Episode Transcript
Speaker 1 00:00:04 Hello, everybody, this is Scotty Milley Milers, and welcome to another episode of All Things Considered Franchising, powered by Scott Milas franchise coach.com. All Things Considered Franchising is a podcast devoted to the entrepreneur, focusing in on, uh, franchise opportunities, uh, people that are independents, uh, just providing resources and information, uh, regarding different brands, uh, in the franchising space, and of course, uh, in the entrepreneur space. Scott Milo, franchise coach.com is a, uh, consulting co, uh, organization that I founded many, many years ago. Uh, we focus on assisting people, researching and exploring opportunities, helping them build the business model, and of course, introducing brands that fit, uh, the services, guidance, education that we, uh, we provide are absolutely at no cost to our clients. Uh, we, our firm is compensated by brands, much like who we're gonna have a guest on today. Uh, so, uh, you'll never pay me a fee for any of the services that I provide. Um, one of those, um, guys who's just really kind of under the radar, uh, but has been enfranchising, uh, for quite a while, uh, I wanna welcome Joshua Hoffman to the show. He is with, um, horsepower Brands. Uh, you might have heard some other, uh, podcasts, uh, uh, with Mighty Dog Roofing, blingo iPhone. They all fit under the, uh, horsepower Brands franchise search, uh, organ Franchise Sales Organization, um, uh, that they provide, uh, many different service-based brands. And today we're with, uh, Joshua, who represents Groovy Hugs. Welcome to the show,
Speaker 2 00:01:41 Scotty. Thanks for having me, man.
Speaker 1 00:01:43 Yeah, you know, um, it's interesting because I have a lot of respect for Zach and, uh, and Joshua as they build the service-based brands, obviously, uh, they, they both have had, uh, great success with the, uh, brands that I brought into the, uh, portfolio and prior experience before they started Horsepower. And you've been working with Groovy use and it's, um, it, it's a service-based brand with a little bit of a different twist. Um, because when you look at organizations that provide exterior, exterior, uh, painting services, a lot of people don't see the value of the other services, as you call it, light renovations. So maybe, uh, tell us a little bit about yourself, how you got into franchising, and then let's take a deep dive into, uh, groovy use.
Speaker 2 00:02:31 Yeah, uh, appreciate it. So, my background, uh, I think of like many people I stumbled into franchising accidentally. Uh, and my career started actually in college. So I was in the heart of the housing crisis, and the only way to pay for rent and beer at the same time was Pay <laugh>. Uh, lo and behold, it was a franchise locations with suburbs of Chicago, uh, and it was a struggling location, so had the opportunity to take it over, uh, and never looked back very much a mom and pop franchise, but fell in love with models, organization, the, you know, the ability to help a 19 year old me be successful as a business owner, which I probably had no business doing. Uh, go in there. So, ended up on the operation side for a number of different franchisors. Um, everything from, uh, training and development coach to a brand president from, again, pretty much everything you can imagine in Home Services.
Speaker 2 00:03:16 So I've spent the last 12 or so years doing that. Uh, and about now, 18 months ago, got introduced very much, uh, like you Scott, he threw a franchise consultant friend of mine said, check out what they're doing in Omaha, Nebraska, and I could not imagine that what I was gonna run into at Horsepower. So I actually started with Mighty Dogs. So you heard from Anthony? Yeah. Uh, another podcast here. And then we launched Groovy Hughes about six months ago. And with my background in paint, my wife says, I think you're addicted to paint. You just keep it in a back in paint, France <laugh>, which I ask her not to phrase it that way, but, uh, I love doing, we've had some, some crazy growth here.
Speaker 1 00:03:50 You, um, you know, it's interesting because you mentioned you started out more in the operational side, uh, and now you're in the development side, uh, helping people kind of fit the pieces, uh, of the puzzle together to see if it makes sense for them. And of course, making sense for you as the brand to bring them on board or award them a franchise. But when we look at and, and, and educate our, our, our listeners, um, the operational side to me is, is, is always as important as the numbers, so to speak, the validation because of the support. Uh, you know, you wanna get into a franchise that's going to support you. You may not like everything they do. You may not be in love with everything you do, but you gotta be able to get along with them and work together. And that work is typically on two fronts, the operational side and the marketing side. So with your background, let's focus on the operational side. Where do you see that line or the importance of somebody feeling comfortable with the operational support training and so on? Maybe you can walk our audience through that.
Speaker 2 00:04:52 Yeah, so I, I think a couple things are important and I, I focus on a franchise or taking a multi-channel approach to your support, right? Like, it always alarms me when somebody says, Hey, here's our one secret sauce. We have this C RM that can do everything for you, or this one thing. And the truth is, it's much more complex than that, right? So I look at one as typically the number of staff members supporting you. And it's one thing I was attracted to at Horsepower here, uh, with, we have about 275 people under our head office here in Omaha, Nebraska. So it's one to say, okay, am I gonna be well supported from marketing from again, uh, day to day, from CRM support to long term vision of what you want to do with your franchise? I think those things are very important. And then it's the focus on your performance, right?
Speaker 2 00:05:37 So it should be top to bottom revenue. And, and I'd say at the bottom line, everyone wants to focus on bottom line profit. Well, that correlates to top line revenue. So if you don't have a franchisor who wants to help your, you grow to your goals and is either holding you back or wants to push you to a place you wanna go, it's probably not a good fit. So I would say that, uh, those two things are really important in the last, this is, and you mentioned this with horsepower, is the franchisor success, right? We talk about a paint company mm-hmm. <affirmative>, it's very different than a franchise paint company. Uh, so you wanna look and say, I, I believe from my end, uh, being on that side was, okay, do they know what they're doing from a franchisor perspective, or is this their first venture into it? Doesn't mean it's inherently bad, but it means that you're gonna be learning with them, uh, which is just an extra challenge for a lot of times for a first time business owner.
Speaker 1 00:06:22 Yeah, no, I agree with you there that very well put that the operational support is important with your 275 plus people, uh, from call center to marketing support, tech support. Um, you know, I always tell my clients that if you're looking to get into a franchise to try to reinvent the wheel and rebuild the brand, you know, take all that energy you're gonna use and all that financial resources and start your own company, because that's not what franchisors are looking for, you know, so let's lean into groovy use, because groovy use is, uh, I, I wouldn't say an embryonic brand, but it's a new brand. Um, it, it, it has a lot of strength in numbers because of the support and the operational support. So tell us, who's taking a look at Groovy use? Who's investing in the franchise, little bit about the services, paint that picture for us.
Speaker 2 00:07:16 Yeah, so I, again, everything with horsepower is going to be home service based. So Groovy Hughes, our focus is on paint, interior, exterior, commercial power, and soft wash, again, which is a big growing space here when it comes to exterior maintenance as well. As we mentioned earlier, the mild renovations or cosmetic upgrades, think shutters, gutters, front doors, things that really catch your eye from the field. So again, who this is attractive to in our owners, again, in our first six months, we place about 20 owners here. Uh, typically people who like something that's very stable, right? It's why we got into painting. You know, how you paint a house hasn't much changed in the last 60 years, right? There's some better technology and it's always gonna happen. Now, the second side where I kind of call this our Goldilocks brand, is there are some sexier brands out there, right?
Speaker 2 00:08:03 There's not a lot tons of sexy about paint, but to the consumers, it's that design aspect, right? So when we focus on software being able to redesign your home, it's your largest and most intimate asset. So you get that somewhat sexiness with the need base. So when you talk about recession resistant, certainly seasonal resistant business, it's typically someone who likes that. And then again, somebody where you're talking about, Hey, it's easy for a mom and pop to open. Well, those people aren't really sophisticated. So I tend to find it somebody who looks at, you know, you look down your main street in whatever town you live in, and you see a Wendy's, a Burger King at McDonald's. You'd look and you'd say, well, I'm not afraid to open a Chick-fil-A because those are there. Well, that's what we look at. We're the Chick-fil-A of what we're doing in that space. So, uh, very well on that end, we are designed to be an executive model. So we're about 50 50 split of what we typically will call semi or semi absentee owners to owner operators.
Speaker 1 00:08:55 You know, one of the interesting things about your model, uh, is that there are multiple revenue drivers. You know, when you think paint exterior or some of the other franchises that are out there, all good brands. Everybody has their own little fit niche into the industry. But, you know, if somebody's gonna get the exterior of their house painted or a certain part painted, if you're only providing that revenue, that ex exterior painting, the chances of them calling you back in the next five years is slim. The none. Unless of course, they're making a referral saying, Hey, I want you to call my brother my sister, or my nextdoor neighbor. But you have multiple revenue drivers that allows you to have more touch points with the clients to keep that keep keep to consistently be engaged
Speaker 2 00:09:45 When you hit the nail on the head, and this is where we saw most paint companies make mistakes, which is they treat it like a single time acquisition, right? I come to paint and I never see you again. Where the truth of the matter is, if I can get into your home, get that foot in the door multiple ways, well, Scotty your house, you see black mold on the soffits or in the boxing, we come to Washington and say, well, hey, you've got some rot, by the way. We can do your gutters, by the way, it's probably about time to paint. It's gonna lead to a larger ticket. And then again, that recurring revenue opportunity that's year over year, uh, in that way. So again, leads to just much higher revenue. And at the end of the day, happier customers, because I at least know from my experience that, I mean, once you have a good experience with a contractor, the next thing from the homeowner is, do you know somebody who does X? And then the answer is, yes, it's me. That's good for everybody at the end of the day. Right?
Speaker 1 00:10:35 Right. You know, you mentioned the keyword contractors, um, you know, uh, people who may be listening to this are scratching their head right now as far as labor. Um, obviously you're looking for those owners of the franchisees who have the ability to delegate, manage. You're not necessarily looking for owners that are gonna jump on a ladder every day and, you know, whip out a, uh, paintbrush, so to speak. You're looking for that management type, uh, type that executive. As you mentioned earlier, uh, you know, when you were describing the brand, talk to us about the labor component to this. Uh, you know, the assistance, I know you have an in-house recruiting team, you're providing services and help finding contractors. Walk us through that on the, uh, on, on on the groovy use side.
Speaker 2 00:11:22 Yeah, so if I wanna start, I'll just start with the industry. This is a very attractive industry to blue collar labor, and this will probably make some painters upset, but painting is not rocket science by any means. It's, there's a right way to do it, but it's a very easy industry to enter into and skilled to learn. But on the other side, it actually pays like skilled labor. So it's not like being an electrician or a plumber where I have to go to months of school or could run into some major damage points so I can get, again, for blue collar, a typical painter in the United States makes 25 to 35 bucks an hour. That's a darn good life for somebody who said, Hey, I learned this skill in a week. Right? So one, the labor pool is huge out there. The second is, why are they attracted to us?
Speaker 2 00:12:01 Well, from my experience, nobody grows up dreaming to be a painter <laugh>. So right, right. When they get into it, they get into it for the money. But when are you then not good at, that's the marketing, the business ownership aspect, those things that come in with the owners we're looking for. So we have Recruit Z, which is our in-house recruiting firm. They actually have two divisions. One is actually a white collar division, so that'll help you hire sales management GMs, right? And a blue collar division that will help recruit paint painters, technicians, carpenters, the things you need. And then they work also in tandem with our national partner, Sherwin-Williams, on your local level. So when somebody comes on board with Groovy Hughes, our national exec calls their local stores and says, Hey, Scotty's, come on board. Give them your best 10 guys you've got, because those general managers of those local stores, they know who pays their bills on time, right? And they know the other guys who are coming in for touch up paints and have, you know, complaints. So that allows us, again, in twofold, a large labor pool to vet them for our candidates and for our owners to then start you with a, a very, very large labor pool at the end of the day.
Speaker 1 00:13:01 That's interesting. So there are a lot of assets to the franchisee as far as the labor side of it in all aspects, because, you know, one of the things that, uh, Scott Milless franchise coach.com that we do when we're analyzing and helping people kind of build that model to introduce opportunities is that we talk about the sales aptitude. And I'm not talking about, and I mentioned this a lot on my podcast, we're not looking, and when I say this, I'm not talking about the Willie Lomans, you know, the dialing for dollars or walking the briefcase and knocking on doors. We're talking that ability to network. So you as an organization internally, um, will be able to provide the support if somebody is not a hundred percent comfortable being in that position to find somebody or help them hire somebody who is, and be able to bring in the customers and kind of networking and the ability to make a presentation.
Speaker 2 00:13:56 And that was our design to help grow the system, right? We all have gap deficits in our that's, or just straight up things we don't like to do that we might be good at. Well, that's where things like you talk marketing, I might know digital marketing, but I've got Franchise rocket to do that for me. Hey, I need staff who's better at marketing because I'm, you know, maybe I'm, my background's it and I don't really like talking to humans that much. Great. I'm gonna find a general manager of salesperson who's willing to do that. So at the horsepower level, it's putting all those vendor verticals and those integrated verticals in place for the places that you say, okay, my skill might, might not be here, but I have the support from Horsepower to be able to do that.
Speaker 1 00:14:34 Great, great. Talk a little bit. We're talking to, uh, uh, Joshua Hoffman, who's director of franchise development for Groovy use. Uh, one of the, uh, shining stars on the Horsepower Service brand, uh, portfolio list. Uh, and I'm Scotty Milas, host of All Things Considered Franchising podcast. Um, talk to us about the item seven investment range. Um, you know, uh, give us an idea of what someone should expect, you know, to get this started single territory. I'm sure you're scalable into multiple territories. Give us a little background there,
Speaker 2 00:15:05 Scotty. I don't know who paid you to say such nice things about me, but I appreciate <laugh>. Uh, so item seven. So again, with that increased service offerings, we have an increased upfront package. So we do what we call front loading, so putting as many items so you have cash as you open your business. So our range, typically, again, our, I think our national average is about three territories. We'll run you about 400,000, but our range is about two 20 to four 20. Okay. Uh, with about 200,000 of that range being in vehicles, there are three required vehicles, again, for those service lines with the low end of the investment being leasing all the way to purchase options. So again, we wanna make sure you have a ton of cash to start the business so you can grow quickly and then again, an improved equipment package so you can actually produce said work.
Speaker 1 00:15:47 Do you have any, um, multi-brand, multi-unit operators in the portfolio? I know Horsepower does, but in, in general with groovy use? I mean, is there anybody who owns a different type of service-based brand who may want to consider this to add to the portfolio?
Speaker 2 00:16:06 Yeah, so one within Horsepower right now we've got, we expect about 20 more. We've got about 20 multi-unit owners with three of those getting into their third brand, uh, within the horsepower portfolio. Cuz to think like a Mighty Dog Roofing, hey, a great add-on to that is paint, right? A great add on is lights. Uh, but we also have owners who have owned something else. I think one of, we have an owner down in Texas who had a mosquito concept and he said, I've got this giant customer list that I can go after. I've already been on the property. This is a natural ad for me. Um, so simple answer is yes. And I always say painting pairs pretty much really nicely with any of our brands. And then the beautiful one with horsepowers, they were all built from inception. So all of our brands were built with the same end user in mind, with the same infrastructure, meaning brands number two and three mm-hmm. <affirmative> are that much easier to get started up.
Speaker 1 00:16:53 That's interesting. Uh, I, I'm, I'm a, I'm always fascinated and, and intrigued with people who have multi-brand operators, uh, people who like to diversify their portfolio, who know how to use their existing client list to attract other services and kind of build their portfolio. It's, it's, and, and I think that's one of the great things about franchising is, is that it'll allows you to kind of piggyback off other opportunities or other things that you may own, other brands that you may own. So, uh, that's interesting. Um, Joshua, um, financing, um, uh, you know, s b a I gather, um, any, any insights, uh, you know, as far as funding net worth requirements, liquidity? What are you looking for as, uh, as the franchisor, but where do you see the comfort margin for somebody to come in? Obviously, you know, we, we discussed here at Scott Milo franchise coach.com that you don't wanna be overfunded, but you don't wanna be under phone, uh, funded. You want to kind of be in that front spot. And as you said, one of the things that I've always admired about the horsepower brands is that you're front loading it. So in other words, it's not your investment as X, but now once you made your investment, you need an additional, you're taking the total picture and saying, this is what you need to cover your marketing, operational labor, and really kind of going down the list.
Speaker 2 00:18:15 And I, I think that's a great way to put it. So, and I speak to my business that I owned, I was always making decisions early on based on what my wallet said, or I looked, I said, I know I should take this opportunity, but hey, the money's not there. The money's not there. Where we're gonna say, Hey, we wanna make sure you're making a smart decision long-term for your business and the immediate smart term decision. So with that, our net worth requirements are a hundred thousand dollars liquid, $500,000 net worth. Now, as it comes to funding, I'm, I'm not a professional when it comes to that, right? A lot of good lenders out there, but SBA is the most common, HELOCs are great options as well as like 401K rollovers. Yep. Uh, really great programs out there. And a lot of our owners will use multiple streams to do that when it comes in.
Speaker 2 00:18:53 Because again, as a first business for first time entrepreneurs, you really want to have the infrastructure that horsepower has. And I'd say even further on when you run your second, third, and fourth, you start to learn, man, I'd want all that infrastructure anyways cuz that's what I need to scale. Cuz those aren't revenue generating activities that I'd wanna spend my time on. So, uh, again, this is not one, and I, I say as far as the revenue business, we really like about this paint is so established, meaning your search terms are established, we're seeing owners get outta the gates very quickly. This is not like a brick and mortar that you get open. You go, hopefully I see some profits in a year. It's saying, Hey, when you open your doors, you're, you're working outta the gates. So again, having the right capital, but not when we're saying, Hey, you need an arm and a leg and, you know, grain, the 401k, all that other good stuff.
Speaker 1 00:19:38 Yeah, I know, I, you know, some of the guidance I give on the financial side to my clients is that one numbers don't lie. I mean, you, you, you know, they're either transparent that, that, you know, one and one is two, there's no way to spin it, <laugh>. I mean, you can't, you can't. And, and number two, you definitely want to go in capitalized and funded correctly because you don't, you can always give back money. Um, to go back and get more money is always more difficult. So that, that, that's some of the advice, Josh. And, you know, uh, believe it or not, we're running outta time here. Any last minute thoughts on franchising? Anybody that may wanna pick up the phone, uh, and contact you, you know, what's the best way? But, uh, for someone to get ahold of you to learn more about, uh, groovy use. But, you know, any last minute thoughts on somebody who maybe just, you know, God, you know, I I I I really wanna know more about business ownership, but, you know, I mean, any thoughts on that?
Speaker 2 00:20:34 Yeah, I think threefold one would be just get on and start doing research. Get on and start listening to your, a podcast like this again, you're gonna learn what's out there. Number two, and I, I don't wanna sound this too much like a plug, but get yourself a franchise coach or consultant. Again. If you, if I go out and Google franchises, you know, near me today, I'm gonna see too many options and I'm going to get overwhelmed or I'm going to focus my search on what I think I want. And that'd be the last one I think a consultant can help with. But as you sit and you're considering a franchise, consider what the end game you want out of it is. Again, I thank you. I laugh cause there's, there's so many things out there and I go, if you asked me 12 years ago, hey, would you ever be in the home service space? I'd say no. But when I look what that provides me as far as profitability, as far as lifestyle, that's great. And hey, maybe you want a brand that's more geared towards lifestyle, like pastries or fitness or any of that, but identify that early on and then your consultant can help you say, well, here's the brands you want to consider. But I'd also say keep an open mind. Yep. Because again, it's what the franchise delivers you, not necessarily what the widget is.
Speaker 1 00:21:36 Yeah. I I I like your thoughts on what's the end game, cuz that's one of the things that, uh, I spend a lot of time with all my clients is, you know, what's the end game? What's your exit strategy? People don't think, realize that you need an exit strategy. You know, that ties into what your, what you're gonna want to do when it's time to get out, retire, sell whatever you want to do, uh, life, uh, work life balance. But, uh, that's interesting. Uh, best way for someone to get ahold of you, uh, just go on the, the the Horsepower brand, uh, website or should someone connect with you on LinkedIn, what would be the best way for them to, uh, reach out to you?
Speaker 2 00:22:11 Yeah, always connect with me on LinkedIn again, Joshua Hoffman. And you'll see Groovy Hughes all over the place in Horsepower. Um, otherwise if you go to our website, groovy hughes.com, you'll see a franchising page on there where you can go ahead and fill out a form if you wanna learn more. Um, otherwise, again, talk to Scotty here, reach out. He can get you in contact with me. Be happy to talk to you more about the opportunity here.
Speaker 1 00:22:30 That's awesome, Joshua. We appreciate your time. Uh, this has been Joshua Hoffman, uh, director of Franchise Development over Grovey Hughes, a uh, horsepower brand. Uh, some of the other brands, blingo iPhone, mighty Dog Roofing are just a few. Uh, but, uh, Joshua is, uh, director of franchise development with Groovy use, but what he likes to call a light renovation, uh, brand, uh, in the service-based, uh, in the service-based category. I'm Scotty Milas. I'm your host of All Things Considered franchising. You can reach me at scott milas franchise coach.com, fill out my inquiry form or shoot me an email at Scott Scott milas franchise coach.com or reach me at 8 6 0 7 5 1 9 1 2 6. Until next time, everybody, enjoy the day and, uh, like I said, give yourself permission to learn and wanna know about business ownership. This is Scotty Myla signing off.
