WS1901 Is Franchising The Next Best Investment For You? | Kim Daly

Welcome back to another episode of the Real Estate Syndication Show. Today, we had the pleasure of speaking with Kim Daly, a seasoned franchise consultant with nearly 23 years of experience. Kim shared her insights on why real estate investors should consider franchising as a means to diversify their portfolios, especially in the current economic climate where high interest rates and limited real estate availability pose challenges.

Kim emphasized the benefits of franchising, such as the ability to scale wealth and the support of established systems and processes. She introduced the concept of semi-absentee ownership, where investors can take on a CEO role and hire a general manager to handle day-to-day operations, allowing for a more hands-off approach to business management.

One of the key takeaways from our conversation was the mutual selection process in franchising. It's not just about buying a franchise; it's about being awarded one based on a good fit with the franchisor's culture and expectations. Kim also touched on the reasons behind franchise failures, often attributing them to the owner's inability to follow the system or maintain the necessary mindset for success.

For those interested in exploring franchising opportunities, Kim Daly can be reached through her website, The Daly Coach, or her extensive video library on KimDaly.tv. She's committed to educating potential investors to make informed decisions without regrets.

Don't forget to like, subscribe, and share the Real Estate Syndication Show with friends interested in building wealth through real estate. Visit lifebridgecapital.com to start investing today. Happy New Year, and here's to your success in diversifying your investment portfolio!


Today’s guest host, Jim Pfeifer, is the Founder & CEO of Left Field Investors – a Community of like-minded individuals interested in creating financial freedom through passively investing in real assets that generate real cash flow. The Community works together to provide education, a network and deal flow for its members. For more information, you can visit www.leftfieldinves

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Transcript

Kim Daly: I love the real estate investor mindset for franchising. And especially in the moment that we're in right now with the economy, I'm working with so many people that have a portfolio, but the interest rates may be making it hard or the limited availability of real estate to invest in or the high price points. All of these reasons are driving real estate investors who are sitting on money to look at franchising.

Jim Pfeifer: Kim, welcome to the show. Let's start out with who you are and how did you get to where you are at today?

Kim Daly: Thank you, Jim. I am a franchise consultant, been doing this for, it'll be 23 years in 2024. How does anybody get into franchising? It's like you start looking for freedom. You start looking for opportunity to scale your wealth. You start looking for systems and processes because being an entrepreneur is so daunting. And all of those reasons are the reasons I ended up looking at franchising and finding what I'm doing, which is a franchise called FranChoice. My business is to help other people learn about the value of investing in a franchise.

Jim Pfeifer: Excellent. Well, you know, this is a real estate show. So why should real estate investors be even interested in hearing about franchises?

Kim Daly: Such a great question to get right to the heart of the matter. I love the real estate investor mindset for franchising. And especially in the moment that we're in right now with the economy, I'm working with so many people that have a portfolio, but the interest rates may be making it hard or the limited availability of real estate to invest in or the high price points. All of these reasons are driving real estate investors who are sitting on money to look at franchising. So because franchising allows you to buy down the learning curve of starting a business, right? You're buying that business in a box. We don't need you to take three to five years to get to profitability, right? So you can put your money into the business now. It won't be passive. It doesn't mean it's going to be full time either, right? There's a very elusive term in franchising called semi-absentee. Now, not every business allows an owner to be kind of in that CEO role. I'll define a semi-absentee investor as if you are a savvy investor. Maybe you've owned a business before, maybe you haven't, but you understand business and you have some leadership skill and some organizational skill, right? These are what make the term so elusive because everybody's a little bit different. So. If you have those things, semi-absentee to you could mean you're the CEO, you hire a general manager from day one. That could be your wife, it could be your kid, it could be somebody you just know that worked for you in a job, somebody that you just hire by running an ad, but you feel you can give that accountability and responsibility to and that's what would allow you to not need to be there every minute the business is operating and that may be twenty to thirty hours in the beginning but then once you know the person is the right person stepping back. Probably ten to fifteen hours so that's kind of by definition what semi absentee would mean but we don't use the word absent we do have investor type models that come with a general manager in the skills to find that person or, the laundromat industry. I'm the queen of the laundromat because I work with so many real estate investors. And you guys understand like the tenant mentality. So that laundromat, that's an example of a semi-absentee, but really trending more toward even lower hours than I've already talked about, maybe five to 10 hours a week once it's up and operating. Yeah, the whole my point is it won't be absent like plug and play But let's be real even your real estate portfolio really isn't that until you have a team True.

Jim Pfeifer: Well, so let's talk about it You mentioned laundromats if i'm if i'm gonna invest in a franchise or become a franchise owner I don't really want to run a mcdonald's right and that's what I think a lot of us think about when we think of franchise i'm I don't want to I don't want to deal with McDonald's, right? If I'm going to McDonald's, I'm going through the drive-thru. I'm not going to own it. So can you talk about the different types of franchises and what is even available, right? We've talked about laundry so far, but I know there's a ton of different things. And you talked about some are more passive than others. So can you kind of start on the ones that you really got to dive into and spend a lot of time on? And then the ones that maybe you might be able to do less work and just pass it off to others.

Kim Daly: Okay, so fantastic question, Jim. And in fact, this is why Kim Daly has a business, right? And why I've been doing this so successfully for so many years. I have the relationships with the right franchisors for you. So the breadth of franchising is so deep. There are franchises in all different industries, and you're so spot on. The majority of people think of franchises Chick-fil-A or McDonald's and nobody really wants to get into food, right? And I don't blame you. So I am America's top franchise consultant. I place more people into franchise businesses than any other consultant out there and have been doing that for over a decade of my 20 years. I've been at the top level and I do not show food. You will have to beg me. I have some specialty dessert things that are very scalable. But to answer your question, I love low investment, high margin, reoccurring services. So what does that look like? Well, how about if you're in the real estate world, how about things that cater to the homeowner? So maybe it's a business that picks up dog poop in the backyard. But while you're there, you also offer other services around the yard, like repairing irrigation systems or repairing a fence. How about selling a fence, installing a fence? Not where you're doing it. You use subs. You use guys who know how to install a fence. Your business is the sales and marketing side. Most of the time, Jim, in the franchise business that's in the home services, The reason we don't need owners with prior experience or industry knowledge is because we're using the subcontractor model. So you're going to not compete against the trade guys who are so good at what they do. you're going to be the sales and marketing arm. You're going to be the one with the marketing plan from the franchisor. You're going to be the one with the sales team that goes out, bids on the job, wins the customer's trust and respect, and then brings those subs in to do the work. And that keeps your payroll very, very small. Right? So that's kind of the model. I love the home services space. I love it. And in the home services space, we do stuff in the house, like the softer things like floor and windows, paint. you know, California closets to things out in the yard, which is a massive market too. Like I said, fencing, patios, pools, outdoor lighting, power washing, you know, concrete stamping. That's amazing. The things that you can do with concrete to make it look like marble, granite, pavers, and it's freaking concrete. It's like one third the price. So, you know, and I, I'm a fitness girl. I'm a wellness girl. personally. So I love that space, right? A lot of times, but people worry about fitness and the fad, but don't limit your thinking. If you're out there going, yeah, but there's so many gyms, Kim, why would I, why would I want to open another one? That's where the conversation for you and I would begin. And I'm not going to talk you into anything. I'm going to talk you through it. I'm going to put you in front of franchisors and let them tell their story to you. Because if they're awarding franchises and you have a passion for fitness and your market is open, don't limit what's possible for you. If you think it would be awesome to own the next personal training studio in your market and be the customer avatar, right? Go ahead and keep an open mind and let's explore. Since COVID, Jim, There are all these like preventative health businesses like cryotherapy and IV drip bars. And people are so much, they're so much more aware now of like taking control of their health. There's a lot of like functional medicine type places. There's just endless, endless opportunity, which is why I love my business so much, because I'm privy to see like all of it. But just because a business is now a franchise, does not mean it's a good franchise or the right investment for you. And this is the importance of having someone like Kim Daly, who has not just the title of franchise consultant, but years of experience and relationship and knowledge that you get to lean into and learn from so that you can then make a good, educated and informed decision. And my services are totally free.

Jim Pfeifer: Okay. And I want to get into that. Um, but you, you mentioned a couple of things. So finding subs, like you're talking about subcontractors, right? Does the franchise model help with that? Because I know when I need an electrician or I need someone to fix my irrigation, I don't know how to, I it's, it's problem finding those people. Right. So I don't have that skill. Where do I get that? Does that come in the, in the package?

Kim Daly: Yes, that should definitely, the recruiting part is definitely going to be a big part since COVID, right? And the great resignation. The recruiting part of what franchisors are offering is definitely part of your due diligence process, along with the customer acquisition part, which is what we always know we've been buying, right? A franchise is always sort of a sales and marketing engine. with a clearly defined customer avatar, but both now are part of your due diligence process when we are going through the one to two month exploration with the franchise.

Jim Pfeifer: Okay. And I want to get to that. Um, maybe part of this question, you, you said, um, when you were awarded a franchise, now I thought I was purchasing it awarded implies that they have to accept me. They're not just going to take my money. So can you talk about that process, how they have to approve you? And maybe in that conversation, you can talk about the one to two month process that you take somebody through.

Kim Daly: Yeah, so that's a great question. So you're so right. Franchises, it's not your opportunity to buy until it's been awarded to you by the franchisor. So both parties have to feel like this is a mutual fit. Ultimately, when you invest in a franchise, like everybody knows, like I said, it's business in a box. But what are you actually buying? What you're actually buying, Jim, is a partnership, right? This whole idea that you're in business for yourself, but not by yourself. So when people come to me and they go, well, I've looked at franchises before, but I never found the right one. When I really listened to what they say, after asking some probing questions, they were looking down at what the business did rather than up at who is doing the business. So it's leadership that adapted models to a pandemic and kept franchisees from failing. It's leadership that adapts models to recessions and different economies and competition and even the customer demand, making sure that what you're offering is remaining relevant to the changing customer times, right? So it's always about who you're in business with, not what you're doing. So that's the first part and that's where I come in. I have all of these relationships. So this one to two month process is not just about you learning about who you're potentially doing business with, but it's about the franchisor learning who they are. may potentially be doing business with because they want to award a franchise to somebody who fits into their family, who's going to be fun to work with, who's going to be open and coachable, who's financially qualified, right? They don't want to award you a business where you're scraping pennies to get to the finish line and then you have no extra should you need it, right? They don't want to award a franchise to somebody who's Ego is so in the way that they're not open and coachable to following the franchisor's way or at least asking, hey, I have an idea, but why do you do it this way? Right? Maybe the franchisor has already thought about doing it the way you're thinking about, and there's a reason they're not doing it that way. Those are the types of things that ultimately lead franchisees to failure. And so if the franchisor can do a good upfront job of sniffing out, Who's going to be open and coachable and follow their lead and who's going to be fun to work with and bring life and energy and positive positivity to their culture. Then that's just going to help everybody enter into this right into a mutually beneficial relationship.

Jim Pfeifer: How do you work with your clients to find the right opportunity, right? When you were mentioning, you know, the first thing you mentioned was going up and scooping dog poop. I do enough of that just in my daily life. I'm not going to buy that franchise. So how do you find a franchise that will work for me?

Kim Daly: Oh, Jim, do you know how profitable that business is? That's the silliest 80 bucks a month I spend and it is never going off of my credit card, right? So it may not be for you. But for the person that's not status oriented, who's like, yeah, that's the most recession resistant long term reoccurring business out there. I'm in like to tell me more. It is for them. So I'm just playing with you. But so what happens when people come to me, I gather the data. I want to get to know you personally, professionally, financially. I want to understand your vision. So you're building this real estate portfolio. Why are we talking? What is the goal? How many cash flowing assets do you want to have? What is your financial like picture look like in 3, 5, 10 years? And what portion of that would you want to build through the franchise? Because wealth is created through scale in real estate and in franchising. So we always kind of want to start with the end in mind and then back end it into the skills you have. Like if you come from a sales background, do you want to run a sales organization? If you're an HR professional and you love the idea of creating jobs in your community and being an employer, I want to lean you into businesses where you might need some people. I want to look at what you're trying to create, the leader, the owner that you want to be, the role you want to play, or more importantly, the role you don't want to play. Then I, using my knowledge, relationships of what's out there, I bring three to five. This is a curated list. of a small group of companies that match what you told me you were looking for and that you're financially qualified for and that are open in the market where you want the business to be. And then I'm just not going to hand them to you and go away because you don't know what you don't know about how to say yes or no to this. I'm going to teach you as you're working through the one to two month process with the franchisor so they can teach you about marketing and training and technology and future opportunity. Kim Daly is going to be your mindset coach. Like, how do you assimilate what you're hearing? How do you, if you love them all, how do you start to decide, right? I'm going to help you kind of figure out that matrix and what's most important to you and And kind of help you get to that, yes, I'm the resource for financing. If you're looking for lending, I'm the resource for how to say yes or no to any franchise. But you'll be working with the specific franchisors we've curated for you to figure out among them. Is there one that feels like the right investment opportunity for you? And again, it's all for free for you. I get paid by franchisors. So if we reverse this, I'm like a recruiter for franchising. So I offer a B2B service. I'm cutting down the amount of time franchisors have to spend sifting through lots of people who email them overnight. Or I'm delivering, you can look at it the other way, I'm delivering, hand delivering, high quality, motivated, financially qualified people who are maybe interested, fit the model that the franchisor is looking for, but I'm delivering them right to the inbox of those franchisors. So when they pick up the phone and call you, they know you're legit. They know who you are because of me. They roll out that red carpet and you get an A plus experience just in terms of learning about the franchise. So it's a win-win for both sides, and I'm just happy to be like the eHarmony.

Jim Pfeifer: That's great. So, you know, I know you've been doing this a long time, and you must have a ton of franchise owners who are super successful. I don't want to hear about them. I want to hear about the ones that failed. Why does somebody fail at this, right? Because as you said, you set them up. They've been awarded this franchise by the franchise owner. So it's all set up there and it's meant to work. So when it doesn't work, and I'm sure there's been some failures, why doesn't it work?

Kim Daly: It's so funny that everybody wants to talk about the failures. It's hilarious, Jim. That's how you learn. I get it. So failure is it's a nuanced word. What does that mean? Did the person quit? Did they get a health issue? But I'm sure you mean like they were doing everything they thought they should and it still didn't work. What I find to be true in that scenario, the franchisors typically say that it is the person wasn't following the system. What does that even mean? Right. That can mean many different things. I've recently stepped out as a keynote speaker for franchising because I have this message, because I am a franchisee. And for eight years, I was an average performing girl here at Franchoise. And then one year later, back in 2011, I made history in my industry, building the largest business that had ever been built. I did three and a half times more revenue in 2011 than i did in 2010 or any of my previous years and i spent the last 13 years incrementally improving what i did and getting better at all parts of my business and growing it and growing it so because i've stood in sort of not a failure place but the you know just creating the same year over and over which was lackluster at best And then history making, I sort of had this aha moment, like, OK, so I'm the same me. Franchise was the same process, but I created two very different realities. So if you come to me and you ask me the question you just asked, I'm going to put it back on you. And I'm going to say that failure is owner created, not franchisor created. So, yes. Are there franchisors that fail? There are. I am very blessed to be a part of franchise and we carefully screen and do what we can to prevent that from happening with the companies we work with so that's not typically what's happening in my world, it's people losing sight of their dream it's people forgetting to dream and have goals clearly defined goals, executable goals date daily executable goals it's people not being willing to grow into the role of salesperson or leader to help solve the problems of their business it's people buying a business thinking that you mister franchise or were supposed to do this for me. And I don't mean it in any judging or condemning way. I was that person for eight years. So my coaching, when I say I'm a mindset coach, you're going to be learning from the franchisors how this is going to go down. Marketing and training and technology. You're going to be learning from Kim Daly how not to fail. And that more importantly, how to go live the life of your dreams and build and scale a successful franchise business. That's what I see as my secret sauce for my candidates.

Jim Pfeifer: That's great. And we're running up on time. And I do want to ask this last question. You kind of talked about it a little bit, but how is franchising affected by downturns in the economy, possible recession, interest rates have gone up. There's just so much uncertainty in real estate, in the economy. So is it the same for franchising? And you mentioned, you know, some people did really well in COVID, maybe others didn't. So what's the outlook in 2024 for franchising?

Kim Daly: Such a great question. So this is what I would say. If your heart yearns to own a business, or this conversation has inspired you to want to think about diversification, since we cannot control the economy, you have to get in. If now is the time for you, now is the time. If you learn when it's the hardest, then awesome. You have muscle and skill that you won't need when it gets easier. And guess what? When it gets harder again, 5, 10 years from now, because it will, You won't even be stressing about it, you'll be like, I started in a recession, right? So the franchisor, if a business is impacted, the franchisor is going to help you prepare for that from the beginning by telling you, oh, our costs have gone up or whatever. They're going to prepare you financially. It's the mindset that I would prepare you for. And the mindset of a business owner is like, I'm in it to win it. I realized the economy is not mine to control. And this is really, Jim, what I realized 13 years ago. I spent my time for the first eight years focused on all the things that were never mine to control at the total expense and the time and energy and positive energy on the things that were mine to control. And what those were, you'll have to call me to find out because I know we're running out of time. But that's where my conversation and my coaching with people will help set you free from needing the economy to be a certain way for you to be able to live the life that you want. It's nonsense.

Jim Pfeifer: That's great. That's well said. This has been a fantastic conversation. If listeners are interested in learning more and answering those questions you mentioned, what's the best way they can connect with you?

Kim Daly: Amazing. So, so many ways. Go to my website, The Daily Coach, D-A-L-Y. But if you're curious, go to Instagram, go to YouTube. I have nearly 800 videos, all on KimDaily.tv. I am the social media queen. Love the video. Love to just educate people so you don't make investment decisions that you regret. That's really the whole pitch of what I do, not to talk anybody into this, to talk you through it so you understand it. So whether you're saying yes or no, it's an intelligent yes or no.

Jim Pfeifer: That's awesome. We'll put all that in the show notes. Thank you, Kim. This has been great. We appreciate your time.

Kim Daly: Thank you. Happy New Year.

Jim Pfeifer: Happy New Year.

Jim Pfeifer: Thank you for being with us again today. I hope that you have learned a lot from the show. Don't forget to like and subscribe. I hope you're telling your friends about the Real Estate Syndication Show and how they can also build wealth in real estate. You can also go to lifebridgecapital.com and start investing today.