We Bought A Franchise!
Join Jack and Jill Johnson on their rollercoaster ride as the fresh faced new franchise owners of Pink's Window services in sunny Palm Beach, Florida! Peek behind the curtain at the real deal of launching and expanding a franchise – the good, the bad, and the downright chaotic!
The Johnsons are set to reveal the highs and lows, the freedom, and the fortune that come with being your own boss. Tune in to the "We bought a franchise" podcast today! 🎙️🏝️
We Bought A Franchise!
The Mindset of Wealthy Franchisees with Scott Greenberg
What makes some franchise owners wildly successful while others struggle? Scott Greenberg, acclaimed author and former top-performing franchisee, unlocks the secrets of "wealthy franchisees" in this eye-opening conversation.
Scott's journey began unexpectedly when he spotted an Edible Arrangements ad in an airline magazine. As a motivational speaker seeking both real-world business experience and additional income, he took the plunge into franchise ownership. What followed was a decade of powerful lessons as he built multiple top-performing locations while continuing his speaking career.
The mindset difference between successful and struggling franchisees became immediately apparent. While struggling owners focus on external factors—location, market conditions, franchisor support—top performers understand they are the biggest variable in their business success. They approach their first 18 months with a "farming mentality," planting seeds rather than expecting immediate harvest.
One of Scott's most powerful insights is his formula for how franchise owners should spend their time. Take your desired annual income, divide by 2,000 work hours, and you'll get your effective hourly rate. Would you pay someone that amount to sweep floors or answer phones? If not, you shouldn't be doing those tasks either. The most successful franchisees work ON their business (marketing, culture, strategy) rather than IN it (day-to-day operations).
Perhaps most revealing is the stark contrast between franchisees in identical systems. Jack and Jill share the story of two owners in the same franchise—one recently had a successful exit after just two years, while another is calling it "the worst franchise on earth." This perfectly illustrates how personal mindset and approach create dramatically different outcomes.
Ready to explore franchise ownership or improve your existing franchise's performance? Visit scottgreenberg.com for resources, or schedule a free consultation at thefranchiseinsiders.com to receive a complimentary copy of Scott's must-read books: "The Wealthy Franchisee" or "Stop the Shift Now."
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Send us your questions for an upcoming episode at 305-710-0050.
From your pals in franchise ownership, Jack and Jill Johnson.
Hi everyone. Welcome back to the we Bought a Franchise podcast. I'm Jack Johnson.
Speaker 2:I'm Jill Johnson.
Speaker 1:And we have an amazing guest today. This is a gentleman, Scott Greenberg. Scott, welcome to the show.
Speaker 3:Thank you. It's about time you invited me Right.
Speaker 2:I feel like we have you on every episode because we talk about you so much.
Speaker 3:We do. Okay, that explains that burning sensation in my ear. Yes, that's why that we talk about we do.
Speaker 1:Okay, that explains that burning sensation in my ear. Scott, we're so thrilled to have you because we're obviously working with potential franchise owners every single day, working with existing franchise owners, including ourselves, every single day, and Scott is an acclaimed author. He's written two excellent books that I think everyone who's exploring franchise ownership, everyone who is a franchise owner, needs to read. But Scott practices what he preaches. Did you know? He's been a top performing franchisee himself. Scott, we'd love to hear your maybe let's start with a little bit about who you are and your journey into franchise ownership.
Speaker 3:Sure, so I yes, I'm a speaker and writer and I help franchisees grow their businesses in a variety of different ways. So, yes, I'm a speaker and writer and I help franchisees grow their businesses in a variety of different ways. I began years ago as a straight-out motivational speaker, long before getting into franchising, and so it was great. I mean, I was traveling the country giving these presentations and my content evolved into different topics and I was doing a lot of things on leadership, speaking to people who had a lot more experience actually doing it than I did. So I was mostly just sort of like restating a lot of the cliches that you hear there's no I in team, that kind of stuff like quoting other speakers and it was like, fine, but I always felt like something was empty and my wife and I were starting a family and I'm like, okay, I want another stream of income, but I want some more real world experience. And I saw an airline magazine ad for edible arrangements and I thought, oh, that looks cool. Before I knew it, I was on an airplane and off to a discovery day and signing lots of documents, so I ended up buying. Honestly, I got lucky that I found a brand that worked. I would never advise anybody to just have an impulse like that and then start signing. I would definitely work with someone like you. It's like, well, hang on a second, let's explore different options and see what's best. So I lucked out into a situation that was really good. So I never left speaking.
Speaker 3:But I also pursued that business as a way to learn as much as to earn, so I could get some real world on the ground concepts to share with my audiences.
Speaker 3:So it was tough but we got better and better and eventually we kind of climbed in the rankings and became one of the top stores in California. And then we took over a struggling location and for 10 years I did that while still speaking. Well, I started getting invitations to speak to franchise systems. So I've met franchisees from all these different brands and all these different sectors and I got to meet most people and those who are struggling. But I also got to meet still get to meet all their top performers and I've seen what they all have in common. It is unmistakable. And so I ended up writing a book the Wealthy Franchisee about those people, what makes them different and what the rest of us can do to replicate that. So I've since sold my stores. I now do full-time speaking and writing and coaching, but helping people grow their business by replicating the same tactics and the same mindset as those in franchising who are just killing it.
Speaker 1:Scott, it's like the Bible. We tell every client they need to read this. And you know, our journey before becoming franchise consultants was being a part of a company called Home Care Assistance, which was a home health care franchise which now is known as Key, and it actually started as a family business and I witnessed firsthand because I did all the friend debt for Home Care Assistance and I witnessed firsthand because I did all the Fran Deb for home care assistance growing from one location to hundreds and same sort of thing as you. I would watch and you'd bring on new classes of franchise owners and you would think you would know who was going to between the top performers and the low performers and you would see it. The best place to see it would be at the franchise conference, which I know you do a ton of speaking at different franchise conferences, which is, I mean gosh, how many different franchisors have you worked with at this point?
Speaker 3:Oh, I stopped counting a long time ago. So many that when I'm interviewing franchisees from different systems, sometimes the middle of those phone calls or Zoom meetings I forget which brand they're from and after a while the issues start to sound the same. But I've spoken to a lot.
Speaker 1:Okay. So I would see at our conference the top performers. They'd be sitting up at the front asking questions. They were brand champions. Then we had sort of the lower performers that were sort of clustered in the back that used this opportunity to attack and, you know, bring up the things that were frustrating them. And I remember watching that and saying you know, if one day I'm a franchisee, I'm going to do what these guys in front of the room are doing. And if I have, you know, concerns because nobody's perfect Every franchise system has things that it could improve on. But it was then that I saw boy mindset really matters in franchise ownership.
Speaker 3:Yeah, I agree and I will tell you that. You know, I went into it with, you know, an open mind and open eyes, not believing that it's simply a matter of having a positive attitude, because I meet a lot of people with a positive attitude who are going bankrupt and some of them don't even realize it. Like I talked to one guy. I said how's business? He said great. I said what's that based on? He says well, you know, most businesses close in the first year. It's 18 months. We're still here. I had no idea and he showed me his P&Ls and this guy's like in trouble. But he was all about positive attitudes. Like mindset is so much more than that. But it's amazing how big it is.
Speaker 3:And you know, what's interesting is, when we became one of the top locations, other franchisees started visiting us and calling me and asking questions. And what's interesting about hearing their questions is you see what they're focusing on. They never said hey, what do you do to build a great culture? Or what do you do to get through those tough times mentally? How do you keep yourself pumped? No, they ask questions like where do you find good people? And how are you driving in more clients? How are you keeping your costs down, like just focusing on that level. They were never interested in looking in the mirror and seeing what they can do, and I believe that every franchisee is the biggest factor in the business, for better or for worse. And until we ourselves are the greatest asset, we'll never really know how good the business can be.
Speaker 1:Yeah, I mean that's so well said. Yeah, I mean that's so well said. You know, and it's it's amazing to me. I work, jill, and I work with a lot of franchisees who are looking to exit and sell their business, and it's amazing to me how many will come to us and they don't even you'll say, okay, well, let's see your P&L and and well, I better call my accountant, like just the most basic thing. And, like you said, you're right, you better be on top of that revenue and you better be on top of not only where you are today, but where are you going to be a month from now. Go ahead, scott.
Speaker 3:Well, I was just going to say that. You know the typical or struggling franchisee. They see the P&L as a report. The wealthy franchisee sees it as a tool that they monitor and use constantly to look for opportunities and see the problems. So the idea is that you have to call your accountant to get your P&O. You should be able to access it within moments and should be so you can see how things are going. You can't just forget your bank account or just look at the operation.
Speaker 1:Right? Well, again, we feel like it's so. The whole mission of Franchise Insiders is franchise owners helping future franchise owners, right? So every one of our consultants, ourselves included, are either current or former franchise owners and we believe that having that experience in running a franchise, growing a franchise, understanding what it's like to do all these things that we're coaching our clients to do, is so vital, because it's and also building a business from day one that you could sell. It's amazing to me how many people like you know your experience like you said, you were very fortunate, it was in you to be a successful franchisee but a lot of people who just say, hey, you know what our town needs, our town needs an ice cream shop, let's bring it here. Of people who just say, hey, you know what our town needs, our town needs an ice cream shop, let's bring it here. You know that one we saw in Atlantic City. You need to be thinking from day one about exit strategy. Even if you might not ever sell that business, build it to sell.
Speaker 3:Yeah Well, it's an interesting way of putting it that if I'm making sure that this thing has value that would be appealing to other people, the only way to make that happen is to make a lot of great choices which will put more money in your pocket as you're building up towards that moment. So it really is important to be able to do that, and so I mean it's great advice if that's what you're offering people and they should be thinking about it first phone call with you where they want to get into a business, they should be thinking about what they want on the back end, and so I absolutely love that guidance.
Speaker 1:Yeah, I mean it's looking at businesses from multiple layers and I think again, like you said so many times, people they immediately how much is this person making? What's the net profit? How much am I going to make? It's like slow down. Let's understand that those first few months, probably those first 18 months, are so critical and you want to make sure that, financially, you're prepared to do it and that you understand what those challenges are. I don't know, scott, where do you see you know in terms of franchisees in those first six to 18 months, because I've always found that's the most critical time, probably the most challenging time. What have you seen people do differently during those initial months that really sets them on the right path?
Speaker 3:there's a number of things, but if I really had to boil it down, they spend 18 months learning and giving and they're not thinking so much about taking right. They're there to promote. They're there to pump up their team. They're there to build up their community, to provide as much outgoing value to everyone around them. They get the word out to build the loyalty right and they're not thinking about how quickly they can start making money from the business.
Speaker 3:And that's not an easy thing to do, right, because often people are leaving their regular source of income in order to run the business. So I understand that burden to want to start paying down debt and want to have a stream of income. But the more you can focus on putting value out there, there starts to be that boomerang effect. That's one thing I've always admired about the two of you. I've known you and certainly watched you on social media and I constantly see you giving and sharing advice and even like this podcast, it's all about how can you just put more value out into the world. Well, there's a boomerang effect to that, and so I think that we need to just think ourselves as farmers and that first year or two is planting season.
Speaker 1:Yeah, I love that. That's super solid advice. I'll never forget when I joined the Rotary Club for the first time, which was a wild experience for me. It was very different and I was younger and I went in with a sales mentality. Um, I went in like, hey, I'm gonna make these connections, I'm gonna get clients, and I learned very quickly that that was the wrong mindset for that um, and fortunately I had someone in that group who sort of saw that and said, listen, if you're gonna join something like this, you have to be about giving first. You can't just go around looking to to let everyone like their lead. You have to give to people and give value to people and the other stuff will come.
Speaker 1:Um, and I also think that the world has changed a lot and the days of the slick sales person they're gone. Um, nobody wants to be sold people, especially now with all these choices we have, we can go on to youtube, we can find. We can find the people that we want to talk to. Um, but no one wants to be sold. They want to learn, they want to have authentic, you know, guidance and and and for people to be real with the, with the positives and the negatives.
Speaker 2:Yeah, and we, we do that quite often with our clients, you know, to the point where we tell them not to move forward with something like that true honesty, because we want the best for them. You know, it's not just about the dollar signs and we want to make sure that they're, you know, picking the right franchise that's right for them, and so we'll have that authentic conversation with them. And it may kill us on the back end, but that's just not in our nature you know, because we want everyone to succeed.
Speaker 2:We, I mean for us, their success is our success. So, um, you know, it's it's important to be that. I mean anyone can make a sale, anyone can, you know, make it something look really really good and, and you know, selling a business is not a, it's never worth it.
Speaker 1:Someone has to be ready for that.
Speaker 3:Yeah, yeah, yeah, it's tough. And, jill, I know you said that it hurts you on the back end, but I've got to take issue. See, I don't believe that, especially with you guys and your line of work, with what you do and with what I do. Every transaction is a marketing opportunity, right that, if done well, it's going to lead a lot more. So you say you help someone determine that it's not the right thing for them. The word of mouth, the trust that's there, has got to be worth so much more than what you might make if they do move in that one transaction.
Speaker 2:Oh, 100% Right.
Speaker 3:The trust and integrity that you're demonstrating there. And so a couple of years ago I backed out of a full fee speaking engagement with a pretty major brand because what they wanted me to speak on I just couldn't get behind. I had interviewed the franchisees and I'm like if I get up and give this message, I'm going to have things thrown at me. It just was not in line with what I wanted. And I said you know what? I think we could maybe focus on this other message. And they're like no, this is what we want you to speak on. And I'm like, yeah, I'm probably not the guy for you and it was tough to do that and they were angry about it. But I could sleep well at night because I didn't want to take their money to say things that I didn't mean. I knew that I wouldn't be of much help. So it's hard to say no, but I think in the long run you want to have the right kinds of transactions. So I support your approach a hundred percent.
Speaker 1:Yeah, I think that's exactly right. You know, what's so interesting is how many people we still get to this day who call us and say Listen, I want to own a business, but I want someone else to run it for me.
Speaker 3:Do you?
Speaker 1:have any of those absentee franchises and it feels like in COVID that really became a thing, right With good reason. People. People were starting to diversify and they started to look at franchises like the stock market or like real estate and, like you, our experience has been that the most successful franchisees that we've placed the success. Yes, having a great franchise is really important. But as I looked at our client, hector, who comes to mind, he owns a senior helpers franchise and the average just to make sure we're FTC compliant here the average in their item 19 shows franchisees gross $1.6 million after they've been a franchisee for 60 months or more. Hector did $3 million in his third year. So why does Hector do twice what the average post 60 months does? And the answer is is that Hector is relentless. Even in his diligent process with us, he was so focused, he was so detail-oriented, he got the deal he wanted, he got the extra zip codes. Maybe you can speak to that what you've seen in those high performers. What is it that separates them?
Speaker 3:It's interesting we're talking about a few different things here. One of them is just honesty and integrity of franchise systems. I know at least one franchise system. On their website they say, yes, this is great for people who want to be absentee owners. And then I went to their convention. I spoke to the owners and they're like uh-uh.
Speaker 3:And so you have to be careful when a franchisor, you know, says that, um, this can't just be an investment, right? A franchise is a living thing that needs love and energy and cultivation and we don't want to be deadbeat owners. But that doesn't mean that we need to work at full time. And again, for me, I never gave up professional speaking, and the real name for professional speaking is traveling, right. You know, for me to go never gave up professional speaking, and the real name for professional speaking is traveling, right. You know, for me, to go to a franchise conference and speak for an hour, it might be two days that I'm gone for that and I never wanted to leave that.
Speaker 3:So I had to build my franchises in a way where I knew that I didn't have to be there always, but I was engaged constantly. Multiple phone calls and text messages, you know, all day long. I'm looking at the security cameras to make sure someone showed up and turned on the light that they're prepping the fruit, to make sure they closed at night. They would send me reports. And then, when I'm not on the road, then I was definitely in the stores having a presence. But I was able to open up a second store, able to continue to travel. I was able to scale by working intelligently, the whole thing of working in the business versus working on the business.
Speaker 3:And so if Hector's running a senior in-home care thing, he can do that and he can scale it. But not if he's the one who's going into someone's home and he's looking after an elderly. He can't be doing that. But he has to do things that allow him to scale. And so I don't know that. Again, you physically have to be the one operating a business, but you got to be engaged and give the business the love and attention it deserves. But again I'm doing a session at the QSR Evolution Conference. I'm doing a whole presentation the wealthy franchisee. Then I'm bringing up a panel of franchisees and interviewing them. Some of these people have a couple hundred units but they only have 24 hours in the day, just like someone who's operating a single unit. So it's about smart use of your time and knowing what kind of energy and how to manage your time.
Speaker 1:That's a great point. And we've placed people in the same franchise that have opted to fill shifts for caregivers and their revenue is a quarter of what Hector's is. And we've always said, especially in that type of business, work on it, not in it. The minute you're out there doing that, you're not doing what you should.
Speaker 3:Let me share with you a really sloppy formula that I think is good enough to share with people. I ask franchisees, how much money do you think you deserve to take home every year? How much money do you want to make? And they give me a number. Usually it's probably less than it should be, sometimes it's way more than it should be. But they give me a number and then I say, okay, divide that by 2,000.
Speaker 3:You work 40 hours a week, 50 weeks a year. That's 2,000 hours. So take the money you want to make, divide it by 2,000. That's what you think you're worth per hour. And ask yourself would you pay someone that much to be sweeping up, to be in that home, to be answering phones? And usually the answer is no. Well, if you're doing it yourself, you are, because that's an hour you're not spending doing the bigger things, such as the marketing and the community involvement and the coaching employees so they can do those things. And so I think we need to. If we think that we want to take home a certain amount of money, if we're worth it, then we need to do the kind of work that aligns with that and train others and not think, well, I'm saving money on labor. It's costing you something more valuable, which is your time.
Speaker 1:That's awesome. I mean not alone worth the price of admission. That's fabulous. Thank you, scott. I mean so much of this again is working smartly. I have a question for you. Here's a big thing that comes up Validation in terms of franchisees that we're validating with. You know, for years I've said talk to the high performers that have joined in the last few years so you get a sense of how the system is growing right now and get a sense of what they've been doing. I myself personally have always thought I think Jill and I are aligned on this that there wasn't much we could learn from the low performers. But I don't know. I'm kind of coming around to. Maybe some diligence there is worthwhile. What are your thoughts on that?
Speaker 3:I like collecting as much data and perspective as is possible. So, if I'm talking to a prospective franchisee, I really encourage them to do the validation calls. I encourage them to ask questions that bring out facts and data, as opposed to opinions Like do you like the business? Well, you don't know their value system. You don't know their temperament, right, what they want that you know, as opposed to asking questions like you know, describe the culture, or how much money did it actually cost you to open the business? Yeah, what do you do to market? Now, when you're talking to top people, that's great information. Sometimes, when you're talking to struggling people, it's a cautionary tale, right, and so I think there's use in hearing all those perspectives. But it's like reading online reviews. It's like, well, hang on a second, let's really look at what is the review, who's saying it? That kind of thing. You're probably going to get more truthful things, more useful things, from those top performers, because they're determining what's possible.
Speaker 3:I will say this, though what I learned when I wrote the Wealthy Franchisee and I interviewed all these great franchisees is very often they themselves don't know why they're successful. The most common answer I got hey, why are you so great? They said, well, I just have a great team, or I got lucky or I don't know. To me it was obvious. Talking to them, they have that kind of mindset, but they wouldn't always be able to reflect on that. On that, and if you ask the struggling people why these people are succeeding, they're going to say, well, they've got the best location, or they work the hardest, or they're just a favorite of the franchisor. So we have to be discerning.
Speaker 3:But I think there's something useful, even if it's knowing what not to do, who not to be like. We can get that as well. But I will say this, and franchisors will not be thrilled with me encouraging this but when I was doing validation for edible arrangements, yes, I called the people they told me to call, but that's like checking someone's references. Yes, for someone's references they're not going to give you the people who are angry. So because I travel a lot, I would always try to go by the local edible arrangement store and see if I could get someone to give me some perspective. So you want to hear from a lot of people, but don't necessarily believe just one franchise. Kind of take it all in and try to get to the facts as opposed to just their subjective opinions.
Speaker 1:Yeah, I think that's really great advice. I mean, even just looking at Pinks, the top performer right right now, he is fabulous when it comes to networking and, um, he has a different approach than than we've had, which was ours was more. Hey, we're going to spend more on marketing. Um, his was more. I'm going to spend less on marketing, but I'm going to get out in the community, I'm going to network, and for a long time, both businesses were doing about the same thing, but we were doing it in different ways, and the reason why I bring this up is, if you talk to us versus talking to him, you're going to get two different approaches to running the same franchise, and the cool thing is is that the franchisor supported both and said, look, you need to be doing both, but if you want to put more into one and more into less, it's fine, as long as the net results the same.
Speaker 1:Which brings to mind another thing that just came yesterday. We have a client who owns a franchise and he acquired it in 2023, two units and just last week he sold it for $5 million. We spoke to another owner of this very same franchise different market who claims it's the worst franchise on earth Came in same time and says no support, terrible franchise is going to close the doors. Isn't it incredible how two people, same franchise, can have such wildly different experiences?
Speaker 3:Yeah, Well, if it's the worst franchise ever and for two units you can sell for 5 million, Imagine, if it was a decent franchise, what he could have sold it for. Yeah, and you hear that in every system, right, Some people who, like you, know franchisor, they're just in their cubicles. All they care about is their you know royalty on the gross sales. They don't care about me On my location, my territory is different and they don't get. You know, you hear that stuff.
Speaker 3:But the top franchisees, they demonstrate what's possible. There's so much human nature that is reflected in franchise performance and I guess, as someone who just used to do straight out motivational speaking, maybe that's what attracted me to franchising is. It's a great space to see all that kind of psychological stuff at play and how it correlates with performance. So I think if you're in a decent system and they have that top tier group of people in different markets, people succeeding with the business in different markets, they've proven there's an opportunity. So now what it takes is a franchisee who's willing to make not just a financial investment but that kind of mindset investment. And again, until they do that, they'll never know what it's worth. And so I meet those struggling, complaining franchisees all the time and I'm just thinking you're leaving money on the table.
Speaker 2:Yeah.
Speaker 3:Right, because you're holding your business back by your belief system, by the assumptions that you make.
Speaker 2:When it's easy to get caught in that cycle, especially if you're talking to other franchisees who are in the same spot and you just feed off each other. You know it's really it's hard to get out of that, but that's always why we encourage talking to the top performers. But looking at people's strengths, you know, like in the pinks example, you know marketing is more of our strength, whereas that particular owner, he, was great at networking. So, finding what you're good at and really using that, and it's going to be different for everybody and it's not to say that one's better than the other.
Speaker 3:Right, but that's why working with consultants like you is great, because you can take people through that process to figure out what are their interests and what are their strengths so you can line them up with an appropriate opportunity.
Speaker 1:Well, and what's interesting is that that franchise reference I gave you, where our client just had the really successful exit, there's going to be certain markets where that business is going to perform better.
Speaker 1:And I would actually argue that the client who we spoke to we didn't place in that franchise, who was unhappy with it, was in a market that was not well suited for that franchise. And that is true. Like you know, when I was in home health care, it was hey, in any market you've got an aging Like there's certain, like you can't go into Louisiana because there's a proof of need that you know you'll never get. But in most, every other state, home health care is really needed. But there are other types of franchises that, frankly, are going to do well in some markets and not do as well in others. And that's where, to your point, scott, I think working with a consultant, whether that be us or any of the other hundreds of great consultants out there who know about this stuff, can help guide you in the right direction. Yeah, but mostly you guys, of course, franchise owners helping future franchise owners, that's right, that's right you had to choose.
Speaker 3:I'm just saying all things being equal it should be you guys.
Speaker 1:So, scott, where can people go to learn more about you? And also, if they want to buy your books, what can they do?
Speaker 3:My website is scottgreenbergcom, so everything is there. My books are available wherever books are sold Amazon everywhere else. And I'm on social media Certainly on LinkedIn is where I'm most active.
Speaker 1:Awesome and we're doing a special promo for any of you that would like to get a free copy of Scott's book from us. Get a free franchise consultation. You go to thefranchiseinsiderscom, fill out a contact form, schedule a consultation and once you've had your free consultation, we'll send you a copy of either one of Scott's books Stop the Shift Now or the Wealthy Franchisee. Both are must-reads if you're thinking about becoming a franchise owner. Scott knows his stuff. He's super well-regarded. We were very fortunate to get this interview with him today. So, scott, thank you so much for spending time with us. Thanks for having me.
Speaker 2:Thanks, Scott.
Speaker 1:For this episode. I'm Jack.
Speaker 2:I'm Jill.
Speaker 1:We'll talk to you next time. Thanks for joining us on the we bought a franchise podcast.