I'm like,

Speaker 2 man, that doesn't seem like a franchise to me.

Speaker 2 And it's harder to franchise, I think, a home service than it is a restaurant because you can control the four walls a lot easier than controlling this huge space of people running throughout neighborhoods and trucks and locations.

Speaker 1 Well, what happens is somewhere along the lines, I don't know, I know a good amount. I know No Precision just had a franchisee, I think, private equity transactions franchisee.

Speaker 2 Jim Rap. Yeah.
He was the largest precision owner out of Florida. Yeah.
Yeah.

Speaker 1 And but that founder of Precision, right? At one point, he got into the garage door business and then he decided to franchise. Being in the franchise business is an entirely different business.

Speaker 1 And, you know, for me, I'm a franchise guy. My team is all franchise people.
My COO and co-founder, he's a home services

Speaker 1 person, expert in franchising. That's what he does.
Not the business of day-to-day doing restoration in our case. His skill is home service franchisor, which is, as I mentioned, its own business.

Speaker 1 And to your point, it's a training business. So for me, I love,

Speaker 1 you know, I think I was put on earth to help people become a business owner. I've been doing it since since I was in my early 20s.
I've helped about a thousand people buy a franchise.

Speaker 1 I want that to grow. So I personally, I love seeing someone go from, you know, non-business owner to business owner.
So that makes me enjoy being a franchise or,

Speaker 1 but it is a difficult thing when someone buys a franchise. They're not a customer, the franchisee.
They're not a customer. They're not a employee.
They're not a partner. They're a franchisee.

Speaker 1 It's its own designation. Yep.
And so you have to get this person who, by the way, has never owned a business, who bought a system and very often will try to challenge that system.

Speaker 1 And you have to get them to do it your way without being able to fire them.

Speaker 2 It doesn't sound fun. I mean, literally everybody I know, Kevin Wilson, Mosquito Joe's, good buddy of mine, been on the podcast, and he doesn't do anything else but franchises.

Speaker 2 He's like, it's the way to go. But he also sees the other side of it.
And I think there's like two types of people. There's the franchise guys, and they never stop.

Speaker 2 They're like, once you do it once, it's contagious. You go figure it out.
And I just, I've always thought, you know, A1 has put me in a pretty good spot in the podcast.

Speaker 2 So if I started a franchise, I just know a lot of people that'd be like, if Tommy got behind something,

Speaker 2 I know he wouldn't screw us over. I know he'd be there to help.
I know he'd figure out the marketing systems. I know he'd figure out a good deal with inventory.
He'd have the right CRM.

Speaker 2 He'd have all the right things in place.

Speaker 2 And I think I'd have hundreds of people that would say, if I told you you got three years to be a multi-millionaire, I mean, I want to keep my promise, but hey, I can't do all of it.

Speaker 2 The reason I love a franchise is because what I care about from a franchisee, I'll run your Google, LSA, PPC, organic, and GVP. I will do all the Facebook ads.
I will handle all the AI chats.

Speaker 2 I'll do all the call booking. You'll pay fees for this stuff, but I cannot be big in the community.
I can't know what baseball team to endorse.

Speaker 1 I can't show up to parties, pass out cards, B ⁇ I i meetings right i want boots on the ground and i want you to be an expert of showing off our brand 100 i think i think maybe someday it makes sense maybe in a different industry or something i think you'd be an incredible franchise or just knowing that you care about seeing people succeed and that's what being a franchise

Speaker 1 is all about but you know we say at vota we're looking for the mayor of the town So you know, I played, you know, sports growing up baseball.

Speaker 1 You know, when I played baseball as a kid, the back of the jerseys always had this contracting company. And the guy was always there handing out orange slices.

Speaker 1 people just loved him and you would give your business to him and uh i always thought of him as the mayor of the town right so the mayor of the town is who we need because we do all the facebook ads google ads local service ads everything you mentioned we have a call center answering the phones we do all the marketing but i always tell franchise candidates i may buy a voda this isn't an atm machine If I didn't need something from you, I wouldn't have franchisees.

Speaker 1 I would be opening corporate stores. If Facebook ads and Google ads and everything else just worked without anything else, we wouldn't need it.

Speaker 1 What we need from you as the local owner is what you just mentioned, the BNIs and the Chamber of Commerce. And, you know, nobody wants to give Voda or in our Ivy Tower business.

Speaker 1 They want to give their local owner

Speaker 2 business.

Speaker 1 So, you know, we look for people that want to be the mayor of the town. They don't want to do all the other stuff.

Speaker 1 But to your point, the challenge of franchising is, and I deal with it every day, is like, you know, dude, like, let's just say you're franchising, man. Like, come on, you bought this system.

Speaker 1 I know what to do. Follow my way.
And unfortunately, that doesn't always happen. And so you have to kind of work through that.

Speaker 2 So you guys do, what's the big franchise company for restoration?

Speaker 1 You got, I mean, Serve Pro is the largest.

Speaker 2 Yeah, yeah. So Serve Pro.

Speaker 2 So do you guys work with insurance companies?

Speaker 1 We do. So Serve Pro, just to put in perspective, Serve Pro is a $3 billion, it's a big company, $3 billion a year annual revenue in a $300 billion space.

Speaker 2 $300 billion is water restoration?

Speaker 1 Restoration in the broad term of anything to do with fire, mold, water.

Speaker 1 In that case, it's about a $200 billion annual commercial industry, $80 billion residential, so $290 billion and growing about 5% year over year. Water mitigation is about $17 billion a year.

Speaker 1 And that's where we focus in the

Speaker 1 water extraction.

Speaker 2 So the other side, so there's water, fire, mold.

Speaker 1 Yeah. So when you talk about restoration, you really want to put everything from...
water, fire, mold, contents restoration, right?

Speaker 1 So when your clothing or bedding gets destroyed or ruined, that's part of restoration.

Speaker 1 So it's a broader term, but in the sense of water mitigation, it's like, you know, you got a flood here and you pull the water out, dry the drywall.

Speaker 2 You get the dryers. And then do you guys handle, because I know a lot of restoration companies, they'll pull out the drywall, they'll clean up the mess.

Speaker 2 And half of them will go repair it all, fix the drywall, fix it. And some of them will just say, we just handle.
We pull all the stuff out, make sure it's not contaminated.

Speaker 2 We put up your furniture, store it, clean it. And then they let the company come in and repair it.
Do you do both?

Speaker 1 We do encourage our franchise owners, especially when they first start, to not do the reconstruction.

Speaker 2 The reconstruction.

Speaker 1 The margin gets cut into substantially. Most of the margin is in that the water dryout and cutting the drywall and moving on.

Speaker 1 As our franchise owners become more mature and they can handle the more complicated work, we do allow them and support them to do it. But in the beginning, we want them focused on the non-rebuild.

Speaker 1 To answer your question on insurance, yes, we absolutely work with insurance. Best way to explain insurance work and restoration is like a drug dealer.

Speaker 1 So there's what's called TPAs, third-party administrators. Most insurance companies are delegating it to a TPA.

Speaker 1 TPAs are out kind of cycling jobs to restoration providers, making sure the job's done properly. Because remember, insurance is not in the restoration business.

Speaker 1 So a lot of times you're doing third-party administrative work or program work is the terminology. I equate TPA work to a degree, and it's a necessary thing, but it's like a drug dealer.

Speaker 1 So they say, hey, Tommy, you know, here, here's some work and try it out. And you get a little taste.
And then all of a sudden your business is dependent on the TP work.

Speaker 1 You have to do it the way that they need you to do it, which is there's a space for that, but they cut into the margin substantially.

Speaker 2 Everybody I've talked to in restoration said, do not take the insurance work from the insurers. Go to the clients from Google or everything else.
And then 80% of those come through the claim.

Speaker 2 And then there's certain things that the claim won't cover and use financing for that.

Speaker 1 Yeah. So we encourage our franchise owners to get those relationships with property managers and plumbers and realtors and roofers.

Speaker 1 No, and your house has a pipe break the first thing you do is you call the plumber to fix it and then the plumber refers the restoration company right that's a much better way much more margin so yeah we do have the insurance work but it's uh it's kind of a necessary evil now why does serve pro do so much of those insurance work do they just get do they get a better how does that i've heard they the majority of their work actually comes from the insurance yeah so serve pro you know listen i think serve pro what's amazing about serve pro is

Speaker 1 you know and this is a bit of me speculating but how how I understand it is they really do have insurance relationships.

Speaker 1 Like the way I think of Serve Pro is they got this giant insurance opportunity years ago and said, uh-oh, we gotta, we gotta get a distribution model to service this account.

Speaker 1 And they went out and sold franchises. So it's worked well for them.
But, you know, there's all kinds of, you know, there was a lawsuit a couple of years ago with State Farm and ServePro.

Speaker 1 I'm not putting down ServePro, by the way. It's a giant program.

Speaker 2 No, no, no. No, this is just a conversation.
I'm just trying to understand the big boy in the space.

Speaker 2 So what they do, like, who's the windshield provider safe safe light safe light repair safe light replace so for them i heard they got like this way of getting secondhand glass and they pay way less for the windshield and they're still able to sell to the insurance so it's like a better mousetrap the glass isn't as good but you really can't see the defects And they're able to charge the insurance company, you know, the $800, but they're only paying $100 for this glass.

Speaker 2 That's like the upper hand because I had a buddy come out. He's commercial roofer.
And he's like, all I need is 5,000 jobs in commercial roofing. And it's all in the insurance.

Speaker 2 And he says, this will be a $4 billion company. And I said, 5,000 jobs.
He said, yeah, now here's the deal.

Speaker 2 If you get it on the insurance, it's like when you call your insurance, they only like it's somehow on their, like, you got to go through this company. Because they've already got it preset.
Yeah.

Speaker 2 I don't know what it's called, but he's like, it's on their docket or whatever. Yeah.

Speaker 2 He's like, it's hard to get this and you got to pre-negotiate and you got to make sure the paperwork's right and this and that and it's not quite as much money but i'm like man i'm like to me i'm like last year i got this bug to go to all the wind the storm stuff right yeah and these are all the storm comes and there's all kinds of damage yeah well I was just going to go work out a deal with all the roofers and storm chasers and I'd be the garage drawer guy and I'd give him a kickback and then you go through this app called uh what's the what's the app called that you've turned into all the insurance exactomate exactimate see you know the shit so exactomate and i'm like what if i could provide a better price to the insurance but here's the deal if i just walk into the garage and i say we're gonna give the insurance a good deal but all the best roofers you know what they say they say we're gonna get you a like for like we got you an 18 000 credit but do you want this same grade and the best guys are getting 30 000 they're paying out of pocket 12 getting the 18 from the insurance so my deal is do you still want this opener or do you want want me to replace the opener while i'm here you want an insulated door because i'm getting the insurance company to cover two grand right if you come out two grand out of pocket and then i was going to create a network of garage door companies that service home depot yeah and the hardest part is i need to go i need to work out the deal with xactimate well i mean you said it earlier when we were doing the shop tour around how the value so so much of your value in your company is the fact that it's not dependent on new construction right you have it's a need not a want i mean for us one of the best things about what we do is, you know, there's, unfortunately, you can't do anything.

Speaker 1 If you have a flood in your house, you know, you have to fix it, you know, unless you're going to live with it.

Speaker 2 It's a demand-driven industry.

Speaker 1 Yeah. And your insurance policy says you have to fix it, right, or you're not going to be covered.
And so, you know, we get, you know, there's 14,000 water damage cases a day in America.

Speaker 1 And it's not because of hurricane. It's pipes breaking, toilets overflowing.
This whole, you know, home in America is 39 years old on average. So there's a lot of infrastructure.

Speaker 1 You know, the average served pro location does about 1.5 million in revenue, which is great. It's great.
But there's just so much more market.

Speaker 1 What I love about restoration is you're getting $3,000 on average to dry a home or business. And it's, I mean, it's, it's some equipment.
It's a guy. It's a truck.
We're extracting water.

Speaker 1 We're not doing anything crazy. And then we're getting paid.
And there's a need. See, me, I think I'd be cool what you're doing, that you're talking about.

Speaker 1 I love the storm chasing kind of, you know, listen, a restoration guys,

Speaker 1 you know, our GMs are Red Bull chugging, chain smoking, adrenaline junkies. They love going out into the storm.
And so, yeah, how about for you? Like, what's your big thing for 2020, 2024?

Speaker 2 2024, the big thing for me is in home service, we have this thing called capacity planning.

Speaker 2 And I've been very, very good at making the phone ring off the hook. You need to have great technicians.
Everybody says, I need more leads. I need more leads.
I need more leads.

Speaker 2 When you look at this, they're not answering their phones. They're not converting and they're not differentiating themselves.

Speaker 2 Great technicians, great installers, great maintenance techs are what make the difference. So what if you built this machine to find the best, best, best candidates? You did personality profiling.

Speaker 2 You went to the vocationary schools.

Speaker 2 Like you got guys like Andy Elliott that are pulling people in and you just paid a lot of money for affiliate deals because a top performer for me will literally do quadruple with this.

Speaker 2 With the same leads, same everything. So everybody's worried, I need more leads.
I need more leads. I'm like, well.

Speaker 2 You don't need more leads. You're not booking the phone calls.
You're not converting them. You're not differentiating yourself.
You're getting in a bidding war.

Speaker 2 And so, like, I've got a spigot that I could turn for leads. Once I get the spigot for technicians and installers,

Speaker 2 and we've done very well, but it's not a spigot yet. Once this is figured out and they're not just falling off, everybody's got a 30 to 40% fall off rate of taking somebody outside of the field.

Speaker 2 So that's my big thing: is the people is how to identify true winners that want more for their life, that dream bigger than anything.

Speaker 2 And that's the secret is like

Speaker 2 everybody's like, I need more leads. I'm like, my buddy Tom Howard only had less than two handfuls of technicians and sold the company, the HVAC company for well over 100 million.
Okay.

Speaker 2 Because he had ultimate performance. Yeah.

Speaker 2 And I don't think of marketing, marketing is 50% for the people, 50% for the customer.

Speaker 1 Yeah.

Speaker 2 A lot of people, they only put an ad up when they need a new guy.

Speaker 2 Like somebody quit or they got more leads you should always be looking because if the right person comes along to work for you they're they're literally they're passing out cars at the gas station they got a big network they're posting their stuff on facebook they became a lead generator they're getting their picture in every review and they pay for themselves i think you should always be looking for great people people say always be closing i say always be recruiting yeah always be recruiting it's interesting like We were talking about like the simple things.

Speaker 1 So, you know, when I was getting into restoration, I went online and I I started, you know, submitting fake, you know, jobs to test what it would be like.

Speaker 1 And I would get a call or I would call in to a restoration company and, you know, you get like, yeah,

Speaker 2 what do you need? What do you want?

Speaker 1 Like that was the way I was at the phone. Like, I'm in an emergency and this is the way they're answering.
And so like for us, we just changed one little thing.

Speaker 1 We just say, when someone calls with a water event, you know, hey, you know, my house flooded. Hey, is everyone all right? Is everyone okay? Like we just start off with that simple human question.

Speaker 1 Or when we go to their house, we say like, you know, hey, Tommy, I'm really sorry that we had to meet under this circumstance.

Speaker 2 Like these little things that just little nuances that make a big difference to humanize it and pull the emotions in. Yeah.
We actually care.

Speaker 1 Right. And it's just small.
And then you hire people that actually do care.

Speaker 1 And it's like, you're not rocket science, but you know, in the water mitigation world, unfortunately, it's an emergency and people are just so rough about it, you know?

Speaker 2 Yeah. And I think that if I just had a house flooded and my baseball cards or my kids' stuff, like the things like maybe my grandfather's Bible, it'd be kind of like emotional.
It'd be like, man,

Speaker 2 it's not a fun thing. Like, you know, it's a fun business that I was involved in? Christmas lights.
Nobody calls, like, they're like, our minimum price was $1,500. Here's the deal.

Speaker 2 Like, we'll get out there whenever we can. Yeah.
And they're like, okay, we just have a party. I'm doing it for my kids.
And you go out there and it's like, Christmas is a fun holiday. It's not like,

Speaker 2 get out here. I need my Christmas slice put out.
It was like the demeanor of the clients, like, we're just looking for joy and happiness. Yeah.

Speaker 2 It's like, we just want to do something fun for the kids, make sure we're festive, make sure we're celebrating because our kids are young.

Speaker 2 And we, and then I was like, let's do a Santa Claus at all the HOAs for free pictures. Yeah.
I just tell them we're in the neighborhood.

Speaker 2 Cause for that, it's all about windshield times, like getting lots of jobs on the street. Yeah.
On the same street. So I think it's like, man,

Speaker 2 I love business too much to ever like be like, okay, I'm finished. I love home service in particular.
And I come up with all these ideas.

Speaker 2 Like, if I had more integrators that actually could like, I just don't have the time for all the stuff.

Speaker 2 But like, man, I come up with these things and I'm like, whoa.

Speaker 2 Like, for example, we've got 39% of the doors we don't sell. We're at a 61% conversion rate.
Okay.

Speaker 2 So I called the manufacturer up, big company, and I said, would you be willing to hire somebody? on your team, on the sales team to review every single one of the doors we don't sell. Like the calls.

Speaker 2 With a, just go over the jobs, what the quotes were, and then we'll work together on what you have in stock in that market.

Speaker 2 And I'll have a guy on my team, and we'll spend 10 minutes on each of them to figure out what we could offer.

Speaker 2 And I told this guy's number two in charge of the largest garage drawer company on the planet. I said, you will look at all these jobs.
It's not like I'm trying to get a discount on jobs.

Speaker 2 I want to go full price, but find out what we could give on these other jobs so I could recoup some of the stuff. He goes, how many doors are we talking?

Speaker 2 I'm like, probably a month, 500 extra doors but just remember these aren't low margin doors they make a lot of margin on these they're not like builder grade stuff it's it's better and then i said if this works we'll go from 500 to a thousand and i said by the end of this year we'll be at 2 000 extra doors a month yeah and he's like yeah let's do it yeah and i said we got a lot to figure out on our side to make to systematize it but this should be started in second quarter and that's what i mean what i love to do is when my competitors are trying to play checkers on five moves ahead in chess.

Speaker 2 Yeah. And that's why I invite them in.
I'm like, come look at what we're doing. Yeah.
And they're like, son of a bitch. They're like, there was two garage door guys in the shop tour, great guys.

Speaker 2 And they're like, we don't know what to say or do now. You just confuse the shit.
We don't know where to get started. I said make a list.
Yeah.

Speaker 2 And start with the top five biggest things that'll impact the business.

Speaker 1 Now, situations like that, where someone comes and takes a tour and they're in the garage door business, I assume like sometimes that leads to deal flow for you.

Speaker 2 Yeah, because we've got a thing called garage door freedom. And so if they come in and they join garage door freedom, we give them, we help them set up their CRM.

Speaker 2 We teach them how to answer the phones better. We show them how to get branded.
We've worked out 80 affiliate deals.

Speaker 2 And the average garage door freedom member has tripled their company.

Speaker 1 So is it like you're almost like a licensing model? Do they pay you a licensing?

Speaker 2 They pay us a small fee. It's like a grand a month.
It's nothing, nothing major.

Speaker 2 But the deal is, you know, if they like us and trust us, when they do make a deal, they'll probably come to to us and we'll let them roll equity. And we like them, we trust them.
We know they're not.

Speaker 2 It's a way for us to vet these guys too.

Speaker 2 And, you know, it doesn't make any money, but we've gotten several deals from that. And we've only got 70 companies in Garage Door Freedom.
I'll probably get it to 500 in the next 18 months.

Speaker 1 It's interesting because like, you know, when you're talking about franchising, so it's funny. I actually forget that I'm in the royalty 7% business.

Speaker 1 I pretend that I'm Voda corporate and this is all corporate locations in the sense, I don't mean that to diminish our franchise partners but what's interesting what we do is so we have a call every Friday system-wide all of our franchisees are on there their general managers also are on there we have um you know in college so 60 locations 120 people plus the franchise or people yeah keep in mind there's some guys that have multiple units so right now yeah so maybe like 80 yeah so we have about 30 owners right now oh 30 owners and all 60 locations yeah two units each 60 because there's two people on those calls plus you guys so correct and then our our team and then what i'm debating is in bringing in their technicians as well.

Speaker 1 Maybe like with a rule, like they can't try to dominate the call. And then we have Microsoft Teams channels, all kinds of different channels and different topics.

Speaker 1 But one of the things we do is like when you go to a training with Voda, you know, you're training with five to eight different franchise owners so far since we've launched.

Speaker 1 And so you guys all kind of, these franchise owners, they train together and they build a relationship.

Speaker 1 So when they leave, we actually put them into a channel together and like we call it the pledge class. And we keep them, I'm in there too.
And we're all chatting throughout the day.

Speaker 1 You know, little fun stuff. like, you know, the GM will mention a thing he did wrong and then the other guy learns from that.
Right. And so we're communicating at this crazy level.

Speaker 1 And so my vision is that I don't care if we have a thousand franchise partners one day.

Speaker 1 I want to have a call where there's a thousand franchise partners and a thousand GMs and, you know, another hundred technicians or whatever.

Speaker 1 But we, we actually pretend that we're corporate because a lot of franchisors, they actually, they see their franchisees as

Speaker 1 almost like a combative relationship, like the enemy.

Speaker 2 It's almost almost us versus them. Yeah.

Speaker 1 And so when you think that way, that's what's going to happen. And so we go into these calls, man.

Speaker 1 And like, it's funny because like when we first launched, like that Friday call was all hunky-door exciting because everyone's in honeymoon stage.

Speaker 1 But as our franchise owners are going further through the process, with any business, they're going to have the ups and the downs. So those calls aren't always fun.

Speaker 1 Like, I don't get on that call on a Friday and hear only good, right? I have to hear the good and the bad. But it allows us to address things so much faster, hit it head on and get quick to conflict.

Speaker 1 But it's just interesting because,

Speaker 1 you know, I noticed it while I was here, like you just, I mean, you're accessible to people here. Like you could come work here.
Like it's kind of crazy.

Speaker 1 You could watch your content, you know, you're all over the internet, famous in the space. And it seems like in general, you know, a lot of celebrities now.

Speaker 1 And then you could come work here and like have direct action. It seems like you're accessible to your whole team.

Speaker 2 It's yeah, listen, these guys know I bounce to lots of meetings, but I make time. And I think that that's important is I'm just a normal human being.

Speaker 2 And one of my buddies said, never meet your heroes because they're not who they say they are online. And I'm like, it's true.

Speaker 2 Like, I try to just not facade everybody, not pretend that my shit doesn't stink. This is what you see is what you get.
We do some things right.

Speaker 2 It's because I've made 20 years of mistakes and then I fixed them one by one.

Speaker 2 Hey guys, I hope you're really enjoying this podcast. I wanted to let you know if you're thinking about joining us in September at the Freedom Event, I've got some good news and some bad news for you.

Speaker 2 First, I'll start with the bad news. The super early bird tickets are gone.
This means that the $800 off the elite and VIP tickets are not available anymore.

Speaker 2 And the general admission price has gone up a little bit too. The good news is you can still get $400 off the elite or VIP tickets or a 10% discount on your general admission ticket.

Speaker 2 Plus, we're still giving away a few special bonuses, but this is only going to be available till August 5th.

Speaker 2 So listen, if Freedom 23 was was amazing, this year we're going to be taking this event, and I mean taking it to the next level.

Speaker 2 Jocko Willick, the Navy SEAL who wrote the book, Extreme Ownership, is already confirmed as one of our keynote speakers, and there's still a lot more to come.

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This is going to be an event of the lifetime. That's freedomevent.com.

Speaker 2 Take a pen or put it in your phone, freedomevent.com. Just make sure you do it before prices go up on August 5th.
Now let's get back to today's episode.

Speaker 2 You know, I always say success leaves clues. If I were you, what's the margin on your 7%?

Speaker 2 If you don't mind me asking, like, is it pretty profitable to 7%?

Speaker 1 As a franchiseor? Yeah. Yeah.
So franchisors typically operate at scale when you get to a certain amount of units and royalties are coming in.

Speaker 1 So remember, you know, my franchisees, what's great is they're going to compound. Their business is going to grow year over year, right? So our 7% grows with them.

Speaker 1 What's nice about franchising, it is somewhat like a technology where, you know, as our, you know, if you want to call them cohorts, cohorts, as franchisees join us, they need a lot of support, right?

Speaker 1 When they first buy.

Speaker 1 And so, you know, I've got 12 people on the team for 30 franchise owners. It's unheard of.
There's brands at 300 locations. They don't have 12 success coaches and people.

Speaker 1 Our franchise owners, because we're adding so many so quickly, they all have immediate problem fires every day, three, four times a day. Six months in, they have different problems.

Speaker 1 A year and they don't call as much, right? And we still support them, but in a different way. And so for us, it's a pretty capital-intensive business.

Speaker 1 You know, you mentioned, I mean, I went into this with several millions of dollars in infrastructure before we ever even saw a dollar come in.

Speaker 1 But to answer your question, when we're at a scale, I mean, a franchise or should operate at like a 50%

Speaker 1 margin.

Speaker 2 Here's what I would do. Just tell me what you think about this.
You've obviously got some clear winners out of those 30. There's like probably like three that are just murdering at the top 10%.

Speaker 1 Yeah.

Speaker 2 I would say, listen, after one year,

Speaker 2 each of you guys get one of these guys. And whatever you're able to increase, I would say for the next six months.
So I'll give you six months to grow them.

Speaker 2 For the next six months, you take 2% of the seven.

Speaker 2 The only reason why is what's in it for me to coach these guys and bring them.

Speaker 1 They're saying they're like a team lead.

Speaker 2 Like they get a percentage.

Speaker 2 You're going to take this guy under your wing. You're going to bring him to your market.
You're going to hold him accountable.

Speaker 2 You're going to show them everything that you've done to walk them through all the mistakes.

Speaker 2 You're going to coach them because what's in it for you is I'm going to give you, or I'd even say, listen, I'm going to give you profit units.

Speaker 2 If anybody that hits this level under your man, if you could bring all these companies up, the profit units just means there's 100% of the franchisor's equity. I'm creating an extra 15%

Speaker 2 for this. And you could continue to add profit units because it's a mathematical equation that says they doubled.
I'm only giving them 2%, but they double.

Speaker 2 We got 7% since they doubled it. It's almost like getting 14% because, but they did it a lot faster.

Speaker 1 You know, I think it's, it's very interesting thought process because one of the things, because Vote is a young brand. So the business started in 2009 and an amazing story.

Speaker 1 The founder, his name is Dragon, moved here from Serbia in 2004, you know. ended up building this business with his like hands basically into a beautiful business.

Speaker 1 Him and his wife live a great lifestyle. And when myself and my team came in and acquired the business and with the intentions of franchising, we had this whole grand vision of where we could take it.

Speaker 1 But what's interesting is we launched franchise in April, so a year ago, just about. And all these owners are new.
And so I have a bunch of underclassmen. I don't have any upperclassmen.

Speaker 1 I don't have anybody that's been doing it for three years.

Speaker 2 No, it's interesting. Yeah, that's not even a year old.

Speaker 1 Yeah. And so for me,

Speaker 1 I haven't, and you know, this is, you know, pro and con. Dragon has my partner, the founder, right? He's involved in the business.
He's been in in the trenches.

Speaker 1 I haven't been in the trenches and I know that. And so when you have someone that's saying, hey, I, I bought this franchise.
I went through exactly what you're going through right now.

Speaker 1 Now I'm a top producer and I'm going to coach you. And then they get a royalty for doing that.
I think it's very interesting. It's kind of, I think they call it like an area developer.

Speaker 2 Yeah. You know, there's different ways like my top guys, they're willing to share.
The way that I describe it is, listen. I'm only spending 10% of the total revenue back into this market.

Speaker 2 So if you don't take the bottle guy and move him up, you're you're never going to have great opportunities because literally you don't take that $300 average to $700.

Speaker 2 Let's just say the average ticket's $700 and I'm only spending 10%.

Speaker 2 I could only spend $70 to acquire a customer. Now, if the average ticket's $300, I can only afford $300 and I take it blended amongst all the techs.

Speaker 2 But you want to see your life get better, make everybody come up with you. Because if I could spend $120 to acquire a customer in this industry, I'm winning.
We get on TV, radio.

Speaker 2 And then guess what happens? We start start attracting the A-plus clients. And since you're an A-plus player and you're a team player, I rate my leads.

Speaker 2 If you're not ranking your leads, by the way, you're losing.

Speaker 2 Anybody out there that's listening, if you're not literally ranking your leads and matching them up, you know, you don't want Tom Brady sitting on the bench during the Super Bowl, but it doesn't matter in a scrimmage game.

Speaker 2 Yeah. So you want your best guys playing in the game with the best opportunities.
And I think people don't understand that.

Speaker 2 They're like, I try to make sure that every single person is getting an equal amount of leads.

Speaker 1 Is that like a lead scoring? Like, how do you rank them?

Speaker 2 So, like, for example, we've got level one, level two, level three. And if it's a level three, like what we figured out is how many garage doors do you have? That's the number one thing.

Speaker 2 It's not what the biggest problem is, but if you've got three garages, I want to send my time. I don't care if it's for tune-ups.

Speaker 1 You mean because you have like multiple homes?

Speaker 2 No, three homes, three different doors.

Speaker 2 So we've looked at credit scores, male or female, age, age of home. And what we found is the number one thing is how many doors do they have?

Speaker 2 And typically, you know, it kind of goes without saying, but

Speaker 2 the people with a lot of home, a lot of garage doors live in nicer neighborhoods.

Speaker 2 And it takes a certain caliber of guy to go out there and monetize that because people are rich because they got good at negotiating and saving money. They're not just opening their wallets.

Speaker 2 Everybody's like, I want to go to the rich neighborhoods.

Speaker 2 I'm like, you don't even know how to do stuff in the decent, like when you're selling vacuums, my dad used to love it when he'd he'd walk into, like,

Speaker 2 I mean, he'd walk into kind of a lower end house and maybe the people didn't speak great English, but they'd come out with $2,000 cash. Yeah.
And they always had, they were always buyers.

Speaker 2 You go into the rich people's house, they're like, yeah, we don't need that. So it takes a different type of caliber.
But some of my guys love tune-ups. Some of them love spring jobs.

Speaker 2 Some of them love off-track doors. Some of them love.

Speaker 2 So you got to find out what they do well on. So if you're not rate, if you don't have anything to correlate the leads to who runs better, you're screwing up.

Speaker 2 I had a guy that always screwed up on Fridays.

Speaker 2 He burned through leads. I found out he needs to be done by noon because he goes to Havasu to go out on his boat every weekend.

Speaker 2 So without the data, I would never be able to make those. One day I rode with him.
This is a long time ago. And I'm like, dude, he's like, dude, I got to get going.
I got.

Speaker 2 I'm taking my boat to Havasu. I go, do you do this every Friday? He goes, yeah.
I'm like, why didn't you just tell me you want Fridays off? Yeah. Or like one call.
Yeah.

Speaker 2 Like, they don't want to tell you. So it's up to us to use the data on cover.
I think this age of data, like we are living in the golden era.

Speaker 2 The generational wealth, 20,000 baby boomers a day retiring. 12% of them own businesses.
Nobody wants these businesses. I'll take them all.

Speaker 1 It's interesting. No one's going to, like, he would never take himself out of the game.
That guy that just needed the Fridays off. Think about like a baseball game.

Speaker 1 When you're watching a baseball game, if you're a coach or a man.

Speaker 2 And the pitcher's having a bad time. You pull them out.

Speaker 1 The coach goes up it says hey like uh i think we got to pull you the pitcher never says yes they say no no no i'm fine then they let up a home run right then and there you got to take them out i got a question for you so so i've been here since maybe you know i don't know one i've been here since one o'clock it's 5 30 at the time of recording this i'm sure you had meetings before you started the tour i've been going to seven since 7 a.m i haven't seen you look at your phone one time but like can you walk me through your day like are you typically able to not have your phone or email or do you have a lot of email so i don't do any email my My assistant does that.

Speaker 2 Fridays are usually easy for me. It's Monday, Tuesdays that I'm burning.
And, you know, I got a lot of stuff on my schedule, but we're going into the weekend. It's like we still are super productive.

Speaker 2 You know what I love to do on my phone that I do a lot during the day is I'll just go on here and I'll see where we're at for the day. And I'll just see where my top technicians are.

Speaker 2 And a lot of times I'll just text the top guy and I'll be like, dude, you're having a great day. Appreciate you.
And I just love looking at it. And I love looking at it at the end of the day.

Speaker 2 I'll text message some of the managers and be like, you know, the other day we had a million dollar day. And it's like, we're kicking some ass.
And I'm just like, I appreciate you guys.

Speaker 2 But like, yeah, today's going to be a $700,000 day.

Speaker 1 No, when you say you don't do email, you mean like you don't look at my email?

Speaker 2 I don't even look at my email. You don't even log in.
I don't even, it's logged in on my computer and I'll glance at it every now and then, but I don't open any of it. She does.
She filters it.

Speaker 2 And if it's something important, she'll print it out and we'll go over it. And if it's not, I have a team that goes through it and finds out is this important or not? How do we do it?

Speaker 2 What do we do with this? Really? Oh, yeah. I think email is the biggest waste of time ever.

Speaker 1 What about like just like people? Like people just probably reach out to you all the time. If you do that via text, yeah, you'll answer text.

Speaker 2 I'll answer text. My voicemail is full on purpose.
Call my cell phone real quick and put it the mic up.

Speaker 2 So he's going to call me. Dan's about to call me.
You guys should hear my voicemail. Put it up to the mic.

Speaker 2 So

Speaker 2 I'm going to send it to voicemail.

Speaker 2 Hey, there, you've reached Tommy Mellow with A1 Garage Road Service, the Home Service Expert podcast, and the book, The Home Service Millionaire.

Speaker 2 If you want to get a hold of me, please try text messaging me. It's the best way to get a hold of me.
And I hope you're having a wonderful day. Talk to you soon.
Thank you.

Speaker 2 The mailbox is full. I cannot accept any messages at this time.
So the mailbox is always full. And people are like, why don't you take voicemails? I'm like,

Speaker 2 because you're going to leave a three-minute long, stupid get to the point. I don't have time.

Speaker 2 Hey, man, just wondering what's going on. How you're doing.
I just, I was camping last week. I thought about you.
Holy shit.

Speaker 2 Just two sentences of a text. I'll know exactly.
And I love talking to people. And if it's more than 10 text messages, I'm like, let's just jump on a call.
Yeah. Yeah.

Speaker 1 So you pretty much

Speaker 1 you're bouncing meeting to meeting. You don't have to worry about this phone because you're just, you know, yeah, you know.

Speaker 2 sometimes I'll get buried with 20 text messages and I just go through them and I figure it out. Sometimes it's a lot.
Like the goal is for me is buying back my TAM, the book, Dan Martel,

Speaker 2 and really being intentional.

Speaker 2 And I'm going to get to the point where here in the next six months, where if you want to hang out and talk to me, it's going to be more in a group setting because it's just not fair to my mom and dad and Bree.

Speaker 2 and my sister and the technicians and CSRs in the company. Like, do do I want to help people? Yes.
But do I want to help them by screwing over my family and the people that work with me, my coworkers?

Speaker 2 I don't think that's fair. And anybody that says, well, you should make time for me because,

Speaker 2 because why? Because you think you're more important than my mom. Right, right, right.
And I'm not a good son. I've not spent enough time with her and my dad.
And it's bothering me now because.

Speaker 2 The goal was to have financial freedom. And I got a lot of money now.
And that was supposed to be it. You solved it.
You figured out the money. Yeah.
And now I'm just addicted to it.

Speaker 2 Now I'm enjoying it. And I'm like, shit, but still, you got to smell the roses.
You got to take time and remember why you started. That's why I give these lessons because I'm going through them.

Speaker 2 You know, when I tell people this stuff, it's because I've experienced it. Most of the stuff I teach is because I've gone down the wrong road.

Speaker 2 And it's not, I don't tell people don't do drugs because I'm not talking about that road, but I've just gone down the road of like losing priority, losing why I started, losing the main goal.

Speaker 2 And now I look at health first.

Speaker 2 Then I look at time and then I look at money. I don't care if you gave me a billion dollars tomorrow.
If I'm unhealthy and I'm going to die in a month, what's the point?

Speaker 2 Money's really relative. I don't care if I said I was going to give you a trillion dollars today, but you're going to not die tomorrow.

Speaker 2 You wouldn't even have enough time to like, you could give some of it away, but that's it. Yeah.

Speaker 1 Yeah, I agree. I mean, it's, I think it's challenging that.
So it's a blessing and a curse. I love what I do.
I love every bit of it. I'm here.
I've been on the road since Tuesday.

Speaker 1 I get home on Tuesday. So I'm gone for a weekend.
The IFA is all weekend. I got meetings 8.30 in the morning.
Tomorrow, Sunday. You know, you know how.

Speaker 2 What day does it go until?

Speaker 1 So it starts. They keep pushing it up.
So it starts tomorrow, like unofficially, and then it officially starts Sunday. It goes until Tuesday.
Okay. But

Speaker 1 I flew to, so our office is, it's confusing. Our headquarters in Wisconsin because my COO in the world

Speaker 1 were in Madison.

Speaker 2 I know you have family in Milwaukee.

Speaker 1 So we're in Madison. So I flew to Madison Tuesday.
We filmed some content Wednesday. I had a prospective franchise owner come in to meet my team.

Speaker 1 And then yesterday, we had what's called Discovery Day, which is seven or eight groups of people that are just about ready to buy a Voda franchise. They're at the last stage.
They come in.

Speaker 1 We have dinner. They meet the whole team.
The whole leadership. My whole team's there.
They meet them. We go through a whole presentation that went on today.
And then I'm going from here to IFA.

Speaker 1 Point of what I'm saying is I could literally go from Wisconsin to here for this conference. Tuesday, someone tells me to go to New Mexico.

Speaker 1 I could go there and enjoy every minute of it and work, not even work, be in meetings every second. But the challenge is you got to learn to turn it off sometimes.
It's hard.

Speaker 2 Well, I don't know. I don't have an off button, really.
I've been learning, like, trust me, people are like, do you ever sleep? And I'm like, you should see me.

Speaker 2 I'm like, listen, I'm so good at turning off, but the deal is I'm never completely off. There's always something.
Like, I'll wake up in the middle of the night and start whiteboarding.

Speaker 2 Like, the deal is I got whiteboards in every room in the house. Really? And I'm like, I'm a whiteboard.
And people are like, what do you whiteboard?

Speaker 2 And I'm like, ideas, thoughts, because I got to start with the end and reverse engineer it. What would need to happen for this idea to work? Who would need to be involved?

Speaker 2 People are like, can I see you whiteboard? And I'm like, it's always different, but just imagine you've got this thought. What would it take to make it happen? Never say no to me.

Speaker 2 If I gave you a thousand people and a billion dollars, could we get this done? Well, yeah. So don't say no.
What resources would you need to get this done?

Speaker 2 Actually put some thought into it and tell me what kind of timeline we're looking at how much will it cost and what resources do you need because saying no is lazy it involves no thought it involves no creativity just tell me what you would need to get this done yeah and then let me look at it i'm probably going to say no to a lot of things i'm going to bump up your timeline give you half the budget you asked for and we're still going to figure it out i love that i mean we say i say to people when they come to work with me i say um hey go home write down everything you would have done differently at your last role and bring that in that's like the playbook for you right of what you would do differently and you you know, for us, like we wanted to, we had this goal of awarding 300 territories in a condensed timeframe.

Speaker 1 And everyone told me, make sure you don't grow too fast, which I completely understand. But I used to challenge that question around, well, what does that mean? What would make it too fast?

Speaker 1 Like, how do you quantify that?

Speaker 1 And one of the things we realized was if we were to train eight people every single month to be a voter franchise owner, it's a lot of people, eight people learning how to run their own business.

Speaker 1 Well, it comes down to people. For every 16 franchise owners, we need another success coach who's dedicated to those 16 people, for example.

Speaker 1 And then we had to like reverse engineer it and hire ahead of that. But it's just interesting.
I think every problem can be solved if you just backtrack, like you're saying.

Speaker 2 Yeah, reverse engineer. You know, I said this the other day on a TikTok or Instagram.
I said, we're going to be a billion-dollar revenue company.

Speaker 2 And everybody's like, I doubt the guy's worth $500,000. And the whole industry is not worth a billion.
And I'm like, okay, you guys are idiots. But I'm like, let's just do some math.

Speaker 2 You hire 14 guys a month. They have a $1,200 ticket average blended with new doors.
New doors could go 5, 10, 20, 30 grand, believe it or not. So it's blended at 1,200.
They run four calls a day.

Speaker 2 This is just assuming you never lost a technician. 14 guys a month, 60 months, which is five years.
You got a billion dollars. Yeah.

Speaker 2 The hard part is getting that kind of lead volume, but it's just 14 guys a month for 60 months.

Speaker 1 You're saying, you know, like, cause like, I know you're pretty big on local service ads, if I'm not

Speaker 2 big on all of Google, yeah. Yeah.

Speaker 1 Local service ads is interesting because it's, uh, so, so one of the one of the tricks that we do, and maybe you do something similar, but we, we just cap the weekly spend.

Speaker 1 So we'll have like a hundred thousand dollar weekly spend on Google. We're not spending anywhere near that because there aren't enough dollars.

Speaker 2 No, no, no. You got, you got to, you got to put a way bigger number.
You also got to turn on messenger on LSA. You also, we built an algorithm that tells us how much we're showing up.
Really?

Speaker 2 So, yeah.

Speaker 2 And we, what I've learned is if you're not answering on the first ring, if you're running an ivr you're losing your ass so i could tell you my quality score for lsa ads you're answering you're answering in one ring you want to answer lsa i mean we we try to we used to have an ivr press one press two yeah well google knows that and that delays the answering and they look for tone their ai it's all recorded there's a google guarantee yeah and then One of my buddies figured out you could, let's say someone calls up and they say, I'm trying to buy a garage door remote.

Speaker 2 And we're like, yeah, Home Depot. Like, we don't just just show up to your house and sell you one remote unless we might charge you like $200 just to show up.
But that's not a real lead.

Speaker 2 So you could go oppose it in the Google Council. Yeah.
And so we get, you know, we get a lot of refunds and it doesn't hurt the algorithm.

Speaker 2 But if you don't have Messenger on it for messenger leads, your LSA is getting severely hurt.

Speaker 1 With an AI, like an autoresponse.

Speaker 2 You can set up an AI, but all you want to do is have somebody there to message them or an AI.

Speaker 1 Well, my point around it is that no matter what, there's only so many local service ads in a, in a pond. There's only so many fish that pond.

Speaker 2 Yeah, there's no way you could put it at the 10 million dollars and it will never get spent. So you want to have your LSA.
You always want to be bidding on your own keywords on PPC.

Speaker 2 You want to be working on organic. If I had a franchise, what I would do is I would look at every single non-profit.
I'd look at the EDU backlinks and I would figure out how to build backlinks.

Speaker 2 And I would make the franchises

Speaker 2 get 10 backlinks a quarter to the main hub.

Speaker 2 And I would be constantly working on getting more, more links then i'd work on site speed mobile speed this is what i do i do i'm a marketer right this is what i do if i was franchised and i was coaching on marketing and i had one brand with 30 owners yeah i would just give them homework and how to do it and i'd say listen you could even have your wife and kids help it's like look at your vendors yeah look at all your vendors right yeah

Speaker 2 Some of them have a domain ranking of 90. Like they're massive.
Write them a testimonial, do a video and say, all I ask is that you link link back to my website.

Speaker 1 I mean, it's crazy. Like when we got into Voda, like when we did the acquisition, you know, they had 2,5 star reviews in the flagship location, which is, you know, a good amount of and amazing.

Speaker 1 And I remember one night before we did the deal, my eyes were black underneath because I was up till like four in the morning reading every review.

Speaker 1 I read every review like a psychopath because I have undiagnosed OCD,

Speaker 1 which, you know, it probably helps me. But anyway.

Speaker 1 One of the things we did that I thought was interesting was, you know, the dragon, the founder, which is an amazing thing that they came up with was after the job, the next day they call every single time they check the person at the front desk their technician comes back and they literally say hey this homeowner said you did this great and this bad there's no hiding right but we realized and then they asked for the review but we realized like we took a qr code and we put it on this nice little you know card and instead now if i'm in your house and i do it i do it i'm like hey thanks everything good hey would you mind doing this review real quick like right now like we do it right in front of them reviews went up 47 that month month but one of the things we then we learned with local service, like I don't know, a lot of people don't know this, but there's local service.

Speaker 2 There's a Google My Business. There's a review for that.
There's a specific link.

Speaker 1 And so now we have the other side. So we'll go and we'll get, if it's a local service deal, we'll get the local service QR code and then we'll get the regular.
And here's the thing.

Speaker 1 If I'm in your house and I ask you for a review right here and now and you're kind of not wanting to do it, then I need to put my phone back and I'm not leaving because something's wrong.

Speaker 2 Like, you know what I mean?

Speaker 1 Like, if you don't want to leave a review, then you might be in.

Speaker 2 You know, here's the deal. I've got a really good way of getting reviews more emotional where we put out an A-frame and we're like, these are my kids.

Speaker 2 The reason why I work here is to support these kids. And now listen to this.
You're going to love this.

Speaker 2 So you say, what gives me job security and allows me to give them a great Thanksgiving and Christmas and allows me to take my kids to Disney World is because when you leave a review with my picture in it, when I'm working, people actually call and ask for me by name.

Speaker 2 It's what gives me job security. So I'm telling this to a buddy of mine.
He's a a superstar salesman. And he goes, dude, I do it way easier.
He goes, here's what I do. I just do it in 30 seconds.

Speaker 2 And I haven't even tried this yet, but he's really smart. He's one of the best salesmen of all time.
He goes, listen, my boss is going to kill me if I don't get a review. Like I might lose my job.

Speaker 2 And like, he's going to, he's waiting to take my truck away. If I don't get, that I give you five out of five service today.

Speaker 2 Listen, if I don't come back and show him that you gave me a review, my ass is grass. So he's like, your stuff works, but it takes takes like five minutes talking about the family.

Speaker 2 But I'm like, it's an emotional connection. I'm like, they'll both work.
He's like, my way is simple.

Speaker 2 And I'm like, but you want to tie it to the first thing I want to do is start the job is say, just so you know, Dan, my job is to give you five out of five service today.

Speaker 2 If at any point during our interaction that you feel like I'm dropping below that, can you let me know? Because I'll make it right. I'm going to call a manager.

Speaker 2 We'll just, we'll figure this out, make it right. Why do I say five out of five?

Speaker 1 Because that's the most you can get.

Speaker 2 Because it's Yelp, Google, Facebook, x store yeah it's five stars so i say five out of five and then at the end you say i want to make sure did i give you five out of five yeah and then the plan is listen would you mind taking a few minutes and you're allowed to give them something you could give them a deco hard work to say listen your time dan it seems like to me you're sharp you probably make a ton of money

Speaker 2 i'm going to give you something in exchange. No, you don't have to leave me a five star, but I know your time is important.
I'm going to go ahead and include all I want is a review.

Speaker 2 Let us know how we did. And I'll go ahead and install this DecoHart.
You can just do whatever you want. You could give away a can of lube.
You could give away, well, we got lubrication.

Speaker 2 It sounds funny, but lubrication is. I forgot we're in the garage.

Speaker 1 I didn't know what you were talking about.

Speaker 2 Yeah, can of lube, can of K-Y jelly.

Speaker 1 The way he said it is, so I got to ask with the photo, is it like a postcard of their family? Like, are they showing their phone? Like, what's.

Speaker 2 No, no, no. The A-frame's got a picture of their family, but I'm trying to get a picture because if you take pictures in the reviews, it's geotagged geotagged into Google.

Speaker 2 Those reviews count 10 times more. And also,

Speaker 2 here's a picture in the house. A picture of the house of me working on the whatever.
Yeah. Because those reviews are gold.

Speaker 2 Like when it's a picture, it's a for sure because it's all geotagged at that location. Google knows that's real.
It's like, so number two is there's what's called local guides on Google.

Speaker 2 So if you enter their Gmail and they're a local guide, that review is going to count 80 times more. Just like when you go on Yelp and there's an elite, if they're not a Yelper, you know what you do?

Speaker 2 Click find friends on Yelp. Have the people with a browser on their computer on the second monitor on Yelp.
Yeah.

Speaker 2 Put in their email into Find Friends. If a Yelp account pops up and there's 25 reviews with pictures in them, that Yelp will freaking stick and it's gold.
Yeah. Because they left reviews.

Speaker 2 So you just tag that job on your CRM that they're a Yelper. And if not, you're going after Google.
Like these things, I figured all this stuff out a long time ago.

Speaker 2 And it's not like I'm not paying people for reviews. Yeah.
I mean, I've literally given away stuff and they left me a one star.

Speaker 2 Like at the end of the day, my goal is just, I think your time is worth something. Yeah.
Yeah. And they might be happy as hell with me, but

Speaker 2 like me, the technician, but something goes wrong in the process, like

Speaker 2 trying to think of something that could go wrong. Like, I never got a copy of my receipt and I called you guys back for it and they change it.

Speaker 2 Like, you know, there's certain things that are just out of your control. The manufacturers didn't get the door in time and now we're calling them.

Speaker 2 And it might be just that the dispatcher put the time in wrong or put avenue instead of street. Yeah.
And I went the wrong direction. So I finally found the house.
So there's a lot of things.

Speaker 2 And all you got to do is listen and say, I am so embarrassed. Yeah.
Like, let me tell you one thing. This is not how we run the business.
Like, your time is worth something.

Speaker 2 I promise you, like, we are a good company. Yeah.
And I,

Speaker 2 what I do is one of the things to the company's story is, Dan, you know, I could work anywhere I want, pretty much in the universe if there's garage doors. They trained me for three months.

Speaker 2 I'm a certified Navy SEAL, SEAL team six when it comes to garage doors. Yeah.
You know, this company, they were here through COVID. They've been here for me and my wife and my kids.

Speaker 2 They've been here through the good times and the bad times.

Speaker 2 And Dan, I trust them with my family. And I think you should trust them too.

Speaker 2 I love what you were saying about, it sounds like kind of what you were saying about this idea of like um you know they take the customer side like oh yeah yeah you want to get them to be like listen i'm probably going to get in trouble if i do this but you know we do have a coupon it's like and i don't like my guys to lead with coupons because they devalue themselves but say i'm not supposed to say this but you know i could probably just add one strut is like listen i want them to actually believe yeah

Speaker 2 I want them to take the customer side. I want to say the goal has always been, it's me and you, client versus a one.
I love my company, but I'm going to work hard for you because I like you. Yeah.

Speaker 2 Like, you're a cool dude. Let's just see what we can do.

Speaker 2 Like when guys come to my house, like for the home service stuff, and they're like, listen, I'm not supposed to do two coats to clean your tile or whatever it might be or the air dryer where they'll put, like, I'm not supposed to be giving this stuff away, but listen, you're a cool dude.

Speaker 2 Like, this is an extra $200 value. Just do me a favor.
Just don't say anything. I'm like, dude, you freaking rock.
It's like, yes, I love you.

Speaker 2 Like, if you had that mentality, but it shouldn't be always discount, discount, discount. Don't lead with discounts.
Yeah. One of my buddies, Brian Burton, has a podcast.

Speaker 2 And if you go to a1garage.com forward slash game day,

Speaker 2 it's called the Waste No Day podcast. That one goes specifically to one podcast.
I redirected it. And it's this guy that just explains he's never had to give a discount on anything.

Speaker 1 Just because the way.

Speaker 2 Just he's like, I wouldn't discount. I don't like cheap things.

Speaker 2 I don't ever discount my services he goes through the process of it so i i did a short code basically a1 game day yeah because i wanted all my guys to listen to that to understand that you deserve more than being a discount person we're not cheap we're not discount people we're not the free discount there's a lot of companies out there that are like discount or it almost sounds like cheap discount like that i'm trying to think of the other words that it's like you wonder why you attract such shitty customers yeah is you've already already said you're not worth anything.

Speaker 2 Yeah. You're like the discount services.
What are you discounting? Are you discounting the quality, the labor, the parts? Yeah.

Speaker 2 Well, I don't want, I want quality people that have background checks around my family. I want quality parts.
What are you discounting?

Speaker 1 What are you cutting? Yeah, it's the same. It's like, you know, Starbucks and sells an experience, right? Apple sells an experience.

Speaker 1 Like, I think about for us, like, our average ticket for our floor cleaning side of our business is around 560 on that.

Speaker 1 And that's, you know, substantially higher than the national average when it comes to a floor cleaning average ticket. And it's just, I mean, it's the same thing, right?

Speaker 1 It's like answering the phone with a smile, showing up on time, a picture of the driver in the app. So that when...

Speaker 2 What do you guys use for your CRM?

Speaker 1 So we use workies.

Speaker 2 Workies?

Speaker 1 Yeah. Yeah.

Speaker 2 I've heard of it.

Speaker 1 We use workies. We switched to workies.

Speaker 1 Workies. Yeah.
A few months ago. I know you're big on

Speaker 1 service titan.

Speaker 2 I'm big on anything that works good, that gets you the data you need to make decisions. I'm not big on ones that when people say, I got this one knowing I need to get one better.

Speaker 2 Like put on your big boy pants and act like the company you want to be.

Speaker 1 We, so there's a couple of things. So so first off, we got work ease because we felt like the user interface was really, really strong.

Speaker 1 And if you think about it as a franchise owner, your only real interactions with us, like from a tangible perspective, is like you have the CRM, you have QuickBooks, you have a few things.

Speaker 1 And like we wanted them to have a really easy-to-use CRM. The other challenge is, remember, the CRM is paid for by our, you know, it's their business.
It's a franchise owner.

Speaker 1 And it's challenging when someone first starts.

Speaker 1 They have a, they're, you know, there's only so much money they'll pay on technology when they first launch, no matter how much we can say to a blue in the face. I'll give you an example.

Speaker 1 I'm going through this right now. We utilize very specific technology for the project management element of restoration.
Everyone needs to use it.

Speaker 1 Restoration, way behind the eight ball when it comes to technology. Like there's no one cohesive program until this particular solution we use.
And it's not cheap.

Speaker 2 Is it a secret?

Speaker 1 No, it's not a secret. It's called Capabuild.
And it's a newer, I mean, it's not new. They're two years old, VC-backed company.

Speaker 1 A buddy of mine that's my neighbor, his, we didn't meet them through this.

Speaker 1 This is coincidence, but he's my neighbor in New York City and very smart guy, went, you know, worked for Bain Capital and went to Wharton Business School.

Speaker 1 Anyway, the same company that invested in his business invested in this company. And they've got $12 million a year.
Restoration companies using it.

Speaker 1 They've got like 500 licenses so far, but they're two years in. So they're younger and earlier.
And we jumped on early.

Speaker 1 And what they do is they take all these fragmented restoration tools that you need to utilize that creep up over time where you end up spending $1,500 a month with all this siloed things and they put it all into one place

Speaker 1 okay but it's not cheap it's you know it's a thousand dollars a month and it's so necessary and but it's per location per franchise per location right and you guys are franchiseors are the cheapest people i've ever met yeah so what they do is they negotiate a cheaper price and then they still want to feedback to the franchise yeah yeah so i'm sure you've been able to hustle that down a little bit so i'll tell tell you so first thing no offense i'm not trying to say you're no i'm not offended but i'll tell my franchisee that always we joke about this we have a good relationship but i i make no money on that service i make we don't have a like a kickback or anything and so we at voda and i tell people this like we make our money on the royalty And we make our money.

Speaker 1 We do get some rebates on trucks. We get trucks cheaper.
And we encourage also, we talked about buying trucks.

Speaker 1 I can't wrap my head around. I just leased a truck in Wisconsin at a Capital Lease, and we got the Section 179 and bonus depreciation.
And you cannot convince me why I would ever buy a truck.

Speaker 1 I don't understand why anyone.

Speaker 2 And I was kind of blunt. Some of the people were probably like, I'm like, losers want to own their own trucks.
Like you, you want to put all your capital.

Speaker 2 And it's something that doesn't even help the business because you feel more comfortable paying it off. Yeah.
And then you like, well, it's paid off. And this truck gets me a lot of business.

Speaker 2 And it's seven years old. Yeah.
Well, here's the deal. Who do you think makes more money? Me or you?

Speaker 2 I'm not talking to you.

Speaker 2 But the people that brag to me about like, people that brag to me about like,

Speaker 2 look, if you want to pay off your house, which is a mistake, I paid off all my houses because interest rates are high. But when it dips below 4.5%, I'll take 80% back out.

Speaker 2 80% because I want the 20% to get rid of the PMI, right? But it's like these guys talk to me and they're like, they brag that their trucks aren't wrapped and they're busy as hell.

Speaker 2 I'm like, yeah, because you're still in the field, bro. Like, and I'm not, I was in the truck.

Speaker 2 Look, I'm talking about, I was in the truck for a long time, but I'm like, don't act like you got it all figured out.

Speaker 2 The problem that you don't make a profit and you're still bringing in 200 grand a year and your company's making zero is because you got this freaking ego and you think your shit doesn't stink. Yeah.

Speaker 2 And literally, like, it's like, oh, yeah, it doesn't have to be that way. I'm like, no, you can pay off a struck and still make a lot of profit.
But then the trucks.

Speaker 2 it looks like shit on the road and you you pull up with a brand new truck and it's got a brand new wrap and the dude looks good, and he takes care of himself.

Speaker 2 You're already like, the customer knows they're paying more money.

Speaker 1 100%. I mean, you know, you know, we, we spent a lot of money in rebranding Voda from the original name and, you know, making it the way that it looks.
And our trucks are blue with a nice wrap.

Speaker 1 It just says Voda. It's very clean.
You actually, I think it looks like you're like, is that a cleaning company or energy drink? I'm not sure if you look at the trucks.

Speaker 1 I'll have to pull it up or something. But, you know, the technology that we were using, it's $1,000 a month.
We don't make any money on it.

Speaker 1 I actually recently said to the CEO, there's a great guy, but I said, hey, man, I'm going to tell you something. I'm not going to fight with franchisees.

Speaker 1 Not fight, but have, I don't want to convince someone to spend money. I don't make any of the money.
You're making the money. So you guys have to figure it out.

Speaker 1 And the point of it is, we have this belief, which is, I don't mind if you don't like something. Like, I feel like I'm like a dad.

Speaker 1 If you're mad at me at 21 years old, but at 30 years old, you realize I was right and you're winning because of it. I don't care.

Speaker 1 So for us, we know and we absolutely listen to our franchise partners, but we know this solution works. And the reason why is it creates this consistency.

Speaker 1 We want to have really large national accounts. We have to have a consistent operating system around the technology.
We have to have, anyway, it works so well.

Speaker 1 But what's interesting is we have to convince people early in around why they need to use this. I think the whole tangent I went on there was I would love to use, for example, Service Titan.

Speaker 1 It's just, it's, I think, what is it a month? Like, uh.

Speaker 2 It's a few hundred bucks per tech, but you don't pay anything for the office. You don't pay anything for the CSRs or dispatchers.

Speaker 1 But here's where I know it's worth it. We had to pull all the reporting into our own dashboard that we've created called scoreboard, and it's a priority, pulls all the APIs into one place.

Speaker 1 Nightmare. I took a year off my life

Speaker 1 building that.

Speaker 2 And we could have just used it, you know, service time is great, but it was built for Ajax Plumbing Electrical. So you got to modify a lot of things to make it work right.

Speaker 2 That's why we're pulling things into the Power BI, but I'm also able to do more regression testing and pull and quantify things that no one else is looking at.

Speaker 2 And I wanted one dashboard for payroll for intact, which is QuickBooks. And I wanted for service time to pull it all into one natural hub.

Speaker 1 And I'll tell you,

Speaker 2 it's going to be very hard. You're bringing a knife fight and I got a hand grenade and a rocket launcher.
So I don't have a vision of like being the biggest Grosdra company.

Speaker 2 I want to be the Grosdra company.

Speaker 2 It's going to be hard. A Q-tip.
Well, yeah. It's like, look, yeah.

Speaker 1 Yeah. Q-tip.

Speaker 1 You know what I mean?

Speaker 2 Yeah. Yeah.
Yeah. Like the brand is like, it's not, yeah.

Speaker 1 Like,

Speaker 1 just for anyone's Q-tip. When you think of a Q-tip, it's, you know, it's Q-tip.
That's actually the name of the brand. It's a cotton swab.

Speaker 2 Like, it's actually for Kleenex. Yeah.

Speaker 2 Yeah, no, I understand. Yeah.
It's like, listen, I might have 50 brands, but very soon, very, very soon in the next few years, it will be impossible. It'll be impossible to keep up.

Speaker 2 It'll be impossible to touch us. Like literally, like, because we'll have better vendor agreements.
We'll have like my trucks right now come from Mexico, from enterprise, straight from Dodge.

Speaker 2 It goes straight from Dodge to another company that wraps them and does all the work to them and then sends them for free to every market. Wow.

Speaker 1 Zero dollars. Not even like a dollar per mile.

Speaker 2 Not even nothing. $0 to the local Dodge dealer in that area.

Speaker 2 Like,

Speaker 2 how do you keep up? Nobody else is getting the trucks for my rate.

Speaker 1 That's amazing.

Speaker 1 You know, it's interesting when you talk about the franchise being, you know, cheap, I think you said, you know, I had this realization where I started to think to myself, wait a minute, if we brought on 30 owners that pay $1,000 a month, and for clarity, because he's probably going to listen to this, I love capabilities.

Speaker 1 It's amazing, right? But one of the things I realized was if we bring on 30, and let's say this year we'll bring on about 100 franchise owners, new owners.

Speaker 1 So we'll be at 130 owners, eight a month, give or take. And we're bringing all this business.
Our franchise owners should win when we win. Meaning, you know, I make my money on a royalty.

Speaker 1 So yes, the more owners I have, the more royalty. I want high average unit volume, but I also want lots of owners.
So I started to negotiate.

Speaker 1 And we haven't accomplished this yet, but I was like, why wouldn't it go down? I don't want the money, but why wouldn't our franchisees benefit when we have 100%?

Speaker 2 Hundreds of people. And we split the rebates.

Speaker 1 Yeah, or split the rebates.

Speaker 1 But I realized I would rather make a deal where.

Speaker 2 Everybody wins. Everybody wins.

Speaker 1 The vendor wins. I win.
The franchisee most importantly wins. The customer wins.

Speaker 1 I think a lot of franchisors, unfortunately, like, I don't know why that happens, but they get very greedy.

Speaker 2 Well, the reason why Google's mission mission or vision back in the day was to do no evil.

Speaker 2 And service time is amazing, but I called Ara, the founder, or actually he called me the other day and I said, you know, my biggest fear is, I said, you're going to lose control.

Speaker 2 And you got to fiduciary responsibility to your shareholders to give them a high return. You promised to give them a high return, but you also remember why you started, which was for the tradesman.

Speaker 2 But at what point does this fiduciary responsibility to get a return over supersede the client, which is us, you know, the home service businesses.

Speaker 2 And that's the scary, slippery slope for a lot of people. It's like, I borrowed money, I got paid out, I helped my family out, but now it's profit, profit, profit.

Speaker 2 And every company over, once the investors come in, it's like you have to get them a return. I mean, or you lose your street credit.

Speaker 1 Well, what's interesting is you're talking about the CEO of the, of the business, right? The private equity, the steward of that capital, it's literally their fiduciary responsibility.

Speaker 1 I had a little run-in with a a private equity firm that bought my last company. They're great, nice relationship.
I remember we had a little challenge and they said it to me point blank.

Speaker 1 And I really appreciated the way the gentleman at that firm said this. He said, Dan, don't take this personally.
It has nothing to do with you. We don't think you're bad.

Speaker 1 If we see anything that potentially harms our investment, right? We have a fiduciary responsibility to our investors and we have to protect it. That's it.
It's not, there's nothing personal to it.

Speaker 1 It's just they have to do what's right.

Speaker 2 They got to do diligence. They got to do their homework.

Speaker 2 And if they look, do you know what happens with a fund if they make a couple of bad investments out of the eight to 12 they invest like their lps go away yeah the future of the company goes away there's a lot of pe companies and most of these pe companies most of them the large majority are not very smart they're very smart financially fiduciary like they understand financials they know nothing about culture operations yeah so most of them try to cut their way to the top they think they can arbitrage everything we're going to take five companies buy them put them under one operating system and then we're going to sell and take the arbitrage because we'll pay 3x 3x for these five and then we'll sell it for six they don't know how to actually increase the value yeah how to get leaner like how to book more phone calls and how to get people to stop turning over so they kill the culture the day they buy it they cut their way through and then you wonder we're going to have a reckoning in the next few years it's going to be a reckoning do you know how many companies i know with pe that signed an arm loan and they came in at like three or four percent of them that kicked up 12 and a half percent now i mean literally our payments on our line that see PE borrows the money.

Speaker 2 Yeah. Right.
And then I make the payments on the money they borrowed to pay me out. Yeah.
Through A1, which we're good. It's a financial model that's genius.
And you got the two and the 20, right?

Speaker 2 Yeah. They pay a 2% management fee, but the 2% comes out the 20% of the profit.

Speaker 2 And I know these numbers are confusing as hell for somebody that's like not, they don't understand this game, but PE is the best thing ever invented. Do you know the PE, the average?

Speaker 2 So 9.7% is, I believe, the SP 500's return over the last 25 years. Do you know what PE is over the last 25 years? 14.4.
You're talking all the crap and all the most amazing ones. Yeah.

Speaker 2 Do you know how many people do you think beat the SP 500?

Speaker 1 Very few.

Speaker 2 It's almost impossible to beat the SP 500.

Speaker 1 PE does. And people are getting multiples on their money when they're a limited partner.

Speaker 2 Why do they want a 3X?

Speaker 1 I think it's over seven years.

Speaker 1 I think it's interesting, like, you know, and then they de-risk by because a lot of times, I don't know, you know, you have a leveraged buyout and the founder has their own capital still in the fund rolled forward.

Speaker 1 And I think it's interesting, you know, private equity, I think, is amazing.

Speaker 1 I think in franchising, it can be challenging because, you know, so Dunkin' Donuts, what's the business of Dunkin' Donuts Corporate? Dunkin' Donuts is in, it's not in the donut business.

Speaker 1 They're in the franchisee business, right? Their customers, the franchisees. I feel my franchisees are my customer.

Speaker 1 I often sometimes feel like when private equity comes into franchising, the franchisees are a product to extrapolate a return from. And that's where it gets a little bit dicey.

Speaker 1 I think it's interesting. Private equity.
So like, you know,

Speaker 1 Drake wants to be be LeBron James and LeBron James wants to be the rapper. You know, basketball players want to be, you know what I mean? They kind of always like hang out together.

Speaker 1 I always feel like private equity and entrepreneurs, like entrepreneurs, you kind of like, you have some like, I don't want to call envy.

Speaker 1 It's not the right word, but you know, these guys went to the top school. We didn't go to the top school, but we have something they don't have.

Speaker 2 Well, the deal is Ken Goodrich with Ghetto called me up and he knew I was going to do a process. And he goes, Tommy, I'd give everything I own.

Speaker 2 I mean, obviously not his family, but like material things.

Speaker 2 He said, to be 40 years old and have a chance to learn what these guys know. He goes, so here's what's going to happen.
He goes, we're going to pick a great company for you. And he was on my board.

Speaker 2 And he said, when you learn how it all works and what these guys know,

Speaker 2 he goes, dude, he goes, you already in my. in my eyes have like a doctorate in home service, but you really don't know how money's raised.
You don't really understand P.

Speaker 2 You don't understand the level of arbitrage, and you don't know what the financial reporting is and audits and how to have a great board meeting. He goes, when you learn this, he goes, lights out.

Speaker 2 He goes, dude, if I told you that I don't think I could get to 50 billion net worth in the next 10 years, I'd be lying. Now, I don't have that goal because

Speaker 2 after a billion, it's like you got the private plane, you got the big houses. There's no point.
But how much could you help people with that kind of money?

Speaker 1 Yeah.

Speaker 2 So for me, money's a, it's more of like a, uh, it's a scorecard, right?

Speaker 1 It's like by doing good. But that's what I'm saying.
So you're saying like you have your entrepreneurial ability plus the understanding.

Speaker 2 Then when you got a both, it's like,

Speaker 2 yeah, good luck. Yeah.
So guys, I always ask a few questions as I start to close out. This was awesome, by the way, dude.
I think we're going to work together in the future.

Speaker 2 I can almost guarantee it in some capacities, some things. So number one, what are like two or three books that changed your life?

Speaker 2 Doesn't have to be business-wise, just could be something lately that you read. It could be the Bible.
What's your favorite chapter, Revelations, or is it Thomas?

Speaker 1 So I, the Bible is definitely a foundation in my life. You know, I'm Italian, grew up Roman Catholic.
So, you know, Bible, you know, was involved.

Speaker 1 I would say from a business perspective, I mean, traction is my business Bible, if you will.

Speaker 1 I've read Traction probably like 10 times, honestly, or at least listened to it or like gone through the exercises. Obviously, the E-Myth Revisited by Michael Gerber.

Speaker 1 And then, on a non-business perspective, a book called Man's Search for Meaning.

Speaker 2 Oh, yeah.

Speaker 1 Great book.

Speaker 2 Yeah, yeah, when he was going for

Speaker 2 the Holocaust. Yeah.
Yeah.

Speaker 2 Awesome. And

Speaker 2 if somebody wants to reach out to you, Dan, they want to learn more about franchising. Maybe there's an opportunity with your company, or maybe they just wanted more information.

Speaker 2 What's the best way to do that?

Speaker 1 If they want to just talk franchising, LinkedIn, I'm super engaged on LinkedIn. Just Dan Clapps, Voda Cleaning and Restoration, V-O-D-A.

Speaker 1 If you're interested in Voda as a franchise, potential franchisee, you just go to www.myvodafranchise.com. My V-O-D-A franchise.com.

Speaker 2 And we talked about a lot of stuff. I'm going to let you close this out.

Speaker 2 Just a final thought for the listeners. I don't care what it is.
It could be go do this today.

Speaker 2 It could be read this. It could be tell your wife you love her, whatever you want to do.

Speaker 1 I mean, what I would say would be go back to the beginning. How many episodes of this podcast?

Speaker 2 Like 350.

Speaker 2 Really? Yeah. Been doing this a while.

Speaker 1 If you listen to this whole podcast, like from start to finish, you would be, you'd have a doctorate in home service.

Speaker 1 Cause what's kind of crazy is I got into home services and I would say a third of what I've learned is through this podcast.

Speaker 1 So if you're listening, if you're new to home services, just keep listening and reading because it's.

Speaker 2 That's funny because some of my buddies in the garage industry are like, dude, you listen to one through 50. It gets you from 3 million to 10 million.

Speaker 2 And then you listen is like, it was my journey oh from the beginning right so yeah yeah 2017 i was doing like 15 million so when i started it's all the way it's the the whole thing is like and i'm asking the questions as i'm going through it dude you should take like some ai system and like you know what that's a really good idea

Speaker 1 and then just condense it into like little blinks oh my gosh and then someone could

Speaker 1 someone could just listen to it and uh and then let me let me be the guinea pig because i'll listen that's great no that's smart it's funny you took all these notes i realized i could have just listened to the recording

Speaker 2 Yeah. So, Dan, I appreciate you.
Go ahead and finish your final thought. I'm sorry.

Speaker 1 No, that's it. I'm selfishly.
I'm going to go listen to this myself with my notes, but thanks for having me, man.

Speaker 2 Yeah, I appreciate you, brother.

Speaker 2 Hey there, thanks for tuning into the podcast today. Before I let you go, I want to let everybody know that Elevate is out and ready to buy.

Speaker 2 I can share with you how I attracted a winning team of over 700 employees in over 20 states. The insights in this book are powerful and can be applied to any business or organization.

Speaker 2 It's a real game changer for anyone looking to build and develop a high-performing team like over here at A1 Garage Door Service.

Speaker 2 So if you want to learn the secrets to help me transfer my team from stealing the toilet paper to a group of 700 plus employees rowing in the same direction, head over to elevateandwin.com forward slash podcast and grab a copy of the book.

Speaker 2 Thanks again for listening and we'll catch up with you next time on the podcast.