Multiply Your Success with Dr. Tom DuFore

262. 5-YEAR ANNIVERSARY SPECIAL: What if Everything You Know About Franchising is Wrong?—Mike Andes

• Franchise Your Business | BigSkyFranchiseTeam.com

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Welcome to our 5 year anniversary episode. We want to thank all of you loyal listeners that have been with us over the last many years. If you decide to listen to episode 1 you will learn about my dad and me and, hopefully, hear how far we have come for our production of the show. I always like to have a special guest on our anniversary episode and this year is no different. 

Our guest today is Mike Andes who asked how he can make franchising great for his system. His solution? He decided to take everything most people in his industry hate about franchising and change it. If you are new to franchising or thinking about it, this episode provides you with a unique way to think about how to franchise your business.

TODAY'S WIN-WIN:
Religiously survey your franchisees and act on it to support your franchisees.

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ABOUT OUR GUEST:
Mike is the founder of Augusta Lawn Care, a home service franchise that has scaled to over 150+ locations across the U.S., Canada, and Australia. His mission? To transform the blue-collar business landscape and help small business owners achieve financial freedom and sustainable growth.

ABOUT BIG SKY FRANCHISE TEAM:
This episode is powered by Big Sky Franchise Team. If you are ready to talk about franchising your business you can schedule your free, no-obligation, franchise consultation online at: https://bigskyfranchiseteam.com/.

The information provided in this podcast is for informational and educational purposes only and should not be considered financial, legal, or professional advice. Always consult with a qualified professional before making any business decisions. The views and opinions expressed by guests are their own and do not necessarily reflect those of the host, Big Sky Franchise Team, or our affiliates. Additionally, this podcast may feature sponsors or advertisers, but any mention of products or services does not constitute an endorsement. Please do your own research before making any purchasing or business decisions.

Speaker 1:

Welcome to the Multiply your Success podcast, where each week, we help growth-minded entrepreneurs and franchise leaders take the next step in their expansion journey. I'm your host, tom Dufour, ceo of Big Sky Franchise Team, and I'd like to welcome you to our five-year anniversary episode, and I wanna thank all of you loyal listeners that have been with me and with us over the last many years. And, if you recall, our very first show was the day after Father's Day and our first interview was with my dad. Now, if you're new to us, I interviewed my dad originally as a practice interview and I decided to keep it. After I realized that I would be launching the podcast right after Father's Day, I thought, boy, what a great way to do that. If you decide to listen back to episode one, you'll learn about my dad and me and hopefully hear how far our show has come from episode one to today, at episode 262 for our five-year anniversary.

Speaker 1:

Now, as part of our anniversary celebration, I always like to interview a very special guest, and this year is no different. Our guest today is Mike Andes, who asked how he can make franchising great for his system. His solution Well, he decided to take everything most people hate about franchising and change it. So if you're new to franchising or thinking about franchising your business, this episode is for you. Now. Mike is the founder of Augusta Lawn Care, a home service franchise that is scaled to over 150 locations across the United States, canada and Australia. His mission To transform the blue-collar business landscape and help small business owners achieve financial freedom and sustainable growth. You're gonna love this interview, so let's go ahead and jump right into it. I'd love for you just to start, maybe talking about your business and what you do. What led you to start thinking of expanding and eventually franchising?

Speaker 2:

Yeah. So when it comes to lawn care, like you mentioned, it's a relatively simple service. It's one of the lowest barrier to entry jobs slash businesses you can get started in. And so a lot of times people are like why in the world do you franchise a lawn care business? And so the reason I actually did was way back when I started my lawn care business, I was 11 years old. I mowed grass just so I could pay my way through college.

Speaker 2:

I started my lawn care business I was 11 years old, mowed grass just so I could pay my way through college. I started college when I was really young. I was 13 years old and I went to pre-med, thought I was going to become a doctor, ended up dropping out of medical school and the only thing I knew how to do was mow grass. So started Augusta Lawn Care. That was a little over 10 years ago now, about five years into it we did prior to that I got in a workplace accident underneath a dump truck, got sucked up into the PTO, ended up in the hospital and in that kind of mend period a couple of weeks of not being able to work I realized my business had no systems, no procedures. It was built on me being there every single day. I was literally FaceTiming my crew from the hospital bed, showing them the next project. And so the next couple of weeks, as I was on the mend, just like, really started to think through what are the systems and procedures required to run a business that does not rely on me working 80, 90 hours a week. And I started just sharing that on YouTube and made landscapebusinesscoursecom, which is free, and just started sharing my story Like here's the system I'm changing. I'm changing how I pay my guys, no longer by an hour, it's by based upon performance. Now I make estimate videos so I don't have to go to the job site and show the crew a job once I've done the estimate All these systems in the business when I started to realize that people didn't listen.

Speaker 2:

They didn't listen because they looked to me as like a content creator, a consultant, someone that makes videos, whatever. But what I wanted was to change the level of professionalism in the landscape industry and I just didn't see anyone doing it and for me it was frustrating because I saw what it did for me and my business. In two years after instituting pay for performance, I went from working 80, 90 hours a week in the business and hardly making any profit, not being able to afford raises for the crew or benefits or anything to. Two years later I took $280,000 in distributions from that same location and went there for two meetings a week, and so I knew what it could do for me. And it was so frustrating that when I share that story with other people on YouTube and podcast, no one listened, and so I figured the only way to actually see the change I wanted was to be on the same team as them, have brand equity, that we were together in this together, and that's why we franchise and I had already been a franchisee at Anytime Fitness and seen the power of systems and having 5,000 locations and the power of the software that they can build together, and I would only do the same thing for the lawn care industry.

Speaker 2:

And so then there's just a matter of like hey, let's take everything that people hate about franchising and just do the opposite.

Speaker 2:

So we don't charge a royalty, the initial fee can get refunded back to the owner as long as they stay inside the systems for five years, and then the 3F program is a franchise fee forgiveness program If you work as a lawn care technician out in the field for two years you can join the franchise for free. We just try to go through every single aspect that I as a franchisee had trouble with. And then I interviewed over 50 other franchisees from other home service franchisors before starting the franchise and say what's your pain points? What do you not like? And a big one is like the royalty, because as you get a $2 million business, I'm now paying way more on royalties than I was when I was 100 or 200,000 in the revenue. And yet I know the systems, I know the procedures, I know how this is supposed to operate now, and so just trying to do what was right by the owner, that's really been our focus from day one.

Speaker 1:

That is phenomenal with what you're describing, and I just want to unpack what you said a little bit because someone who might listen in and say, wait a minute, you give the franchise fee back, no royalties. How in the world do you generate revenue as a franchisor to support that system? So how do you manage that as the franchisor?

Speaker 2:

Our franchise, the give back program, for example, where they get the franchise fee back, basically after five years they can roll that initial fee into another location, or they can wait till the end of their term 10 years and just get the cash back, like literally a check back to them, and they just have to follow three systems pay for performance, they have to wrap their trucks correctly and have to do open book management with their team to be able to share the numbers with their team. As long as they do those three things, they'll get the money back, and so I. My incentive in this case is to keep them in business, because they're going to get, they're paying a flat monthly fee of $1,600. So, like I, just need to keep them in business, that's my objective, whereas when, when there's a royalty structure in place, I find that the franchise or has perverse incentive to inflate top line revenue. So encourage people to spend overspend on marketing, overspend on salespeople, overspend on salespeople, overspend on a lot of aspects, because they're just trying to inflate top line revenue. They don't care about the bottom line profit. And so another thing that I was really adamant about, too, is like allowing people to leave the franchise at any time with their customers for no penalty. And no one does that, and I understand why because it's like it's freaky. But bottom line is like it forces us, as the franchisor, to constantly improve the systems, constantly offer more value, constantly offer more training and support and serving the owners. And so that is. It's not easy, it's very difficult to run a system where people can leave at any time and take their business elsewhere, especially in a low barrier entry market like lawn care. But it keeps us honest and ultimately building a franchise.

Speaker 2:

I think the number one thing that keeps this industry really held back is we build businesses and franchise ores build the business in a way to sell it to private equity or a five, maybe a 10-year term. But if you were building that business over the course of 100 years, if you were actually asking yourself, what does this business look like in 100 years? You would structure it differently. You'd go slower, you would listen a lot more, you'd think about the owners a lot more. You'd think slower, you would listen a lot more. You'd think about the owners a lot more. You'd think about the brand reputation in 20 or 30 years from now.

Speaker 2:

And that's really why I think so many franchisors fail why so many don't get to 100 locations and that vast majority of them will never become profitable, because you usually have to get over 100 locations to become profitable. And I really hate the fact that the franchisor world gets such a bad rap. When world gets such a bad rap, when I think franchising is a beautiful thing in terms of following systems, having support, having backend, the ability to be able to use common practices and use across hundreds of locations and then just follow the system and avoid all the pitfalls, I love it. But there are so many bad actors when it comes to franchisors. There are so many people that just think that they can franchise their system. They don't support their franchisees, they take a royalty off the top without giving the support required to actually be successful and it gives a bad rap to the industry, unfortunately.

Speaker 1:

That's completely spot on and it's something that we even share and talk often with our clients in the capacity and summarizing this in the way that we say it Essentially, as long as you keep asking how are you helping your franchisees grow their business, make it more profitable essentially helping them accomplish their goals how can you help your franchisees grow their business, make it more profitable essentially helping them accomplish their goals, how can you help your franchisees first, and then the follow up is well, how does that help me as the franchisor? Whereas oftentimes founders start with the I want to serve and help my franchisees, but over time that gets converted and it starts switching to say, well, how can I, as the franchisor, start making more money? And when that's first, that's the beginning of the end, because you're going the wrong direction at that point.

Speaker 2:

Yeah, and I think, honestly, people can say whatever they want, but if you look at the franchise disclosure document, it'll tell you whether or not they care about their franchisees. And so, for me, I want to make sure that if I got hit by a bus tomorrow, that no one could undo the culture that we wanted to have and, from the onset, of putting the owners first. And so, if you actually care about your franchisees, you will put it in legal writing. You will have a franchise advisory council set up. You will have the ability for people to outvote you. You will have the ability for people to leave.

Speaker 2:

You will have all of these things. You won't be penalizing them for every little thing. We don't have a renewal fee. We don't have a lot of these things, because if it's in documentation, regardless of what happens to me, or I change my mind tomorrow, or I sell a private equity, it can't change. And so you show me your franchise disclosure documents. I'll tell you the true value you put on your franchisee and whether or not you actually look to them as a partner instead of a customer.

Speaker 1:

Amazing focus that you have there and a commitment really to your franchisees and what they're looking to do. Well, one of the things you talked about is this pay for performance that you have in place, and that's one of the three requirements that you have in order for the franchise fee to be returned at the end of the 10 years. Talk a little bit about what that is in an industry and just in general, where hourly pay, salaries and things are very common.

Speaker 2:

Yeah, like in a nutshell, if I'm explaining to someone, p for P is essentially the harder you work, the more money you make. And all it is is they get a percentage of the labor revenue they earn for the business. That's their wages. And how is that compliant? Well, we're still making sure they get at least a base pay and it's going to be above minimum wage. They're still going to get overtime, but if they're earning enough for the business, they'll make substantially more on pay for performance. And so what this does is align the incentives of the owner and the employee, because right now, if you're paying someone by the hour, the longer the job takes, the more money they make, whereas for you, if you're doing a bid on a job, the shorter the job takes, the more money you make as an owner. And so that's why there's this inherent friction between owner and employee is because we have different incentives which we want. One person wants to go faster, the other one wants to go slower by having people pee. You basically say hey, look, as long as this job gets done to the customer satisfaction and as quickly as possible, everyone makes more money. So now we're all talking the same language. Now is it easy.

Speaker 2:

No, the reason we pay hourly is because it's simple and it's lazy. You just literally clock in and out At the end of the week, you multiply that by a certain hourly rate and you give someone a paycheck. It's a lot more difficult to say okay, there's hourly rates, that we have to calculate how much you earn each day. We have manual deductions If you go too fast. You create yellow slips or callbacks If you lose a customer, if you have a non-revenue producing tasks like sharpening the blades or changing the oil these things all have to be accounted for. What happens if you have a really good employee with a brand new employee that's getting trained? Well, this person is going to slow this one down. How do we account for that? So, yeah, there's a lot of variables that have to be figured out.

Speaker 2:

We've created software just so it could make it work, but ultimately it comes down to if you want your employees to think like owners, they need two things they need to be paid like an owner, that's paid for performance and the information of an owner, and that is open book management. And so, in our opinion, in order for us to change the level of professionalism in the landscape industry, where the stereotype is it's a two or three month stint job, summer job, it's. You show up, you're smoking, some guy's smoking, music blaring not in a uniform, not in a nice truck, like. If we're going to change that perception, it starts with the employee and giving them the information and the composition that owner has. And if you're complaining, and you're in the labor industry, about the fact that you can get twice as many jobs in a day, you're way more like an owner and you're getting compensated. You have the information of an owner and if you give those things to your team, there's a higher likelihood that they will treat it like their own.

Speaker 1:

As you incorporated these models into your own original operating location and then with franchisees as they start incorporating this. What have you found to be maybe some of the challenges or common roadblocks that folks see when implementing this type of a pay for performance error?

Speaker 2:

Yeah, you got to have accurate pricing. You got to have accurate budget hours and the jobs, because if the crew's getting paid a percentage of that revenue but you're way inaccurate some jobs are way over, some are way under they're going to get discouraged. You need full transparency. A lot of people are like oh, I'm going to do P4P, but then they won't share the numbers with their team, so their team doesn't trust them, and so it's imperative that everyone is above base pay on P4P. In other words, they're actually there's motivation to make more money than what they're guaranteed at their base wage. That way, when they actually make a mistake and there's a callback, there's money on the table to take out of.

Speaker 2:

So, for example, if someone backs up over a mower and cause a $200 damage case, well, if they have $500 on this week's paycheck as a bonus on P4P, that $200 is coming out of that $500. And so now there's a culture of accountability within the team. They have to go fix their own mistakes. I'm not going to run around and fix all their mistakes. If they made a mistake and they were going too fast on cause they're trying to beat the clock and make more money on P4P, that's fine. They're going back and fixing the skin mark from the mower. They're going back and talking to the customer, and so it's just putting accountability back to the frontline team members and allowing them to win or lose based upon their own performance.

Speaker 1:

When you first started implementing this, as you talked about the transition of your own business after the accident and the injury and recovery and kind of recognize what you did you started making some of these changes For the staff that stayed around. How did you see that impact them? Or even with some of your franchisees and the staff that they bring on?

Speaker 2:

Very quickly you learn who your lowest performers are. They're the ones who complain. Now, all of a sudden, they're the ones that all the high performers don't want to work with. So low performers will get sniffed out of the system very quickly, because most times people don't want to be that guy and rat out all their employees, their fellow or coworkers that are taking longer lunch breaks, slacking off, stopping at every gas station. They don't want to be that person. However, if it affects their paycheck, no, they're going to care.

Speaker 2:

And so if you're on a crew with someone, now all of a sudden their performance actually affects your paycheck, because together as a crew, you make a certain amount of revenue and you get a cut of that together. And so now, all of a sudden, your lowest performers will not last. It really does shed away B and C players, people that are money motivated. They love it, they're willing to work harder, longer hours, they're willing to push through and they think like an owner, which usually means when someone implements, about 20% of the workforce is going to leave. They don't like it. They don't like being pushed. They're used to being able to sap the clock and take long lunch breaks and stop at every gas station and they're not motivated by money, but what usually happens?

Speaker 1:

we see about 20 to 30% increase in efficiency and so the rest of the team is able to pick up their slack. You basically get the same amount of work done with just less employees. Now, one of the things you talked about early on is that you started sharing this information originally through social media, where you, just before you started franchising, you just wanted to share it and help raise the standard of the industry at large. Talk about your use and incorporation of social media. I think a lot of times, owners and founders, they're scared to start incorporating or using it. They don't know where to start. They don't know like why would I even do this? How's this going to help my business? Talk about how you used it and might address some of those questions.

Speaker 2:

Yeah. So to be clear, if you have a local business, like a lawn care business, and you have no intention of, you know, making making impact or franchising or getting into the content game, making content on YouTube or social media is not going to help your local business. It's just not. The target audience for YouTube is the entire world. You might serve 10 or 15,000 customers in your local area, so getting views is not going to be super beneficial. It's probably going to be more beneficial that you do direct response marketing in your local market and spend your time and attention doing that. That being said, when I made videos to start off, I knew that if I would have had a family independence and I would have gotten that accident, I would have gone bankrupt. Otherwise, I was in a very fortunate circumstance to be able to be living at home, not have a lot of financial obligations, and I was able to get through that tough time. But most people would have gone bankrupt and that's why so many businesses fail in this industry and home services in general and most businesses in general. Honestly, small businesses is everything's hinging on the owner and I wanted to build a business that could run without me, could have systems in place that, regardless of their local or it's on the other side of the country the business runs, and then I really own a business and not a job. I, the business runs, and then I really own a business and not a job. I wanted to give that to other people because I knew that there was plenty of other people that, in my scenario, would have gone bankrupt. There would have been a lot of pain.

Speaker 2:

I knew what bankruptcy had done to my family when I was growing up and the pain that caused, and so I was just sharing videos like, hey, this is what I'm doing and this is what I'm thinking is going to work, and like here's the results of my Facebook ads. And I was just sharing information. It was only after a couple of years of that where I'm like okay, I'm going to have a new franchise, I'm going to take this content thing really seriously. Now In 2020 is when I got my first full-time editor, and then since then it's scaled up to. The team is now like 10 to 12 people. We do tons of content on all platforms. Yeah, it's quite the production now.

Speaker 1:

One thing I was thinking about for your business in any of the types of trades home services, commercial services oftentimes they're highly fragmented, where you have a lot of independents and mom and pop operators and as you have expanded your franchise, are you looking primarily for a startup kind of a traditional franchisee that comes in and maybe has no experience in your industry? Are you working with existing landscapers or lawn care companies that might be coming into your business? Talk about how you've addressed that situation.

Speaker 2:

Yeah, it's a pretty good split of, like people just starting out, never been in the industry before, seeing this as an investment opportunity, getting out of there nine to five, and then the other half being existing businesses in the lawn care and landscaping industry that realize that they need systems in place so they can run the business without themselves being there all the time. They want multiple locations, they want the support for their general managers, regional manager and having the back end of their office this is our command center behind me answering phones, et cetera. So it's kind of a 50-50 split. And there's businesses that have joined that are already doing over a million dollars in revenue in the lawn care industry that want to join and again it's incentivized actually heavier for them because they still pay $1,600 a month. Doesn't matter if you pay $2 million in annual revenue or $200,000. You're paying the same amount per month. So it actually makes more sense even for people that are larger to be joining. So we've kind of seen a 50-50 split of both and I think as we go up market in other words we are increasing like our capital requirements to join we will see probably more and more existing owners switch over because the network of the brand just gets stronger. So step back for a second. So on the media team, we have a lawn care web design and home service web design. We build websites for people in this industry so we can see all the data there For Augusta Lawn Care and this is the advantage of general joining a franchise is you have search engine optimization and you have Google authority to your domain.

Speaker 2:

So when we start a new location, usually within a week or two, we're on the first page of Google, whereas when we build sites for our clients that are independent, it can take three to six months. This is the type of advantage of joining a franchise and having a bunch of locations, et cetera. I can kind of see the difference between an independent versus a franchise in that regard. So some people are just like, hey, I'd rather just shortcut the whole six month thing, hop into the franchise, get leads much faster. I don't want to have to build an office, I don't have to go find a shop space to rent. I'll just have command center, do my stuff when I have it, when I. If I want a general manager to run the location for me, I don't want to have to train them, I want to send them here. You guys train them in a week. You guys do the support on a monthly coaching call.

Speaker 1:

So it just you know about some of the growth and franchisees coming on board with the 50-50 split of someone that's existing in the space and someone that's new in startup, made me think back to a comment you said earlier about thinking 100 years from now and setting the business up and the franchise up from there. I guess I'd be curious just to ask, as you've been growing through franchising, where have you started? How many units are you up to? What's your goal? Or, as you start thinking and have been planning for maybe a hundred years out from now, Right now we're at 170 locations.

Speaker 2:

I think we need to get to about a thousand locations in order to have the impact we want on the industry. And then when I say that is like when we start competing in a market, that's when we see other competitors start to change their behavior. Because if we answer our phone 24-7, if we go into a market and all of a sudden the customer expects that now all the competition has to match it or they have to get better. Just the same way, like Amazon came along, they're doing two-day shipping, free returns. That wasn't a thing 20, 30 years ago, and so people either adapted to it and now everyone Walmart, et cetera has to do it or they died.

Speaker 2:

And so our way of changing the level of professionalism in the industry is changing the expectation of the customer so that our competitors has to change and adapt the standards we have. They have to pay their employees based on performance, because now the employees want that, or they're going to go to Augusta. You know the customer is demanding the fact that, hey, you got to answer your phone because, like they're going to be answering it 24 7 and give me instant pricing over the phone. Our goal is just to get to a thousand locations. I think by doing that we'll be able to have enough penetration in the market to be able to have the impact we want.

Speaker 1:

Changing gears a little bit, was this seven stages of business wealth that you talk about? So I'd love for you to just talk through that and talk through those stages.

Speaker 2:

I think a big part of a franchise is having frameworks so that when things happen in the business inevitably there's going to be challenges and hurdles that you're not left guessing. You're like, oh man, am I different, am I strange, am I weird? I think that's the reason for a lot of times people quit is because they feel like they're not capable of getting to the next stage of growth, they're not capable of getting through the obstacle. And so the nice thing about a franchise is you see the same people using the same systems every single time and you start to see patterns, and so what we try to do is just create frameworks around the patterns we see every single time. So, like I know, from zero to a hundred thousand, these are the things you're going to be feeling from a hundred thousand to 200,000. These are the things you're going to be feeling from 200,000 to 500,000. Here's what the business is going to look like, here's the struggles you're going to have and here's how you're going to overcome them. And so, when we are are successful in their first location, they want multiple locations and they got multiple locations. They want to keep moving forward. They might want to invest in real estate. They might want to invest in the stock market. We want to actually facilitate them.

Speaker 2:

Investing in other businesses, other ventures, is investment. So so, for example, this July we have the seven figure club. If you have over a million dollars in revenue, you come out for a retreat. We do a day long. And we're talking about things like B corps, we're talking about ESOPs, we're talking about tax planning, we're talking about real estate investments, stock portfolio stuff, because we're trying to just overall increase the wealth of the owner. And so, instead of just looking at like, oh, we want to have a successful lawn care business, it's like how do we holistically think about how do we make these people rich? And that is like the framework I look through, because if I'm going to think that way after five or 10 years, I need to give them like what's the next stage? Like I want to invest in real estate. Okay, great, how do you do that? Okay, should I do an Airbnb so I can get accelerated depreciation? What does it mean to be a real estate professional so I can get much better tax? Can my spouse do that so I'm able to get those same benefits?

Speaker 2:

These are the type of things that we actually still want to give the education to the owners, and I would challenge franchisors to think holistically about the wealth of your owners instead of just like, oh, my job is to give them a successful business. They did not come to you because they wanted a great painting business or they wanted a great sub sandwich business. They came to you because they wanted to make a lot of money. They wanted to build wealth for their family, and there's reasons as to why they want that wealth, whether it be sending their kid to college, getting another house, being able to retire early, get out of a nine to five, and so build the franchise around that, like make them more money and then they can do whatever they want with the money. I don't care less, but I just know, if I can make them more money and then build their wealth, that they'll be able to do stuff more with their life, and I believe that that money will be used well.

Speaker 2:

And so we've really tried to focus on like what are the seven stages of someone? Going from 500,000 in annual revenue is the first step all the way to the last step, which is diversification as stocks, real estate, et cetera. In between that there's a lot of steps, and one of them is like multiple locations having finding a general manager. These are different stages, the as you move, you know making one location successful is great. Then how do I actually systematize and get a general manager in place so it runs without me? Then how do I copy and paste that model? And then how do I actually start diversifying other asset classes that are going to be much more tax advantaged is really the seven stages of wealth.

Speaker 1:

This is something, then, that you share and use as a framework within your franchise network, as a kind of a training system or platform. Is that what I understand?

Speaker 2:

are talking inside the franchise. We all talk the same language, like if someone says they're in profit mode, I immediately know okay, they're not buying trucks, they're not hiring employees, they are just simply raising prices whenever they hit capacity. I know that, and the way I will talk to them is very different. If someone says they're in growth mode, because I know they are going lower in price, they're trying to increase their close ratio, they're trying to win every single job, they're probably spending money on marketing, and so it's a different way of cutting out so many variables.

Speaker 2:

When you save a term, when you have, hey, I'm in this stage of growth, oh, I immediately have all common rules that we all agree to, and that is the language by which we can speak and get over a lot of hurdles that otherwise are make it difficult to communicate. Like if for me to be able to smile and immediately you know I'm happy, that is a rule that we now have ascribed to, that If I smile, we can both assume I am happy. If I say I am in growth mode, we can assume all of these other things, because we're in this community and we've adhered to this certain language, and so that's kind of how I think about community building in general.

Speaker 1:

You've provided so many great, just pieces of information, nuggets, wisdom in franchising. I feel like you've already answered this question, but I'm going to ask it anyway. Is we will help companies launch and go into franchising as a franchisor business and work with a lot of emerging franchise brands. So what advice would you give to an emerging franchise brand, knowing what you know now? What advice might you give to someone as they're kind of launching into this franchise world?

Speaker 2:

If you're starting, I have a really clear path to 100 locations. It's really difficult to be able to support the franchisees at the level required and be profitable when you have five, 10 locations. You just can't give them the support they need with the money you're making back from them. And so we had a very clear here's how we're going to get to 100. And we got a gun for it and it was like I live in the closet of the office just so we could conserve cash for three years getting to a hundred locations so we could become profitable. We didn't have outside funding. If you have outside funding, maybe you can cut a few little corners and that's helpful, but if you're trying to bootstrap, it's going to be really, really difficult for the first few years. Once you come to terms with that, then it's a me, a leg up in terms of what I wanted. I wanted a franchise advisor council, I wanted to be able to leave at any time, I didn't want a royalty, I didn't want a renewal fee, all these sorts of things. And then I would say, once you have franchisees, religiously survey them and ask them what you can do better and track every single thing in terms of their satisfaction. If you make them happy, they will sell franchises for you.

Speaker 2:

We don't run a ton of ads. I don't do a whole bunch Like literally this shirt in my YouTube videos is the extent of our advertising and that is like people just eventually will see that on my shirt and they'll go look it up and they get into the funnel. But the reason for that is because the owners, they believe in it. Our MPS score last quarter was 71. Pretty good, but it's gone. It's been a long, long trail of getting that up because when we first started is low and you survey and you ask them like what can we do better? Okay, so what do you like about this? Do you like this Having surveys? Like survey them so much and then take their feedback and do it and like prove to them after every survey here's all the things that you said that we need to improve, and three months later, here's everything that we did and now more like what's next? And that's how you increase your net promoter score, mps score, and that's how you get franchisees to start selling for you.

Speaker 1:

That's great advice and real quick for someone who listens and say well, what's an MPS? I mean, what's that acronym?

Speaker 2:

Yeah, so it's a range from negative 100 to positive 100. And zero would mean that everyone is like neutral about your brand. If it's positive, it means that there are more promoters than detractors inside of your business, and so it's a very quick and easy way to be able to know what is the customer satisfaction. And so, like I think Chick-fil-A is like 67. You got like Apple is something like 50 something, so like it's kind of all over. And then you have, like some of the most happy I think, amazon. Amazon's pretty high up there.

Speaker 2:

But it's a kind of a metric and the question that is asked is on a scale of one to 10, how likely are you to refer XYZ service to your friends and family? It's across the board. That is the net promoter question. And so if someone scores six or below, they're considered a detractor, they're actually taking away from the brand, they're considered a negative. If they're a seven or eight, they're neutral, they don't do anything. You basically would be stuck at zero. And then if you have people that are a nines and tens, those are people that are promoters, and that's when you have a plus number. So it's a really nice way to be able to, across businesses, across industries know what customer satisfaction is. So, like at Copilot CRM, which is the software side, we do the net promoter score as well. We know what that is and I can actually compare, like the two businesses and be like, okay, one's in software, one's in franchising, but I can still know like the general satisfaction of the customer.

Speaker 1:

Mike. For someone who's listening in here is a boy. I love the message Mike's sharing. I'd love to learn more. Get in contact with him. What's the best way for someone to reach out to you or get in touch with your business?

Speaker 2:

YouTube we do a ton of stuff on YouTube. Every week I go fly out to companies and we try to turn them around If they're struggling. We do it for free, we just record it, and so probably really beneficial of your home services. Mikeandyscom I have free courses, so I like once I did my MBA. I actually made a whole course on the MBA. That is good for small businesses. It's all free on there. And then, if you like books, there's a book too. It's free on my podcast, but you can buy it on Amazon. Yeah, so just go to mikeanniescom. There's a ton of stuff on there.

Speaker 1:

Excellent. Well, Mike, this is the time in the show and we ask every guest the same four questions. And the first question we ask is have you had a miss or two on your journey and something you learned from it? Yeah, so like.

Speaker 2:

The most recent one is last year. We launched software that we have available to public as well as our franchisees, and it tripled in size in a matter of a couple of months in terms of number of members, entered massive bug hell with spammers get into the system and start spamming emails and text messages. Everything started to break. I'm just trying to rebuild it and we kind of just getting back on track now. So that's been a uh, quite the learning curve. You know, the level of talent and skill required in terms of engineers has been the skill I've been learning like attracting really great engineers, certainly at L, in the past couple of years.

Speaker 1:

Let's take a look on the flip side.

Speaker 2:

uh, when a highlight Honestly, the net promoter score is the most top of mind because literally yesterday it came out. It means a lot to me that the owners are seeing the improvements and that over the course of that year or two we've almost doubled that by just focusing on them, surveying them, improving systems and the software and the coaching program and all these things they're trying to do, and so it means a lot to me. That's definitely the most top of mind win.

Speaker 1:

For folks who are familiar with the Net Promoter Score, the number you're at is tremendous. It is a very high number and difficult to reach. You're working hard on behalf and you're working hard for your system. Absolutely Well, let's talk about a multiplier. The name of the show is Multiply your Success. Have you used a multiplier to grow yourself personally, professionally or any business you've run?

Speaker 2:

Even last year, when I go back to my L, you know, in the software side of things, I think a big part of that was not reaching out and having networks of people that had done that before and so not being in the right rooms, whether it be conferences, masterminds, coaching, et cetera. I'd always been very cheap. Like you know, I was raised without a lot of money and, like even when we go to the franchise, like I was being very cheap. I had to cut so many quarters in terms of, like, living in the closet and doing stuff like that, but then you would get to a certain level. You have to realize that you've got to pay money to be able to shortcut, uh, the amount of skill that's required to stay up with the business, because you just simply cannot learn every single thing yourself, and if you are, it's going to take a long time.

Speaker 2:

And so when the business grew so fast with the software side, I realized this massive skill gap I should have for a long time beforehand, but ended up having to learn the fact that I can go get these skills, I can learn these things from coaches, masterminds, getting in the right rooms, and, yes, that's going to cost me money, and so for a while, like, my living expenses were far less than what I was paying in coaching, but it was the thing that was required for me to get to the next level, and so the sooner you can do that, the better.

Speaker 2:

I think that overcoaching is actually a bigger problem, though, counter to that, and as getting so many how to's and what I should do next instead of just going on implementing. So there's a balance there, but I certainly was indexing far too much and like just head down doing the work, versus like looking up and like, oh, someone else has done this before, I can unlock these secrets from them, and so I would certainly, as soon as you can afford it, try to unlock those secrets from people who have already made those mistakes.

Speaker 1:

The final question we ask every guest is what does success mean to you?

Speaker 2:

Contentment. When I went to Africa, I was with a bunch of the orphans, and over there you just realize that we would give them a little bubbles or a soccer ball and they'd be busy all day long, and they just throw it out of their mind. And these are kids that were abandoned by their parents day long and they just throw it out of their mind. And these are kids that were abandoned by their parents. One was thrown inside of a fire while one was thrown off of a train, and yet they would just throw it out of their mind. And so after that I was 18 and I went there, I just realized that like hey, success and money is cool, but the standard at which I am quote unquote successful is when I'm content, and that for some people that can be billions of dollars and they are not content and therefore I have not. I do not see them being as successful, and so that that benchmark has served me well.

Speaker 1:

Mike, thank you so much for a fantastic interview, and let's go ahead and jump into today's three key takeaways. So takeaway number one is when Mike talked about when he said let's take everything that people hate about franchising and change it. And so for him, he got rid of royalties and has the give back program and all of these other things that he decided to change. And really the takeaway is not that he's changing all of these things specific for his business, it's that he thought about what is the problem, what are the challenges, what causes friction or challenges between franchisors and franchisees, especially in his specific industry, and he decided to make a change to that or to create a solution. So the takeaway is what can you take and apply to your franchise organization? Takeaway number two is when he talked about the seven stages of business growth, and this is where he has found consistent patterns with his franchisees and has these various stages, these seven stages, and he has found common problems in each of those stages for the franchisees that are in those areas and so they have specific solutions for those franchisees. So to me, the takeaway is what are those stages for your franchise system? And if you don't know, start looking back. There's likely some evidence or information that you can pull from to build out your own stages to improve your franchisee support. Takeaway number three is when he talked about his multiplier, and his multiplier was when he realized that he had to go out and learn from professionals coaches, consultants and he said as soon as you can afford it, you need to start pursuing that or going after that. And he said he found that he was being cheap by not attending conferences or joining masterminds or hiring quality consultants. So I think that's a great lesson to help accelerate your growth and you can likely eventually learn a lot of these things, but what's the cost of time to you in that regard? And now it's time for today's win-win.

Speaker 1:

So today's win-win came from when he talked about the advice he would give to an emerging franchise brand and he said it's hard to provide support. But what he decided to do is to take action and create a survey to survey his franchisees and listen to what they say. Don't just take that survey and let it sit and do nothing with it. Rather, take the survey, the information, and be thoughtful and considerate with it, and to start implementing that. And for them internally he uses a net promoter score, along with the other information they share, and I'm certain that it is a win for him as the franchisor, there's a win for the franchisee and, for sure, there is a win for the customer and the staff and the team of each of those organizations.

Speaker 1:

So I just think it's a great, great little nugget and little takeaway that's easy to implement. You think about the cost of implementing it? Very low cost, but it's the commitment to do it and it's going to hold you accountable as a franchisor to provide better support and service to your franchisees. So really, really great, mike. And so that's our episode today. Folks, thank you, thank you. Thank you again for being our loyal listeners all these years. If you have not subscribed to our podcast, please make sure you do so. Please give us a review and remember if you or anyone you know might be ready to franchise their business or take their franchise company to the next level, please connect with us at BigSkyFranchiseTeamcom. Thanks for tuning in and we look forward to having you back next week.

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Tom DuFore

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