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
Franchising's Next Frontier: How Technology and Smart Industry Selection Create Winners
What separates successful franchise concepts from the overhyped flashes in the pan? In this revealing roundtable discussion, franchise prodigy Dan Claps – who sold his company to private equity before turning 30 – joins forces with seasoned franchise consultants to cut through the noise of franchise marketing and deliver unfiltered truth about what really drives success in this industry.
The conversation quickly challenges conventional wisdom about market saturation. Rather than fearing competition, the experts reveal why established markets often present the safest bets for new franchisees. "How many pizza restaurants are in your neighborhood? Every corner, right?" Dan points out. "Pizza is a $25 billion space. You need a lot of pizza." This counter-intuitive approach to evaluating franchise opportunities shifts the focus from avoiding competition to identifying robust demand.
Perhaps the most powerful insight comes when Dan shares his formula for franchise success: "90% of being an entrepreneur is picking the right industry." The panel explores how technology integration, recession resistance, and market validation should guide your franchise selection process far more than trendy concepts or flashy marketing.
For current franchise owners, the discussion tackles the evolution of the franchisee-franchisor relationship. Dan reveals innovative approaches to keeping veteran franchisees engaged beyond the two-year mark when many begin questioning the value of their royalty payments. His insights on establishing Franchise Advisory Councils and creating financial incentives for system-wide growth represent cutting-edge thinking in franchise leadership.
Whether you're contemplating franchise ownership or already operating within a system, this episode delivers practical wisdom from those who've built and sold successful franchise businesses. Their candid assessment of market opportunities, technological disruption, and relationship management provides a roadmap for navigating the complex franchise landscape in today's economy.
Text: 305-710-0050
Hi everyone, welcome back to the we Bought a Franchise podcast. I'm Jack Johnson, I'm Jill Johnson and we are back with another roundtable format. And today we're throwing something even more interesting into the mix. We have one of today's hottest franchises. The CEO and, dan, I guess would it be fair to say you're the founder of the franchise. Is that fair?
Speaker 2:You know I always like to joke. I did find the business, so I would count myself as a founder. But the founder of Voda is a partner in the business, and so I consider myself the founder of the franchise company, but the business started in 2009.
Speaker 1:Okay, so Dan Klaps, who's the CEO of Voda Restoration. You guys, Dan, is like one of the biggest prodigies in franchising. Were you even 30 when you sold your company to private equity?
Speaker 2:I was a month away from 30.
Speaker 1:29. Wow Excellent.
Speaker 2:It was like June May 7th was the transaction and my birthday was June 7th.
Speaker 1:There's a lot and, for those of you who listen to our podcast, we've had Dan on before, but we're excited to have him on this format with the whole team. We also have our team of amazing franchise consultants. We have Catherine Allen, who owns a Soccer Stars franchise. She was MVP in her first year. We have Morgan Knoller, who also owns a Soccer Stars and she is known as one of the biggest big deal closers in her system. She's also one of the top five franchise owners. We have Brian Gross, who's also had a successful exit with his franchise Art of Drawers, but before he exited, he was one of their top. I think you were their top franchise in your first year, correct, correct? Yes, so we've got quite a powerhouse today, we sure do.
Speaker 1:So all right, Dan, let's get right into this. I want to start with you. The format of this podcast for all of you listening is to be more of like a fireside chat where you're going to get to hear real franchise people just kind of talking about what we're seeing in the industry and in the world. So, dan, for you, let's just get right into it. What category in franchising do you think is most overhyped and why?
Speaker 2:Oh, wow, overhyped, and why? Well, I guess for me, the biggest thing I see in franchising and you mentioned this is all about being candid, so I plan to be For your listeners. I'm from New Jersey, so respect my directness. I'm a big proponent of, I think obviously, when a franchise concept comes out and it's never been done before, that's very exciting and obviously starting something that has never been done before is a great business principle. But I think that when a new type of brand comes out in a completely different industry that has not been franchised before, I think that you can see some challenges when they grow, because you know to put in perspective.
Speaker 2:If, like you're in the roofing business or you know boutique fitness, this has been done, it's been tried and true. There's no changes in crazy licensing or build outs end up being three times the amount, and so I think the things that get overhyped are sometimes a concept which would end up being a huge concept around the country, but maybe not franchising as many units right away. You know. To give you an example, like you know, I think the golf concepts are really, really interesting and exciting, but some of them haven't been proven out yet, which is fine. Bigger risk, bigger reward. There's nothing wrong with that. And then you franchise that business and then in certain states there's regulations or requirements that were unforeseen, and so I think the things that get overhyped are it's exciting to go into a new industry never done before, but I think franchisors doing that should probably prove that out in a few markets first, but before then going into hyper growth.
Speaker 1:I think that's a good point and I don't want to open that up to the group here. But before we do that I have a quick question for you, just to follow that up. One of the things that's made me nervous there are some newer franchises that when you look in their FDD, if the franchisor is just losing money, hand over fist, that really freaks me out. And I know some of them may have equity partners and things like that. I don't know, am I being short-sighted with this?
Speaker 2:I don't know. That's an interesting point. I think that when someone's exploring a franchisor, they should obviously explore item 20 and item 21. The only thing that I would say you should definitely look at that the leadership team or the founder has substantial capital. The only thing to play devil's advocate to that is when you look at, often, a franchisor that's in high growth phase.
Speaker 2:If you think about the accounting principles that are applied to a franchisor, they could look different than the actual reality. So to give you an example, it's very granular. But if a franchisor has awarded, you know, 50 territories in a year and they were able to collect those franchise fees, they obviously have substantial expenses in those costs. Those all get recognized for the year, but the franchise fee gets amortized over 10 years and so all of a sudden that number can look upside down, because all the expenses were recognized for the year but all the revenue was deferred over 10 years. And so I think that's one thing to keep in mind. There's other ways to obviously validate that they have financially sound. Obviously, if they have royalties that sustain or, you know, subsist in my sales, the IRS recognizes those revenues. So it gets a little confusing.
Speaker 4:So I thought Dan brought up an excellent point with creating a new market. Right, and I think it comes back to we hear all the time is there's too much competition, the space is too saturated. So something new, almost still safer, right. I just had a candidate who was going through the process with an electrical services company major metro area and weeks in the process came to a stop because I guess they had just Googled for the first time electricians in their area. They said they found over 20. And it gets back to a franchising trying to mitigate risk, right, and would you rather be in a market where there's huge demand that's kind of recession resistant and just get a slice of it to have a substantial business, or go and try to create a whole new market? One of those is simpler, right, you know so. So I really like dan's take on on just the risk of going in something that's brand new and unproven.
Speaker 5:I like your comment on the high risk, high reward with the emerging brand, right. So like a part of what we do at Franchise Insiders is the Zorical assessment which will show us who falls more into that entrepreneurial bucket versus the proven system, right? So I think that's, you know, that's where we come in, so when we are talking with a candidate and we can see, okay, this person like me, I'm very entrepreneurial, that was my, those are my results. Soccer stars had been around a while but they had just started franchising. So essentially, in my opinion, it was kind of an emerging brand because they had never really franchised before.
Speaker 5:And so more again, you know, I'm sure you would agree with this, they were kind of an emerging brand because they had never really franchised before. And so, morgan, you know, I'm sure you would agree with this, like they were kind of building the plane while it was flying, like, oh, we need, you know, and because I came from franchising, uh, and I'd done that for 13 years and was building them like new, new, that world, I and it aligned with my passions and interests and all the things, like I was able to scale really quickly. But I think for someone who maybe came in, or could come into a brand who is not that entrepreneurial, you know, person, they may struggle more, and so that's where that matching process and understanding your candidate for us is really crucial, so that we're setting them up for success and, in turn, on your end, dan, you know we're bringing you quality candidates that are gonna, you know, thrive in your system.
Speaker 2:Just to piggyback on Dan, you know we're bringing you quality candidates that are going to, you know, thrive in your system. Just to piggyback on that, you know, like that's a great example. Obviously, there's exceptions to what I was saying, like in your case, in that concept backed by a large you know financial partner Right, and they're very savvy in the youth enrichment space. I think that's it. That's a different situation versus, like you know, I started doing something completely new. I've never been a franchise or I don't have a ton of you know this hypothetical. I don't have a ton of you know capital like that. I think it's different than in your case. That brand is super well backed financially and has a lot of intellectual capital behind it.
Speaker 2:And then just one more thing on Brian's point. You know what's interesting to me, like how many pizza restaurants or pizza places are in your neighborhood, every corner right? Well, pizza is a $25 billion space. You need a lot of pizza. You know, in our space restoration it's a massive industry too. You need a lot of competitors, but what I've found is a lot of people will like, let's say, I was looking at you know a waxing concept and I go and I look at all the waxing concepts in my area and I say, okay, there's five and there's 10.
Speaker 2:What people don't always remember is that you don't know about the other brands, that maybe someone bought in a neighboring territory, that they have a development schedule, that they will be opening three or four more of those from. Maybe there's a development schedule in four different concepts in the same space, and so like it's difficult to really assess like how many are in your market versus you succeeding or not. I think it's more important to look at like what's the industry growth and revenue size, and then it's okay for there to be competition. Because just last thing to Brian's point me personally, I'd rather not have to educate a market on something. I'd rather come into a market where there's a general understanding of that and then go into it. Now don't get me wrong. When Orange Theory first came out, you were the first Orange Theory franchise owner, kind of very early into boutique fitness. There probably was some market explanation. But what people forget is that Orange Theory wasn't this giant concept at first. Their ADVs have gone up over time as the market has caught up to that space.
Speaker 1:Dan, do you remember when you and I were having dinner at the Boca Resort and the founders of Orange Theory and Anytime Fitness were at the table right next to us?
Speaker 2:I thought it was funny because I had met Dave Mortensen a few weeks prior and I saw him sitting there we were having dinner and obviously I was intimidated to go up. It was like literally like the founder of Orange Theory and spouses and the founders of Anytime Fitness. And then he actually saw me and came up and I was like, oh, this looks cool in front of Jack, Like I know these guys, but it was just actually because I was afraid to say hello to them.
Speaker 1:You know one point on competition. You know, jill and I I remember we started Franchise Insiders I purposely like the big name franchise consultants at the time not because I didn't like them, but I didn't want to see their stuff. Right, I just wanted to have tunnel vision. I knew they were there but I like blocked them because I didn't want to see. I just wanted to go. I knew that we could win and I knew we had a good brand, but I didn't want to see them. And it was the same with pinks. Like with pinks, we never even bothered to see who our competition was. We just open and um. And we created the top pinks franchise last year. And our opinion has always been the same as what you said, which is we know the demands there, we know the competitors are there and we know inherently we're going to be better.
Speaker 3:I think that's you know. Again, when people look at things, it's like, oh, but there's already this in this area and it, you know if it's. If you want to open a crumble and there's already a crumble in your neighborhood, you're yeah, you're not going to open it, it's already there, they've done the research that that's a good market. So you know, for us too, with, like the window with pinks windows, it was like we knew. I mean, we had window washers and pressure cleaning in our neighborhood. We saw it every day and instead of that pushing us away, it made us excited, because we're saying people already doing this. So then let's find our edge, like, how can we be the best out of all this? The need is there. So I don't think you need to shy away from competition, um, but I think again. I mean, I'm sure you guys all see this we get people that say, oh, they just opened up. You know this, uh, ice cream place. I want to open one, like, but it's there already.
Speaker 3:But a good brand one, but we could find something similar, since the need is there and the market is there. So let's look at something similar.
Speaker 1:But to Dan's point, I mean, it's like so here locally, we have a, and you're right, there's a million pizzas in Boca Raton and most of them are mediocre.
Speaker 3:Yeah, we still don't have one that we like.
Speaker 1:So there's this guy who comes in, opens up a place called Death by Pizza and it's Detroit pizza and it's awesome pizza and it's Detroit pizza and it's awesome and it's got a cool brand and you can't get in. So again, I still think a brand. Just like what you did, Dan, with Voda. There's tons of restoration out there. Voda looks good, right, Voda looks modern. It's got a young leadership team. It has things that make it different. Um, what's a hidden opportunity that franchisors see that most consultants and buyers overlook?
Speaker 2:The first thing is like, 90% of being an entrepreneur is picking the right industry. If you pick the right industry, you can even afford to make some mistakes because you're in the right industry. There's high margins, high growth, there's high opportunity. People want to be in it, they want to work in it, they want to use the service or product and so I think picking the right industry is key and from the lens of a franchisor, I know that for us we didn't start in restoration, we were franchise executives that got into restoration, but I'd say 90% of our success was picking the right industry.
Speaker 2:It was high growth, it was in favor of institutional investors, there's high margin, there's consolidation happening in the space and, as you know, there's water's not going anywhere. There's gonna always be water and floods and issues and with climate challenges and just the average age of a home getting older 38 year old average, which is just gonna get older there's a lot of opportunity. So I think, taking the right industry and then I think the biggest opportunity to your point, whether it's restoration or roofing or some type of next gym concept, usually businesses can succeed with just better communication, a better customer service experience and, most importantly, going into an industry where the technology is antiquated and just simply investing in better technology to make the service better, make the business offering better. Better technology to make the service better, make the business offering better those things alone you can go into an industry that's kind of dinosaur-esque and go in with better technology, better branding and a better, just really way of communicating and you can win. You don't have to recreate the wheel.
Speaker 1:Yeah, we had a franchisee from Sharkyy's cuts for kids on last week and I'll tell you. You know, when Jill and I first became franchise consultants, we looked at that brand and we're like man, who would ever buy this? And now I look at it and I'm like this is an awesome franchise. It's been around a long time. It doesn't have litigation. Um's got a lot of franchisees. Ai is not going to take it over. It's a simple staffing model. We've got section 179. That is where I think franchise consultants really can help people who are coming in and saying I really want the UPS store, and help them sort of see the forest through the trees.
Speaker 6:Yes, I think we need to pay a lot of attention to technology and AI and what can't be replaced, like sharkies, I mean I'm going to get my kids haircut, not using AI, I'm going to go into a store, so that one's pretty recession proof.
Speaker 6:I like those. Home services are always needed, but the technology has to be there right. We're increasing, so I think that's our job to make sure that whatever franchise we're showing our clients is something that can grow and scale. Yeah, I think there's a lot of things. I also think part of our job is making sure that these new franchisees coming in understand that they're running a business and even if the AI is there and they do have the franchisor backing them, they still have to work hard and run the business. And I'm hearing more and more that they're sort of feeling like it's a playbook and they can come in and that the franchisor is going to give them all the clients that are going to do all the marketing for them and it's just the business is going to run itself. So we're seeing a lot of that on my end.
Speaker 1:I'm a lot less afraid of my burrito getting made by a robot in a couple of years at Chipotle. I wouldn't trust it to cut Trey's hair, that's for sure. But that's why validation is key, and someone said it the other day. We were on a call, dan, with CMIT, which is an IT consulting franchise, and she said we mandate that each prospective franchisee validate with at least five to seven franchisees, which is the guidance that I think 90% of franchise consultants give too. Talk to those owners to really hear what they're doing and how they're running the business and how. Yes, you can have a great brand like Voda, you can have a recession-resistant service like Voda, but the franchisee is still the one that makes the magic happen.
Speaker 6:And I think what's unique about Voda is it's really two franchises in one. So, voda and Dan, you've done a lot of work, but you've made sure that, even if it's not restoration, that you're still doing the carpet cleaning, you're still getting those jobs and your employees stay employed. And I think that's really important to note, because a lot of the home services is just very narrowly focused and they could be doing a lot more with just one brand. I think Voda does a really good job.
Speaker 5:And I would say with my biggest learning, I think, with Soccer Stars, was the cash flow and figuring out that, because I had to pay my coaches up front and there was a lot of payment on the back in like four or five months later. And with Voda Dan, you talked about that at the Franser Conference. That's where the cleaning and the restoration are really good, right Hand in hand, kind of keeping that consistent cash flow going while these bigger jobs are coming in.
Speaker 2:Yeah, and not to shamelessly plug Voda, but to give you an example in that regard, I think about a few years ago when we launched the business, we saw a lot of opportunity where we would go to a home to do, let's say, a mold extraction, get mold out of someone's home. And they would say, oh my goodness, I didn't know this was going to be you know $3,000, and maybe insurance isn't covering it for whatever reason. And I remember thinking like, well, how many of these jobs are we losing to people that maybe just can't stroke a check for three grand or don't want to stroke you know swipe, their credit card? And we pulled in a partner where we could do consumer financing right. So all of a sudden we can walk into a home and if someone can't spend the $3,000, we can offer them a 0% APR over 24 months. And then we took that product and we embedded it into our CRM system where we can literally just right there on the spot say, hey look, jack, we can finance this. Here's the payment terms, it's right there, just click a button and it goes to the invoice. That's an example of technology.
Speaker 2:Or one other example two years ago I was at the Restoration Industry Association Conference that I go to every year, and everyone was like no AI, that's crazy, no one's going to want things done that way.
Speaker 2:Well, our technology provider that we utilize for project management leaned into that, and here we are now today where, when we do estimates, that's a big part of our business, right, it's more of an art than a science when you do a water mitigation estimate for insurance through Xaptimate. And for a long time we had a partner we still do but that would work with our franchise owners if they needed some help getting those estimates up and they charged a fee, but the fee was always worth paying because they could take the average ticket up enough where that percentage didn't matter, right? Well, here we are two years later. Our technology provider was able to do that now through AI. So they introduced AI estimates to make doing estimating more accurate, more seamless through AI, through all the knowledge that it has, and so you know perfect example if you're not leaning into that technology, not when everyone's starting to do it, but beforehand, you can very quickly in any business start to lose market share.
Speaker 1:Isn't Klarna going public today? Can they see that, speaking of you know, being able to finance over time, I mean, look, people keep sort of talking about feeling like the economy's wobbly but yet spending is still great. People are still out there spending at the same levels they were spending. Restaurants are still full. Actually, debt, if you look at debt ratios, there's still. People are not. It's no different than it was.
Speaker 1:But it's the jobs, right, they're saying. But even the unemployment numbers aren't terrible. But people keep saying, well, why aren't the jobs growing? Because AI, because ai can take the place of so many of these jobs, which is why we're seeing such a strong influx of new, you know, business owners and franchise owners, because, let's face it, so many of those jobs that were needed, like, look at, we can do so much coding now with claude. Um, claude can take the place of, like a coder, two coders and so, yeah, that's why we're seeing it.
Speaker 1:The economy is still very strong in terms of what people are spending. The stock market's at another all-time high today. But the reason why the jobs are soft is because AI is able to take the place of so many of those jobs, which is why we're seeing the influx. Which, dan, leads me to my next question for you, and I have to read it here Um, when, as you grew Voda, and I remember being there with you in your first couple of months what's the hardest part about growing a young franchise system? What, what you know? Take us through that a little bit.
Speaker 2:Yeah, I mean, I think probably the hardest part about growing a franchise system like Voter or any other is it's a lot like building a technology company. Or an extreme example if you read the book Shoe Dog by Philip Knight, it's about his journey of building Nike and I can sum up the book for you. He goes through basically hell for 20 years and now he's Philip Knight. They had inventory issues for the entire journey of Nike, like he was always, even though the company was in China and Japan and wherever all over the world. He was like struggling to like, keep like his business afloat or his personal life because he wasn't able to take a ton of money out of the business. I think that building a solid franchise or you have to be disciplined and you have to continually just reinvest your profits that you make when you finally do make profits into the business, into the leadership team, into support staff, into technology, and so if you're a franchisor, you're building an asset that is eventually going to be worth a ton of money and make you great EBITDA, but you're going to have to have a really long time horizon because even when everyone's going to celebrate you everywhere you go, they'll say great job and your franchisees are happy. But if you're doing it right, you're reinvesting into that business for the long term. And then I think the second thing is and this is something a reality I came to recently If I go right now downstairs and I press a button on my phone for an Uber, I expect it to show up, I expect it to be on time and all these things. I don't know how many rides Uber runs a day around the world, but the expectation is it shows up. If you really think about it, you're pressing a button and the car's showing up. It's amazing when I fly in an airplane and I was 10 cans through the air, which is an amazing, you know feat for mankind, right, you know, I expect it to be on time and if it's even a little bit delayed, I'm upset. I see people get upset even when it doesn't take off because of weather, like it's not. They can't control that, but the bar is so high, no matter what, right. And so I feel the same way with building a franchise system. You hit this next bar where you're like man, we're doing 10 times more than we ever were before. But that next franchisee, or that franchisee that's been around for a bit, that's starting to mature and wants to continue to get value out of their royalty, is going to continue to raise the bar, and so I think, like the, it's not really a challenge. But you have to just understand your customer, which is your franchise owner. As Jeff Bezos says, the customer is divinely dissatisfied, like they will never be satisfied, and that's not a negative, that's a good thing, that's what pushes you to get better. But I think it's just you have to be in this business knowing that you know you're North Stars, you're making an impact, you're changing lives, you're helping people become a business owner. They're not always going to thank you for it and they're not always going to recognize that, recognize that, but that's okay, that's that's. You know, like what you've done. You know?
Speaker 2:One more example on that the average home service business, if you look it up on online, like, does 100, 200,000 their first year. You know. And Voda, the average owner knows a half million their first year. But if you've never owned a business or maybe you do, in our top 25, median 25, it's 800,000. If you've never owned a business and now you do, all of a sudden you do 800,000, well, you have nothing to compare it to.
Speaker 2:So you're just like, wow, that's not very good, I still got to pay these royalties. I had to pay a franchise fee. You're stopping me from doing X, y, z and sometimes it gets kind of lost, that like how much you leapfrogged years of trial and error. But I think, to sum it up, it's understanding that it's not always going to be pats on the back from your franchise owners. That's okay, because over time what I've found is when franchise owners meet kind of that two-year mark, usually they start to see wait a minute, I'm starting to see that the franchisor is playing a huge role in the organization of my business. So I think it's just understanding that you didn't get in this business for feel good, everything's amazing. You got in the business to make an impact and build something substantial, and good things take time.
Speaker 1:Well said Team. Any thoughts on that?
Speaker 6:Yeah, I think that's absolutely true that two-year mark is. I think we've all felt that in the two-year mark. One thing I think I've seen with franchisors and maybe you can speak to this, dan is how do franchisors support those new franchisees as well as the veteran franchisees? Because I think it's really easy to support the brand new franchisees coming in. They're so excited to learn, it's like first day of school. They're just soaking up knowledge, they're willing to do whatever, but then you get to like a certain point at that two-year mark probably, as for most people and then how does that franchisor support those veteran franchisees to get to that next level of growth? And I think that's where I've seen some franchises struggle a little bit.
Speaker 2:Yeah, that's a great question. You know it's interesting and I come from a lens. I started as part of a franchise system in Murphy Business and Financial franchise in 2014. And so I know what it's like to be a year and a half in. You're trained, you've learned everything and it's like wait, what is this royalty getting me now? And so I think the franchise the worst challenge is to continue to wake up every day saying how do we make it where no one's ever going to want it. I'll never forget a franchise owner calling me and saying I don't want to pay this royalty and I just said back I wouldn't either. No one ever wants to pay. I don't want to pay any of my bills, right, like it's just part of the. I'm never happily paying, you know, a bill. But how do you make it where the value proposition is so strong? I can only speak to our business and again I'll just speak from a lesson learned.
Speaker 2:One of our top franchise owners, who was early into the system and he bought directly through me about a year in, said I don't feel like you. You know I've helped navigate this business from the beginning. I don't feel like you're listening to me as much as you know, you should be anymore. Like I have a strong voice, and so I think step one is to establish an FAC. So for us, we established a Franchise Advisory Council and now those relationships inherently you have legacy owners end up in there because they're early in, they're further along, they have a big influence with other franchise owners, so they get elected. Now we have this FAC where the legacy owners and top producers have a tremendous voice, like they're really helping us navigate the next steps of the business. And then the second thing that we did was we established a top producer call where once a month, our top producers, the leadership team and our founder get together. To get from zero to 500 is a different mindset. 500 to a million, a million to two, and then two to five, five to 10, 10 to 20. That's kind of like the lineage of a business. Each one of those requires a completely different mindset and mentality and coaching, and so I think it's understanding.
Speaker 2:First of all, by the way, if you have a million dollar producer I'm speaking for the franchisor's lens why would you forget about the person that's, as a customer, paying you thousands, if not tens of thousands, of dollars a month in royalties, like they're, they're the most important, and so I have a little bit of a unique lens in this that I'll happily talk to someone that's not producing if they, you know, I I I ask that they go through the channels first, but I'm I'm happy to get on a call. But I found, if I can influence top producers the people that are most engaged, that are producing the most, and incentivize them to help the middle and then the middle help the bottom, that's where we get the best results. So it's actually the opposite For me. I try to focus my time on the people that are succeeding and just ask for them to like carry that forward or pass that back to the rest of the system. But then one more point on this, and I haven't figured this out yet of the system.
Speaker 2:But then one more point on this, and I haven't figured this out yet. But I think, from a franchisor perspective, if you're a top producer, morgan, and I'm like, please help me with everyone else, well, I'm sure you're a great person that wants to help, but what's in it for you? Right, like we all should get some incentive. And so we're working on, like, why does helping the middle and bottom performers actually benefit your business, whether it's national accounts, just brand awareness, or maybe there's some type of financial incentive. I just think that it's important that we don't just ask just to do us a favor, but like how can we make it where it's worth your time to actually invest into it? And I haven't figured that one out yet, but that's something I'm always thinking about.
Speaker 6:Well, it's interesting you say that because that kind of led us to consulting, because we felt like that's what we were doing. Catherine and I are part of a fact channel. We were elected by the peers. We are happy to give back. That award that I won last year was community impact, so it's important to me. But I did start to wonder. There's no financial gain. I'm still going to do it, but it started to dawn on me.
Speaker 1:I'm kind of consulting and there's so much that people can learn from you guys. Sorry, Catherine, go ahead.
Speaker 5:Yeah, we're on the FAQ and we're on the top producer call, so we do that too. Dan, I love that you do that. I think it's great. Can I just get a little royalty-like break, maybe it would be nice.
Speaker 2:We had this vision of like and if a franchise is listening to this, please go do it and maybe you can go swim in the waters and see if there's alligators first and then, before I jump in I'm kidding, but like an idea that I had was like if you think about like Warren Buffett's favorite companies that he's ever invested in, he says direct sales organizations are his favorite. Now I'll use a structure like MLMs not frowned upon, like obviously there's negatives to them. But when you think about like Mary Kay model, there's a what's that called A downstream commission that goes all the way down. If you think about like the military, like extreme ownership, like there's pods, right, there's teams of four that have teams of four, that have teams of four, and so like how can you create a financial structure where, look like, if you're going to invest your time, there is some type of rebate at the end of the year If you help get your pod, you know their goal was to do X revenue. If we can get them to, you know Y revenue average you get a financial benefit as a franchisor.
Speaker 2:It's kind of like blending an area developer model with not. But again, I haven't figured this out, but I think a franchisor that does. Hopefully it's us first, but that would really create a great community where you are financially incentivized to help everyone else. And the last thing I'll say the good thing is I think, like you, you learn. Like the best CEOs are great followers as well. Great leaders are great followers. I think when you teach, you actually end up learning Like if you could teach something you really know it.
Speaker 1:Yeah, makes perfect sense, dan. I know you're up against it and, by the way, anyone who's interested in working with us, go to the franchiseinsiderscom. Look at our team page. That's how you can get in touch with Catherine Morgan, brian David. Anyone would be happy to help you with, uh um, finding the right franchise. Thank you, dan.
Speaker 5:Thank you team.