Episode Transcript
Speaker 1 00:00:06 Hey everybody, Scotty, my scott myles franchise coach.com. Another episode of What's Your Know, know Your Why, and all things considering franchising. Hey, I got a great guest today and I'm really excited about this cuz I met this gentleman. I, I don't know, I, I, I guess it was just by chance three years ago, two and a half, three years ago. I mean, time flies when you're having fun. Um, and I was in, uh, the market, uh, for A C R M and really a C R M that, uh, focused in on the franchising industry, could never understand that all these systems are out there for the franchisor, but there wasn't any system for the consultant development person franchisee, uh, and the, and, and of course bettering the franchisor. So, I'm pleased to announce and have on my show today, Dave Hansen, president of Client Tether. Dave. Hello.
Speaker 2 00:01:00 Hey, thanks for having me, Scotty. I appreciate that. It's
Speaker 1 00:01:03 Good to see you again. I know. Uh, to be transparent, you and I just spent a few days, uh, in Fort Lauderdale at one of, uh, at our conference and wow, what an experience, huh? Lot of people. Yes.
Speaker 2 00:01:14 <laugh>. It's so much fun. It's so much fun. You know, I, I feel like I'm still recovering a little bit cuz uh, there was a lot going on, you know, 7:00 AM till about 2:00 AM some nights, so I'm, I'm not as young as I once was.
Speaker 1 00:01:24 <laugh>. Yeah. Well, look, let's take a couple of minutes here and, uh, kind of get the audience caught up on who Dave Anson is, who Client Tether is your connection to the franchise industry. Uh, I will tell, uh, the audience that, uh, you are one of those suppliers in the industry, uh, that really has your finger on the pulse of what's going on, uh, kind of the things that shouldn't be happening, the things that are happening, uh, things that are working, things are not working. And I just thought, as someone who is looking to open a business, considering a franchise maybe for the first time or even diversifying a current portfolio mm-hmm. <affirmative> technology is becoming more and more relevant in the decision process. Yeah. So tell us a little bit about you, client Tether, little bit of history, and we'll just kind of take the conversation from there. How's that work for you?
Speaker 2 00:02:20 That sounds great. You know, no one ever complains about talking about themselves, so, uh, we can start with that. <laugh> We'll, we'll move on quickly, I promise. Uh, so, uh, yeah, so I'm, and, and thanks Scott. Those are kind words. Uh, I do certainly try to keep my finger on the pulse of what's happening, uh, both for our company strategically, but also clients and friends in this space. You know, like, uh, I guess I'm one of those guys. Like, I, I, I, I've been accused of being a know-it-all, but I do like to know what's going on in the space. So, um, first me, uh, I've been, been, man, uh, I started my first sales gig when I was five. Uh, and, uh, selling things door to door. That's a funny story for another time though. Scotty, have I told you that
Speaker 1 00:02:56 Story? <laugh>? That's interesting. No. Yeah. Probably not. Probably, probably not. We gotta, we gotta share a beer over that one. I am. I thought making pizzas, starting making pizzas at nine was, uh, was, was, uh, was exciting, but Wow. Door to door sales at five. Well, yeah, I, I, we'll talk about that at a later time.
Speaker 2 00:03:11 <laugh>. Yeah. Another
Speaker 1 00:03:11 Time. That is funny. That is awesome.
Speaker 2 00:03:13 The punchline is the killer part, but you would blush and it's, it's hilarious. <laugh> makes my mother cringe every time I tell the story, but, uh, but I, I've been in sales really ever since, uh, leading, you know, across like ed, education, tech, high-tech, sales, uh, translation industry, right before I was recruited to come over and, and be the president of Client Tether. Uh, so, but, but I've always tried to plug into the ecosystem. If you understand the ecosystem and the industry and who the key players are and, and how people find information, like, you really tend to understand a lot. And so, uh, in, in the, and, and let's talk about Client Tether, and then let's start talking about industry stuff, like people really wanna know, right? Yep. Uh, but we're, so, uh, I, I'm the president help run, help run Client Tether, which is a technology company.
Speaker 2 00:03:52 It was founded by the guy that founded, uh, Fivestar Painting and, and was one of the co-founders of Five Star franchising and, and, uh, founder of Painter one, like, he's, he's really entrenched in the service industry. And, you know, eight and a half years ago, uh, when he exited before the Dwyer Group picked up a five star painting, he started his own company and he said, man, there's no tech, there's no tech to help me create scale. Um, they had kind of created their own tech stack over there. He'd helped design, so designed client, uh, to address a bunch of issues in the space. But, you know, people have a hard time getting in touch with leads and nurturing leads. So you build a system that automates all that. So, and then you build a system that can automate, you know, quoting and proposal management, online rep and, and like, and, you know, post-sale nurturing and referral gathering, like all this stuff that you would want in a service business, or as it turns out in a cons, a franchise consulting business or, but it was built for franchisors and franchisees.
Speaker 2 00:04:42 So it's, if you either look at any other big box solution, you know, the names everybody knows the HubSpots, the confusion, softs, the sales forces, they're designed for a single enterprise, like a pharmaceutical sales organization or a high-tech sales organization with a very complex data model on the backend and very complicated user interface. And, and so we built systems the opposite, very easy to use. Uh, our dev mantra for a long time was, if a dumb painter can't use it, then don't build it. So, um, you, you use it. So, you know, it's, it's simple. Yeah. Like, it's not hard to use, but it's also got this engine behind it that can automate so much that it creates scale at a, at a local franchisee level across a whole network, or for a consultant, or for a franchisor, or doing Fran Dev or whatever the situation is. It was designed to, to create scale and simplify the complexities of running a business, right? And also create visibility. Now, that's, that's the other aspect when running a business, right? You gotta know what's happening.
Speaker 1 00:05:34 Oh, absolutely. Yep. Absolutely. Um, you know, one of the things that has always impressed me about Client Tether and your team, uh, Kurt and everybody else, uh, Kent, um, is the, the adjustment to change. Um, you know, people, people look at the franchising industry and say, wow, it doesn't change. Well, you and I know that it's constantly changing, and the power information is always changing. Um, and as your company grows, you bring on more and more clients, and the harder it becomes to please everyone, let's face it, there's no such thing as a perfect franchise, and there's no such thing as a perfect system. So yeah, adapting to change has always been, you know, one of the things that I've admired about your company, the patience, the listening, uh, I think you and I had a conversation last week that a lot, not a lot, but a good chunk of your changes and improvements, enhancements mm-hmm. <affirmative>, uh, have come from people like myself, other consultants, other franchisors, franchisees. Talk about change in the technology side, what you've seen over the last, I don't know, couple of years, as long as you've been doing it, where do you see the technology and franchising going? Mm-hmm. <affirmative>, and, you know, what's the ride gonna be like for us?
Speaker 2 00:06:57 Yeah. Well, thanks for the, thanks for the feedback, Scotty. I know change, change is hard. It's hard for an industry. It's hard for a business. Uh, it's hard for people to see what needs to be done. And, and, and frankly, I think there's a lot of ego that gets in the way. That's one thing that we tried to avoid is, is like we, we are, I bet you 50 to 60% of our, of our platform innovations come from feedback from our clients. Uh, and you know, like you're saying, maybe even more than that. Some, some, some sprints. I'll bet it's 70 to 80%, and then other sprints may be half or 25, right? But it's, it's a high percentage of o our overall dev. Um, there, the, the reality is everything's changing, right? Everything's changing all the time. And if you, and if you take a stance that I'm just gonna, like, I'm gonna stay right here and not change, you're gonna get passed by at some point in your career, in your life, in your business model, uh, because the marketplace is changing the economy of good heavens.
Speaker 2 00:07:49 Like we've seen such economic turmoil the last couple years. Like, if you're not paying attention, listening to the signs, listening to people who are on the ground, you get outta touch. And, and then you start building something people that want. So let's talk about a few specific changes, right? Uh, technology in, in the land, the landscape. Uh, there was a period of time, I'd say it probably ended about five, five years ago, where everyone was saying, boy, I want an all in one platform. I want everything under one roof in franchising, uh, you know, think there are big, big, big tools out there, right? Like a friend connect, for example, or something that try, they try to do everything. What happens though, is you do everything at a C minus level, right? And like, and eventually every, or maybe you've got one a plus and then a bunch of Cs, and, and people start to get annoyed because you have limitations in the system.
Speaker 2 00:08:32 They usually get uber expensive. Trying to make a change in a massive platform like that is pretty, pretty much impossible if you need a customization. So the industry started to pull away from that and say, okay, now I'm gonna get, it's called micro architecture, right? But I'm gonna, I'm gonna find the right tool for the job, and I'm gonna make sure that it's got good ways to get data in like an api. And it is, got a good way to get data out like a web hook, right? So there people now are trying to find what's the best sales automation crm. I'm gonna plug that in, right? What's, what's the best franchise onboarding tool? I'm gonna plug that in, I'm gonna make sure they talk. Then what's the best, um, I don't know. You pick, pick another tool, right? What's the best marketing tech stack?
Speaker 2 00:09:10 I'm gonna plug that in, rather than say, I'm gonna buy HubSpot and then pray. I can make it all kind of work together, right? And sort of, kind of bend it, spend 80 grand and try to customize it. So it might work in franchising. Nope, people aren't doing that anymore because they've gotten more savvy than that. And so as a tech supplier now, the, the pressure's actually on all of us to say, can my system play nice and talk to everybody? And, and so, uh, that's one of the things we, we specialize in. It's like making sure everything talks, but, but the people that haven't invested in that, especially young companies, it's hard to have good APIs when you're young, right? They start a little bit in that ecosystem.
Speaker 1 00:09:43 Is simplicity becoming a norm? I mean, are, are, you know, when you look back at technology and, and, and, and evolution of technology, you know, when we think back how complicated it is, but now with plug and place things that you're talking about, simplicity has really become the norm. Is that correct? I mean,
Speaker 2 00:10:00 Well, I, yeah. I don't know if
Speaker 1 00:10:01 You could simplicity to use, I mean, look, I'm, I'm, I'm 62. I'm not shy about it and, and I still struggle with technology. So Yeah. Is, is simplicity kind of that norm on the operational side? The, the franchisee coming into the system, you know, all these buttons to press, or is it, let's make it really simple and only have 'em touch a few buttons?
Speaker 2 00:10:23 You know what's funny is that should be the norm. That should be the norm. That's not what I see. We replace a lot, uh, and, and are exposed to a lot of very complicated, very messy systems. But, but this is why, to be fair, I don't, I don't want to, I'm this, you're not gonna hear me dog on the industry. Like, I love this industry. The people in it are golden. Like, you can't find better people. They're just, uh, and this is, this is the, the, the driver. I've been trying to put my finger on this for years. Like, why is it that we have such bad technology strategy in the franchising industry in general? But it's because a gentleman who had a pest control business was very successful and then started to franchise it. And that gentleman is the c e o of the franchise system now, but he's not a C T O.
Speaker 2 00:11:04 He, he, he still, he, his experience is running a single unit entity, right? And so, and this is where, you know, emerging brands, I love them because they're, they're so hungry for information, like how to make it work better. Cuz they realize after they dive into that pool, they're no longer running a pest control business. They're running an enterprise with not enough money to run an enterprise yet until they get, you know, 30 to 50 franchises under 'em. They're trying to learn how to sell franchisees, how to build technology strategies, how to be a marketer, like all this stuff they didn't have to really do before at a different level. And so, um, but that's, that's I think why it's, it's usually not, honestly, people have very complicated technical stacks today, but it's because they have indu, they have industry tools from their industry that aren't suited for franchising, right?
Speaker 2 00:11:48 You know, CRM is one 'em, but a lot of their operations tools, they'll use like, let's say like a jobber or like a, like a house called pro or a good tool in an, for a single entity business. But when you try to franchise that, the data blows up and now you've got no visibility. And so that's, that's a challenge. A lot of people have simplicity, however, Scott should be the buy word. It should be the strategy. Because if a franchisee can't operate easily without, without calling the home office four or five times a week to figure out how to push a button, then, then you're gonna have serious scale problems.
Speaker 1 00:12:19 So let me just kind of help the audience out a little bit. So, you know what I, and I don't wanna assume cuz we know what happens on Assumption <laugh>, um, just for definition sense, I, I just wanna make sure that the audience understands the franchise or when we talk about a franchise, or they are the brand mm-hmm. <affirmative>, uh, they are the owner of the brand. Uh, they kind of call the shots, they build the systems, they build the operational side, the marketing side and everything. The franchisee is the person who invests in the business, become a franchise owner. So I just wanna make sure that people understand that. But we all know why franchisors have systems because they, they need systems and technology to manage the franchisees. But on my level, and you do work with people that are in my industry, the consultant side mm-hmm. <affirmative>,
Speaker 1 00:13:09 Uh, we're working with the potential franchisee or the franchisee that already owns businesses, uh, that's looking to diversify. Maybe they own multiple brands now they're looking to add another one. Mm-hmm. <affirmative>, how should technology be viewed, or how should the franchisee, the potential franchisee of this new brand look at technology as an asset or a tool to them to be successful outside of just product and service? I mean, oh yeah, no, no. This, that, that, that's important. But yeah, with the evolution that we've been talking about about technology, there is now a backend. So how does a franchisee or somebody new coming into business ownership, how, what's their best strategy to evaluate the tools that the franchisor is giving them mm-hmm. <affirmative> to help them be successful, not guarantee success, but help them be successful.
Speaker 2 00:14:03 Yeah. Yeah. You gotta be careful with the words like that space, right? Uh, yeah. Here, I, I, that's such a good question, Scott. And let me, I mean, maybe I comment on the question first and then we talk about the answer. But what, what I don't see a lot of times, well, let me actually talk about what I do see. Let's, let's spin the positive. When I work with brands that have cohesive technologies that are simple, very few touchpoints, maybe like, let's say two, maybe three total tools that a franchise is gonna have to operate in, they're cohesive technology strategy changes their dialogue. And is, if I'm, if I was looking for a franchise and I working in this industry scout, I'm always tempted to buy a franchise, I'm like, right, that'd be a really good one. Holy cow. Um, because I see what I see on the backend is that's an easy to operate business model.
Speaker 2 00:14:49 There's proven success rate. What I'm gonna be is this, I'm gonna help, I'm gonna be selling, and I'm gonna be, I'm gonna be parsing out work, and it's gonna, like, I can see simplicity in the way that the operations are gonna run. And that, that a lot of the minutiae has been managed by technology or services by the franchisor. Like, if, if, if that's my story as a franchisor, then I'm gonna get a different, I'm gonna attract the right kind of buyer. I'm gonna be attracting savvy business people, okay? They're looking for semi absentee, uh, franchise opportunities. And not everyone wants those, right? But if you want somebody who's gonna buy three or four, then, then generally you want, you want a model that's gonna be semi absentee. It can't be without tech. Okay? And, and if you start to dive into that tech, now that franchisee, right?
Speaker 2 00:15:28 If I, if I'm looking for a franchise, things that I want to know, oh, no, no, how many technology tools am I gonna have to touch on a daily basis? And great. And how much time do people spend on these technology tools? I wanna see them like, show me what they do. Um, and obviously discovery days for that, right? But, um, if I don't, if I see, and they, and I, you know, a day in the life, give me a five minute day in the life, what are things I'm gonna do? And they show me the walkthrough and it is do this, and now step outta that tool, now step into this tool. Now, if I see they're going in and out of three to four different tools, I'm going to probably be more wary of that because it's gonna, it's gonna, that's all manpower now. It's sucking the life outta me. I'm gonna have to work an extra 10 hours a week just to make sure the tools are in sync versus a cohesive tech strategy where the, the tech actually adds scale. Now I don't, I don't have to work 10 hours a week because of the tech. That's what I'd be looking for.
Speaker 1 00:16:17 So on the scale side, uh, that, that's a great point. The scale side, you know, a lot of people going into or looking at franchising for the first time, slowly get educated that maybe you need multiple territories, multiple locations, you know, whether it's a territory, a retail location. Um, and, and to educate our listeners, the technology, uh, for one unit needs to be able to be scalable for multiple units or multiple territories. Would, would you agree to that, that the idea of being able to have three locations, five locations, 10 locations, stop when you're done, that technology has to be able to help that franchisee and its management team mm-hmm. <affirmative>. Because if you're at that level, you're, you have a management team now mm-hmm. <affirmative>, uh, to connect the dots and the communication between the locations, territories. Is that, is, is that a fair assessment?
Speaker 2 00:17:13 Oh, absolutely. In fact, key, a key indicator. There are red flags to look for. If you're, if you're considering multiple territories and you hear, oh, you're gonna, so every territory will have its own login. If you hear that phrase, then you probably wanna take a step back. Uh, because that means the technology wasn't designed for a multi-unit owner. Uh, you don't want that. Uh, now, and, and you gotta be careful because sometimes, let's say if you're using art system, like you might have a login for each specific location, but you as the franchisor or the the multiunit owner, you'd have one. And you can see it all. Like it's designed for that. So just to clarify that point, but yet you wanna be careful if, if the technology can't scale and give you better visibility as you expand your empire through this, this vertical of this franchise concept, then you gotta be careful, uh, because you, the technology will then start to become a stumbling block. And it, it removes scale rather than creates it as you try to scale your, your, your, uh, your, you know, the number of units that you own. You can boost your revenue and your income
Speaker 1 00:18:12 As you hop on a jet. Uh, and, you know, go visit people franchisors. Let's stick on the franchisor side because, uh, you know, or, or franchisees. Let's, let's stick with both franchisors and franchisees. As you hop on your debt and you do your traveling and your meeting with clients and talking about enhancements and improvements, um, I'm a big believer that analytics data is very important in any type of business. I don't care, you know, if you're selling lemonade, you need to know your analytics. Yeah. Um, is there any information or data that you would you see that franchisors or franchisees should pay more close attention to than they are that, than they are? Is there something out there that, you know, is kind of that blind spot, you know, that, you know, I mean, is is there anything that you see that is, is more important than any, anything else in the data side?
Speaker 2 00:19:07 Yeah, absolutely, man. Uh, two things. They shock me when I talk to people. Uh, and, and I ask 'em, well, what is this metric? And they usually say, I have no idea. Uh, the franchisors and the franchisees, uh, sometimes the franchisees will have it depending upon their system, but I ask 'em about what, what is your conversion rate from stage to stage in your sales cycle? Uh, where, where do you lose people? What's, where's your biggest attrition point in the sales flow? Uh, almost nobody knows. Um, uh, and, and just as a sidebar, I used to run a techno help run a technology company, uh, that was doing translation. Uh, and they, I, we were Salesforce users and I was trying to get that data outta the platform and worked with tech support. And I said, Hey, how do I get this? Like, oh, well you have to hire a consultant.
Speaker 2 00:19:52 They have to build that report for you. And I was like, you've got to be kidding me. Like you're supposed to be these data monsters and <laugh>. I can't even find out at what sales cycle I'm losing my people. And like, Nope. And then I got a bill, uh, for it, or an estimate, and it was like almost a $12,000 custom build just to get to that data. Well, it's so valuable. Uh, I ended up coming to Client Tether and, and we've, we've provided, right? And that's kinda the point. Like, you need to be able to see the, and part of the reason they can is because they're complex data structure on the backend. We streamline that. But, uh, the, the, the reality is, if you can't see your sales, your sales flow, and your candidate flow, if you're a franchise consultant or your, your customer flow from lead, from cradle to grave in one dashboard and see where you're losing people, that's one area where you're losing money because you don't have visibility into your data. Uh, you should
Speaker 1 00:20:40 Be able to see how does that tie into the franchisee site? Somebody who's looking at franchises or considering owning a business business. Um, I mean, I know that some of what you're talking about on the retail side can tie into the p o s system, but I'm sure there's a connection to, or some of the data that you can't get on your p o s system is more in line with what you can get on Client Tether. So where is the connection for that? If somebody is, you know, going to Discovery Day at this point, they've narrowed down their search. Mm-hmm. <affirmative>, how, what should they be looking for on the franchisee side? I would, I would imagine that the, uh, a service-based business is different than a retail business. The data, what you're looking for. So on a service based business, is it, if the franchisor is offering call centers, scheduling, things like that, follow up email campaigns, maybe talk a little bit more about what they're looking for or what they should be looking for on the franchisee side, potential franchisee side.
Speaker 2 00:21:36 Sure thing. So, uh, transitioning from what we're talking about to this, uh, one thing they've gotta look for is, uh, visible data. Like they gotta have data visibility, right? Simple dashboarding, something that shows me how am I doing today? How am I doing this week? How am I doing this month without them having to dig into reports and look into Excel. Uh, if the answer is Excel, then the tools aren't good enough yet, right? <laugh>, but the shift shifting gears though, like what are some other functional things they should be looking for? Yeah. Re you're right, retail's totally different on retail. P os should be able to tell you, um, and e-com tools, e-commerce tools should be able to tell you like visitors versus buys, uh, things, things like that. Uh, and Po Os is gonna, I mean, all POS tells you is like, who bought, uh, not who walked through the door typically, right?
Speaker 2 00:22:18 So, um, anyway, uh, so, but it's different, right? That data's different and it's a different operating. But on the service side, uh, there, there are certain things that you absolutely must, uh, have in place or things that you should be looking for. Like, uh, if you have a franchisor that takes over a lot of the back office work and the minutia and the operating overhead, for example, like, you, you brought this one up, but do they have the ability to streamline the, my lead follow up in scheduling? So I spend my time at a higher partial, like a lower in the sales funnel or a higher level functions in the sales process that that's, that's great cuz that creates scale. You wanna own three territories. Well, if you have to follow up on every lead in three territories, one, you better have really good tech that automates it.
Speaker 2 00:23:02 Uh, I know a guy who does that. Uh, but then, but if you're, if they don't do that, creating real scale, like in like having a call center or having an internal CSR team that manages those appointments and, and, and optimizes it in-house, honestly is better than third party, uh, every time. But if you can't, if you don't have third, if they don't have in-house, but they have a third party that doesn't, you need to know the metrics. What are their conversion rates? So if they say, yeah, we have a call center that we outsource to ask them, what is your conversion, what's your schedule rate from a new inbound leads to appointments? And if that number is anything less than like 30 to 40%, that's a bad fit. Okay. You wanna take it over yourself. Um, I've, I've got clients that, that sit at 70% and they do it in-house using our automations. That's a good number. Uh, it's a really good number. It's about two to three x most industry numbers. But if they got a call center, they're not scheduling at least 30 to 40% of all those leads. They got a problem. And, and you should probably not, uh, purchase that franchise or find out why that rate is so low. You gotta ask more questions at that point. Cause that should be a trigger.
Speaker 1 00:24:02 So it's safe to say then, and, and, and again, just kind of pushing this out a little bit, and one of the things that I've learned, uh, since being, being, having my my fingers on client Tether is the, the ability to communicate with people my database on a regular basis without going in one by one with this client, that client, the automation. Mm-hmm. <affirmative>. So is the automation, the campaign side, whether it's text messaging, uh, email campaigns, uh, reminders, uh, to the franchisees client base, and as somebody looking at a franchise to help streamline those processes of communicating with potential clients. Cuz they may not be a client now, but hopefully maybe down the road remaining in contact with those people. Important. I mean, do you see the analytics to support that?
Speaker 2 00:24:55 Oh, baby. Yeah. So, uh, let me tell you, lemme tell you a funny story. I'll, I'll tell this with a case study we had a, uh, uh, this is a somewhat selling franchises, but the same thing is true of, of leads that, that you've already paid for. Most people look at old leads or people that didn't convert as, ah, they didn't wanna buy it. They're a bad lead, right? Bad lead, bad lead. They'll even label 'em bad leads. Uh, some people do that on our platform. Um, but the reality is sometimes their conversion rate is pretty good. Uh, in the franchise sales space, we had a group that did a pilot and they said, but you got a whole bunch of old leads, but let's take 40 of 'em. Let's just drop 'em in a re a rehash campaign. They included texts and emails only and, um, no calls cuz we can automate calls too, or even brownies in the mail.
Speaker 2 00:25:34 But like, it was just texts and emails and, and let's just see what happens. This is what they said. So they, they turned it on and within 60 days they'd already sold one franchise. They had two people in f d d reviews. They had one person scheduled for discovery day. They had like, of the 40, they had like seven people that were actively involved in the end, the tail end of the sales pipeline, 60 days. Uh, and, and when, when I looked at the data, I was like, holy cow. They reported it back to us. And, uh, and I realized that their conversion rates on those, on those old dead leads was actually two and a half times higher than industry averages for, for franchise interesting sales conversion interest. And they were dead. So you got
Speaker 1 00:26:13 Your, I I've seen, I've seen the value in that. I mean that, that's, that's the beauty of the, the, and again, not to make this all about client tethered, cuz it is about the industry, but it is important that that communication and, and having that ability through client tethered, you know, one of the things that you and I had talked about and, and we're kind of winding down here, so, uh, time flies when you're having fun, I guess. But, uh, and talking about something that's interesting. Um, one of the things that you and I had touched on, um, when the, the first night of the, uh, the conference we were at last week, um, you, we, we had a conversation kind of jokingly or that how young the industry is becoming mm-hmm. <affirmative> and that, but our, our, and, and again, as we get older, everybody else becomes younger and, and that's a norm in industries.
Speaker 1 00:26:59 But one of the things that we found is, is that as much as the industry is becoming loud, uh, younger, it's becoming a lot more energetic. There's a lot of passion involved in this, in franchising. And do you, I guess my question is this, uh, and you've been around the block just like I have, uh, a few times, a couple times. Do you see the knee for franchising as an industry, um, to remain a positive attribute to the, to the entrepreneur, the business owner as an option, uh, the success rates of owning a franchise? Do you see that, uh, our industry and there are a lot of political things that you and I could get into about the industry. We'll save that for another time. Yeah. Uh, but are you seeing the industry remain positive and a, an asset to the entrepreneur and someone who really wants to get into business ownership?
Speaker 2 00:27:54 Yeah, I mean, the, the short answer is 100% absolutely. Irrevocably, yes. Uh, the reason is, Scott is, uh, you and I have both done entrepreneurial things. Being an entrepreneur is a dream, right? American is to own your own business. If you ever want to develop true wealth, it's not gonna be generally as a W2 employee, right? Right. Uh, and so people that want to kind of write their own destiny create generational wealth, uh, or at least earn, earn more and control their destiny more. They need to, they need to get into entrepreneurialism. They need to start a business. And, and here's the challenge though, is you look at those rates, the success rates are abysmal when people are just starting their own business. Franchising creates the operating system, the, and the, the infrastructure, the tools, everything. Like approve a model and says, it says it writes a check to essentially, you know, buy, buy the rights to use all this, but we've already got the package ready for you.
Speaker 2 00:28:46 And the success rates are astounding. Uh, and so you can take someone who doesn't have any, any, um, let's say marketing intelligence whatsoever, let's say it's an accountant, very savvy on the finance side, decent with human relationships, but no idea how to market. He or she would fail starting a business. Yeah. And yet they buy a franchise and they can be incredibly successful because the franchise system, uh, they kind, they kind of help, uh, us take care of that need. That's a deficiency. And, and a normal person that wouldn't be a general entrepreneur, that'd be great at everything. Right? That's, that's a unicorn. Uh, so
Speaker 1 00:29:21 No, that's interesting that, that, that's a great, great way to look at it. You know, for me, and I, and I'm sure you've heard this from other consultants, that, you know, one of the, some of the pushbacks on why somebody shouldn't do something or they don't want to do a franchise other than fear and anxiety and finances. Yeah. A lot of people say to me, and, and I've had this conversation with other consultants is, well, they don't wanna pay royalties. And, you know, uh, so sometimes it's really helpful to educate people on what royalties are. I mean, royalties are how the franchisor earns their money. Uhhuh, I mean, that's their income source. Uh, they don't get it on marketing dollars. They very rarely get it on product, uh, unless they're a a product distribution, license type agreement. But I, I've always tried to explain to somebody, yes, you may, you may go out and start your own home services type business as an independent or even open your own restaurant.
Speaker 1 00:30:12 Mm-hmm. And physically you're not paying royalties. I get it. But on the back end, you really are paying royalties because you have to take some of your money and it's probably gonna be a lot more than you're paying in royalties to develop your backend and your system and your technology. Oh, yeah. And some people really wake up to that and say, yeah, yeah. I mean, you're not writing yourself a check every month for royalties, but you're, you're, you're taking money out for this. You're taking money out to build that. That's a royalty to the company, right? Matter of fact. Oh yeah. This is an expense uhhuh <affirmative>. So, um, you know, so, but just to touch lastly on the industry and keep going on the industry here. Um, what, what positive things have you seen outta the industry? And if somebody's coming in, starting to look at franchising for the first time, uh, exploring business owner, is there anything that they should really be concerned about? Uh, you know, any red flags that should be on the top of the list as they start their validation process? Anything that you're seeing or hearing that, uh, you know, somebody should be aware of?
Speaker 2 00:31:16 Yeah. Well, let's start with the positive. I'll, I'll just say this, like, I've worked in a lot of industries who have you, Scotty? And the one thing that I find is that this industry is just flush with good people who give a darn, um, down to earth people. These are the people who started the carpet cleaning business 20 years ago. Now they've got 200 units, right? Right. Uh, many of them, they don't change, uh, that much. You know, they become wealthier, right? But then they, they're, um, they, they have to go through such a grind to get to that point as a franchise, or they're just good down to earth people. They do, the industry itself does things that are incredible. Like, you know, I went to an event, we raised like, you know, 12 grand for the Ronald McDonald House and assembled like 600 kits for kids.
Speaker 2 00:31:54 Like the industry has a conscience. Uh, and the industry's also actively involved in try to protect this business model in America. So as an industry, I mean, there's so many good things about it. Um, some of my, my greatest friends I've developed in this industry, and I haven't been in it too long, like four years. So, um, I, I, I just think anyone who's looking at franchising you, you should just be aware. This is, this is a great place. It's a great ecosystem, and people are open to helping anyone succeed. You can be sitting across the table with a competitor and they'll sit down with you and be like, Hey, lemme tell you about my experience. Like the, it it's a big blue sky mentality in this industry that I've never seen anywhere else, which I love.
Speaker 1 00:32:31 Uh, yeah, it's an open, it's an open book. I mean, everybody respects each other. I mean, I, I, I, I mean, you know, I, I think the funny thing is, you know, you, you know, Joe Schmoe has been at X Brand for six years, and the next thing you know, you meet him at a conference and he is with a competitor, and the competitors are talking. It's like, I mean, I've never seen it in any other industry. <laugh>. I mean, you, you hired my salesperson, I'm gonna, I'm gonna, you know, I'm gonna level you out. I mean, I'm coming after you. And, and, and in the franchise industry, you don't have that.
Speaker 1 00:32:58 And it's even with brand people that own multiple brands, it's the same thing. Oh, yeah, yeah. Look, you own a McDonald's now you wanna own a a chicken place. Okay, great. Let's make sure it's not competing and da da, da da. But you're absolutely right. It's, it's a, it's a franchising. There's a lot of giving back to the community, and, uh, it's a lots, it, it's a Dave. Um, I, i, I, I can't believe our time is up here. I i, I, I think you and I could just, you know, sit around and, uh, crack open a bottle of Jameson and probably just carry on this conversation until dinnertime. But, um, in all fairness to everybody else, um, anything that we might've, we, we should've mentioned that, you know, we haven't mentioned, uh, that potential business owner, that entrepreneur, uh, that multi-unit franchisee looking to diversify. Uh, anything you want to add about this, our, our, our conversation? Sure. Any thoughts? Yeah,
Speaker 2 00:33:52 Wrap, wrap up thought. Um, your question, your second question was, what should somebody be looking for? You gonna be red flag, not necessarily the red flags, but strategically, what should you be paying attention to? Uh, labor is, is a big one that I would say, let's end on this note from me. Uh, if you're looking at a franchise concept right now, the labor market's tough. Like it's, and as the inflation increases, uh, unemployment will swing back. People will be seeking for jobs again, handouts have declined. Like, there's all this stuff at play right now, which has made the labor market really crappy for business owners. So, uh, as much as possible, right now, I I just say pay attention to how labor intensive the business is. Are you hiring a lot of staff? And if so, are they low level staff? Mid-level, high level, mid and high level, like, uh, old people older than like 35 are, are a lot easier to hire right now than people that are under 35. Exactly.
Speaker 1 00:34:41 So if you're, great point.
Speaker 2 00:34:42 Yeah. So if you're dependent upon labor to make the business thrive, then reevaluate that or make sure you've got a great strategy. It's not a deterrent, right? You just have to go into it eyes wide open and say, okay, I know, you know, I, I just finished coaching my second year of high school baseball. Like I've got a great connection to a whole bunch of kids that are 18 to 20. Now, it wouldn't be as hard for me as somebody who's like, I don't know a soul. Like, my kids are zero. Like, I've got a baby. I don't know anyone in that age group. Right? Like, you gotta make sure that you're plugging into that, that ecosystem. So you've got access to labor if you need entry level labor. Otherwise, you're gonna have a tr you're gonna have some trouble.
Speaker 1 00:35:15 Yeah. Good. Good. Uh, Dave, uh, outside of, uh, connecting with you on LinkedIn, uh, what is the best way for somebody who wanted to learn more about what your organization does on the technology side, the CRM side, uh, information side? I mean, what's the best way for someone to get in contact with you?
Speaker 2 00:35:33 Yeah, I mean, you can reach out on LinkedIn. I'm on there quite a bit. Uh, you can, can also just email me dave client tether.com. I'm an open book happy, even if you don't wanna buy something from me, like I'll connect with you. I'll, I'll answer questions. I'll connect you to people who are experts. That's something I'm, I'm really quite good at. If you come to me as a problem, I'll be like, that's not me. But let me tell you, this guy right here, and that gal right there, they'll, they'll answer it for you. So I'm, I'm happy to, to, you know, kind of be air traffic controller if you need something as well.
Speaker 1 00:35:59 Great. Great. Well, again, everybody, this is Scotty Mylo, Scott Myles franchise coach.com. Another great episode on technology and franchising. Uh, you know, what you should be looking for in the franchise, uh, on the technology side, uh, with my good friend Dave Hanson. Again, another episode of What's Your Know, know Your Why, and, uh, all Things Considered Franchising. Uh, obviously you can reach me at Scott at scott mylo franchise coach.com, or go to my website, Scott, my franchise coach.com, and of course on LinkedIn, Scott Mylo, uh, Dave, again. Great, great, great conversation. Wish we had more time. Uh, I'm sure we'll have you back again. Uh, there's a lot to talk about in the industry, but let's make it a great day. And again, Dave Hanson, client Tether, uh, reach out to him on LinkedIn or, uh, you know, the information that you see or, uh, here, uh, and the best way to get ahold of him. Thanks again. This is Scotty, my signing out.
