The Franchise Insiders "Inside Scoop" Podcast
Jack and Jill Johnson are two of the most experienced franchise experts in the industry, and their podcast The Inside Scoop is a must-listen for anyone considering investing in a franchise. Here are five reasons why:1. Jack and Jill have over 20 years of experience in the franchise industry. 2. They sell franchises, so they know which ones are actually making money. 3. They're not afraid to tell it like it is - you won't find any boring interviews on this podcast. 4. Every episode is jam-packed with financials and data that you can use to make an informed decision about which franchise is right for you. 5. Their insights and observations about the franchise industry are incredibly valuable - you won't find anything else like it out there. If you're thinking about investing in a franchise, make sure to add The Inside Scoop podcast to your must-listen list.
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The Franchise Insiders "Inside Scoop" Podcast
Franchise Ownership in 2025: Hot Takes and Hard Truths
What happens when you gather six successful franchise owners in one room and ask them to share their unfiltered insights? You get a masterclass in franchise reality that cuts through the noise and marketing hype.
The Franchise Insiders team brings decades of combined experience as both franchise owners and consultants to deliver a refreshingly honest look at what's actually working in franchising today. This special roundtable episode features Jack and Jill alongside their expert consultant team: David San Juan (Pinks franchise owner), Brian Gross (former Art of Drawers owner with financial expertise), Morgan Noller and Kathryn Allen (both award-winning Soccer Stars franchisees).
From the beginning, the conversation dives deep into which franchise categories are genuinely overrated versus those flying under the radar with exceptional returns. The team unanimously warns against common pitfalls like overvaluing existing business purchases on BizBuySell ("most of what's on there is junk") and chasing trendy fitness or food concepts with razor-thin margins. Instead, they highlight the remarkable opportunities in "unsexy" sectors like home services, B2B facility solutions, and senior care – where average revenues reach 7 figures on investments as low as $150K.
Perhaps most valuable is their candid discussion about misconceptions plaguing new franchise owners. The myth of "passive" franchise ownership gets thoroughly debunked as Catherine shares how her MVP status required "working 80-hour weeks... seven days a week" initially. David adds a recent lesson from covering for his general manager: "I made a mistake putting too much on one person and not learning the business ins and outs."
The conversation explores AI's transformative impact on franchising, 2025 trends including private equity's growing interest in successful franchisees, and practical wisdom about financial runways and proper validation techniques. The team even shares a lightning round of which franchises they'd personally invest $250K in right now.
Ready to cut through the franchise marketing noise and hear what really works? Text 305-710-0050 to access our franchise financial planning tools and find out which consultant can guide your journey toward successful business ownership.
Text: 305-710-0050
Hi everyone, Welcome back to the. We Bought a Franchise podcast and today we have a very special episode. We're kind of mixing things up. So for those of you that follow us, that listen to our podcast, you know that we've expanded our team and added a whole team of franchise consultants. Our whole concept is franchise owners helping future franchise owners, and so today what we thought we'd do is have all of us come on and just sort of talk about things that are happening in franchising, just give you guys real talk of what's happening in the industry. So from there, what we'd like to do is maybe talk a little bit about each one of us, who we are, maybe our hot take, and then we'll get into it. So, Jill, why don't you start off? Well, Jack and I run the Franchise Insiders. Why don't you start?
Speaker 2:off Well. Jack and I run the Franchise Insiders and we've been really excited to add to our team. So we're excited to share our team with you guys today.
Speaker 1:But essentially, we've been doing this since 2017, and we love helping people find franchises To kick this off today, and I want all of us to kind of talk about a hot take that we have in franchising. You know, for me it still comes down to if you're going to do this, if you're going to be a business owner, you should want to be really good at it, like it feels good, and you're going to hear from everyone on our team. Everyone on our team has done something very special in their franchise has been a leader, has done something innovative, has been an MVP. It feels good to win, and when you lead a team the right way, they really respect you for it. So my thing is stop thinking about absentee and passive franchises and start thinking about how you. This is a part of your life story building a business and being successful with it. And with that said David Samwon, kick us off, sir. Tell us about you and your hot take.
Speaker 3:Thank you, jack. Thank you, jill. My name is David San Juan. I'm a former SWAT officer and corporate security investigator turned entrepreneur, and I own a Pinks franchise and scaling as we speak. My hot take is home services, I believe is a real goldmine, and forget the fast food brands. I'm bullish on home services and blue collar workers.
Speaker 1:Love it. Thanks, David.
Speaker 4:Brian. Hello, I'm Brian Gross. I spent about 15 years in the wealth management space and then about two and a half years ago I bought my first franchise in the home services space, a company called Art of Drawers. I spent a couple of years scaling that up and recently just had an exit myself. My hot take is the best franchise for you has nothing to do with what is the hottest brand or the fastest growing franchise right now.
Speaker 1:Perfect, and you know Brian has brought all this financial wherewithal to the company. It's no wonder we've been churning out these new apps that help you guys with financial planning. If you want to know how we can help you determine how much you can invest in a franchise, how you can plan for an exit, we have some killer new apps that you guys all will want to try. So definitely make sure that you text us 305-710-0050 to get your hand on those apps. Morgan, you're up?
Speaker 5:Hi, I'm Morgan Knoller. I was previously in corporate event planning and I am a current Soccer Stars franchisee out in California and I had the award last year for community impact for helping other franchisees, which led me to doing this and trying to help other people find their their business. And, um, I think my hot take is don't get too attached to that sexy brand name. Let's find the right business model that fits you and will help you scale bigger and probably faster than that one that you're you've got your eye on.
Speaker 1:Love it, catherine. Last but not least, Hi everyone.
Speaker 6:I'm Catherine Allen and my franchise journey started with the Key, formerly Home Care Assistance. I was there for 13 years, worked alongside Jack for a few of those and, yeah, I was director of marketing there so really had a chance to build up and support over gosh 130 franchise owners throughout North America and Australia. Love that, loved helping entrepreneurs build their business. I then bought a soccer stars franchise, also in California and in the Bay area, and I was the MVP in the first year. I am still holding the top for, I think, revenue. I look at that rack and stack every week. Every week it comes out, and my hot take for franchising is that the future belongs to businesses that blend AI and humanity. The companies that are going to win are those that can connect deeply with people, robots, machines they can't replace humans yet, and so that is where those leaders, those innovators you know franchises being that mayor of the town, you're going to win. You're going to win all day.
Speaker 1:Let's, let's dive into this and for those of you that are, they're listening, this is going to be fun. Okay, we're going to dive in and we're going to talk about real stuff that we see happening in the franchise industry. Um, first things first. I want to talk about franchise categories that we think are overhyped. Um, I got to tell you there's a lot of buzz. First of all, I'm going to tell you the thing I think is most overhyped buying an existing business.
Speaker 1:There are some people out there that make it sound like it is the greatest thing on earth. And I got to tell you something if you think buying a business from some mom and pop who are retiring and who want to sell it to you for pennies on the dollar, if you truly think that is reality and that that exists for you on BizBuySell, you're in for a rude awakening. Most of what's on BizBuySell is junk and, by the way, most great franchise opportunities that are for sale, franchise owners sell to franchise owners. So for those of you that are thinking how wonderful it would be to buy a cash flowing business and it's sitting there waiting for you beautifully on biz by self Wrong, there's a reason.
Speaker 2:It's on biz by self. But yeah, I agree with Jack too. I think purchasing a franchise that's established and running like David did, that is a whole different ballgame.
Speaker 1:Right. So franchise owners that's really a massive acquisition. Strategy for franchise owners is to grow their business, get it to the point where they're stable They've got a team that can do it and then go buy other locations. So that's my overhy with fitness, and so you just need to be careful.
Speaker 6:You want to be thoughtful? Um, I just, you know, I'd be wary. I think it's something you could. You could, you know, buy into um and then you could, you could exit in a shorter period of time, but it's just, yeah, fitness, be careful out there.
Speaker 1:Occasionally like an orange theory. As you've mentioned before club Pilates. Those are the ones, if we're going to look at it, that make some sense. But they're gone, right, they're sold out. And, to be honest with you, if you actually were to try and get an SBA loan on a fitness franchise, in most cases you're probably going to get turned down because what they show on their item six and seven maybe they say it's a three to 500K investment Wrong. In today's day and age it might be a 700K investment. So I agree with you, catherine. I think there's much better ways to make money than investing in a fitness franchise, although I love going to them all day long.
Speaker 2:Yeah, I think that's the thing to keep in mind, and we've talked about this before. But if you love a particular like, you love Pilates and you buy a Pilates franchise, you're not doing Pilates all day. You're the business owner, you're behind the books, you're hiring and firing, you're HR, you're doing everything. So you actually probably have less time to do Pilates than you would have had before. Yeah, something to keep in mind as we look at some of these that you know it's not necessarily what you love doing, it's what makes the most sense for you.
Speaker 1:Right, agreed, morgan, you're up.
Speaker 5:I agree with Jill. I love Pilates. I do, but I'm not going to buy it. And, like Jack said, I have my eye on a sister company and I just got their profit and loss statement. I'm thinking about acquiring them. So I'm one of those franchisees as well that might be acquiring more. But I think my most overhyped category would be food. I think the margins are razor thin, labor is brutal and you're most likely buying a job, not a business. You most likely are not going to be a business owner. You're going to be there day to day and doing the ins and outs and hiring and firing, and it can be a lot. So I think you're much better off looking at something like home services and something that doesn't have a brick and mortar location.
Speaker 1:Yeah, and one of the things we're going to get into a little bit later on in the podcast is AI's impact on franchising, and I think it's going to be the first one to get massively effective. But we'll talk about that next. Ryan, what do you got?
Speaker 4:Yeah, I'll add in something different. I'll go with pet services, especially anything that services that requires a retail location, and I think a lot of people fall in the trap of the passion project and Jill just said it perfectly right it's the same concept as Pilates that just because you love dogs, you love pets. The reality is you're owning a business, and a pretty expensive business. So a lot of people do have pets today. There is a lot of demand for these services, but that alone doesn't make it, you know, a great business for everyone I think you're.
Speaker 1:I I agree with you for the most part, brian. The only thing I would say is, if you have someone that that say they want a strong real estate play and they want to buy like a freestanding building and they want a franchise that they could do that with. Obviously automotive like a Midas would make sense, but I look at like a Dogtopia and I say, gosh, that'd be great for depreciation. Now back to where your point is absolutely correct. Most of our clients don't have a million plus to invest and so if we're talking about the average franchise investor that's got 100 to 500K, can you get better ROI than you can in the pet industry? A hundred percent. And I agree, don't leave with passion. Fulfill your passion outside of work. Go make money with your franchise, david what do you got?
Speaker 3:yeah, it's tough to go last after this group, but I'm gonna double down on the fitness. Um, I'm a big fitness guy. I my whole life I thought I wanted to own a gym and work out all day long. And you know, especially when it comes to niche, to the niche type, like you said, the polite in this five years, six years, it changes. Now there's something another fat out and people just want to jump ship and go somewhere else. Um, I do like the old school bodybuilding type gyms, but again, I'm not very sure on those margins. I don't think they're great.
Speaker 1:Um, but yeah, I'm gonna double down on fitness can't help but agree, even though I may or may not have just spent what. What did I spend at equinox in san diego? Stupid, I mean you don't want to know. When we were there like we had, we were in this airbnb. We had nowhere to go work out, so I went to equinox where I had a membership way back in the day and they charged me they're the only ones there, so they were like right you don't have to join or you have to pay this right godly amount of money to join and eat it.
Speaker 1:Okay, so let's go to the opposite side of the spectrum. What do we believe is the most underrated sector in franchising? For me, actually, what do you think?
Speaker 2:Underrated yeah underrated.
Speaker 1:What do you say?
Speaker 2:I mean, I think it's always like a home services or like a like we used to call them dirty businesses. You know, they're the ones that you, you don't think of. Those are the ones that do very well, um, you know, window washing, like we've never washed a window in our life.
Speaker 2:Well, I mean, I guess I have, but not to that extent like maybe some windex, um, but you know, it's not something that we were interested in, but it's something that everyone needs. And so I think people sort of overlook those things because they're not shiny, they're not fancy, but they're the ones that will actually, you know, make money.
Speaker 1:I'm going to say and I think you're right, obviously, I mean we invested in that and it was, you know, for us last year we were the top performing pinks franchise, so we saw it come to fruition. I'm going to say b2b is not talked about enough in franchising. But I'm not talking about, you know, b2b services that like lower companies costs or things like that. There there are b2b franchises that manage things, do things like facility management, that their item 19s are insane. So again it. It's like what Jill said these boring businesses you never would think about. And to Morgan's point from earlier, they are not the shiny object, the sexy new ice cream shop, but, man, I mean the bang for your dollar on, say, like B2B facility solutions is insane. David, what do you say?
Speaker 3:I'm going to go with senior care. It's being talked about a lot. Baby boomers are the largest generation right now and everyone talks about restaurants, but the real wave right here is senior care and maybe more specifically at non-medical. Families want to pay to keep their mom and dads at home. It's recession-proof reoccurring revenue. You don't need to store it front. So I think senior care right now is probably one of the most underrated and maybe I have to change that statement because I think people are catching on and it's out there. We see a lot of people interested in coming to us specifically in senior care.
Speaker 1:I mean we all went to a conference where all the senior care franchises were presenting and it looked all their averages are going up and up and up right. All the average revenue for senior care franchises are somewhere between, say, a million and two and a half million annually. I mean that's insane, especially when you consider that the investment it's probably like 150K all in and when you consider there are some brands out there like HomeWell Senior Care where you can start with five grand, boost Home Healthcare where you can start with a thousand, although that's still, that's not non-medical. But, david, I think that's a great call out and probably the best bang for your dollars in senior care. Brian, what do you got?
Speaker 4:I'm also going to double down on the senior care space no-transcript. I think unique ways like mobility services, concierge services, some of these more niche types of businesses that are just making day-to-day life easier and more comfortable for that senior population just have amazing upside.
Speaker 1:You know that's a really good point. There's another one called, and this is one that for like, let's say, you had your million dollar Dogtopia investor, you might also. If it were me, I would show them a concept called Town Square. And what Town Square does is it's a place where you walk in and it looks like this town from like the 60s right, and so, for someone that has dementia, they go in.
Speaker 2:Maybe they see like the old car changing as the population gets older, but it goes back to where they feel comfortable.
Speaker 1:You know that era of where they right feel familiar because we know they're going to go back to their long-term memory you can spend your whole day there and um, and it's just great for for them and it's a place where they can be safe and they can be happy. Um, so that's one where someone was saying, look, I really want something where I can own the real estate, where I can capture the depreciation, um, alongside like a dogtopia or a midas or something like that, look at a town square. And the other thing is is that a town square, I think, is affiliated with senior helpers? So then there's cross flow of business. You know this is I've been trying to do a lot more exercises like this, as I've been working on our AI franchise matchmaker with our development team, and really what we're trying to do.
Speaker 1:I'm trying to make it as much as possible think like us. So like as someone answers questions, not just, you know, providing these random results, but actually digging deep and thinking just along these lines of how we're talking. For those of you listening, we have an AI franchise matchmaker where, if you're working with any of our consultants, you can note which one you're working with. It'll ask you 23 questions and it will show you franchises that match what you're looking for. So, with that said, morgan, what about you?
Speaker 5:I agree with the B2B. I think that that's underrated and it could be anything from like the images and graphic signs that are just straight business to business, or it could be like consulting and things that you can do out of your home. So I think those aren't talked about enough and I think there's a lot of them out there that should be talked about. And then also, I think, with the home services, the AI, I think just kind of understanding this difference between the different home service franchises is really important and those can be underrated because some of them are using drones and they're doing doing big contracts and they're doing them faster and better than other ones. So, while there's a lot of home services out there, for us as consultants the underrated ones are going to be the ones that are using technology and using AI and have massive support for the franchisees, and I think those need to be talked about a lot more.
Speaker 1:Totally agreed. I mean, look at like Cabinet IQ. I mean those guys are bringing a lot of AI and technology into what they're doing Cool big projects. Again, it's not going to be your 150k investment, it's probably closer to 350,000, but really really neat business. Catherine, what do you got?
Speaker 6:for 13 years. I live and breathe that. So if anyone wants to talk senior care, please call me, because I know it in my sleep and agree with what everyone said here. But what I'm going to lean into is I'm kind of pumped on this aircraft detailing with Real Clean. They're the only ones in the business currently doing this and I think they've got something here. Definitely something to look at.
Speaker 1:All right, you guys, here's a quick lightning round. Here we go. You've got $250,000, jill to invest. What franchise are you investing in? What?
Speaker 2:franchise are you investing in? Why do I always have to go first? I'm turning it back on you.
Speaker 1:I'm going. Citywide facility solutions. Their item 19 is insane across the board. The investment is pretty low. There's actually some resales out there that already have a book of business Me. Normally I would say like senior care, citywide facility solutions for me, Okay, go.
Speaker 2:Okay, Well, I was going to say senior care. Citywide facility solutions for me Okay, go. Okay, Well, I was going to say senior care. So, even though you said normally you say no, but I think everything that we talked about today and just the background that we've all had with it, it's just especially as we're getting older, too and we're starting to actually be the children that are getting the senior care for our parents it's just something that's so important and a great investment and you feel good doing it. I love that too.
Speaker 1:Well, and the nice thing is is that you only spent $150,000 of your $250,000 case and now you've got $100,000.
Speaker 6:We'll talk about it.
Speaker 1:All right, catherine, you're up. What do you got?
Speaker 6:Real clean aircraft detailing. Like I said, 250,000 minimum investment. I'd also maybe get a few units of puddle pools because I just love that fish. I love that fish and it makes me so happy, and so I don't know, you know me, I'm a puddle pool. I'm just I'm pumping puddle pools, multiple units, or like starting with a real, real clean.
Speaker 1:Catherine's going to be out there running her puddle pools from her phone at her soccer stars.
Speaker 6:All people you want to pull your phone. High tech, it's a tech group that does full servicing, b2b, b2c. Check it out. It is great Love it.
Speaker 1:Morgan.
Speaker 5:I'm going to go with the home services. I'm going to go with Voda cleaning and restoration. I think I like their business model. Again, excellent marketing. It's very catchy, just like pinks or puddle pools. It really catches your eye. But it's two in one You've got the cleaning with the carpets, but you also got the restoration side.
Speaker 1:No snow fence available and demand never goes away.
Speaker 4:Love it, brian. I'm going with Monty's Handyman Service. Yeah, it's nice. A home service brand. Very fragmented space, no national leader and just untapped demand across the country. But also a great service to be in the house, to be the first company to build a portfolio around. So you want to add any home service brand to your portfolio. You can easily add that off of your handyman services.
Speaker 1:That's a new one too, that one literally just dropped. All right, david.
Speaker 3:I'm up again. Hopefully the dogs don't bark. I think Catherine also took my pick there. But I'm real clean, I think dogs won't bark. I think Catherine also took my pick there. But with Real Clean I think the cat's out of the bag. I'm actually heading to confirmation day next week taking a look at Real Clean for South Florida Really excited about it. I'm also really bullish on Pinks. With $250K you can stack two home services, not just Pinks, home services in general. You could stack two of them on top of one another and scale from there. But home services for sure, and I'm going RealClean as well.
Speaker 6:Glad we live in different states, david, glad we're on opposite coasts. Let's go, okay.
Speaker 1:I mean RealClean seems to me like all the markets where you've got a strong private airport, you're going to see it go pretty quick and again, it's very different, but it's very necessary. And I was watching. Like I said, I watched these guys clean a big Delta plane the other day in like five minutes. It's insane. All right, let's switch gears. Obviously, we're seeing ai change everything.
Speaker 1:Um, we've now added a ai franchise consultant to our team, as I mentioned, and we're trying to get it more to think more and more like us. That's how it's changing. Franchise insiders is that we even? I mean it's to the point now where I actually use it as a, as a sort of second spot check on franchise matching for our clients. Here's what I'm thinking what is the AI franchise matchmaker? And so, when we work with you guys, you're going to get really two angles there. But as far as how I see AI impacting franchising man, as I look, I don't know if you guys have seen this, but like Chipotleotle, kava, both of them have deals in place to have robot workers, essentially the assembly line of you know your burrito bowl, or what do we call that? What even is that your pita bowl?
Speaker 1:a grain and so, essentially the, they're going to have ai robots now making your Chipotle and your Cava and that to me, I think, is going to make food very appealing to owners again. Because I'll bet you'll see right now where those margins are very slim and I think, morgan, you mentioned that earlier. Once you have this sort of AI assembly line, I think you're going to see those margins after you've ported the robots and I'm sure it's like anything. I'm sure there are Section 179. I'm sure you can finance them, but you're going to see margins really go up. On food franchising, but of course it's going to go through its teething period. But yeah, david, what are you seeing in terms of AI and franchising?
Speaker 3:Look, I'll be the first one to admit that I'm obsessed. I use it every day. Now we leverage AI. We still got to verify what AI is spitting out is accurate, so I'm pretty optimistic on AI.
Speaker 4:Yeah, brian, what do you say is a lot of these companies. They have the resources and the money to actually invest in AI across a big system. So when you think about dialing in marketing, finding your target customer, you'll do that much cheaper than you have in the past. And I think what you're going to do especially home services, some of these areas where the marketing expense is one of the biggest expenses you're going to see a huge separation between franchise systems doing this really well and mom and pop operators, and I think that's going to be as we continue to go down this road is really going to create a competitive advantage for a lot of franchise systems that are able to get on board and utilize AI very effectively.
Speaker 1:I think, as the CEO of NVIDvidia said, uh, ai will create more millionaires over the next five years than the internet did in the first 20, and I personally, I think that's 100. True, and and for those of us that can learn to really utilize it and master it, um, you know, you can't just go and type in. You know, find franchises for my clients, I mean you. You have to essentially get ai to understand you and you need to understand it, and it's like working with, with co-worker. It's, it's managing it, it's working with it.
Speaker 1:As david said, it's going to make some mistakes, so you've got to double check it. Um, but to your point, brian, it does make us all so much more efficient, um, so much more um sort of it. Just the information flow, the way we now search on the internet. It's so much more conversational and for all of you out there, for those of you embracing it, I truly believe that if you use AI and franchising, it's going to help you grow faster than than you ever would have imagined a few years ago. Morgan, what do you got?
Speaker 5:Yeah, I think. I think the goal as a franchise owner is always to work smarter and not harder. So if you're not utilizing those, you're working too hard and burnout is real. I mean, we're all clearly hard workers type A, resilient, and that's all great, but you can get burnt out in any business. So use what you can and use those tools and I'm even using a virtual assistant, you know, and I would like to expand to two of them and I think the call centers are getting better than ever for the support for franchisees because of all this technology. So use it and understand it, but don't forget that it's there and it's there to help you work smarter and scale faster. And I think that you're going to see a lot more people leaving their corporate jobs, coming into franchise ownership, business ownership because either their job's getting replaced or they're seeing how much smarter you could be working and you could be scaling a lot faster and making more money than they are in their current jobs.
Speaker 1:Well said, catherine.
Speaker 6:Yeah. So it is such an exciting time to be a franchise owner with AI. Oh, my God. I will say this. I was reflecting on this last night in preparation for this exciting podcast this morning. So, harnessing AI for efficiency absolutely, Multiple of you touched on that, but I was thinking about it and I'm doing outreach to preschools right now and with ChatGBT5, that was recently launched, versus ChatGBT4.
Speaker 6:Oh, my goodness. So ChatGBT4, for example, you would put in the inputs, like you need to understand it, you need to get it. Like you said, Jack, to understand you right, You're the creative director. So I love that.
Speaker 6:For me, I would consider myself a writer, but writing took me so long. It took me so long and rewriting and organizing my thoughts. So with AI, it's just sped up that process tremendously. And then you know, with ChatGPT4, putting in the input, it would put it out. Now, with ChatGPT5, it already knows. It's like I'm putting in what I want and it's like do you want this to be a scroll stopping post? Do you know? It already knows the prompts, so it's just even from.
Speaker 6:So I go back to my story of preschool outreach, which I've been trying to get to since I opened two years ago and just in the last, you know, working on it yesterday, I'm like, oh my gosh, I can get to this so much more quickly with these tools. With the way what AI has developed in the last six months, it's going to continue to leap every six months. So you know, it's understanding AI, it's knowing how to use it. So it's going to help franchise owners scale faster than ever before at a fraction of the cost. Right Like it. Just that's the beauty is the cost that it takes to operate a business in general franchise. With AI, you can just scale so much quicker, keep more money in your pocket. Yeah, so, anyways, that's where that's where I'm at, Very excited.
Speaker 1:I think that's right. I think you can see now, a high school dropout armed with AI, who knows how to use it, can be making a ton of money in a very short period of time, can be communicating so much more effectively and professionally than ever before since it's out there. Hey guys, I have a question. So what trends do you guys see in 2025 that franchisees need to really be aware of? And I'll kick us off. This is something Jill and I talked about before getting on here. I think it's that the buyers for your franchise are changing.
Speaker 1:Private equity is in the franchise world in a big way. Equity is in the franchise world in a big way, and there are things that private equity looks for in terms of buying franchisees. But yes, for those of you listening, private equity absolutely. If you are a great operator and you have a certain EBITDA that you have hit, private equity would love. Private equity would love to recapitalize you and arm you with more money to go grow a much bigger franchise, and it's a benefit to you, the franchise owner, and it's a benefit to the franchisor, because if you're a strong owner, like everyone on this call, well now you imagine if you guys now had 20 million bucks to go up in 20 units with what you know, I mean, how effective could you be? I mean, so that's the thing Not a lot of people, when they go into franchising, are they thinking about. Well, private equity isn't just coming in from the top, they're coming in from the bottom with franchisees and rolling up multiple units.
Speaker 1:So my point to all of you listening out there is that you now have so much potential and I don't know how long this will last, but certainly the next five years it should be a strong continue to be very strong exit opportunity or recapitalization opportunity For those of you thinking about franchising. Even if you're just starting with one unit, get good at it, be really good at it and grow. As you start to grow and make money, then you can start to acquire more units. But start to think about this, and so you know the team. We all talked about it.
Speaker 1:We actually created another app for you guys called the Franchise Exit Calculator, and what you can do is essentially take what industry you're looking at, take how much you can invest and then have an aiming point. I want to, you know, get a business to a million dollars EBITDA and it will tell you how many units you should have to do that. So, for any of you again who want to get access to these tools, text us at 305-710-0050 and make sure you mention which of us consultants you're already working with. If you don't already have a consultant on our team that you're working with, don't worry, we'll get you assigned. But that's my thing I think people need to be aware of as franchisees is that there are much bigger exits out there if you just grow a great business. So, with that said, catherine, what do you think franchisees need to be aware of in 2025?
Speaker 6:I think that a lot of these businesses and franchises are leaning in just the ones that are embracing technology, the ones you know hearing about rolling suds with the drones and cleaning the five stories plus. That was really cool, and so you want to when you're vetting these different franchise opportunities. If it were me, I would be looking for a partner who's really innovating and embracing technology and what that looks like and what that roadmap is for them, because again and I know we keep talking about it it's not just AI AI technology, robotics, drones those that are leaning into those things have a team focused on that right at the top and innovation. I think that's important and just something that you should be thinking about in your conversations when you're doing your calls with franchisees, when you're on your calls with the franchisor. Those are just things you want to understand and think about, and I think that's what I would look.
Speaker 1:Yeah, I think that's really well said and I think in this series and we're going to be bringing you this new format where all of us are sort of doing this roundtable at least once a month AI is going to be a huge part of this moving forward, because it just is right, like you said before, catherine, there's a massive difference between chat GPT-5 and 4. Claude is getting better by the day. What about x's ai? What about all the different, the other ones that we have?
Speaker 2:I'm trying like gemini does he actually.
Speaker 1:Yeah, he doesn't like gemini's trash um let's see what trey says. So if trey says trash, I'm not, I'm not going there you know, what the most fun is actually, um is to have them work, actually use them. Yeah, so, like, as I'm using one, I'll say to claude hey, chat gpt said this what do you think? And it's kind of fun to have them battle it out a little bit. So, you know, make sure you're using not just one and getting the different personalities that are out there. Morgan, what are your thoughts?
Speaker 5:I think a big trend, uh, for 2025 that we haven't talked about, but is kind of what we're talking about, is labor. I think that if you don't have a good labor strategy, you don't have a good business strategy. So, when talking to these franchisors and learning more about the businesses, I think all of us on this call have been asking how are you supporting your franchisees, finding people to work for you, what kind of support do you have with your call center? Are you using virtual assistants? Are you using AI? All revolves around labor.
Speaker 5:So I think that labor is a big topic that isn't really necessarily a priority on the calls, but it really should be, because that's how your business model and strategy is going to succeed. So, yeah, using all those tools to make sure that you're hiring properly and keeping your employees happy will allow you to scale. So I think people are talking more about that on the calls than ever before is how are you supporting the franchisees and how are they finding employees? How are they keeping their employees? Yeah, so I think that's a big topic.
Speaker 1:Do you like your assistant, Morgan? Yeah, so I think that's a big topic.
Speaker 5:Do you like your assistant Morgan? I love her. She's a hard worker, she asks all the right questions and, not unlike AI, she started to learn my personality. So she's already jumping ahead and being like hey, last month you were asking me to do these things, are you ready to do them again this month? And that's so helpful because I'm moving 100 miles an hour, we have two kids, we have multiple jobs, multiple streams of revenue. So to have somebody kind of backing me up and saying I know your personality, I know your workflow, let me help you out. Or I ghost her for a while, I'm too busy to answer. She'll say I know how busy you are, can you answer these questions so we can get this off your plate. And I love that.
Speaker 1:That's awesome.
Speaker 4:Ryan, what do you got? One of the things I'm seeing a lot of is people looking to buy an existing business, and I work really with two big groups of people. One is I work with a lot of franchise resales, so I do try to help people find existing businesses. I also work with people transitioning from corporate to business ownership, and I think a big thing I see that's always a red flag is trying to look at item 19.
Speaker 4:We're trying to look at what SDE is and thinking of it as a paycheck. You are no longer an employee, you're not working at a company, and earnings and a paycheck are two totally different things, right? And so I think one of the things that really just try to get people to take a step back and think about is you're not skipping the startup phase by buying an existing business. You're going to pay a multiple or you're buying someone else's headache because it's not working out. So it's not a free lunch, and one of the things I would just do is take a step back and look for a business you actually want to own three, five years down the road. It actually fits for you and your lifestyle, versus something that's just cash flowing or has an SDE on it right now.
Speaker 1:Great point, yeah, absolutely Fabulous point, david. What do you got?
Speaker 3:I'm seeing a lot of clients come to us and they I know everybody on this call has had this already where they want this business in a box, where it's on autopilot, like, yes, you're buying a franchise, yes, you have SOPs and you have one leg up on startup, but it's not autopilot, it's still a business.
Speaker 3:It doesn't just show up and run itself up and run itself. I've been very blessed to have a general manager from almost the very beginning of my pinks, but he just took a week off vacation, which he well deserves from what he's built for my pinks. And I am going crazy right now driving to and from from Orlando to Port St Lucie and realizing that myself I made a mistake and I put too much on one person and where I wasn't learning the business ins and outs, and now this week has just been like breathing out a fire hose. But I'm going to tell the story to all my clients because I don't want them to think that they're just going to buy a pretty shiny object and hit the ground day one and somebody else is going to run their business and they're just going to collect the check. Just not reasonable. I think that's a great point and straight segue into our next topic, which is and they're just going to collect the check.
Speaker 1:Just not reasonable. Yeah, I think that's a great point and straight segue into our next topic, which is the biggest misconception we see potential franchise investors have. We were talking about this earlier and to us it's always people not understanding what the real financial runway of a franchise is right. So it's like you'll talk to um, a uh home services franchise and it says you know all in investment 150k and someone says, great, I've got that or I can get that with financing. But in so many cases you are going to likely leave your job to go start this business.
Speaker 1:It's really hard to keep your job and run a franchise. And if you think hiring a gm for 80 000 a year really hard to keep your job and run a franchise, and if you think hiring a GM for $80,000 a year is going to grow your million dollar business, you're absolutely incorrect. In some cases you can add a great GM from day one, like David has done, but more often than not I mean, think about this If you're sitting there in corporate America making 80 grand a year, are you the type of person that can grow a multimillion dollar business? I don't know the exact answer to that, but I've got a good idea. So I think, being financially prepared. So if the franchise investment's 150K and it takes anywhere from, say, six to 18 months for you to start drawing a salary and replacing your salary, what kind of cash runway do you have to start drawing a salary and replacing your salary? What kind of cash runway do you have to take care of yourself and your family as you grow that business? Because if you go in short, then you're just going to wreck the business. You're not going to have enough financial runway. You have to be, you have to give the business time. And so sometimes people will say well, you know, I'm, I'm. Why should I do that? Why should I go through that hard period when I can just stay in my job and make my, my company salary? Well, you can't sell your, your job for five times EBITDA in seven years. Um, but you can. Probably you can do it with a good franchise. So it's worth it to put that time in.
Speaker 1:But you want to make sure that you are capitalized, not only to grow the business, but that you're capitalized to live your life. And it doesn't mean, like I see someone yesterday, someone on LinkedIn, saying you shouldn't be buying fancy things and you shouldn't buy cars and you shouldn't do this, and that I don't think any of us have the right to tell someone how they should live their life and what they should and shouldn't buy. I mean, that's your choice. I've always felt like you should be able to do the things that you like. You like going out to dinner do it. You want to drive a nice car? Do it, but don't wreck your life. So make sure you have enough money both to fund the business and to still live your life as you're growing, because you're going to have a lot of fun but you're going to have some hard moments, so you want to still be able to do the things that make you happy. David, what do you say?
Speaker 3:I, I mean, you nailed it. I was going to talk about working capital and misconception, that just listening to the franchise or when they tell you you know this is the number on the item 19. You know, you need to think, worst case scenario. I just have my partner on the deal that we're working say that the item 19 says we only need X amount of money and I'm like, well, add about 30, $40,000 to that, just in that, just in case. I'd rather be overcapitalized and I learned that the hard way. Also with Pinks I took a gamble and it's worked out well for me. But I don't want to go to the distrust again and now I'm in a good place and I just want to make sure the next business I start I'm overcapitalized. So misconception, just believing everything that R19 says taking a step further.
Speaker 1:Yeah, and that's. I think that's where it's important to make sure you're doing proper validation and talk to five to seven franchisees. Talk to someone that's been in the business at least three years. Talk to someone that left the system. Really hear it from the franchisees. For all of you guys out there, all of us on this call, do franchisee validation. I don't know of one franchisee that's out there trying to sell franchises. When we talk to franchise owners, we're giving them as much helpful information as possible, because we know, once you join us on that side, we want you to be aware of what the realities are, so you don't come in thinking it's easy. Brian, what do you think?
Speaker 4:You literally just took everything I was going to say. But it's back to validation, and that's an advantage of franchising versus even independent business. You have owners who have walked the walk of what you've done and they know the reality. And it's just, I also say, not just validating proper validation, asking the right questions, and it's not are you making money? Do you enjoy it? Right? It's getting a real sense of what does your one look like, what were the unexpected challenges, how did you scale and how did you finance that scale Right? So, going into these businesses and not just being excited about the brand or excited about the space, but really understanding what you need to succeed and what it looks like to actually run that business on a day-to-day basis.
Speaker 1:Love it. Love it, Morgan. What do you say?
Speaker 5:Yeah, I agree with everything. I loved the validation calls and I still love them. I like talking to future franchisees about my own business and being real and honest, but just making sure you're talking to a top performer absolutely, but also talk to someone that maybe isn't a top performer. I started it thinking this was going to be part-time like anybody else and maybe a little bit semi-passive. And now it's my full-time and I'm very passionate about it and it's my day-to-day and I love it. But certainly didn't start that way. So, yeah, talk to as many people as you can and validate those franchisors and make sure that you have the right support going into it.
Speaker 1:Perfect Catherine.
Speaker 6:Yeah, so, as I do, the validation calls too for soccer stars, and I think that it's just really understanding the work that needs to go into building and starting a business. And you know a lot of people come to me. Oh, we hear you're the MVP, you're the top performer.
Speaker 6:I'm like yes yes, but I might've been the MVP in that first year, but guess what? I was working 80 hour weeks. I was working on the business seven days a week, every minute I could that I wasn't with my kids, you know. I was coaching 13 classes. I was doing everything. So it took a lot of hard work to get there. But guess what? Now I'm stepping back. I have a manager. And back to what David is saying about his manager.
Speaker 6:My whole thing was if I'm going to own a business, I need to understand the ins and outs of the business. I need to be up. That's why I was coaching 13 hours a week for six months, because I needed to. How was I going to hire, retain, train, hold accountable coaches if I didn't fully understand what I was out, what our product was, the classes right. And then how am I going to sell this to preschools and to schools if I don't fully understand what it is that I'm selling? So I think it's really important to fully understand your business. You don't need to be out you know analogy about their coaching for six months but you need to understand. You know the ins and outs, because you can't manage someone if you don't understand that you can't manage them. Well, I don't believe. And now I have a manager who's my right hand, who is incredible, and so now I am in a place and like, quickly with the business. Right, you want to be working on the business, not in the business.
Speaker 6:So I was in the business business owner model for, call it, those first six months and then now, with the manager, it's more of that executive owner model where I can step back and I can manage the manager, but I'm still in the business all the time because I have lofty goals, I'm buying a second territory, I'm expanding, and that's what that is and that's what I want and that makes me very happy. But it's just the level of work. And I hear some people oh well, you know, I can't do weekends on these validation calls, I'm just going to be able to work, you know, these few hours and it's like, okay, but you're not going to be generating the revenue that you want to generate. That's just the reality. So if you're okay with bringing in a lot less, then that's okay. But just being honest with that, right, what you're putting in is what you get out.
Speaker 6:And I think that's where corporate America and where I got a little frustrated. I felt like I put in a lot. And you know, then, at the end of the year, I'm told, oh well, you're only going to get 50% of your bonus because the company didn't hit the financial goals. Well, what about me? What about my effort? What about me working 12 hours, you know? I mean I, you know. And so this with a business and a franchise, it's like yeah, I'm working a lot, but like I see that return and it's awesome and that makes me happy. So I'm done, drop my that's so well said.
Speaker 1:And you know what, catherine? That's part of what drove Jill and I into into business ownership too is that same exact thing. Here's your goal for the year Um, um, and your compensation doesn't change, but you better hit your goal. Yeah, um, and I'll never forget having that meeting and saying, nah, that doesn't work for me. Yeah, if you want me to hit a goal, then if I hit that goal, then it should come with a reward. And you're exactly right with the business that you own, you get to set that goal, um, and I think that's just part of what makes it so rewarding. For winding down this, I have a question for you guys, two-pronged One, and this goes to you first what was the first business that you owned? And two, is there a podcast or book that you would recommend it doesn't have to be about business ownership, but, for people who are building a business, a podcast or book that you think they good? Besides this, one.
Speaker 2:I mean, I personally like anything Cody Sanchez out there. I think she has really good information. I don't 100% agree with everything she talks about, but I do think there's a lot of really good snippets out there. Whether it's in her social media or any podcast that she does, I think that she does give very good advice to new business owners. So, um, that's who I am.
Speaker 1:And what about your first business?
Speaker 2:I mean we've had many businesses.
Speaker 1:That first one.
Speaker 2:T-shirts oh yeah, T-shirts. Yeah. The first business that I owned was a t-shirt company and made hashtag t-shirts and sold them on social media and on Etsy.
Speaker 1:She had like a whole following. Literally like at night, she'd put trade asleep and she'd be cranking out these t-shirts with like hashtags, like this is actually pretty neat little business.
Speaker 2:It was a good business. I took it in the wrong direction at first. It was a super simple business model because I could knock out 25 hashtags on one piece of heat transfer vinyl, so the cost was like zero to make anything. So the markup was insane. Then I started doing custom orders and it kind of got out of hand. And then Jay got older and I had to actually do some real mom stuff. But it was fun at the time. It was a good creative outlet, happy I did it.
Speaker 1:We learned a lot yeah, I mean, and then I tried to copy jill. I started an online uh, surf shop t-shirt business, which nobody cared about. But do you know, what was great about it is that I learned google ads. Um, I learned building a website, and so when Jill and I went to start Franchise Insiders, we actually used a lot of the lessons from both Hashis and Certificative to create a real business, and I still make t-shirts.
Speaker 1:And Jill still loves to make t-shirts. So, even though they were small businesses, they were awesome learning points for us. Catherine, what about you?
Speaker 6:Well, South Ccer Stars would be the first business I've owned and I Wait a second, what you and Morgan had a business.
Speaker 1:Oh, how could I?
Speaker 5:forget, don't forget. We were business owners when we were little kids. We started our own business 32.
Speaker 6:A couple of them.
Speaker 5:We found out there's two of them, two we started we thought there was one.
Speaker 6:Right, so the scrunchie business that we had. How old did we think we were 10? We were like 9 or 10.
Speaker 5:9 or 10.
Speaker 6:And then, prior to that, it was selling holly around the holidays Holly.
Speaker 5:Around the holidays we would sell a little holly with little bows and sell it through the door. Yeah.
Speaker 6:Door to door sale.
Speaker 5:We had to knock on every door hey didn't you two launch a new podcast too? We did, yes, we did.
Speaker 1:Where can people find that? What is it?
Speaker 6:It's called best friends in franchising BFFs with Morgan Nolan, catherine Allen, and you can find it on uh Apple. Yeah.
Speaker 5:Yeah.
Speaker 1:Yeah.
Speaker 5:It's out there, it's live. We have one episode. The next two are coming shortly. Yes, um, and it's just us talking about kind of what we talked about here, but more in the daily lives of two moms that are franchise owners and best friends since childhood.
Speaker 6:Yeah, and in the daily lives of two moms that are franchise owners and best friends since childhood. Yeah, and just the podcast piece, jack. So I'm going to do a major plug for Growth Day, the Growth Day app Brendan Burchard, ed Miletz on their lot. It's amazing. It has been transformative for me. I don't have a therapist. I don't have a business coach. I have Brendan Brouchard in the Growth Day app. I use it daily. He does a daily fire. It's all about mindset. There's so many resources on there with the top mindset coaches in the world. If you're going to own your own business, you're the CEO of your household, right? Your business. It has been transformative for me and it has made me such a better leader I I can't say enough. So growth day app.
Speaker 1:Brendan, you know I totally forgot to add my podcast, Uh, I would say Peter Atiyah's podcast for those of you interested in health and longevity, because as we're building these businesses, we want to stay mindful of our health. And then I have a book for all of you listening and all of you on the podcast. It's a short, fast book. It's called the Richest man in Babylon and it's a killer book about managing and building wealth. It's a I don't know, it's probably a thousand years old, but it has great lessons in it. All right, Morgan, didn't mean to steal your thunder. What's your podcast recommendation?
Speaker 5:Recently in it. All right, morgan, didn't mean to steal your thunder. What's your podcast recommendation? Recently I've been just kind of in and out of Kim Daly really fast, just kind of getting some some hype for me for the day. But I am currently listening to the audio book for Kim Perel. She came out with a book called mistakes that made me a millionaire. She's been on book tour and so I'm currently listening to that right now. And then, outside of our little scrunchie and holly business, that was my first business, but then I've always kind of worked for myself. I tried not to and it didn't fit my personality very well. I hated the hours. So I was. I own my own interior design business and I still do interior design sometimes. And then the corporate events was all me too, and the knot gave me an award for that. So I still do event planning, but very little. I do one event a year for my school district. But yeah, being my being my own business owner has been part of my life for a long time, it turns out.
Speaker 1:Wow, that's super. I didn't know that with them. Did you know that that's so cool?
Speaker 6:That's something new every day, jack, every day.
Speaker 1:Look at that, Brian. What do you say?
Speaker 4:I started junior high, junior high, through high school, I had a lawn care business in my hometown, so I cut a lot of grass and as an adult, I will only hire now franchises to come and do any outdoor maintenance works. I never want to mow grass again in my life, but it was a great first business and then I'll go with a book rather than a podcast. So one that I really like and recommend for anyone looking at this transition is Atomic Habits, and I bring that up because this can be an overwhelming process. If you start thinking about trying to do everything at once, if you dial it back to just getting 1% better a day, learning 1% more, this process becomes much more digestible, whether it's finding a business or getting in and actually scaling Awesome.
Speaker 1:Very cool, david. Last but not least, Awesome, very cool.
Speaker 3:David, last but not least, bought a business was because of cody sanchez, and here's one of her books, and I think pretty much named every book that I had in front of me and that's, that's the path I went down and I just like I went from reading zero books for 20 something years to reading 20 in the past six months. Uh, I've become obsessed with everything in the wealthy franchise, uh, franchisee and I mean brian just nailed it, atomic habits Got them all right here. Uh, just became a book, warm and and full disclaimer. I love listening to the audio, I follow along, but my reading comprehension is terrible, so I go full audio book. Um, and podcast. You know, like I said, cody Sanchez is the reason that I'm here today and I, cody Sanchez is the reason that I'm here today and I I listened to contrarian thinking and also the diary of a CEO with a Steven Bartlett. Uh, probably two of my favorite podcasts on YouTube right now.
Speaker 1:Awesome, Very cool. Well, thank you guys. This has been a lot of fun. Um, for those of you listening, um, we're going to have next week a franchise owner from Sharky's Cuts for Kids. I don't think any of us talked about that. We didn't Haircutting We'll have to talk about that next time but that's a franchise that we have been working with since 2017. It's not the most flashy, but you're going to get a sense of why this multi-unit owner has been so happy with her investment. We're going to have that conversation with her next week and thank you to all of you guys, the team, for being on the podcast today.