SPEAKER_07 0:10

Hello everybody.

SPEAKER_08 0:15

Happy Thursday. We switched up week calls for the first time this year, and moving to Thursday. So that's gonna be a new habit that I need to start saying. And not happy Wednesday, but happy Thursday. Thanks for joining. Glad to see so many of y'all. William, hello, Yusuf, Jonathan, Sunil, Neil. I see so many, so many people on. You guys, it's wonderful to see everybody this week. I know last week we had a really wonderful call. In case you missed it, it's up on Buzz Sprout. So you should always have the recording. It will come in your weekly invites. Um, but we'll we also send out those links. So if you happen to miss that call with Housi in Sacramento, I absolutely recommend listening to it. I think one of the best ways to attack these calls is just coming prepared with your questions. Whether it's the same questions every week or brand new questions, you know, it never hurts to continue asking those things to new people and just get to know the community of citywide, the culture of the company, the operations, the sales, the profitability, whatever it is that you're interested in knowing, this is what those calls are for. So um we have the lovely Jason Lawrence with us today, and he is going to be hosting our call here in a minute. Um, he has also hosted several Z calls in the past. So I always think that whenever you're hearing these calls um year by year, sometimes it's really great as a reference point once we finish this call to go back and listen to his previous calls. What's changed year over year? Um, you know, things like that, just to kind of get a little bit more of an understanding of somebody's market, especially if you want to reach out afterwards and have any of those conversations. That is always a great way to to manage that and and go about those next steps. So with all of that being said, um, Jason, let me know if you are ready to get things started. Otherwise, I'll keep chatting. I'll keep chatting.

SPEAKER_07 2:32

Yeah, give me like two minutes.

SPEAKER_08 2:34

Yep, no problem. No problem. I caught him right in the middle of lunch, you guys. Sometimes this is a bad, sometimes this is a bad timing for some some ghosts, and sometimes it's a great timing. So I appreciate all of you guys joining. Um, I know we have a couple new people on. Um, and so thank you guys for having this be your first call. I'm super excited for you to all join. Like I mentioned at the very beginning, you know, that this call is for you, and we want you to get the most out of it. Obviously, Adrian myself could talk to you all day long, but the benefit of these calls is you getting to have those questions answered by the franchisees themselves. So um, I know that several of you guys were active on Housie's call last week and brought a lot of great questions. Um excited to talk about all of that as well.

SPEAKER_09 3:31

Paul, maybe you can kind of share with the group um to just give them a little bit of understanding of how we've changed the training and talk through what the sales academy and the revamping of that's gonna look like.

SPEAKER_02 3:46

Yeah, thanks, Adria. So uh some things that we're doing and that we're really excited about, and and uh we've always kind of felt like we've done a good job of training. We've really been happy with that. But after further examination, we thought about, you know what, we're not going for anything good. We want something great. And so our our philosophy is going to be after uh somebody signs, we bring them in. And uh first of all, there's a myriad of things that you have to do between weeks one and weeks three, and it's all listed out. It's not, hey, you guys go do this, we're in with you, and we've got lists where our coaches will be working with you, and they'll go through the different items that you'll be having to do. They'll they'll talk with you and they say, Hey, what are some of the things areas you're looking at? What are you know, so they'll go and we go for a week. And during that week, uh we're gonna talk high level citywide. It's like it's our leadership academy.

SPEAKER_07 4:52

So here are some really things.

SPEAKER_08 5:03

I am not hearing Paul very well, so I'm gonna sorry Paul, I'm gonna turn the mic over to Jason.

SPEAKER_02 5:14

Hey, can you hear me now? Because I'll Jason, let's roll ahead. But basically, we took our training from one week and now it's three weeks, but it's specialized on leadership, sales, and operations. Jason, you're up.

SPEAKER_04 5:32

Awesome.

SPEAKER_03 5:32

Well, thank you guys for your patience in uh waiting on me for a minute. I'm in the process of cruising back to my office where I'm only about five minutes away. So at that point, you'll see my face once I get set up there. But uh so my name is Jason Lawrence. I am president and owner of Citywide Facility Solutions out here in Washington. Um office is located all of about 15 minutes south of downtown Seattle. So we decided to tuck ourselves in the furthest northwest corner of the United States possible. Um, but it's awesome. So don't believe the hype, it doesn't rain here half as much as people say it does. Uh I got my Star Wars Citywide a little bit different than what's traditional. I came on board all the way back in 2011 uh as a senior sales executive. I had an opportunity in 2012 to join the ownership team. So I bought out the local partner that was here and then bought out um some more from them and then became one of three owners out here in Washington. Uh at the time they had got the business to where our first year that I was a senior sales executive in 2011, we were a one million dollar operation. Um by time uh we got to what I call pre-COVID, so 2019, we had grown to 6.7 million, and then last year we finished at just under six point sixteen point three million. So um definitely still scratching the surface of what growth is possible, but definitely learned a lot through the pandemic, had a lot of appreciation for the industry we're in, the opportunities we have prior to joining citywide. I was a sales executive at CentOS, worked there for five years, so definitely uh fine-tuned my sales skills in that process. And um other than that, I am a proud husband of my wife for 17 years. I got two little little guys who aren't so little anymore that are 11 and 15, and um have a team of about 37 employees here at citywide, um, with the goal of getting closer to 42 by the time 2026 is over. So a lot of serious aspirations for this year. Finally decided to add some headcount to help make that easier. And um the goal this year is to go from 16.3 to 21 million and uh go to 2027. We want to be at 27 million by the end of 27. So that is my intro.

SPEAKER_08 8:13

That's incredible, Jason. Thank you so much. What incredible goals, Jonathan. I saw you you went off mute. You want to ask the first question?

SPEAKER_00 8:21

Uh sure, yeah. Um, Jason, nice to meet you and thank you again, Savannah, for for having me on and letting me ask these questions. Uh Jason, I'm I'm curious. Uh you have a really big team now, um, and you've scaled a lot over the last few years. Um I I'm just curious on uh the challenges you had faced with scaling. You know, how do you know you want to add more people? Does adding more salespeople directly mean you're gonna have more sales? Um do you find it hard bringing on salespeople and training them, keeping them on board? Um, I'm just very curious on the team and the struggles you've had growing that team, or if it was easy for you.

SPEAKER_03 9:09

Uh yeah, uh it was definitely not easy. Um there's plenty of struggles. I think the biggest struggle is um when you look at the team and you forecast what you need, and then something goes wrong because something will always go wrong. I think you learn a lot within those challenges. So for me specifically, when it looked when we looked at what our targets were for sales and growth, usually we've been able to have at least one, typically at least two salespeople that have been productive. But a lot of our goals have been based off of three and even four being really successful, and then you find one is not performing, or you find one that's turnover, and now it's not realistic to expect the other two or three to just do 33% better to go hit your goal. So you find yourself behind schedule on the goal, and so the the idea was we can continue functioning in that manner, or we can decide to staff up, and as a result, then it makes it lighter on each person. Now, along the way, you're still coaching, training, and developing people because you want every single one of them to be extremely successful. And so uh obviously when you're investing in the business, your profitability can take a hit, but at the same time, if you recognize that you're building that recurring revenue, then you'll definitely get it back.

SPEAKER_00 10:45

If you were to um start over again in a new territory, would you lean a little heavier on a bigger team up front?

SPEAKER_04 10:58

Um, I think that would highly depend on my capital situation.

SPEAKER_03 11:02

I think if I could afford to do it, absolutely. Um and because if you can get that drive and get it going, it'll definitely pay you back. So I think it would be dependent on my capital situation, but uh it's hard for me to imagine a scenario where if I was starting in a new market that I wouldn't have at least two sales executives, probably even targeting three. But I also think that's contingent upon your own individual strength. If you're a person that um has a very solid sales skill set, then you probably don't need three. You probably need yourself and you need probably at least one dynamic person um to have a second one, and you might choose to be able to um bring on an operational person sooner than somebody else who um is not sales oriented, because that's probably I would be building my team specifically around my strengths and do everything possible to stay operating in my strengths instead of drugged in or dragged into, not drugged, dragged into um the other challenges uh of running the business.

SPEAKER_07 12:12

Kunal, I see your hand is up if you want to jump in.

SPEAKER_05 12:16

Sure, thanks. Hi Jason, this is Kunal. Um thanks for sharing all the good experience, and it's very exciting to to hear that you are working for more than a decade uh with this group. So just to understand, like uh uh as a part of your journey, like uh you're working more than a decade with this group now. So how much challenges right now you're facing, or how tough it is as compared with the initial few years when you started, and in terms of saturation of the sales, are you facing any kind of a challenges with the same territory, or still there is a lot of potential or a lot of kind of a sales avenues that you're exploring with the team? With the same territory, I mean to say.

SPEAKER_03 13:01

Yeah, I would say um right now it's definitely easier than it was in the past. Um, I'm fortunate enough right now to where uh I have leadership in place. So I have a senior director of operations who's the primary person as far as customer retention and then upselling our existing client base. I have a director of sales, I have um five sales executives uh under and the janitorial side where working to hire a sixth one. So having leadership place uh in place is possible um now that wasn't possible years ago, so it definitely makes my workload easier. And um I decided last year to implement a brand new position that um I'm not sure exists in any other locations. Maybe it does in some capacity, but uh I titled it business operations specialist um that's there because ChatGPT said that was better than admin assistant special projects. And essentially I recognize the amount of inefficiencies we have, the projects and and updates to how we do things that want to be implemented that I just don't have time for. So I added a person that can tackle that. So I would definitely say things are easier now than they used to be. As far as on the sales side, I think when it comes to selling, we're in an industry and an environment right now to where buyers, potential customers are just a lot more savvy than they used to be seven, eight, nine years ago. So I don't think um you know you're not gonna trick or fool in any anybody. And so I think it becomes just as important as it used to be to build relationships, if not more important. But I think it's also really, really important to just be open about um what you can do for a client, or in cases where you're not gonna be a good fit for whatever reason to just express that um because you're not gonna trick anyone. So my approach to sales has always been to be um vulnerable, very, very transparent, spend time getting to know who my prospect is, know something about their business, and so that when I'm having conversations, I can offer a consultative approach that literally is genuine. And um, that's how a lot of our relationships have have formed out here.

SPEAKER_05 15:15

Great. Thanks, thanks. And in terms of your uh continuity of the client, uh how you're tackling that because as you correctly mentioned, now nowadays uh all the customers are very much tech savvy and they explore a lot in terms of the current options, in terms of current competitiveness. So, how do you manage in terms of continuity of the same accounts and uh what kind of percentage uh you you you are containing? Like after 10, still you're continuing all the 10 every year or you are you're losing some? And if you're losing, what is the reason?

SPEAKER_03 15:53

So sorry to clarify, you're asking how many clients we're keeping versus we're what we're losing?

SPEAKER_05 15:59

Yeah, continue. Like if you if you're having 10 good accounts in a year, how many you're continuing, and if you're continuing, uh what kind of efforts you're putting to make it make them continue, and if you're losing, what kind of approach or what is the reason if they are losing to you?

SPEAKER_03 16:17

Yeah, um, I couldn't tell you the exact number, but I could tell you percentage. So we typically measure retention in two ways. There's total revenue retention. So, how well are you retaining all your revenue? That's the janitorial plus all the extra services, the other services. And then there is just the contract revenue. That's just your recurring monthly janitorial. I believe last year our actual customer retention was right around 86.5%, 87% is where it was. Um, our typical target is 90%. So we were below what we wanted to be at last year, which contributes a number of factors that includes all loss business. So those are the clients where we fired six clients last year um because they weren't paying their bill on time. And I can't I can't pay to service your building. We had a number of um, we had probably six or seven clients where they sold their building um in Washington. They were demoing the building and building condos and apartments, and so all of that factors into that retention percentage. I would say the the way we're continuing to work to keep clients on the books for retention, it's a combination of probably three or four things. Um, the first thing is are you able to deliver on what your promise was? And so that goes into uh your FSMs, that's what we call our account managers. So are they visiting the accounts on the scheduled time as expected? In those account visits, are they effective? So, what is an effective visit? An effective visit is seeing the building to make sure you're doing your job, it's seeing your client, it's asking for a rating to measure how we're doing, and it's problem solving. Are you solving the problems they're running into? And so the first one is all centered around your visits and doing what you're supposed to do. I think the second one is how you manage your crews, the crews that are doing the work. What I find one of the biggest differences in retaining business versus losing it is we have some clients where we are absolutely doing 100% of what they asked to do and we're doing a great job. But inside that 100% is a limited task list of what they've asked us to do, and their building doesn't look very good. So when that client gives you a good rating, are you excited and leaving? Or are you saying, when can I get some time in your calendar to check our task list? Because we're knocking it out of the park, but your building doesn't look good to me. Like, what more can we do for you so that we can get in alignment and that when we're doing our job, your building also looks good. So I think it's how you're tackling that. And then I think the next thing is the value you add. Clients are very, very comfortable uh referring to us as their janitorial company, and that's not what we are at all. We're a management company for building maintenance, and if the only thing you use us for is janitorial, you missed it. You should be calling us when you need to repaint your office or deep clean your carpets or clean your roof or build you a new bathroom, any of that. And so I think that all all that ties into it. So, what I'm finding is the clients we lose a lot of times, they're your two days a week accounts, three days a week that don't see value. They're the clients where we're not building a relationship, we're only talking about cleaning, and we're not delivering on the results that what we said uh because maybe we got too comfortable. So uh probably a longer-winded answer, but hopefully uh that answered your question.

SPEAKER_05 19:45

Yes, thanks, thanks, Jason. I appreciate that. Thank you.

SPEAKER_06 19:51

Hi Jason, uh, this is Sunil. Um, so help me understand, right? When you started the business, right? Um, what was the structure of the team at that time, right? You know, how did you know when you know um what was the composition of the team at that point? And also if you can walk me through, you know, at that point, what did your day look like? You know, you know, how you know, because it seems you have a big team now, but help us, you know, if you're able to reflect on your journey and say you know, how was your life uh or uh your day, you know, managing that initial franchise.

SPEAKER_03 20:29

Yeah, sure. So when I first started um as a senior sales executive, I was one of five people. Our entire team was five. There was a local business partner, uh, owner here. Um, we had one FSM at the time. We had one night manager, we and then we had myself and a BDS. I think that's five. Hopefully five. Um losing track, five or six um that was there. And so when at that time I was a senior sales executive, so I was literally just pounding the pavement. I would literally leave my car parked at the office and just go walk. I would go walk and knock on doors. And um, it was a little bit of a shock for me because coming from CentOS, everybody knew CentOS. Um, some people love CentOS, some people not so much, but everybody knew who you were. So it was kind of a shock where people were like citywide, what is that? And I'm I'm like, my my office is right there. And so that was kind of crazy. Um, but then if you fast forward a year to where I took over, um, bought out the local partner, took more ownership and moved from there. Um, my days were crazy. Um, I told my wife before we decided to, you know, buy in. I said, Are you sure you want to do this? And she said, Yeah, why wouldn't I? I said, Because you're not gonna see me. And she said, What do you mean? I go, This is not a nine to five. Like, and for me, in my position, I cashed out all my 401k. I paid all the early, all of the fees for doing so. I bought in. I I was in. There, there was no plan B at all. And so during that time, you know, it was. A lot of 60 hour weeks because I was still in sales, pounding the pavement. I needed to get to know more of what we were doing at night. So I was out at night plenty of times with the crews, seeing if they're doing their job. And so it was, it was crazy. It was all it was a lot of work. So thankfully I have a very, very supportive wife that understood that. And I think there's elements of that that have to be involved to be successful. If you think you're going to jump on board at citywide and you're going to just, you know, work a 25, 30 hour week and then get to where you want to be, it's it's not going to happen. Um you got to put in the work. And so um now it's dramatically different. I mean, I'm still putting in some pretty serious weeks, but that's because of voluntary versus have to. Um, I stacked all my meetings are on Mondays and Wednesdays. So Tuesdays, Thursdays, and Fridays are much more open. So now I spend my time still joining with some reps on sales calls, still hopping out with FSMs on occasion to make sure. Because one of the areas that can derail your success later on is getting away from the process. Like a lot of the process, running the playbook, just doing the things you're supposed to do on a daily basis, it's it's easier than you would expect to get off track. So a lot of what I'm spending my time on these days is is people, is our culture, still making final hiring decisions and verifying that we are staying on track with the real basic fundamentals of what you're supposed to do.

SPEAKER_06 23:31

Okay, wonderful. Yes, and if I if I can ask a follow-up question, right? So I think you mentioned uh right the building the team, right? And I think we got a chance to join the previous sessions, right? And it seems there are some reference the processes from Citywide which help you find some potential, you know, they are involved in identifying the right skill set from sales point of view. It seems you are in the sales domain. How did that journey happen for you, right? You know, were you, you know, get because it inherently, if you have a good team, you are able to do so much, right? So if you can touch base on, you know, how what avenues did you explore to get your team, you know, you know, get your team uh created?

SPEAKER_03 24:13

Yeah, um, there's a lot of different avenues. Um, some of it was um my personal favorite of being part of Citywide is the network. I mean, being a part of the team, you have all the support from the home office, plus you have the opportunity to network with um Adria can probably correct me on this, but I know it's over 105 locations. So um for me, some of it was um talking to other owners about what they're doing. Um, that was probably before the last 12, huh, Adria? So you're right, like we'll push 120 now. Um, so it was some of that, but I think what's also really important is um evaluating your current market. And so one of the things that I'm thankful for is the home office provides um, I always say home office, support center, um provides a lot of flexibility. So if you want to pay a sales executive more than maybe a different citywide, you have that ability to do that. And so I had to learn a lot about my market and what works, what's competitive, what um you should pay. Because what I ran into early on is that I would pay people, they'd come on board and then they'd have some success. But the amount of comp plan and how it was structured here locally wasn't putting them in the position they wanted to be. So I was running into turnover of people that were good people and the right people because it was a comp issue. So there's some areas where I've had to just re-evaluate and reset that. And then um, most of the top level people want three things. Um, they want autonomy, they want to know how they fit into the bigger picture, and they want to be developed. And so I had to also continually take a look at like how am I doing on those three things? Um, and it specifically gets challenging when it comes to the bigger picture and also the development. Um, because people, if you're not putting together solid trainings, solid meetings, if you're not helping, then you miss out on the development part. And I think that's huge, especially when you're first getting started. Um, because if you can bring in people that have all the ability in the world and then develop them and then show them a career path, they'll want to stay with you forever. And so um, we spend a lot of time and energy on developing people and we're spending a lot of time and energy on letting them know how they fit in the bigger picture. Like how is your job, your position impacting the company? How does the company stack up against other citywide locations? What does the future look like for you? And so it's a lot of my time and energy in how we're figuring it out is that, but it's come with a tremendous amount of trial and error. I've brought on people that I thought were good that did not work, and I've brought on people that I was a little skeptical about that turned out well. Um, some of the tools we use is we use uh predictive index um that helps is a behavioral um, you know, uh survey that people complete to let you know about them. We use a cognitive one as well, uh, obviously looking at resumes, and then there's uh also several other options out there for qualifying candidates. And so I have gotten extremely skilled at interpreting results from those as well to give us the best, um, the best guess on if people will work.

SPEAKER_06 27:22

And these tools that you're mentioning, are they part of the the services, part of the citywide uh okay, got it.

SPEAKER_03 27:28

Okay, thank you. Yep, absolutely. Takes a little time and energy to interpret them. Um, but there is a lot of people uh at the support center now, as well as a lot of owners that are very, very good at interpreting them. So you you can turn that around and structure like your interview questions around some of the areas you would have questions about based on the results that you receive. And so it helps to be um extremely professional when conducting the interview, but also targeted, so you know exactly what you're trying to get out of it, which is helpful.

SPEAKER_06 28:01

Got it. Thanks.

SPEAKER_01 28:05

All right, hi Jason. Um, yeah, really great uh background and and and story to hear uh your your success and accomplishments uh with the brand. One question I have, especially since um you you chose to um buy out in the territory that you have, and um sounds like you also expanded, was when you were making that decision and evaluating the choice to buy in, um what uh or if any considerations did you give to the size of the addressable market in that specific territory? Um and I guess a follow-on to that is if you were thinking about a new territory, are there any um specific attributes or uh key indicators that you would look at to determine if the size of the addressable market can help you meet the goals that um that you've achieved with uh within the past decade?

SPEAKER_03 29:00

Yeah, that that's a great question. Um, I definitely looked at um the market, um, but it wasn't as much about the size as I was focused on, is trying to just gain a better understanding. So for me, um I did a uh did as much research as I could on competitors like who provides a service in the area. I stayed, I started with janitorial because of the fact that janitorial is like the it's the recurring revenue source. And as a result, for me, that felt like the strongest avenue to attack. And so I was looking into competitors, I was looking at stuff like uh what were their reviews? I was trying to find out information about market share, and and so it was really more of the education part because with Citywide, one of the benefits is any territory you get is going to be good size. I mean, versus when you're targeting other types of franchises, like you know, of course, I'm in the land of Starbucks, you can't drive more than four blocks with seeing one. So as a person, it's like that that to me doesn't seem as good of an opportunity. So it was more about um the competitors and who existed. And what I found was a lot of people in this industry are very comfortable with average the mediocre service. Um, the next thing that I was looking for, which um Citywide provided was in my sales experience, I was used to blue collar. So I was used to walking into um manufacturing facilities and logistics. Like I was a uniform sales executive for CentOS. And so what I got excited about with Citywide is that I'm still not only am I walking into those, but I can walk into anything else. Anything else that seems to be at least a relatively decent size could use our service. And so my focus was centered mainly around who my competition is, who am I going against, and what is my cust target customer look like, and um and how can I go about attacking that. So it was a lot more about that versus just um size. And it was something where I felt very, very comfortable, especially when I learned how comfortable people were with mediocre service. I've never considered myself mediocre um at anything. Um, and if I was, I probably wouldn't admit it more than once. I'd probably be somewhere working on it. Um and so I that's what got me really, really excited. I was familiar, um, competition didn't scare me, and um it seemed like a really, really good opportunity.

SPEAKER_06 31:25

And Jason, in terms of the contracts uh that you get, right? I'm pretty sure there are different tiers of the customers. What is the use normal term of uh of your engagement uh with the customer?

SPEAKER_03 31:39

Yeah, for us, we mainly focus on two options. Um, we offer people we have one where it's a one year, literally they're locked in for a year and then auto renew unless they give us a 60-day notice and they don't want to renew. So we have that one, and then we have one that we operate from as well, which is just straight up 90 days with a 60 day out process. So on that, um many customers don't bat an eye at the one year. If you have if you bat an eye and it's a problem, then no problem. We can drop all the way to 90 days with the 60 day out. I I don't even hesitate to offer that. Um, in my market, because of the size of my team, I have seven FSMs, I have five night managers, um, which I'm looking to hire a sixth one. And then I have two different people in leadership and director of operations positions. So when you total that up, I got somewhere close to $1.2 million tied up in staffing that's responsible for retention. So if a client wants to go down to 90 days, then I will give that to them in a heartbeat because if we can't retain you and deliver on our services, but we got $1.2 million in payroll dedicated to retention, then there's bigger issues. So um I won't let contract terms stop me from doing business. Um, I just had a client that's a property manager and they didn't want to do anything longer than 30 days. So sign them up. Here we go. And um, no guarantee, put your money where your mouth is. Uh, but it's a $26,000 a month account that also agreed to let us manage all their supplies, which is probably another $2,500 a month. Um, that's an area we've struggled here with is selling the supplies. Um, but in that case, yes, that's more risky than having a traditional contract, but it's on my team to go deliver.

SPEAKER_06 33:22

Okay. And apart from, I think we heard from you that you know there are th I think five or six people in operations, five, six people on the sales team. Do you also have a team which is actually helping you with the services, or are you still relying on individual contractors?

SPEAKER_03 33:39

Individual contractors. Yeah, we have about 85 um contractors on the janitorial side. We probably have another 55 that do other services. Um, that's there. Um, I have a person uh on my team we call uh a TAM, talent acquisition manager. Her primary focus is centered around around recruiting ICs. She does help with internal recruiting candidates, but the overwhelming majority of her position is recruiting contractors. Um, we use scorecards to measure performance for each of our team members. One of the items we added to the scorecard was three contractor referrals a month. So you cannot convince me that when you're out in the field seeing your clients or looking for new ones, that you can't take pictures of three trucks a month of contractors because they're out there and they're labeled. And so that's helped with our pipeline and our funnel to bring on more contractors because we always need more because there's always some that'll let you down that you got to move on from and you got to be able to continue to build that.

SPEAKER_06 34:42

So thank you.

SPEAKER_00 34:47

I have a question, Jason. Um uh with your current um with your current territory and the vendors that you have or have gone through in the past, um if you're if if if you're gonna get rid of a vendor uh just because of poor work or poor performance, uh how many times does that actually come from you noticing that their job is not up to par as opposed to the client coming to you and saying, hey, I need a new vendor here?

SPEAKER_03 35:22

I would say probably 75% of the time it's us noticing it. Um that's there. Um and the reason I would say that is because with our seven FSMs that we have that are doing their visits, uh with our team, we're on average doing close to 40 client inspections a day with our team. And so they notice things throughout the facility. And then we have our five night managers at night and they notice, and both times we are putting in inspections and reports and feedback, so we know the ones that aren't performing. Usually, by the time it gets to the client reporting it, it's because we've been behind the scenes trying to figure out what's the best strategy, but it's also because we are implementing communication. So every the way our system is set enough set up as an FSM, when you go and inspect your building, what what we did is we standardized what an inspection is. And so we came up with 10 key points that factor into what our FSM rates the building from their visit. And it's simple stuff. How did your janitorial closet look? Is it organized? Were the dispensers filled in the bathrooms? Was the break room look good? Did the carpeting look good? Um, did the general flooring look good? Um, was the um yeah, um with the trash emptied those? And so pretty standard things that pretty much every building needs to be covered, and then you it's a yes or no on those things, and then we get the client rating. And so when an FSM visits uh finishes a visit, eight of those things are what they looked at, and then the other points are what the FSM rates the building, and then what the client does. Well, the reason I describe all that is because as soon as that inspection is entered, an email goes to the contractor, the contractor gets that exact result so they can see exactly what's measured. And so the area where you can get into more trouble with your contractors is if you just don't communicate effectively. We try to treat our contractors very similar to how you would treat an employee if they're not performing. Like if the employee learns they weren't performing at their annual review, then we really suck at communication. And so we want to take those situations where contractors are not doing well and we want to invite that conversation. Let's discuss it. Is there a reason for what's your reasoning for it? Is there something we should do differently? Is there other areas we can help because we want you to be successful? Because if we can't work this out, then we're gonna need to move on. So um, back to answering your question 70, 70, 75% of it's us identifying it through our systems and structure. The other 30 is probably the client that's reporting it.

SPEAKER_00 38:15

And then one follow-up question to that do you let the client know when you do make a change like that, or do you um just kind of keep it to yourself and you know no, we let them know.

SPEAKER_03 38:28

Um, part of our structure is what we call us our star policy, and it's an escalation process based on how severe the change is needed, or how um potentially damaged the relationship could be. So, to give you an example, if uh something as simple could be our contact that we had for the last year moved on, we got a new contact in the building automatically that's a one-star. And so one star means that now uh we have to have a night manager on site at least once a week. We also are inspecting once a week, where a lot of our accounts we inspect twice a month. And so if we're having ongoing issues, that would probably elevate that to a two-star. Two star means that a night manager has to final it with the IC twice uh a week, and an FSM has to be on site visiting twice a week. And so when we elevate clients to a two-star, we let the client know you are on the star policy. We let them know for the reasons that it's there, and we let them know we're working with the team to correct them. And if it's not corrected, we will look at changing your crew. And what we've found is that by telling the client that, and then they see us execute those steps, they have an increased appreciation for how we're different from other companies out there. It actually gets them excited. We've I've had several accounts that are four or five thousand a month where we're blind copied on an email from our contact to their boss saying, Hey, as a heads up, Citywide said we're on the star policy, this is what they're doing so far, they've been executing it. And uh, it's been a huge retention tool by telling the client where we're at and what we're gonna do about it.

SPEAKER_07 40:12

Great. Thank you for sharing that. Yeah, no problem.

SPEAKER_05 40:19

And just in looking into all the services, the services might be common for uh client to client, from customer to customer. Uh you do categorize uh some of the client will be a good spot to target, or some might be tough to target, as per your vast experience.

SPEAKER_03 40:36

Definitely. Um, one of them that we don't service anymore that we used to years ago was restaurants.

unknown 40:42

Okay.

SPEAKER_03 40:42

Um, we used to do a ton of restaurants. I had several contractors that loved them. Most contractors hated them. And the reason for it was because one, the cleaning hours are tough. Most restaurants are prepping in the kitchen at six in the morning, shut down the bar at one. So you got a five-hour cleaning window. The chefs um don't take a lot of pride in keeping clean as much as they take pride in making food. So it's destroyed every night, and um, they're open for a lot of holidays. And so that was an industry where 10 years ago we had a bunch of them and it was really, really tough. My best crews would throw a team of five when they only needed a team of three so they could rotate and give people days off. Um, that's something we stay away from now. It's just not worth the hassle for us. Um, childcare facilities, we definitely don't strike away from, but they can be a challenge, mainly because you know there's plenty of parents that want to send their child in the white onesie. And the only reason that onesie is dirty from them crawling around all day has to be because you didn't mop well. And so you got to make sure you're dialed in with your scope of work. We still pursue them um for sure, but we are dialed in about what our expectations are, and we're dialed in with teams to make sure those are tackled really well. And then the third one is um apartment complexes, not the ones that are uh where you pull up and you don't have to go through a common area to get to your apartment, but any of the ones where you go into a building and up common areas to do. Um apartment complexes are tough. And the reason they're tough is because most of them want their cleaning during the day due to quiet hours. They don't want you vacuuming at 11 at night. And so what we found is in apartment complexes, it's a lot more closely related to a day porter to where you do daytime cleaning, but our rates for day porters are higher than our team at night. So we had to restructure pricing for apartment complex at a higher price so we can pay for day porter quality people that were better for client facing so we could sustain in and satisfy those requirements. So restaurants we got away from, child care can definitely be tough, and we've realized we had to be a different pricing structure for apartments due to their requirements in the daytime cleaning.

SPEAKER_05 42:52

Great. And what are your sweet spots in tops of target?

SPEAKER_03 42:56

Uh, our sweet spot out here is medical. Um, I have three medical clients that just between the three, they total $215,000 a month, is those three clients. So uh one of them I was on the board of directors for about a year and a half. Like, how you guys doing? Make sure you're happy. See my face because I cannot afford to lose you. Um, but the other the other two uh is there, and outside of that, we we have another probably 50 buildings of medical. We do a lot of medical, uh a lot of really um just positive relationships got built. And out of those three, the lowest tenure um that I've had is one of them is three years, uh, another one is seven years, and then another one I've had um it'll be 12 years in April.

SPEAKER_05 43:40

Great. It's good to know that. And in terms of medical, is there in kind of a specific regulation, uh state to state in terms of using some materials or something like that? Or that's not a tough to manage with?

SPEAKER_03 43:53

Um, there's regulations, like for instance, some of it is elevated safety for your crew. You want to make sure they understand like hazardous. Protection. So you know that there can be a needle in the trash can, even though there's never supposed to be. Um, making sure they get hepatitis B shots so that they're safe, making sure they're trained on bloodborne pathogens. So, what to do and the elements that you run into that. Um, so there's some fundamental things that are necessary. But the most important thing with medical and maintaining the relationship is in medical, um, they're not usually crazy dirty. Okay, it's a lot more about disinfecting. And so you we got to make sure we manage our team because it's really easy to walk into a medical facility and the floors look pretty good. So maybe I don't need to sweep them up, or the sink looks pretty good, so maybe I don't need and in medical, you're you're cleaning what you don't see just as much as you're cleaning what you do see. And so a lot of the medical focus is we cannot deviate from our established task list just because the facility looks good, versus if you're in an office building, a multi-tenant office building with common area bathrooms, the first two stalls in the bathroom probably get used, the one in the back probably not. So you don't need to do a crazy detailed disinfect every night if the toilet doesn't look like it needs it. But in medical, you have to every single night, it needs to be dialed in.

SPEAKER_05 45:11

Thanks, thanks for sharing just sure.

SPEAKER_08 45:16

And following up on that medical discussion, do you guys mainly focus on janitorial with the medical offices, or are you doing any other services with them, or has that grown at all since you've started?

SPEAKER_03 45:30

Yeah, good question. Um, it of course it starts from the janitorial, but we do a lot of floor work. A lot of our annual maintenance programs are set up for medical. And so, for instance, we're doing your quarterly strip and wax on the older facilities. The newer ones have the flooring that's non-waxed, the LV LVTs, they call it. Um, and so on those ones, it's the quarterly auto scrubbing, carpet cleaning. And so many of our medical have the annual maintenance program. So we have a set schedule when we're gonna do that additional work. Um, we also do we're doing more painting in them because they're they're um dialysis clinics. When you're wheeling in wheelchairs all the time, you bump off the walls and you hit stuff, and so they don't look good. So we're doing more painting with them as well. And um a lot of snow services for medical. Um, out here in Washington, you don't get a ton of snow. The rain usually gets rid of it when you do. Um, but you do get the cold weather, the ice, and you don't want a lawsuit. So we have probably we probably have 65 clients to where if it drops below 34 degrees, we're out putting ice melt. And um, so I look at it as cold weather is like white gold. Um, I'm not kidding. For every single day that it drops below 34 degrees, that's worth about 10 grand in revenue for us. So we hit a three-day stint at the end of last month, and it was 33,000 that we build out for just throwing ice melt out on sidewalks. Um, so yeah, we order ice melt now by the trucks. We have uh one of our contractors has a warehouse that does most of the ice melt spreading for us, so they let us store it there. And so we've been able to get our ice melt cost down to just under $15 a bag, and we sell it at $35. So bring on the cold weather.

SPEAKER_06 47:21

So Jason, uh, if uh you know, you know, I think uh I just wanted to understand the key categories of expenses that you have, right? So, you know, there is royalty that goes to you know the franchiser, you know, you have payments that go out to your individual contractors, you know, you are making expenses, you know, for the salaries. What other expenses um you know you are incurred in this uh operations?

SPEAKER_03 47:48

Yeah, well, I mean I I think it kind of depends on where stage of your business you're in and then what you're leveraging. So for us, um, the support center helps us manage our social media, and so we we pay a monthly fee for that, um, which isn't crazy at all. It's 500 bucks a month, um, roughly. So um my office manager fills out a sheet that says, hey, what are your employee anniversary dates and birthdays and blah, and blah, blah, blah. What do you want us to highlight? We send it off at the beginning of the month. They take care of all the posting, which is really nice. Um, we use a support center for some um month-end uh accounting reconciliation. So uh super supportive in helping for that. So we pay for that on a monthly basis, which is great value. So there's that. Um, they do charge uh marketing fees. Um, so they're aggressively working with national business development to uh continue to bring value for the brand as a whole that's there. Um, I think those are probably the main thing that come to mind. Obviously, you know, you have fees once you first buy your franchise and then the royalties you already mentioned. So you have that. Um, you know, the home office has really been working, or support center, I always say home office, um, has really been working to improve technology, so upgrading CRM. So there's been some nominal fees that are around technology. Um I use the support center for licensing. So all of my Office 365 people, Microsoft Teams, all those things uh I pay for. So I um there quite frankly, probably best decision I've made in a long time. I was I was doing it on my own, you know, signing up individual Microsoft accounts on that, and having people that have two or three different logins for stuff was not the idea, but the real value in it is there's some amazing things that we're doing here locally with Teams. Um, in fact, uh Sab and Adria, you wouldn't know this, but we had a meeting with Tom Partridge like three weeks ago to walk him through what we've done with our licensing, and he was completely blown away about what we're doing. Um, so that licensing also helped us because we redesigned an entire internet for us just here, my location, through using Microsoft SharePoint and OneDrive. And so, yeah, that was probably one of the best decisions I ever did was shift over to having the support center and the licensing with them because through using Teams, I've been able to cut my inbox from about 115 emails a day down to less than 40. Um, so from an efficiency standpoint, probably one of the best decisions I've ever made.

SPEAKER_06 50:30

And is there any directive to use certain products uh from Citywide uh as you provide the services to the client?

SPEAKER_03 50:38

Yeah, there definitely is. Um, you know, but thankfully there also there's certain areas with products where they're optional, you know, like um for instance, um, you know, I have a license for Asana that there's a lot of really, really good things that um many locations are doing with Asana, but I'm not like an aggressive, active Asana user. And so um it's kind of nice to be able to use it as I see fit. Um, however, majority of the time, I feel like I want them trying all that stuff. I want them digging and and testing out everything possible, but I love the idea that I can, you know, in many cases can pick and choose how many of it of those things I adopt. Um, that's there. So it's the level of flexibility in most cases is awesome. Now, obviously, there isn't flexibility with our financial software, there's not flexibility with our CRM system, but I I don't see any way that they could operate and offer that because they need to have visibility into what we're doing because that's what we're buying into, is the whole system and they need to have awareness of it. And so in that stuff, it it just makes sense. But thankfully they've been working aggressively over the last, you know, plenty of years to upgrade it because the benefit is they're using it too, right? If they're forcing it on you but weren't using it, then any hiccups you have are just yours. So the hiccups you have are also theirs, and so they're actively working to make sure that they approve upon it. So that's a benefit.

SPEAKER_08 52:21

Another great Thursday Z call, a bunch of questions. Y'all really appreciate you guys coming with so many questions. And Jason, of course, we appreciate you for hosting this call always. So thank you. And if there's any closing thoughts from you, we'd love to hear them. But otherwise, I just want to say how much we appreciate you giving us your time. I know it's a lot on a on a Thursday afternoon, but it's very beneficial for us to get these questions and and have everybody get to meet you and hear from you. So thank you.

SPEAKER_09 52:55

Thank you, Jason. Yeah, no problem. Thank you for your colorful examples of onesies and daycares. And we we love to hear the the granular thoughts. So those are always uh we can always count on you for those. So appreciate you.

SPEAKER_03 53:09

Yeah, no problem. Only closing thoughts I would have is um obviously if you have additional questions after the fact, um, it's not hard to reach out. So if if there's more things that come up, you're more than welcome to reach out and and contact me. Um I value a lot of the transparency that comes from it. I swear it. What'd you say, Paul?

SPEAKER_08 53:33

What what Paul?

SPEAKER_02 53:35

Nothing. I was I was gonna say something about the ducks. Jason is an Oregon duck fan. He goes to all their games with his kids and and usually post from there.

SPEAKER_03 53:48

Well, I struggle to see the relevance of that, but you know, Paul, in your own way, um, it's a good thing your wife is amazing because that makes you so much more tolerable. Uh, but anyways, if you guys have anything that you need, uh other than apparently learning about my personal life from Paul, um, feel free to reach out. I think the biggest value in Citywide is the is the network and the system. So um don't hesitate to reach out if you got more questions or there's something that I could do for you.

SPEAKER_08 54:17

Thanks, Jason.

SPEAKER_03 54:19

Thanks, Jason. Thanks. All right, thank you.

SPEAKER_05 54:22

Bye bye.

SPEAKER_08 54:22

Good afternoon, all. Thanks for coming.

SPEAKER_05 54:24

Thank you.