Transcript of Franchise Secrets: From 0 to 326 Units in 18 Months | Aaron Harper

How to own and operate a powerwashing business that I've never learned anything about, or an HVAC business I've never learned anything about. What I do know is how to create a franchise business that can replicate any other business that has the right systems and processes in it. Hey, I want you to keep running your great business. And your business is so great that I want to put it in every single market across the country and potentially across the world.

Before we get into some of the parts that I really want to examine today, for my audience's information, just give them the quick Tencent tour. We don't have to go back to childhood or anything, but just give them some relevant highlights, and then I want to get into the meat and potatoes here with you.

Sure. I've been in franchising for years. People often don't know what franchising is, but franchising is this small industry that leads a small group of people, it seems like, that lead a large industry of franchise brands, not just fast food. That's only about 50% of franchises out there. I specialize in home and commercial service franchises and have had the opportunity now to help build three home and commercial service franchises to become the largest brand in the world in that respective industry. A carpet and floor cleaning brand that we helped build about 3,000 units, 55 countries Then a drywall repair brand that I built from 98 units to 323 units nationwide in about two years. Then decided to venture out on my own instead of working for other people and making them a bunch of money. I was like, Wait, I can do this on my own. And looked at a bunch of different brands to franchise that were non-franchized that had good bones that I could replicate. I met the founders of Rolling Suds in September of 2022, and it was the best business that I looked at. Family business started in 1990, focuses on residential and commercial powerwashing, and specifically those services.

I knew I could replicate it in any market, so I raised capital. I acquired the brand in January of '23. We took the brand to market that year. Since then, we've grown to 326 units, operating in 35 states with 115 trucks on the road.

What I I love about the space that you're attacking, specifically. I have so many questions around franchising, but I love that you're attacking these, we'll call them, physical businesses. With everything that's coming with AI, you just go to McDonald's. That business is changing rapidly. It's a franchise, but it's changing rapidly with the way AI does things. I was in one the other day that was brand new or looked brand new, or maybe it was a full remodel. That There was only one person in back handling the food, and all the orders were being taken by a machine. Instead of six people, there's only one. I mean, there's so much. But with what you're describing, these are businesses that will not be replaced by AI. I mean, AI, for the foreseeable future, hopefully in our lifetime, AI is not repairing drywall. It's not powerwashing outside of buildings. It's not doing these different things.

It's not carpet cleaning.

It's not carpet cleaning.

Refinishing cars.

Was that part of your methodology? Was that something that you considered when you went into the space?

Yeah. So I specifically like the blue-collar businesses because they're need-based. They'll happen no matter what. And technology will only continue to get more and more advanced. And so my thought was, well, hey, this is the space I've been in. It's even more of a safe space to be in now than it was when I first started due to a of these technology. So when I was looking at different brands, it was only service. It wasn't like I was looking at food or health and wellness or beauty. It was just services around the home or business.

When you say looking at brands, I'm very interested in... When I think franchise, I think this is probably most people that are listening, right? The idea of owning a franchise or even being in that space, most of us, Don't maybe mentally lock in until the idea of you've already created the business in a box, and now I'm considering whether I want to buy into a franchise. But where you have expertise that I think is so interesting, and this is really where I want to dig into, is you found a business that wasn't franchised, and then you were able... You then package it up into a franchise that you now have the 326 units of. When you're going out, one, why Why start your own franchise in that way versus just find something that you thought you could own a geographical region for, something that was already together? And then how do you go about finding that? If someone listening is super entrepreneurial and wants to follow your path, what are you actually looking for when you dig into a business like that?

I had a very specific methodology of how I approach the search. I said, All right, I'm going to get a checklist of things that I'm looking for in a business. Some of those things were unskilled labor, high margins for franchisees, so that there was still enough margin for a franchisor to take a royalty and a franchisee to still make money. There was a whole list, recession-resistant, large total addressable market, both residential and commercial customers. Once I had that list, then I had the framework in which I could go look at businesses based upon. It was just a less emotional decision because it was like, Okay, what are the things that... How many boxes does it check? I established my list based upon recent acquisitions in the franchise space from large capital companies. I went and called large companies that I knew that acquire these types of businesses. I said, What do you look for when you are acquiring a 3, 5, 6, 7,000-unit franchise system? Whatever they told me, I then included in my list. So then now I'm like, Okay, I have my rubric. And so then I looked, I basically just let everyone that I knew know that I'm looking for this type of business, service-based, blah, blah, blah, whatever.

And that my goal is to have that person, or that business owner, continue to run their great business while I create a different business. And this is the part that people don't understand about franchising. There's the power There's the powerwashing business, and then there's the franchise business. Those are two completely separate businesses. They take different skill sets, different capital requirements, different infrastructure. Everything is different. I don't pretend to know how to own and operate a powerwashing business that I've never learned anything about, or an HVAC business I've never learned anything about. What I do know is how to create a franchise business that can replicate any other business that has the right systems processes in it. Hey, I want you to keep running your great business. And your business is so great that I want to put it in every single market across the country and potentially across the world. Before we get into some of the parts that I really want to examine today, for my audience's information, just give them the quick Tencent tour. We don't have to go back to Chalet or anything, but just give them some Just some relevant highlights, and then I want to get into the meat and potatoes here with you.

Sure. I've been in franchising for years. People often don't know what franchising is, but franchising is this small industry that leads a small group of people, it seems like, that lead a large industry of franchise brands, not just fast food. That's only about 50% of franchises out there. I specialize in home and commercial service franchises and have had the opportunity now to help build three three home and commercial service franchises to become the largest brand in the world in that respective industry. A carpet and floor cleaning brand that we helped build about 3,000 units, 55 countries. Then a drywall repair brand that I built from 98 units to 323 units nationwide in about two years. Then decided to venture out on my own instead of working for other people and making them a bunch of money. I was Wait, I can do this on my own? And looked at a bunch of different brands to franchise that were non-franchised that had good bones that I could replicate. I met the founders of Rolling Suds in September of 2022, and it was the best business that I looked at. Family business started in 1990, focuses on residential and commercial powerwashing, and specifically those services.

I knew I could replicate it in any market, so I raised capital I acquired the brand in January of '23. We took the brand to market that year. And since then, we've grown to 326 units, operating in 35 states with 115 trucks on the road. So what I love about the space that you're attacking, specifically, and I have so many questions around franchising, but I love that you're attacking these, we'll call them physical businesses, right? Yeah. With everything that's coming with AI, AI, you look at... You just go to McDonald's. That business is changing rapidly. It's a franchise, but it's changing rapidly with the way AI does things. I was in one the other day that was brand new or looked brand new, or maybe it was a full remodel. There was only one person in back handling the food, and all the orders were being taken by a machine. Instead of six people, there's only one. There's so much. But with what you're describing, these are businesses that will not be replaced by AI. Ai, for the foreseeable future, hopefully in our lifetime, AI is not replaring drywall. It's not powerwashing outside of buildings.

It's not doing these different things. It's not carpet cleaning. It's not carpet cleaning. Refinishing colors. Was that part of your methodology? Was that something that you considered when you went into this space? Yeah. I specifically like the blue-collar businesses because they're need-based. They'll happen no matter what. Technology will only continue to get more and more advanced. And so my thought was, well, hey, this is the space I've been in. It's even more of a safe space to be in now than it was when I first started due to a lot of these technical... So when I was looking at different brands, it was only service. It wasn't like I was looking at food or health and wellness or beauty. It was just services around the home. When you say looking at brands, I'm very interested in... When I think franchise, I think this is probably most people that are listening, right? The idea of owning a franchise or even being in that space, most of us don't maybe mentally lock in until the idea of you've already created the business in a box, and now I'm considering whether I want to buy into a franchise.

But where you have expertise that I think is so interesting, and this is That's really where I want to dig into is you found a business that wasn't franchised, and then you were able... You then package it up into a franchise that you now have the 326 units of. When you're going out, one, why start your own franchise in that way versus just find something that you thought you could own a geographical region for, something that was already together? Then how do you go about finding that if If someone listening is super entrepreneurial and wants to follow your path, what are you actually looking for when you dig into a business like that? I had a very specific methodology of how I approach the search. I said, All right, I'm going to get a checklist of things that I'm looking for in a business. Some of those things were unskilled labor, high margins for franchisees, so that there was still enough margin for a franchisor to take a royalty and a franchisee to still make money. There was a whole list, recession-resistant, large total addressable market, both residential and commercial customers. Once I had that list, then I had the framework in which I could go look at businesses based upon.

It was just a less emotional decision because it was like, Okay, what are the things that... How many boxes does it check? I established my list based upon recent acquisitions in the franchise space from large capital companies. I went and called large companies that I knew that acquire these types of businesses. I said, What do you look for when you are acquiring a 3, 5, 6, 7,000-unit franchise system? Whatever they told me, I then included in my list. Then now I'm like, Okay, I have my rubric. Then I basically just let everyone that I knew know that I'm looking for this type of business, service-based, blah, blah, whatever. And that my goal is to have that person or that business owner continue to run their great business while I create a different business. And this is the part that people don't understand about franchising. There's the powerwashing business, and then there's the franchise business. Those are two completely separate businesses. They take different skill sets, different capital requirements, different infrastructure. Everything is different. And I don't pretend to know know how to own and operate a powerwashing business that I've never learned anything about, or an HVAC business I've never learned anything about.

What I do know is how to create a franchise business that can replicate any other business that has the right systems and processes in it. It was very specific of what I was looking for is like, Hey, I want you to actually keep running your great business. And your business is so great that I want to put it in every single market across the country potentially across the world. And so that business is largely my business. I'm the majority shareholder and lead investor in this business that I own. And then they keep owning 100% of their business, which then gives them upside in the new business that they didn't have before. And so to answer your second question of why wouldn't I just go buy a geographic and own and operate a brand in Nashville and open a bunch of locations in Nashville. It's not my skill set. Running corporate-owned units of a powerwashing business is also significantly different than running a franchise. A franchisor is a coach, a mentor, has some legal knowledge of how to structure these types of things. They're oftentimes a therapist, marriage counselor. There's a bunch of different roles that you would wear, the hats that you would wear as a franchisor in any given day.

And those are typically much different hats than you would wear as the owner and operator of a local service business.

So one of the things you said when you were putting your framework together was the framework itself allowed you to be less emotional in decision making. Why is that important? And how does a framework help you do that?

Yeah. So I always tell anyone who's looking at buying a business that they should have a checklist. It's like, think about it like this. If you're going to go buy a house, you're going to know you want a yard in the backyard. You're going to know you want to be in this type of neighborhood with this type of school district. It's going to want to be in this range of a square footage. You're going to want this many rooms, this many bathrooms. You have your checklist. If you didn't have that, you're just like, Hey, realtor, show me houses. And they're like, What else is? With franchising, we don't bring in people who have, typically, powerwashing experience. We bring in sophisticated people who are coming from a white collar background. They've maybe worked at a business that they've been an employee at or they've owned other businesses that have been successful. And so oftentimes, it's their first business. I'm like, You You don't need to be passionate about the business. You need to make sure that you feel comfortable doing the needs of the business. And what is the actual means of a powerwashing business? Well, we're a B2B sales and marketing company that does powerwashing.

We do 60, 70 % of our business is commercial, which takes longer sales cycle. It's being in your community. It's shaking hands. It's being the mayor of the town. So that's a sales business. Whereas if you get into commercial cleaning or residential cleaning, it's a recruiting business. You're going to lose people, and you just need to keep recruiting. There's a demand for cleaning, clearly, but you're going to lose people. It's like, what is the actual business doing? And what do you like doing? And what are you good at on a daily basis? And that's how you become less emotional. It's like, do I want to do that thing? And how many of the boxes does it check, which I know will make the business successful if it checks 80 % of the boxes or 70 % of the boxes or whatever it is.

I want to dig into this idea, you don't need to be passionate about the business because that to me feels very contrarian. I think most of the talking head people that you'll see on Instagram or wherever, it's, Find something you love to do. If you don't love to do it every day, then you're not going to show up every day. I will tell you as someone who has built their entire career, essentially inside the insurance industry, insurance is boring as hell. I am not passionate about I appreciate its value and what it does for the people who use it and how it works. I have an understanding and appreciation for it, but I'm not passionate about insurance. I don't wake up in the morning and go, jeez, I hope Travelers has a new rate filing today that I can read. I can't wait for that. One, how did you create this contrarian idea? And how do you break it down for people who are sitting there going, well, jeez, Aaron, if I'm not passionate about it, then how do I not get bored in 12 months or 24 months?

Yeah, I think there's a difference between being passionate about owning a business and being passionate about the thing that you're doing in that business on a daily basis. I'm passionate about building wealth and providing value to my employees and the franchisees that join. That gives me joy, and I'm passionate about that. But it doesn't matter if it was lawn care or powerwashing or roofing or whatever. It's just being excited about business that it doesn't necessarily mean to be like, I'm going to be in senior care because I love working. My grandfather died, blah, blah, blah. All that, I think, can really get in the way of which business is going to make the most amount of money, and will I be successful at it on a daily basis? The other thing is when someone owns a business or when someone starts their first business, they're learning the game of business as much as they're learning whatever business that they're in. And so your first time in owning a business, it doesn't need to be some passion project that's going to change the world or habitat for humanity. It's like, you just need to learn how to operate a business.

So the more simple the business is, the less learning curves there's going to be in the other part, which is just learning to be a business owner. And that's what we really try to help our franchisees understand is we can give you all the systems and tools that you need to be successful, but you still have to have the stomach and the ability to go through the pains of being a business owner. And it's going to be scary and terrifying. But once you get past through that, you're going to be a stronger person on the other end. And so I just don't think it's necessary to... I got to believe in cleaning people's homes and making them feel a bit about their homes. Sure, that could be part of it, but how are you going to operate and successfully run a business?

I think this is such an incredible point. I'll tell you, we have never dug into this idea this deeply on the show. So this is really exciting for me because I love when we get into stuff that I believe in, but we've never actually dove into. Inside the insurance industry, I've talked about this a little bit where what we see or what I see, and when I'm maybe working with a new insurance agency owner. I've worked with a lot of owners outside the industry now, but for a long time, my primary experience working with business owners was with insurance agency owners. I got absolutely lamb-based at one time. This was about a decade ago. It was mid-20 teens. I was doing a keynote, and they wanted a Q&A portion, so we're doing Q&A. Okay. This was on some sales and marketing strategy, inbound, whatever. We get to the end, and I get this question of, with everyone you've run into, what do you see as defining characteristic between a successful agency and an unsuccessful agency? Or a stagnant agency. Most insurance agencies print money, but they either grow or stay stagnant. A failing insurance agency is really one that just isn't growing.

It's actually a wonderful business model. Incredibly hard business, but wonderful business model. To my point, my My answer was there are insurance agency owners and there are insurance business owners, and those are two very different people. What I hear you saying, and I completely agree with your take, is Whoever is at the top of the pyramid, whoever the buck stops with, needs to be a business owner. When I see major problems in insurance, and I'm sure this is what you see in franchise, but this is where I want you to expand a little bit, is I see agencies The agency owners, and how I define the difference is the agency owner still believes they're the best salesperson in the business, or they're the best customer service person in the business, and they haven't relinquished the task of the business for the running of the business. Is that what you're saying? And obviously, this is what you've seen.

Ultimately, if you start a business, your single goal is to hire great people that will build the business eventually without your direct involvement. And so learning how to do that is harder than learning the insurance business. And so what a business owner has to do, or the powerwashing business. What a business owner has to do with their first business is learn how to run a powerwashing business successfully and then how to be a business owner successfully. Those are two very different skillsets, again. What we try to help our franchise owners do is think about your business like an asset. You are creating an asset. If you don't want to create an asset, honestly, business ownership might not be the right thing. Just get a job, dude. You don't have to carry all the weight. Terrifying element of, Emma, is this going to work out or not? Everything's on the line. Just keep staying a job. But if you're going to invest in a franchise and spend $200, $300, $400, $1,000 getting into a brand, is that you're buying into systems that you can execute on that will theoretically, over time, help you remove yourself and create layers in between you and the business over time.

Where you see most business owners struggle, and is that they don't let go of those things. They don't create the barriers because the risk associated with pre-investing in the business, hiring people before before you need them. And taking profit that maybe you don't even have yet and putting it back into the business to grow for where you're going to be two years from now versus right now is scary. Most people don't have the risk tolerance necessary to be able to do that. And it's evidenced by, out of 100 people who start a business, nine of them will get to a million dollars in revenue. Nine %. And so if you think about a business doing, let's just call it 10 to 20 % margins, right? If you have a fast food restaurant, you're doing 11 % margins. That's what you're doing. So now you have a business that's doing a million dollars, which, let's just call it 11% margins, that's a little over 100 grand that your net profit is. It is going to take significantly more capital investment than $111,000 to get that business to million in revenue because you're going to need people, marketing, all these different things.

Then you got to go from a million to three million, which is like the death zone for any business because you don't have enough capital coming in from a profit standpoint to pay for the team that's necessary to get you to three to five million dollars. So again, you're potentially raising capital, you're reinvesting, you're doing whatever it takes. And so this game of how do I remove myself, how do I create barriers is in itself hard enough versus trying to make the business so complex because you're passionate about it. Who cares? It's going to be so hard. You might as well put it on as close to an easy mode as possible by picking a simple business that doesn't have a lot of complexities.

If you know me, you know I'm prone to shiny object syndrome. And to be honest with I was drowning in marketing tools. Convert kit for emails, HubSpot for CRM, landing page software, automation, webinar software. I was paying over $500 a month and spending half my day just switching between these different platforms. Then I discovered Go High Level. One platform, one login, everything I need to run Finding Peak, the podcast, the newsletter, speaking business, coaching business, all of it. Over a million and a half businesses I've already made the switch, and now I know why. If you're tired of juggling tools, I got a special 14-day free trial deal for listeners. No questions asked, no contracts. Cancel anytime you want. Simplicity scales. Go high level is the answer. To get the deal, click the link in the description, whether you're listening on Apple or Spotify or even watching on YouTube. This, my friends, is the way. What do you think it is from my psychology standpoint that so many business owners fight creating systems? I've done enough interviews, I'm sure you have, too, with guys like yourself who just... You probably see the world in systems.

You see things happening and you're like, I think I see the system this guy or this gal is using to get to this thing. And the highly successful people. You will not meet a highly successful person who doesn't have many different systems that they're using to automate activities. But that's this tiny little portion. And then you have all these other people, both owners and leaders, non-owners, etc. And they just fight and scrape and don't document anything and create from scratch every time. And then they sit there and they buy workshop after workshop and $27 PDF after $27 PDF, and they never actually implement those systems. One, maybe break down why you see that happening, what the mental barrier is, if you have a thought on that. And then how do you start to crack those people open and convince them that even very simple systems in some of the easier places can create massive lift in your day. The biggest thing for me when I started really diving into systems in my business in my life was the amount of stress and anxiety that went away. All of a sudden, You're only anxious about the things that you should actually be anxious about, not the hundred little tasks that are happening throughout the day.

Yeah. So I think most business owners don't have the necessary foresight that they need to create the systems. Think He's not the business owner that's the top salesperson at the insurance agency, and he's the agency owner. That person needs to sell all day long to get enough revenue to pay potential more team members, which means that For him to get out of that role, he's running the business in the morning and in the night when it's not during business hours where he can be selling. That's now whatever, 16-hour day, let's just call And he doesn't even know what systems need to be created because maybe him himself in the sales process isn't using any systems. He's just using his personality to close deals. And so I think the amount of work necessary that it takes is not necessarily an amount of work that everyone wants to do. I also think that there's a lack of knowledge around what do I need to build in order to not be doing this all day long. And then what you're talking about could be an ad for franchising because you don't have to do all of that. You can just be like, Tell me what I need to do to execute.

And You have the marketing vendors, you have the call center, you have a bookkeeping company, you have the marketing vendors. You have all your technology. All that stuff takes a lot of time and a lot of money to create. And you're not going to do it as well as someone who's done it 326 times nationwide. It's like, how do you remove these potential risky elements of owning a business? It's like, you either You have to do them yourself, which means you have to have the intuition and foresight to create something that is meaningful that you can step away from. Or you buy into a franchise or a mastermind course or something else where they tell you exactly how to do it. But then you have to have the humility to not be the person driving the business for it. I'll give you a very clear example of this. I hired a professional CEO to run my company about two and a half, three months I knew when launching this business that once we hit 300 units, I would not be the one to get us to 600 units. It's a different skill set. I am a founder that creates things from scratch, and I'm a zero to one guy.

A 300 to 600 guy that's systemizing a 300 unit franchise system that's going to have 3 to 500 trucks in the road within the next four or five years, that is a different human. But if I didn't have the to know that that wasn't going to be me. My business would stall out, and it wouldn't grow because it would be limited by my own beliefs that I'm the only person who can make it grow. Another example is I needed to come in and help build a department out. Since he's taken over, I've said, Okay, there's this department. He's asked me, Hey, let's Let's build this out the right way. So I'm getting in this department. I'm doing the working in the business. I'm recording all of my calls. Then in the morning and in the night, I'm pulling the transcripts out for those calls. I'm creating scripting. I'm recruiting team members in the morning and in the night. I'm making sure they have the scripting. Then I'm training them on how to do it. Then I'm qualifying and making sure they've done it. And I know that in February and January, February, I won't be necessary in the business again.

But that takes an incredible amount of foresight and incredible amount of humility to be like, Yeah, my business doesn't need me, and I'm going to prove it.

Yeah, I love that. Humility, to me, is the key. I did an entire TED Talk on Ego, our TEDx Talk on Ego, and I couldn't agree with you more. What I've seen over the course of my career is, to me, the reason most businesses stagnate at best or fail at worst can ultimately be derived down to ego. You could say it's a market shift. You could say there's a million reasons why I think they get categorized and put into McKinsey studies. But if you really dig all the way down, my personal experience has been, ego is always the reason. Someone somewhere couldn't put their ego aside, made a decision, didn't make a decision, did something, didn't do something that ultimately led to the demise because they couldn't set aside their ego. It is literally a superpower to be able to be confident in yourself while being humble. We're not trained on this. We're not trained on this at all. There is no class you can take in school. There's no class you can take in college that trains you on how to be a confident, high-agency, assertive person while still having the humility to say, I I don't need to do everything to own this business, or I don't need to do everything to be the CEO.

One of the things I talk to some of my coaching clients about is, again, there's a lot to this, but essentially, it's what's your job title? And they'll tell me what it is. And most often it's CEO or President or founder, whatever they call themselves. And I'm like, That's a job. That's not an identity. That's a job. So what is the job of a CEO? Is the job of a CEO to all the business development stuff? Is it? Now, granted, there may be a season where you need to help, but what is the actual job function? And if you're the best business development guy or gal, then you need to consider what you did, which is Find someone who's the best CEO for the business, and then you go be the head of business development or the head of sales. If that's what you love doing every day, it doesn't take away from your equity. It doesn't take away from your position on the board or whatever decision-making structures. Or you have in place. But it's like, own the job that you're in. If you're trying to have that title that makes you feel good about yourself, but then do all the work, you're not actually that thing.

You're not actually a CEO. You're actually the head of customer service. Or worse, you're just a customer service person because someone else is actually the head and just giving you service stuff to do. I mean, it's bananas. I think just to put a recap, too, on your psychology, why people don't do this. I think some of it, too, is the pain we know. We would rather deal with the pain of the lack of systems that we already know, then what if I put this system in place and I get a new problem that I'm unaware of? You know what I mean? It's the pain we know we'd rather live with. I think that's really good. So let's say someone's sitting out there. I want to start from scratch. So let's use me as an example. I'm at a point in my career where I have started thinking about, do I want to be in insurance forever? I don't know the answer to that is yes. I've been in it for a long time. I love it. I'll probably always have one foot there, but I'm very interested in other challenges, other businesses. I also have felt disconnected from my local community because for the last 15 plus years, my work has been national, not local.

I haven't really done business in this area that I live in. Other than going to a few charity events, et cetera, I I don't do too much here from that standpoint. Let's say you have someone like me who feels fairly confident in running a business, but honestly, it might take me a day to figure out how to unscrew a light bulb. So zero handiness. Don't want to owe it a food business. If I were going to look at a franchise, I would probably want to go someplace in the direction that you're in. How should I start my journey? Deciding, do I own? Do I start? How does this journey start for someone like me who's thinking, I got 20 to 25 years of really solid, hard working business years left. I'm considering franchising. How does that journey start for me?

Yeah. So I always say that, figure out what you're good at. It sounds like in insurance, as an insurance person, you're probably doing a lot of sales, I would imagine. So whatever you've been good at that people have paid you a salary to do for a for a long time is probably a good indication of whatever the function of the business is to get it going is what you're going to do first. But I would tell you to identify a checklist of things you're looking for in a business. This is not a checklist of, Oh, home services, wellness. It's like, Does it do well through recessions and why? Is it skilled or unskilled labor? Why would you go with one or the other? So think about it through that lens and get that checklist down. And then, whether you want to start or buy really depends upon you. I think there's this mentality, and I think a lot of it's been put forth by a lot of influencers that you can just go buy some existing business for zero dollars down that someone's just going to give to you right off the gate, and you're just going to be able to step in.

It's got $300,000 cash flow, and all you have to do is reinvest that cash flow and build the business from a million to four million. I think it's a bit of a fallacy, candidly. I think that if someone's willing to give you their business for zero dollars down, then it really probably doesn't have a significant amount of value anyways. What people don't understand is if they're buying someone else's business, they're buying that person's constraint. So they have to learn how to figure out that business owner's constraint and also learn how to start a business at the same point. If the business owner, after owning it for 10 to 15 years, can't figure out the constraint, meaning getting it to the next level, what makes this first-time business owner think that they're going to be able to figure out the constraint in a business that they don't understand? There's employees that have to go along with buying someone else's business. There's all these things that could happen. The seller can compete with you afterwards. They can take their brother-in-law from there. There's all these things that can go wrong. Now, there's a lot of things that can go wrong in any business, even a franchise, when you start one up.

The thing I What would recommend is that if you are going to invest in starting a business, find one that you're going to enjoy doing, meaning you're going to enjoy what the day-to-day is going to look like. If it's sales, in this case, that would make sense. But also think about the opportunity cost associated with starting something from scratch versus starting something with a franchise versus starting and buying an existing business. Starting something from scratch is going to require a lot of innovation and a lot of innovation and a lot of luck, and a lot of these things have to go right and obviously hard work. Starting a franchise is going to say, I got to find the right brand that I believe in, and I have to believe that that brand has the ability to continue growing and create value nationally so that I can then focus on growing my local business. And so figure out... You can look at brands and say, Hey, how many boxes does this brand check? Which helps that framework. Or if it's an existing business, expect that you're going to spend 18 to 24 months of your life looking for an existing business to buy.

That's just the reality. And it's getting more and more competitive now to buy an existing business than it's ever been ever. There's more buyers than there is supply of great businesses. Those are the things I would think through. I think AI is a really good lens to look at things through. What is the business going to look like? I'm going to go buy a marketing company. This marketing company is doing $1. 2 million, and so I'm going to buy it for a multiple of its 400 grand in cash flow. I think that maybe in two years, that marketing company could be run with one employee and 16 ChatGPT agents doing things 24/7, not like eight hours a day, 24/7. So it's like, you have to really consider these things before you decide to make a life-changing decision and which bucket to go toward. But I think starting with your skill sets of what someone's currently paying you to do, And then thinking through the lens of what checkboxes am I looking for would probably be a good place to start.

One of the concerns that comes to mind would be, let's Let's say I'm looking at a carpet cleaning franchise, right? So I'm saying, Hey, I think this is going to continue to be an issue. People's lives are busier. Parents, especially two income households, there's no stay at home person. Simple things like making sure the carpets are clean and making sure the drapes are clean, all this stuff. It's incredibly difficult to have the time or pain. But I don't know that business at all. I know sales. I know how to run a business. I feel very confident in my ability to turn a profit out of a business and grow. But man, I don't know if my employees are doing a good job or not. How would someone like me who doesn't have an expertise in that thing, isn't necessarily passionate about the thing, but sees the value, How do I ensure quality? How do I feel confident that I have the right people doing a good job when I say they're going to, et cetera? How do I get past that hurdle?

I mean, it's systems, right? I mean, that's all. You have to have the systems systems in place to do quality control. You have to have the systems in place to recruit good team members. You have to have the systems in place to have a bench of potential other team members that are working part-time that you could put in full-time when someone doesn't show up and expect a turnover. I mean, if we're talking in specifics around franchising, specifically, a lot of this stuff should be created in terms of job postings in That's what you're talking about. What are they doing on a daily basis? Sops, how are you checking up on them? What quality control? Ideally, this should be created by a franchise brand. But I mean, people, no matter what business you're in, it's a people business. And so people will always be your biggest problem, whether it's employees, bad customers. There's just a variety of different... And generally, it's a people problem. So Finding great people is the single biggest leverage thing you can do to build a business that doesn't need you, is finding great people and inspiring them to do great work.

But it is still your job to inspire them to create great good work. Like a CEO's job is to create a vision that's large enough for all of these other people who are going to help you grow that vision to fit their vision inside of. And so that's a really important piece of it. But I mean, when you start something from scratch, you are doing everything because the business needs you to. Unless you're coming in with venture or a product that you've got to build for two years and burn cash on. Generally, a service business is going to require you to be the salesperson. You're going to deliver. I mean, with our model, they're hiring two people that are going to run the truck so that the business owner is focused on sales and revenue-generating activities on a daily basis, at least initially. But you're going to be working 18 hours a day. I have conversations with some people that will pop on my calendar. I don't know how they get on my calendar, but they'll be like, Oh, I've got 15 hours a week and 250 grand. I want to put it towards a business.

I'm like, Man, if I could run a business and build the $2-$3 million business with 15 hours a week of a team member, I wouldn't franchise my business. I just hire four or five team members pay them 15 hours a week to do the work, and then I'd build these. It's crazy that people think that they can create great businesses without actually putting everything they have on the line to make that work. This person, this avatar or we're talking about that's been in a company for X number of years, has an income and a mortgage and three kids and private school and car payments and all this stuff that's making $225,000 a year. That is one of the hardest places to be as someone who wants to start a business because you have to be willing to forego all of that, put it all on the line, work harder than you've ever worked, have an almost unrealistic belief in your ability to execute on that. Then you have to wake up every single day not knowing it's going to work, but work your life off like it's going to have to work. Meanwhile, you're going to have pressure from bills and and your wife all of a sudden is changing her lifestyle.

There's so many things that you have to do to make it work. But you get to a point where you are the chairman of the board of your own company, and you can leave for four weeks and go to Michigan with your family, and no one's calling you, and the business is making money while you're existing. And so it is the greatest possible thing you can get to, but it's going to take really hard work to get there.

Yeah. It's funny. You see a lot of stuff about golden handcuffs online. You see people talking about this. I will say that I've struggled with this at different points in my own career with, do I start another business? Because I started multiple, exit multiple businesses, et cetera. I have this entrepreneurial spirit. That's also part of me that loves coaching and helping people. You get caught in this place where you're like, you get used to that. You build a business to a certain level, you get used to a certain lifestyle, and now you're like, do I want to kick myself in the nuts again for another three years starting a business from scratch again? Do I want to do that? They're real questions. I think what isn't talked about enough, particularly on this topic, is it almost goes back to the ego issue. It's like, what do you actually want out of your life? Do you want to be a business owner? There is tremendous fulfillment, tremendous reward. Your brain is going to be popping all day, sometimes with good stuff, sometimes with bad stuff. But you're going to be engaged. If that's what you're looking for out of life, then starting a franchise or starting a business for scratch or whatever is a wonderful path to do that.

But at the same time, you're not going to have the country club membership. Your kids probably aren't going to be able to go to private school or whatever luxury things you want out of your life. Then the flip side is, if you're okay not being the shot collar necessarily, you can go get a nice corporate job, which can still be engaging and fulfilling. But yeah, you're going by someone's hours. It's not necessarily you get to choose whatever you want to do. You have three weeks of vacation and that's what it is, etc. But in exchange, you have these other lifestyle issues. I think too often we get caught in, again, the ego of, I want to be a business owner. My two friends over here, they're business owners, and people want to ask them questions and invite them to the thing, and I want to be that. But they don't want to trade. They don't want to trade the lifestyle for what those guys had to do or those gals had to do in order to get to that position because no one talks about the 10 years it took for them to be in that position.

That's the part of this conversation I think gets lost so often is, what do you actually even want your life to be on a day-to-day basis? Because this decision dictates that, and there's no way around it.

Well, yeah. These people, oftentimes, and this is one of the biggest challenges that franchisors and franchising as an industry faces, is these people you're talking about with the country club membership, with the three escalades that they have at their house, and the kids in private school, and the $400,000 a year salaried folks who have been in the same industry for 20 years and have built a great life, are looking about ways to diversify. Because they've heard online that the richest people in in the world have an average of seven streams of income. They're like, Well, I've done stocks and I have some real estate holdings, so now I'm going to go franchise. They'll type in, Semi-passive franchise opportunities near me into Google. All of these brands will pop up because these brands, they want to get more franchisees in. But what ends up happening is they can't leave their job because they have $400,000 worth of He invests his annually in all these things. They come into a brand, they hire a manager, which, just to be clear, a manager is not a business owner. If the manager was a business owner, he wouldn't be a manager.

He'd go start a business. Then they say, Well, I'll just do some business development, like one to two hours a day. And they invest 300 grand into a semi-passive franchise opportunity. And the franchisor, maybe through either ignorance or just downright lying, signs them up thinking that they can be successful or telling them they can be successful. And then you have a person who's in a worse situation than they were before because now they have to pay out of their $400,000 salary a manager and all of their normal expenses with the hopes that that manager is going to get them a return on their $300,000 We've already talked about the math. It's a million dollar business on a 20% margin is 200 grand, let's just say. It's going to take a lot more than 200 grand to get to a million dollars. The likelihood that the first manager that you hire or really any manager that you hire, candidly, is going to be able to take that business from zero to one with 80 to 100 grand salary. It's just crazy to me. Oftentimes, this will happen where it's like, I can't leave my job. It's like, Well, then don't cycle a 10-year franchise agreement that's going to obligate you to royalty minimums and opening schedules and CapEx expenses, all these things.

But a lot of the franchisees that come into franchising are coming in under that guise and under that assumption. It's one of the biggest problems that we face as an industry.

You're one of the largest influencers. You have one of the largest platforms in the franchise space. I'm sure that a lot of people come to you with opportunities, ideas, right? I'm sure very much so, you are in the nexus of what's happening. When you look out over the space, what are you the most excited about? Is there a certain type of business? Is there a technology Is there a concept? What's got you jacked up about the space in general?

Yeah. So I'm super excited about this next generation of franchisors and franchise professionals. I think in a lot of ways, since franchising started and was commercialized in the mid '50s, McDonald's became like, Oh, wow, this can really actually work as a business model. I think what ends up happening is during that time, you have people that are like, Oh, this is a get-rich-quick scheme for me as a franchisor or franchisee. Over time, as a result of a lot of the way these things have been structured, you've had a lot of really big flops. You've had Quiznos, you've heard about subway, and everyone hears about these things. No one ever hears about the franchisee that's got 28 two men in a truck, truck, truck, that's making $16 million a year in his business. No one hears about that guy because he's just running this great business. They hear about these terrible things. What I'm really excited about is I don't believe that the next generation of franchisors has the same mentality as two generations ago of franchisors or even the Gen X I think the millennial generation of franchisors and franchise professionals thinks about the franchise business model in a much more opportunistic way versus a more sit down and shut up and eat your vegetables way.

What I'm seeing, so I lead a mastermind. I don't charge anything for it, but it's invite only for other franchisors that are in the service space. Collectively, there's eight of us, and we collectively, between all of us, have 4,000 units. We meet for 90 minutes per month and then twice per year and talk about different topics. The innovation in the way that they're thinking about things is unlike anything I've seen in any of the previous generations of franchising. This isn't to knock the other generations. We wouldn't be here without the other generations. But us as millennials, older millennials, whatever, we just think about things differently because we were raised in a different environment. You're seeing some of these people, I'm one of them, I've got some other friends, building really great brands with the right amount of money coming into it with the right idea, with the right amount of infrastructure, and really setting an example for future franchisors that are like, Oh, that's the way we're supposed to do it. Oh, Oh, it's going to cost over a million dollars to franchise a business. Oh, I don't have that amount of money. Maybe I shouldn't franchise my business.

Or franchisees here, Oh, I'm going to have to be full-time and I'm going to have to leave my job. That pays me 400 grand a year. Maybe I'm not going to do that because I'm not ready and prepared and I don't have the risk tolerance to do it. That's good, by the way. That's great for franchising that those two people in that franchise or in that franchisee don't franchise. That's great for it. But I think where we've had is this, Oh, everyone someone should get into franchising. And it's like, that's not the case at all. So I'm excited by that and a lot of the friends I have in the space that are thinking about things differently.

I would definitely say the uneducated understanding of franchising is that you show up with a suitcase full of cash and you get a business that runs itself with you putting limited effort in. And that's not correct. And I love that we've I'll loan that up today because what I've heard today in many regards is essentially running franchises no different than running a regular business, a non-franchise business, in so much as it's going to take a ton of work, it's going to take capital, it's going to take attention, focus, operating in your particular zone of genius, hiring out the rest. It's just a different type of business. If you don't feel like building the brand from scratch, if you don't feel like building the systems for scratch, but you believe in what the business is doing, then you can maybe skip the line on a few of those things. But ultimately, the labor of getting it to escape velocity is exactly the same. You're going to have to do all these things.

Yeah. The only difference is basically if you think of a business as a job and you're going to bring tools to the job, like the business is the job in this metaphor, you're going to have significantly more tools with a franchise than you would otherwise, which means individually, that job, that business is going to take longer and be more risky. Because you have to create all those things. You have to create the hammer, you have to create the wrench. You don't know what a wrench looks like yet. Whereas if you buy a franchise or you go into a franchise, those tools exist. Maybe you have to iterate on one of them or tweak one of them because it's different in your market versus Pennsylvania or whatever. But you still have the tools. All the SOPs are written, all the suppliers are chosen, all that stuff. But the actual stomach that you'll have, that you have to have in order to build a successful business, does not matter whether it's a franchise or a non-franchise business or you're acquiring it because you're still going to have the same amount of mental unease starting this company that you're still going to have to get to escape velocity.

You just have more more tools in your toolkit with a franchise than starting from scratch on your own.

What question haven't I asked you? What's something relevant here that we've missed? Is there anything that we haven't dove into in terms of- Maybe who shouldn't franchise. Yeah, let's hit that.

Let's hit that. I love that. Yeah. So a franchisee has to be entrepreneurial, but not too entrepreneurial. A franchisee has to be able to follow systems and not go against and want to create all their own systems, right? So the best franchisees I see, and I've been responsible for helping over 700 businesses start across the country, they're like, Give me the playbook, and then I'm going to do exactly that. Then after they figure out how to do exactly that, Then they're going to iterate on different things, and then we're going to learn from them, and then we're going to implement it across the system. If the person who's wanting to start a business, if someone's listening to this and they want to start a business, enjoys creating things from scratch, coming up with ideas, breaking things until they work, a franchise is not good for them. They should not buy a franchise because what you're paying a royalty for, which, by the way, you pay forever. You know what I mean? It's not like, Oh, you only pay for a year. You pay your royalty for forever. What you're paying for a royalty, fundamentally, is to not have to create that stuff from scratch.

I've seen franchisees buy into a brand, and they will literally immediately start questioning all of the things that the brand is doing. It's like, there's no reason to buy in the brand if you're just going to say, Tell me why. Tell me I need to understand. Just say, does this work for other people? Yes. Okay, great. I reasonably expect that this will work for me if I do the same thing. And so that person shouldn't franchise. The person shouldn't be a franchise A franchisor who has a great youth enrichment brand, if they are not 100% able to step away from their youth enrichment company, where they are no longer needed at all in the business, that person should franchise their business. Because they're going into a different business now that they have to learn from scratch, which is the franchise business. If their business isn't systemized enough and they haven't learned how to open another location somewhere else on their own, there's no reason to go start a franchisor. Oftentimes, franchisors will think, Oh, I'll just sell 5, 10 franchisees, and they'll just pay me royal fees forever. It'll be mailbox money. It's like, No, you need to get to $50 million in system wine sales to make franchising worth it.

$50 million. It doesn't make sense if you can't get there. And that's going to take all of your time. And the franchisor is a complete startup again. You're starting up a completely new business. And so these are things that people don't know when they think about franchising because they're just typing in, Semi-passive franchise opportunities near me, or how do I franchise mybusiness. Com, and they are not being told these things.

Aaron, I know there's going to be a lot of people listening to this who are interested, at least in learning more, where do they go? How do they connect with you? How do they get deeper into your world? Do they have questions about franchising or even rolling suds and that stuff? Where do they go to go deeper into your world?

Anyone who's interested in becoming a franchisee, we're looking for empire builders and people who want to build sizable pressurewashing businesses. Those folks can go to rollingsudsfranchise. Com and see if their territory is still available. If it is, you'll get on the phone with someone from my team. If you want to just continue to learn more about the journey and franchising in general, you can follow me on Twitter, Aaron Harper CEO. You can look up Aaron Harper, Rolling Suds on LinkedIn. I post every day. I share experiences of what's going on. I try to synthesize the knowledge that I'm getting and put it into understandable, readable content. You can follow me on YouTube. If you type in Aaron Harper, Rolling Suds YouTube, it'll come up. Those are some It's just to follow along. Even if you don't want to be a Rolling Suds franchisee or even if your territory is sold out, I try to put out as much value as I can as it relates to just franchising in general.

Dude, I appreciate you. I could go. We didn't even get into general business stuff. It was awesome. They can go listen to the show that we did together for your podcast where we talk a lot more- For my podcast, scaling podcast.

Yeah, exactly.

Guys, I also have the link to Aaron's podcast and specifically the one that we did together where I was on his show. Bro, appreciate the hell out of you. Look forward to the next time we connect.

Thanks for having me on, Ryan.