SPEAKER_01 0:25

Thanks guys for joining us. I know that sometimes when you log back on, hi Chris. Um take your camera off and pop your and and turn your audio back off. So feel free to jump back on. Um hi Steve and Kurt. Hello, everybody. Good to see you guys. Thanks all for joining. Um great to see you guys. Hey, Kurt. Um, we have Bob Summers with us today. And um, I'm gonna let him start by introducing himself. Bob, if you don't mind, give us all a little bit of background on you, your team, your location, and maybe what you were doing before citywide and how you got involved. Anything that you want to talk about would be fantastic. Um, and then for everybody on the call, several of you have seen your faces before. You guys know the drill. Um, this time is best utilized when you come prepared with your questions. What do you want to get to know from Bob? Um, so feel free to jump in and just come off mute and dive right in with your questions.

SPEAKER_00 1:28

So, all that being said, Bob, I'll I'll let you go first.

SPEAKER_03 1:36

Microphone, there we go.

SPEAKER_08 1:37

Uh good to be here, good to see all of you. My name is Bob Summers. Uh, I'm in the Boston market. Uh, we've been a franchisee in the citywide system for 18 years now. Uh, so we started in 2008. Um, I have to give an upfront contract. I've got a puppy. Don't ask me why, and he's absolutely going nuts right now. He just escaped from the gate. So give me one second and let me see if I can wrangle this guy. And I'm gonna blame it on my much better half, who is my wife and business partner, for not being here. So I'm sorry. He just decided to act up. One second.

SPEAKER_01 2:17

That's okay. We'll we'll go around around the room. There's a couple faces I have not seen before. Steve, it's nice to meet you.

SPEAKER_12 2:24

Yeah, you too, Savannah. Thanks.

SPEAKER_01 2:26

Great to see you guys. Screet, Screet, nice to meet you as well. I have not met you. And then I think we have Judson, Shane, and Audi all joining us as well today. Um, I know you guys have been on a few of you have been on the call today. Shane, great to have you as well. Thanks for joining us. And hopefully we got the puppy wrangled.

SPEAKER_08 2:48

I'm really, really sorry. This was like my worst nightmare that this guy was going to start acting up. Um, but anyway, so been in the market for 18 years. Um, it's been an unbelievable journey as the number 19 franchisee. And now, knowing that we've got 110 or so, I think, right, Savannah?

SPEAKER_01 3:07

115.

SPEAKER_08 3:08

115. So prior to citywide, I was in tech sales or business development. Um, and that was for 15 years or so. We decided to get involved in citywide for me at age 40. Um, so do the math. And uh 58 now, and it's just been an incredible run. Um, my wife, Karen Summers, was in the radio business. She was the general sales manager of a radio station here in the Boston area called Mix Radio. And uh she is our salesperson extraordinaire. Um, so we started this together, and um, like anything, it's had its ups and downs. Um, we've been very reflective lately after 18 years, it's gone very, very quickly, and um it's amazing what this business has become. Um, and I have no other agenda than to just be here and talk, by the way. Um, you know, I'm a big fan of Citywide, but you know, it's uh it's it's been ups and downs, you know, especially in the beginning, a ton of work. That's the way we chose to do things. Um there are probably better, more efficient ways to do things. Um, but I was glad that in the beginning we really chose to almost take on every role so that we could learn from the ground up. Um, flash forward to where we are now in 2026, we have 52 employees. Uh, we are pacing to do 40 million in annual revenue. Um, our original goal after a couple years of learning the business um was to really become a $10 million business in 10 years. And um, at that time, those were um kind of lofty numbers, but us and some other franchisees, as well as uh Jeff Odo and others, said we think we can do it. Uh, we were able to just barely get there in 10 years. And now I look at the glass ceilings that have been broken through um in the last eight years, let's say. And it's phenomenal what newer franchisees are coming in and doing, kicking our butt, no doubt, um, from our first few years and beyond. And uh it's just really fun to see what these businesses can turn into. Um, so you know, my background again was sales, uh, also Karen's. Um, and when we started the business, we divided uh sales and operations where I was more operations, but I did some selling. Um, and we kind of, you know, we were all in. Um, and uh we're just grateful for where we are now. So I've I have a lot of a lot of thoughts that I'm happy to share. Um, but I hope that serves as at least a general kind of background on who we are, where we came from.

SPEAKER_01 6:00

Thanks, Bob. I appreciate it. Um, all right, y'all. You guys feel free to um go ahead and turn your camera or turn your mics off and jump in.

SPEAKER_00 6:08

Whoever wants to go first.

SPEAKER_03 6:15

I'll go first.

SPEAKER_06 6:15

Uh Bob, can you hear me?

SPEAKER_08 6:17

I sure I sure can, Justin. Nice to talk to you.

SPEAKER_06 6:21

Absolutely. I I I was uh just uh you know, initially, you know, as a new friend Z, I'm kind of you know looking at the uh beginning stages, and uh you've been in the business so long, so I'm not sure if you remember your your first uh two years, but uh you know, do you remember like uh how long it took you to land your first five accounts, or did you kind of walk into the business with you know some business already on the books?

SPEAKER_08 6:45

Yeah, um so I don't remember a lot of things these days, but I can tell you I remember those first two years very viscerally. And um it took us for our first five accounts, uh two and a half to three months.

SPEAKER_06 7:03

And and was that like uh you said your wife was uh was sales and remote so operational, so you know your wife did the selling on that.

SPEAKER_08 7:11

Yep. So how did that happen? It was both of us hitting the phones, knocking on doors, um, and really doing it ourselves. We did have a salesperson at the time as well who was helping. Um, but those first five accounts, you know, um there's always this how do you go to market? Do you really get specific right from the start geographically or with certain industries, or do you just spray and go? And uh we sprayed and went and went for any kind of customer we could get in any industry, any size, because we knew that uh, you know, cutting our teeth and um learning, you know, um about the business from the ground up, regardless of the size or type of customer, was going to be where we were gonna, you know, gain the most value.

SPEAKER_06 8:00

Hey, I appreciate it. Thank you. And and I and I apologize. I'm down in uh Mobile, I should have been introducing myself. I'm down in Mobile, Alabama, so I was looking uh at the territory down here. Yeah, I'm a lawyer by trade, yeah, but I'm I'm I'm very excited about the opportunity that City presents.

SPEAKER_08 8:16

Great. Well, I'm happy to be a resource. So um, you know, after the call, whenever reach out, glad to glad to you know be here and answer any questions, further questions.

SPEAKER_01 8:30

Bob, we've spent some time the last couple of weeks with people that are about, I would say, anywhere uh four to six years in has kind of been our average tenure. So um hearing from you this far in having 52 employees, I'm wondering at what point did you start to take off those hats? At what point did you hire, if you have a director of sales, director of operations, for them to kind of look at that downward path and um see what is possible down the line?

SPEAKER_08 9:03

Yeah, you know, I think one of the great things about um the business model as well as frankly the franchise or and some of the flexibility we have is there are recommended staffing schedules um which are great, but or and you can choose to staff the way you see fit to a degree with certain guardrails. And so we had I had somebody in my network um who was a dear friend, which are and still is, um, there are pros and cons to that, right? Um so he joined us early on as someone who would have been a director of operations. Um so that was about a year in. Um so that hat was taken off, which was massive. Um, and then other hats were taken off prior to that. One of them was um what we call a night manager, which is kind of the right arm person, the right hand person to the FSM, um, who's the account manager that's going out and visiting customers day to day. That was something that I chose to do to lose, to use the to learn the role. And uh after I want to say seven or eight months in business doing that role, we hired somebody and that was massive, taking that hat off. Because prior to that, again, it's the way we chose to do it. I'm sure there's better, smarter ways, but it was kind of grinding every day and every night. Um, but when you're doing something and the adrenaline's pumping and you know that you're doing it on a temporary basis just to learn so that when you're doing those subsequent hires down the road, you're gonna be more equipped. That served us well. But I have to say it was nice getting a little more sleep at night, knowing we had a night manager that was taking over those duties that I kind of learned. And for the level of the investment and the value that came out of it, that was a big move. Um, you know, on the sales side, um, we had our first sales manager um six or seven years in. Um, so we would have been six or seven million at that point if we're talking 10 and 10. Um, we probably could have done that sooner and would have if we didn't have Karen. Um, but we did. So uh, you know, that that was a hat for me that was taken off early on. Um, and she was more than well equipped to do everything sales-wise. Um, the actual sales, but also the management, and then subsequently getting us into the hiring and staffing plan for how we were going to scale the sales organization.

SPEAKER_01 11:35

Okay, thank you very much.

SPEAKER_08 11:38

Certainly.

SPEAKER_05 11:39

Hey, thanks, Bob. Um, this is Shri Shrikant Shri Rama. I am uh I'm based out of Texas, uh, looking at uh secondary markets in Texas here, northeast of Dallas um region. Um phenomenal achievement. 18 years in the system. That's really something to say. Uh, what you have achieved, uh, what you're looking at. Um, I will probably ask you some tough questions. Sorry if it's tough for you. Uh uh Citywide uh reorganized under the new P, right? Last year, late last year. As a long-tenued franchisee, what's your read on the transition? Do you think it's better? Is it going to be the same? Or what are you watching?

SPEAKER_08 12:23

So as a franchisee, we're pretty unaffected by those sorts of changes. Um, and that makes it sound like there's something maybe that that could affect us that would be um negative. And uh I guess what I would say is it's it really hasn't impacted us in our day-to-day uh or the relationship. And I think that um since you asked, I think it's a very positive thing. Um, because one thing that I can tell you I've admired from the the start, which to this day blows me away, is uh Jeff Odo's um transparency and um commitment to franchisees and pretty much anybody that is involved in these businesses that even um you know touches it directly or indirectly, including contractors, employees. So uh he was up front that he wanted to bring a private equity firm in for a variety of reasons. But I think one of the things that I learned is that the private equity firm can actually help us as we continue to kind of age in the in the system with their expertise. And I think that they're also assisting the franchise or um as they make decisions because yeah, we're growing individually. But imagine what's going on with citywide franchise with the number of franchisees and now the expertise that they have with a private equity firm that I know went through a gauntlet um and was, you know, they both kind of selected each other. So I guess Shreem, you know, my feeling is it's a positive thing. But for us day to day, um, there's no impact.

SPEAKER_05 13:58

Okay. Okay, just to follow up on that, um, and then I'll let others uh uh for the rest of the questions for now. Um so for the national accounts, the NBD accounts, is there a view that would change with PE acquisitions? Is it either becoming more centralized or more becoming decentralized approach?

SPEAKER_08 14:18

Yeah, I'm sorry, with regards to national accounts.

SPEAKER_05 14:22

Yes. Uh with private equity coming in, would they be um looking at decentralizing to the rest of the franchisee owners on those accounts and kind of walking staying stepping out of it, or they're trying to have more national accounts and try to run that um business in that way?

SPEAKER_08 14:44

Yeah, I'm not sure how to talk about that in the context of private equity because I don't see any sort of relationship there, but it looks like Michael has something to say.

SPEAKER_10 14:52

Um hi, this is Michael Karp. I've met some of you before. I'm the president of our franchise organization. Um so when it relates to our private equity firm specifically, keep in mind they're a 20% minority partner. So they don't have a tremendous amount of say daily as to how we run the business and what we do. We brought them in for various reasons, primarily one being it was just time for the Odo family to take some chips off the table. And that was the most likely way we could accomplish them by allowing to kind of divest of their net worth being wrapped up in one organization, so to speak, um, while also bringing in some expertise to us. But they don't they don't have a lot of say on how we run the business day-to-day, what we do. They're there to be a resource to us and guide us, but that's about it. So I'm not sure that exactly answers your question, but I think it does.

SPEAKER_05 15:45

Okay. Yeah. Thanks, Michael.

SPEAKER_10 15:47

Thank you.

SPEAKER_08 15:48

And I think if you're asking about national accounts in general, it's a a program that's necessary and it's awesome and it benefits the franchisees.

SPEAKER_00 16:00

Chris, I saw your mic come off mute. Did you want to jump in?

SPEAKER_11 16:04

Yeah, I had a question just based on kind of a follow-up from what you were asking about as far as the employees and and such. Um, as far as the SEs go, the sales executives, how has that correlated with the monthly revenue at certain points? Like it do you do you reach a certain point? I know I've I've heard you know anywhere from like 125,000 uh to 150, something like that. And I just wonder how how is how have you treated that as far as when it's time to get another sales executive, get another night manager, kind of get another team for the accounts.

SPEAKER_08 16:41

Right. Um, so sales executive being our hunter team, and then FSMs being our existing team. So it's a little more formulaic with our existing team. Um, and it does, I think, vary, and that's a local decision. Generally speaking, when we get to a 50 account threshold and roughly 130 to 150,000 in monthly what we would call route volume, so janitorial contracts, we will then bring on another FSM. Um for sales executives, how do we calibrate that? Uh, we really do that to our market size, and we want to have territories um that tend to be in the 3,000 to maybe 3,500 in total building count range, which frankly is massive. Um, those are big territories, and um nobody's asked it, but I guess my lesson learned would be um sales staffing early on is just so paramount. Um and uh not only having the right people, which is a topic in and of itself, but also the right number of people, because I think a lot of owners will come in and want to do the selling on their own, which is great, but that willingness to staff early on, uh, because this business, the beauty of it is the recurring revenue. Um, and that's where it is, you know, with your with your um day-to-day sales executive effort going out and securing those contracts, um, those janitorial contracts, which is business that we manage day to day.

SPEAKER_11 18:16

Does that answer your question, Chris? Yes, it does. Yes. Thank you.

SPEAKER_08 18:20

Yep. Rodney, nice. Got your hand up there. How are you doing?

SPEAKER_07 18:26

Good, good to see you again. Likewise. So I know you know a lot's changed in the 18 years you've been running the business, but um, in addition to what you just said, you know, staffing with the right people early on, is there something else that looking back on on your journey that you think, gee, I wish I would have known this before starting it, or something that you think any new franchisee these days really needs to know before getting into it?

SPEAKER_08 18:50

Absolutely. Um, the number one thing is do not underestimate the value of a substantial or let's say adequate um contractor pool. You don't want to be what many of us were early on, which is terrific salespeople going out and selling, closing the deal, celebrating, and then going, dang, man, we got to put a not so great contractor in here. And um you need good contractors, and but they don't need to be perfect. Um, the experience for the customer comes from what your FSM is doing to um communicate with them and um to be the point person, but you do need good professional contractors, and um that hurt, you know, we lost a lot of business early, and um, you know, we got to a juncture where we um along with, you know, because the franchise or is growing with us too, right? Especially that early on. And I think there's huge advantages to being a potential franchisee right now, right, as opposed to back then. And this is one of them, just the value of having the right contractors and enough contractors. Um, and that is something I definitely would have done differently. I would have done more recruiting, I would have been more stringent on the criteria for the contractors that we brought on board.

SPEAKER_07 20:18

Got it. Yeah, pre-selling is okay to a certain extent, but you have to be able to deliver once you sell. Yes. Yep.

SPEAKER_08 20:25

So we underestimated that part of the business model, no doubt. Got it. Thank you. Yep.

SPEAKER_11 20:31

Do you have a threshold? Do you have a threshold? Do you have a threshold of uh the percentage that you would allow one IC to have of your business?

SPEAKER_08 20:43

That's a great question, Chris. Uh yeah, the answer is no more than 8%, and we monitor it regularly. And it should probably be um lower than that. You know, uh our monthly contract revenue right now is uh around 2 million. Um, so you know that contractor's getting a big check. My guess is they've probably earned it, and we've got a really long-standing relationship with you know someone who's at 8%. But that's what we're currently doing now. But we always need to be evolving and evaluating that.

SPEAKER_10 21:14

Bob, before before we go to the next question, I think it it's important also, maybe you should explain what your criteria is. And I know how stringent you guys are on it, and I think it drives your success on what it takes to become a citywide contractor in Boston for you. Um, and it forces the cream to rise to the top.

SPEAKER_08 21:34

Yeah. Um, our criteria is um for janitorial companies. Uh, they need to have four commercial accounts. Uh, they need to have four references of commercial accounts, they need to have four employees, so no mom and pops. Uh, they need to not be a sole proprietor, so they need to be in Incorporated or some you know legal entity that's a you know a C Corp, S Corp, whatever, um LLC. Um so those are our basic criteria. And it was hard at first because that eliminates a lot of the contractors that want to work with us. And what we worked hard to do was to put the right number of resources on the outreach to the contractors and to get creative with all of the recruiting um so that we could go find them. So we really up-leveled our standards and it was hard. And there were uh frankly moments where I wondered, are we gonna be scraping the bottom of the barrel? And that was 10 years ago. Um, and we're not even close to it now. So that criteria has worked well for us. The other thing is um the attorney general website has the business status of uh companies, organizations in Massachusetts. Um, so that's something that we take a look at. And then of course there's insurances, and we expect insurances to line up with the services that are being performed, especially if they're not a janitorial company.

SPEAKER_10 23:06

Michael. How many, how many uh contractors do you have in your group right now, and how many in the backlog that are qualified have been agreed to, but are waiting for business for you from you?

SPEAKER_08 23:20

So we have what we would call active contractors, and we have about 650 buildings that we manage. Um, so we have 250 active contractors of all types. About 160 or 70 of those are janitorial companies. And we have 20 to 25 waiting right now for business, um, if they are selected. Um and it's it's really a symbiotic relationship. You know, we don't try to sell them on citywide, um, except for the fact that they know that if they work with us and they show up and do a great job and run a professional operation, which we're gonna spot check, that they're gonna have an opportunity to grow their business. Um, and we have never missed a payment to our contractors on the 10th of the month. And as much as when I see them, you know, if they come in the office and I say, hey, what do you like working about us? As much as I want them to say, you know, you're really good, fair people, and maybe I can drag that out of them if I bait them a little bit. Uh, but the number one thing is you guys always pay us. Um, you know, you bid fair, we don't have to sell, you know, um, you've got account managers out there, and we get to focus on what we do best, which is show up and and perform whatever duties they may be, whether it's janitorial or something else. So the fact that we pay them unconditionally builds a lot of value. But we have 250 active. And then um I don't have the information right in front of uh of me, but we've got 3,500 to 4,000 that we have been in some sort of contact with over the years that either haven't qualified, that we worked with, that didn't work out, that um, you know, fall in other various categories that I don't want to say we keep warm, but we have record of them so that we know that if they do reach back out, or maybe it's someone that we want to reach back out to, we have those records. So that's just a reflection on us taking, you know, the whole contractor pool thing really seriously, um, and just a big factor for success in the business.

SPEAKER_11 25:32

So you mentioned that you try to stay away from the mom and pop, so to speak. Um, but does that mean that you're looking at franchise national franchises or anything like that? Or cleaning companies? No. Okay. Yeah. How about how about for any other uh OS? I'm sorry? How about for any OS? I'm just thinking that there could be franchises that don't have management, don't have sales that should be candidate.

SPEAKER_08 26:00

Yeah, there are some of those opportunities, and the franchise or has explored some of those. Um, so it's not anti-franchise. Um, it's just more locally. We're looking for local operators um that have their own employees. Um, for us, you know, that that happens to be important, especially in the state of Massachusetts given some labor loss.

SPEAKER_10 26:21

The the larger independent contractors, you know, the the large landscaping firms or the regional firms, they don't really need us as much. Like one of the value propositions that we bring to these contractors, as Bob said, is you know, you get to focus on, you know, if you're if you're good at landscaping, you want to focus on cutting grass and cutting trees. You don't want to have to go out in between, you know, driving your lawnmower and go sell a new account. You're you're dirty, you're messy, it doesn't work well, you're not good at putting proposals together, you're not good at quoting, you're certainly not good at billing. We all have contractors who have come to our houses. I'm still waiting for our electrician's bill from three months ago. He just, every time I call him and say, I want to pay you, it's like I haven't gotten around to it. So, in our model, if they're so big that they've got all those resources, a sales team, a billing department, a collections department, do they really need or want us? To Bob's point, we relieve all that off their plate so they can focus on growing their business and they can count on us helping them to grow their business. And more importantly, we pay them every month on the same day, whether we get paid or not. So they get a lot of value out of the citywide relationship, which is why you know we buy in volume from them. We'll get that discount, we can add some margin in there. Hopefully the customer values what we do and we can charge a little bit more than street value there because we're relieving them of having to have a facility manager because that's what our FSM does. While they're tucked in bed sleeping at night, not worrying about things, we're making sure that the scope of work is getting done by the contractors. So when they show up tomorrow morning, it's all done. So we play both sides here and add value to both parties. But again, it's got to be the right size contractor, or they don't really need us. That's right.

SPEAKER_11 28:06

Yeah. The reason why I asked that question is because I I know of uh a friend of mine that works for a uh a pretty large uh franchise that talks about getting contracts with citywide. So I'll do it. Apparently it has happened, but yeah, I know it's not gonna be the norm.

SPEAKER_10 28:26

It's not a law that says we you can't do it. We're saying this is our target, go fishing in this pond. But if we've got other franchises, and we have some franchise partners with that provide services to us, like uh restoration services and other things that we'll certainly tap. It's all about do they value what we do enough to give us enough room from their street price to what they quote us so we can build in some margin because we're we're trying to do it at the customer's budget. So we really want to make the money on this side, and they've got to be willing to see that value and give up some room. And if we're lucky and the customer values us, we'll make a little money on that side, and that's how we get to our total margin.

SPEAKER_00 29:08

Yeah, Shane, do you want to go next?

SPEAKER_09 29:12

Yeah, thank you. Um, hey Bob, I'm in Southeast Florida doing well. Yeah, I think you said you're close to 40 million. Um that's that correct.

SPEAKER_08 29:21

That's what we're pacing for this year. That's our goal. Yeah.

SPEAKER_09 29:23

How many salespeople do you have? And what do you think is the biggest um learning curve for a new salesperson?

SPEAKER_08 29:31

For a new sales executive. Um yeah, I could talk about the learning curve for us for sales executives too. That might be a longer conversation. Um so we have six sales executives. Uh we have uh four business development people in various capacities that support uh the sales team with an outbound effort. Um, we have a um VP of sales and a sales manager. Um so we are you know 12 or 13 people when we're fully staffed. I think we have um maybe one more business development person we're looking to bring on. Um and I'm sorry, the what was your second part of the question about the learning?

SPEAKER_09 30:14

For a sales executive, what's their biggest learning curve? Yeah, the bidding, is it you know, the B2B side of it? Is it yeah, you know, what's what is well, it depends on the salesperson a little bit.

SPEAKER_08 30:28

But if we do our job um and we're bringing the right B2B, successful, previously successful sales hunter on board, um, the biggest learning curve is is really the formula, our sales formula, which is very proven and pretty simple. But executing that sales formula, um, you know, there's there's some surgical parts to it that we know that when we do these things collectively, that we have a higher closing rate. So making sure that they're doing these little things like the money call and that we're doing the appropriate follow-up uh with the customer after we meet with them, that we're getting, you know, bids in our system and um just following that whole sales process uh because it is incredibly, in my opinion, detailed and um just robust. I mean, when they do it, it works, but it takes a few cycles, you know. What it is not is the industry, um, which is one of the things I love about this business is the simplicity of the industry. It doesn't mean it's simple, um, but the great thing, and again, having done it for 18 years is things don't change. You know, as long as contractors don't show up and don't do a good job, we're in business, baby, and it's good. Um, so but I would say that's the that's the biggest learning curve for sales executives is is really learning our sales systems and formula and making sure they execute to it. And of course, part of that is the prospecting and the outreach. Um you know, it's um we're we're not uh, yeah, prospecting's important, but this is not a robo dialing sort of environment, right? This is thoughtful prospecting. Um, so there's a learning curve to that, making sure that we're calling the right people um and you know, delivering the right message, which isn't, hey, we'd like to come clean your building and give you a quote. It's you know, we're a management company and we specialize in working with customers, you know, buildings that might be frustrated with their vendors. And is this something worth having a conversation about? Is there a vendor or two that maybe you're frustrated with? So long-winded answer to your question.

SPEAKER_09 32:38

But no, it's helpful. Uh what's the average tenure of a salesperson?

SPEAKER_08 32:42

Right now, our average tenure is probably a year, if that.

SPEAKER_09 32:47

So if you get two or three years out of them, you're that's a good, a good run.

SPEAKER_08 32:53

So I think so, yes. And um, where we are with our business, it's not always been like that, right? So I'm not talking our average tenure of a sales executive over the last 18 years has been one year. It's just a moment right now where we're with six sales executives. We brought in a VP of sales, which was the first time we brought somebody in at that level. There's another thing I wish I did earlier. Um, and uh we, you know, in the last seven, eight months have really um re-engineered our sales efforts um and our team, um, which shows you what's possible. I'm not saying we weren't doing a decent job before that, but to get to where we are without really having the level or caliber of salespeople that we have now makes me incredibly excited about the future. But that's why we have uh, you know, an average 12-month tenure right now. Um, and I think that we're starting to really figure out as a system um through compensation plans, recruiting techniques, um, all of the things that so many of the citywide markets do so well culturally, we're really up in our game. And I expect the sales exec um you know tenure to be two, three, four years or more, especially if we're giving them opportunities in a growing business to be able to step into a new role and continue to grow professionally and financially.

SPEAKER_01 34:16

And just as a added on to that, we do for all everybody that does sign the new frame trace agreement, you do get two seats with your training. So you're able to bring that sales executive to our support center for sales training. So they would be well, within the online training, of course, they'll have access to either way, but they're able to come and attend that sales academy that you've probably heard us talk about within a couple of these meetings as well.

SPEAKER_00 34:51

Shri, I think you're next.

SPEAKER_05 34:57

Bob, I think uh you have been through both 2008 and COVID. So how was that uh in in those trenches? How how was CW for you and how were you able to come out of it successfully? I know you have definitely come out successfully, but how was how was that particular journey for you?

SPEAKER_08 35:17

Uh yeah. Um, so 2008 is the year we started. Um so uh, you know, we didn't time the business like, oh, now's a great time to start a business. Um, but when we did look at citywide, what we heard was recession resistant. Um and you know, we've had ups and downs economically, of course, through 18 years. And I think again, no agenda here. It is absolutely recession resistant, dare I say recession proof. Um so that has been really a boon for us and to see the business battle tested, not only in 2008, but again in other years where there were, you know, some economic crisis of some sort. And then COVID's amazing. Um you know what happened in COVID, uh, I could have never scripted. And as COVID was spreading, buildings were closing, people were panicking, including ourselves, right? Um we were making decisions in the moment, um, and really trying to understand what's gonna happen. Um, and we kind of Karen and I stepped back and said, let's just observe this. We've never seen anything like this. We made a decision not to make any um any sort of uh you know changes with our team, no layoffs or anything like that. And over the course of a couple weeks, kind of you know, late February into March of whatever year that was 2021, we started to see our janitorial contract revenue drop, not surprisingly. Buildings you know closing temporarily. So let's say our goal that year was 20 million, right, in total revenue. Our janitorial contract revenue starts coming down, but all of a sudden, we start getting calls for disinfecting and other things that need to be done as it relates to COVID, um, as well as empty buildings that still need to be maintained. And the long story short is by the end of the year, despite that decrease in revenue with the janitorial, we perfectly replaced it. And you could call it, you know what, luck, but I don't think so. We perfectly replaced it with all of these disinfecting services and other things that during COVID were needed. And then, of course, as buildings started to come back online, our janitorial revenue came back up and these things came down, and there we are moving forward again. It was remarkable, um, and something I I would have never um expected. And reflecting on it, to me, that was like the ultimate test of the business model. The other thing is that I think is in the message there, but not stated explicitly. The fact that um we are diversified in industry as well as services is uh absolutely critical to why we got through COVID. If we were all schools, all office buildings, that would have been a different situation. But we're very diversified. If we were all janitorial, would have been ugly. But the fact that we had all these other services and we had this discipline of um vendor sourcing, which is basically all of our recruiting with our contractors, we could on a dime go out and find contractors, and we had contractors coming to us for disinfectant. Um, so yeah, those were two notable moments when we started. Uh, so we never really felt the pain because we started in 2008. But again, we saw those downturns, and we really um, I don't want to minimize it. You see it, you feel it. Um, but when the rubber hits the road, there wasn't any sort of material impact to the business. Um, I think there's always value for what we do out there.

SPEAKER_10 39:26

Well, and more importantly, uh the COVID years were the highest growth percentage-wise, year over year growth we've had in the history of the business. Um, it it actually so much so that we sometimes have to pull those out of our analysis because they skew everything.

SPEAKER_02 39:43

Yeah.

SPEAKER_10 39:44

So it was a very interesting couple of years for the company.

SPEAKER_02 39:47

Yeah.

SPEAKER_00 39:50

Kurt, I don't know if I lowered oh, I'm sorry, Bob. You you go ahead.

SPEAKER_08 39:55

No, I was just gonna say, um, as simple as it sounds, you know, people want their trash emptied. And uh it's gotta happen and somebody's gotta show up and do it. And usually they don't want to manage that stuff. So um it the recession resistant thing, it it's true. It it's um it is absolutely a I think a hallmark of this business.

SPEAKER_10 40:18

What did you do in snow removal in January?

SPEAKER_08 40:21

This year, I probably three hundred thousand dollars in January, maybe a little more.

SPEAKER_10 40:26

Yeah, and people still need their parking lots cleaned and their grass cut, even when bad things happen in the world. They still they still need us to do things because they they gotta maintain these buildings, they gotta provide a safe environment for people. It's a very interesting business.

SPEAKER_02 40:41

Yep.

SPEAKER_10 40:43

Hey Steve.

SPEAKER_01 40:45

Yeah, Steve, go ahead. I don't know if I lowered your hand or not, but you can jump in after Steve, if not.

SPEAKER_12 40:50

All right. Hi, Bob. How are you doing? I'm doing great. Thanks for making time. Appreciate this a lot. I'm uh looking at Manhattan. Okay, give you some perspective. So I got some questions. We can fly through them, okay? You're you're you're you said you're Boston vicinity. So good news. I'm very familiar with up there. My wife's from up there, my kid goes to school with mass. Okay. How much how much of your business percent is actually in downtown central Boston? Like the financial district, back bank, Chinatown, North End.

SPEAKER_08 41:25

Yeah, uh, not a lot of it. Less than you know, yeah, it's a less than five percent.

SPEAKER_12 41:32

So clas class A, B, and C environment buildings. You're you're you're not in many A's, of course, because they're probably too big. B's and C's are tough. Uh in the in the true city area, I'm I'm speaking.

SPEAKER_08 41:47

We're definitely in A's. Um, we're not an international place or the prudential building. Um, you know, as Michael said, we have certain value to certain constituents. And for us, the customers that I think we add a lot of value to tend to be, you know, mid-size, where they may not have, you know, um the staff that uh Logan Airport or an international place would have. Of course. That being said, there are franchisees that have cracked the code on that too. Um, but we've got so much opportunity in Boston. We're pretty focused out in the burbs with single tenant buildings that are in certain industries that are you know 10,000 to 200,000 square feet.

SPEAKER_12 42:26

Yeah, easier picking fruit. What's uh what's what's the union infiltration like in Boston? Is that a hindrance? Have you dealt with it?

SPEAKER_08 42:35

Yeah, no, good question. We asked these things when we were evaluating citywide as well. Um, in Boston, certainly there's a union presence. Um, we don't run up to them, uh run up against them much because again, we're not prospecting a lot of those buildings. We do have buildings in Boston that are not under union um you know supervision or whatever, right? Um, but yeah, no doubt, downtown Boston has its fair share of unions.

SPEAKER_12 43:05

Do you know of any citywide that works with the unions across the US or as a contractor?

SPEAKER_08 43:13

Yeah, go go ahead.

SPEAKER_01 43:14

I was gonna jump in. Our Kansas City location um has figured out a way, I should say, of kind of working with the unions by becoming a part of and hiring union workers to bid on certain jobs. So um, yes, there are several cities that um Detroit, I mean Detroit, Chicago, Kansas City specifically, I think Jacksonville as well. There's several cities that have kind of negotiated that way in. Um but we can take that down a deeper side tomorrow as well.

SPEAKER_12 43:51

Yeah, no, that sounds great, Savannah. Thank you. Thank you on that. Um uh your sales execs and FSMs, what What are their pay structures like in trying to figure out how to do this?

SPEAKER_08 44:04

Yeah, our sales executives have a 75K base. Uh their OTE for uh selling roughly 80,000 in new contract revenue will put them 125 to 135 depending on the timing of it. Uh we pay uh 50 to 60 percent of the monthly contract value of the deal that they've closed, um depending on a few nuances, including margin. Um, so it's pretty straightforward. I will tell you that's a new plan. And again, something I wish we did sooner, because we're attracting um you know much better candidates as a result of that.

SPEAKER_10 44:43

Oh, yeah. I I would I would tell you that in each one of your markets, you have to look at the target companies you want to go after. We seem to have uh desire and liking for the air marks in tosses of the world, good salespeople, good training. And the most important thing is if you're gonna go fishing in that pond and truly recruit, not just post a job and look for unemployed salespeople, which is a curse that a lot of us do. We think we think we think posting on Indeed is recruiting, and that is anything but it's advertising. But if you're gonna go hunt in those ponds, you've got to be competitive with the you know uh companies and industries that you want to go after. So it varies by market, but it's all around roughly the same pay ranges. Great.

SPEAKER_12 45:26

Thanks, Mike. And uh Bob, overall net is around eight percent, six percent, ten percent, if you're lucky. What what are you netting? 10. Okay.

SPEAKER_08 45:45

No. Um I think we're um I mean it's not a gravy train.

SPEAKER_09 45:52

Yep.

SPEAKER_08 45:52

Um, but we I don't think we're compromising on a lot of decisions that we know are important to our team and to the company and to provide, frankly, the sort of experience that we want our employees to have. So um, you know, of course, everything is of scale too, to where we are now. Certainly there was plenty of that as we were growing. And yes, it's it's not a free-for-all. I'm not suggesting that, but you know, one of the things we've struggled with, I've never run a $40 million business, right? Um, neither has Karen. So all of a sudden the budget gets bigger and you're thinking like you were when you were a $25 million business, and that's you know, it's a problem, right? So that's where the franchise or comes in. Um, you know, Michael is a resource fellow franchisees to help us think bigger and understand how do you scale? I mean, it sounds like a great problem to have, right? But it really can be a problem when you realize that you haven't invested enough for the size organization that you are.

SPEAKER_12 46:55

Your uh last question entertainment expense and travel for your reps. Do they have that? Do you reimburse them or are they doing it out of pocket and roughly what is it?

SPEAKER_08 47:05

Yeah, we we do reimburse them, and that is something that we need to improve on. Um, we have entertainment budgets, um, you know, and that's to go out, you know, for meals and you know, maybe taking a game or whatever, but we're really probably not at the level that we should be there. Um, and I would say that if there's something on the bigger side, it more goes through Karen or I for approval. And more often than not, we're gonna say, hey, sounds great, you know, yeah, um, just because we know we need to do more of it because this is a relationship business, it's not a cleaning business. Um, it's not even a maintenance business, you know. This is uh, you know, management um and relationships. So those things are important, and I'd give us probably a C on that right now.

SPEAKER_10 47:51

Most most of the established uh owners do provide car allowances, yeah. Um, for for all their employees who are driving as well. So they're they're covering their costs.

SPEAKER_12 48:00

Absolutely. Yeah. All right. Thanks, Bob and Mike. I appreciate it. Any thoughts on Manhattan?

SPEAKER_10 48:06

Um, I got I've got plenty for you, Steve, but I think I just heard that you're doing another call and I'm I'm happy to jump, or you can call me anytime and I'll give you my thoughts. All right. Sounds good, Mike.

SPEAKER_12 48:16

Thanks. Thanks again, Bob. Yeah, my pleasure.

SPEAKER_01 48:19

We also get a lot of sales executives from the um enterprise management training, KoughCoff Kurt.

SPEAKER_02 48:27

Yeah.

SPEAKER_01 48:29

All right, wait, go ahead. Oh, yeah, go ahead, Kurt.

SPEAKER_04 48:32

Yeah, Bob, just a simple question. If taking it back to say year three to six, when did you feel it was necessary to kind of uh relinquish that Wild West sales approach where you know you're out there selling anything you can to a more concise uh sales approach where you're looking at you know your market logistically, you're looking at verticals logistically that make sense in your market. And the second part to that question is how did your IC roster at that moment influence those decisions?

SPEAKER_08 49:08

So um as far as market focus, what are we in year 18, year 17? Um I say that somewhat kiddingly. So we've been very vigilant about minimum size accounts that we want to go after. We really haven't gotten serious about industry focus until recently. Um, and I couldn't be more excited about it because it's kind of like you know, the definition of um stupidity, right? Doing the same thing again and again. And we kept selling these accounts and the same thing would happen again and again. And we know the ones that really we don't line up with them and they don't line up with us. So um we have made changes to that. So I mean, really, that has been relatively recent. We've had, I would say, a general focus and we know, but we've now put systems in place and expectations with our sales team as well as with our operations team that, hey, when we go out there and we're we're um doing our outreach, we're only focused on certain industries, which by the way is probably 10 industries. So it's not like it's taking anything away. Um, and none of it came from any influence with the contractor pool, Kurt. Um there's really no sort of um intelligence that comes from our contractors, and I certainly in no way mean that in a disparaging way. That's just not, we don't have those sorts of conversations with them. We're driving the strategy and the go-to-market, and we're selecting the best contractor for that building when we get it. We're not turning to them for you know business or prospecting advice or or industry insights or anything like that. Anything else I can expand on there? I don't know if that answers your question.

SPEAKER_04 50:57

No, it answers the question. The I see part of it was more I see support in different areas of your market. Like um, just for instance, if you had an uh you know, a part of your uh market that was a little bit further out than your central location, maybe it's an hour and a half of drive time or whatever it is, and your I see pool in that specific area may be lighter or less supportive than what you have in your core. That that's kind of what I meant by, you know, this is a business I'd like to have. I know we can do this to count, but the IC support in this specific area is not as strong as I would like it to be.

SPEAKER_08 51:34

Right. Well, yeah, and that's where it comes back to old-fashioned recruiting and really putting the appropriate amount of time and resources into recruiting ahead and then aligning your go-to-market strategy geographically and as well as somewhat to an industry perspective based on that contractor pool. And, you know, you will have a contractor that says they serve all of Massachusetts. You know, everybody says that I'll go anywhere. And you learn real quickly they are incapable of going everywhere. And it's not because there's anything bad about them, it's just they're eager to take on business. So you start to learn the right questions to ask so that you can really understand are they going to be able to be successful? And therefore, will we be successful if and when we select them to take on a contract?

SPEAKER_03 52:23

Shane, do you have a question?

SPEAKER_09 52:26

Yeah. Um, you had mentioned uh that it's a relationship business. So I imagine your sales executives, they're hunters, they're going out and getting the sale, but then they're moving on. There's a transition period where that customer then gets passed off to the FSM, as I understand it. Um do they own the relationship?

SPEAKER_08 52:48

So the sales team owns the relationship until the sales ops handoff. Okay, which then becomes the FSM relationship. So that is a very important moment in time, and we need to absolutely knock the customer's socks off with how we show up, how we lead them through the transition, how we follow up, all the details we cover, the vision we paint for them about how this whole thing is going to work. Um, so yes, that's how it works. Sales owns it, sales ops handoff, and then it becomes the FSM's business to own.

SPEAKER_09 53:23

And then the average, what's the average tenure a cleaning contract has with you with you all? Is it two years or two?

SPEAKER_08 53:31

Yeah, so customer retention. Yeah, it's a good question. It's um in the four to five year range right now. And I suspect as we um continue to get more mature with that um ICP, ideal customer profile, we're gonna see that improve. Do because I I think we can do better than that.

SPEAKER_09 53:52

So your your FSM really is the one that has that relationship for the much longer period of time, right? Because the salesperson's chosen the deal. Okay.

SPEAKER_11 54:01

Yeah, yeah, definitely.

SPEAKER_09 54:02

Um when you have when you you know salespeople churn, I mean your FSMs churn. I assume do they have generally a longer tenure than a sales executive? And when you when they when you lose them, does that create any issues or is it an easy transition to get a new FSM on the account?

SPEAKER_08 54:18

Yeah. So in our market, um the tenure of our FSMs is it's just the whole team is much more developed and seasoned than our sales team. So we have excellent tenure with our FSMs. Um, and yeah, it's tough when you lose an FSM. And we're working right now to figure out ways to mitigate that so that their manager doesn't need to fully step into the route. And there are ways to do that, two ways that we believe in our market. Um, it doesn't mean I'm speaking for the franchise system, but we need to be much better about having a bench with our recruiting efforts of FSMs, right? So people that we are keeping warm, um talking to on the side, expressing an interest in them so that when the time comes, um we may be able to plug them in and you know hit the ground running to a reasonable degree. The other thing is what we're calling an associate FSM or associate account manager, um, which is more of a junior role that is like a utility person that is like an account manager or an FSM in training, so that when we do lose someone, because it happens, they are then able to step into at least some of the route to manage that. Um, so those are the things that we're working on when that does happen, uh, because that can be painful.

SPEAKER_09 55:47

And those FSMs have the opportunity to upsell other services.

SPEAKER_08 55:51

Of course, yeah, that's a big part of their role. So their job is, you know, retention and and cross-selling, upselling.

unknown 55:58

Okay.

SPEAKER_08 55:59

Yeah. Thank you. Yep. Um, and they're in a regular route, just to be clear. So they're out with their customers once a week on average, and their goal is to go in and build those relationships, not just with the immediate decision maker, but with what we call the boss's boss. Uh, we know that when we don't, um, when we get terminated, it's typically because we don't know the boss's boss. Um, I don't like the term boss, but you get the idea. So it's whoever their manager is, someone we may not know as well as we should, and they make a sweeping decision that we never knew about. So that account manager is is all about the we talk about get them, keep them, grow them. They are the keep them and grow them part. Big role. Yeah, the retention's been awesome there.

SPEAKER_09 56:45

Yeah, I I get I understand the turnover on the sales side, but how critical your FSMs are because they own that relationship for a long time.

SPEAKER_08 56:55

Yeah, yeah. And they're owning, they're they're managing, you know, um, if they've got a hundred and fifty thousand dollar route, that's 1.8 million. And if they're doing, you know, 500,000 in other services, you know, they're managing a two and a half million dollar business on their own every day with a lot of support, but that's a big deal. They've got pretty damn good.

SPEAKER_09 57:18

In the beginning, did you and Karen hire an FSM first or a salesperson first?

SPEAKER_08 57:23

Sales. Sales. Um, because I was kind of the FSM. Um and uh frankly back then it was a requirement of the franchise or to hire salespeople. Um, so yeah, because you got to get the deal, chicken and egg, right? Right, right. Um, so you got to get the deal, and having an owner be the operations person, you know, made a lot of sense. Um, but and I want to say, um, well, for us, I mentioned we had a DOO come in early, so he was really an account manager and kind of learning the managerial part of the role at the same time. So we were a little different in that respect.

SPEAKER_03 57:59

Great, thanks.

SPEAKER_08 58:00

Yeah.

SPEAKER_00 58:01

Rodney, I'll let you bring us home.

SPEAKER_07 58:04

All right. Um, Bob, we got into headcount a little bit earlier. So with the team of 52, you said there's about 12 people on the sales side. I'm just interested to hear where the other 40 people in your organization sit and where they're focused.

SPEAKER_08 58:17

Yeah, so don't do the math, don't reverse engineer this, but roughly um 25 to 30 people on the operations team, so account management. Um, so I think we have uh 15 or so FSMs. We have four people managing those teams of roughly four. Um, and then we have a director of operations above that, and then a VP of operations. Um, and then we have a finance team that comprises five people. We have an admin team that comprises uh four or five people. Um and then HR. Uh we've got two people, uh soon to be two people, full-time recruiting for us. We have 11 positions right now that we're trying to fill. Um, so uh that is but that is something that we fell behind the eight ball, that kind of bigger company thinking that caught up with us and that that hit us last year. You know, we um we got way behind in our hiring, uh, our staffing. Um but I think that kind of that should bring us to around where we are, 52 or so. Yeah, thank you. Yeah.

SPEAKER_00 59:33

Great questions, you guys.

SPEAKER_01 59:34

I think the only thing that we really didn't touch on today was was culture. And I do want to end on that because Bob and Karen have a really great culture of team members in their office. And I know that that really filters down top down. Um, but I imagine you guys hire people with that in mind, of them bringing and adding to that culture. Those people that you have um are passionate about their purpose there. And I would encourage you all to go back and listen to some of Karen's old Z calls, um, as well as Karen and Bob doing them together, because I think that in a couple of those past recorded calls, they they you guys talk a lot about those the hiring and the culture and how you've created that and built that over time. So, all of that being said, Bob, we really want to thank you for your time today. Really appreciate you sharing with everybody. Um, and thank you guys all for coming with questions today.

SPEAKER_08 1:00:28

Thanks, Bob. Yeah, my pleasure. Really nice to talk to all of you and uh please please reach out with anything. Thanks, Bob.

SPEAKER_01 1:00:35

All right, have a great day, everybody. See you later.

SPEAKER_08 1:00:40

Thanks, buddy.