The Franchise Insiders "Inside Scoop" Podcast
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The Franchise Insiders "Inside Scoop" Podcast
New Home Services Franchise You Need To Know About: Cabinet IQ
Imagine owning a franchise with little competition and puts client appointments on your schedule for you as an owner?
Meet Cabinet IQ and it's visionary founder Michael Hartel.
Michael shares the scrappy beginnings of Cabinet IQ, from a small office to a Disney-like showroom that captivates clients. He emphasizes the power of understanding consumer behaviors and forming strategic partnerships as key elements in the company's growth. By differentiating themselves from the big-box stores with personalized consultations and building strong relationships with contractors and designers, Cabinet IQ has carved out a unique space in the market. Michael also provides insights into effective marketing strategies that have driven the company's success, including innovative approaches like Facebook retargeting, PPC, and neighborhood marketing.
The episode culminates in a discussion about the core values that underpin Cabinet IQ's achievements and its potential for aspiring franchisees. Michael highlights the importance of community engagement, continuous improvement, and networking, with real-life success stories illustrating these principles in action. As we explore the exciting opportunities Cabinet IQ offers, Michael invites listeners to learn more about the brand's distinctive niche and how his visionary approach is reshaping the cabinet industry. Whether you're interested in franchising or simply seeking inspiration for your own business endeavors, this episode offers valuable lessons from a trailblazer in the industry.
Text: 305-710-0050
Hi everyone, Welcome to the we Bought a Franchise podcast. I'm Jack Johnson.
Speaker 2:I'm Jill Johnson.
Speaker 1:And today we have a very interesting guest. We have Michael Hartel, the founder and CEO of Cabinet IQ. Michael, welcome to the show.
Speaker 3:How are you? Thanks, guys, I'm great. Thanks for having me.
Speaker 1:So I have to say we've been talking about this episode coming up for weeks. We're so excited because you've got such a unique concept that's so different. It's rare in franchising when you can have something so differentiated. Michael, let's dive right in and let's talk about Cabinet IQ, what it is, what makes it different and why someone might want to consider it if they're thinking about franchise ownership. Sure.
Speaker 3:So Cabinet IQ is a high-tech cabinet and countertop company, so our industry is very fragmented and outdated. The biggest problem with our industry is people who go in to remodel their kitchen. They've never done it before and contractors are typically very bad at explaining what's happening next. And you know even the whole process from start to finish, from initial budgeting, design renderings and then the actual execution of the Kitchener model, is just done really poorly in our industry. So you know, starting on the budgeting end, a lot of people come to us with misinformation around how much Kitchenerodeling actually costs. Maybe they find a blog article from 2018 and think they can remodel their kitchen for $15,000 and it's just not possible.
Speaker 3:So when they come to us, we have very unique ways of setting budgets for principal, signature and masterpiece types of cabinetry. At the end of the day, it's not our kitchen, it's our clients, and we set a really good budget for them based on what the lifestyle is, the cost of their home. We have some guidance on how much they should be spending. And then, as far as the execution goes, we have created almost what's similar to a pizza tracker from Domino's. So imagine you have an app that you can look at and, from start to finish. You know what's happening next and when it's going to happen and who's going to be in your home. So there's the peace of mind for a customer to understand that you know it is a process and they understand what the steps are. We actually have more five-star reviews in Austin and our local market here than all of our competitors combined. So we get a five-star review from almost everyone we work with and that's just a testament for the process from start to finish and that's just not typically done in our industry.
Speaker 1:That's really fascinating, and so how did you begin this journey? Like what told you, this is something, I'm onto something and I should I should franchise this.
Speaker 3:Yeah, awesome question. I'll start by saying that I got a PhD in engineering. I studied material science, basically nanotechnology. That's what I studied in grad school for my master's and PhD. Grad school for me was an amazing time in my life. I got to learn how to learn and do creative research, publish papers, give conference talks. It was an amazing part of my life where I got to push the current scientific community forward and make a big impact. All of that came to an end when I graduated. I was really excited to finally be done with school. I was done with that chapter of my life. I was excited to go out and make really good money.
Speaker 3:I got hired by one of the top companies in the nation, the Intel Corporation, so I ran a division of their research and development at their headquarters in Portland Oregon. It all sounds great working on nanotechnology, working at a great company. But about two years in I just felt so unfulfilled and I was just sitting at the lunch table with our coworkers and everyone was just complaining Very long hours, stressful work, environment, very demanding and I just knew it wasn't for me. I had this epiphany where I kind of looked and scanned the cafeteria and I just said I don't fit in. I just feel different. So that led me to leave. I actually just left Intel and took a job with Samsung, which is basically their competitor more responsibility but less work, if that makes sense, better pay.
Speaker 3:I got to move to Austin, texas, where I currently live so more sunshine, it just was a good fit. But literally within six months of starting, I thought a fresh start would be what I needed. That same feeling kind of crept in so I found a real estate seminar on Facebook. I got hit with a Facebook ad for a real estate seminar. I went to this free seminar and they explained how to flip houses. And when I heard about you can take a house, put some money into it, sell it for this and make a profit. That's what I did. So I dove into house flipping in 2014, 2015 in Austin, texas, and I just loved it. I love taking a home. That needed a lot of love.
Speaker 3:The design process, the construction, seeing a physical product get built is just such a contrast to working at computer chips where you can't see anything that you're doing and it's just a bunch of graphs and paperwork. So for me it was a really refreshing, different pace for me. So that led into construction. I became a general contractor, started building houses, remodeling houses for other people, and I noticed the only product in a home that I couldn't control was cabinets and countertops. It's the one thing that you know you have to do it the right way and it has to be a process, just like you know, just like engineering. But I was cutting these big checks to these cabinet companies and they were showing up with the wrong cabinet color. They'd bring 20 feet of cabinets for a 19 foot wall. They'd say they'd be there Monday and then they would no call, no show until Friday afternoon to tell me they'd be there the next Thursday, and it was extremely frustrating. In 2016, I locked myself in my office, I taught myself kitchen design and I figured out where to buy cabinets on my own, and that was just initially to help my own projects. But then people started seeing the product I was producing. Fast forward, you know, eight years of just engineering the ideal cabinet company. Here we are. The ideal cabinet company. Here we are In 2021, you asked why franchising In 2021, both of our corporate stores were pretty much running themselves, which is obviously an entrepreneur's dream and I was ready for the next step, and that was how do we open up 10 of these at a time, or 20?
Speaker 3:But in noticing, in Googling business growth methods, I actually stumbled upon franchising. I feel like most people understand the word franchise from fast food. They don't know the inner workings of the franchisor franchisee relationship and all the beautiful win-win parts of the business. And as soon as I read that, it just sounded so much more attractive to build teams and see people win and to see someone live life on their own terms with a model that I've created. That just really stuck with me, as opposed to owning 200 cabinet stores. It just didn't seem like fun. So that's why franchising it's fun to allow someone to be an entrepreneur, to give them a playbook, to support them and see them do well. It's been really gratifying for me.
Speaker 1:Yeah, I mean what's better? I mean when you get to really chart your future as an entrepreneur and have support and have something that is so different, right, have something that sets you apart, that offers service, and to have a real story behind it, like what you have, I mean that's an incredible win for a franchisee. How many locations do you guys have at this point?
Speaker 3:We have two corporate stores and then 24 franchisees. What year did you start franchising? Well, I did franchise development by myself, with my business partner in 2023, and I just learned the industry. I have tremendous respect for franchise consultants and for people on their journey. That role just wasn't for me. I was probably on a lot of calls that I shouldn't have been, spending probably thousands of hours with people that maybe weren't a good fit, and I should have recognized that earlier on. So I tried to do franchise development on my own. It wasn't really until I met Franchise Fastlane that we really started picking this up, so that was in March April of this year. Actually, we joined the Franchise Fastlane inventory. Actually, we joined the franchise Fastlane Inventory. They're obviously experts at what they do to identify great candidates and work them through the system. So we've been adding about three franchisees per month right now, which is good, stable growth for us, and that's the hiring plan that we have for the next 12 months is based on three franchisees per month.
Speaker 1:That's great. Yeah, Joel and I were just talking.
Speaker 1:I think, you know, we own a, um, uh, a pinks window services franchise, which is actually based there in Austin, Um, and we, um, we actually were just recording an episode where where we were talking about our experiences running the business. A lot of times we'll share an interview with a franchise or like yourself, or franchisee and then we'll do another episode where we just talk about our experiences, and we were just talking about the highs and lows of being a first-year franchisee. Um, so we just set a record for pink's franchisee revenue, which is, you know, that's great, but it was preceded by or, excuse me, so that was for october and september was, you know, awful. So it's like that's the life of a franchisee, especially in the first few months. You know Jill was talking about, you know accounts receivable and with corporate accounts and how much that can take.
Speaker 1:So you know, I think it's important and that's why we do this podcast is to let people know that, yeah, you can go out there, you can chart your future, you can have all that great support, but you've got to be ready for the first year, first few months. So maybe, if you don't mind, take us back to when you first started Cabinet IQ. What were the first 18 months like Was there ever a moment where you're like, oh man, I don't know if this is going to work?
Speaker 3:Yeah, I mean obviously me starting a business from scratch, not knowing anything about it, is different than the journey of a franchisee. For me, starting my business, it was just me with some samples in my truck and I would drive around to areas of town that I knew had a lot of construction activity and I would just walk into these houses being built and ask you who's the decision maker? And just straight up hustling, trying to figure out who to talk to and how to sell cabinets. My showroom was a 15 by 15 foot office inside of a real estate office and I rented it for $200 a month. I had a six foot white table that I draped with a black tablecloth that I neatly placed four different cabinet samples. That was my showroom back then. Obviously, fast forward to now we have just a beautiful showroom design. Our vice president of sales was my mentor for about 18 months the last 18 months and he joined us recently. So he's designed hundreds of showrooms across the country and really understands what that ideal shopping experience is like for a consumer. Showrooms typically look like Burlington Coat Factory in our industry and nothing against that company. They have their own niche. But I think inspiring is probably the last word you would use at Burlington Coat Factory if you were to shop there. So you know you don't walk into our showrooms, you just get overwhelmed by a chaos of choice and samples all over the place. It's more of an inspirational design studio. So around every corner there's something neat to look at, just like Disney, that hits all the senses the colors, the looks, the smells. That's the shopping experience with our company. It's just completely night and day different than other cabinet companies. So a franchisee now they get to walk into the ideal showroom layout from someone that built a $70 million a year kitchen and bath business in Florida and obviously understands consumer buying behaviors and how to sell cabinets, quite frankly, behaviors and how to sell cabinets, quite frankly. But yeah, starting up the business is really. I'll say that I made a mistake, honestly, to be vulnerable.
Speaker 3:The first couple of franchisees. It was a very linear path to open the real estate's involved. Then you come to training once it's almost done and then you go home and open up your store and it does take some time. Obviously it's a brick and mortar location. It's needed for our industry. But I started realizing that when I started my company I didn't have a showroom and I did pretty well. So we basically broke apart that linear chain of opening into operating like a normal home service business, a home-based business with all the samples you need, taking in-home consultations. We separated that from the actual showroom build-out so now you do them in parallel. We're basically able to get people open in half the time.
Speaker 3:So our goal is for franchisees and we tell them this it's 100 days from the time the franchise agreement is signed. We'd like to see them make their first sale and that was an initiative we set in the beginning of the year and we just set that record and our franchisee I'll give him a shout out in Salt Lake city, did it in 94 days, which is you know. Obviously I can't talk about the the number, probably because of FTC regulations, but he did. He's doing really well for himself. He's out selling big ticket items without a showroom completed yet. So that's the experience. We asked them to go out and meet contractors, designers, flooring stores, appliance stores.
Speaker 3:Our ideal franchisee is energized by forming these relationships. They like dressing up nicely, presenting the brand well, walking into these locations and forming these relationships. Um, they like you know, dressing up nicely, presenting the brand Well, walking into these locations and informing business partnerships. Um, I want to share one thing with you too we actually have an outbound call center. I know a lot of brands have inbound call centers. Ours is actually outbound and we're calling the types of people I just mentioned and getting between five to 10 appointments per week, set with franchisees. So the call center's job isn't to sell cabinets, it's just to get the franchisee on the phone with someone who raised their hand and said, yes, I'm interested to talk to the newest cabinet company in town, and that's been extremely effective. It's probably the best ROI for marketing spend that we have right now is this outbound call center.
Speaker 1:Wow, yeah, that's cool. What questions do you have?
Speaker 2:What sets you guys apart from working with another cabinet company? So we've worked with contractors when we've done it and they've kind of referred out. You know we want to work with this guy. So what makes what sets you guys apart? Like what, what do you focus on to get people to work with you versus their, their cabinet guy?
Speaker 3:Yeah, it's a great question. I'll start with the big box stores. You know, and I'll tell you. What is a myth in the industry is that Home Depot and Lowe's sell a lot of cabinets. They actually have less than 5% of the market share. This is something I learned from one of the higher up executives at Home Depot. He shared that with me.
Speaker 3:So even if someone does go to Home Depot or Lowe's, that designer is actually not even allowed to visit the home of the customer. It's all done completely subcontracted. So imagine a designer who really to do a good job, needs to feel the space, the natural lighting, talk to someone in their own home how they use the kitchen, how it functions. So they just do, in my opinion, a poor job of giving someone a really nice functional kitchen. Home depot and lowes typically are stepping stones for a designer to work up to more of a boutique cabinet company like, like ours. So it's kind of an entry-level type of company to go you'll work with. As far as custom cabinet builders, most of them don't produce beautiful 3D renderings of the space. So we have computer software that we design in and it's almost like taking a virtual reality tour through your new home. Imagine being able to look at your home before making that purchase. So we actually use Oculus goggles. It connects to our computer and you can almost sit on your kitchen island and spin yourself around and look to see how everything's going to look and function. That's just not done in the industry for custom cabinet builders. And the other thing too, like I said, is not knowing what's next and how things work is really a problem in our industry. So I know it sounds simple, but just showing up on time and doing a good job I'm having, like I said, a piece of tracker, like dominoes, to understand what's happening next. That's just typically not done in our industry.
Speaker 3:I went out and spent. We invested I don't want to say spent, but invested a ton of money in a customized CRM for not just our industry but for my company. For our company, we had seven different individual pieces of software to run our company and we went to all the out-of-the-box CRM companies out there all the big ones you can name. I had conversations with all of them. Every one was missing a very key component of our industry. So we built a platform that is not only good for customers but also the employees of the companies to run their business effectively. We don't use paper in our industry or in my company. In our company, everything's digital, you know, instead of having folders on the walls and papers falling all over the place. Everything's completely digital, which is obviously unique to our company as well.
Speaker 1:I think that's great and that's you know. Again, you want to be a modern company. You know it's like we were just talking about Elon Musk's robots, and what will that look like 10 years from now? For you know the home services industry. I don't think they're going to get to the point where they can handle the kind of specialized jobs just yet. Yet that we would, we would need our you know our workforce for. But it's an interesting thought, um, and I do think, streamlining and using technology, utilizing ai, uh, making sure that you can provide the kind of transparency and customer support like you're talking about. Like we all, when we order a gordash, we want to know where our food is. I want to know how cool is the pizza is to our house.
Speaker 2:Well, I mean, we redid our master bathroom last year and you know, seeing the timeline, it was like, oh, it'll be done by Halloween and it was definitely not done by Halloween, so you know, but it would be good to see that progress and we worked with a great designer and contractor. So no, I'm not saying they did anything wrong, but you know it's that tracking is really important. When you're waiting, you know, when you want to know when something's done, you want to see that progress. And then it holds you guys accountable too, because you know the customer can see where you're at. So if there's questions they can ask about them, or you know if you're supposed to be at a certain place and not. So I really like that. I think bringing in that piece of technology is actually really important. So that's very cool that you guys have that.
Speaker 3:Yeah, thanks for sharing that.
Speaker 3:I'll share with you too in building the CRM from scratch. We're able to send out text messages and emails in a timely manner when a new thing is triggered. So instead of someone calling us saying, hey, what's happening next, they're already before they even ask the question. They're getting whatever form of communication they prefer. They're knowing what's happening next. Imagine if you guys went online and made a payment for $60,000 for your cabinets on Sunday night. You're most likely going to call them Monday morning and ask what's happening next. So we don't have that issue because as soon as they pay, we let them know exactly where they're at in the process and what happens next and when we'll reach out to them. So when we launched this software last year, the amount of phone calls to our operations phone got cut by 75%. So now we're receiving 75% less calls from customers, meaning we have 75% more time to build our businesses and not field questions that should have been answered ahead of time.
Speaker 1:So how much have you incorporated AI into your customer support?
Speaker 3:Right now we're using it for marketing. I have a really cool tool where you can take a picture of your existing kitchen and choose from different cabinet colors and door styles and it basically takes your space and changes the door style and the color. This is for top of funnel. This is for people who maybe aren't interested in speaking to someone yet, but they're out in the information gathering stage. So in order to use this tool, you actually need to give us your first name, last name, email address, phone number and then zip code so it can route to the correct franchisee. We do zip code routing for our franchisees, so that's a nice top of funnel tool.
Speaker 3:This was created by two PhDs, one at Harvard and one at Yale, and I can talk really nerdy about the AI dissociative modeling and how it's just different than everything else that's out there. Most AI you just kind of put a filter on something else. This actually deconstructs a kitchen. It deconstructs a 3D object that is made into a 2D image and then puts it back together with new parameters. It's super high tech, it's cutting edge right now and that's pretty neat. We have an AI chat bot that we're training right now to answer any generic questions about our company and that's just going to be nice for customers to be able to at any time ask a company a question and get what answer a human would write back. So that's going to be another feature as well.
Speaker 1:That's awesome. And then, as far as marketing goes for your franchisees, what's the main platforms for you guys right now? Is it? Is it Google, is it Facebook? Is it both?
Speaker 3:Yeah, it's a. It's really an omnipresent strategy. I hate to you know, I'm not going to tell you that. You know we get all of our leads from Facebook. We hired a CMO back in April. She came from American Apparel and after that she was at Francesca's, who she helped grow from 50 million to 500 million through a billion dollar IPO billion with a B. I'm extremely intelligent strategist and marketer. So you know we've begun working with each other this last, you know, basically in the summertime, just doing a slight brand refresh, really talking to our customers the right way, elevating the brand to the point where you know it needs to be.
Speaker 3:But as far as outlets for leads, it's the Outbound Call Center is a really, really good resource to get in front of people who literally need cabinets. It's not like you run a Facebook ad and hope that you're going to hit someone with a Facebook ad when they're going to do something once or twice in their lifetime. It's less than a needle in a haystack type of odds. We do do Facebook retargeting. If someone does land on our website, we retarget them with ads. Our pay-per-click strategy is very dialed in and we've spent a lot of money on national keywords for search engine optimization. So our websites, when they launch, I'd say the majority of them are already in the top 10 for the keywords we need to be in. So it's an omnipresent strategy.
Speaker 3:When they actually start jobs and have a job in progress, we have really nice yard signs that say we made the smart choice for our kitchen remodel. Scan here for a consultation. So we get leads from neighbors and a part of our CRM is when we schedule a job at that location, automatically a hundred of the nearest houses that are owner-occupied get postcards that reflect you know. It says your neighbor made the smart choice. Scan here. So now we're hitting these neighborhoods, we're canvassing these neighborhoods and it's not uncommon for us to do, you know, four or five homes at a time in the same neighborhood, just because of the presence. And there's no better marketing than just doing a really good job for the customer, because that message gets out in the mom's chats, the group chats, the group me's and things like that in the world. So doing a good job and introducing the brand to neighbors is a really cost effective way to get new customers too.
Speaker 1:Do you have a goal? I mean you guys obviously have. I mean, our window washing power. Washing jobs are fast, right, so we can rack up Google reviews pretty quick, whereas you guys have a bit of a longer cycle. Is there any best practices you don't have to answer if it's proprietary, but any best practices for new franchisees in terms of, hey, at the end of three months in business, you want to have X amount of Google reviews in place. What about that?
Speaker 3:Yeah, we do have some guidance. We'd like to see them have 20 reviews even before their business launches. We don't ask them to get fake reviews. We ask for what we consider a character review. You know a past co-worker or you know family friend? I think it's totally okay to have someone write something nice about you on the Internet, even though you didn't do business with them. So we have, you know, character reviews, that we have Our grand opening party. We have, you know, character reviews, that we have our grand opening party. We have a qr code that is out and it says if you love the showroom, you know we'd love to hear about it, and it links to the google page. So, you know, out of the 100 guests you know, maybe 15 or 20 will say beautiful showroom. You know nick's a great owner. Go see him for cabinets. So that actually boosts you into the 20, 30 review realm. And most cabinet companies actually don't even have that many. Some may even have less than that, even though they've been in business for 30 years, 20 years. So we're already. You know, before the business even launches, we're already kind of on par review-wise.
Speaker 3:I keep going back to our CRM, our CRM. When a job is finished. We have a series of three text messages and two emails that go out over the course of two months. So obviously you're only going to ask someone that had a good experience.
Speaker 3:Most people, when you ask them to leave you a review, they forget. You know they have good intentions but they get busy. They're not going to do it. Then If they don't do it right then, and there they typically don't do it. So our installers leave them with a QR code and it has their name and it says we love you know. We, you know I forgot what it says. We, you know, appreciate your five-star review.
Speaker 3:This is a quick QR code scan to go to the Google review page. So that's the first part. And then it's a series of emails and text messages. The last one literally says I'm so happy, you had a great experience. This is the last time I'm going to bug you about leaving the review. We'd really appreciate it if you can. And we see when, in those chains of emails or texts, when people leave it, it's usually when you have to ask them four or five times, which is just the busy lives that we live these days. So I think we're really good at if someone says they are going to leave us a review. We ask them enough for them to leave us a review.
Speaker 1:Yeah, that's great. I mean listen, this is did you name the company, by the way?
Speaker 3:I did. You want to hear the story? It's a. It's pretty short. Uh, so the company when I founded it I named it investor Depot, right? So basically I was a house flipper, investor, um, slash contractor. I thought investor Depot is a nice plan, home Depot kind of a one-stop shop for house flippers.
Speaker 3:But six months into owning the business I was getting phone calls to my business phone and they're asking me if I sold cabinets. They were just confused by the name Investor Depot. Like, are you a bank? Are you like a lending company? My neighbor told me you sell cabinets, but I don't know what you do. Obviously a marketing faux pas when you don't know what the company does. I changed it to Cabinets Plus. Batteries Plus is obviously a large company and I said, hey, we do cabinets, we also do other things too. So Cabinets Plus was as creative as I could get as an engineer back then to form the company Cabinets Plus. So we rebranded all the apparel, all the signage, all the trucks, all the website, all the things Very expensive and time-consuming endeavor.
Speaker 3:Two years go by and then I decided to franchise and our franchise attorney realized that Cabinets Plus is already registered in 27 states and that I can't use it if I want to be a national brand. And when I got that phone call my heart sunk and I said man, that's a bummer. I just spent tens of thousands of dollars to rebrand this company. Now I got to start over and I sat down and I just meditated for weeks and it came to me Cabinet IQ. Our slogan is the smart choice for cabinets and countertops. Having a PhD, I felt like IQ is kind of a nice touch on my personal touch to the brand. But just cabinet IQ, the smart choice for cabinets and countertops, is where we landed and I'm glad it all happened. Obviously a pretty painful endeavor to rebrand again, but it really is the essence of our brand. It is the smart choice for consumers to come to us for their cabinets and countertops.
Speaker 1:I think it's perfect. I mean, as I'm sitting here talking to you and you and I you know we had a conversation a few weeks ago but I feel like in this podcast, as we've really gotten a chance to listen to you and learn about, I think it's, it's perfect, it's almost a perfect personal and professional brand fits you, it fits the product. I think it's really cool and it stands out.
Speaker 1:I mean, again, for me, my, my takeaways on this jill and tell me what your thoughts are. I mean, again, you're kind of owning a space that not many people own, but it's pretty darn necessary, especially with so many of us out there who have these homes. We have low mortgage rates, we want to make improvements, we got a lot of equity in our houses, hopefully, um, and so it's a great sort of need service, high ticket, I would imagine, pretty good, pretty decent ticket for a job.
Speaker 3:Yes, our franchisees are launching in a $25,000 to $30,000 average ticket. So you can do the math and think about how many sales you need per month to own a million-dollar business. You're not running around town trying to sell three jobs a day. You need one job a week to own a $1.2 million business. So, right out of the gate, selling a high ticket they can do really well for themselves.
Speaker 1:Yeah, that's the ticket, yeah.
Speaker 3:The business is pretty light too. The business owner, the franchisee they only have one employee and that's an experienced kitchen and bath designer that we're going to help them find and vet and train as well, so just two people can launch the business.
Speaker 1:How long does it take to do the average job that you mentioned?
Speaker 3:When someone comes to us and they pay what we consider a 5% design retainer, we normally have their design ready for them next week and if there's no changes then we can order the cabinets. They take, you know, four to six weeks to come in, depending on the brand. We have some that can come sooner, but most of our lines are four to six weeks. We're actually only in the customer's home for about two or three days doing a kitchen for the cabinets and then the countertops were only there for about 45 minutes total with the pieces we need to install. So we're not marrying a customer for 18 months like a home builder does. We're really in and out, you know, and doing the highest margin and highest gross ticket products in the space. So it just makes the business feel lighter and more.
Speaker 1:And is it? Do you guys like do 50% deposit down and get the job going?
Speaker 3:So 5% to do the design. We don't touch our design program and spend 15, 20, 30 hours designing anything for anyone. You know if they like us, they like our reviews, they like the product, the budget we set for them works, they pay a 5% design retainer to start the process. We actually take 100% of the materials up front and 50% of the labor as the deposit. That's about an 85% of the total ticket as the deposit. The remaining 15% is done or paid for when the project's finished.
Speaker 3:So that means you're cash flow positive from the first job you sell, which is really nice. You're not laying out a ton of cash and hoping you get the rest in your bank account when the job's done.
Speaker 2:Right.
Speaker 1:No as a home services business owner, it's music to our ears. We were just talking about, yes, I mean, when we do corporate jobs, it's great, we love having commercial business, but you know, when you've got a front, you know payroll for a couple of weeks before you get paid. That can cause some sleepless nights. So that's very cool. I mean, listen, folks again.
Speaker 1:Big jobs, majority of the money for the job, upfront, differentiated service with fragmented mom and pop competition, smart people to support you franchise. That's selling pretty quick, but the franchisor recognizes that they don't want to sell a million units a month. So you put somewhat of a governor on it, which is that's very smart. It is. It's, I mean again, the best thing you can do as a franchisor. And it's hard, right, because when a million people want to buy your franchise, of course you want to sell that to them, but you want to grow at a measured pace if you can. Okay, All right. So we've covered all those things that make you guys different. What about, before we close the show, tell us about what are the similarities you're seeing in your high performing franchisees. Who are they in terms of personality, in terms of similarities that you've seen with them? That's led to the more successful franchise owners.
Speaker 3:Yeah, awesome question. I'm going to quickly go through our core values, because this is who we look for, and the people that identify them, resonate with them and follow them are definitely our high performers right now. Create a positive impact is number one. That's the number one core value in our company. I find that you make money by caring about people and solving their problems, but you're not going to make money if you don't care about people. So it starts with caring about someone's home, respecting them. That vibe just comes off. So we want to bring in people. That I mean. Obviously, profits matter and I completely agree, but it starts with caring about people. So we have some questions for prospective franchisees around creating a positive impact. We do community service projects in Austin. I won't get into that, but we definitely give back to our communities in big ways doing free remodels for people that are in need. It feels good to have the resources to help people in need. But create a positive impact. Be a lifetime student. Mind the details, take accountability for your actions and inactions and do what's right Now. It's easy. So those are the five. The last two are pretty self-explanatory. Mind the, you know this is a a type of business where you just have to follow the process and, uh, you know. Obviously we want people that feel good about learning and growing, being a lifetime student. So those are the five core values.
Speaker 3:I would say um, the top performers right now get energized by walking in to appliance stores and saying, hey, I'm opening up a five-star cabinet company, I'm looking to give referrals to appliance companies that are also five stars. Can we sit down and chat about how we can work together? You don't go in asking for cabinet leads. If you lead with value. Obviously people's ears perk up when they hear that they can grow their business by sitting down and talking to that person.
Speaker 3:Appliance stores, tile stores, plumbing and lighting, fixture stores there's a lot of peripheral industries around our business and I tell our franchisees this during training the more friends you make in this industry, the bigger your business will be. I could literally chart a graph of how many industry professionals you're friends with that actually like you and how much revenue you bring in. It's a linear relationship. So it goes back to the top performing franchisees. They enjoy forming those relationships and going in and meeting people.
Speaker 3:I had a franchisee just completely smash it one month and they actually had to turn their leads off. They said I can't fulfill all these leads right now. They actually had to turn the marketing down, which is a sales and marketing person. That's like my happy place. It felt really good and I asked him what are you guys doing? And she literally wrote back, just following the process, and that made me just so happy and just really validating what we're doing and letting the franchisees run a playbook. So you know outgoing, you know some sales professional experience if possible, and someone that is dedicated to following the process and trusting you know their franch, or that's probably the top three for me.
Speaker 1:That's great, that's great, and I think again it's when we look at all this. It's having the ability to go out and execute. What else do you have?
Speaker 2:No, I mean, I love hearing that, I love that you guys have those core values and you're seeing success. You know, I think that that's really important because a lot of times people think they could come in and do it their own way or you know. But if they're kind of held accountable to that and then you're seeing the success, you can actually say you know, this is proven. You know, just follow what we're suggesting and recommending and then you're seeing that transpire. So I love that. And you know, it gives them some stability as well too.
Speaker 1:So it's awesome. Yeah, this has been really good.
Speaker 3:Our COO came from a continuous improvement, six Sigma black belt and we're just, we're never done. You know everything is is being improved as we speak and it feels really good to have that mindset of just always. You know, understanding what the next, you know what does cabinet IQ 2.0, 3.0, 4.0 look like? And pushing to get there.
Speaker 1:It's really fun to see the brand grow so clearly. For those of you that like to work with Jill and I and get introduced to cabinet IQ, you know the drill text is at 305-710-0050. But if you'd like to go view the website or anything else pertinent, where do you suggest they go?
Speaker 3:Yeah, cabinetiqcom is our corporate location. They can start there and just understand. You know the types of projects that we work on, a little bit about the team, but yeah, I mean, obviously you guys will have a lot of the information that will answer the question.
Speaker 1:So I'd suggest that they reach out to you and learn more about the brand, but if you can't help yourself from filling out the form on the Cabinet IQ website, I just mentioned that Jack and Jill sent you. Well, this has been fabulous, michael. We really enjoyed having you on the show. Michael and I have been trying to get this together now for a couple of months, so thanks for hanging with me. You know it's weird, michael. You know, when we started the podcast I couldn't have imagined people would want to. You know, join us. But they do. So thank you for hanging with us and this has really been very I think, for those of you out there.
Speaker 1:So many times, michael, people come to us and they say I want something different, I want something where I don't have a lot of competition. Usually my answer is dude, there's always a lot of competition, so you've got to be special, but I think you may have found. You may have found a niche where there's not as much, but as people see you succeed, don't be surprised if there's someone else that comes in. But listen, you're kind of trailblazing this thing. So, michael, thank you so much for joining us on the. We Bought a Franchise podcast. We really appreciate it. Uh, for all of you out there again, if you want more information, text us 305-710-0050. And for this episode, I'm jack I'm jill and we bought a franchise.