Franchise Freedom - Escape the Corporate Trap with Cost Intelligence, AI & FDD Secrets

Franchise business coach Giuseppe Grammatico and his industry experts deliver the ultimate semi absentee franchise ownership masterclass! Learn the proven strategies to transition from the corporate grind to financial freedom. This episode covers high-profit models like Cost Intelligence, scaling with needs-based home services, the future of AI in franchising, and the non-negotiable due diligence checklist (FDD & Item 19) every serious candidate must use. 

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DISCLAIMER: The information on this site is for general information purposes only. Franchising involves risk and careful consideration should be given before making any decisions.


01:30 The Cost Intelligence Model: A Hidden Franchise Gem
13:59 Scaling with Purpose: Emergency & Home Services Franchises
20:15 The Responsible Franchisor: Communication & Support
27:25 AI & Technology in Franchising: The Future is Now
36:07 The Non-Negotiable Due Diligence Checklist (FDD & Validation)

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Transcript

Lisa Hennigar: 0:00

that's it. And I can say this with a lot of confidence. There isn't a business out there today that doesn't have opportunities that we can help with.

Shannon Roderick: 0:07

I am not just here to take a royalty. You know, I, I, we have always said that we want to, we want these brands to change people's lives, right?

Giuseppe Grammatico: 0:19

if you can't handle validation and research of a brand, how are you going to manage an entire business?

0:26

Welcome to the Franchise Freedom Podcast, where you can escape the corporate trap through franchise ownership. Here's your host, Giuseppe gr, the franchise guide.

Giuseppe Grammatico: 0:39

Welcome to the Franchise Freedom Podcast. I'm your host, Giuseppe Grammatico, your franchise guide to show where we help corporate executives experience time and financial freedom. Thanks for joining us today. We really appreciate it. And don't forget, feel free to visit our website, ggthefranchiseguide.com Click on that book a call. I'd love to chat with you, answer your questions in regards to business ownership, franchise ownership, if you're potentially a good fit. Book a 20 minute call with me today. There's no cost, no commitment, and I would love to help you out in any, way we can. today I'm joined by industry experts who have helped countless families build franchise empires that last. Whether you're planning to pass your business to the next generation or building your first franchise with Legacy in mind, you'll get real world stories and expert insights right here. let's dive into what really takes to create a franchise that just doesn't just survive, but thrives for generations. speaking of areas of improvement for small business tell us a little bit about ERA group. Who is ERA group? What, what specifically what services do they offer? I guess we'll start there.

Lisa Hennigar: 1:41

So we are the largest cost intelligence consulting firm in the world that probably your guests have never heard of. And what we do, we specialize in reducing indirect costs and improving profitability, saving the people, because a lot of companies go to the people first, and that's just backwards. we're focused on finding out efficiencies. Through pricing process and policy. And the beauty about our brand too is there's such an ecosystem because as people are coming out of corporate world, which they have just the most wisdom, the most experience, or they're being pushed out today. Which is why we've come in contact because you're able to, to share our brand with them, but we're able to really take that knowledge so that that business owner, those C-suite, can focus on their core business. Well, we come alongside them, no pressure, no embarrassment, but to improve their business, and we happen to find a lot for them that allows them to bring in more people. Maybe expand their business, increase their technology, so it allows them to be more strategic and make better decisions on the growth of their business from our partnership.

Giuseppe Grammatico: 2:57

I like that. I, I really, and and what, what did, what did you call it in the beginning? cause we've been working together and I think that was the first time I've heard this. Did you say co cost intelligence? I, I, wow. I, I like that. I, I really like, how come I haven't heard that before? Cost intelligence. That's so cool.

Lisa Hennigar: 3:12

Funny story. a year ago we changed our branding from expense reduction analyst to ERA group. For those who've been around a while, it's been a hard, we we're expense reduction analysts, but we're not. as part of the rebrand, it was really looking at what is it that we do? And here's the beauty. We've been around for 32 years. We're in 64 countries, a thousand consultants. Can you imagine the data points that we've collected over

Giuseppe Grammatico: 3:38

Hmm. Yeah,

Lisa Hennigar: 3:39

So we took those data points. We took the benchmarking, the indexes, got ai, we've got machine learning, and we built this machine. where cost intelligence came from our CEO. It was at our conference last year, and he was sitting in the middle at the end. Everyone had gone off either to the room or to go socialize, and I needed to chat with them and he is just sitting there in the room and I'm like, Charlie, he says, I think we should be talking about cost intelligence, because that's really what we do. And he went out and he owned that. We own that URL and we've been slow to it, but it, it's really about what does that mean? Well, it's, we built on value, our time, which is typical consultancy work and, and that is the essence of what ERA does.

Giuseppe Grammatico: 4:38

That fit, that fits a lot. And this is definitely a people business. And this is conversation you would think most small businesses would be open to having, doing a full analysis of their entire business, not just one key area to see where their can be cut, cuts some cost savings, maybe some consolidation and things like that. So you would think people business owners would be. Overly excited given the, the value proposition, the way that the proposal, the consultation works and things like that. You know, one, one I know the answer, but just for everyone listening in, a lot of people hear this, and maybe it's the way I'm describing it, but they're like, you know what? I am not an, I'm not an accountant. I don't, I don't run p and ls and balance sheets, and I'll come back and say that this is not accounting. So talk to us a little bit about. the areas that you're potentially able, the number of areas, maybe some, some ideas, some, some i, some samples maybe of, of areas you can potentially save a small business on.

Lisa Hennigar: 5:32

No, I love that question because you're right, there's a lot of confusion around our brand and understanding, and many people think it's a financial model.

Giuseppe Grammatico: 5:43

Right.

Lisa Hennigar: 5:43

not. It's not. It's a consulting model.

Giuseppe Grammatico: 5:47

Hmm.

Lisa Hennigar: 5:47

which a lot of people think because cost is in there, we're looking at indirect cost of a business pricing process and policy. Okay. And so when you look at the joint venture model, because all of the people who do the work in our business are joint venturing together from their expertise. And I'm just gonna give you the US because that's where we are and that's, that's what I'm overseeing is North Americas. We have over 75 different areas of expertise here at era,

Giuseppe Grammatico: 6:20

Wow.

Lisa Hennigar: 6:20

and if you wanna get granular, which you can, I would say it is between two and 300 What do I mean by that? Solar, you look at utilities, it

Giuseppe Grammatico: 6:32

Mm-hmm.

Lisa Hennigar: 6:33

it could be electricity, it could be solar. You look at healthcare, it could be senior, it could be operations, it could be equipment, it could be dental, and we have that breadth of expertise. And you might have someone out there who's coming from a marketing background and they're like, I cannot imagine getting another job. I'm just done. They could be a great candidate. might have someone who has been in the SaaS area, they could be a great candidate as long as they enjoy talking with people who's not the best candidate for us? As someone who likes spreadsheets more than people.

Giuseppe Grammatico: 7:14

You don't need to be an expert. It sounds like ERA will train you in all these areas. The joint venture. If I understood correctly, you're working with other franchisees across the country in order to help with those, with those specific areas. And I dunno if you can share this and if not, that's okay, but are you able to share what is this cost? Is there even a cost for the analysis? Is there anything you can share? Because yeah,

Lisa Hennigar: 7:38

you ask me

Giuseppe Grammatico: 7:39

let's do it. Let's, let's share it.

Lisa Hennigar: 7:41

we're sharing. No, that's the beauty. We have a promise to our potential clients that we will give you an assessment because we know there's a couple exceptions and, and they're, they're very well known nonprofits that we've looked at. But that's it. And I can say this with a lot of confidence. There isn't a business out there today that doesn't have opportunities that we can help with.

Giuseppe Grammatico: 8:08

Hmm.

Lisa Hennigar: 8:08

We're typically focused on that 10 million to 250 million all the way up into the billions. as we're looking at their business, we have all those data points that I was talking to you about. all we need is their general ledger and P&L Now, of course, there's some categorization and sometimes there's some back and forth, but it's fairly easy. We can put that into our machine and we can bring that back and show them their business in a way that they cannot. Have all systems connecting and so we can have some great dialogue with them. And so it's not even a hard sell for us Then it becomes, these are the areas of the biggest opportunity we could get started on them today. going back to our expertises and we just had a group validation call. We have a guy who does ingredients, food ingredients, getting down, and we were talking about bread. And he was talking about an ingredient that the, the client was using was a pharmaceutical grade. They didn't know that,

Giuseppe Grammatico: 9:11

Hmm.

Lisa Hennigar: 9:11

so they were always doing what they had always done. So he came in and said, this product is equivalent and it cost$2,000 less a barrel, And they were buying millions of barrels.

Giuseppe Grammatico: 9:26

That's, yeah. Sometimes you, you, you don't even realize that something you're missing that something as simple as that. And that's just one area.

Lisa Hennigar: 9:32

To that level of expertise is what we can bring to a client who thinks of an ingredient expert in cost intelligence, but that's the scope and the breadth that we can bring. You think of sea freight, when all those boats were sitting out in California, we saw it on the news in in 2020. Our clients weren't dealing with that because our experts knew those things were coming before they were, and they knew how to move around them. So our clients that Eric's clients did not have the disruption that much of the rest of the United States was dealing with.

Giuseppe Grammatico: 10:13

Right. That's amazing. What, what are, what does it look like for the, for the client that is. Open to that sounds like the, a free analysis and then what are, can you share costs or, what does that look like?

Lisa Hennigar: 10:25

So we share in the savings.

Giuseppe Grammatico: 10:28

Gotcha. Right.

Lisa Hennigar: 10:29

save a business a million dollars a year, we share 50% of that. And when I say we, I mean our franchise owners. And they're collective a group. That's how it works. And so a good way to think about it's when we go in and work with a client, here's their level of expenses. You take all their line

Giuseppe Grammatico: 10:49

Mm-hmm.

Lisa Hennigar: 10:49

and you group them. Here's their expenses. When we come in and we do our work, now their expenses are here. So we bill on that gap. For the next three years, and we share in that savings with that client so they can take that 50% and push it into their business in a very strategic manner to either hire more people, invest in technology, grow their

Giuseppe Grammatico: 11:13

Mm-hmm.

Lisa Hennigar: 11:14

is their, takes them more profit, whatever is their goal.

Giuseppe Grammatico: 11:18

Love that. Yeah, that's huge. And what business isn't looking in a an up or down market looking to, to save expenses and lower their costs. So, I really like that.

Lisa Hennigar: 11:27

Add one more

Giuseppe Grammatico: 11:28

yeah, absolutely.

Lisa Hennigar: 11:29

back to your potential client. This is the beauty too, because as we bill on value to our client, franchisees benefit from the value to their bank account.

Giuseppe Grammatico: 11:45

Mm-hmm.

Lisa Hennigar: 11:47

much time are they spending? Are they grinding out a 40 hour week for that? No, they're not. And we will monitor it, but there's very little time that gets invested into this on the long term. It's more heavy upfront, then we're staying there as a continued advisor monitoring, and so this isn't a 40 hour a week, grind it out, course. I don't want to use that word. Passive investment because we want our owners to be in the business, but they're not sitting at a desk for 40 hours a week. They're not doing it.

Giuseppe Grammatico: 12:26

And because you're essentially doing all the work upfront and creating, correct me if I'm wrong, these are annuities a way. So you're saving a, if it's lowering, just to keep it simple that that ingredient, and it's a hundred thousand every single month, it may be a hundred thousand for however length, length of time that the, the agreement is based upon. So the work is done upfront, and then you're essentially getting those, as long as they're getting the savings, you're, you're getting half of that.

Lisa Hennigar: 12:49

of the joint venture, because someone else that they've partnered with is doing that work.

Giuseppe Grammatico: 12:55

Right.

Lisa Hennigar: 12:56

And then because they brought the client and they own the relationship, they put that team together, they're benefiting from watching their team members. And typically signing five projects with every client or more. So you got five people doing work that you, as the franchise owner are benefiting from them doing that work.

Shannon Roderick: 13:18

And it has really just taken this brand to, to um, a different level in the market. We, like I had mentioned, we started out, um, in May of 22 with six locations, and today we, we proudly are 125, um, locations across 39 states and over 400 territories.

Giuseppe Grammatico: 13:40

Wow, that is a absolutely amazing. I didn't, I didn't realize, just six in, in, uh, just basically three years ago. So that's, uh.

Shannon Roderick: 13:47

3 years ago. I know. Just had my anniversary last weekend.

Giuseppe Grammatico: 13:50

Yes. Con well, congratulations. So that, that, congratulations. Happy Mother's Day. You, you, you hit'em all this month. So it's, uh, that is absolutely amazing. Um, what, um, I guess for the audience, not, uh, not familiar with Resto Pros, maybe just, uh, you know, who is Resto Pros, what those, uh, resto Pros offer?

Shannon Roderick: 14:09

Sure. Resta Pros is, um, a mitigation company. I. so mitigation, meaning there was damage, it might have been caused by water, fire, mold, smoke, storm damage, um, have been, you know, a, a bathroom overflow. It is where it just cannot be, um, remediated with just a, a house fan or a towel. You're soaking up some damage or, or just removing it. It is really where we have to go in, remove the damaged material, whether it's commercial or residential, into a safe environment. Um, and then some of our locations take that, that service a little bit further. Um, we always say we have to start out with mitigation, right? We've gotta, we've gotta clear everything out. And some of our locations now have brought on rebuild to, to. Make sure that that property can be restored to its its original condition.

Giuseppe Grammatico: 15:06

Gotcha. And. With Resto Pros, uh, there was, uh, I'm not sure of the date, and this is a question I had for you, but be rugged brands, uh, tell us a little bit about that and, and maybe any of the other brands that fall into that, uh, parent company or that, that umbrella.

Shannon Roderick: 15:22

So, um. Because of the success with Resta Pros and the team behind that success, our founder is, is a very innovative, um, individual and, and we really did. You know, you, when you have something really good, you've got the secret sauce. We've got the boilerplate. And more than anything, we had the vision of services and home services we wanted to bring to, to our markets in the, in surrounding communities. And so Alex de developed a company, um, a parent company. Um, called B Rugged Brands, and that is going to, um, house, um, our home ser our different home services brands that we have. They are. you know, we're cleaning out damage. Um, we are sometimes in sewer and what we call in this business category three. Um, you would not drink it. You would not wanna sit in it, you would not, it, it, it's bad. It's contaminated. We, you've gotta, gotta clean everything that it has touched. The second brand that we have, that we have, um, recently, um, launched is called Scoop Brothers. And Scoop Brothers is going to be a pet waste valet service. We are going to be able to service both residential and commercial and along with, um. Pet waste removal, scooping it if you, um, so, so inclined to, you know, categories like that. Um, we are able to put in, um, the, uh, commercial pods, you know, that you see the pet waste, um, pods that go around and, and we will be able to service those also with installation or, or maintenance on'em.

Giuseppe Grammatico: 17:26

Awesome. And, and what, so what is the, uh, so with Be Rugged so that, you know, what, what, what is the plan, I guess going forward? Is it to, you said. Kind of keep it all, is it, is it gonna be jokingly, you said, you know, the two brands are similarities between the two, but

Shannon Roderick: 17:39

cleanliness.

Giuseppe Grammatico: 17:40

uh, yeah, what, I guess, what does the future, you know, for the brand look like?

Shannon Roderick: 17:45

It does. Um, we are gonna look at some more home services brand, um, brands that, that really are, um, more of a, of uh, either a subscription based model, um, that it's reoccurring. Um, and, and, or. Needs based, you know, we really have a niche in, um, in this emergency services through quality of work, reaction to in response time and just how we, we deliver things to insurance and to our customers. Um, as far as estimates, quality of work, um, and really it's through documentation we have. Just taken Resta in, in what we can build onto it to with technology. You know, we've got Matterport where we scan the whole house and the property, um, and. Last time, when's the last time you did inventory of, of your house? Right. It is just a, it's a leave behind link that, um, I know I haven't, um, you know, just being able, if something ever happened, you know, we have some technology, if we did services at your house, that we would be able scan, um, and, and be able to store those, um, or send you the link. As a, as a homeowner, um, so that you, you had it after we were done. Um, but really, you know, when it comes to, um, B rugged, it is, we, we really wanna attract brands that are, are needs based and that we can, um, have multi. you know, with that. And, and we've got some benefits that, that will also, as we use one for one brand, we can use it in another. We, we should see, um, some of those savings across the, the, um, the whole company.

Giuseppe Grammatico: 19:32

I like that. Yeah, because some, sometimes people will ask, you know, is it better to stick with one brand, add a complimentary brand? And there's pros and cons, there's differences. I don't even like to say pros and cons. I like to say there's differences and I. Uh, sometimes the options may not be there. Maybe an instance where the territory was sold around you, uh, and now you're looking at at, at a complimentary brand. So it's good to have those options because I always encourage everyone to kind of think out what, what do the next five or 10 years look like? Are you looking for a quicker exit or you're looking to kind of create a legacy for your family? So these are all things I have them. Maybe not necessarily deciding on day one, but just thinking about as they, you kind of, uh, expand their business. So. Uh, that's a big one. Um, in, in our last conversation, you know, one thing that really attracted me to Resto Pros and we've helped quite a few people, uh, move forward specifically with, with Resto Pros, is the support. And not only support, but you know, you're, the lines of communication are completely open. Um, you know, checking in with franchisees and things like that, which I think is a major differentiator, we. We, we speak with, you know, numerous brands and the level of support is definitely, uh, you know, on the high end knowing kind of what's going on with each franchisee. What, what their thoughts, where their, where their needs are, what maybe what, what their struggles are. Can you elaborate a little bit on that? Because, you know, you hear, and it's been, I believe in a way, overused, responsible franchising. Well, what is that? And I've seen it kind of take all these different directions, but, uh, it really boils down to, to support and communication. So can you expand a little bit on. Uh, or elaborate a little bit on, you know, what, you know how you work with your franchisees.

Shannon Roderick: 21:15

Yeah, absolutely. And, and I have to tell you, our, our level of support, um, almost came by default i, I probably, um. a little bit of a unicorn because I had zero franchise experience. Alls I knew is that there was an owner, they invested money and we needed to support'em.

Giuseppe Grammatico: 21:38

Right.

Shannon Roderick: 21:39

told me that, oh, we could suggest some things. Nobody said, Hey, you know, I came from. A business where we owned these properties. You know, we, we owned these entities and it was, you know, over a hundred locations across the us And so if, if something didn't work out, you went to that location, you supported the team that was there, you put action plans in place. And, you know, we just kind of said, Hey, we're gonna follow up with you and, and we're gonna right the ship and, and we're gonna keep moving. in franchising, you know, I, I said, well, we're just, we're just, we're gonna go support'em. We're gonna put people in, in the market, we're gonna put people in the field. We're gonna have meaningful conversations with our owners because they just didn't buy this franchise to let it sit on the shelf. text message, or phones are always, are always open. Our doors are always open, but we to become a better brand. We need to hear from our owners, right, wrong or indifferent. And, and as long as you can accept openness and not know that, you know, you're the master of all the answers, I think you're just, your brand can continue to, to grow in, in a positive manner, and then it, it leads, you know, really to some ownership on our, on our owners, right? It, you know, for example, something came up and did you let anybody know? Well, no. Why not? Well, I, I didn't know if it would really affect anybody. Well, actually, let's, let's put it out there. You know, you bring a problem to me. I'm gonna ask our franchise performance directors. A lot of people in this, this world call'em coaches, um, but they are responsible, um, be. For between, you know, 30 and 35 locations per, um, FPD in, our organization. And they are there to just focus on those locations and, and being able to help. So I think the more that we can communicate to them, Hey, put this out to your division or, or your region, see if they're having these same things, then it's easier to move that needle to correct anything that, that we need to address.

Giuseppe Grammatico: 23:58

Love it. Yeah, that's, uh, I could, could, it, it sounds so basic and so simple, but, uh, you guys do a really good job and, and even prior to that, it's just. This is, this is, um, you know, the anxiety levels are really high. You don't know what you don't know. I know when I started, uh, over 20 years, uh, close to 20 years ago in franchising, you know, there was all these things on my mind. Uh, who do I hire? Who do I get for payroll? When do I set up my legal entity? You know, what about all the other legal, legal documents? Do I need a franchise attorney? There's so many moving parts and we help. Or we can, but I like that you kind of have that checklist, you know, putting yourself, you know, putting, putting, putting yourself in their shoes basically. You know, the many of them have never owned the business before. So really giving'em kind of step by step, as you mentioned, you know, these are the things you have to do. And maybe not throwing'em all, throwing it all on their plate, but just saying maybe the, these are the first five things you need to do. And kind of break it down because it does become. Uh, overwhelming if you've never done it before. And some people may be still transitioning out of a job or, you know, um, you know, maybe they just left their job, but they, you know, they got, you know, they're, they're, they're kind of prioritizing everything. When do I order the truck? When do I start hiring employees? So that roadmap, that, that guide, I think is, uh. Um, is crucial and it definitely helps with the nerves and, you know, helping them make better decisions in that, you know, we kind of have a plan and this, the, these are the five items we have to, uh, tackle this week. So, uh, that's a big part. And those are some of the questions and, uh, that I get concerns like, where, where the heck do I even start? And I go, well, that the franchisor will, will assist you in, you know, in that process. Um, what else, you know, stands out to you from a, a support standpoint? Uh, with Resto Pro, we'll, we'll, we'll call it b rugged, um, because you have multiple brands that, that really go over and beyond. Um, supporting franchise owners. Uh, you know, they're, a lot of, a lot of, a lot of these owners are first time owners. So what else, uh, from a support standpoint are you offering to kind of a system?

Shannon Roderick: 25:57

You know, I, I do think, um, I think what's, what sets us apart and what allows us to support is, is the, the comradery in and the care. Right. I am not just here to take a royalty. You know, I, I, we have always said that we want to, we want these brands to change people's lives, right? They, they were doing what they were doing, they invested their money in something and we wanna give them the roadmap to, to be able to be successful. Um, and, know, I think. A listening, um, b being innovative. You know, I, I, I always tell people, they're like, wow, you know, the, the training for when we started as an early adopter, zero to 30 looks completely different now at 1 0 5 and, and one 10 and, and things like that.

Kelly Macht: 26:54

I'll encourage my, my candidates like Google, blind repair near me. Right. And, and it's very rare that they find a lot of options out there. So it does get us into more homes. And then lastly, technology, Kelsey touched on the idea that the window coverings is just the widget. Well, the other piece of the brand is that they are technology heavy. Anytime somebody who's jazzed about technology, jazzed about AI, this is a brand you should really consider because it's a simple widget, but the technology that is the engine behind it is really significant. And it's an area that the brand's making significant investments in. Kelsey, you probably want to expand on that a little bit more.

Kelsey Stuart: 27:30

Well, on the technology side in particular early last year, early 24. We just kind of sat around in one of our leadership meetings and we, the concept was like, do we really believe that AI is going to be the future? Is there an opportunity to get the brand ahead of the curve to start adopting and bringing on these pieces before the rest of the world? And, and can that get us in a position where we can, where we have like a defense as the world shifts and, and Businesses go up and down. Anytime you can kind of create a mote around you, like that, that's an opportunity that has to be evaluated. So we, we dove in, but in particular, we decided to build out our own AI system. So instead of renting, a lot of people are using AI right now, renting other people's business or renting their models or their information, that means their programs are getting smarter, not yours. So we partnered with Yeah. Yeah. So we partnered with a company. We had our own AI built out of our own data. We're almost complete within a, a, a full tech stack that sits on top of that. So the AI is actually learning from virtually every twitch of the business. And that becomes the base on how the franchisees operate their business. It also becomes the base on how the clients interact with. Us from a marketing standpoint or in the house doing consults and, and by continually growing our data set I firmly believe it's going to put us in a position where we can react and, and improve upon data and are really kind of comes down to marketing and efficiency in a way that even once everyone decides that this is the right path, we'll already have a headstart. And so they, even when they start moving as fast as we do. They won't be able to catch up because we're then running at the same speed. We've just been doing it longer.

Giuseppe Grammatico: 29:17

I like that. We the AI conversations have definitely hit home with people. We've noticed a lot more, a lot more views on those conversations or those kind of segments or snippets. And to your, to your point owning it I think people don't realize there's nothing free in this world. And when you're using free eye, I've tested some, some platforms as well. Friends of friends. I'm basically almost like the guinea pig in a way I'm putting my information and they're gathering it. So although I'm not paying, I'm technically paying with my time and not building something for myself. So I do have somewhat of a free service, but I'm not building anything. And I think that is, that's just, is AI taking over? I don't think it's taking over. I think we all have to step up and use it somewhat in our businesses. I know we've, we've cut it, we've cut our marketing spend down by using AI with a couple of agencies that we've used. I think it's a, it's a must to use, but I don't think AI is going to replace everything. So I like that. Can you, can you talk a little bit? I mean, I know you said it's, it's being launched. Can you talk specifically on any, on any aspects of it or is that

Kelsey Stuart: 30:17

yeah, yeah, I, nothing I, in the long run, a lot of it is the stuff. that humans do, we're just doing it with either automation or with more sensitivity and data is really kind of where AI gets its superpower is when it's finally got enough data that it can create what's called predictive analytics. Most of the data in today's world is looking backwards. It's what happened, how that happened. Now, how do I analyze? and guess on how to make it better. AI gets really valuable when it almost gets to a level where it can almost predict at a high degree of certainty what's going to happen. So a couple pieces that'll be actionable for the franchise owners. Our call center will be ran by AI voice agents. We will have people in the background, so if the AI gets stumped or doesn't know the answer, I've got people sitting there ready to pick up the phone live, but it's going to allow us to answer the phone 24/7 365 snow days. We're still answering the phone. So that's the phone, right? That's right. Right now I've got seven people who work in a call center. They're taking phone phone calls. I mean, this is like in my office 30 ft behind me. But what happens when there's eight phone calls? Somebody's got to wait. And this thing it's programmed to take up to 250 calls at once. It can do some amazing, yeah, to be able to do smart scheduling. So like we're very route based or geographically based drive. Time is a waste for us. And so being able to present options to customers in like a basically a very smart routing suggestion, like we only give customers options that are geographically appropriate for us with the right people with the right skill sets. My favorite example, and I've already seen this in action, is we use iPads. We're not using, I mean, it can't build AI and still use a notepad. We're on iPads and as the customer is, or as we're having a conversation about how they want the room dark at 7. 30 on a summer night because the kid's got to go to bed, but they don't want strings and they want to be able to push a button to make it go up and down, the AI system is listening to these descriptions and beginning to populate the products and the manufacturers and the follow up questions. That match that active conversation. So in real time, the AI is presenting the products and the real value that the homeowner is going to think it's cool, but for a new franchise owner or a new employee who hasn't yet learned all the variables and hasn't really mastered the, the, the trade yet, we can give them the ability to feel and look like an expert because they don't have to have all that knowledge in their mind. They like, we're going to present it to them so that they can just. Work with the information that's already in front of them.

Giuseppe Grammatico: 33:09

That's that's impressive. This is, this is this is it guys. This is what the future is looking like. And AI doesn't need, as you mentioned, snow days, not feeling well. We lost power. My AI it's, I'm also setting up something on my end. If we lose power, it doesn't matter. It's not running from my home.

Kelsey Stuart: 33:24

Like, what do they get? What, what support is there kind of, so to go back on that, because I think that's a really important topic. We kind of build all the systems with the overarching concept. There's going to be a lot to do, but you're not gonna have to figure out what to do. And, and by that, again, we, we do really enjoy that first time business owner. And so we know that, in that environment, there's a lot of questions on like, how do I get this set up? How do I do my marketing? Who do I talk to? What do I say? And for one reason or another, we've just really gravitated toward that coaching role of walking people through that stage. The business setup, the infrastructure of it, the business checking account, how do I, all these little elements of setting up a business, we walk candidates through that. The marketing can be broken up into two categories. You have your digital presence. And then you have like your community interaction, the digital side. We pretty well automate that for the owners. In fact, we've got AI running SEO and PPC for owners. Pretty effective there on the ground level. We'll tell you exactly where to go, who to talk to, how to get engaged, how to become known in the room. You're going to have to go do it, but you're not gonna have to figure out what to do. And that's really kind of the theme throughout the first, probably first year of the business is most of these things are going to be brand new to you and you're going to have someone who's excited and willing and wanting to walk with you during that kind of saying, Hey, go over here now, go over here and now do this thing and now do that thing you have to execute on it, but we will walk with you and kind of point you in the way so that you can at least head forward with some confidence. knowing where you're supposed to go and what it's supposed to look like when you get there.

Giuseppe Grammatico: 35:12

I like that. And that's, and that's what people are looking for. I think that, I had someone just say, I'm overwhelmed. I'm overwhelmed and They were only on after the second call and, and I said, well, the franchise or is, and you have to ask these questions, what is included, what, what they will help you with kind of step by step. These are the questions to be asking. We haven't made a decision on the brand yet, but you want to find out the support. And as we mentioned, first time business owner, it is extremely overwhelming because you don't know what you don't know. You don't even know the questions to ask or the things to do. What are these legal entities doing? How do I set them up? Who does that? Do I do them online and the attorney so I get it but there you go. Yeah, that'll be, that'll be my last interview. Yeah, it's it's great. It's great. I mean, just for someone to say that, that really kind of, that really bothered me. I mean, I'm sure he misunderstood, but. It's kind of bothersome if that actually was said or maybe it was taken out of context, who knows, but

Kelly Macht: 36:07

having said all that, I think there's one point that I want to bring up on Blumen, and there's, in the, in the FDD, which I just mentioned, which is the Franchise Disclosure Document, the very large legal reading that every brand has, there's a section in that called the Item 19, and that's financial performance representations on that specific brand. And when you, they're not all created equal, right? The amount of information a franchise system wants to put in there can be varying widely. And I think I'm really blessed to work on a brand that Kelsey and his family have decided to put a tremendous amount of information. There's 13 tables of information. There's seven different P& Ls. We show you consolidated P& Ls for a single van owner versus a multi van owner. So you can say, Hey, why would I not want to scale my business down the road? Right? We even show you a consolidated P& L for our owners. For whom in that calendar year, that was their first full year of operation with us. So you can see what brand new owners are doing with us.

Giuseppe Grammatico: 37:02

not executing for you. You need to follow the blueprint, the process. And I think some people don't, they, they just think they invest and the business kind of runs on itself. I haven't found that business yet, but I'll keep looking, but to my, to my knowledge, it doesn't exist.

Kelly Macht: 37:18

I think Kelsey brings up a good point when you're talking about some of our franchisees and some of our success stories. One of the important things that you should be doing when you're vetting any franchise opportunity is having an opportunity, not only to. Speak to the leadership team. You've got to get to know people like Kelsey and his brothers. And, we put them up every week on calls that our candidates can join in on, but we do the same thing with our franchisees. Then Blumen is very fortunate to have a wide variety of franchisees on our validation calls is what we call them. Giuseppe. And so each week we hold one hour zoom calls, open format, Q and a, for them to just talk to a franchisee. Like, what are your pain points? What are the things that you've had challenges? Would you do this all over again? Where are you having success? What are your growth plans looking like? Are you meeting those? If not, how is anybody helping you with that? Right? Bring those questions. But we put brand new owners. We've got two owners that just opened with us in 2024. So people can talk about like, what does it look like the last few months for you? We've got legacy owners, some of our most successful owners that are in the system. The gentleman that Kelsey just mentioned validates with us and can talk about, scaling his business. So we've got people that have come from all walks of life and they've got all different stories. They've got different territory sizes, some are in big major metros, some are in smaller. So there's really, you can see yourself in a little bit of, of different franchisees, but we highly encourage, like, you've got to talk to franchisees to understand. From their perspective, is this something that you really want to dive into and do? And I, I often say, if you're not on those validation calls, or at least making some calls of your own, like, you don't really look at you as a serious candidate, because without validation, you can't really determine if the vision you have in your head or the stories that we've shared with you really make sense for you, and validate that this is the opportunity that you want to move forward with. It also gives us a chance to get to know the franchise candidates on a very different level as well. They get time to spend with the leadership team and they, along with myself, can kind of pre vet them before we have them out to Dallas to meet the team eventually, right?

Giuseppe Grammatico: 39:26

You would think that's common sense. I know for me it was complete common sense to speak with other franchisees, but it's not. You need to, you need to remind, I, I've been shocked that people come with that so hard. It's what I wouldn't do. Yeah, yeah,

Kelly Macht: 39:42

yeah. I tell my candidates quite frankly, look, if you're a couple of weeks in, you're not on any validation or leadership calls, I'm going to assume you're not interested in this brand. Right. And I get it. Life happens. There's all kinds of things that will happen that prevent people from being on calls. But you know, the fact that you're working or the fact that you've got kids in the evening or the fact that like none of those are enough, you're going to, you're looking at being a business owner. You, you're going to have to juggle responsibilities. You're going to be investing your time. You can't do that now.

Giuseppe Grammatico: 40:10

This is the easy part. Running a business is going to be a lot. If you can't, if you can't handle validation and research of a brand, how are you going to manage an entire business? So yeah, it's the three stages. I always say you talk with the franchise or you learn about the brand. You talk to the franchisees validation. And then stage three is you talk to the captain steering the ship. You talk to the franchise or directly virtually in person at a discovery meet the team day. Or some, some brands aren't even doing that. They're doing that within their due diligence calls and just asking where, where is the ship going? What are we adding revenue streams? What others, talking about AI, this is something new that we're going to be adding on. There's no, there's an added cost. There isn't a cost. This is included here or we're changing something else up, but you have to have that complete picture. In my opinion, to be comfortable with it and to make the best informed decision. All stages equally important. Yeah,

Kelly Macht: 41:06

at the end of the day, you as the consultant and myself as the franchise development person are not going to be part of the picture. The relationship lies with the franchise system, with the franchisor. If you haven't invested in them, if that's not where you're making your decision based on. that interaction, that potential relationship, that's problematic.

Giuseppe Grammatico: 41:26

Absolutely.

Kelly Macht: 41:27

You and I are going to be gone.

Giuseppe Grammatico: 41:29

Yes. Yeah. Right.

41:31

Thanks for tuning in if you want to learn how to make the transition from corporate to owning your franchise. Join Giuseppe on the next episode. You can also follow on all social media platforms and achieve financial and time freedom today.