SPEAKER_09 0:13

Hi, everybody. Thanks for joining.

SPEAKER_00 0:23

If you are uh if you started with your camera on, Teams has a new function that requires you to um turn your camera back on and um come off mute. So feel free to turn your cameras on so we can see your faces.

SPEAKER_08 0:40

Give everybody here just a few seconds to join. We got some people hopping in. All right, we're gonna we're gonna hit it off.

SPEAKER_00 0:52

So thank you so much for joining me today, Dan. Um, we've got a lot of candidates on the line that cannot wait to hear your perspective. We would love to hear a little bit about your background on you know who you were before you came into citywide, um, how long you've been, anything that you can share in regards to your location, or you know, kind of that what I think is the best question of what if you knew this now than if you knew it then. Um, those those are great questions for new candidates. So I'm gonna let you kind of introduce yourself and then we will open it up for questions for the group.

SPEAKER_04 1:29

All right, yeah, sounds good. Uh hi everyone. Um my name's Daniel Brown. I'm one of the franchisees. I'm in the market's called Hampton Roads, but it's the Virginia Beach, uh, Virginia area. I also have a hand in the Greensboro, North Carolina territory as well. So I'm I'm I've got a little bit that I delve into a couple. Um I started with Citywide. Uh I can't speak for every citywide franchisee. I know there's uh some out there that have got the same, uh, what I would call a very good benefit as me. Um, one of the main ones is that I started as an employee before I even became a franchisee. I was working um for another franchisee who is now my business partner um uh in when I started in 2018, 2019, end of the year, beginning of the year. Um so my journey kind of is a little different to some others that bought straight into the straight in without having any knowledge or background. Um I'm a little bit different in that regard. But um I was I come from the franchise world. Uh I used to live in Southeast Asia. I was running some franchises out there. Um I wasn't an owner out in Southeast Asia, but I was an operator. Um I did that for six years in Malaysia and Singapore. And um I moved to the States with my partner who's from America. That's that's that's what brought me to the US initially. And um uh before I got it with Citywide, I was working in the fitness world. I was in the fitness world, I was um regional management and operations for about 32 fitness facilities in North and South Carolina, and I um I ended up just as right before COVID, in fact, happened, I got on with um on Citywide, and uh obviously everybody was in a bit of a panic mode that was happening, but we actually flourished as an essential supplier, and that was a it was a no-brainer from there. Uh a couple of years in, two years in, I was running, I was a general manager running the North Carolina, the Riley Durham market, and then after after about a couple of years, so 2022 is the is the year when I started the Virginia Beach market. So we are just over three years in, just over like three years and three months from the start. I believe it was got the data on me at some point. Um and yeah, that's kind of my journey. Uh I know it's a long story, long story as short as I could get it for you guys. Um what why did I decide to go for an employee and then buy into it is is a question that I get on these calls. Is being from the franchise world, I know not everybody is, but being from the franchise world as I am, a lot of franchises that I were with back in the day, they all have their own franchise requirement and system, but Citywide's got a playbook that's when followed, simple. And when followed, it works. And I just got used to being able to plug and play that playbook and been able to speak to right. Does it have does it have what you need? Does it have the resources? Does the franchise all provide it? Yes, it does. It's got a fantastic playbook, and the mission vision values, the core values of Citywide kind of match what I was looking for as well. And because I was a part of it, I was like, when the opportunity came to purchase my own, it was a it was a no-brainer. So I can definitely speak from an employee standpoint, Dr. Owner.

SPEAKER_08 5:04

Daniel, we're losing you just a little bit.

SPEAKER_00 5:06

Um, just so you're aware. You're kind of cutting in out. Just just a bit.

SPEAKER_04 5:12

I apologize. Let me cut my video if that's the reason. I don't know. I'm in a pretty good area, so let me turn the video off. Do I sound better now? You're on mute, Adria.

SPEAKER_00 5:25

Yeah, you you seem it seems a little bit better now. So I'll let anybody that wants to just pop in, feel free to take your yourself off mute and ask any of your burning questions.

SPEAKER_10 5:35

Uh I have a question, Daniel. Uh uh I'm Max and I'm from South California. Uh, what's the uh size of your area? And uh it seems like you've been in the franchise uh with CityWise for three years, right? Uh what's your uh revenue growth year over year?

SPEAKER_04 5:55

Yep, so uh we started three years ago. We'll finish just over we'll just finish just under six million in our third full year. Um this year. We will be finishing year over year. 2024 we finished at about 4.2 and we'll finish about 5.8, 5.9 this year. Um, so that's that's yeah, that's that's where we stand. I think my the size of the market, we have 1.6 million people population year, if that answers your question, Max. Um okay.

SPEAKER_10 6:31

And also uh how many how many salespeople do we have right now?

SPEAKER_04 6:36

Yep, uh in Hampton Roads, we currently have three. Um when I started, you know, when you start the market, you always pick, I think it depends on the individual. So this is the advice I do give people when you start is most markets they start with you know themselves as the salesperson. Oh, sorry, they start sales as managing managing accounts and they kind of bring on a salesperson. I did it in reverse. I kind of was the salesperson and brought on a manager to manage the accounts um because that takes a whole lot of time up when you're managing these clients um visits all the time. So when I started, I I started with no salespeople but me as the designated salesperson. And after about six or seven months, I brought on another one. And so uh right now I have in Hampton Rose, I have a sales manager, and then I have two sales executives.

SPEAKER_10 7:26

Okay, and and the last question uh in the beginning, when you were the only one uh selling, uh, did you use the business development center services from uh citywide?

SPEAKER_04 7:38

Um if yes, did it help? Um knowing Hampton Roads, I didn't because I already had the establishment of knowing kind of what to do from being an employee beforehand. But to answer the question is yes, when we when you start a market when we did when North Carolina started, it's hugely beneficial to use the support centers BDS. I know some other franchisees that use it to this day that have been in business a similar amount of time, three or four years. And um I know they they do book a decent amount of appointments. So if I'm coming in fresh and I'm and I don't have the knowledge, I 100% would be using it.

SPEAKER_09 8:18

Thank you, Dan. Yep.

SPEAKER_00 8:27

I know that there's still some burning questions out there, so you guys don't be shy, come right off mute and go right in.

SPEAKER_07 8:34

Hi Dan, uh Mark here from uh up in Edmonton, Alberta. Uh just a question. You mentioned uh the advantage of the citywide model, and you mentioned the playbook. Uh I assume then that that means you're following it. So with that in mind, and you've had pretty good growth, um, how have you found following the citywide model for um the revenue triggers for addition of employees or positions? And how has your uh been, or in particular your your earnings before taxes? Have you seen that kind of rise to a point? Uh, or is it kind of peaks and valleys with your hiring, or is it pretty steady? And if so, is it kind of increasing or holding steady over time?

SPEAKER_04 9:19

Yeah, uh great question. Uh nice to meet you, Mark. The first one I'll answer is the hiring point. Again, I'm gonna give Citywide a lot of props as a franchise all. They give us a roadmap, there's an actual physical roadmap to success, and it actually gives you revenue points of when to hire certain positions and what revenue volume. For example, and it's it's not necessarily based on gross, it's based on your recurring contract revenue. Um, so once you get to like 375,000, I I don't mind, I don't hopefully not, I think that's fine to share, is that's when you hire your first director of operations to run the operations for you. And and that's where um that's kind of where Hampton Roads is. I have a director of operations now, just just how you just started, and it's a new phase of the business. So there's always that little um when it comes to, you know, when it comes to your EBITDA, there's always that little curve, right? When you bring on a director of operations or you bring on a new manager or you bring on the next person, there's typically a month, maybe, maybe two, where you kind of see that EBITDA drop a little bit on cost. Uh and again, if they follow the training manuals, the training playbooks, and they do some role plays and practice in shadows. You can typically get somebody at least starting to take on some of that contract volume, produce some of the sales, not to the full expectation, but at least enough to where that uh that cost hit isn't as detrimental. Um I'm gonna I'm gonna I'm not I'm not gonna go and I think those who are here to speak to that when profit start hit more than me on average. Again, I come from having a lot of experience where if you're brand new, you're not necessarily selling everything and have the knowledge of all the things to do in projects all at once. I didn't mind taking on a large remodel job after three months because I've been doing it for a few years prior to uh so uh I don't want to say that hey, you can be profitable in six months because I don't think that's the system average. Uh Adrian, do you have that system average profitability standpoint?

SPEAKER_00 11:32

So we do not disclose that in the FDD. So I'm not allowed to um, you know, disclose that here, but you can certainly disclose that for your locations. And then, you know, there's other Z that have previously spoken on it. And obviously anybody here can, you know, dive into some of those metrics from a financial perspective as they choose to, and and you can disclose what you're comfortable with, Daniel. There's there's no limits on what you say. Um, but the big brother has a lot on what I say, so just there's the two seconds on that.

SPEAKER_04 12:04

No, I just I just wanted to make sure we're on the same page there. But um uh yeah, I again the for me, it's again the citywide playerbook gives you all the things, how to price, what to do, um, for the most part. If you're starting out and you're starting from the beginning and it's like, well, where do you go first? Because we offer 20 plus facility services, facility solutions, janitorial contract revenue. It's the fastest way to grow, it's reoccurring, it's predictable. And um, the other stuff is is a short-term win. But if if I was to give that, how do you get there as fast as possible? It's focus on the janitorial growth.

SPEAKER_00 12:43

Daniel, I get a lot of questions around what that ratio is. Can you share what um your locations, you know, from a is it 50-50? Are you guys at 6040? Where would you say from a janitorial versus other services ratio perspective you guys sit at?

SPEAKER_04 12:59

Yeah, we're typically uh 6535. So typically 35% of our um 65% of our revenue is is janitorial. Um actually, if I'm putting everything all together, it is more 60-40. And I we have three buckets. We have the janitorial line, we have the extra services line, and then we have the consumable supply line, is typically around 10%. So if I take just janitorial, total revenue, 60%, and then between everything else, about 40, I would say.

SPEAKER_08 13:30

Awesome, thank you. I'll let somebody else pipe in.

SPEAKER_10 13:37

I have a question regarding this third line that you just mentioned, the consumables. Can you please describe it in more details, Danielle?

SPEAKER_04 13:43

Yeah, consumables are one of the favorite things to sell because you sell it once, you got it forever. It's your uh it's within the janitorial side of things. It's your toilet paper, your paper towels, just your paper products, the things that you are restocking that are used by the customer on a daily basis. Um, typically you have a vendor that does a direct delivery to that customer's location where you're not necessarily selling it every month or every week. You are putting um, you're talking to them, you give them the value of what we do, how we manage it, and they just again you sell it once and you're just you're being essentially inventory control and placing orders as the client needs it.

SPEAKER_09 14:20

Okay, and what is the typical margin on this? 35. Got it, thank you.

SPEAKER_01 14:32

Hey Daniel, uh Daniel Loveday from Nashville. Uh got a question here. Um coming from a similar background, obviously, you know, I'm a citywide employee and uh getting ready to open up my own kind of remotely close to where I'm at. Um, how much uh revenue, like recurring revenue JS, did you start out with when you took over Hampton Roads? And then what did you kind of finish at at the end of that first year to get the rookie of the year?

SPEAKER_04 14:56

Yep. No, good question. We we we started with, I think it was like you know, we started with about 15, just under 15,000. And um we got it to just over just over 100 in recurring JS by the end of that year. 100% focused on janitorial. Again, my experience from working as an employee like yourself, if I give anyone advice taking it over and running in just all JS. It's if I can get to a point where we can hire managers to manage the accounts fast as possible, it's so much easier on an operator to know that you've got someone taking care of the clients while you're still being that champion of the market, right? And you're selling the product, you're selling it. I don't believe anyone could sell it as good as I could in my market until I found that sales executive that could become a sales manager and then take that mantle. And um there's always going to be problems, as you know, Dan, in the uh in the operations world. But um it's always good to it, feels great to be the one that's bringing that revenue forward and starting new relationships from an owner's perspective.

SPEAKER_01 16:04

So was it just you and one sales executive to start, I guess? And then when did you add on your uh your second sales executive?

SPEAKER_04 16:10

It was me and an FSM to start. So again, I made the decision to have a manager from the beginning, facility solutions manager.

SPEAKER_09 16:16

Um, and then I brought the actual SER sequence in. Awesome, appreciate it, thank you, sir. And then at the end of that, hundred thousand mic reoccurring. Oh you are better now?

SPEAKER_00 16:42

Yeah, you're you're you're better now.

SPEAKER_04 16:45

Okay, I apologize. Yeah, I'm I'm I'm stopped in a good area now, so I thought I was okay. Um maybe it's teens. Um the um, yeah, sorry, when I got to the 100,000 at the end of the first year, um I started looking to bring on the next manager so that that ramp up period, it's kind of I have a one to 125,000 ratio.

SPEAKER_00 17:11

Daniel, share with us just a little bit about when you were talking about sales executives and when you brought them on. Talk to me a little bit about those hires, um, what challenges you've seen from, you know, in the beginning versus you know what you look for in a sales executive now, how you go about recruiting them, how you go about retaining them, compensation, anything you want to add some color on from all things sales executives.

SPEAKER_04 17:36

Sure. Um looking for, always looking for the hunter mentality. Again, I do use workable, which is I don't know if I'm gonna if I'm sharing too much here, but I use workable, which is a citywide given recruitment system. It's very easy to use, user-friendly. Um I use that you're looking for a hunter, someone that's got the profile of I want to go out, I want to speak to people. Um, I'm always hesitant of the ones that tell me that they only they only do well when it's over the phone because they're not going to get out in the field and they're not business development for you, and they're not bringing in potential new clients. Um, you need people boots on the ground all the time. Um, so I I put a lot of stock in finding a hunter mentality. Um biggest that's the biggest challenge I have is people tell you on paper how good they they are and how much they do. But at the end of the day, they may not be as good as uh they may not be as willing to go out in the field and meet people, client potential clients door to door, business to business. Um I look for people with experience in business to business over people that haven't I personally haven't had great success in the ones that have come from inbound sales than I have the people that have been used to being business to business outside. Um compensation was the next one you said, Adria.

SPEAKER_00 18:59

Um yeah, yeah, I think that would be helpful to understand a little bit about how um their comp plans are aligned.

SPEAKER_04 19:06

Yeah, um I we do base base plus commission. Um, so we have a base salary for them, which essentially is having them do the job itself. Um and then we pay commissions. I actually do a tiered system on how much they sell, they get more a percentage of it. Um I heavily, heavily, heavily incentivize on the janitorial. If they sell a project here on there, it's much less commission because I want them focused on selling the reoccurring. Um, so for example, if a sales like Zech sells less than 5,000 a month, they get 25% of that commission, but we split that payment over a six-month period. So it's not all in one lump sum. So they're invested in selling a quality contract over a fast rush, quick sale. And then uh the more they sell, the more they get. So if they're selling over the hour average is just over 8,000, if they're averaging 8,000 a month, they get 50% of that commission. And then uh once they get over 10, then we start getting into the 60 range, then we kind of we don't pay any more than 60% on a on a sale, but they have to have sold 10,000 in that month to get that 60% for the month. That makes sense.

SPEAKER_08 20:17

Paul, I'll allow you to speak this one time, and that's it.

SPEAKER_11 20:21

Thank you so much, Adria. Hey, uh, for those of you that can't see Daniel Brown, if you could just imagine uh Russell Crow in his cry, not the big Russell Crow, but Russell Crow. That is Daniel Brown. Uh Daniel, my question for you is this you you obviously work really hard and you knew that was part of the deal of starting a you know a small business and stuff that you'll do. But tell me what you enjoy most about being a uh you know a small business owner or a a large business owner or whatever. What what what what do you enjoy most about it?

SPEAKER_04 20:56

Um well, first, here's my face, Paul. They all saw me before, but you're welcome. This is the Russell Crowe face for you. Um I just had bad signal earlier, Paul, when it was video, so I'll turn it back off. Um the my favorite thing is the I like the ability to forecast. I know we're doing it right now because it's coming to the new year. I love the ability to be able to forecast and plan for the success of the team and myself, right? I love to be able to sit there and go, okay, I know what the trends are because of my experience, but I love to be able to sit there and go, and I don't mind sharing, we'll finish just under six. Our projections to get to eight million, just over a two million dollar growth. And being able to project, project and predict what we typically sell per month as our net gain in contracts, plus what we sell about 30 to 40 percent on top of that of what we totally invoice, knowing that that compounding effect over the year will get us to about the eight million next year is very, very exciting. So I like that. The other piece of it is another one. Of the citywide's um huge, huge you know mission is to spread a ripple effect. And I'm not saying that lightly, is my other favorite piece is other business owners, which are our independent contractors. There's some of them are starting their business, they've got one building, it's their wife with their kids, they're all three of them cleaning a building, and they start having five, six, seven buildings hiring their own supervisor, and then before you know it, they're the ones not working and they're hiring, and that they're actually helping other people start a business and supporting their families. And it's so cool to see where I've got contractors that started with a thousand dollars a month, and now they're at 40 or 50,000 a month, and they're like my they're like the big project people, and they've added pressure washing to their wheelhouse and floor care. It is amazing when you get to see them on peer review, invoice review day every single month, and they're giving you hugs and thank you for the opportunity, and they come to our charity events when we when we're involved with clients, and that's the most I I think it's the most heartwarming fulfillingness if you're taking out the business side of it, is we have the ability to do that, and it's not there's not many other things out there that you can say, look, we also help other businesses grow uh alongside ours. It for me that's really cool. Uh it's fun. And I've got friends now that started off as just business associates that are now contractor friends.

SPEAKER_00 23:26

I love that, Daniel. That that always gives me goosebumps because I do think that that's one of the hidden I just think benefits and what makes um it just so rewarding. And a lot of people talk about that, and I think that's an unexpected reward of the business and the model. Tell me a little bit about how you go about recruiting for independent contractors. That's probably the most common concern I get from candidates that come in in my first conversation. They're like, I don't know these people. How do I even find anybody that's gonna be good and that I can trust? Talk to me a little bit about how you've gone, you know, building that black book of independent contractors that you can utilize for all the 20 services.

SPEAKER_04 24:06

Yep. Um if I'm gonna be really honest, I have got a quote unquote a black book for this, but it's never perfect. I I've done it for a long time, and you will feel like you're getting it right, and then you'll get a contract, so you think you've vetted them enough, and they'll be not very good, and you'll be like, oh, well, that goes my plan out the window. Um it is the thing that you should do as much as you do selling contracts. You need to be onboarding contractors of the same intensity and the same level as bringing on janitorial because if you bring on 10 clients and you haven't got enough contractors and you start stretching the ones thin, I've done it. Um I've done it, everybody else, um, everybody else does it. There isn't a manager out there or an owner out there that hasn't done this. I I swear I Paul could speak to it too. You get a contractor that you love that's shown up for you, that's amazing, and they do such a good job, you give them all the stuff. Then they start to slip off. Then they start having complaints and issues. And before you know it, the reason is you went them from one building to seven buildings in a three months, like three months' time frame, and they did not have the infrastructure to be able to take care of it. And then they drop off, and then you have a bad relationship, and you end up burning what was actually a very good contractor. So the key is to consistently recruit. I'm on Facebook janitorial groups, um, things like being in you know, Boma, you get some people that join that. Um I also put ads out on workable, which goes to Indian other platforms. So I actually have postings out for contractors to join uh from different cities in my territory um for different trades, from painters to you know plumbers to janitorial. I'm always looking. Big thing on my management team, so my ops team, they're driving around all day. They see a they they drive by a van, they take a picture, we onboard them and we contact them that way. Um we have to background check them. You've got to background check your contractors. Um, you absolutely have to do that because you want to protect yourself and you want to protect you know the client's integrity of their of their building. So uh it's um it's an ongoing process. I've had huge success and I've made some major mistakes. And um unfortunately, the best advice I can give you is unless there's a bad background check, don't say no. Bring them on board, trust to see that they're they're own their own business and trust that they care. And um you'll get the vibe in the in the meetings when you're when you're talking to them and having that initial initial conversation. You'll know if they're the right fit or not for your company and joining you, but you'll never be perfect. I've got ones to this day that we'll bring on, and I'm sure they'll be the wrong fit, but you don't know until you get in there. And um, always start the new contracts with a smaller account, never start them with a really big, important one, because that could make or break kind of that month for you. If it if you bring the wrong one in in a large account, um put your tried and trusted in. Almost kind of like tried and trusted, take them out of a smaller building and give them a bigger one once they've proven themselves.

SPEAKER_09 27:22

Awesome. John, why don't you uh hop in?

SPEAKER_03 27:30

Hey guys, uh yeah, sorry, I joined the call a little late, but uh I'm in Southern California and considering um the citywide franchise. But uh my question to you, Daniel, is would Yelp be a good resource to kind of cold call like these contractors for like plumbers and you know maintenance guys, I guess? I don't know if that's yep.

SPEAKER_04 27:52

I've done it in the past. I absolutely have. Um, what you find is the ones that are on Yelp are also on the Facebook groups and posting themselves from Yelp and their reviews to the Facebook groups and social media groups. What I like about the social media groups, one, uh and and Yelp is good because you get good reviews and you can use them. Um on the Facebook groups, they actually post before and after pictures of the quality of work because you can kind of half assess how good they are just by um just by um being just by seeing what they've done in the past.

SPEAKER_03 28:24

Okay, so uh and and staying on with like the contractors, and I don't know if you covered this earlier in the call, but let's just say, for example, you need a plumber guy to go out there to service one of your buildings or clients.

unknown 28:40

Yep.

SPEAKER_03 28:41

Like you're just telling him a rate, and then you're kind of making the margin on top of what you're charging the client. Is that how it works or from the business side of things?

SPEAKER_04 28:51

A little bit, yes or no. Um, so when you're developing partnerships on that level, when it comes to janitorial, it's a little bit different because you actually get given like a pricing matrix of how to price that. Every plumber's going to be different with their own rates. So, what we do is, you know, the benefit of a contractor joining citywide is for the most part, right? Every business is different. Um the I go to a plumber, I'm used plumber, if that's the example you used, and I say, look, you don't have to do any marketing for your business or as much marketing. I have got this many clients. I need you to give me what are your rates, I need you to give me a discount on those rates because I'm gonna do the marketing for you and I'm gonna market your business. Secondarily, is I'm also gonna do the management over that building. So anything that comes up, I'm gonna find and I'm gonna bring your way. Um, you do good buy me price-wise, you give me a discount. That is when I put my piece on top of that. So the client isn't actually getting full price plus us, they're getting typically maybe a little bit over or just about in this in line with what they normally would pay the going rates are for your area because our contractors then value the partnership. You know, I have in Hampton Rose just over 160 physical contracts. So I have 160 clients just on janitorial alone that that plumber has opportunities to if they give me a discounted price as a bulk. So when you're recruiting contractors when it comes to that, landscapers, electricians, you're having those conversations on the front end.

SPEAKER_03 30:26

Okay. And I know there's no perfect science, but like how would you gauge or consider one of your contractors getting um spread too thin? Like, are you are you kind of like limiting them to like three accounts per contractor, and then you're like, hey, I should probably get another plumber here? Or do you kind of do it by designated areas? You know, uh just kind of curious about that.

SPEAKER_04 30:51

Yeah, I think people do them in different ways. The closer the proximity to themselves, the better.

SPEAKER_09 31:01

Maybe no more than three or five, three to five.

unknown 31:05

Okay.

SPEAKER_00 31:17

Mark, I'm gonna call you out. Uh, you're about to come into Kansas City and get the full scope of our support center and our leadership team. I would love to you to pipe in and ask Daniel, maybe like what's keeping you up at night? What question do you have that is, you know, that like, oh my gosh, I just am so afraid of XYZ happening. And maybe he can walk you through, you know, some of those concerns.

SPEAKER_07 31:43

Yeah, I guess um it will be interesting to hear what your heartburn is. I I don't know if it's I I hear you're uh looking to grow by 30 percent, I guess, over the next year. You want to go from six to eight million? That's uh that's an aggressive goal. It's a it's a great number. Um but I guess yeah, what is keeping you up? Is it uh you know having the right contractors to foster that growth? Is it finding more SEs that are gonna help you get there? Um is it maintaining them? Uh do you have like the FSMs you need, or are you know gonna have to ramp up to get to that point? And like a big question for me is on the finances. I've really been, and Adrian o'cause this trying to get into the numbers a lot. And I'm really my curiosity is is as you grow two million this year, if you're able to meet that goal, uh, are you gonna see your profitability dip down or is it gonna rebound from that? You you spoke to it a little bit when I asked my earlier questions, but is your anticipation that that your bottom line is going to expand or just kind of go up exponentially with that?

SPEAKER_04 32:50

Yeah, no, I actually love that question. Um, I like the numbers too. Um, I've been very lucky because the business partner that I have obviously had a lot more experience in how it goes. So typically how we view it is for every million that you're at, you typically finish at that percentage of of um of EBITDA. So if you're at six million, you're looking at six percent. If you're at eight million, then when it gets to 10 million and at 10%, you're typically gonna sit around that 10% range as you grow from there. There are some markets that are at the 11 to 12, which may run a little bit more lean and it comes to staffing. But our rule of thumb is typically whatever that million is, that percentage. And then when you get to 10. Um, we have found that to be a healthy scale growth. Um, and that's just me in the tenure in the markets of between North Carolina and Virginia. Um when what keeps me up at night, I think the biggest fear I'll always have, and just it's because of how much work it takes, is turning over the management, the facility solutions manager who visit clients and manage accounts. When you've got right now I've got three full-time facility managers plus a director, one of those managers manages anywhere from what the 125 to 130,000 a month, maybe 30 or 40 accounts. And big key thing is that you've got to visit these clients. If you lose that, if you lose that person turnover performance or lose them for another reason, someone else has to cover that job. So everyone's moving down the ladder to cover that. So if you're looking to grow, a big thing that could set you back is is is potentially losing a really good employee in the management side.

SPEAKER_07 34:34

Okay, thank you. And just to be clear, then you're saying that as an industry, or you're saying that as part of the citywide model, uh, you're finding that on average for every one million and every in revenue that you add, you add one percent of bida.

SPEAKER_04 34:48

Uh uh, I would say that's our model that we've found, not necessarily citywide. I can I don't I don't want to speak for other markets. I'm sure other people may have less or more aggressive. That is what we have found has been a healthy number um that we that we have operated in.

SPEAKER_07 35:04

Yeah, for sure. Okay. So you're definitely driven to uh push that revenue.

SPEAKER_04 35:09

Yeah, yep.

SPEAKER_07 35:13

Okay, so that's great. Thank you.

SPEAKER_04 35:15

The big uh sorry, I will add Mark, the biggest hit financially, and I did this early on, is there's some markets out there that put a lot of stock in hiring people two to three months out, forecasting that in 90 days that employee will be ready. That really does hurt the the bottom line if you hire that early. I've kind of found a sweet spot between 30 to 45 days out has been my better sweet spot. I've been able to swing people ramped up. The individual can swing that. Some people take longer to ramp up than others.

SPEAKER_00 35:59

Daniel, I think one thing that um is always hard for me to articulate, and your ego is already quite large, so I don't want to improve upon that. Um, but we do have some phenomenal entrepreneurs inside of our system, obviously, including yourself. Will you talk a little bit about what that um mentorship, the networking, just what the human capital inside of the system and how you feel like that may have benefited the growth or how you utilize it? Just can you speak to that a little bit?

SPEAKER_04 36:31

I can, and I I can speak from franchise to franchise being from what I had before, is uh again, I can only speak from my experience. I didn't have a mentorship in the previous franchise that I worked in. There was others out there, and it was kind of like you knew who they were, but there wasn't that. Um, I have a performance group of other other uh owners that have been some of them that have been around for 15 years and are up 30 plus million. Um, I've got others at the same level, and I've got one of them that's just started out about a year or a year and a half ago that is kind of in that. So I absolutely love that I can go to the really experienced one and say, when you got to that six to seven million mark, what was the thing that you wish you did different? And they will sit with you and they will they will go through it with you and they'll explain what they did. Doesn't always apply because every, you know, every demographic or every situation, you know, from where you may be in California might be different to Virginia, of course. But at the same time, the model's the same. And you know, at convention that's obviously coming up in March, I already have two meetings with other um franchisees that have been around a lot longer that are absolutely already scheduled to sit down with me and go over some of my stuff for my next phase of growth. Give me that advice. Um I could pick up the phone now to some other franchisees and say, Hey, I got a quick question for you. I've never had anyone say I don't have time for that. Not once in my whole time. Um I I tried to remove the blanners because when you come from my employee to the my business partner, and then the good thing is for me is I can just call others and it's just the same thing. Um, I'm very, very lucky. I consider myself lucky that way. I've got some really cool friends, and uh and even I know financially we talk about our financials, we go over our numbers together to see how we translate. Um I I know Steve out there in Oklahoma, he helps me with our my consumable supply strategy when I was looking low in 23 and what to do differently, and we spiked up in 2024 and 25.

SPEAKER_08 38:41

Love that. Well, we've we've got about 20 minutes left. So you guys, if you've got some questions, now's the time.

SPEAKER_09 38:54

Hi Daniel. Uh I'm gonna jump in.

SPEAKER_05 38:57

So um, I'm Colin, I'm Courtney, I'm based in New Jersey. So I just had a question. So how is your um you know day-to-day different now as your business is more mature than your first year or your first six months?

SPEAKER_04 39:11

Oh, very different. It's uh polar opposite. Um the first six months, that's how everyone is it's a grind. You're out there, you're in person, you're seeing accounts in the morning, you see, you know, you're selling accounts, you're visiting clients, making sure that what you've agreed to is right. Sometimes you you know you're working nights because you're checking on the buildings with the contractors before you bring on a night manager. That's a position that you you would bring on to support the night staff. Um, the first six months, I'm not scaring one away, it's a grant. You've got to put all the work in. You feel like you're doing everything. Um, you are tired. But when you turn that corner, you've got a manager and you've got a night manager and you've got kind of people plugged and played. Right now, I I still do sales in terms of projects and janitorial because I enjoy it. I gravitate that way. Um I would say 80% of my time right now is doing one-on-ones with with each team member. Now I've got directors now, so they do one-on-ones with the managers. So I have one-on-ones with my directors, my sales manager and my director of operations. Then I have um one-on-ones with we have an I have an admin now who helps me across both of the territories that I'm involved with. And um team meetings, running those, doing analysis, look at the financials. I we do, you know, some collection calls from AR, um, accounts receivable, and kind of doing a lot of the financial side of it now. But I would say 80% of my time is more supporting coaching trend development, and then 20% in the field right alongs doing the doing the work. And I think it depends on the individual, who you are, where you gravitate to. If you're financial guy, you'll gravitate that way. If you're a more of a I like to be out there face to face, you might have more percentage out there. Um throughout throughout the time, the first year, Colin, you will ebb and flow where you'll say, right, this month I'm gonna be 80% in sales and 20% in operations because I need to get new business. But operations will always pull you over because there's always something, whether it's a project or an issue or a question or a there is something. So really time blocking and being intentional about when your sales strategy and when you would when you would do the sales aspect in that first year is key. If you let if you kind of take your foot off the gas on the sales side of it, you'll find yourself stagnant a little bit. And um uh yeah, I was a hundred percent field guy first year, and now I'm 20% field guy in year three.

SPEAKER_09 41:42

Okay.

SPEAKER_06 41:45

Yeah, can can I just jump in with a quick one? When you lose a customer, what what is the key, you know, is there any like recurring reason why, apart from businesses getting you know shutting down, is there any other reason why a customer would go to a competitor?

SPEAKER_04 42:00

Uh honestly, if I'm gonna be really, really honest, if if the reason is anything other than the building closed down because they're own financial, or if if we are deciding it for a reason such as that they can't afford it or that are money-wise, typically it's performance-based. Um, when I've lost accounts and we do a debrief on that, a manager will give you all the reasons in the world that you know, the IC was the contractor wasn't good, or client didn't tell me. It typically comes down to that relationship with the client. If you don't have a good relationship and they don't trust to have that conversation, what's going wrong, we've not done the right steps in cultivating that relationship and building the value of Citywide and showing what who Citywide is. We are the management company, we we represent them. And if they don't feel that value and they only see us as a cleaning company, then we haven't done a good job. And um, typically by the time I've ended a debrief on that, um, we've been too slow to replace a poor contractor, or we didn't listen to the client's concerns and act fast enough and follow the playbook model, whether it is for a complaint resolution policy.

SPEAKER_09 43:13

Thank you. Hey, this is John again.

SPEAKER_03 43:19

Um, I know you said you've led um with janitorial supply and services. You know, to me, when I look at janitorial products, that's such a commoditized product. How are you going in there setting value to pull these customers away from your competitors or winning these relationships based on the janitorial products and services?

SPEAKER_04 43:43

Yep, so big core of um of Citywide is most, even your Janny Kings and your Jan Fros, other ones like that, the way that they're structured is they represent themselves. They when they got a cleaning company in there and the client's got an issue, it's them. Against them, we're completely impartial because I'm not the cleaning company. I am the one that's covering covering up the problem solutions for the client, and I'm giving the contract to the work. So our value isn't necessarily, I'm not as an saying our cleaning is cheaper or our cleaning is necessarily a thousand times better, but our management to take that time and stress away from that customer is. So when it comes to chemicals and equipment, we have a vendor that gives us discounts on that. And our we and we have some enforcements where contractors will buy the chemicals and equipment from us so we can guarantee that client that they are compliant with OSHA and that we're taking what we're very, very serious on what's in their building is the right stuff, the right equipment. And I use outside vendor advice of what's the best for a ceramic tile, and I use the advice of what's best for this type of flooring. And uh you get to know that pretty quickly. But I over competitors, we are completely representing that client and what they need and what their needs are. Everything's customized to them. What they're every car dealership has a it's the same thing, but every general manager or owner has a different hotspot and a different requirement. We listen to that and we cater their entire scope of work and services to what they look for. Um, most janitorial companies out there will go, this is my price for cleaning the building. I'm not just looking at that, I'm looking at this is what I can do for you and how to save save you time. So you focus on selling cars and I'll focus on keeping your building aesthetically and structurally um in check. Did that did that answer did that answer the question? Just want to make sure that that did clear that up.

SPEAKER_09 45:46

Yeah, thank you, Daniel. Um thank you.

SPEAKER_02 45:55

Are are these janitory contracts typically like annual or are they just like month to month or yeah?

SPEAKER_04 46:02

So um I think different markets do different things. I I run everything on a on a typical month-to-month because I believe the value of we bring the management, that's the that's the core piece of the retention, is clients choose us to work with us and nobody else because of how we operate and what we do. Um I have an initial 90 days in my term so that they get to know, we get to learn the building and get that figured out. There's always going to be some bumps or kinks or something hidden, or you know, that sometimes contracts they change after about three days when the client realizes that they want something else. We just modify it. So um I typically run month to month, and then at the end of every single on their anniversary year, we do an annual increase um every single year, and we tell that on the front end just to keep up with a you know, minus that if there's a big state minimum wage change or something, drastic changes, we just keep with, you know, standard living costs of living and chemicals and equipment go up. So we do a standard two to three percent every year. Other markets do more, some do less, but that's what that's what I do.

SPEAKER_02 47:07

Thank you.

SPEAKER_00 47:09

Thank you for that, Daniel. Can you talk to um I get this question a lot as well, just the size range in the accounts and what you find is there a sweep spot from a monetary perspective that really makes the most sense for margins?

SPEAKER_04 47:25

Yep. Um, I can what I will say is, and and I I I did it and I said I wouldn't, but I did at the beginning when you first start, you will you will sell and take anything and everything because you're getting the business off the ground. You will sell a $500 contract, you will sell a $200 contract, you will find that the $200 contract is more or as needy as a $10,000 a month contract. And you're like, why am I doing this? Um, but you're getting your business off the business off the ground. So I I will say at the beginning, I'm not gonna say don't, I'm saying long term you'll find that you wish you didn't because of the the time you spend on the small ones. The sweet spot we look for is a 10,000 square foot building or more that's a five-day a week clean. So you're talking your offices, and I I love car dealerships. Car dealerships spend a lot of money just to keep their building looking good. They're typically a six-day a week clean. Most contractors will not say no to that either. Um in fact, I think all of them do say yes to that uh car dealership because of how much extra work they can get in shore care there. Um but I would say a typical typical contract that ranges from 10,000 square foot or more five days a week is the sweet spot. They typically for me range about 2,800 or 3,000 a month.

SPEAKER_09 48:46

I'm sorry, what was that? What was that last part?

SPEAKER_04 48:48

2,800 or 3,000 a month per month for the janitorial contract value. Yeah. And typically that range yeah, in dollars, yeah. And that will be, and that will be. I run I run mine in between a typically janitorial at a 35 to 37 percent margin. Um on that front. And um you will again, you'll get for me now where I am at three years in, we don't sell a contract that's less than a thousand dollars a month. That's our minimum requirement. It does sometimes rule out some small, let's say a dental office that wants a once-a-week cleaning, and their budget is 200, they're gonna need just as much management, in my experience. So now we typically stay with a three-day a week or a thousand dollars a month minimum. And just to piggyback on that, your management team have to visit these clients. Not they should because you need to know how they're doing. Are we doing well? Are we risk? Are we at risk? If you sell $40,000 worth a thousand accounts, that's 40 buildings for 40,000. But if you sell 40 buildings at 3,000, you just triple that value. But the manager is still doing the same amount of drive and stops and visits, but the value is so much more. They can now manage again 130,000 and 40,000 a month just in contract revenue for you at a 35% margin over you're only making 10 or 15,000 at 40,000, you know. So it's uh looking at the sweet spot of the 2800, 3,000 range is everything in when you're looking at the the bottom line.

SPEAKER_08 50:27

Awesome. That was super helpful.

SPEAKER_00 50:29

Well, Daniel, I want to thank you so much for your time that you spent with us today. It was incredibly insightful, and um, you know, as always, you're you're the best mini Russell pro that Citywide's ever had. So thank you for that. And and thank you guys all for spending some time with us this afternoon. Um, we will have be here spend time next week and you know, come with your prepared questions, and we look forward to continuing to get to know all of you. Thanks all for the time. Thank you, everyone.

SPEAKER_04 50:58

I appreciate everyone. Thanks, Paul. Miss you, sir.

SPEAKER_09 51:01

Thank you.