The Franchise Edge | Matthew Haller

In this episode, we sit down with Matthew Haller, President and CEO of the International Franchise Association (IFA), to discuss the current landscape and the bright future of the franchising industry. From the halls of Washington D.C. to local communities, we explore how the IFA is protecting the franchise model and empowering entrepreneurs to grow.

Key Takeaways:

• The Power of the Franchise Model: Insights into why franchising remains a vital engine for the global economy and local business ownership.
• Advocacy in Action: How the IFA works to protect the interests of franchisors and franchisees against regulatory challenges.
• The "Franchise Edge": Understanding the unique advantages of a proven system and a supportive network.
• Advice for Future Owners: Matthew shares what it takes to succeed in today’s competitive market.

Transcript

0:04

Let's just jump in then. Matt Hollar, president of IFA. Thanks so much for coming to Scorpion in Dallas. Great to be here, Jamie. This is a first time in the studio, by the way. It's beautiful. Thank you. Thank you. I can't see like 100 cameras here on the spectrum. And a massive audience. Huge audience, huge audience. Yeah, well, you know, we wanted to make room for a studio audience, you know, so we could do the clapping. We're talking about Seinfeld a second ago. Yeah, it's back to the 90s here. Yeah, right. Laugh tracks and all. That's right, that's right. We'll get to live tracks later. We're going to talk about some music, but, uh, so you've been in in franchising for a long time. What drew you into franchising in IFA? Yeah. So I've been at IFA 15 years in four different roles at the organization. I think like a lot of people, I was drawn to franchising out of, you know, need for to do something different. Yeah. And a desire to do something different. I was working in the pharmaceutical industry at another trade organization, and frankly, wasn't that energized about some of the work that I was doing there and, you know, started casting about for other opportunities and came upon, if I had known of IFA but didn't know a whole lot actually, about franchising, but knew about their role in shaping policy and being a voice on small business issues, and there was a new CEO at the organization at the time who was looking to elevate II of his voice even further and had created a new role, which was a director of communication. So that's how I came to the organization. That was 15 years ago. I've worked in state government relations and federal government relations. And then during Covid, the board asked me if I was interested in taking on this role to to lead the organization. And it was a really interesting time and a great challenge. And we were all locked in our homes and, you know, dealing with all sorts of issues coming still in Covid, really 2021. Yeah, but it's been a great run and have a great team and great members and lots of important issues. So what are the primary things you've tried to tackle since coming into this role from Covid? Because that was the first time you and I interacted. Yeah, we were talking. There was a webinar that we had, I think participated in around Pep loans or something like that. And um, but you know, how what policy wise, like what are the things you've been trying to drive since you've taken over? Yeah. On the policy front, I would say making sure that IFA is really representing franchising, not just the interests of franchisors. And, you know, 25 years ago, the IFA board opened up membership and then, you know, board service and ultimately, uh, leadership of the organization strategy to franchisees. But I think in the last five years, we've really, you know, made it created some intentionality around being more franchising, not just franchise oriented. Yeah, yeah. And Covid was a great, you know, excuse to be able to really deliver. Yeah. For franchisees around PGP, and some of the ancillary issues that came up around tax treatment of PGP loans. So that's been a big priority of mine. We've got some recent things that we've done, which we can talk about in terms of investments that the organization has made with multi-unit franchisees. And, you know, that's been really something I'm proud of and something that I think we'll see a lot more of as we as we move forward. Just maybe taking a bit of a step back, though. I mean, you mentioned webinars. So, you know, we did webinars, but we didn't really have infrastructure to do education online. Right? Right before Covid. Yeah. And, you know, that was something we had to make a lot of investment in infrastructure and building education as a key component of our strategy at a time where you literally couldn't be with people. Right. So our business, you know, we're a nonprofit, but we're still a business, right? And today, 50 more than 50% of IAF's revenue comes from various events and events are really about education and networking, but we had to find a way to deliver that experience virtually and frankly, had no infrastructure to do it. So we had to make some serious investments in technology, in people to manifest that into reality and bringing the franchise community together during Covid. And now all of the content and education that we do, you know, online through the IFA Learning Academy, through the CFE program, really extending the life of what we do when we're in person, at our convention or other events to a 365 day a year, you know, engagement, education, convening is a big part of what we do as an organization. Yeah, I remember I think one of the things the key difference is, since you've taken over in this role has been what you just described. We've worked with IFA for a really long time, but it was always kind of just in the context of the convention. Yeah. I mean, we don't want IFA to be a four day thing that people do. We want people to maybe not think about it 365 days a year, but, you know, have something for meeting our members where they are, whatever they need at any particular time. And so that has really been a part of our our strategy and then creating, convening and community around, you know, whether it's marketing or development or technology, you know, individuals with those key roles in the various elements of every franchise or organization. And then supplier partners like Scorpion and others who can provide thought leadership and training and best practices in that space as well. Yeah, yeah. So 2025 has been a great year for franchising. Um, out looks really strong for next year. What do you think is driving that momentum? Yeah I think people are looking for alternative forms of wealth creation right in, you know, I mean just just today. Right. Or this week there's been, you know, so much downsizing in corporate America. Right. So that's kind of one vertical that I think is driving, you know, at least leads into into franchise orders. Now we have to deal with that at a time where for a lot of brands, not all, but a lot of brands are seeing consumers pull back, right, in different ways. So I think franchising, you know, it's incredibly resilient, right? People ask me, how's franchising doing? It's like, well, there's 300 industries. So you know, at a time where, you know, quick service restaurants, maybe, you know, down, um, but, you know, home services could be very up. So I think, you know, it's hard to paint franchising with one, you know, big brush. But I think generally speaking, you know, franchising is an incredibly resilient business model. Those franchise owners that have their franchisees interests, you know, first and foremost and are, you know, in touch with them and, you know, on the front lines with them are figuring out ways to take costs, you know, out of the system and figure out how to focus on unit level economics. And that's something that for the strongest brands, we're seeing the performance still. And that's your greatest validator for system growth, is existing franchisees that want to buy more, or existing franchisees that are telling new leads. You know, hey, this is a good brand. You know, even in a relatively lumpy economy that we're growing. And that's a really good thing. Yeah. I mean, think about wealth creation. I think one of the paths in franchise and wealth creation is that multi-unit model. So you mentioned earlier, you know, how you guys have tried to not just support the franchise or the brand, but how do we support the franchisees and specifically multi-unit franchisees? Are there specific programs that you're really proud about that you've kind of targeted the multi-unit or the people that want to become multi-unit? Can you talk about some of those things? Well, it's definitely the the one of the biggest trends in franchising. Franchise owners looking for members or multi-unit owners. Right. Multi-Unit. Multi-brand. So we're not going to be able to necessarily build that audience ourselves. But, you know, we've always been a part of the multi-unit franchising conference, which was put on by Franchise Update Media. So we were in a joint venture relationship with Franchise Update Media over the last three years, and ultimately that led to IFA acquiring that organization, still operate as a as a standalone brand, and the Multi-Unit Franchising Conference is really an event built by multi-unit franchisees for multi-unit franchisees. There's a ton of mentorship that goes on at that conference for somebody that may own, you know, three restaurants and wants to, you know, become a ten or a 20 and maybe diversify their portfolio and learn from some of those, you know, who own hundreds or even thousands of, of, of franchises. So if was ability to, you know, get in that business more directly with those relationships, it's also who our franchise or members are increasingly looking for. Sure. So that's a huge opportunity on advocacy. I mean, it's just there's scale. Right. So these owners have, I think, more time and more resources to invest in, you know, communication with lawmakers and, you know, traveling to to do things that matter to support Issa's advocacy agenda. Uh, in terms of, you know, programs. It's opening that door for franchise owners who want those relationships. So that manifests itself not just, you know, at that conference, but through the website and through storytelling and really getting the message out about, hey, how did I do it? How did I build this brand or this, this franchise enterprise from one location to, you know, dozens or hundreds or even thousands and, you know, we're a platform. You know, we have a new brand and a new website franchise where, you know, we want to be the single source of information for anybody looking for information and education about franchising. And so being that storytelling platform for people that have, you know, done it themselves and others who can see themselves in other stories like that is is inspirational but also educational. Yeah. Speaking of multi-unit and franchise wars for that matter, there's there's been a rush of private equity into the franchise community in the last several years, particularly since Covid. Um, we've seen it. You know, we have a vantage point at Scorpion because we work across, um. Franchise. And we also do a lot in home services, residential services, and even in that market on the independents, there's been a ton of private equity investment. So how is that kind of shaping how you, as the president of FIFA like, view the franchise community? How is that shaping how you think about policy? How's it shaping how you think about, you know, investing time and getting to know some of these funds? You think about those things like how do you approach that situation? Yeah, it's a huge trend on both the franchise or franchisee and even the supplier side. So it's it's about embracing it and making sure that within private equity there's a lot of players that of course almost legacy been in franchising for decades. And then there's a lot of new players. And new players don't always understand the importance of the franchise or franchisee relationship. And I view it as our job to educate them as the trade that represents franchising. And so that that's an opportunity for us. And, you know, we need to be kind of in that that audience. And we have, you know, dozens of PE firms and family offices and venture, you know, the whole kind of stack. Yeah. Who are involved in the association. We'd certainly welcome more and building you know they want obviously relationships with you know founders and those, you know who are seeking, you know, growth capital or seeking plans for succession planning. That is something that we need to embrace from a content standpoint, but also create forums for networking and education and some, you know, structured dealmaking too. So that's it's a big priority of ours. Uh, what it does do, which is a challenge, is, you know, franchising is not always right owned, you know, in the community, right? When you have outside capital. You know, it's a different business that we're representing now. It's still, you know, the exception, not the norm, but the trend continues to go in that direction. I think partly that's a function of, you know, the economy regulations. Um, you know, people that are, you know, Gen Z that may be less interested in, you know, buying their parents, you know, business and going and doing something different. Uh, but, you know, people need an exit strategy and that capital is available. And so it makes it a little different for us to tell the story of franchising, as you know, a local business operating in your community that's still, you know, is a lot of the story, but it's not all of the story. And just being mindful of that. Yeah. I mean, I think on the plus side, just knowing that there's been so much private equity, you know, influx of money into the franchising obviously shows the resilience of the business model, how important these brands are. You know, otherwise, you know, private equity would figure out other places to deploy that capital. No doubt. I mean, they clearly see it as, you know, a growth strategy in place to put their capital and get a return on the investment. That's still at the end of the day. You know what? that business model is? I just think they need to understand, you know, the relationship aspect that still has to exist between the franchise or and the franchisee. And if it's institutional money that is, you know, without a relationship. Yeah. Right. Then it's you know, that's that's not I think what most people want within the franchise or franchisee relationship and some brands, you know, are still pretty allergic to, you know, having outside capital. They want an owner operator in the community operating, you know, their, their their franchise. And that's, you know, certain organizations prerogative. Um, and they may change their perspective, you know, over time, as you know, fewer and fewer of those people are available. Yeah. You mentioned earlier, um, you know, 2025, obviously there's been some consumer pullback in spending. Some certain industries are kind of thriving certain or maybe maybe seeing a little bit of a downturn or flattening. What specific industries in franchise are you seeing a lot of growth from and do you think are going to be big growth lovers in 2026? Yeah. Home services is doing very well. You know, pet care also doing quite well. And restaurants are still performing above the industry average. So you know despite some of the consumer pullback I think what we see is more of a trading down on the consumer side. But timing the market on the consumer. If you're thinking about a franchise investment, it's probably not the right way to look at, you know, something. Yeah. Because, you know, this economy is changing so drastically with things that, you know, whether it's the administration doing things, whether it's just outside factors, you know, outside anybody's control. I think at the end of the day, looking at a franchise investment through the lens of unit level economics for the franchisee and, you know, steady systemwide, you know, franchise growth, I think is is the best way to approach things. Yeah. Yeah. What about, um, you know, going back to to franchise orders and how they're, you know, driving revenue at the brand level. I think one of the big focus areas that we've seen, and we've talked a lot of our franchise customers about this year is not just, you know, how do we more effectively sell new franchises, but how do we actually make sure that the franchises that we've opened up are actually getting to, you know, revenue and profitability as quickly as possible? What are you hearing about that? Because it seems like there's a the term has been responsible for franchising. I hear it all the time. Right. But I do see like we just got back from Unconference or Springboard not long ago. A lot of conversation about the importance of that. So what's your view on that. And are you really seeing a difference in how franchises are approaching franchise development and opening new locations through making sure that they're getting enough revenue and profitability as quickly as possible? Yeah. What I would say about responsible franchising first is, you know, we sort of initiated this conversation within the franchise community with some intentionality. Now, some, I think, have hijacked that term and it's become a little bit of marketing speak, But I think at the end of the day, we wanted to get the industry focused again on the things that matter most at a time where two years ago, when we started this conversation, you know, we were under a great deal of scrutiny by the FTC and some states. So we had some serious, you know, regulatory issues and felt like it was important to, you know, initiate that conversation and help franchise owners and prospective franchisees, you know, really focus on what matters most, which at the end of the day is if franchise owners are making money solely through sales. Like, that's a red flag, right? Franchise owners need to be generating revenue off of royalties. Right. And that's happening when franchisees are profitable within the four corners of, you know, their retail location or their territory. Right. And so getting back to that, particularly at a time where we have this consumer pullback, I think if you can demonstrate that. And again back to my earlier comment about franchisee validation of your brand through adding additional units themselves or validating you to a prospect that wants to come in. I mean, that's that's what a lot of the conversation I think has moved towards. Yeah. And I hear, you know, every day from brands who are talking about, you know, we're not focused right now on development. We're focused on our existing franchisees and making sure we're doing the right things to help make sure that they're performing in this environment. Yeah, because this is probably more the norm going forward than, you know, some of the boomtown of pre-COVID era. Yeah. There's not free money out there anymore. That's right. You know, we have had, you know, recent interest rate cuts. But, you know, there's still, you know, not at historical highs, but, you know, higher than they were for the last, you know, ten, 15 years. And I think that's going to continue. I don't think the consumer is changing in the next several years. So I think focusing on the core so you can get back to sustainable development. I think is, is is what we're seeing and hearing from from the smart brands. Yeah. You mentioned. I agree I totally agree. The purpose of of franchising is to generate the revenue through royalties. We're super passionate about working with franchisees to do just that. Right. We have a bunch of franchise development clients that rely on Scorpion to help them kind of source leads and produce leads for to buy new franchises. But our bread and butter and our business is working with small businesses and franchisees. I know you're not the marketing guy, and we've had these conversations, but I do want to get your point of view on this. Like, one thing that's always fascinating to me about franchising is that the reason that a someone buys a franchise or a core reason is because they believe in the brand and the values of the brand and the product or the service, but they also buy it because they've got this playbook, this operating playbook. Why is there not a marketing playbook for franchisees when they buy a brand? Like, that's what drives me nuts. Like, you give them this operating playbook? Hey, this is the process of how you run the business. This is the you know, this is this is our you know, if your home service business, this is what we do when we show up to the home, you know, we put our booties on if we're a, you know, plumber, etc.. But there's not a hey, here's your playbook for marketing. Why do you. Why do you think that is? It's a good question. I've never thought about it before, but I think it's something that, you know, maybe we should work on. Education within the industry of this is something that, frankly, it's not like franchisees in most cases are coming into your system with some background in marketing or running a small business. So a lot of times they need not just a marketing playbook, but they need a basic like PNL playbook. Yeah, but marketing is part of that. Right. And and in a challenging economy, like pulling back on marketing is the last thing you should do. So, like optimizing it is probably the thing that everybody needs to focus more on. So I think it's an opportunity. Um, maybe it's something that the IFA and Scorpion should work on. Standardized. Definitely work on. We're going to work on this. I mean, I think again, just because, um, you know, you've got again, not not to wear this topic out, but I'm going to hear for a second. They walk in and they're, you know, they're given this great operating playbook that's been a lot of thought, a lot of process put into it. But then they it's like what a marketing. It's like, well here's 17 vendors to go choose from. You know good luck. And I know I'm exaggerating it a little. Bit when there's no standardization across the system. That's right. And that impacts the customer experience. That's right. That's right. Yeah. Well philosophically we're certainly on the same page about that. And that is something that we really, really want to commit to, to helping figure out, you know, and again, that's not a plug on Scorpion either. It's just look you're doing your franchisees a service if you can give them, hey, you should be doing X, Y and Z at these approximate budget levels. And you should commit to this for 12 months. And you know, you should measure it in these ways, etc.. So I think it goes back to a lot of franchisors don't have not maybe not a lot, but a significant number of franchisors don't have full line of sight into their franchisees, pal, right? So they don't actually know what they're spending their money on between labor and rent and marketing. And, you know, the other things that are that are in there. So, you know, let's let's start there, right. As a best practice, make sure that you're looking at that on a monthly, at least quarterly basis, and then sitting down and having the conversation of, hey, you know, you're you're not performing at the level of, you know, even a median within our system. And let's, you know, let's workshop why and maybe marketing spend or where you're who you're spending with. Yeah. Is is part of the problem. Yeah. Yeah. Okay. So back out of marketing for a second. I know a big passion of yours has been, um, legislation around joint employer. I wish it didn't have to be. Yeah, I get it, I get it. But clearly, you know, I'll keep politics aside. But clearly there are reasons that, you know, that was brought in to the limelight a couple of years ago, but you made a lot of progress on that this year. Talk a little bit about that and how much time has gone into it. And you know, what's your outlook on the future based on, on on some of the kind of recent rulings? Yeah. So let's back up ten years. Yeah. That's when the joint employer conversation had to start in, in franchising because under the Obama administration, the Labor Department and the National Labor Relations Board changed the definition of what it means to be a joint employer. And it became a definition that was completely unwieldy and burdensome for a franchise or franchisee relationship. So we went from a if I hire Jamie, I'm clearly your employer. We have a direct employment relationship, but the franchisor has no relationship. Yeah. The rules changed to allow the franchise, or because there's an indirect or potential control aspect to how franchisors enforce their system standards and trainings at franchisee locations, that the franchisor can now be liable. And what that meant was a lot of franchisors had to back off on providing support and training and other things that franchisees were paying for. And frankly, for the last ten years have had to continue to pay for because I don't know any franchise owners that backed off on their royalty rates or, you know, other fees. But the franchisor, because of the liability risk, had to back off. So this hasn't been good for franchisors. There's been a, you know, billions of dollars in litigation against both stores, and it hasn't been good for franchisees. And it's not good for employees because employees, frankly, want to work for a small business, not for a faraway corporation. So if has mounted a number of different efforts to change this through legislation, because we've had for joint employer rules in that period of time since this began in 2015. But they've all been done through regulation, and that's basically a stroke of a pen. What we need is codification through Congress passing a law. Um, not impossible to overturn, but extremely difficult to overturn. So that's what the American Franchise Act, which was introduced in September, is all about. And we have a significant amount of bipartisan support on this bill in the House. Government is currently shut down. We expect a Senate bill in a similar bipartisan fashion to be introduced when they return. And that's our number one priority in Congress this year. Or this Congress, which will go through next year, is to pass the American Franchise Act. And what that's going to do is, I think, unleash the ability for franchise owners to go back, frankly, to the way it was before and provide tons of operational support and training and things that franchisees need, especially first time franchisees, you know, to get them started and supported on an ongoing basis. Not to get in the weeds, but just can you give me a sense of like, what's the time and resource commitment that's had to go into getting this bill to where it is? Because, I mean, I know we've talked about it for years, but can you just give me a sense of like, I've, you know, I've personally spent 50% of my time on this and my team spent 50% of their time on it, like, just just curious, like, what's that like? Yeah. So we have we have 70 employees at the IFA. We have 12 people that work full time in government relations. So where I was, you know, before, at this stage, I'm not spending a ton of day to day time lobbying for it. What I'm doing is a lot of this like building awareness in the industry. Yeah, fundraising for our Coalition to Save Local Business, which is something that, you know, we've raised a significant amount of money to do advertising and public affairs work and have lobbyists that have relationships with lawmakers to help advance this bill. From a government relations team perspective. I mean, it's 100% of their time, right? It's, you know, every day they're up meeting with lawmakers and staff who are still working, even in spite of the shutdown, getting the industry mobilized behind this. So, you know, we have 1200 brands. We have 800,000 franchise owners, 700 suppliers. You know, everyone's a potential advocate in support of this. And, you know, we say your voice has power. I mean, the most important voices, the most trusted voices in America are small businesses, not lobbyists and not big corporations. So at the end of the day, it's about connecting our relationships with policymakers in D.C., with our members in communities so that they can tell a member of Congress, hey, I'm a franchisee or I'm a supplier or I'm a brand headquartered in your state or district. And this is important to me. And here's the material impact it's had on our business and our relationship over the last decade. And this is a bipartisan way to put an end to this. See sawing. So it's just that constant, you know, grinding and education and advocacy at a time where, you know, there's a thousand other trade associations and all these corporations also lobbying Congress for their attention on their parochial issue that they think is the most important thing. So, you know, being constantly present to the point of being really annoying, but annoying enough where they say yes and then having the resources because this is not without opposition. Yeah, right. There will be opposition to this from elements of organized labor who, you know, would much rather organize a franchise organization as one entity than, you know, individual franchise locations as they are. That's what this is all about at the end of the day. Um, but it's not good, as I said earlier, for brands, for franchisees or for the workforce. Yeah. What are if you had to I know a lot of priorities, but if you had to say my top 3 or 4 priorities for 2026 for the IFA, what are those? Yeah, I would say first and foremost, it's about education, about what's really good, franchising. Um, number one priority for us is, you know, continue to make, you know, we're only as good as our weakest link in franchising. And regulators and policymakers will regulate to the lowest common denominator. And I think that also means, you know, kind of revitalizing some of the ways that we deliver education through a lot of our events and continuing to evolve how we deliver education virtually and with other types of convenience that we do. So that's probably first and foremost. Second is, you know, affecting policy change for the business model that will help with creating really good, healthy franchising. And then last is just being, you know, an unabashed evangelist for franchise stories and storytelling. And that's what our franchise means. Local campaign is all about getting the message out of franchisees in all sorts of industries, of all sorts of sizes and, you know, demographics and highlighting our brands and storytelling. So whether it's, you know, Clement Troutman, who's a tropical smoothie franchisee, who is in our first ad, or, you know, Angie Castroneves, who is a Real Housewife of Salt Lake City and has a brand called Lunatic Fringe. You know, those are the types of stories that I think we want to continue to tell. And our foundation has the resources to get that message out. So we're always looking for hand raisers and support in getting that message out. What are some of the ways that the franchise community, suppliers, franchisees, brands can support at the local level or even at the national level? Yeah, I mean, there's a whole range of opportunities. I think, you know, being a hand raiser and just literally reaching out to our team and saying, hey, I want to help with either advocacy or storytelling or being an educator or a speaker on a particular topic. I think those are things that we're always reaching out. We always want our members reaching out to us directly about. So there's there's so much that I see, like one of the things in franchising that I think is so unique and special that you don't get in other industries as much is the willingness to share amongst peers, even competitors. And I think that's something that, you know, we try to embrace at IFA. So, you know, we'll again meet our members where they are with what they're willing, you know, to give and, you know, be a platform for education and exposure, storytelling and advocacy. Okay. Um, any of those places that you feel like you have greater needs than others right now? Any of those like those those areas? Like, be it advocacy or storytelling or. Look, we always need more people that are talking to lawmakers. Right. So, you know, today the number one priority, I would say is, uh, you know, getting, uh, getting franchisees in the state of Maine, you know, to engage in getting messages to senators in Maine about, you know, standing up and supporting the American Franchise Act. Yeah. So that would be like a very specific thing. Okay. Uh, today, um, you know, a more general ask is, you know, be involved. Right. Like, you just you get out of if a what you put into it. Right. And you know, it does take time. It does take, you know, some amount of resources. But, you know, most individuals and most companies who say, uh, you know, we actually took the time to be intentional about our involvement in the association of whatever. You know, your need is like, there's going to be something there for you, whether it's, you know, getting your team more educated about, you know, being a good franchise or investing in professional development through education, you know, exposing your brand through all the different tools that we have on our website and with our expos and other events. So there's there's a ton there. Um, you know, we're available to have conversations with franchise owners or suppliers or franchisees about, hey, here are business challenges. How can I help us solve them? So we want to, you know, we provide that level of concierge service, as we like to call it. Yeah. And you said something I want to reinforce because we felt this. You get out of IFA what you put into it. You know we've we are putting into it at first kind of started, you know, way back in the day like at the, at the convention and doing some pretty audacious things. You did a marketing perspective, right? Like, which, you know, we gave away cars, which I'm sure anybody watching this remembers us doing that. But big investment. But man, like we reaped so many benefits from that investment right. And now today you know we've got the preferred vendor relationship with you guys. Um, our team works super closely with you guys throughout the year, not just at the big conference events, but webinars, ways that we can get involved in different advocacy opportunities, educational opportunities. And I think the the payback that we felt, both in terms of the business that we've been able to kind of produce through that, but also just through the relationships and feeling like we're a part of the franchise community and a part of franchise growth in the country has just been awesome. So I just want to make sure that I stamped that statement that you made. You really get out. You get out what you put into the IFA. So yeah. Um, yeah, that was just a little plug. Well stated. Yeah. Thank you, thank you. Um, I didn't get paid for that either, people. So, um, just a couple other things I would be remiss if we didn't talk about AI. Um, and, you know, how are you? How are you hearing franchise orders of the community? Um, policy, perhaps. Like when you think about AI, how is that going to impact franchising in the next 3 to 5 years from your point of view? Yeah, I mean, all over the map, right? In every level like it is. I mean, even for an association, right? So, you know, in terms of content creation, you know, that's that's a huge opportunity. Um, in terms of due diligence, I think that's, you know, a real opportunity, I think just within your organization, uh, it's it's a huge opportunity. But I think, you know, like anything else, you've got to you've got to try some things, uh, and figure out, you know, what's the what's the real business case to be made behind, you know, investing, um, and finding the right partners, frankly. Yeah. Uh, in the technology. And if, you know, obviously in the marketing space or elsewhere, uh, that really understand what's your business goal? And how can I help us get there faster? Are you personally hearing or have you heard of anything either AI leveraged in an operational function or in a marketing function that you're like, wow, that's really cool. Or wow, that's interesting to try. Is there anything that, like, stands out there? You know, I don't know that it's actually been tried and I don't even know that I recommend it. But there was a pretty interesting discussion at springboard about AI. Dan Monahan, you know, went through a number of different kind of use cases for how you could consider using AI at different levels in a franchise organization. So I would encourage people to check out some of Dan's presentation. Yeah. For for a little bit of insight there. So I want to make sure I give him. Yeah. Dan's always thinking of things. Yeah things like that. He is great about that. But the one that he rolled out, which I think is a little, you know, provocative and I'm not sure that I would recommend it, but, you know, I'll mention it here just because I think it might lead people, you know, to think about, like, should I really be doing that? Yeah. Right. Is, you know, giving AI like a seat at your table for, you know, franchise advocacy councils, right? Like. Hmm. Interesting. Yeah. You know, bouncing a question in the room, not just off of other franchisees, but asking, you know. A model, the model trained on your business. Yeah, that's a really smart and thought about that before. We're, you know, one of the the new ways that we've been leveraging AI at Scorpion is, you know, we've had a hard time getting franchisees to understand that just because you spend money in marketing doesn't mean that you're going to immediately produce revenue. Like there's this there's this block in between where you should take the investment from marketing generates a lead and actually convince them that, yeah, you're at the right place, which oftentimes means like answering the phone. Right? Well, if you look at some of the data from our annual franchise. Yeah, I was going to report. That at the Leadership Development Conference. I mean, still, like 50% of franchise owners are literally not returning leads that come in via phone. And so, I mean, what are we doing here? Yeah, we so we started we built a product again. We're running marketing and advertising campaigns for a lot of our clients. We built a product that we offered to our clients to just take after hours phone calls. Right. So instead of sending them to a call center or to voicemail, again, most of our clients are a lot of our clients are home services businesses, right. So someone has a plumbing problem at 8 p.m. when your business is closed, they don't want to leave a voicemail and wait for you to call back the next day. And usually they go maybe to a call center that's not familiar with their business. With that business, they're just a general call center that's probably used by 15 different plumbing companies or 500 different plumbing companies. So we built AI to actually personalize that experience for a brand. Right. So if you call a mr. Rooter of Sonoma County at 8 p.m., you're going to probably get in touch with our AI agent who can actually has access to the booking, they can actually book the appointment for you. So we've seen that application of AI really be beneficial because it's Mr. Reuter of Sonoma County spending money in marketing and advertising. Right. But that lead that may have not gone answered after hours is now actually turning into a book appointment. So that's been one way that we've that we've really applied AI and tried to help our customers, um, you know, in a very cost effective way. Yeah, I think that's that's brilliant. And, you know, getting really granular about like, what's the pain point for the customer? Yeah, that is leaving revenue on the table for a franchisee and thus a franchise or and then building a specific solution to solve that, that probably can be used in all sorts of different certainly home services businesses. Yeah, yeah. So what are you most excited about in franchising next year? You can only have one thing. What are you most excited about? I'm excited about the new IFA convention, so if you haven't seen our new branding work. Evolve is is the theme. Every business I think, is constantly evolving. We wanted to really lean in as a theme of how we're evolving the event experience for our members, hopefully new members, and new ways for both franchise owners and suppliers to kind of activate and tell their story within the event. I think it's going to be really different. And I you know, we want to underscore that. So, you know, not going to get too into some of the details, you know, leave a little suspense. But people are going to events for a lot more than just content, right. They really want to, you know, have a good time. They want to we want to create different forums for networking, but also for the education, you know, go actually a lot deeper in the topics that matter most to people. So those are some of the high level changes that we're we're making and will bring to light in February in Vegas. Well, if you if you haven't if you haven't been IFA, you got to go to IFA because the convention is just it's always it's a great time. It's great networking. There's great content. So if that's what you're most excited about next year, like, and you're doubling down on making that an even better experience, it's going to be great. So you got to go. All right. I'm going to end on a couple of personal questions. Getting to know Matt Haller just outside of work. Who's your favorite musical artist? I got recency bias on this one. So I'll go with the Foo Fighters. Okay. Because I was just recently stumbled truly into a private show in D.C.. Those of us are friends and that on social media we knew this. And those of us that are also Foo Fighters fans are insanely jealous. Yes. So they started just doing random pop up shows around the country to roll out this new album. And they happen to be in DC and did a 500 person show at the black Cat, which is a really old venue. And Dave Grohl, of course, is from the DC area. So it was particularly special. But I was walking my dog and saw this line in front of this club and was like, what's going on? I said to some woman and

she's like, oh, the Foo Fighters just announced at 4: 38:52

00 they're playing tonight in a private show at the black Cat. And so I literally ran my dog home and drove back. Got a ticket. Got a ticket, and it was an epic night. So that's so awesome. Do you have a favorite Foo Fighters song? Ooh good one. I would have to say The Pretender for me. Yeah, pretender is good. That's my favorite. I go back and forth, but that's my favorite. Yeah, maybe my hero. Okay, that's also a great song. Good song. Okay. What's one one word that best describes, um, franchising going into 2026? Resilient. Okay. Why that word? I just think it's it's tougher out there than anybody really wants it to be. Right now, I think we all came into this year with a feeling of euphoria. Yeah. And that, you know, that hasn't manifested itself. But, you know, you talked about the stats earlier, right? Franchising is still doing well. And I think we're not going to see a big shift environment wise as we move into to 2026, but I think franchising will still perform. So I would I would say resiliency. Okay. What's one piece of advice you'd give to a franchisee that is considering expanding, either expanding through, um, same store sales growth or expanding through a multi-unit opportunity? I think it's an existing franchisee. Um, I think I think they have a ton of leverage right now. Uh, because you are who franchisors predominantly are looking for. So, you know, use that to your advantage. Okay. All right. Um, and what are the most successful franchise systems in 2026 look like? I would say those that have turned the corner to development because they focus these last two years in this really high interest rate inflationary environment on getting their unit level economics at their existing franchisees, right? Okay. Can we plug a brand or two that maybe you think. Ooh, that's dangerous. I'm a membership organization, Jamie. I get it, I get it. But, you know, you've got a lot of good personal relationships, too, in the industry. Are there certain brands that, you know you would encourage other franchise owners to go have conversations with because you've seen them do things like you just describe really, really well and you think that they could benefit other brands that want to turn that corner. Yeah. So this is like, we're on Meet the Press and I'm the person that you're asking the question. You're not going to get a clear answer. I will give someone a clear answer if they contact me at the IFA involved in the association. I love it. That's perfect. That's perfect. I can appreciate that. Fair enough. All right, Matt, this has been fun, man. Thank you so much. You got it. Thanks for the time. Appreciate Scorpion support of the IFA and great partners. Thank you so much man. We appreciate it. All right everybody take care. See you.