Episode Transcript
Speaker 1 00:00:05 Hello, everybody. Welcome to another episode of All Things Considered Franchising, powered by Scott Milo franchise coach.com. All Things Considered Franchising is a podcast series devoted to the entrepreneur, people who are interested in exploring business ownership, franchise opportunities, or even just an open discussion on owning your own business, exiting corporate America diversifying a portfolio. Scott Milas franchise coach.com is a consulting organization that I own, that I help people build the business model, and then of course, introduce them to the opportunities that fit, uh, or decide if franchising is, uh, relevant for them or not. Um, I have a kind of a unique guest today, a guy that I probably met, oh gosh, I was thinking about this before we hit the record button, um, about, probably about six, seven years ago. Uh, seven years ago, eight years ago when he was just kind of getting into franchising. So maybe a little longer than that. Um, kind of a, uh, firecracker type attitude guy. Um, and, and he, he brings a lot to the table. Um, I met him on the lead generation side many years ago when he was working for a data company. Um, uh, and, and, and I'm pleased to welcome Anthony Spagnola, uh, Anthony's with, uh, horsepower Brands and is a, uh, director of franchise development, uh, for Mighty Dog Roofing. Uh, Anthony, welcome to the podcast.
Speaker 2 00:01:30 Hey, Scott. Thanks for having me on.
Speaker 1 00:01:32 Yeah, you know, um, I, I still remember that, uh, that first time I met you. I think it would be, I don't know if we were in Orlando or Texas somewhere, but, uh, you, you had an interesting career prior to getting into franchising, and then of course got into franchising, uh, was on the data side helping guys, brands like myself, uh, with lead generation and then, you know, really kind of saw the, the upside to being on the development side and kind of went into the brand side. And of course, now you're with Josh and, uh, Zach over at Horsepower Brands. But tell us a little bit about your background, how you got into franchising and, you know, just kind of go from there.
Speaker 2 00:02:13 Uh, sure. Yeah. I, I started off my career in, uh, like software and marketing. I worked for a bunch of tech startups outta New York City, and one of 'em wanted me to start like an enterprise sales division. So that kind of got me selling into franchise companies. Uh, went to Metro Collective, uh, selling lead generation, like you mentioned for franchise help and be the boss. And then we had a texting software called, uh, Fran Funnel. So that was kind of my first, uh, intro into the, the franchise world. Uh, I fell in love with it. Um, ended up leaving there, becoming a independent consultant. I actually helped build a franchise company with some friends. I became a franchisee. I had two restaurant franchises outta New Jersey for a little while there. Uh, and now I'm on the, uh, development side. So I've been on pretty much every side of the table in franchising, and it's been about 10 years now.
Speaker 1 00:03:02 You are what I consider to be the, the, the new generation, those young guns, uh, coming into franchising. I mean, 10 years is still a tenured, uh, and, and expertise within the industry. But, um, your generation, uh, your, your enthusiasm and the, um, the ability and the want I call it, to wanna be part of the industry. Cuz it's a growing industry, it's a changing industry, and to be, have people be successful as business owners is intriguing. So talk a little bit about your impressions about franchising. Maybe, you know, why people should consider a franchise versus an independent, and then we'll take a little bit of a deeper dive into, uh, mighty Dog Roofing.
Speaker 2 00:03:50 Yeah, so I think, I think a lot of people don't realize how much stuff goes into running a business. Um, you know, just from all the technology, all the software, all the vendor relationships you have to have with manufacturers, suppliers, uh, there's so much that goes into it. So, you know, if you're not super experienced in, in building, you know, companies, it's, it's hard. And I think there's a stat out there, something like 80% of small businesses fail within five years or something like that. You, you pretty much flip that on its head when you go into the franchise world because franchises have proven, you know, systems and processes. They have technology and software, and they have all the vendor relationships. Um, so it just helps you get a jumpstart and it's a much, uh, less risky way of starting a business. You're still the business owner, you're still a locally owned business, but you're nationally backed. So you have the support of a big company behind you to help ensure your success.
Speaker 1 00:04:46 Yeah, that's great. You know, I, I, the best way I heard to explain how it's different, investing in a franchise as a startup versus developing your own systems as an independent is to use a baseball analogy, you're starting on third base in a franchise, uh, and you're trying to get home and, and home being to be successful and to build profits and income. Uh, you know, on an independent, you're really starting at home in the batter's box and you're trying to get around the basis. So it was kind of a unique analogy that I thought that somebody described to me, a guest I had on the podcast, um, who, who told me that, you know, it's, it, it's starting on third base. Um, it's, uh, and you're right, there is a lot to owning a business. Uh, you know, uh, you and I have something in common.
Speaker 1 00:05:33 We're both in the food industry for many years, and it's not simply turning on the oven and taking an order. I mean, there's a lot of intricacies, uh, uh, product ordering, vendor relationships, everything, uh, that, uh, you know, you need to run a business and it's, you know, just not putting money in the register and taking out, I mean, it's, uh, it's unique. Um, you're with Josh and Zach, uh, horsepower Brands becoming a very, very relevant franchise sales organization, service-based businesses, uh, within the industry. And you're, you've tapped into Mighty Dog Roofing, which I find to be a very, very unique business model. Um, it sits in that category of a need not so much a want because you need a roof. Um, and, and it, and it, it's that, you know, it, it, it's, it's, it's, it's something that just, you know, kind of keeps coming. You know, one roof set, two roofs, three roofs, and before you know it, you have a pipeline. Tell us a little about Mighty Dog and what separates you in the industry and what makes you unique.
Speaker 2 00:06:41 Yeah, so, uh, mighty Dog, actually, it's, it's, it's a lot more than just roofing now. Uh, you know, roof replacements and repairs, that's our bread and butter. But we also offer siding, gutters, windows, windows, and we just rolled out solar.
Speaker 1 00:06:55 Interesting. Okay. Yeah,
Speaker 2 00:06:56 We do that for both residential and commercial. So there's a tremendous amount of opportunity with a Mighty dog because of all the different service lines you have to offer. It's pretty much anything on the exterior of the home at this point. Um, so we're kind of a one-stop shop. Uh, we have a subcontractor model, which for some people might be scary if you've never worked with, you know, contractors before. But I think that's the best part of Mighty Dog is we use subs for all the labor so that our franchisees can really just focus on sales and marketing and, and that's what Mighty Dog is. At the end of the day, we're not a roofing company or a construction company. We're a sales and marketing company. Um, we've got so many competitive advantages from our branding and our marketing to the technology that we're using.
Speaker 2 00:07:40 We actually have a drone, uh, technology. It's a AI technology that flies the drone for you. It takes an inspection of, of the roof, it reports back any damage. Um, so that builds a lot of trust and credibility with the homeowner because now it's a third party technology telling you that you have damage and you're actually able to show it to 'em, saves you a lot of time. You don't have to get up on the roofs as often. And, uh, it's a great marketing tool. And we've got lots of cool technology like that. Um, we've got sales presentation software, a canvassing software, a great CRM system, uh, a visualizer tool we call it, where you take a picture of the person's home and you can show them exactly what each type of, uh, uh, shingle and each color actually looks like on their house. It's really neat. And then the vendor relationships we're so big now that we've got national partnerships with manufacturers and suppliers, so we're getting the best possible pricing, we're getting better warranties, and we're getting rebates back from everybody, and those rebates are getting paid directly to the franchisee to help offset their royalties.
Speaker 1 00:08:43 That's interesting. So let you know, I, I'm just visualizing a conversation with a client right now and presenting Mighty Dog Roofing. Uh, and you mentioned the subcontract subcontractor model, um, unique in a sense that the franchisee now does not have, uh, the employee, employee or responsibilities. Uh, maybe it's benefits, maybe it's, uh, an employee handbook, all those little things that come into owning a business. But I can see the question that comes from, uh, people that I talk to, especially with today's labor market, is how are you finding or determining who your subcontractor partners are? And are they, is it a list, uh, based on territory? Is it a nationalist or is it, hey you, this is your territory now we're gonna go help you find subcontractors. Walk us through that a little bit. Cuz I'm sure a lot of people out there are scratching their heads right now and, and wanna know how that's done. Cuz it's unique.
Speaker 2 00:09:45 Yeah, yeah. That's a lot of people. That's their biggest concern is how do I find good subcontractors? How do I ensure, you know, quality control, you know, if you're subbing out all the labor and we've solved that, uh, problem pretty easily, uh, with those national partnerships. So in every market there's roofing supply companies, those sub suppliers are already tapped into all the subcontractors in that market. They know the good ones from the bad ones. Most of those companies are owned by bigger companies that we're partnered with. So we lean on those suppliers to introduce our franchisees to the best subs in their market. And that's usually all it takes. We give you a list of the best subs, you reach out to them, you book 'em for a job, you figure out which ones you like to work with. You know, you may not get along with all of 'em, but you'll find one or two and those will be your go-to crews that you use for everything. They'll become like part of your core team. They just happen to be 10 99. And if you have any trouble finding subs, uh, through the suppliers, which you probably won't unless you're in a very unique type of a market. Then we actually have a, we have a staffing company called Recruit Z. Yeah. And they have a program now just to help our franchisees find subcontractors for a very nominal, uh, fee. They'll go out, they'll find the sub for you, they'll vet them, they'll qualify them, and they'll set them up, uh, on a job for you.
Speaker 1 00:11:05 That's interesting. So just to make sure that our audience understands, and we're talking to Anthony Spanno of, uh, franchise development manager for, uh, horsepower Brands who handles Mighty Dog Roofing, um, that a client goes and let's just say they facilitate a, a job, whether it's a roofing, a gutter job, they're going to then reach out to their database, the supplier database, um, and get introduced to contractor subcontractors to perform that work if they're handed or, or, or get that opportunity to do that job. Correct? I mean, I just wanna make sure our audience understands this.
Speaker 2 00:11:44 Yeah, exactly. I had actually, a candidate actually put it to me the best. He said, so basically he's like, you guys are, you guys are, uh, catching the fish and then you have subs that are basically skinning it and fileting it and deboning it.
Speaker 1 00:11:56 Great way to put it.
Speaker 2 00:11:57 It really is a great way to put it cuz we're doing everything else that contractors, frankly, are, are not that good at, and they don't really like doing. We've got great marketing and we've got a great sales presentation and we've got the vendor relationships. So we order the materials, we schedule the subs, we do everything except for the actual labor, and then they show up, the materials are there, the subcontractors show up, they can knock out a full roof replacement in like a day. And, uh, everybody wins.
Speaker 1 00:12:25 Interesting. That, that, that's, that, that's an interesting model. So let's talk about the characteristics of your franchisees. Um, it sounds like, and correct me if I'm wrong, Anthony, is, is that there is a sales aptitude to this business model. Uh, you know, you have to be comfortable going to someone's home or business making a presentation. You mentioned the visuals, the drones, showing them what the product, the project is gonna look like based on the computer images, the illustrations. So is, am I correct, and I'm not talking about being a Willie Loman here where you're knocking on doors and dialing for dollars, but you've gotta get out there network and be able to make what I would call a boardroom presentation. Am I correct?
Speaker 2 00:13:10 Uh, yeah, yeah. It's very much an enterprise type of a model though. So we're looking for business owners. We're not looking for construction people. We want somebody who can build a team and delegate those responsibilities. So you're right, like the franchisee shouldn't be having to go out there and knock on doors, but they should have a team of salespeople that are doing that. It is important to have, you know, uh, that sales personality, that relationship builder type of person. If it's not the franchisee themselves, then they would usually hire either a GM or a sales manager that would kind of fill that role. So we do have some franchisees that are more, you know, finance backgrounds or system processes type guys. Um, but we do have a lot that have sales backgrounds and uh, that is a big piece of, of the business. I mean, we're doing most of the marketing behind the scenes, so our franchisees are really focused on sales.
Speaker 1 00:13:56 Interesting. Now, when you say doing the marketing, um, is that more of the, uh, the social media, the outreach to the territories? Um, do you have an in-house call center where you're handling calls, maybe scheduling appointments for the franchisees or their sales team? I mean, how are you handling all the marketing issues and scheduling?
Speaker 2 00:14:16 Yeah, so that's the beauty of, of Mighty Dog Roofing and, and all the horsepower brands, is that we have a lot of horsepower behind us. And Horsepower has a whole bunch of different companies under their umbrella, and a lot of them are, are, uh, service-based companies that were built to support our franchisees. So Horsepower owns a, a full-blown marketing agency called Franchise Rocket. Franchise Rocket does all your marketing from your social media to uh, Google, uh, to online directories, you name it. Uh, and then we also have a director of marketing at, at the corporate level who helps you with more kind of local, you know, mailers and events and things like that. Uh, and then, and then you're right, we actually have a call center as well in-House Powerhouse Call Solutions. We've got people picking up the phones, calling your leads back seven days a week to actually book those inspections and those estimates for the franchisee.
Speaker 1 00:15:09 Interesting. Talk to us a little bit about the investment level. Give us a profile of a territory, uh, you know, kind of paint that picture for, for our listeners here on what, what we're talking about investment wise, scalability, uh, you know, uh, for someone to get into the business.
Speaker 2 00:15:27 Uh, sure. So you'll see if you see our item seven, the the initial investment requirements, you'll notice we have a lot more items on there than most other companies. And uh, you know, it's because we're being very transparent. You know, we know all the stuff you're gonna need throughout the year. So we include a lot more stuff into our item seven. We even go as far as including the first 12 months for a lot of those expenses. And we do that so that, you know, there's no surprises, no
Speaker 1 00:15:52 Surprises.
Speaker 2 00:15:53 You can hit the ground running with a really healthy budget, but it also allows you to take advantage of SBA a financing. The more we front load into that item seven, you can include all that into your loan. So if you're looking at our total investment and our item seven, comparing it to another brand outside of horsepower, it's really not apples to apples. We're, we're including a lot more stuff in there. Um, but our total, with that said, our total investment for one territory, uh, ranges between about 215,000 to 320,000. That would be for one territory. Now, if you go to two or three or up to five territories, you could do, um, the only cost that changes is the franchise fee and you get discounts as you add more territories, right? So it's actually not that much more to do a few territories. Most people are doing three territories, that's the most popular and for three territory people are usually budgeting somewhere around, uh, 400,000. You could get away maybe even 350,000, something like that for a three pack.
Speaker 1 00:16:52 You know, it's interesting because that the, the investment range is that is a real comfortable, uh, range in a service-based business, um, that has multiple revenue streams. And I think, uh, I, I I, I really wanna kind of put those three stars or four or five stars next to Mighty Dog Roofing because of what I like is multiple revenue drivers. You know, your, your your, your, your briefcase, your your toolbox in this case, cuz it's service based, um, has multiple revenue drivers. You're just not selling one type of roof, one type of shingle walking away. You could potentially do a roof or repair a roof for somebody and then in six months, three months or whatever be called back to repair a gutter or replace gutters or, so again, it's really anything that multiple revenue drivers Correct. I mean, I, yeah. Am I wrong?
Speaker 2 00:17:50 Absolutely. Because by having all those additional services, like you said, it's a good foot in the door to, to start building a relationship, maybe to someone who doesn't need their roof replaced yet. But maybe you can go in and just replace one window that has a draft, you know, or you do that little repair job that nobody else wants to do. Now you have that relationship and then maybe it's them or a family or a friend down the road needs a roof and they end up calling you in for a referral. You know, or, or it's great to bundle in those services to increase that average ticket. Our average tickets are already some of the highest in the industry because roof replacements are one of the most expensive things you're gonna do to your house. Um, but when you start bundling in gutters and a few windows and things like that, right. You know, that can be a very high average ticket. Then when you throw in commercial jobs, forget about it. I mean, there's commercial opportu opportunities out there for hundreds of thousands of dollars for, for one job, for one project.
Speaker 1 00:18:42 That's interesting. So multiple revenue streams, multiple revenue drivers, uh, the ability to not only provide one service, but multiple re services products that you can sell somebody, uh, which makes obviously referrals a lot more popular. It's like, oh, you do gutters. By the way, my neighbor or my neighbor down the street was mentioning he needs his gutters. Let me give you his name because you may wanna reach him. So the referral program probably works a lot better with multiple revenue drivers as well.
Speaker 2 00:19:14 Yeah, yeah. Another big one for referrals is that realtors and insurance agents, those are huge referral sources for us. So that's a part of our, our marketing and customer acquisition strategy is, you know, I I like to drop it into like three buckets. Bucket number one is online marketing, franchise Rocket does all that for you. Bucket number two is canvassing. So there is an aspect of knocking on doors, but we do it very smart. Uh, we have a software behind it. You know, if you're going out for an appointment, hit a few doors on the right, on the left, a few doors across the street, um, and then networking is the third bucket. And that's going and joining your local Chamber of Commerce or BNI group. It's, uh, sponsoring a luncheon for local realtors and insurance agents. Um, you maybe exhibiting at a local home show because there's no better, uh, lead than a referral.
Speaker 1 00:20:04 Yep. You know, um, we always talk about, um, profiles of franchisees that are coming into Mighty Dog Roofing or in general, it's always a topic. Um, you, you mentioned that you're looking for entrepreneurs, people that know how to manage a business can delegate a business. You're not looking for someone necessarily that has to get up on the roof and, you know, hammer in the nail, so to speak. Although, you know, I mean, obviously owners, if that's what they want to do occasionally, that's fine, but is there anybody interesting or profiles or of franchisees that have come in from, you know, the corporate world or, or you know, employment, uh, that kind of surprised you that are doing very well? I mean, you know, kind of like you never visioned X coming in, you know, from that background into our, our system. Are there any surprises, uh, of backgrounds, uh, that you can, you know, tell us, share with us?
Speaker 2 00:21:00 Um, yeah, I mean we have such a, a good, a great mix of different backgrounds throughout the system, and that's what makes the franchise system so special is we've got so many smart people from so many different backgrounds and we can all kind of put our heads together and come up with different ideas. But we've got a lot of what we call like corporate refugees, you know, uh, people who are in corporate finance and things like that and just really wanted to get out a and start their own business. We've got people who are, you know, coming from medical device sales, um, you know, all different types of backgrounds. We've got, um, a lot of husband and wife kind of duos and even father and son duos. So we see a lot of family businesses. Interesting. Which is really exciting. Um, so really there's not one specific background that, that we see doing better than anyone else. I think, you know, anybody with that Empire Builder mentality, that's the thing is we want someone to work on their business, not in their business, and really build and scale a team, you know, so team building I think is, is really important. Um, and maybe that's not for everybody, but that's what really makes a successful Mighty Dog is building a, a, a strong sales team. Right,
Speaker 1 00:22:03 Right. Well, we've been talking to Anthony Magnolia, director of franchise development over at Horsepower Brands. Uh, he is the, uh, franchise development manager for, um, mighty Dog Roofing. Uh, a unique service-based brand, uh, multiple revenue streams, uh, for both residential and commercial. Uh, Anthony, if somebody wanted to get ahold of you and talk to you about Mighty Dog Roofing or franchising in general, uh, you know, maybe, you know, uh, questioning whether they should make that leap into business ownership, what would be the best way for someone to get in touch with you?
Speaker 2 00:22:36 Uh, yeah, so, um, the best way would probably be to email me. It's at apa horsepower brands.com. You can also go to, uh, mighty dog roofing.com or you can hit me up on LinkedIn, Anthony Spaa. Um, you know, one thing that I haven't mentioned that I definitely wanna throw in before we cut this short is that we actually just won a whole bunch of awards, uh, for Great Entrepreneur 2023. We ranked the 11th fastest growing franchise company, uh, in the world actually. And then we ranked number one for top new and emerging franchises, uh, also best in category. Um, and it's because we have some of the highest average unit volumes in the industry. Uh, so our first, uh, first or second year franchisees, so brand new franchisees, they're averaging 75% of them averaged over a million and a half in annual revenue in 22. So this is an opportunity that scales really, really quickly. So definitely hit me up on LinkedIn, email me. I'd love to take you through our process and I'd love to introduce you to some of our franchisees so you can kind of hear it from the horse's mouth. That's
Speaker 1 00:23:39 An interesting model. And, and, and you know, one of the interesting things about this, uh, this model just to close out here, is that on the, on the management side of the business, where the owner is going to be responsible, the franchisee, the management, the delegation, you know, the coordination of subcontractors, this is really a Monday through Friday type business. I mean, this isn't like a retail where you're open seven days a week. I mean, it's, it's Monday through Friday and then you probably have site managers through the, uh, the subcontractors that are managing the sites and, and the work that you're doing. Is that correct? Right. So there is that work life balance, I guess that, that's my point. Yeah,
Speaker 2 00:24:18 A absolutely. And that's why we have the call center too, cuz they're working for you behind the scenes seven days a week. You know, they're working when you're, when you're not, when you're spending time with your families so that you can, you know, have that work life, you know, balance.
Speaker 1 00:24:30 That's great. Well, Anthony, anything you'd like to close with? Anything else that I forgot to ask you? Anything you wanna leave out? I mean, it, it, it's always great to catch up with you. Like I said, you're just a firecracker in this industry and I, there's always this excitement with you, uh, when you sit down and chat, whether it's, you know, over a meal or just a beer. Um, you bring a lot of light to the room in regards to, uh, franchising in business. I mean, but is there anything you wanna close with? Anything, uh, you know, you wanna say?
Speaker 2 00:24:59 No, that was really nice. I feel like I'm blushing over here <laugh>. Thank you for the, the, the compliment. But, um, no, honestly, like, you know, we, we have discovery days, uh, here, uh, you know, in Omaha, Nebraska at our corporate headquarters. It's one of the most amazing events you could ever come to as a horsepower discovery day. Uh, we do 'em for candidates and we also do 'em for consultants. If you've never been here, we'd love to have you out. Um, and our, our candidates get to, you know, meet franchisees. They get to meet all the members of the corporate team. They get to meet a lot of our third party vendors, and they actually fly out here every month to meet our franchisees. That's how great our relationships are. Um, so anyone who comes into my process, um, you know, would love to get them to a point where they're coming out to Discovery Day. Cause I think it would really blow 'em away.
Speaker 1 00:25:45 Wow. That, you know, that, that's good to know. And, uh, having known Josh in a lot of brands that he's built in, Zach, I can tell you you're absolutely right. I would have to say that, uh, uh, Josh, Josh and Zach, especially Josh, uh, when it comes to Discovery days, they, they probably throw the best discovery days I've, I've I've ever seen or been part of. So, uh, but anyway, um, Anthony, thanks for joining us. We've been talking again with Anthony Spa Vice p uh, director of franchise development with Horsepower Brands Mighty Dog Roofing. I am Scotty Milas, your host of All Things Considered Franchising, powered by Scott Milas franchise coach.com. Anyone has any questions regarding Mighty Dog Roofing, please reach out to Anthony or give me a call. You can reach me at 8 6 0 7 5 1 9 1 2 6 or visit my website, Scott milas franchise coach.com. And of course, visit Apple Fly Spotify. So all the other social, uh, media type outlets to listen to, uh, all things Considered franchising. Anthony, great to have you and, uh, we look forward to having you back on, uh, somewhere down the road within the next four to six months. All right. Thanks for having me, Scott. Great seeing you. Okay, thank you.
