Jeremy Weisz
why did he pick that? Why did he How did he come up with that name? Well,
Lance Graulich
first of all, in the bakery business, of course, I grew up in New York and in the bakery business, my grandfather happened on a chain of supermarkets. My grandfather from Poland that I barely understood anything he said, but he was a carpenter for the old country. Scotsman. I
Jeremy Weisz
know it’s funny, my grandpa from Poland was a carpenter as well.
Lance Graulich
Oh, how funny. Yeah. So he, he ended up having a chain of groceries and with a bakery in there, and many people know, even today, and especially back in the old days, the bakery boxes were always white. And one of the bakery companies at some point said, All right, we need and it was a thin walled, the boxes came flat, you assembled them in the store, and they came in all sizes, but it was always white. Sometimes they were craft, you know, the natural
Jeremy Weisz
Krispy Kreme also, white. Yeah,
Lance Graulich
they were white all they had a pattern, their logo on it, but it was a pattern. And but there was a company one day, that said, I’m going to create a different box, I’m going to create a pink box to get attention. So that pink box also became an industry standard, so bakeries, a lot of the bakeries would choose to have a pink box. And you knew that the bakeries that had the pink box, something special was going on inside. So he was pretty well traveled with his family business, this gentleman that had called me and said, create Pinkbox, and I said, so here’s the deal, I’m gonna take a nice chunk of equity, you’re gonna put up all the money, I have other projects I’m doing but I’ll create something special for us and make it happen. So I did and we have created over 100 donuts To start with, before we open skinny the menu down a little bit, but we want it to be a true gourmet doughnut. At that time, the only real gourmet doughnut or upscale, different, unique donut shop in existence that I knew of was Voodoo Donuts out of Portland. And I had never been to Voodoo before. But I clearly was able to see in 2011 when we were creating the brand Pinkbox, I was easily able to see what they had. And we created some special donuts, but I’ll tell you my favorite donut that I created. I have a friend that that lives locally in Las Vegas and owns some very popular restaurants. And I was sitting at the bar with my wife one night and he was working on a new pork dish that he was having me sample but he gave me an order of our favorite item which is bacon wrapped dates. So I was eating a bacon wrap date nice like dates, almonds, blue cheese, bacon, balsamic reduction. I can make a donut I can make this into a donut. Hmm. Blue cheese, bacon almonds. So I created a donut called date with a nutty pig. And it wasn’t that popular. I knew it wouldn’t be. But it was that donut that everybody came in to ask about because they would see it and you know we all talk in marketing about stickiness. We talked about points of differentiation, differentiation. We talked about the secret sauce, and I helped quite a few brands get off the ball. The ground, merging restaurant brands I’m working with one right now I was on the phone with back in New York all day all morning. And unfortunately 7am my time I started. And you know, it’s all about your secret sauce. Why are you different? Why should somebody come to you and with pink box, we had more donut varieties than anybody. We freshly baked our product throughout the day, not necessarily one time a day one fry. And as bakeries would say, we did two fries a day. And and, and we’d have doughnuts, we would surprise people by having doughnuts that no one else would ever have. And we’d switch up the varieties pretty frequently. We’d always have the core items like Krispy Kreme when I was there, we had the core items all the time, Krispy Kreme didn’t really shake things up too much.
Jeremy Weisz
You know, it’s funny, because I remember I love this differentiation. I’m wondering what other places that you consulted with and had them do one of these, like, almost like the bacon wrap date blue cheese, like equivalent, because I remember going even if we don’t buy that item, it’s still a talking point is still a marketing point. There was like a, I forgot what it was like some hamburger place. And they had like a $400 hamburger. And it was all the just top grade ingredients. And I never ordered it, but it was like, oh, wow, that’s, that’s really cool. And it’s a talking point for the, for the business.
Lance Graulich
Absolutely. And and especially, you know, with the birth of social media, and especially like Instagram, everybody loves to put those crazy pictures, you know, the solid gold, burger donut, whatever it might be. Or like you said that, you know, $400 burger, my burger place was actually called Create and create, you had an opportunity to create your own burger. And there was a checklist and you can check off for the segment of the population that love doing that. You create a different burger every time and the beauty of it was that you didn’t get killed on the price. Because you can add banana peppers and alfalfa sprouts and you know, mushrooms and this and that for no additional charge. There were a few extra upsells like, you know, bacon and other items. And we had like five or six different cheeses that you would choose from. So it was fantastic. But But knowing that there’s a segment of the population kind of like comparing a Starbucks. Now there are people that go to Starbucks now would you like a latte? Would you like a caramel macchiato and you’re like, I just want a cup of coffee. That’s all I want. And we had that same thing. We had pre determined combos, we had a burger called the modernist that had you know, mushrooms and avocado and Chipotle, a male, we had one called the classic, which is a classic burger like in and out the famous In and Out Burger, just like that. So we had burgers, and it was an art theme. I mentioned the classic, the modernist, and there was one called the impressionist. And, you know, anyway, it was it was a phenomenal concept. It was different. But look, you know, giving birth to your own brand is the hardest thing that anybody can do. But if you have a passion for it, it can be crazy successful and Create should have been that business. But you know, I got divorced and had some partners that maybe I should not have brought into the partnership. And as we all know those things make growth cumbersome.
Jeremy Weisz
Talk about sticking out because you represent a lot of different franchises maybe talk about a few and what is the sticking point? What is that, you know, blue cheese donut or $400 burger for for some of the franchises they have you because I know you again, like just to say when someone comes to you, you place them specifically with the goals that they may have the the financing, or finances, they may have, you know, because a lot of people lands go to Google and just try and do all the searches whereas I am in life. You know, the biggest The best advice I ever got is find a mentor who’s done what you’ve done, who’s doing what you do, and they will shortcut the process. So I don’t see any reason why someone wouldn’t go to you as opposed to Google because you’ve done this, but talk about some of the franchises you represent and in some some things that make them stick out. Sure.
Lance Graulich
Yeah. And and by the way, the terminology that I that I use for what you’re describing is resource up, get somebody it’s the same reason that anybody who starts a business the first two people they need to be hiring, or consulting with an attorney or an accountant to understand even what they’re getting into. And if those two agree on certain things for you, that’s fantastic. I mean, start with what kind of entity you should be setting up. So regarding sticking out the secret sauce, if you will, I have a brand called Smash My Trash, Smash My Trash. If you know anything about commercial trash and let’s say you own a restaurant or a retail store, you know you get charged based on your you know, you have the rental of your of your container, you have the frequency in which it gets picked up. And you know, some extra charges if things are sticking out of it or what have you. smashed my trash has a patent pending technology, nobody else is doing it, where they spend 15 minutes or so compacting your trash, so you can reduce your your trash usage or trash fees. By could be up to 70% which is amazing for 15 minutes worth of work. And that franchise is hot, hot, hot. And it’s incredibly unique.
Jeremy Weisz
Because you go to people’s houses with all the Amazon boxes, people. I mean,
Lance Graulich
well, yeah, you hit that whatever head You’re right, don’t come to my house, you’ll see all those box. So the next one, I would say I mean there’s there’s tons of them.
Jeremy Weisz
Yeah, keep going. I could listen to this all day. Lance
Lance Graulich
let’s uh, let’s talk about College Hunks Hauling Junk and Moving on. So College Hunks has been around a long time. And College Hunks. So, you know, what is it 11 years ago or so Google started.
Jeremy Weisz
They were on Shark Tank. Also, I remember college. I think I think though, maybe early war, I
Lance Graulich
have several brands that were on Shark Tank. So College Hunks Hauling Junk. As a matter of fact, the next one I mentioned will be a shark tank brand. They might have been on Shark Tank. So the young founders at the time, you know, grew grew their business. Just that is sheer, amazing customer service know how and just taught, you know, the old days of franchising was, Hey, I’m going to teach you something you don’t know. And I’ve already made the mistakes. So you’re going to be successful, because, you know, you’re not going to make the same mistakes I did. And you’re just going to give me a fee. That’s franchise. Well, when Google came about and technology came about and the internet was really born, it changed everything for so many franchise brands because now it’s incredibly difficult for the mom and pops to compete. Because what brands like College Hunks Hauling Junk and Moving are doing is they’re dominating search engine optimization. They’re dominating the internet with their keywords and everything else. And what’s happening is when somebody wants to move, either they’re going to quickly pop, you know, do a Google search. And they’re going to find College Hunks due to the local SEO which is going to go right to the franchise franchisee
Jeremy Weisz
they get tons of loans,
Lance Graulich
or corporate. So basically last I checked, it could be as much as much as 80% of the business that a franchisee of College Hunks is going to do is generated is a lead from corporate due to the website or the corporate Call Center, which is incredible.
Jeremy Weisz
Not only like the business system, they get the leads and the customers which is ultimately really feeling helping build their business even more.
Lance Graulich
Absolutely 100%. The next business I’m going to tell you about is Cinnaholic Cinnaholic was on Shark Tank about six years ago, and Cinnaholic is talking about secret sauce. You mentioned cinnamon buns. Well, they have cinnamon buns, 23 varieties of cinnamon buns. In fact, the one closest to my house, I was showing a friend recently. They haven’t they have 1000s of reviews on even Yelp there. I say Yelp. They have 1000s of reviews on Yelp and an in like 4.8 stars or something like that. I mean, their rating is incredible. People love it. But here’s the twist. You asked for secret sauce. It’s vegan.
Jeremy Weisz
Vegan Really? Wow. Lee v Sign me up. So it’s, quote unquote healthy? Well,
Lance Graulich
the reality is like my daughter is 19. And she’s got, you know, for, for medical reasons. nothing terribly serious. But she has to eat really healthy and she tries to eat vegan and you know, we do not eat there frequently.
Jeremy Weisz
Where are they? Are they all over the country? They’re all over? I don’t know, if it’s about fifth, I want to try one today. They didn’t have one in Scottsdale
Lance Graulich
15 states or so. But it’s, you know, look, it’s easier than a donut shop. Because you’re just baking. You’re not worrying about deep fryers. And all
Jeremy Weisz
I’m lactose intolerant. And and so a vegan something I don’t have to look at the ingredients. And if you have, like you said restrictions on your diet for health purposes. It helps to know, like, yeah, it’s not in there.
Unknown Speaker
So what
Jeremy Weisz
else keep going like, I could listen to this all day. Like let’s go through all 650
Lance Graulich
Let me Yeah, of course. Let me let me give you let me give you one that’s different from all the others. There’s a business. I don’t want to really say networking. It’s more like an entrepreneurship club. That you join, that’s a franchise that prior to the pandemic, they were only face to face. And, you know, they started in the Phoenix market. And they were did incredibly well with development and connections. And it’s more than networking. It’s if an entrepreneur in the group has an idea and wants to run a pass the group is an incredible, incredible franchise that I might end up being, end up doing in Las Vegas, by the way with another partner of mine. And so the funny part, though, is not so funny, the pandemic hits. Now, what do they do, they were all face to face, they never did virtual because as any business people, you know, you want to shake hands, you want to be idi with people. And so they started doing zoom. And what did they quickly realize what zoom is, and sorry, zoom, we’re on it right now. But they didn’t love the breakout rooms. Because before their events, they have a mixer of you know, 50 people or so. And then after the events, people kind of break up and talk to the people that they really want to do business with. So these guys were tech guys, all kinds of other business experience, the franchisor, I’m talking about the parent company, so they jumped into action. And they spent a fortune. And they created their own Zoom like platform. That is amazing. And I’ve never you’ve walked into a ballroom before, perhaps in a casino in Vegas for an event. And you see rounds of 10 setup, you know, tables of 10. And you see different people and you want to sit down somewhere. That’s exactly what they created. So you can see people at the table, you can sit down and then start talking to them. I love that. It’s amazing. There’s even a little bar in there. And in the social room. I don’t know how you get the alcohol. There’s an interface with your computer if the USB or what but, uh, we’ll see how that goes. So that’s, that’s called M3Linked, M3Linked.
Jeremy Weisz
So I’m Lance, I want to talk about Krispy Kreme also, like, what makes for someone running a successful franchise, like you obviously have been successful with running, you know, they talked about Wingstop and Krispy Kreme, you know, not all franchisees are created equal. I imagine what what made what you were doing more successful than I’m sure it’s competitive as well, like they’re competing against each other in different states, just because your competitive nature what, what were the things you did to run the companies that yeah,
Lance Graulich
that Oh, by the way, we didn’t talk. We didn’t talk long before we went live here. And I’ll tell you, you’re hitting all the high points here. And I mean, that sincerely, these are great questions. Because this is these are things that I discussed with prospective franchisees every day, whether it’s an experienced private equity guy that I’m working with right now, or someone that’s been a corporate guy for X amount of years, to a 28 year old, that’s had some success and is very aggressive and really wants to be their own boss, everybody’s a little different. But the formula to me is quite simple. If you’re going to have employees, especially you need people skills, and you need to, I helped someone once with a business that was an investment banker that was very wealthy, very successful, but he did not know how to manage hourly employees and they they robbed him blind, really and and and he just didn’t know but there are certain metrics and systems you put in place to have those safeguards and, and, and, and know have those guardrails in place to understand when you’re doing well and why and vice versa. So having the people skills is fantastic. The interpersonal skills fantastic required, to some degree, it depends what business you’re in, if you’re working by yourself, and there’s no employees, then you don’t need to worry about that. But you still need interpersonal skills, if you’re doing any kind of sales or any type of, you know, b2b type scenario. Regarding, you know, most franchises don’t necessarily care what your past experiences as long as your resume represents some level of success. Only because, you know, if you’ve had success in something before, and that can be defined a lot of different ways. You know, are you disciplined? Are you committed? Are you able to work on your own? Are you really fully committed to developing and doing everything you need to do to build your own business out? And good franchise ORS can really spot that and a good franchisor doesn’t want to just take an initial franchise fee or check to get rolling. Yeah,
Jeremy Weisz
I mean, they represent the brand and if you run it terribly, well, guess what, you look bad in all other states or locations.
Lance Graulich
I mean, big black eye on the brand. You definitely don’t want that. But, you know, really matching people with the brand. That’s it. appropriate for them. So it’s a big lifestyle choice, too. I’ve worked with quite a few people in the restaurant business that were franchisees of the same brand as myself, whether it be Wingstop, or Krispy Kreme that, you know, probably shouldn’t be in business for themselves, they probably should have hired somebody to run this business as opposed to, hey, I get weekends off all the time. I’m not, I’m not answering my phone when my people really need me. And, you know, it’s a bad thing. So it’s not, it’s easy for me, you know, yes, the investment level, they have to be capitalized to a certain degree. I mean, you don’t need a lot of extra working capital, but you have the ability to businesses don’t ramp up as quickly as everyone would think all of the time. You know, I when my first Wingstop, it was doing five grand a week, because there wasn’t a lot of brand recognition. When I open store for it did like 34,000 opening week, which at the time was a Wingstop opening week record. But you know, so, you know, and that’s, and that’s a whole other thing, some people have an appetite for, you know, a lot of territory and they want an emerging brand, and they want to get a good deal from the franchisor. And other people call me and say, Lance, I just want to really establish brand well, define really established, you know, is that 1000 locations, if it’s already at 1000 locations, might be a little bit difficult to find you the territory that you want. Like I had a lady in El Paso, Texas not too long ago. And she says to me, I would love to be in El Paso. I inquired with Cinnaholic. And guess what? They were sold out. Someone bought the entire area.
Jeremy Weisz
Hmm, very interesting. Talk about that for a second. So, you know, that, you know, placing the right person you mentioned lifestyle, right with Krispy Kreme. So what were the things you did, maybe differently from maybe within Krispy Kreme? Maybe you take the least successful Krispy Kreme and the most successful? You said, maybe for you, you would hire certain staff, right to manage it, or some other things that you did not and you’re like an entrepreneur at heart, you’re innovative? Are there certain restrictions that you had to pull back on your creative reins because of being in a franchise?
Lance Graulich
Well, I can tell you that, you know, the old mistake about what is the old saying about? Do the same thing over and over go?
Unknown Speaker
Yes.
Lance Graulich
Insanity, that exactly. insanity. So I, that is something that I think about often, and that if you see the same mistakes in front of your eyes on a regular basis, in any franchise, you need to ask yourself, why is this happening? Is it because I hired the wrong individual? Is it because the training is inadequate? Or is it a combination of both? And then, you know, the old expression in education, my wife’s a school principal, my mother was a retired school principal. And there’s an old educational saying, which is teach to the test. So are we teaching to the test? If we want to give exceptional customer service, I need to get out there and model exceptional customer service. Welcome, Jeremy, thank you so much for coming today. So I know it’s your first time here, blue, you know, and all of a sudden give them the spiel on why they’re here and why they care about you. Customer Service should be important, but as we all know, some brands focus on it more than others. So the training, how is the training, I can give you an example at Krispy Kreme, Krispy Kreme, we were the second franchisees of Krispy Kreme. And they exploded ahead a ton of growth right after that. And what I can tell you is, and this is the other piece that I didn’t exactly mentioned, but it’s it’ll be in my future book on hiring for the restaurant industry, which will be happening. Most people hire the wrong person in the first place. And then they expect this high school kid, college kid, retired person, whoever they expect them to all of a sudden get better. But guess what, people are going to be the best they ever will be at the interview. So if they don’t knock your socks off for all the right reasons for the position, you’re hiring, and there’s certain metrics that I look for in the hiring process. But the bottom line is, and doing multiple interviews is always the best thing. If you’re going to do one, interview one and done and you’re hiring them 70% of the time that doesn’t work out because then all of a sudden they’ll be late. They’ll smell like 10 packs of cigarettes the next time they show up, give them an opportunity to prove to you that they deserve the job. However desperate you might be because you had people Quit, or there’s a pandemic, or whatever the reason is, you have to take your time. Because if you’re going to have these new employees essentially practice on your customers, because they’re not good at what they’re doing yet, customers hate that. Customers hate that they recognize the turnover, and they don’t want to be associated with your brand. So, anyway, but Krispy Kreme, I kept noticing that newer bakers would screw up when they made the original glazed donut, or the shell donut, but it’s the same product, one just doesn’t have a hole. And it would either the hole would close up because possibly the doughnut wasn’t proved right. There was a lot of different things that went on. So what my team created, because again, definition of insanity, doing the same thing over and over again, expecting different results. And we were training people according to the training guides, well, the training guides weren’t good enough. They had they had, they had loopholes. And there was some gray area and you don’t want gray area and in, in surgery, or in doughnut making. So we ended up creating sort of an addendum for our team to use to ensure they hit the mark. So maybe it was taking the temperature of the dough, one extra step or making sure the temperature of the chocolate was right, you know, for the icing part because that was the other thing that got screwed up. In fact, I have it in my house, I have a copy of it. It’s a laminated shark with donut pictures on it. That is essentially a troubleshooting guide that we created and then corporate adopted it.
Jeremy Weisz
I mean, that’s, I guess one of the things when you are one of the first few franchises, right, you have to improve this you may have to improve the systems a bit.
Lance Graulich
And that’s exactly right. And then look, don’t get me wrong. What is fantastic about franchising, and I’m not complaining about what we had to do, because Krispy Kreme Look, they manufacture their own equipment, they have all their own patents, they did some unique things that other donor brands would never have done. So they did some great things and they produce a great, amazing glazed doughnut that everybody goes crazy over might be too sweet for me and some other people, but it’s a it’s a it’s a very light, airy, phenomenal product. But even brands like McDonald’s, the fillet of fish and the Big Mac two items to mention. They were created by franchisees, you know? And nastily innovating, that knows. That is the best part though, of the franchise process is you have an amazing brain trust and it Wingstop I was president of the franchise Advisory Council and you know, we get input all the time I remember when the new franchisee in Idaho called me you know, like upset about certain things. Can you help me with this, this and this, I was told by corporate this and this, and I can’t get certain boxes, and I can’t this and my distributor doesn’t know about whatever. And there’s always growing pains and every brand. But you know, it’s expected if you’re doing all this stuff on your own. It’s a nightmare. You don’t have anybody to rely on that speaks your language because you’re creating something that nobody else knows.
Jeremy Weisz
Lance why did you choose Krispy Kreme because you could probably chose a lot of
Lance Graulich
Krispy Kreme chose me. So Krispy Kreme. As I mentioned earlier, I’m a big connector and, and because of that I’m like a magnet people come to me as well. I had a family friend from New York, whose family was the first franchisee of Krispy Kreme in New York City. His name’s John John calls me and says Hey, I got a guy that’s very successful, and he’s trying wants to become the franchisee for Nevada. And he doesn’t know anything about the business. So he’s going to need an operator. So that’s how we got connected and ended up getting the state of Nevada and the state of Utah at the same time. turned out I didn’t get the I didn’t get the position. We didn’t become partners at that point. Because but we got to know each other incredibly well. I was getting paid a lot of money in those days. And he as a consultant and I was in the casino business as well as a food and beverage director. And so we stayed very close. He hired somebody for a lot less money to get his first store open. And, and that Krispy Kreme in the old days. I mean, it was like $4 a dozen glazed and they still did over $120,000 opening week was years ago. And And nowadays what’s a dozen glazed doughnuts instead of $4? It’s nine and in Vegas, probably where I am. But um, so no, but years later, we stayed in touch and he had an opportunity says I want to bring you in as my partner and what kind of deal would it take and I’ll never forget this. This is what this is. A very proud moment in my resume that nobody would know about until now, because it’s a few people listening here. And that is, we went out to a fancy dinner in the Bellagio hotel, back in the day, and I signed my deal. And with my equity with my bonuses, I think I got $10,000 as a bonus when I for every store we opened. And before you knew it, we were doing 25 million a year as a franchise of Krispy Kreme. And we got 10 open. And what what was interesting is within 90 days, just over 90 days of me being with them, I fixed a lot of the major problems that were giving him a lot of headaches. And we went back to dinner and if I remember we went to the same exact restaurant, I think it was Chico at at Bellagio, the same restaurant. And he surprised me and he handed me my new deal. I didn’t even ask I didn’t even renegotiate. He handed me my new deal, which got even sweeter, because he couldn’t believe what I was able to do for him. So that was fantastic. But you know, after several years at Krispy Kreme as his partner, I was bought out. And he brought in I think it was his sister to help them because, you know, Krispy Kreme had some problem growth problems. And that might be a part too for us to discuss. But basically, Krispy Kreme people think a lot of things about what happened to Krispy Kreme way back when there was franchisees that filed bankruptcy. I can tell you in short, what they did was they overdeveloped and what so for example, Southern California, if I remember correctly, that was one franchisee just in Southern California had a development deal of 22 locations, if I remember correctly, well, that was far too many, it should have been five or six. And then they could have reevaluated after those were open, because sales tell you how you’re doing. So after because I think most of the original stores in Southern California opened doing over $200,000 a week, that donuts $200,000 a week. And then by the time they got to store six or seven, it didn’t do anything. I mean, the market was completely saturated. And so that’s why I encourage I part of my business, as you mentioned at the top of this, this conversation is that I helped set up brands and independent businesses so they can franchise whether they have 20 locations or one. And that is a conversation I always have in the early days, you’re better off being conservative with these development agreements, because you need your people. If you have integrity, you need your franchisees to be successful. And you need your franchisees to say nice things about you and the brand, and the support and what you do with the marketing fund and all these good things. So Krispy Kreme did not do that at all. They they, they didn’t have an appropriate template for thought everything they thought of did not work. But at the end of the day, they still had a product that was high in demand. They just built the system incorrectly. It’s like trying to build a car that’ll fly that will never fly.
Jeremy Weisz
Yeah, I mean, it’s a tough balance. Sometimes you want to grow, but how fast and make sure the market you
Lance Graulich
know what, it’s not even speed. It’s not even speed. I’ve done things too fast, because I had the wrong partners. Usually it’s the operations that fail. Because people it’s the people, you know, your people can handle it or you can handle it. But you know, Krispy Kreme had the infrastructure. But they did it too. They did it too fast. They had no business opening all of those stores in Southern California at all. No. And then there was a retraction you know, all of a sudden stores are closing because and it’s not because people didn’t like the doughnuts. But you know what I always use is Starbucks is a perfect example. It’s one of my favorite examples Starbucks in the early days I got to meet one of their first VPS of brand development or marketing. I don’t remember what his title was. But he explained it to me in the early days of Starbucks it was all about becoming a destination there were no drive thru stores. They wanted people to go in and have the experience and smell the coffee and see their name on their cup and all these different things and you know hear their name being called you know, Lance Lance, here’s your latte and and experience it. That’s when they were going to be simply a destination. Well guess what? years later, they said How the hell with that let’s say a drive throughs we’re now going to be a convenience. But to their credit, they did take their time in most respects. But then at the end of the day, you probably remember how many years ago was it 677 years ago, they ended up closing 600 stores. Well, most of those stores, I I think if I remember correctly, most of those were these, I don’t think any of them were drive thru stores, I think they were all sort of just endcaps with no drive throughs because, and it wasn’t that they were wrong. It was, you know, they changed their model. And they they went back to those older stores and said, You know, we’re gonna do drive throughs now because our drive throughs will up our sales 50%
Jeremy Weisz
you know, I would love to know, Lance, ideal prospective franchisee because you talk to a lot of people, some of them you may recommend not having a franchise some people certain types of franchises. I wonder if you talk about maybe your high school friend? Yeah.
Lance Graulich
This is a funny story. So, Steven came to me. I think my brother sent me a text message and say, Steven, want Steven wants to talk to you about franchising. So great, give me my number. So Steven was he had one job out of college, and joined a privately held company that was outrageously successful. And the reason I tell you this is he’s what I call a corporate refugee. Now in this case, it was his choice to become a corporate refugee, all he knows is the corporate world hasn’t had much exposure, admittedly to anything else. At that stage, super bright guy super successful, helped grow a company to gazillions of dollars and what he was looking for, because it was his first venture, he wanted to stay safe, even though he had quite a bit of money. And he wanted something that was preferably home based, and no brick and mortar involved. So you don’t want to get in the restaurant business where it’s 400,000 a look a little, little fast, casual brand, like Wingstop was back in the day. And
Jeremy Weisz
so I like all of those criteria, say up check home base check.
Lance Graulich
And that’s exactly what a lot of the corporate guys are okay with what some of the corporate guys though, are okay with, you know, look, I call it the profit path. If I can show you a prospective franchisee a clear profit path, like we talked about Smash My Trash, when you see their numbers that they’re going to show you, you’ll fall out of your chair. I mean, it’s unbelievable. But they don’t have 150 locations open yet. They only have you know, several open, you may have to pay, you know, exactly, you know, because there’s another thing in the franchise world called proof of concept. Just because you’re successful in Paducah, Kentucky, wildly. I know people who live in pain and I’m a guy from Las Vegas that wants to put one of whatever. Well, there’s still risk because you know, I have an IV infusion brand that I represent. That’s in Liberty, Missouri, Overland Park, Kansas, but they’re also in Phoenix. They’re also in Dallas. And they’re also sold out in Oklahoma. That’s enough proof of concept for me. They’re in small towns, and they’re in a large towns. So back to my friend Steven. Steven ended up he said, And oh, by the way, if you can find something that’s a resale again, a whole other big conversation is about resales because people think resales are great. Well, resales, you’re either going to be paying an awful lot, because it’s a really good resale in that respect, very predictable. So you’d be paying a lot, you’d be paying a nice premium, because franchises will typically sell for four times cash flow. So then he said, Well, if you find a resale, so we explored some resales that were really inexpensive, but they were really inexpensive for a reason. And the numbers didn’t cancel out. And the best part of franchising, I should tell you and your audience would want to hear this is even after you’ve talked to all the corporate executives and you have a great comfort level for them with them. The best piece of the franchise model is that you get to go through some level of validation with existing franchisees where they hand you a big list and say, Hey, call these people call whoever you want, call five people, and ask them how their experience was and report back. And, you know, look, there’s a bottom 10% of all franchisees. So you’re gonna find some franchisees, they’re not happy, but in some cases, it’s probably them. It’s not the brand, especially when you talk to a lot of other happy franchisees. So, in this case, Steven could not get the validation done, period, end of statement, and he’s like, What do I do? I said, you’re done. That’s what you do. You’re done. You’re done with that brand. So I went back to one of the home base brands that I showed him which by the way was M3Linked and he ended up becoming a franchisee and I’ll leave it at that there’s a lot more that he’s doing now with the brand. He’s actually an owner of the brand as well. He bought it and
Jeremy Weisz
there’s another story I would love for you to tell. I know we’re right at the hour. I don’t know if you have a few more minutes. We can wrap up. But um before you tell the story, I want to just point people to where they should contact you go to your website, where should people go on line and how can they contact you?
Lance Graulich
You will find me it’s Ionfranchising.com I-O-N-franchising.com. But on social media, you’ll find Ion Franchising, or my name, Lance Graulich G-R-A-U-L-I-C-H.
Jeremy Weisz
There’s a lot of misconceptions around franchising, and I would love for you to talk about Schooley Mitchell for a second.
Lance Graulich
Yeah, so oftentimes, there’s so many people I spoke to a lady yesterday who was a banker, and and she said, You know, I don’t know if I can afford this, but my friend told me to call you because I am interested in being my own boss. And every day I’m talking to people that think that you really have to be a millionaire to own a franchise. And the reality is, that is so not the case. You know, most people as long as they have $20,000 cash, and that can’t be your last money. Hopefully there’s some home equity or stocks or a 401k or some other money you can rely on as well if you need that while you’re scaling your business. But Schooley Mitchell is a brand that I love. In fact, they just did a deal with Schooley Mitchell introduced somebody in there that was successful and they’re going to become a Schooley Mitchell franchisee Schooley Mitchell is about $62,000 started out of your house, that’s all it is. $62,000 there’s loans available. Now for a typical brand you can put down 25 30% as low as 25%. And you’re in business. And so $62,000 you’re in business with Schooley Mitchell, this is some additional marketing, you know, they’ll help you with lead generation, but they’re vendor watchdogs, they help small and medium sized businesses reduce their their their expenses, and they’ve been very successful have an incredible team and incredible system. Like the gentleman I just introduced them to, that became a French as becoming a franchisee. And he’s, he’s blown away. He’s blown away at their service blown away at their knowledge blown away at the systems, he got a tour of the back office and all the tools that he gets as being part of the system. So here’s the kicker $62,000 investment. So I’ll pretend you’re someone I’ve never talked to before Dr. Jeremy. So what is your expectation and is $62,000 investment of what your your return on investment would be and anticipated income?
Jeremy Weisz
You know, I don’t know anything about franchise, so I guess I’m a good person to ask. But um, I guess I’d I’d like to I mean, I don’t know what’s possible, but, you know, producing in the first year, you know, something that would help me pay that back, obviously.
Lance Graulich
Well, so that that’s great that you also mentioned that Schooley, Mitchell, usually within eight months or so, from what I hear you, you can pay that off in the first year now in any brand, it’s going to take you time to really ramp up. There’s quite a few brands, you’re gonna you know, you could triple your revenue of year one in year two. So the exciting part about Schooley Mitchell is they actually have franchisees mature franchisees that have been in system a number of years that actually net a million dollars a year out of their house. absolutely incredible. Now, a lot of times depending on who the individual I’m talking to is, I don’t necessarily even mentioned that in the first conversation because it could scare them. They think I’m some sort of scammer, or I’m exaggerating or lying to them. But this is a reality. And so I tell people I said so. So what if you make $250,000 a year out of your house? Working with as a Schooley, Mitchell franchisee? Oh, that’s fantastic. I’ll take that too. Well, yeah. So go for it. Depends what your work ethic is. Depends how you’re working on your own. And are you going to follow the system? And another great expression you’ve heard before? Are you going to trust the process? You know, because if you try to build a better mousetrap with some of these brands, you’re gonna waste your time and it’s not gonna work out for you. But, you know, look, a lot of people ask me, well, when do I get my money back? Well, it’s going to depend. Nobody’s gonna guarantee that but you know, so with Schooley Mitchell, you can get your money back within eight months, there’s other brands, you can get your money back within the same timeframe, which would be fantastic. And there’s others that could be up to five years, but there’s quite a few brands I have. I have a friend that owns 20 franchised hair salons. The guy doesn’t even have hair. He is when he was presented with the idea. This happens to me a lot. I present people ideas and I warn them in advance. It might not be sexy, you might not love it, but you’re gonna love the profit path. Well, his franchise hair salons. He can pay him off in two years and three months on average. And he today as probably a net income of at least 1,000,001.2 to 1.5 million a year. off of his hair salons,
Jeremy Weisz
and he just parlays into the next one, right? successful. I mean, they also want you to be serious, you know successful so that they, you keep getting more of their franchises in different areas. Right. So what
Lance Graulich
exactly what I offer in franchising is truly like a menu in a big restaurant, you know, what would you like? Are you looking for an appetizer? Are you looking for a main course? You know, you’re Are you a multi unit guy gal? Or are you just looking for a home based brand, you can get your money back in eight months and make a higher income than you’re currently making right now. I have something for everybody. The question is who’s committed to really doing?
Jeremy Weisz
First of all, Lance, thank you, who should be contacting you? Just Just to wrap everything up? Who should be contacted? You mentioned the corporate refugee, who are the type of people that should be contacting you that you’ve seen,
Lance Graulich
you know, typically half of my business are the corporate refugee types, but the reality is anybody that’s interested in having their own business, and has no idea how to start it, I, my, my Consultations are free. I’m happy to talk to anybody that wants to learn. And sometimes I talk to people and there isn’t a deal done for four or five years. And other cases, it could be five weeks. So I’m happy to talk to everybody but anybody that wants to be their own boss, and, you know, has at least $20,000 hopefully some extra above that. So let’s let’s say 40,000 $50,000 I have a business for you that you can learn how to make money.
Jeremy Weisz
Lance, thank you so much. Check out everyone check out Ionfranchising.com and learn more. And Lance Thank you so much.
Lance Graulich
Thank you Dr. Jeremy for having me.
