SPEAKER_02 0:07

Hello, everybody.

SPEAKER_08 0:10

Happy Thursday. Hi, Rodney. Hello. Welcome to the call, Ross and Brent. I believe this is both your first time. So it's great to have you guys today. Hi, Ross. And we've got Henry joining us as well. Hi, Brent. Thanks, guys, for coming to the call today. So glad to have you guys. I know that some of y'all are pros at this, and some of you are brand new. So let me just give you a quick rundown of what we're going to do today. Jason is going to introduce himself, give you guys a little bit of background on him and how he got started in citywide. And the rest of the time is spent with y'all just asking questions. We want to make sure that we get the bulk of your questions answered today, whether that be operational based, sales-based, recruitment-based, profitability, whatever you're trying to get answered today, that is the goal of this. So we can continue you getting to know the model, but also getting to know the culture of Citywide. So all that being said, Jason, I'm passing the mic to you so you can tell us all about you.

SPEAKER_01 1:23

All right. Great. Well, welcome, guys. Um, so I guess before Citywide, get a little background on me. For about 20 years, uh, I worked for an engineering firm and I uh was in sales. We sales and I sold a lot of service is what I sold, but uh equipment for a pulp mills. So we're in the paper industry. And I did that for many years, got tired of traveling, decided I was gonna buy a business and never thought I'd buy a franchise, but somehow it came on my radar, and I uh, you know, the fact that they offer so many services is I was trying to get in a service industry. I figured it would be a good match. And uh after having these Z calls and talking to a bunch of different franchisees, I realized it was a good fit for me. Everyone's open to help, and that was a huge benefit, I think, for me, and for me choosing citywide in general. Um, we've been open, well, we just finished three years, so we just started our fourth year. Yeah, so that's good. We have uh let's go. Well, let's see, we have three FSMs. One is moving to a CBS role. I have two sales guys and I have a night manager, I have an office manager, and I have a BDS uh person uh setting appointments for us. So it's been uh, you know, at the beginning it was me doing everything, and now having a team is huge and makes things a lot easier. I need to say that. Um, but that that's what we look our uh office looks like today. Um, you know, we actually opened, it was November of 2022, so our first full year would be the uh 2023. And that year, you know, surprisingly, uh I wasn't sure what what it would look like and how we would do business-wise, but we were just shy of a million dollars for that first year. Um, so that was that was nice. Uh, you know, I didn't really didn't really know what to expect and how it would all happen here in Des Moines. That's my location. And then uh in 2024, we we are just under 2.5. And then last year for 2025, we were at 3.7. So we've been growing, you know, pretty quickly. Um definitely looking to you know have a big growth this year. So um, you know, hopefully we'll hit that 5 million mark is where we're shooting for for this year. Um, but no, that that's a little bit about me, just some of the history. Uh the reason I really chose uh City Wide was really the people. Um meeting the team was great and being on calls with all the different franchisees, they were just so open about the business and what to expect. So I'm happy to answer any questions and give back as much as I can to help you guys make a decision.

SPEAKER_08 4:08

Thanks, Jason. Rodney, I'll let you go next that for just an additional context portion. Jason, we we use a lot of acronyms in citywide, and sometimes for people that have not yet been on these calls, yet and heard about what CBS is, what FSMs are. Um, quick intro for those. Ross, I see you laughing at that. There's too many, there's too many acronyms. Facility solutions manager, you'll hear us use a lot. It's our fancy word for account manager. And um, CBS was the other acronym that Jason used. He can dive into that a little bit, but it's going to be complete building solutions. So, all of that being said, Rodney, I'll let you chime in, but I wanted to kind of fill in the gaps there in case y'all were looking like, what is what's happening?

SPEAKER_06 4:50

What's he talking about? Thanks, thanks, Jason, for the time today. Appreciate it. And I'll apologize in advance. I have to drop at the bottom of the hour for another meeting. But um, Jason, Rodney Reisdorf, Buffalo, New York, uh, Perspective Z. So I don't think more too dissembler in population and probably size than Des Moines. Um, I'm interested to hear in your first three years, at what points, either timeline based or milestone-based, did you bring on your FSMs and your salespeople, your night manager, and kind of how did that team grow and scale over the last three years?

SPEAKER_01 5:25

Yeah. Um, so well, to open the office, you have to have an SC. So you have to have a sales guy to open the office. So that was from day one. Turned out, um, you know, I was excited and anxious, ready to get the office open. So I didn't make the best hire on that. So he didn't last too long. But but uh, you know, shortly after uh we he moved on and I got another sales guy. So that was probably about six, six to nine months uh time frame. I got a different sales guy, and right after that is when I got my first FSM. So it was right before we finished that that year out. Um, so before that, I was doing everything. And um so the FSM came on, the first one came on, like I said, but it was probably middle to end of 2023. And um, and then we hired um we hired a second sales guy shortly after that, probably uh about four or five months after that, which turned out he was better at setting appointments. So we moved him to our our BDS role. So he's you know, it I don't know about three or four months in, we decided to move him over to that role. And um, about that same time, it was it was uh last year, or I'm sorry, not 2025, it was in 2024, we hired our second FSM and uh a second sales guy. So that's kind of how that played out.

SPEAKER_02 6:51

Great, thank you.

SPEAKER_08 6:55

Jason, can you expand a little bit about that first hire of the sales executive? What what what went wrong with that individual when you found that second sales exec that did stick? What were you doing right in that hire?

SPEAKER_01 7:09

Yeah, so I I think the the problem was is not that he was a wasn't a good sales guy, it's just he wasn't a hunter. He he was used to having leads given to him, and we weren't at that stage to have someone you know give you leads. And plus for a sales guy, I want a hunter. Yes, we will give you some leads, and that's just cherry on the top. So you need to be a hunter. And I realized that quick, quickly that yeah, he he was not a guy that was going to go out there and get the business. He was trying to get it handed to him. He would have made a great FSM, is what he would have made. But that was why. And then so after that, yes, when I started hiring, I would look for people who have the hunter mentality, competitiveness. I have three college athletes here on my team. I think that's important. Um, you know, just that competitiveness, it really drives the office and drives everyone to do better.

SPEAKER_05 7:57

Thank you. How do you sorry guys, by the way, I'm I'm driving, so my my camera's off, unless you just want to see some blurriness. But uh how do you handle a a sub-no-show or quality failure? Because where my biggest curiosities lie is is in the where the margin's made and you know, vetting and quality assurance on the sub-side of things.

SPEAKER_01 8:27

So while your your first question about no-shows, um I mean it has happened to us a few times for the janitorial side. And you know, if that happens, excuse me, if that happens, um, you know, it's it's it's unfortunate, of course. Uh, we hear about it first thing in the morning, and we usually, I mean, it's it's not that big of a deal. We we can usually have them come back in. Something happened, they missed for some reason. They can come back in that day or that morning and do a trash and then scratch some trash really quick. Uh, we sometimes we have to credit them back for the missed clean. Uh, it just depends on what you know, how big the building and what the clients like and how often we clean the building. Uh, that's only happened a couple of times for us, but it has happened. No shows as far as like any services outside of janitorial. We really haven't had that happen. I mean, our our account managers, they're the ones that are there managing it. They're calling that sub, making sure they're going to be there. They meet with them there. So they're they're not, you know, they're project managing that. So we have not had any issues with with that type of service. Now, the janitorial is a little different. They show up at nighttime, can't always have someone there making sure they're there.

SPEAKER_05 9:37

Yeah, yeah. Okay, cool. Appreciate it.

SPEAKER_08 9:42

Jason, do you do performance deposits with your contractors or how are you keeping them so accountable? Because that isn't, I wouldn't say that's always the case that we hear on these calls. That's a question, Henry, that has been asked a few times. And so it's, I think it's a good, a good point to bring up. Um, ultimately, we're all human and relying on individuals to come in the middle of the night or come late at night sometimes can get um wishy-washy. And so one of the things we've heard from people is contracts with the contractors, of course, but also holding them accountable via performance deposits. I'm curious to know, do you just have really great independent contractors and are setting those good expectations up front? Or um what's your ability to keep them regular?

SPEAKER_01 10:27

Yeah, so with janitorial services, we we do a performance deposit, and that's 50% of their monthly um you know revenue that they get for that account. That performance deposit, the it's fully refundable as long as they um don't leave the account in a bad condition, you know, jeopardize our relationship. Or if they don't want the account anymore, we require they give us a 30-day notice. So we're not scrambling to fill that account. Now, we have kept uh performance deposits because we haven't gotten a 30-day notice, you know, or like, hey, we're done, this is our last clean, or I'm leaving after this week, you know, that stuff we don't give the deposit back then. Um, as far as some sometimes you have to switch out a contractor because it's been poor performance. Those that's just a case by case. We might give a portion of their performance deposit back, and that's just case by case, it just depends. Um, but having the performance deposit, I would say, is key. You guys definitely need to charge that performance deposit. That does hold them accountable, and they're gonna fulfill their you know their their contract with you to get that back.

SPEAKER_05 11:35

Okay, what what uh so like my background is is restaurant tech. Um so I'm curious, like what role does the technology stack play for for you and and your experience so far from the early days to now obviously trying to jump through uh different growth hoops, like how how impactful has the technology stack been? Um yeah, maybe just curious to learn a little bit more about that.

SPEAKER_01 12:04

Well, um, I'm not the most technologically advanced guy, so I'm fine with what we have here. I mean, we do not have CRM right now, it's down this week, and there's a CRM training going on right now on that. But uh that we're gonna have a new CRM coming out, which is gonna be uh what I understand is gonna be really, really helpful from what we've had in the past. Um, you know, I just we just use we have Power BI, which gives me a lot of the reports that I look at on a daily basis. Uh CRM, I pull up stuff there all the time as well just to see where we're with our inspections. And again, that's in Power BI. Um, but I mean I I don't know, I don't have any issues with with what we're using. And um I'm you know I'm I'm fine with what we have. Now we do we use a lot of um just team chats. We we do that. We have uh um a centralized place for all of our files where everyone can pull their files from. And um I mean I don't know. I don't know what other technology that you would be looking for in this. I know they're I think there's talking about some more work order work order management uh software.

SPEAKER_08 13:12

No, but Henry, I think too, and Lisa and I can offline take you through Power BI. Power and Power BI is our reporting and analytics software, and it's really great because you can compare yourself across the whole system and track all of those key data points that you could possibly ever need. It's a tech guys dream, honestly. So we'll take you through that and show you a few components of that that'll are going to be really helpful. What I have heard in initial phases has been really helpful for people is seeing industries that are similar. For example, if your territory has a lot of healthcare facilities and you're wondering, okay, maybe go, let me go find the people that do the most health care across the system and I'm gonna reach out to them about RFPs, about making sure I have the right whatever it could be. Um, it's a great way to have that rapport with the other franchisees and bounce ideas off of them while also having that competitive nature of tracking associated with it. So it is, it's all the technology that you could possibly imagine, um, all the analytics, and we can dive into that more.

SPEAKER_01 14:23

Yeah, and another beneficial thing, which Savannah was just talking about, you can see all the sales that are happening in you know real time. And then you can go back and you can, you know, so oh, we're servicing this in whatever city or multiple cities, and that that helps you with your sales when you go in. We're already servicing you in this city. Um, but it's definitely very helpful. We we use that all the time. We we look and see, you know, what what accounts are out there that we're currently servicing in different markets.

SPEAKER_05 14:50

And then do you guys have like a within Power BI, do you guys have like a sales leader board and all that? Not just like benchmarking across the system, but also for your reps internally, uh, you know, chasing, trying to combat one another and who's the top dog kind of thing?

SPEAKER_02 15:05

Yeah, yeah, absolutely.

SPEAKER_05 15:06

Yeah, okay, cool.

SPEAKER_08 15:10

Rodney, go ahead.

SPEAKER_06 15:12

Thanks, Savannah. Jason, were there any accounts that were being serviced uh nationally in your market uh when you opened the franchise? And if so, did you use the option to purchase those?

SPEAKER_01 15:24

Yes, uh, I think we had 10 accounts, 10 or 11 accounts. Um and we yes, we did. We took those over uh in January. So we were open about two months and then we took them over.

SPEAKER_06 15:37

That's great. Did you see those kind of state status quo in terms of revenue and services, or have you been able to continue to grow and expand those?

SPEAKER_01 15:47

Um well, yes. Um well, they they stayed, they stayed. We haven't lost them. I think we lost one account, um, but that whatever reason, as far as growing, a lot of those accounts were uh what we call MBD, so the national uh team that puts that together, and they negotiate a lot of those contracts. But we did add on there's there were some other services that we add on at one of these uh locations, and that that was beneficial just from us talking to them and then presenting it to the national team, and we got the that contract.

SPEAKER_02 16:21

Okay, thanks.

SPEAKER_07 16:24

Jason, could you talk a little bit about how long it took you to go from you know initial investment to breakeven?

SPEAKER_01 16:34

Yeah, so um, and if you're talking about breakeven all of our money back that we put in or just actually turning a profit now or maybe and maybe you're still you know working towards that breakeven point.

SPEAKER_07 16:46

Um but and and if so, I you know, I'd love to hear um maybe whether you have a projected date at which uh you're expecting to reach that break-even point. But yes, I'm interested in figuring out how long it's it's your you think it's going to take to get your full investment back.

SPEAKER_01 17:03

Yeah, sure. So so last year was the our our first profitable year. So year three was a profitable year for us. Uh year two, I mean, we'd had months that were profitable and months that weren't, but uh um, but year three was profitable. Um we're gonna will be profitable again this year, of course. Uh we're just growing that. Um, and now I have to full transparency, I pay myself a salary, so we would have probably been profitable a lot sooner if I wasn't doing that. Um, as far as re-recouping all the money that invested into it, um, we're you know, we put a lot of money back into the business right now and we're growing it with with our staff. So, I mean, another two years out is kind of what we're projecting.

SPEAKER_07 17:50

And do you have a sense as to, you know, once you reach that um I I have a real estate background. So in my world, you know, once a building is built and then it's fully leased up, we call that once it reaches stabilization. And so in my mind, once you reach that, you know, stabilization point where you know you've been profitable, you've made your money back, do you have a sense as to what your net margins are going to look like at that point? You know, bottom line earnings relative to revenue, even if it's just an estimate.

SPEAKER_01 18:26

Um, so are we talking about the the EBITDA? Are we talking about just EBITDA? Okay. So I I think a good rule of thumb that I got from another uh franchisee, actually over in Nashville, Savannah, uh but was uh typically uh it goes up about 1% for every million dollars. Um but yeah, we're we're gonna we're looking at um probably in that 10 to 11 percent super helpful.

SPEAKER_02 18:55

Thanks.

SPEAKER_08 19:00

Thanks, Jason, for sharing that and thanks for transparency around the salary, because I do think that sometimes gets lost in translation of um people that have operating partners or that are an operating partner and adding that factor or factoring that back in. So that's that's really helpful to know. As far as year four going into year four, what is your day-to-day look like for you this year compared to even last year or the year before?

SPEAKER_01 19:31

Yeah, um, I think just our our team they're growing and they're taking on more responsibility. Uh hiring an office manager has been key for me to get some stuff off my plate. And I have um my my first, I'm looking probably towards the end of this year, hiring a DOO. So that will help me out with the operations here. Uh operations obviously a lot of moving parts, and that takes up the majority of my time. So having a DOO by the end of the year will will be beneficial. That's our goal. Um, but I think just you know, last year compared to where we're at this year, um, I've I've stopped taking sales calls. What I've done now is I'll go with the sales executives on the larger um potentials uh that we have out there. But I I want them to go and make the money and do the sales. So I used to take sales calls and I just I want them to take them now, and I'll only go on the larger opportunities.

SPEAKER_08 20:30

That's helpful. Thank you. Um, Rodney, you go before I I I could talk all day, so you go before me.

SPEAKER_06 20:36

Thanks, Savannah. Jason, when uh you know when you opened your franchise on day one and you hit the ground running, did you focus on one side of the business more than the other, focusing on building your IC network of independent contractors or your building clients, or did you just kind of you know go, you know, run at both of those at the same time?

SPEAKER_01 20:57

Yeah, that's that's a great question because I was I didn't know what to do when I first opened up. It's like, do I hire contractors first or do I go out and do the sales? Because I want to make sure I have a contractor to fulfill it. And so I was just I was kind of torn, but I knew that I I needed to get contractors going. I I was working both ends. Actually, I sold our first account before we even opened our office up here. So I had I had that sold uh probably a week or two before we opened our doors and uh started working on uh on getting uh contractors signed up. And you know, I I just let them know that I don't have anything for you right now, but I'm gonna sign you up and it will take a little bit of time and then we'll move forward. And I think that's a good way to go. I mean, you you have to have you gotta be able to fulfill your your obligations. So you need those contractors.

unknown 21:44

Yep.

SPEAKER_02 21:44

Thank you.

SPEAKER_08 21:52

Jason, I think you just got back from being uh a platinum member. Congratulations. Um, for those of y'all Are not aware of that kind of status. And um platinum market is extremely exciting to be because that means that they are in the top quartile, or really maybe they're just the top 15 franchise across the system in revenue retention and revenue per capita growth. Jason's market is exactly that in both. And I think you guys have probably already figured that out based on being goaling, I guess, for$5 million in four years. So that's just a really phenomenal goal line. And Jason, I just want to, I guess, say congratulations for that success. I think that's super exciting. And so for us to all hear from you and to know what your day-to-day is like is really is really helpful. Ross, I think I saw you maybe getting off mute. And if you wanted to pipe in, go ahead.

SPEAKER_07 22:54

Yeah, first of all, congrats. Um, that's awesome. Thank you. Um I'm curious, what types of asset classes are you guys focusing on? Uh, if if anything in particular, do you have a specific, you know, typical bread and butter building?

SPEAKER_01 23:13

No, no, we don't. We we try to sell what we can. And I'll tell you, when I was doing um calling individual franchisees, I they would tell me that they had a minimum that they would stick with. So at the very beginning, I would follow that minimum. And then I quickly realized I just got to sell stuff. So I didn't care if it was once a week, once a month. I was just selling stuff to get things moving. Now I'm at the stage where we've got to put a minimum in, you know, in there because it doesn't make sense to have a lot of small accounts for us. But at the beginning, I would say go sell anything and just get get going. Um, as far as, you know, we we like medical. Um, we try to sell a lot to the medical industry. Uh, we, you know, of course we love office buildings. Those are really easy cleans, those are nice ones to get. Uh, I like uh light industrial transportation, those are also really nice ones. Uh I tend to try to stay away from restaurants, but we do have a few restaurants. Um, but but yeah, those would be the ones we we really really we like medical, we like light industrial transportation. Those are definitely ones we like.

SPEAKER_07 24:16

And are your sales efforts concentrated towards mom and pops, or are you reaching out to institutional type owners? Um, or everything and in between?

SPEAKER_01 24:28

So at the beginning, yes, everything. Um, now we're working really hard on qualifying the accounts. It doesn't make sense for us to put a lot of effort and time into these smaller accounts when you know it's a$200 a month account, you know. Like, yes, the beginning I've sold them all day long, but now what we're qualifying. We we need larger accounts. We want we want them to be 10,000 square feet or more. Um, of course, you know, we go up and down from there, but that's kind of what we're shooting for. Uh, we like to do at least three days a week cleaning instead of one day a week. So that's what we've been working on, probably you know, Q4, Q3 to Q4 last year is how to qualify these accounts so we're not uh spending so much time on these mom and pops and you know the small accounts.

SPEAKER_02 25:14

Yeah, that's helpful. Thank you. Ronnie.

SPEAKER_06 25:21

This would be my last one, and then I gotta I gotta jump, but I appreciate the time. Um, Jason, you know, as you were doing the sales in the early days, or even you know, when your team is doing sales calls now, have you noticed any common or frequent objections from building owners of like, hey, we're good, or we already got something for that, or we in-house it? And if so, you know, any strategies for overcoming them and just kind of finding those cracks into a client?

SPEAKER_01 25:48

Yeah, you'll you'll hear that a lot every day. You'll hear that they're happy or you know, they they're good. And you know, we we try to just keep following up with them. But one thing is that we're different, we're not a normal janitorial company. You know, we're a sales and management company, so we offer so much more than just janitorial services. And if they're not ready for janitorial services, well, what are they ready for? Is it parking lot repair, window washing? We're gonna sell them on something, and that's that's our goal, is just get our foot in the door.

SPEAKER_06 26:13

Yeah, I can't remember who it was, but on one of the previous Z calls, they said that about 33% of their market turns over their facilities management on an annual basis, which is great to hear.

SPEAKER_01 26:25

Yeah, you know, yeah. Um no, I uh I'm I'm not as far as you know, we we there's another metric of something we're trying to push this year, is we're finding uh the most of our um other services we were selling were outside of our accounts. So we're pushing hard to sell more inside of accounts. And um that's we we've we've been pushing our annual maintenance plans with our accounts, and I think that's key to retention is you know, the more services you're offering them, the likelihood that they're gonna stay around for a long time.

SPEAKER_08 27:02

The stickier you are.

unknown 27:04

Yeah.

SPEAKER_08 27:05

So that is a question, and Ronnie, I know you might have to jump. So if not, I'll I'll send you this call after when we're finished. But yeah, thanks for being here. Jason, on that note of the stickier you are with with the more services that you're adding, can you talk to us a little bit about how you're walking into a building? Are you going after janitorial to begin with and then seeing and building that relationship as you go? Or are you going and finding out their their pain point and um getting multiple services off? How does that look initially? Is it one service, is it two services? Can you just talk to us a little bit about that?

SPEAKER_01 27:43

Yeah, I mean, we we obviously we want to sell janitorial. Um, so we we try, that's what we're trying for. But um, you know, we we are we are asking them the two questions, you know, what what uh problems they're having with their contractors now or what's going out to bid next. And those are the things that we always ask. And that that way we can at least uh offer something, some service to them and hopefully win something, even if it's just a small window washing job. But you know, our our whole idea is just to to it doesn't have to be janitorial, and we're fine with it not being janitorial. And I'm trying to convince my sales guys, you know, if it's not janitorial, it's fine. Let's just get in there. And um, and so everyone is a team here. We work as a team just just to to bring in a new uh client, a new customer. Um, but actually, Savannah, I don't know if anyone answered your question. I think I went off there a little bit. What was it?

SPEAKER_08 28:37

That's okay. No, I think you're I think you're spot on. I mean, that's really helpful for us to know. I think that uh especially in when you hear about the complete building solutions and you're talking about that. I'm curious, and I'm sure they are too, of what is your point of entry? And so hearing you mention that you kind of maybe lead with janitorial, but you're still asking both questions, I think ultimately gives everybody the awareness that you're you still have so many options. If they're happy with their janitorial provider, you're able to still figure out what their pain point is and be able to get in. So um that's that's exactly what I was wondering.

SPEAKER_01 29:12

Yeah, and another thing with that too is just because they're they're happy now doesn't mean they're gonna be happy later. So we're constantly trying to just stay in front of them. And again, that's if that's other services that we provide for them, as long as we're still there, we're still checking in with them every so often. And eventually they're coming over to us for janitorial.

SPEAKER_05 29:30

In in the in the early days, was it the same? So, like I heard you say earlier, like, yeah, in the early days, we you know, we our ICP was basically everything, and then now we're trying to qualify more. Was it the same on the services front as well? Or in the beginning, were you really mainly pushing janitorial, or were you selling everything to everyone and then getting subs along the way, if if that makes sense?

SPEAKER_01 29:54

Yeah, so um, yeah, we would sell anything we can, and of course, it was like, oh yeah, that's our favorite thing to do, even though we don't know what it is, you know. And now just get on the phone and start calling and find someone that that could do that service. And that's how we built that that uh other services for us. And yes, we we sell a lot of that. Um we're um we don't really turn anything down. Um, you know, we'll do whatever they want.

SPEAKER_05 30:17

You don't just you don't discriminate.

SPEAKER_01 30:19

No, we'll do whatever they want. No, I say that I'm starting to turn down um uh hood vent cleaning because that's just becoming a pain and having the right people to do it, but we get calls all day long on that.

SPEAKER_05 30:30

How do you find negotiating? Like uh, right? Like, is where do you see like are you able to negotiate better uh contracts with the sales because of the volume, or are you able to you know charge more on the customer front because you provide XYZ or better service? I'm I'm curious to kind of figure out like the pricing negotiating strategy here.

SPEAKER_01 30:53

So with with the with the contractors, um, yes, I mean we're gonna bring them volume, but you know, we're taking we're doing the sales for them. So, you know, we try to present it to them as that, you know, I'm bringing you this sale. We need preferred pricing, we're gonna mark it up. I don't want to waste your time or my time, so I need a good price because you know, we got to make some margin on this as well. And they understand that, and and we bring them a lot of business. So that works well. Now, there's some customers, you know, that really get what we do and we save them a lot of time, and they they have no problem paying a little bit more money because we have several customers that just want us to go out and get three bids for them. That's what we do, and it just saves them a lot of time.

SPEAKER_05 31:31

What is the typical uh increase in contract pricing with subs, would you say on average?

SPEAKER_01 31:38

So our our margins are typically anywhere between well in janitorial, we're typically around 33%, and in the OS work, we're typically in that 35% range.

SPEAKER_00 31:50

I wanted to introduce myself to everybody, Michael Carp. I'm the president of the franchise organization. Sometimes I poke into these to say hello, Jason. How are you? Go ahead, Michael. How are you doing? Um I I wanted to jump in on that last question because I want this is one that I struggled with when I first came in. It was a great question. I don't I don't know who just asked it about the margin and you know, don't you just upcharge? Um it's interesting because Jason got it right. I mean, the what the what the what the independent contractors love about us is obviously if you think about their business, you know, a guy who cuts lawns for a living, the thing he's not good at, well, let me rephrase it. The thing he's really good at is cutting lawns. The thing he's not good at is everything else that goes into his business. He's a probably a terrible salesman because he shows up covered in grass clippings every day when in between cutting lawns where he's trying to get a new lawn. And then if you ever dealt with a contractor at your own house, you know, they usually finish the work and forget to bill you. And you're waiting like three months for the builder, and you're like, how is this guy surviving? They're not, is the answer. And then they're even worse at AR. So when you just think about that side, that we to Jason's point, we help them grow their business, and we only want to be a portion of their business, but we we do keep adding accounts to them. We pay them every month on the same day, regardless of whether we get paid or not, which is why we care a lot about the payment terms in our contracts. So they know they're gonna get paid. They don't have to bill, they don't have to chase people for AR. We take a lot off their plate. And then, so for that, you know, if you if you assume that some percent of their cost is wrapped up in selling, billing, and collecting, well, they can give that margin to us. And we're still at competitive market rates when we bid things because we're just taking that piece away that they would have to do on their own. And then on the client side, if the client really values when Jason goes in and says, No, I'm your facility solutions manager, I'm gonna be the one who gets you the bids. I'm gonna be here with a night manager checking on the work every night. I'm gonna be here, you know, twice a month, walking the facility with you, looking for new things, making sure that the scope of the work is going well. Well, hopefully that client values that service a little too, because they'd have to hire people to do that. And if we can make a little bit of margin on both sides, and I know Jason, it doesn't always work out that way, but sometimes it does when it's played right and we sell it right. That's the value we bring to this relationship. And it is a lot of value. And if you can get that point across to people when you're selling and selling to the IC, it makes perfect sense to people. And they go, Yeah, no, I get it where you make your money because we should be bidding it at the same price that I see we bid it at, because we're making margin on those ends. Now, sometimes we'll upcharge that, you know, that IC's charge a little bit too, because there's room in there and we can. So that's how we make money. And by the way, I've been on a number of calls recently where the client has come right out and said, Aren't you just gonna be more expensive because of the way your business model is? And when you explain it to them, you actually see them start shaking their head and go, that makes perfect sense. And a lot of times I've had three in the last two weeks say to me, What a brilliant business model! Like, how do I get into this? And I'm like, No, you're the customer, sign our deal first. We don't want to talk to you about joining. So hopefully that helps a little.

SPEAKER_05 35:15

Yeah, no, appreciate it. That makes sense.

SPEAKER_01 35:19

Jason, did I get it right by the way? You that was perfect. I couldn't say it even better. I think you did say it. I just said it again. Yeah. No, um, no, that that's you know, and speaking on, you know, where we can oftentimes we get a lot more margin than that. I'm just saying that's an average. Well, there's lots of times we're at 40 or 50 percent margin. I wouldn't say a lot, a lot of time, but there are certain ones where we can do that. It it works out in our favor for that way. But we we you know, you don't want to overprice it and underpay your contractor either. You want to make sure you have the right contractor there doing the work, or it's gonna cost you a headache, you know, later on.

SPEAKER_05 35:58

Yeah, yeah. Do you do you oh sorry, go, Ross? Looks like you're gonna say something.

SPEAKER_07 36:02

Oh no, I was just gonna say I liked your example, Michael, because my landscaper dropped off my bill for uh a spring cleaning this week. Uh the only problem was it had October and November on it, and it was the physical bill that he had extracted from his physical file to drop in my mailbox. And so uh I'm picking up what you're putting down.

SPEAKER_00 36:26

Well, you you you wonder like, how are these guys surviving? And like, and by the way, it's why we go after a certain IC, like landscaping, staying on that example. There's plenty of new national companies, there's private equity guys rolling up landscaping all over the country. We don't want those guys because they've got their own sales force, they've got their own billing department, they've got their own collections department. We want the guys that we can take and help build their business. And they like they literally come in and kiss Jason every day to say, You're helping me put food on my family's table and a roof over my head and shoes on my children's feet. This ripple pin we wear is real. We'll get into it someday if we haven't already. But we really try and pass that ripple down. And by the way, if we sell the service the way we just described, in theory, and I'm not claiming Jason, I'm gonna vomit when I say this. In theory, we should never be fired. Because if they understand that we're bringing a contractor in to do a service to their scope and they mess up that scope, which does happen, we're gonna go try and fix it before we fire that IC. But instead of us getting fired, the IC, we're gonna fire the IC and say, Ross, I'm sorry, we've had this conversation three times. I got to take you off this job. Doesn't mean you're gonna lose the other five I have, but you better dummy up. And then I'm gonna bring in Brent, who's the other IC man waiting in the wings to get a job from me. And I'm gonna say, All right, Brent, it's your chance. Here's where the other guy screwed up. Don't do that. And if we've done our job right with the client, they get that because they're in the process of telling us that Ross screwed up, and then we're saying, okay, we're gonna bring Brent in, let's do another walkthrough with him. And they value us doing that work because otherwise they'd have to fire Ross, they'd have to go find Brent. So it really does work out when we do it right.

SPEAKER_01 38:18

Yeah, no, you're right on with that, Michael, because that that's happened a couple of times and just happened recently. And uh when when clients are asking what makes us different, you know, it's not just you know, like before I was mentioning how we're not a janitorial company. Well, the part of that is is like Michael said, you don't have to fire us. I mean, we we'll replace the cleaning crew or the contractor. And once we explain how that works, we're like, oh, okay, yes, okay, that sounds good. We just had a client the other day say, I think it's time for for a new uh cleaning company in in our building. Okay, we're on it, we'll have one starting next week.

SPEAKER_00 38:53

So and what I would tell you to to Jason's point is if we're doing our job right, the client we notice before the client notices. And I would tell you that not knocking Jason's process, but but if the client's the one telling us they're doing a bad job, we got another problem in there because we should be going to them saying, Hey, I've noticed, have you that like I see the coffee rings on the table, I see the room, you know, the conference room's a mess. Like, do you want me to poke my nose in there? No, we love the con, we love the IC, don't. Okay, but I'm gonna talk to them about it. Or we're gonna start looking at others right now. Are you okay with that? And it becomes a collaborative working where they actually understand where, you know, we're we're the we're the you know, we're the management company. Where we get into problems, and this has happened historically with us, is when we sold ourselves as a better janitor or a better landscaper. Because they're gonna screw up. And if we're known as that person, we don't own a mop. I mean, we don't own a lawnmower. We're not the better, we're the better management company, and we consolidate all that and make it easier for you.

SPEAKER_08 40:03

Yeah, and I think expanding on that, it let's touch on the FSM role a little bit because um the three of y'all here, obviously, this is the first time that you've been on Z calls this this week. And um, you're probably fresh into the process and you're hearing all of these terminologies and wondering what all of them are. And I know we talk about sales a lot with you initially, but that that facility solutions manager is such a key role because not only are they in charge of the retention and like Michael said, pointing out those things, making sure that we're on top of it before the client is, but they're also hopefully selling additional services for you. So they're playing both ends of that spectrum. They're an operations person, but they've got to know how to sell too. So, Jason, can you tell us a little bit about the FSM's day-to-day? What does that role look like and what kind of person you are looking to hire for that? We talked a little bit about it on last week's call, but since um the three of them weren't here, I'm hoping we can kind of rehash that and dive into a little bit more about what that day-to-day looks like.

SPEAKER_01 41:08

Yeah, so I mean, the the FSM or account manager, um their number one goal is retention. You know, we want them to build that relationship. Um, like Michael was saying, they should be noticing any issues beforehand. And and we we've have done that in the past, and we've had clients that have been very thankful, even though they said, oh no, just give them another chance. But we replace them. So they need to be um be able to build that relationship. Uh, I typically try to hire uh a salesperson, you know, but this is a salesperson that's more of a farmer type of salesperson, and they work really well uh in this role of what I found for for my guys here. Um their day-to-day is typically about 8, 8:30 in the morning. They're starting a route. Uh, we call route sacred time. I don't want anything scheduled between the 8 a.m. and noon. And that's for them to go and see the client. They're gonna walk the building, they're gonna notice any issues, problems, talk to the client, see if they have any issues or problems, and you know, also ask what's going out to bed or anything else. You know, I notice your windows are dirty, you know, let me get you a quote. So they're upselling while they're there as well. And then after that, uh, after lunch, they're usually coming back in the office getting some paperwork done, uh getting quotes out, or they're out prospecting, knocking on doors, trying to sell, you know, parking lot repairs or landscaping. So that's it's a really key role for us here. I mean, they are the face of Citywide. So they they really uh they gotta build, be able to build relationships and uh, you know, know how to manage. So the one that example I just gave you where the person had client had told us to go ahead and change out the cleaning crew, my my FSM is fairly new, and he kept trying to give the IC multiple opportunities to correct. There's a time when you got to cut that off and say it's been enough, and you don't, you know, you don't want it to go too far. So thankfully that didn't go too far, but they we should have replaced them before the client told us to replace them.

SPEAKER_08 43:06

Thanks, Jason.

SPEAKER_05 43:08

What is what do those quality checks and control workflows look like? Uh is it typically like every single project someone's physically going and scoping and checking it out? Is there processes where you know images are submitted and quality checks that way? I'm curious to see how you found success in quality control.

SPEAKER_01 43:28

So as far as janitorial goes, typically, depending on the size of account, we're visiting an account every other week. So twice a month for seeing that account. Um, we have a night manager that also goes, and so they're usually going the opposite week. Uh, we used to do it the night before, but we decided to switch it up so they go the opposite week. And um, so we're always having eyes on it, typically every week, if it's in the night or during the day. Um, as far as a project like the outside of janitorial, yeah, there that's more of you're gonna go and get the job. Started and then you're gonna check on it and then you're gonna make sure it's completed and everyone's happy.

SPEAKER_05 44:05

Okay, that makes sense.

SPEAKER_08 44:10

Jason, I'm curious. Obviously, you were on the other side of this fence four years ago. Um, you've heard a lot of questions today so far, but what kind of questions have you not yet heard that maybe they should be asking, or you think that I know it's a different kind of question than we've been posing lately, but um important topics to discuss while they're sitting on these side of the calls.

SPEAKER_01 44:33

Yeah, um, you know, I think we had some we had some really good questions. Um I'm trying to think of some stuff that we might be missing there. Um I I think I mean what what um you guys are this is your first Z call, is that right? Is that what I understand? So you're just getting into it now. Okay. Um Yeah, I I mean I think you had really good questions. I I I would think that, you know, I it's very beneficial if I don't know if you guys are all in sales, but I think sales is really good to have for this. If not, have a partner or someone that's really strong in sales. That's um, I think key. Uh operations-wise, um, I I don't think I'm poor at operations, but I know it's not my strongest suit. So that's why I can't wait to hire a DOO. Um, but um as far as uh, you know, the one thing we talked a little bit about ICs um early on. And you know, I I if you when you open your door, and I was I was seeing this before where it was really hard for me to know what to do first. But I I do think just go ahead and start getting ICs in the door, start getting them on your your list so you can um once you sell up a contract, you're ready to go. And of course, if you have uh any other services, don't worry about the fact that you don't have an HVAC guy or a plumbing guy. Sell it, get on the phone, start calling. That's all I did for the first year is just calling, reaching out, try to get three of the same type of uh contractor for for each uh you know services that we're offering.

SPEAKER_08 46:08

But um that's great advice.

SPEAKER_01 46:11

Yeah, I think just doing that, making sure you're charging them. Um, you know, some there's we have fees we typically charge them. We want to make sure they have some skin in the game and we're not just taking someone that's you know just decided to go buy a mop pocket and come into the office. So we want to make sure they have some cows, they know what they're doing. Um, I know that I've in the when I first started, I did hire someone that was the cheapest to do some kind of plumbing job, and that did not work out well for me. And I learned early on that I'm not gonna go with the cheapest. I want someone that's not gonna cause me headaches.

SPEAKER_05 46:45

What uh like so sales is one thing, and then like an existing network is another. How important do you think the latter is? Like an existing network or book of business to sell into?

SPEAKER_01 47:01

So my CRM stuff keeps jumping up, training. Um so I'm I guess I'm I'm not quite sure what what you're asking there.

SPEAKER_05 47:11

The book of business that yeah, like like how how it is it even important to you, I mean obviously it will help, but like is it important that someone steps or is it game changing rather that someone steps in here and they have you know an already existing network that they already have strong relationships with, not just like friends, right? Like an actual network that they could sell into rather than just having the sales experience.

SPEAKER_01 47:37

So yeah, I I've hired several people who've talked about their networks that they have, and I don't think we've sold to any of them. So I I don't think it's important at all.

SPEAKER_03 47:47

So all right, y'all.

SPEAKER_08 47:54

We have a couple minutes left. If there's any other questions that you have for Jason, feel free to um I can keep, I mean, I can keep going.

SPEAKER_05 48:04

Uh what uh like sales funnel, right? Like I'm obviously I'm I'm assuming that door to door is is extremely strong, but what does your success look like in other sales channels besides door to door, whether it's phone or email marketing or flyer-based, or you know, curious to hear that?

SPEAKER_01 48:24

Yeah, so we are strong on field visits, so door to door to door. Uh, we also work the phones a lot. We've been doing some email marketing campaigns over the last year or so. And um we we do get some some good feedback from that and good leads from that. It's not as much as our door-to-door or phone calls, but it does work, and we're actually finding um, you know, like the people we've reached out to in the past and we put them on an email campaign, they eventually do respond and are interested, you know, for us to come in and quote them something. It just takes a little more time on that. Yeah, yeah.

SPEAKER_05 48:59

So then the average deal cycles, like how long is that typically? I guess it depends right on the project size, but uh, do you have an idea of what like an average cycle looks like?

SPEAKER_01 49:08

Yeah, so it does depend on what what we're bidding, obviously. But um, typically for our janitorial, you're looking at about a 60 days. Uh, sometimes it's a lot faster, but we're finding about 60 days once we make contact and we uh you know maybe have a few calls. We do a building survey, do the proposal, and then we close it, and then we typically start 30 days after we close it.

SPEAKER_05 49:32

Okay, that's pretty good.

SPEAKER_01 49:37

Yeah, and then of course there's others that are are much longer, you know, some of the bigger ones and the schools that we sell typically that takes a little bit longer. Um, that was one industry I didn't mention before. I think it was Ross that was asking about, but schools is another one. We've we've been breaking into schools lately, and we have three right now, and we have two others that are interested for us for next year.

SPEAKER_05 49:57

Do you have any deals with the government, any of the government-funded projects or things like that?

SPEAKER_01 50:03

Um, so not on projects. We are cleaning uh TSA and ARM services. Cool. Um, we are now we're just signing a deal with an airport.

SPEAKER_05 50:15

So oh, let's go, Jason.

SPEAKER_01 50:19

Yeah, exactly. So yeah, we're working through those, and we actually just uh finished uh RFP process with West Des Moines, uh the waterworks division, and they um they are really interested. Supposedly the CEO uh recommended us. I don't know who the CEO is, but somehow we're recommended.

SPEAKER_05 50:36

So yeah, hell yeah, dude. Um objections, like what are what are the most common objections? I'm I'm imagining it's like we're good, but really they're not. But like what are what are the common objections and what's your what's kind of your silver bullet, I guess. I know and I know you guys have talked about it a little bit, but I'm just curious, like, are there some wild objections that you found that come up a lot that you just never would have thought of?

SPEAKER_01 50:59

Or no, it's typically that they're good, they they you know, they don't need any janitorial, they're happy with who they have. We we get that all the time, every day. Um, so with that, you know, we we really just try to see what other services they need. I mean, we're just trying to get our foot in the door, get a relationship building, and eventually we'll get the janitorial service.

SPEAKER_05 51:20

Okay. I think that's it for me.

SPEAKER_08 51:26

Brent, I saw you come off mute if you want to go ahead.

SPEAKER_04 51:29

Yeah, I was gonna say, uh I'm I'm Brent. Uh I'm actually based in northern Iowa, Jason. And I would love to uh I guess shadow you or get to know your your team a little bit better. Um I I met Savannah yesterday, so I'm very new in this process. So um, but yeah, if if you're available, I'd love to get to know you a little bit better. And I guess the day in life is more of what I'm curious of.

SPEAKER_01 51:55

Yeah, no, absolutely. I I'm happy to talk to you. Actually, I've sold some accounts in that northern Iowa. So you walk into some accounts.

SPEAKER_08 52:04

Hey, Brent, we can take that offline too, and I can help you navigate those next steps once we get a little further into the process as well.

SPEAKER_04 52:11

Awesome. Yeah, thank you.

SPEAKER_08 52:12

Okay. Awesome. Well, you guys, oh, Ross, go ahead. You take us home.

SPEAKER_07 52:17

No, I was just gonna say this has been super helpful and enlightening. So I appreciate your time and willingness to chat, Jason. Uh same to you, Savannah, and Lisa. So thanks, everybody.

SPEAKER_08 52:28

Yeah, it was great to meet you, Ross. Thanks for being here today. Jason, thank you so much for joining us today and hosting the Z Call this week. You guys had really wonderful questions. So I hope this was a really beneficial hour for you. And Jason, your feedback is phenomenal. So we appreciate learning from you. Thanks for giving us your time.

SPEAKER_01 52:47

Absolutely, my pleasure.

SPEAKER_04 52:48

We do.

SPEAKER_08 52:49

Thank you, Jason. Thanks guys. Nice to see everyone. You guys have a great rest of your day. Bye bye.

SPEAKER_01 52:54

I know.