Pizza King Podcast
Finding Your Franchise Fit and Making It Big
Have you ever daydreamed about owning a franchise, but your bank account said otherwise? Fear not, as our latest episode tears down the financial barriers, guiding you through the maze of securing a franchise loan. With insights from a banking expert with over a decade of experience, we unveil how creditworthiness, liquidity, and future earning predictions are your golden tickets to getting an SBA loan. Plus, our guest shares personal stories that will make you rethink the accessibility of franchise ownership and offers practical advice for those ready to take the leap.
Then, we matchmake your passions with the ideal franchise opportunity, spotlighting ventures like tiny home franchises that tackle housing crises while feeding your entrepreneurial appetite. Our discussion underscores the need for aligning your franchise choice with your skills and the burning desire to carve out a lasting legacy. We also cover the nitty-gritty of franchise management, from handling staff to juggling overhead costs, ensuring you're equipped with the due diligence toolkit before saying 'I do' to your franchise partner.
Finally, we embrace the lessons learned from franchise flops, as our guest reflects on their initial blunders and the subsequent growth spurt in business acumen. We delve into the fine print of franchise agreements, stressing the importance of understanding your commitments and preparing for the road ahead, including your eventual business exit strategy. Our heart-to-heart on the resilience needed in the restaurant business, complete with tales of triumphs and tribulations, will leave you inspired and ready to mentor the next generation of franchise owners. Join us for this candid conversation, where we lay out a buffet of insights for anyone hungry to join the dynamic world of franchising.
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Pizza Business Coach - Tyrell Reed
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https://tyrellreed.com/shop
Have you ever daydreamed about owning a franchise, but your bank account said otherwise? Fear not, as our latest episode tears down the financial barriers, guiding you through the maze of securing a franchise loan. With insights from a banking expert with over a decade of experience, we unveil how creditworthiness, liquidity, and future earning predictions are your golden tickets to getting an SBA loan. Plus, our guest shares personal stories that will make you rethink the accessibility of franchise ownership and offers practical advice for those ready to take the leap.
Then, we matchmake your passions with the ideal franchise opportunity, spotlighting ventures like tiny home franchises that tackle housing crises while feeding your entrepreneurial appetite. Our discussion underscores the need for aligning your franchise choice with your skills and the burning desire to carve out a lasting legacy. We also cover the nitty-gritty of franchise management, from handling staff to juggling overhead costs, ensuring you're equipped with the due diligence toolkit before saying 'I do' to your franchise partner.
Finally, we embrace the lessons learned from franchise flops, as our guest reflects on their initial blunders and the subsequent growth spurt in business acumen. We delve into the fine print of franchise agreements, stressing the importance of understanding your commitments and preparing for the road ahead, including your eventual business exit strategy. Our heart-to-heart on the resilience needed in the restaurant business, complete with tales of triumphs and tribulations, will leave you inspired and ready to mentor the next generation of franchise owners. Join us for this candid conversation, where we lay out a buffet of insights for anyone hungry to join the dynamic world of franchising.
New Pizzeria? Free Store Opening Checklist! Ace Your Launch
Premium Quality Delivery Bags
Use Code: "Pizza King" and Get a free small bag with any purchase $200 or more
Disclaimer: This post contains affiliate links. If you make a purchase, I may receive a commission at no extra cost to you.
We appreciate your support!
Subscribe to our premium content
Pizza King Podcast+
Pizza King Podcast Merch
Now Available!
Pizza King Podcast Store
Pizza Business Coach - Tyrell Reed
Shop Courses and Ebooks
https://tyrellreed.com/shop
is with the bank. You know what I do is I'm helping other people realize their dreams. All I'm doing is feeding to other people's dreams and not my own right. So you know, and I know not to kind of transition into the topic, but you know it's about franchising. So what I do, I do work for a large bank, but you know I I do financing for people wanting to start their own franchises. You know, whether it's a pest service, whether it's pizza, whether whether it's, you know, mcdonald's, they come to me and want to get financing to to realize their dream of having ownership and business ownership. So you know, over the past couple of years that's what I've been doing primarily is helping people open up their own franchises, is helping people open up their own franchises, helping people open up multiple territories and helping people, you know, realize that they can't do it even though they don't have hundreds of thousands of dollars in the bank.
Speaker 1:You know we was never told that. You know we can start businesses with not a lot of money. We was always said, like you said go to college, go to college, make go to college. You know you get your great career. You go to college, make you go to college, you know you, you get your great career. You make a hundred thousand a year. You know two hundred thousand a year if you're lucky, and then maybe they'll let you retire. You know at a ripe age to where you can enjoy it. So you know they wasn't told like you got a savings or you can use your 401, or you, you know can, and you know invest, find somebody that can invest in you and use your connections that you've had. So none of these things were taught to us and taught to me. I didn't know it was possible.
Speaker 1:So I've been working for this bank for over. You know I think I hit my 11th year. But all I do, like I said, is helping other people realize their dreams. And you know it's a good feeling. It's a good feeling when people call me and you know they say, hey, this is what I want out of life and this is what I want you to help me with. And it feels good when I can give them a call and say, hey, we got you approved. You know you are ready to go forward and realize your dream. It's a good feeling to me Cause you know me, I'm about helping people, I'm always about helping people, so let me ask you this from the banking side of it right, uh-huh, how does?
Speaker 2:and totally off topic, but I think it's important to know how does a bank determine the dollar amount on somebody's dream? Or are you expecting them to come in with that too?
Speaker 1:I mean it also depends. It depends on the bank. That's the biggest thing. I work for one of the larger ones, so I get to see the approvals and the declines and the stipulations that it takes to be able to realize a dream. So, yeah, they'll put a dollar amount on your dream, especially if you're working with a small business association. They're going to make sure that you know they're backing your financing, but they're going to make sure you have the money, the liquidity, the you know and the whereabouts you know. Can you do a two-year projection? So, as far as banking goes, I mean they want to finance it and that's how they make money, but they want to also make sure they don't lose their money because they wouldn't be a bank.
Speaker 1:So that's their business is in dealing the money out right, you're absolutely right, but of course you know people don't know. 10%. You come to the SBA with 10%, even if you have collateral or not, and you have good earning potential, you have good liquidity, you have a good record of saving and being credit worthy and things like that. You can go and have like 10,000 liquidity and be able to get a loan. It's possible People think they have to be millionaires or their net worth has to be in the 500,000 and up. That's not true. You can be a normal Joe, like you know. I mean, look at us two brothers. We look as normal as possible.
Speaker 2:Super normal. So I think I would imagine you know so you've been doing this for a few years and you've been seeing a lot of folks come through and you know, apply for financing and really start to start to build out what that dream was like. I'm guessing that you must have realized at some point, like damn, I'm not different than these people. What do I want to do?
Speaker 1:Exactly that is exactly what I realized, bro. Like I was looking at, like, of course, they come into me and they give me their personal financial statements. I have their profit and loss statements, I have their tax returns and they look similar to mine. So you know, I was putting these people on a pedestal because you know, hey, you have enough money to be able to realize your dream, until I started to see the numbers consistently like okay, this person has around the same amount of money I have, and they just got approved to purchase a basket and robins for $700,000 through the SBA, but they have the same type of liquidity and same lifestyle and structure that I have. So you know, as I've seen it more and more, it's just like anything when you see things and actually be able to feel, touch and hear, you start to believe. So that's what started to happen to me.
Speaker 2:And I think that's one of the great things. And look, I'm a big believer in the franchise business model. I'm a franchise owner, been on the franchise executive and corporate side for a long time as well. I believe in the model because it does provide a vehicle for the person who is. It's for anybody right, there's always a way, and franchisors have a lot of control too over how things play out.
Speaker 2:Absolutely so. It isn't even, like always, determined by the bank. So the numbers give people sticker shock. But I think the people who are willing to bet on themselves there's a chance, there's a pretty good chance that you can get yourself into that business. I've gotten into franchises with no money. I've gotten into franchises with a little bit of money or with a nice down payment where other people's money. I've gotten into free charges with a little bit of money or with a nice down payment or other people's money.
Speaker 2:So there's so many different ways to get into it. If you're willing to bet on yourself and I think one of the most important things that people fail to realize, it's not like you think that anybody with money can do it. It's not always about money either. Sometimes you're more qualified based on your experience than than than your bank account. So, um, I think that's an important thing to know when it comes to, you know, even seeking out a franchise businesses is, you know, what are the qualifications beyond the financials, like what kind of, what kind of time and experience do I need? What kind of training are they going to give me? So, um, you know, I think that's dope, that you've had that point of view, because you get to see, I mean, what costs what, and that's an important factor.
Speaker 1:Well, yeah, absolutely. And I mean, like I said, I look at the liquidity, I look at you. Know what you're going to have after you. You pay everybody. You have to pay your franchise fees, you have to pay your royalties. You owe a lot of people, a lot of money upfront.
Speaker 1:If you want to open this business, that franchise fee, as soon as you sign that document, they're going to want their $50,000 or $100,000 or whatever it is. So when you're coming to a bank, that's the first thing I look at is hey, do you have that down payment to even make this happen? But not only that what's your plans? Are you going to quit your job? Are you going to do it this full time? Are you going to do like a semi-absentee type of program? What are you doing and how are you going to continue to make money?
Speaker 1:Because, at the end of the day, it's great that you have a dream, but the bank wants their money and the bank wants to make sure that you can pay that. The bank's dream is profit. Exactly, they want to make sure that you can outlive that 10-year commitment that you're asking for, because the SBA gives you 120 months, 10 years. You have to pay this consistently for 10 years. There's a lot of times you could pay it off early, but the 10-year commitment, the bank wants to know that you can pay and if you can't, we want to make sure what kind of assets and collateral that we can take to be able to make up for that loan amount.
Speaker 2:Yeah, so what has piqued your interest to this point?
Speaker 1:As far as what Franchises?
Speaker 2:I mean not even particular, I mean any particular brands, but just industries.
Speaker 1:Well, I mean, and I'm sure if anybody reaches out to you and asked you hey, you know what's your process of picking the right franchise. Some people have been in it a little longer, where they may have started with the franchise itself and work their way up, but there are some like me that you know. I've always been in sales. I've always been in, you know, you know me, so I could talk my way around any room. You know me, you see it live.
Speaker 1:So of course, I want to go towards a franchise as best set to my skills. I want to make sure that I can get in front of people and politic and shake hands and and let you know I have a need that you know will help your life be simpler. Whether you know, whether it's real estate or anything like that. I'm offering you a need for your business and you're, for example and I'm going to give you an example, I'm not going to say the name of the franchise, but there's a franchise that builds, you know, small units in back of larger houses. So you know that fits a need for the community because these small. My Google is just talking to me for no reason. I thought that's weird. Be careful of AI, but anyway.
Speaker 2:You're about to start getting all kinds of franchise information in your Gmail Right.
Speaker 1:So there's one I'm looking at that they build these small houses and things like that in the back of the larger houses. They're 300 square foot, 500 square foot. I mean, if you look it up, you probably find what I'm talking about. But I like their concept because they're feeling a need that America has One the housing crisis. I mean rent's way too much, it's mortgage way too much, interest rate's way too much. So if you have smaller spaces, you can actually get people in nicer homes to where they're not spending $3,000 a month as a 20 plus year old who's just getting started in their career. So I'm not only looking for a franchise that's going to help me financially. I'm looking for a franchise that's going to benefit the people I'm trying to help, if it helps, like a housing crisis, that's something that I want to be a part of. I want to try to figure out how we can make homelessness easier in every state.
Speaker 1:Having tiny homes is a way to do that. You know, when you have your senior citizens, I mean a lot of people, of course, within our age. I ain't saying my age. I look young, I know, but a lot of people within our age limit have elders. We have people that we have to look out for, whether it's parents or whatever, and you want to be close. They have a franchise where you build these tiny homes that are luxurious. They're beautiful homes, 400, 500 square feet that you can have your parents right there. It's almost like a pool house that you've seen on Fresh Prince of Bel-Air.
Speaker 2:A tiny house franchise.
Speaker 1:I like that, exactly, exactly. So I've looked at many different ones, but I am going strictly on what my skill set is and how it's going to relate to the franchise because I want to be passionate about it, like I see your passion in pizza Like it's crazy. Relate to the franchise because I want to be passionate about it, like I see your passion in pizza like it's crazy.
Speaker 1:And now that huh don't do this, no, no I'm saying I see you, no, no, I see your passion and well, I'm not going to bring up you know, being being the prince, of prince and coming up under your wing but?
Speaker 1:but seriously, I just see that you know, yeah, it's hard work. Yes, I understand that, the issues that you probably go through, especially employing a younger generation and things like that. So you go through all that and the reason you go through that is not only to be able to feed your family, literally and figuratively, but you also are. You know you're building something. Or you know you're building something Like you're showing your children, hey, here's what I can do and here's what you can do as well. And I see that passion because you have the ability to do all that. Even with this podcast, you're trying to shape minds. You know you're trying to say, hey, it's something that we can do. As a people Like you don't have to worry about, you know, not having this or not being having this education. You have the ability to own your own piece of the pie. I guess you could say when you do that, you know they're not you can own that piece of the pie no pun intended.
Speaker 1:Um, so that's a beautiful thing where you know I wasn't able to dream that big like I'd go to the mcdonald's when I was a kid. Every day you go to wendy's and you go to all these fast food, but you didn't know they were business opportunities.
Speaker 2:Yeah, you didn't even know that somebody owned that like that, that, that didn't, that didn't cross your mind. And look and and I think my story is a little bit different because I just came up in this and just started saying this to opportunities, but you made some, some really important points. When you know, and that was the advice that I would you know, the part of the advice that I would give you is choose something that you can be passionate about, because the hard times are inevitable, right, and that passion is what's going, is what's going to push you through to get to that profit. So, like, do something that you know that you can wake up and enjoy doing every single day. I love making pizzas.
Speaker 1:I love you know I love being around the team. I like working with my hands being not working with my hands. I'm not handy, but I'm like I'm artsy.
Speaker 2:Yeah, I'm not handy but I'm artsy, so I like putting stuff together and, you know, getting to the end product. But I would right, but I would not. I wouldn't, I wouldn't have the same type of passion and success if I was in an insurance business, because I can't look at the computer screen all day. So, like you know, I agree. And then, considering, you know, some of those other factors, I like what you said. I mean having to deal with staff and having to deal with some of the expenses and the overhead.
Speaker 2:So all of these, all of that due diligence is needed before choosing which direction to go into. And look, you know, there's franchising is is so wide open and I know we got a franchise expo coming up here next weekend here in Tampa. And when you go there you're going to see that and you've seen it because you've been, you've been doing your research. But anyone that does go to a place like this, you're going to see that there's every type, there's a franchise for every type of business there is, there's, there's somebody already doing it, and you can piggyback on their success or their potential success, because some of them are brand new, a lot of them don't have track records, but you can piggyback on that success or that or that potential success just by signing up to join into their organization.
Speaker 2:So a lot of options in franchising. So take your time. Take your time Absolutely that choice, because then, on the other side of that, agreements are not. Oftentimes, agreement is going to be a 10-year agreement, but I know there's some folks that do shorter deals, shorter agreements or licensing agreements for a year or five years, but typically you can sign a 10 year agreement. So once you, once you lock into that, you need to know that this is what what you plan to do for the next decade.
Speaker 1:This is your life now. This is, and you got to. You get out of it what you're put into it. And if I don't have the passion to wake up and do it, um, there's going to be time, just like when you go to gym. I mean, there's going to be times. Yeah, I want to work, workout absolutely but if I don't have the passion to be great at that workout, then I'm not going to get up.
Speaker 1:I'm definitely not doing it on weekends yeah so you know, that's that's a that's a good thing and and I I'm looking for the opportunity that's going to be something that I can wake up and be proud about, like where I step back and say, oh, I've made something not only just profitable, but I made something beautiful that's putting into the world something positive. And you know, there's 4,000 plus franchises and it's crazy when you, when I started to like work at this job and the different brands that were coming to me I've learned so much just having conversations with these franchisees and they're telling me their stories and they're telling me how they got there. And I started with a corporate job and then I went into this and then I knew I needed something for myself. Like everybody may be financially different as far as what their net income is and things like that, but everybody has a similar path to want to get to where you are and where I want to be is I am a business owner, like this is mine, just like your children.
Speaker 1:Like I want to make sure they grow and you know I'm going to feed them and treat them as they should to be able to grow to that adult that we need them to be. It's the same as your business. So 10 years shouldn't mean anything, because when you have that baby, you're already signed up for 18. So I mean, you got to understand that this is. It has to be a dream, but it also has to be a passion. You have to wake up and be a little excited about it, like, oh my God, I get to do this again for myself.
Speaker 2:Yeah, and I would say I think that's that's a hundred percent true, especially for someone that's starting out as getting into their first one. Now, when you get to the point where you have 10, 20, 50, a hundred locations, then you make a decision based on on potential profit and and gain and it becomes a different game that you're playing then. But getting into the business and starting from especially if you're going from a job in corporate America where you had a guaranteed paycheck or guaranteed salary, the services, all that, nothing was going to bother you until you log back in the next day, like that's it that's a different world than becoming a business owner and a franchise owner, because anything can happen any day.
Speaker 2:And you're responsible for all of it.
Speaker 1:It's you, it's on you.
Speaker 2:It's just having that, just having that mindset, mindset, what, what. So what are you most? What are you learning? That you want, or what have you seen, or that you, what do you want to know more about as you get deeper down this or go further down this path?
Speaker 1:I mean I'm, I'm a, I'm a student of any game I want to be a part of. If I say, hey, this is something I want to do, I need to know all aspects of it. Like the food service business, you know that's something that has been profitable within this country. I mean, you see it, there's a few. There's a new restaurant on every corner, so food service is big. You know it may not be the perfect fit for me, but I see you know the margins in as far as the way you can make money, I've seen it. So I wanted to talk to franchise owners like yourself that says, okay, well, how did you get there? I know you worked your way up, but once you got there, what was the feeling when you signed that franchise agreement? What was that feeling?
Speaker 1:The biggest thing when you first get into this and this could be a lot of people, it could be a little people, but it's that fear of, like you said, trading in your comfort, trading in that oh, all is well. I know if I wake up tomorrow I'm gonna have a job and I might have this money coming in every 15th and 30th. It's that comfort and the fear of losing. That is astronomical. It's hard, especially if you have something to lose, like I have a wife, I have kids. I have something to lose with quitting the job or doing something different. And it's scary because as a man, you don't want to let down your family, you don't want to have a pipe dream. You know I've had failed businesses. I've done and had my own before and you know most of them have failed just because I didn't have the proven method. But the reason I didn't have the proven method is because I didn't reach out and talk to the people who did it before me. So you know, when I see you and you're talking about it and you're you know, I listened to the podcast I'm like okay, you're really you're, you're, you're passionate. I already said that you're passionate about it. But I can tell you're trying to educate the feelings and saying it's okay to be scared, but there's a proven method out there. First, talk to the people that know. But franchising is franchising for a reason. It has that proven method. It has that you do A, you'll get B to get to C. We've had 400 locations that have done it. All you've got to do is follow this formula and that's it. That's it. So that's. That's it's me.
Speaker 1:I just want to continue to get education. I want to continue to learn from every service industry, even if it's not one of my own. You know, I want to know what was your feelings. You know how you're succeeding. You know, I want to know that if things go bad, how did you handle it? So that's been me and my process. I continuously talk, uh, toss out those questions. I continuously say why, why, why did you choose that? Why did you want to do that? Why did you? And you know it could be annoying sometimes, but it's feeding my education. So I feel like, when I'm ready to make that decision and sign that, that, that that agreement to be a part of your franchise, that I'm comfortable with it. That fear is gone because I've done the due diligence to feel comfortable enough and, of course, got to convince my wife that, hey, I'm about to invest $50,000 over her money. Before you kill me, let me show you what I've been doing and the track record.
Speaker 2:Yeah, sometimes that's harder than getting getting the money from the bank. But so I remember, you know, signing, signing my first franchise agreement um, I think I was 22, 23, something like that wow and uh, wow, and I was so happy, we celebrated, right, you know, we celebrated young, that's beautiful, like we won the championship right, popping champagne and all that didn't go to work that day.
Speaker 2:I love it. First mistake, though, because that one, that business didn't make it. That one failed. That was a sure. We signed an agreement, bought it for like 80k, end up, you know. So that was a sure week. You know, we signed an agreement, bought it for like 80K, ended up. You know. Not staying on top of my game and treating it like it was going to be on autopilot. You know I was coming from being a long time, not a long time. I was coming from being a GM and a multi-unit manager and getting into this franchise. I thought I was about to coast. I thought it was already there. You knew it all.
Speaker 1:You already knew it all.
Speaker 2:No, I didn't know nothing.
Speaker 1:That's what I'm saying.
Speaker 2:You thought at that point you knew it all I thought I could do it all because I had seen success as a GM. We had turned businesses around, we were making a ton of money, but I hadn't been the one that had to write the checks yet money but I hadn't been the one that had to write the checks yet I hadn't been the one that had to show up no matter what to that point yet. So it was like I had to learn a lesson. I lost, I don't know, 40 grand in a matter of six months. You know what I mean. And it was like, boy, talk about hard on your ass. I was. I was out here doing surveys for money, trying to get back up. I ain't lying either. I believe you, I believe you, referrals, all that. But it was like. But I had to learn that. And what I had to learn was what I didn't know, which was, you know, I ended up taking on a partner. He brought some money in. He was like man, we were to P&L, that we were who's the accountant?
Speaker 1:We didn't have the money.
Speaker 2:We were just living by the checkbook and it was like you don't even know that you're running in the red. So we had to had to learn that lesson. It was an expensive one, but it was a valuable one going forward, because, when it was, because when it came time to do it again, it came with a different set of expectations personally, and it came with a different, a different set of values when it came to All right, let's, we don't make this work. This is what we know we can do. This is where it's at. This is what this is what, based on my experience, know it can do. You know pro forma, you know projections, everything that we needed to do to make sure, financially, this was gonna be right. So, um, yeah, that was, that was a hard one, but I was so hype, I was so happy. Now, I mean seven, eight, nine, you know franchise agreements later, yeah, it's just the same.
Speaker 1:Now you get it, but that's I mean not to quote iverson, but it's about practice, practice. No, you, and that failure was necessary for your growth. I mean you need it to be. It's just like all of us. We need to be knocked down a peg just to understand that we don't know what we don't know, and have that courage and that ability to ask.
Speaker 1:Like it's hard for a man to come, another man and come to another man say, hey, teach me, how did you? Because so many people got their hands out and they're like hey, give me, give me, give me. And there's not enough people saying teach me, teach me, teach me, yeah, and you know, that's what we need more of, because let's I mean, let's be real, there's over 4 000 plus franchises out there, but only three percent are african-american owned. Three percent. Google it, that's a fact, but that's big. But I think the biggest reason for that is is there's not enough education out there, like yourself saying hey, I did it, I fell, I fell right down, got back up, fell a couple times, but I got a few times, a few times since then.
Speaker 1:Exactly that's large because that failure is what people it scares people the most like what if I fall? What if I lose everything? It's that feeling of you're gonna be okay yeah it, it could happen, but you could.
Speaker 2:But you can also, you know, be successful beyond your wildest dreams. But none of that happens unless you put the shot up.
Speaker 1:What if it works? What if it works? That's always that's what I live on right now, like, okay, I hear everything you're saying, but what if it works?
Speaker 2:Yeah, what was going to be is it will work according to to the work that you put into it. You know it's these models, these franchise businesses, depending on where you go and look. My advice is do your homework on the franchisor. Make sure you're checking things, like you know. Check their track record. How many locations do they have? Are they running units on their own? Like to me, it's like a red flag. When corporate don't got no stores, when corporate don't got no units, that means they don't believe in a model enough to do it. To me, it means they don't believe in it enough to do it themselves or it's not profitable enough for them to operate it. So like ask those questions. If you're getting a disclosure document and that's another thing I want to touch on is you know when you get, once you're disclosed and you got access to? You know to the ins and outs of that business and that agreement? Look for the clues and disclosure document and the biggest one is item 19.
Speaker 1:Item 19. Yes.
Speaker 2:The biggest one is item 19. And this is for those that don't know. Item 19 is financial disclosures from a franchise company or franchisor, or financial representations Optional disclosure.
Speaker 1:Say that louder.
Speaker 2:Optional they don't have to. They do not have to disclose their financials to you If they do. That's a level of transparency that I can work with, right when they don't. I got questions why and there's different reasons why and if they can't answer the whys, then that's a rare flag. A lot of times they'll tell you like, look, no, we don't disclose because we got stores here and stores here and the averages don't accurately represent what it looks like. I get that. I totally understand that, because restaurants can fluctuate. But, however, if they don't disclose that, they also can't go and make claims on earnings or potential profit, things like that. That is illegal. So you got to watch out for that.
Speaker 2:And that's my biggest piece of advice is look for the clues in a disclosure document you got. You know there's no obligation once you're disclosed and once you sign that receipt and you receive that document, there's no obligation to move forward. But it is your right to go through that thing with a fine-tooth comb. Don't just sign it and forget about it. Wait till 14 days and you're ready to jump into an agreement because you're so hungry to sign the paperwork. You're excited, right? Don't let that excitement, you know, don't let that excitement blind you because it's usually glaring. You know item 19 is a big one. The other one I like is hold on. I think it is 21, 21.
Speaker 1:I don't have my agreement in front of me I am, I did and, if I can, if I can cut in a little bit, I mean one part of my job. The one part of my job is what I like about it is I've been forced to look at these and I'm looking at it for other people. And yeah, item 19 is one of your biggest. It tells you here's what you could make if you're one of our top 10 stars. Here's what you could make if you're one of our top 10% stars. Here's what you could make if you're even average. Here's what you might make if you suck at this. So that is a big thing. But another thing that I was really and this is from the large bank, again, this is from their legal team it's like, okay, we like to look at the financials, but I also need to see is how many, like you said, how many corporate stores are there? How many franchisees are there? How many has closed over the course of the last five?
Speaker 2:years, how many has been transferred?
Speaker 1:Yep, how many has been transferred to other owners? Why? Look at litigation? Oops, litigation is huge. You know, is there lawsuits against this franchise? I mean, people are getting swindled and so, yeah, that's a perfect advice, because the FDD is your, that's your peek inside, what you want to be a part of. I wish we had FDDs when we was dating, when we was younger. I could just look it over like, okay, oh, she got an attitude or item 19.
Speaker 2:So, man, that was perfect advice bro, but you would never spend that time looking through 100 page documents, so that's the.
Speaker 2:Thing it's intimidating. Right, it's a legal document and it's intimidating. Don't let it intimidate you. A lot of these things are standard, standard items you know outside of of the custom, stuff like 19 and 20. But a lot of the languages is consistent across most franchise agreements or most disclosure documents. So spend the time, hire somebody to help you go through it. Call me like whatever, like don't that's what I did. Don't just yeah, I'm not yeah, don't just you know, take it, sign it and think that you're obligated to get, because, look, also understand that a franchisor has a business to run to and their goal is to get you to sign that franchise agreement.
Speaker 1:Absolutely.
Speaker 2:For whatever reason, and not everybody's practices are above board. I'll just say that so they'll tell you backdating shit. They'll tell you this Like no, you got rights. Don't get rushed or forced or pushed into signing an agreement without doing your homework, and your homework is in that disclosure document. The other thing is go talk to franchisees.
Speaker 1:Validation calls.
Speaker 2:That's a love at all. Go talk to the people who are really out there doing it. Talk to the franchise. Once you get disclosed, you can go talk to them. They'll set you up with the ones they want you to talk to. Oh, absolutely, Go talk to the other ones too, because there's also a list of franchisee and franchise organizations. The franchisee names which locations they operate, all in the disclosure document.
Speaker 2:Talk to the vendors Also. Disclose in the document who the required vendors are. Talk to them. Understand what, because that's going to come with a different set of parameters. You might get approved for a franchise agreement, but you can't get credit from the vendor. You've got to understand all these things. That makes sense.
Speaker 1:So talk, you know, do your homework and talk to these folks, because it could be the difference between being successful and being unsuccessful so let me ask you a question when you I I'm pretty sure you probably didn't when you're in your early 20s, but did you get a, a franchise specific lawyer in place to review the fdd, or was you comfortable enough with the the FDD once you, you know, kind of went down the line to be able to understand it?
Speaker 2:so initially, no, I just trusted what was there. I didn't even read, I didn't even read it. But I also. But I also worked for the organization that I signed the agreement with. So, like I was on the corporate side, I was, you know, I played a role in what was, what was being disclosed in the in the document, and we and I ran corporate stores. So I understood the model, so I had a. I had a little bit of a different, you know, different insight. Now now no, even even now, like I just signed a renewal for West Shore, who I've been a franchisee of for 16 years, all right, just signed another renewal for a location here in Brandon, for another 10 years.
Speaker 2:I'll tell you, coming from the corporate side, I helped put together the FDD. I was, you know, vp of franchise operations, worked closely with the franchise attorney who provides the FDD. I still sat with my partners and we went through that thing like because, like a fine-tooth comb yeah, because we don't want to miss anything. We don't want to miss, we don't want to misunderstand anything, we want to understand, we want to know all of our rights. So you know, I had a unique view of seeing working through this process and you know I had a unique view of seeing working through this process and you know, being in franchise sales and doing this a lot, I mean, every single day, we, we, we talked through and worked on a document. So that was like the life that I lived for years. But when it came time for me to put my name on it, I had to make sure that everything was as it should be.
Speaker 1:Right, and this is why it's valuable to talk to, like you said, the franchisees and things like that, because I need this information, because you best believe I'm going to be reaching out to you when I have that, uh, that franchise agreement in front of me, when I, you know, I, even when we, when I get the FDD, when I first talk to him, I'm going to come to you and say, hey, let's look over this man, Tell me what you think about this, Give me your advice on this because, again, I'm a rookie at this. Yes, I get to see the numbers and the banking side of it, but there is so much more. I only work on the financing aspect of it. I know what it takes to get financing for your goal. I don't know the other.
Speaker 2:You know these people write all kind of things in these FPDs know the other, you know these people write all kind of things in these fbds and it and it becomes and it could, all you know it, all you never want to get to the. So franchising and franchisor relationships are always a little bit like yin and yang. Just because, just because that's the nature of it, we franchisees pay franchisors.
Speaker 2:franchisors are supposed to support franchising, right? Whatever it's always, it's always a little bit contentious, right? So part of the process is sometimes you got to refer back to the document. So you don't want to be the one that don't know your document.
Speaker 2:And if they're telling you, hey, you're due for a technology upgrade I know you just got new computers, we're about to change, we're changing vendors, you're going to have to drop another 15k on new POS system and you're like, oh shit but, then they say you might want to refer to this section so and so, and this and this where it says we have the right, we have the right, you have agreed to this section so and so, and this and this where it says we have the right, we have the right, you, you, you signed, you have agreed to this, you know, and every two years from now and this, so, like all these different things and I was with checkers, it was, you know, keeping the, you know, the upkeep of the building and the outside, like every every two years, had to be a refresh, or you know, every four years, you know, playing a remodel, like stuff like that.
Speaker 2:So it's all in, it's all in the agreement, and things that are not in the agreement are always, you know, negotiable. But if it's in the agreement, you, you pretty much, pretty much signing your way, signing away your rights to even dispute it, right, right, right, I mean.
Speaker 1:I was with a company that charged like if you.
Speaker 2:So you know how you get customer reviews right? Mm-hmm, there's fines. I was with a brand that would fine us if we didn't respond within 24, 36 hours. You get a fine. You get a fine. Wow, and it escalated. So it was like so little things matter but that. But that brand also operated with excellence and that's part of the reason because you ain't not going to let that happen too many times. So, like there's a there's there's so many different nuances and things in the agreement that you just want to make sure you know what you're getting into Because, like I say, you're signing up for at least a 10 year relationship with that franchisor, so it's best that you be on the same page from day one.
Speaker 1:Absolutely, absolutely. I got it. Man. That's dope, yeah, and that's that's all I said. It's it's. You know, being able to have these conversations has taken away that nervousness and fear. It's given me that more, that more comfort.
Speaker 1:You know I'm reading books and I'm, you know, making sure every day I am putting something in my mind that involves franchising and the path I want to do. I mean, I focus on my why constantly. Somebody told me that I don't know who it was when I first started this process. Like, you need to write down your why. What's the reason that you want to open up a franchise?
Speaker 1:Everybody's going to say money, but you got to have a deeper understanding of your why. Is it to spend more time with your family? Is it, you know, to travel more? What is your purpose for wanting to do this? And if my why doesn't motivate me, you know, when I'm five years into this 10 year agreement, I'm like, oh, you know, then it wasn't the right purpose. So you know, that's been my main focus is reading my why, as I'm searching for these different franchises, to have these conversations with it, and I let them know, like, here's what I look for out of you because, yes, I am buying the right to use your brand, but I want to be successful, and you want me to be successful, so I'm going to.
Speaker 2:You want to have influence in whatever brand.
Speaker 1:That you have influence, exactly, you're not going to push me around, you want to have a.
Speaker 2:It's a partnership. It's, you know, even though you pay the fee you know to use to to use the branding and the logos and you know the images and the marketing and royalties. I mean there's a lot of benefits to it. There's also benefit to you being an extension of them. So they're getting the benefit of having someone who they know is going to be a good steward of the brand Correct, because that helps them sell more. So absolutely you want to, you want to make sure you have influence and there's different ways.
Speaker 2:Some, some franchise brands are small and you know they don't have. You know, you know co-ops or you know advisory committees and things like that. But some, but a lot of the big ones have, you know, franchise advisory boards or you know action committees that give franchisees a voice and give them the opportunity to steer the direction of the brand. You know that, based on what's happening at the, you know at the, at the store level, on the ground, like because you know, once you get so big it's sometimes you become out of touch. So you've got to make sure that the voice of the franchisee is heard too.
Speaker 1:Absolutely Right, right, right, right. What else you got? Even a viewer. Yeah, at least I'm covering some big topics, man, and this is a lot. This is this helped me a lot just having this conversation and talk through it, because a lot of things I'm reading and and taking in. You know, of course I'm on youtube listening to all the gurus and the coaches and the brokers and the you know, but I'm just taking little pieces from everybody and and it all starts to make sense as I listen to it every day, I start to understand. You know what people are saying. You listen to the nightmares of franchise ownership, but you also listen, listen to. You know success stories. That's what I try to put inside more than anything is give me the success stories.
Speaker 1:As you're talking about how you built your empire, it's okay to tell me that you failed. I actually I prefer to hear that you failed, because I understand you're human and you was able to overcome that. Um, I want to know how you overcame it. You know that's valuable to me. So you know, by you saying hey, I was this big, happy 20 plus year old.
Speaker 1:You know, I had my own business, I was doing my own thing and then he got hit with the wah wah wah. You know you could have folded up to the corporate world or went back to, you know, being general manager for them or things like that. But you were like, ok, I'm going to piece everything together and do it again. So that's what brings me comfort when I'm looking for these franchises, because I know not only do I believe in myself, but I believe if something was to happen, it's not going to be catastrophic, it's something I can bounce back from, I'm not going to lose my life over this. You know, I may lose a few dollars, but I gain valuable education and sometimes valuable connections for my next endeavor. So it's good to have these conversations just to kind of prepare me a little bit more. It's giving me that armor that I need to go in and sign that agreement. Yeah.
Speaker 2:I would tell you, man, just just you know, go go about it with with a clear head and know that look for a partnership that's going to believe in you as much as you believe in yourself.
Speaker 2:Because because, like I said, said you in it for the long term and there's gonna be ups and downs, no matter what business you get into. You know this, you, you know you've been in business for yourself plenty. So there's, there's just gonna be. There's gonna be some good, there's gonna be some bad days, there's gonna be some some moments where you did something that you couldn't even believe how, how well it turned out. And when you start to see that and you make impact on a community, that shit is rewarding even greater than that money. So, but then I would also tell you, you know, and before we sign off, but think about as you're getting into it this is the part that no one ever thinks about is what the exit plan and what the succession looks like, because, again, they're expiring agreements and on the other side, in franchising, when you're a franchisor, you're either growing or you're dying, right, so they're always selling they're always evolving.
Speaker 2:they're always trying to sign more deals, which means the pool naturally can you know the brain in the pool naturally gets, just gets younger and things just happen and people age. So you know, I was, I was at a conference a couple of years ago, a franchise operators conference, and one of the one of the gentlemen that was on the panel was a long time franchisee for big frog and he had been in a system for 20, you know, 20 something years. And now he's like we're. We're at a point now and I hadn't even thought about it he's like we're at the point now where we're trying to figure out what's next. We built our business to a point where it's probably outpriced in value. It's outpriced, anyone that can buy it, unless they're another, a larger franchisee than us. A larger franchisee or corporate, you know, gets you for nothing.
Speaker 2:Or we let them expire, we close them, we retire, we just you know, or you know our kids don't want it. So it's like what's the succession look like, what's the exit plan look like, and not saying that you got to have it all figured out from day one. But it's important to know, like what your options are, because at expiration of the agreement. What's next? You can sign a renewal. Do we get a discount? Can we relocate? Can we reevaluate our terms? What's the next stage of this? Because it becomes an important decision for the next phase of your life after that, think about now, but also think about what's going to happen 10 years from now.
Speaker 1:Right, that's big, because I'm 45 now. I didn't start, you know, when I was a little bit younger. This is just a path I'm taking now. You know I'm a grandfather now so of course I want to be able to spend more time with the kids and the grandkids coming up. I understand that I'm going to have to find something that's going to be able to afford that time and give that time back. So that's something I look into.
Speaker 1:I mean, I also deal, you know, at the job I do a lot of resales. I deal with people who are first time franchising, buying an already established franchise, because people are retiring or people don't want to sign another agreement or they tripled the value of what they paid and they just want to walk out of the sunset. So you know there's a lot of different options. And that's a good word right now, because 10 years from now, of course, I'm gonna be 56 and you know it's time for me to go sit on the beach somewhere we're in florida when we're gonna relax, but it's like damn, I can't because I got to take, we got this, we got all these obligations I got to die if I got this like so.
Speaker 2:So what does that look like? Are you, you know? Do you continue? Do you sell? Do you, do you walk away? You know what? What does that look like? So you know and it talked to, that's another question to ask and talk to the franchisor, like you know, how many people are renewing what's your you know? What do you? What does it look like at the end of the agreement, you know?
Speaker 2:do they have first right or refusal to come in and just take over your business and you know, that's right up for a decade and then you know you decide you're done and you don't have an heir or a successor and you know corporate comes in and reach the benefit. Not that there's anything wrong with that. Sometimes that's the best plan. Like, look at what happened here in Tampa with Casper's you know all of those you know back to corporate. Corporate because that was the end of their. You know that was a six decade run in the mcdonald's world. They turn them back over to corporate. They still hang on to the service end of it. So, so like they, they build different things and that would be another thing.
Speaker 2:Just thinking about that, you said, if you said it earlier, the restaurant business is huge. Right, it makes up most of what the franchising world looks like. But also understand that there's so many different industries that piggyback on that because of it. I mean, look at service models, equipment, dealers and vendors. You know all kinds of things. Lending companies like there's so many different ways. The ride stores there's so much. I got 20 vendors you know that I have regular dealings with. So like there's so many different ways to even to reap the benefit of the restaurant business without having to actually be in the business. So, like you know, there's layers to it. So when you're looking at it, if you're looking at something that you like, maybe there's another layer to it that still gives you that freedom, but access to where you want to be. Absolutely, that's what I was going to say. Keep the feelers out for all those things.
Speaker 1:I mean, it's a good word, that's a good word and that's why I'm glad you're my brother, because I need this, every word you're giving me. I need it, man.
Speaker 2:I appreciate you letting me come on and do this live so we can use this content and try to help somebody else, absolutely. You got access to me. You can call me anytime and we can always have these conversations, but not everybody has that same level of access, so I just wanted to do something that puts it out there, because I just want to help people make decisions. That's what we are. Look here, go the plug and if you do decide that you want to get into the restaurant business or you want to get into pizza in particular, I can help you navigate those waters because I have experience.
Speaker 2:I've been doing this for 20 plus years on the franchise side and as a franchisee. I've opened restaurants, I've closed restaurants, I've failed hard. I've failed and climbed back. I've seen zero dollars in that bank account and I've had to turn those keys in. But I've also seen what it looks like to be able to see my kids in there and my kids are making pizzas and having fun and making videos and my son is passing out pizza parties at school like he owned a joint, so like.
Speaker 2:So you know, I've been, I've been up, I've been, I've been down, I've been up and you know I'm just looking forward to helping the next guy do it. So you know, that's what's up. People know how to reach me. Yes, sir.
