Brett: Welcome back to the Corporate Escapee Podcast. I'm your host, Brett Trainor. But before I get to today's guest, I wanted to let you know that we have launched the Corporate Escapee Collective. It's a free online community for fellow escapees. If you're interested in joining, please contact me via LinkedIn or through email, which you can find in the show notes.
Okay. Today's guest is Mike Waller, and Mike is one of my favorite types of guests. He's not only a corporate escapee, he also helps other escape. A little bit about Mike. Uh, Mike had three decades in enterprise software services, including 20 years at a d p. I definitely think that qualifies for corporate
He retired when he had an epiphany, and we'll dig into that into a moment, and is now in year 20 of his original five year escape plan. Uh, where he is a coach that helps people dream to what the future can be, especially folks that have an interest in exploring business ownership through the wonderful world of franchising.
Welcome to the podcast, Mike. Did I miss anything?
Mike: Uh, you hit all the high spots, so great to be here this
No, no, my pleasure. Like I said, it's, I love having, uh, the dual guest and so, you know, a few things that I do want to get into today is definitely your journey, right? Because I love and want to get more details on how a five year escape plan turned into a, a 20 years and going. Uh, little bit about too, what that epiphany was and what, I mean, I think we've all had 'em that have left, so I'd love to hear yours.
But then, quite honestly, I have not had anybody on the podcast yet talking about franchises. So really hope you can, you know, help us understand why this could be a great path for corporate escapees. So we'll get to that part. Part two. So part one. Let's talk about that, that, that epiphany. What led you to, to make the change and how did five become 20
Brett: Well, in 2002 I was, uh, working for a, uh, Software services provider and enterprise software company by the name of Mincom, which was, uh, based out of, uh, Brisbane, Australia, but had the North American headquarters in Denver and I live in the Chicago area. And, uh, I was commuting back and forth essentially for about four years.
And my wife and I have been married for a number of decades and we have four children together. And in 2002, my youngest daughter, her name is Katie. Katie was about 12 years old and she made a comment to me one day that just kind of was the earth through the heart thing. She said, gee, dad, it'd be nice to see something to you other than a cardboard cutout. Now you know anybody who's got kids, you kind of know when you hear a comment like that coming from your kid and. Kind of a joking, half casual, half serious comment. What she was really saying, dad, you're never around. You're gone all the time because of my routine was get on an airplane on a Monday morning heading to Denver, starting my week there, and then traveling.
I'd be on an airplane probably four or five times a week and then do it all over the following week. And so that was a wake up call for me. And I made a decision, uh, roughly mid-year of 2002 to just essentially leave. Uh, call it early retirement, but I didn't mean retirement in a literal sense. I meant retire from what I'd been doing in my corporate life.
And I really didn't have a destination in mind where I was gonna go next. But about, uh, I stopped the traveling and stopped, uh, working for the company, uh, roughly July of 2002. And in August I started getting a little restless and I was really looking for something that would be kinda a lone wolf kind of a business that would gimme the opportunity to spend a lot more time with my daughter. And so I connected with one of my old friends from AD P who had been working with a coach from a business called The Entrepreneur Source. And his name was Dave. And Dave was in Portland, Oregon. And Dave, um, and I chatted quite often, but he shared with me that he was working with a coach from this business called The Entrepreneur Source.
And he said that that the process is intriguing to me because he said it's really all. Figuring out what do you wanna be when you grow up next in life, call your career life. And cuz he was in a similar situation than I was. Um, and so anyway, we, uh, spent quite a bit of time talking about that. He told me about the journey of this with coach was taking him through and I said, tell me a bit more about the company, the entrepreneur source.
He said, well, it's a franchise brand. And he said The model of it is coaching people who again, have an interest or a curiosity about exploring franchising as an a next career option for him. And so I said, well, that kind of intrigues me. And I said, can you, uh, connect me with somebody here in Chicago area, which he did.
And so I spent some time with an individual by the name of Paul who took me on a journey, which intrigued me greatly because it was a very holistic approach to. What do you really want your life to look like in this next chapter? Uh, kind of think of it as U2 point. Oh. Coming from the world of software, we have generation one, generation two and beyond.
So when you think of U2 point, oh, you know, what do you really want it to be? But really looking at it from a number of different perspectives. And it turned out in working with this coach, he took me through that journey and we explored it using an acrostic referred to as I. Which stands for Income, lifestyle, wealth, and Equity.
So if we started to build a platform of, of goals or objectives of what, what do each of those elements mean to you? What's the kind of income expectation that you've got? Um, and so we talked about that, but then we talked a lot of time about the lifestyle element of it. What does it really mean to, you know, Full control over your lifestyle because there's anybody who's been in corporate America for any duration of time, you know that corporate America can own you.
And I enjoyed it. I, I, I have no complaints about my corporate career. I, I thoroughly enjoyed it. , but without a doubt, I mean, all of my business relationships, all of my social relationships were pretty much wrapped up in that corporate life. And so I really kind of came to that place of saying, you know, I really want to have a lot more time to spend with my daughter and the rest of my family.
Our family's kind of unique. My wife and I, when we first got married, we had three children that, uh, about three years into our marriage we're each three years apart. And then we. we thought, well, we're done, you know, no more kids. And then one day, my, now middle daughter, her name is Kelly, she, uh, made a comment to, uh, my wife.
She said, why don't you and dad when she, and she was about, Probably 10 years old at the time. And she said, why don't you and mom and dad have another kid? Because I'm tired of being the little one and everybody picks on me . So, and my wife, faith is a big part of our family life. And so my wife just simply said to her, she said, well, and kind of dismissively, she said, you know, well Kelly, why don't you just pray about it and we'll see what God does. I always tell people, be careful what you pray for because you might actually have an answer to that prayer that might surprise you. Uh, my wife showed up pregnant at 42 with our youngest daughter, Katie, and so it, uh, it was a different chapter of our life. The older kids, whenever Katie was about 10 years old, whenever she was 12 years old.
As a matter of fact, my son was out of the house already am I two older daughters were in college, and so we were in a different chapter of our life in terms of child raising, and so anyway, These lifestyle elements became really important to me because at that stage of the game, you know, I really wanted to have a lot more time to spend with her because of the comments that she'd made to me.
Cause what she was really saying is, is that we were growing distant. Because I wasn't there enough, and I'm happy to say that once I made that escape from corporate America, I, uh, was able to be there at three o'clock in the afternoon with my wife sitting in the stands of her high school on or gym, watching her play volleyball.
Uh, which I probably never would've had the opportunity to do that very frequently in the past. So that was incredibly rewarding to me. . And so it really became a, a case of that lifestyle was a significant element, but the other third component called wealth, it's like, do you want to use the business to create wealth in some form, whether that is retirement or whether it's the el last element of creating equity in a business that at some point in time you may choose to sell that business.
And so those were. important components to me, but they weren't as important as the lifestyle element was. So anyway, I went through that journey and this coach that I work with, cuz the model of the entrepreneur source is kind of unique. It's all about going through this coaching experience of trying to help figure this out of what you want this next chapter of your career life to be.
And then identifying different kind of opportunities that would make sense to explore in the world of franchising. That would really. Map to the profile of what we've put together in terms of the goals, needs, and expectations. And so going through that process was very intriguing to me. We ended up looking at probably four or five different businesses that I could potentially invest in.
And then one day I said to my coach, I said, Paul, you know, you haven't really been pushing the idea of the Entrepre song. You haven't even brought it up as an option to consider. And I said, you know, as I look back at. List of things that are important to me. It seems like a lot of what you're taking me through here kind of checks a lot of boxes for me.
So bottom line on all that was, is I explored it in a little bit deeper way. Uh, talked to a number of current owners of the entrepreneur source. Ended up investing in it in November of 2002, and opened my practice in January of oh three. And again, my five year plan was, is that I'm gonna do this for about five years and then I'm gonna go to the traditional retirement route.
And, uh, I was in my, I was early fifties whenever I jumped into this, when I left corporate. . And uh, lo and behold, here I am 20 years later, I'm still doing it now. I always tell people I said, that either makes me the dumbest guy on the planet. Cause it's like I haven't figured it out yet, or I've actually thoroughly enjoyed what I do.
And what I've found is what this business provides for me is, The ability to stay engaged, to have purpose in what I do every day, to help other people go through that same journey that I went through 20 years earlier, and to really explore it in a way that, uh, hopefully will help take them to the next chapter of their lives.
So, probably a little bit long-winded, uh, uh, answer to your question there originally,
Mike: it was, it was perfect because literally you answered every question that I would've followed up with as you were going through the process because you know, longtime listeners of the podcast know we talk about, or I talk all the time about finding what is that purpose? What do you want outta life?
Especially the. The phase two and well, I say phase two. There's a book, I think you actually referred to me think it was called Halftime, right? I mean, it's funny, our, our pads are similar.
I'm just trailing a little bit behind, but yeah, my, my five year plan is a 20 year plan, right? I want to do this until I'm into my, my seventies. Maybe not the podcast at this point in time, but you know, what I'm developing now is, is what I want to do. And I think there's so many of us. That spent that time in corporate, and I tell people my corporate was good to me in the same way.
Now by the end, was that getting the same satisfaction of it? No. Probably. It's kind of like, like you were, and it was just, you know, time for that change. And I was just doing a little, kind of reflecting on that, that tipping point. And, you know, I, and maybe even shared with you at this off the air that, you know, my wife had asked you, she's like, what was the matter with you?
Right. So it just had. Every, the job was fine, the family was everything. It was just, it just didn't have that, that meaning and the, and the purpose of, of where it was going. So, you know, I think that's, you know, kind of the, your blueprint is, you know, what I want my blueprint to be is, you know, again, I can't imagine the traditional retirement route of.
Playing golf seven days. I love to play golf. There's no way I could do it seven days. But I like the idea of working, you know, your hours when you wanna work, work the hours. So, But I like the idea of the, the franchise type of a model, especially if you maybe not have the, the business ownership in the past that you've got somebody that can show you. So Best way for somebody that is at that midpoint right now and thinking, man, there's gotta be something better than this corporate life. You know what's, what's, what's the sales pitch for franchise?
Brett: Well, you know, I, I do quite a number of workshops of, exploratory workshops, if you will, to try to trigger people's thinking in terms of the whole idea of business ownership. Something that makes sense for you. You know, this would be anecdotal comment, but I would probably say in my experience that probably. 60 to 70% of the working population at some point have at least thought casually about the idea of what about doing my own thing, doing my own gig, whatever that's gonna look like. And so I, I think it's important to identify who you are as a person, uh, when you come on a corporate America, depending on what level you are at, of leadership or, or just a, a, a role that you played in corporate America, whatever that might be.
You develop skills, and many people are what I call truly the entrepreneurial type of individual. Um, they are the ones who are the creators, the visionaries, people who have an idea to do something either differently than it's being done today or to do something completely brand new. There's a, um, a book that I always refer people to give consideration to taking a look at.
It's called Start With. , which is written by Simon Sinek. I don't know if you've, uh, read that one or not, but, you know, I, I've. I've read a number of his different books, but the, the first edition of his book was written in 2012, I believe, and he really explored the journey of you a leadership perspective of why do people do the things that they do.
And, you know, he has a perspective that says simply that you can always explain, you know, how the house and the what's of what you do. But what's the reason why somebody wants to go do something very creative and do it very differently. So when you think of somebody like Steve Jobs that created Apple Computer, you know, he and Steve Wasniak created.
Parents' garage, uh, not necessarily with an aspiration of creating a multi-billion dollar company that today has incredibly successful and has changed the way in which we do life in so many different ways. But that is truly an entrepreneurial kind of a person. You think of it like a Michael Dell that created Dell computer.
You think about a Walt Disney that came up with a whole idea and built an empire around a mouse. And so, uh, you know, when you, you, you begin to, to think about some of those things, it's like the first thing you gotta ask yourself is, why do I want to do what it is that I want to do? And so, are you the entrepreneurial type who has those kind of ideas, that kind of vision, that kind of drive?
or are you somebody who's better at executing? You're somebody who's better at just simply executing somebody else's plan. Um, no right or wrong, either one of those. It's just a matter of identifying who you are, what gifts and talents that you have, and is franchising an alternative. In all honesty, I had.
I was like the average person in 2002. I knew about franchising from the perspective of, yes, I go to McDonald's. Yes, I go to Subway. Yes, I go to Jimmy John's and all these other kind of franchise brands that most people identify with the world of food. And as I began my journey to learn a little bit more about franchising, I came to realize that franchising is a huge part of our economy today. You know, literally there are 4,000 plus franchise concepts that exist out there. Like I say, most everybody knows the big brands. Cause all you have to do is drive up and down any major thoroughfare in any major city and you can identify a whole bunch of franchises as you drive up and down that thoroughfare.
But uh, there are also a lot of businesses that most people would not even recognize as a franchise concept. And so it intrigued me when I began to start to learn about it. And obviously the journey, you know, it's like anything new you jump into, you're really intense in it in the first couple of years as you're going through the learning process.
No matter what level of knowledge you have, you're learning more and more each day, you know? Began to be aware of the fact that, you know, there are almost 800,000 businesses, franchise businesses in our country today. And, you know, they, they literally 75 different industries, so they pretty much crossed.
All elements of society. All elements of of business. Um, you know, one of the biggest firms that I work with today is a, an enterprise called, uh, neighborly. Neighborly has 29 brands under their roof, so to speak. They're a roughly a 3 billion organization that has about 5,000 franchisees. I came to realize that wow, there's a lot of big players that exist in this world of, of franchising.
And so, and something else I discovered, which really intrigued me is like one out of every seven people that are employed are somewhere within the food chain of, or the supply chain of franchising. You know, whether it's, you know, the obvious things are when you look at a McDonald's and you've got servers and you've got, you know, building owner and so on and so on.
But you gotta get somebody who owns that building and which typically is McDonald's in that case. Uh, or it's, it's a case of, you know, somebody drove the food to the, to the back door and somebody unloaded it and all that sort of thing. When you start to think about all those things that are in the supply chain, it's like, wow, it has a big impact on our, on our society today.
And I think, you know, My recollection is correct. I think it's probably somewhere in the neighborhood of three to 5% of our GDP is actually generated through the world of franchising. So it's, it's a big element in our business. I didn't know any of that stuff, in all honesty, but the whole deal with a franchise is, is that you have to be comfortable with taking somebody else's idea and executing against it.
Because that is essentially what you are buying into. And by the way, you never own a franchise in the literal sense. What you do is you license the rights to use everything associated with that franchise. And so that's what you're really buying is a set of systems that everybody else, or somebody or another organization has developed that they have codified, that they can train you on it and that you can execute with the intent of creating a successful business.
Because in the world of FraNChiS, a franchisor, which is the term for the, the master company, if you will, the McDonald's corporation is, uh, they're the ones who build all this stuff and they perfect it over a period of time. And so what you are doing is getting the benefit of all of their.
Finding where all the potholes are at because they discovered all that. I remind people, you know today McDonald's probably has somewhere in the neighborhood of 33,000, 35,000 locations worldwide, the biggest franchiser in the world. But they started out with one location at one point in time. And if anybody's ever read the story of Ray Crock, uh, it happenstance in many ways that actually McDonald's came to be, but it'd be it really.
I want, it's not the Birth of franchising, it's franchise. He's literally been around since the 18 hundreds, but in a different form. Im Singer is one of the early what they consider to be a franchisor. When he came up with the singer's sewing machine and was creating a distribution network for it. It was really kind of the early stages of where franchising began.
But it franchising really became popular, you know, after McDonald's began to get into the business. And over the course of 60 some odd years,
Mike: I didn't realize it was that big until we, you, you threw out some of those numbers. And you're right. I think most of us think fast food, right? That's the, the franchise. But like Serve Pro, I think is franchise. I think there's just like, how many, you said 400 or 70 different industries have represent
Mike: 75 different industries, which is, which is fascinating.
And on the flip side, I actually was part of a franchise group. Back in the nineties, so this was long before even you, you headed in there and it was a bagel concept out of, um, California called Bojo Bagel. And I'm not gonna tell the whole story, but I came in and they were looking for somebody basically to build out the Midwest.
They bought the Midwest rights to this franchise. and they had one store, but they needed somebody to come in and operate and build out and take that plan, what they had. Well, turns out that the Bon Sugar Bagel, it just didn't translate well into the Midwest, into the sense, so the, the naming wasn't there.
The food quality was fantastic. It was a boiled bagel. Right. So their, their operations procedures were good, but it wasn't, it just wasn't the right fit. And one of the things, tying it back to McDonald's, I tried like hell to get into Hamburger University to learn the, the, because they were the best at that operation man.
Just. Everything was, was super efficient, couldn't figure it out. I couldn't find any favors to call in and, and so, so I saw then that the power of what the franchise could be, but there was also some risk that it wasn't a good fit or it wasn't built out far enough. It was basically a young brand and so it hadn't proven itself east of California.
So how do we think about this, right? Assuming. Everybody should come work with you, but if they don't and they're, they're gonna DIY this, what are, what's some of your advice?
Brett: Well, in addition to knowing, you know, what are your skills and your expertise, what are you really good at? Uh, I think it's also important to understand what's my measure of risk tolerance? Am I a risk taker? Or am I a risk avoider? Um, if you look at the extreme risk taker, those are truly the entrepreneurial people because they're not afraid of anything.
It's just there ha isn't a wall that they've run into that they can't go over, around or through in some way. Uh, Reid Hoffman, who's the, uh, one of the original. Developers of LinkedIn, you know, I think says very appropriately. He says, you know, entrepreneurship truly is like jumping off of a, a cliff and building the airplane on the way down.
I love that quote, and I use it in my workshops all the time. Cause that's truly what it's like when you're gonna be an independent entrepreneur doing your own thing. But in the world of franchising, Again, they put all the systems together and that's really what you're buying into. You're buying the rights to use everything associated with their systems.
Because people sometimes, particularly those that come outta corporate America, have become very comfortable with the fact that I got an IT department, I got a payroll department, I've got a finance group, I've got a marketing group, I've got, you know, uh, social media experts and all those sort of people.
If you've gotta create all that on your. And today we again live in a digital age. You know, that takes a lot of time, energy, and money to do that. The franchise typically will have developed all that, cuz in most instances, franchises start just like McDonald's did with one or two or three locations. They may actually be in existence for somewhere between 10 or 15 years, uh, before they actually become a franchise because they're perfecting their model, they're developing it, and they're document.
And they're building in the systems around that so that they can, again, train somebody else. Because in the world of franchising, the franchisor puts all that together. The franchisee operates the day-to-day businesses. Everybody wins because in the world of franchising, you typically pay a royalty, a percentage of your sales.
Generally speaking, not always, but generally it's a percentage of whatever your sales are. You give a percentage of that back to the franchise. And that's for the reason that they're gonna continue to do more r and d and they're gonna develop more product services systems, whatever's gonna make that franchise work.
So I think it's, again, going back and saying, you know, what am I really good at? One of the the things that I bump up against all the time is a lot of people say, I gotta do something I'm passionate about. And I say, well, you know, that's wonderful. I'm all supportive of doing something you're passionate about.
Cause that old adage about if you do something you're passionate about, you'll never work a day in your life. Right.
Brett: There's a certain measure of BS in the middle of that. In all honesty, , because the true, true story is, is that. You may find that you may not have a financial success with that business. And I always tell people, I said, if your objective, one of your objectives is income, if you don't find yourself in a reasonable period of time capable of generating the kind of income off of the business, you might find yourself with a very expensive hobby.
And I said, if you can afford the hobby, then go for it. Your passion will be represented through, you know, the expression of your hobby in that business. But if your aspiration is truly. have a successful business and be able to build wealth and equity and whatever those things are that are important to you, then you may find that, you know, the business may not be capable of doing that for you because all passions don't translate.
I know people, you know, love golf, love fishing. You know, I'm a boating enthusiasts. Our family are boat enthusiasts. You know, I'd love to do something associated with that. Could I ever make any money? I don't know, own a bait shop probably would not fill my expectations, you know, even though I love, you know, doing things associated with water.
And so I just, I challenge people to think about that. But what if you had a business that created a kind of a success story for you financially? that allowed you to pursue your passions, whatever they happened to be. And I'll share a story with you. You mentioned the name ServPro earlier. Uh, one of my most successful clients over the last 20 years was an individual I engaged with, uh, probably now must be around 15 or 16 years ago.
And he was a young guy at the TA at the time. He was about 22, 23 years old, had just come out of the University of Iowa with a degree in finance and went to work for Oppenheimer, the investment company. Hated every minute of it. And he, he and I got connected through a mutual, uh, relationship of another individual.
And, uh, he said, you know, I don't really care what the business is, but here's my goal. This is my number one thing that's in my mind right now. He says, I want to build a business that can generate 10 million worth of revenue within 10 years. Because if I just kind of take the averages and say, if I can create a 10% net return off of this business, that's gonna create a million bucks for me in, in, in, uh, return on investment or income.
And he said, I could probably live okay off of that. And I go, yeah, most of us could So anyway, I ended up showing him about three or four different ideas to learn about. And I introduced to him to the concept of ServPro, which is water damage, fire damage. Now, here in the Chicago area, ServPro back in the early two thousands was not established.
This was not one of the territory or one of the, uh, me major metros that they had really accelerated in terms of development. But they started in the early two thousands to do that, and I helped quite a number of people get into it. So I introduced him to it. He began, began to click with him. Now he's a, a relatively conservative.
Young guy, guy. And so he wasn't huge risk taker, but he said, you know, I get the business. It's simple. It's water damage, fire damage, restoration. You know, how hard can that be, number one. Number two, it's a pretty recession resistant business because no matter what's going on in the economy, if you have a, a flood in your basement or you have a fire of some sort, you're not gonna say, well, I gotta wait till the, you know, two, three years before the economy gets better before I'm gonna fix it.
No, you don't. So, over the course of the last 15, 16 years, he has far exceeded his expectations and he's on a track that if everything goes according to plan, that he will have a nine figure business for himself probably within the next five years. Now, that's an extraordinary success. If you look at the bell curve, he's the guy who's out there on a far top half percent of people that have really had an extraordinary success with it.
and you've got people on the other side of it that you know didn't have as great of a success and you got a whole bunch of people in the middle. And that's kind of what the world of franchising is, is is all about is, is that the franchisor can help you to. Make the business work, they can show you all the intricacies of it, but you've gotta get out there and you've gotta have a vision for what you want that business to be.
So his case was 10 million goal. That's what I'm going for. He worked the business very, very smartly and one of the things he learned early on was, is that, okay, I've got my territories here in the Chicago area and I'll work those territories, but he said, I have downtimes it. all level, particularly in the beginning.
And so he was smart enough, he figured out that, wow, there's a disaster going on somewhere all the time. If I look at Florida, you know what, what happens in, you know, mid-summer to or late summer to early fall, hurricanes show up. Well, what happens is, is it tears up the entire metro area of, of whatever city, Miami, Fort Lauderdale, Tampa, pick one.
and that overloads the system down there in terms of the operators that have their business there. So what do they do? They put out a call to franchisees around the country and say, have you got people on the bench send 'em to Florida because we've got a lot of work for 'em to do. He figured that out early on and so he hired crews that were willing to jump in a truck and go to Florida for three or four months and generate a lot of revenue for himself, and it's been very, very successful for him in, in terms of doing it that way.
That's the kind of creativity that you can bring into the franchise system. It's not like you're locked in, you gotta do everything to the letter, but rather you've gotta follow the system and not go outside of the guardrails, but you have creativity within the guardrails that allow you to be successful.
A lot of franchises are like that. Now. Back to your original question of how do you, how do you determine which one's a good one and which one's not? Virtually all franchises take you through an educational process. Normally, um, what I do in my world is I'm like the equivalent of an executive recruiter for franchise brands.
And what we do is we essentially pre-qualify people and try to connect people or match people with an opportunity that truly would make good sense for them. Kind of thinking like an e harmony. Kind of a model, if you will. You know, the dating platform where you know somebody's looking for somebody and they're one of certain characteristics.
I'm looking for the same thing on behalf of, of my client and then introducing them to those opportunities. So that exploration stop process starts by going through an education process with a business development person who will explain to them the complete model of their business. Everything associated with.
And so in that exploration process, they are by law because the, the industry of franchising, if you will, is highly regulated by the Federal Trade Commission at the federal level, which means that they have to produce a document that's called a Franchise disclosure document. An F D D is as commonly referred to, and that disclosure document, as the name implies, gives a. Snapshot of everything associated with this particular brand. From what's the nature of our business model? What are the inherent risks in this business model? Do we have any litigation, uh, that's been brought against us by anybody? What are our financials look like? What's the, um, order of magnitude of investment going to be for you?
What are those components of investment? But here's one of the other things that's really, really important in the F D D, is they give you a listing of every single one of their owners with the contact information.
Mike: Interesting. Okay.
Brett: So they dis they disclose that with the intent of if you really chose to, you can call every owner on the list.
Now, that doesn't mean that every owner's gonna talk to you, by the way, but it does mean that you can make that effort. So you don't have to talk to anybody. But the Federal Trade Commission simply says, every franchise has to disclose this information. And make it available. And so you're able to go through a pretty good assessment of what's the nature of risk associated with the business.
Now, part of what's gonna come into that is if you're an early adopter, if you're a higher risk taker kind of a person, but still wanna follow somebody else's systems, you can look for a relatively young brand that may not have a real strong track. Or you can look at like a Spro, which today has about 1800 franchisees, or the neighboring group that I mentioned before has about 5,000 very mature organizations.
And so you've got a lot of individuals that have been in the system for a long time that you can validate with those people, and so that's the way that you take some of the risk out of it. What I do is, again, help people to find opportunities based upon their risk profile, based upon their aspirations, and based upon their expertise.
Find opportunities, so I try to shortcut things for 'em and identify opportunities for 'em to take a more in-depth look at without any pressure from me. That's the, that's why I enjoy this. People say, why didn't you go into consulting? What do people do whenever they kind of semi-retired? They go into consulting, right?
Brett: Yeah, . I did a little bit of that too because in the mid nineties I took a sabbatical for about three years and did some freelance stuff. And, uh, then I went back into corporate for another four year stint before I retired. Excuse me. And, uh, so it, it's a case of you really, uh, you get a chance to go through and do this ex exploratory journey of figuring out what's gonna be a good fit for you.
And in that process, again, you talk to owners. Now, here's one of the constraints of franchising. Um, Within the F d D, there's uh, what they refer to as Section 19, which is essentially an income return on investment, uh, section, if you will. They're not required by law to put anything in there. we've all seen these pages and manuals.
This page intentionally left blank.
Mike: Yeah. Yeah.
Brett: Franchise owners can choose to leave it blank because their lawyers say, look, don't run the risk of potential litigation because you made a claim of something. And for some reason somebody thinks that they were misled in some way. And so, uh, That's one of the things that you can take a look at.
Now, the item 19, many franchisors will put information in there. They'll put in to say, you know, our averages are this, for our top performers fall, you know, we have X number that fall into this category, this many that fall in the middle. This many of them lower, uh, return on investment level. However, if.
None of that information is published within the F D D. The franchisor cannot talk about it by law because that's considered to be misleading to someone who's considering their franchise. And so that's, again, that's why the lawyers say, don't say anything, and that way you stay out of trouble. However, franchisees are not constrained in any way.
So where do you find good information? Talk to current owners of the business and my council to plead people is to always talk to people who've only been in it for a short period of time. Somebody's been in it for maybe three to five years and somebody's been in it for 10 to 15 years. So you get a cross section, and generally when you talk to maybe, I don't know, six to 12 owners of the business, you begin to see the common storylines of common threads and it gives you an opportunity to pretty well validate it, try doing that when you buy an existing business that exists out.
It's really hard because those owners gonna play it very close to the vest and they're not gonna talk. It's only one location. Again, if you wanted to talk to a hundred McDonald's owners, you could do that. Or ServPro owners pick any brand and you could talk to as many owners as you want to. Now, in the beginning, whenever this business development person is taking you through this educational process, they will typically recommend to you some people that kind of look.
Came from the same career path or came from the same industry or have similar family backgrounds. Whatever those things are, they will take you to people that you can talk to that will kind of fit that model so you have some points of connection. And beyond that point, again, you can talk to as many people as you want to, so it does mitigate some of the risk.
At the end of the day. You just gotta always do your homework. , and as we all know, some people do it very, very well, and other people don't do it well at all. I try to coach people through that journey to make sure that they're gathering the right kind of information, not to influence their decision, but rather to make sure they're gathering the right kind of information because it's gonna happen organically.
They're gonna begin to see themselves in the business. They see themselves being capable of doing the kinds of things because they've gathered enough information. The Fran, the world of franchising offers that capability to anybody who considers any franchise brand. And like I said, depends on your risk tolerance.
If you an early adopter and you wanna be the first McDonald's on the block, because maybe it'll grow into a 35,000, uh, location operation, or maybe it'll only ever grow to two, you don't know that that's the risk that you. And so that's the part of the evaluation that you're going through. So it really depends on what's that risk tolerance that somebody has.
Mike: Yeah, no, I think that was a really good overview, and I think you're right. It does come down to risk tolerance and you know, even going back a little bit too, where you talked about the distribution curve of. Where folks sit and the way I've always kind of looked at it, maybe not just franchise, but in life, right?
You know, good or average is always in that, that middle. It's how much effort do you wanna put in to get it to good, to great and right? The talent and the systems will get you to this point, but you still gotta put the effort in to, to grow. And I think that goes back to your point of the way I look at the passion is, is it get you, is what you're doing motivating you?
to do it on the days you don't wanna do it. , like it's the simplest way to look right, that I'm definitely enthusiastic and passionate about what I'm doing. Um, maybe I shouldn't use the word passion, but there's days where I just don't feel, you know, don't have that energy, that motivation. But yet I'll still go through and, and do it just because I know.
What the, what this, this journey is and I think, man, part of it, going through this conversation, I may need to re-look at some of those, uh, franchise opportunities as well. So maybe, we'll, we'll talk offline. Cuz I did look at a couple just me directly going to like, my wife was part of this one franchise and I'm like, huh, that's kind of interesting.
They're targeting 50 somethings. It's a quick workout and then just to see where, and. Um, those opportunities are, but, uh, at the time it just, that one didn't make sense. But thinking about broad, more broadly, maybe there is, I mean, diversifying your portfolio, right? Or where you wanna spend some time.
And so maybe you could dig in. Cause I think one of the. The myths is You need to have multiple locations in order to, to make it grow in success and hit it.
Brett: Yeah, it's, it's, it's a fair question. Again, it should always go back to, you know, what are you trying to accomplish with, you know, investing in any kind of a business and do your homework very, very thoroughly. certain concepts generate a lot more income than others do. Um, when you look at, for example, a ServPro, an average water damage is $3,000.
An average fire damage is probably $50,000, and that's the starting point. You look at a commercial kind of a cleanup job, it could be anywhere from a hundred thousand to a million dollars to do the cleanup on that. So you may have, you may only do fewer transac. , but you get a lot bigger return off of 'em just because the dollars involved versus you look at, uh, a hair cutting business like Great Clips or Sport Clips or something like that, where the average transaction may be, call it 15 or $20, something like that.
And so you gotta do a lot of 'em in order to generate enough revenue off of it to say, I, if I get a 10% return, Off of the amount of revenue that I generate, I just gotta do a lot of transactions. It's kinda the same concept when you look at Subway. You go in there and the average transaction again, it's probably 10 bucks or something like that.
And so you gotta do 150 sandwiches a day just to break even. . And so anything beyond that is where you start to make some money. So it's one of the things you have to look at. And so, I mean, I've got, my wife and I were in the, the brand of Fantastic Sams for about five years. And, uh, we had a a five license operation and it was the same sort of thing.
We were at the lower end of the hair care services industry. and so we offered a, a little bit cheaper service, but still, you just had to do enough transactions. Cause I could, I could tell you that my average transaction was $28 for some kind of a hair service of some sorts. And so I just knew that I had to do X amount of 'em to cover the overhead than I, if I wanted to really make any money, I had to do X amount more.
again, it has to do with its size of the dollar transaction and the volume of 'em that you're gonna do. And so, and it, that's where it gets into the multi-location. If you look, and this is gonna be anecdotal on my part, I don't want anybody to take it as gospel, but if you say, let's say that you can make $35,000 out an individual haircut location, $35,000 is, you know, gonna barely get you to the Juul anymore.
You know, it may barely buy you eggs anymore, right? But if you, if you own a half a dozen, you know, now you're beginning to generate, you know, a couple hundred grand a year for yourself, and maybe that fits your expectation. Uh, you know, there are consortiums that own a hundred McDonald's. They're big investment companies.
They're, they're, they're essentially holding companies of their own, that own a bunch of different brands. And so they, they play at a very different level. But the average person may say, you know, uh, I can make a pretty good, I can meet my expectations for what I want to generate income wise out of the business, but I'm gonna need a half a dozen locations to do it.
And that's my goal. I wanna build to that. One of my good friends was in the Great Clips. They built out six or seven locations. They had a goal initially of doing 20 of them, and then Obamacare came along and they found out that, gosh, after we got over a hundred employees, that we were gonna have to start providing healthcare.
And so then it was going to obviously significantly impact their, their, um, profitability out of the business. And so they made a decision. She said, we'll just live with the six or seven locations that we've got. And, uh, they were in it for about 15 years. They sold out of it. And, uh, the beauty of that kind of business is considered to be a semi absentee, uh, in the world of franchising.
You can think of an individual territory or an individual location of something. Or you can have multi-locations as you just described, but you can actually go to a whole never nother level, and you can be what they call an area developer or a regional developer or a master franchiser, and that simply means that you buy up the rights to develop the concept in a given geographic area.
So, as an example, one of my other friends was an, um, an area developer for, uh, sport Clips here in Chicago. He bought the rights for all of Northern Illinois, which represented about 130 locations, that he was gonna be responsible to be the franchisor, if you will, in that area, developer role. And so what he was gonna do was he was gonna do the sales process, he was gonna do the onboarding process, the real estate transaction side of the process, everything.
And in return for that, he got a significant portion of the royalties that would normally go to the corporation because again, he was taking on that role of the franchisor. And so that's a very significant operator if you have those kind of aspirations and that kind of funding to be able to do. You could be incredibly successful.
You know, he went on to buy actually Southwest Michigan and St. Louis as additional territory. So he built an empire out of it and had a great success story with it. Had a lot of fun doing it. And so, again, it depends on your, your, your financial capabilities, your risk tolerance, and aspirations.
What, what's your
Mike: Yeah, no, I think this, this is. Stick. And like I said, I, I think it's personally I may even revisit some of these, these options. And you know, it's funny through this this thing you keep answering my questions before I ask 'em. So perfect because I was gonna ask you about absentee owners and, and you covered, that was gonna kind of be my last question cause I do wanna be respectful of your time.
Um, That there are opportunities, right? I don't know if that would satisfy my work life, right? Wanting to have some something to do, right? But again, I, I guess I didn't realize coming into this conversation how even though I had dabbled occasionally with the one-off as I came across something interesting, how much bigger that the franchise world actually is.
And you know, the more I think about it, the more it makes probably sense. Right. And many of us that are leaving corporate to, to think about cuz the systems are in place, right? And if you can find an industry that you like or have some skillsets that you can add value to, you know, perfect. And it gets you going.
So, any closing thoughts, Mike? If we, is there anything we didn't talk about today you think we should? Uh, the audience should know.
Brett: you know, my closing advice to somebody is, is that, Everybody thinks that they're the smartest person in the world. I was one of those people too.
It's like I can figure it all out myself. Uh, why do people have business coaches, you know, that are very, very senior positions, you know, uh, in corporations and most of 'em have an executive business coach. well, the beauty of coaching versus consulting. Consulting, you've gotta come up with the idea.
Document 'em in a PowerPoint presentation. Present 'em and say, go do 'em. Right? That's a lot of work coaching. You just have to ask the questions. Because what you're trying to do is get people to think about these elements as they're going to the next chapter of whatever part of their life. That's the reason why I've stuck with this, is I don't have to work hard anymore doing the consulting part of this thing.
I get to do the coaching side, ask the questions, but then use my experience base to kind of carry people through the journey to make sure they're asking the right kind of questions. But it always goes back to ask yourself the question, why do I wanna do this? What's my true motivation? What's my. Do I wanna make a difference to society?
Do I wanna make money? Do I, you know, whatever those drivers. Clearly understand 'em, understand what your expertise is, what are you good at? Maybe you're a a natural people person. You interact with people and the word no does not, you know, bother you. You, you may come from the world of sales. Uh, somebody else may be the accountant that sits in the back room with a green eye shade, you know, and they're most comfortable with somebody else doing all the business dev kind of stuff for 'em.
But they can do the execution side of things. Again, know what you're good at. Work with a coach to help you to identify opportunities. They're gonna map to who you are as a person and where you're trying to go to, and you'll find you'll shortcut the process and you'll probably find yourself at a greater level of satisfaction.
And at the end of the day, and I tell this to all my clients, I say, look, I'm not here to try to convince you to do anything. . What I'm trying to do is to challenge you to think about an alternative career path for yourself that could make very good sense for you. But if you go through the journey and you come back and you say, you know, I've done that exploration, I just not my cup of tea.
I can't see myself doing it. I go, that's fine. It's better to identify that now than to take the leap and jump into something, spend, you know, a bunch of money, your life savings maybe, and then find out that wow. Really isn't what I wanted to do. I was just trying to, I was running away from something as opposed to running to something.
Mike: That's awesome.
Brett: that's the importance I think, of having somebody to guide you through the journey. And that's what I found. Cause I, you know, again, I consider myself a reasonably smart guy who had good success in corporate American rose to the senior ranks. But there were just things that I didn't know and I don't, you don't know what you don't know,
Mike: That's one thing I joke about all the time. The more I think I know, the more I realize I, I don't know. And you, you're right. I think even the, the coaching, you know, we all have blind spots and it, it's just good to get a different perspective with somebody that's been down that path. the, you referenced one of my other favorite, um, it's more of a training analogy, but I think it's good in life with mentors and, and network is, uh, Ken Shamrock, the U F C former champion in, um, he had a training thing where he always liked to train with some, he called it a plus minus in equal.
right? So he always wanted to train somebody that was ahead of where he was in the journey because they're probably better him. He's gonna learn sharpen, you know, sharpen his skills. Somebody that's maybe below him and in the journey where he can help provide that support to somebody that's coming up.
And then the middle where somebody that they're going through the journey together, right? They, they're at the same pace, same thing. And that just kind of stuck with me, kinda like, what? What you were talking about. So it's good to get different perspective, I think. And it's one of the things, once I exited corporate that.
Truly value now that I didn't really value what I put in is, you know, kind of some of that investment in yourself and realizing, hey, you don't know all the answers as much as I think so, and I'm jealous of people that do think they have all the answers. But like I said, the more I deeper I get into this, more I realize I don't, you know, the less that I, I do know
Brett: If you think you got all the answers, ask your wife. She'll point out the areas where you don't have the answers. Right.
Mike: that's, uh, really,
Brett: significant other, but yeah, I mean, my wife is really good about giving me counsel about things. but no, I, like I said, you're never gonna find a diamond under a rock unless you start to lift up some rocks. So you gotta lift the rocks up. Maybe there's a diamond, maybe there's not, but you're never gonna know unless you do.
Mike: I love that. And so, Mike, I'm sure there are gonna be some folks that wanna learn more about you and how to connect with you. What's, uh, what's the best way for them to do that?
Brett: Uh, a couple of ways. You can do it, uh, by email. My email address is M W A L L E r eSource coach.com, or they can, uh, reach me at, uh, my office number is 8 4 7 4 2 6 5 2 6. Either way. Anybody wants to reach out, just have a chat. No obligation, no commitment of any sorts. Have a chat. Maybe I can help, maybe I can't, you know, I'm, I'm pretty well at iden.
Good at identifying people that you know, Hey, I don't think I'm the right person for you to talk to, but maybe I've got somebody else I can refer you
Mike: No, that's
Brett: your need is different. So,
Mike: and appreciate it. So if anybody's out there thinking about this path or didn't realize this was a potential path for you, reach out to Mike. He's gonna be happy to, uh, like I said, share with what that journey could look like. And you know what, maybe it does unco. Cover an opportunity that you maybe didn't realize.
Well, I appreciate your time and thank you for the education. I've, it's kind of looking at this as a franchise 1 0 1, but I think we actually got to 2 0 1 as part of the process, which is even better.
So definitely appreciate it and have a great rest of your.
Brett: Hey, I'm gonna do that. Thanks so much, Brett.