Here’s an episode that is a little off the beaten track.
Today I talked with David Weaver, a representative of Franchoice, a for-profit company that helps people buy franchises. I wanted to have David on because he provides a unique perspective on the opportunities that business or franchise ownership can provide.
He’s been around the block and sees how franchise ownership can create the flexibility and freedom you need to fund bigger things—building a legacy, funding a Foundation, or supplying a steady income stream to fuel your nonprofit aspirations.
David and I talked a lot about his journey, his mission to help create as many business owners as he can, and how fulfilling it can be to own your own business.
Ask: Don’t wait as long as I did. If you think you would be good at owning a business or a franchise, you will be. Just go for it!
Listen to the podcast here:
How Franchise Ownership Can Fund Aspirational And Philanthropic Dreams With David Weaver From Franchoice
I have a fun guest in this episode. It’s a little bit out of the ordinary on Relish THIS. His name is David Weaver. He is a representative of FranChoice. It is an organization, and David does this work where he helps people who are looking to expand their opportunities and own their businesses through franchising. The reason I have David on is because of a couple of things. One was to get a little bit different perspective and give people the opportunity to think outside the box a little bit.
One of the things that he has noticed in his experience as both a franchise owner and through all of the good work he’s doing with people who are looking to get into that space is the ability and the opportunity for your franchise to enable you to do more good in the world, whether that’s allowing your franchise and the revenues that get generated to fund a foundation or to donate to a nonprofit. Also, to generate additional revenue that you can then invest in other things that allow you to be more philanthropic as you get older. It’s a different episode. You are going to love it. David is a great guy. Here we go. Read it away.
David, thanks for being on the show.
Thanks for having me.
It’s my pleasure. I’m excited to talk with you about all the things that you are up to over there at FranChoice. You have done some cool things. I love how you’ve got into this business.
It was a bit of a journey. Becoming a franchise consultant is something that is not super common. Many people don’t know that folks are out there to help people guide them through a process of evaluating different businesses. My journey to get here was not super common. I did my thing. As most people do, I came out of college and went to Corporate America. It didn’t take me long to figure out that wasn’t a wonderful fit for me. Climbing the corporate ladder did not seem nearly as much fun as doing my own thing.
Early on, I decided that I was going to be a business owner. Like many people, I didn’t know what business I wanted to own or what that looked like. I did different things. I started in the elevator business selling elevators and escalators here in Denver. Many of the projects that we worked on way back then we’re building out the Denver Tech Center as we know it now, as well as projects selected and professional ability downtown and things like that.
I then moved on to a full-blown sales role. The elevator business was more project management. You are putting up big projects and managing all of that going into it. I then moved to a hardcore sales role. I was selling interior design in decor fabrication for big-box retailers. King Soopers and Kroger were clients. I lived in Denver at the time. I was maybe 26. I had from the Mississippi River to the West Coast. I was in an airplane, and being with companies like Safeway and Ralphs in California and King Soopers in Denver was fun. It was a sales role, big program sales.
What we were trying to do is to implement a new design for a store, and then you would do a test sample and do maybe 5 to 10 stores. They would determine how the sales increase based on the new design of the floor layout and stuff like that. The name of the game would then be to do a store rollout, where we would take that new store design and roll it across the system of all the Safeway stores across the country or something like that. Usually, it would be a chunk of stores like 300. It’s fun and exciting as a late-twenties person.
I’m in Denver, and I’m flying across the country. I’m a bigger deal, and I probably was. My dad was in a similar situation to the clients that I have worked with. He was in his late 50s. We had sold the family business. I grew up in a family business. Both my mom and dad were business owners. My mom owned an interior design company and office furniture like Herman Miller. My great grandfather, my dad, and my uncles had a high production aluminum Foundry that made intake manifolds and car parts for Ford, General Motors, and Chrysler. We were a first-year supplier to the big three.
As I was in high school going into college, they sold the family business. Fast forward, my dad was in this position where he was in his late 50s and felt like he was too old to get a job and too young to retire. He went out looking for a business to buy, which is similar to the folks that I work with finding a franchise for the first time. They tend to be in that late 40s early 50s timeframe and have exited or transitioned out of Corporate America for different reasons. I can very much relate to that experience.
Long story short, my dad found a job in a Foundry in Detroit. I’m living in Denver, and I’m happy with how things are going in Denver. I fell in love with Colorado. He says, “I need your help. I bought this business, and it’s not going well.” He bought it in late ’99. He owned it for maybe six months before I left Denver. I bought my first house, so I sold my house, quit my job, and moved to Detroit to help him with this business.
Nine months after I did that, with the Y2K bug that everybody was worried about, the big three were worried about because every manufacturing facility across the country is run on robotics. They have a few people making cars. They had overproduced inventory in ‘96, ‘97, ‘98, ‘99. In the anticipation of this, nothing happened, as we all know. It’s because they had so much inventory they shut production down in 2000. 9/11 happened the next year. Detroit artificially went into a recession much sooner than the rest of the country did after 9/11. As soon as I’ve got to Detroit, the business went into a massive tailspin. I call that my real-life MBA. I worked in Detroit for four years. I learned and worked a lot.
We turned the company around. We implemented ISO 9000 quality control systems. I revamped the entire manufacturing plant. When I’ve got there, we were leasing four different warehouse spaces, and they were all over the city. The previous owner that my dad bought this Foundry from, the way that they had grown, as many business owners do, they added something whenever they needed it. It didn’t make any sense.
I was spending much of my time moving patterns. The Foundry business was making parts, so you have a pattern. Every part has its own pattern. It was a small job in the fender, so we would make 1 of this and 6 of that. I was moving patterns a lot. I was the only guy in the whole building that had a college degree, and I’m running patterns all over town. I have been spending 15 to 20 hours a week running patterns back and forth.
Getting them from facility to facility?
Yeah. We also had about 15,000 patterns. It was a high-security job to have. You couldn’t just give it to a guy making $10 an hour. If they lost some or didn’t put it back where they had to go, we had a whole library system to keep track of them. Long story short, we’ve got out of those leases. I purchased the building down the street from our manufacturing facility. I never bought a commercial building before but I was like, “How hard can this be?” I learned a lot about all of that, which was pretty interesting. That was the first step in making this transformation from the chaos that I walked into to get my arms around the business.
I learned a lot. I improved the business a lot. I also learned a couple of things that were pretty important. I was pretty good at turning around the business that was chaotic and making sense of a lot of different moving parts. I also learned that family businesses are riddled with cliché. Having a business with friends and family is one.
Another phrase that I coined coming out of that experience is people are funny about money, especially small businesses. I also determined that I coach my candidates on this when they talk about partnerships and things like that. People are funny about money in two types, they are funny about mine when there’s not enough and when there’s plenty or way too much. As the business becomes successful, people’s attitudes about things get wonky.
That’s what I mean by my real-life MBA. I learned a lot about small businesses and running businesses and families. I ultimately decided that I didn’t want to raise my kids in Detroit. I didn’t want to be part of the family business. In 2004, I told my dad, “You can have the business. I’m going to go raise my kids in Colorado.” That was a transition, for sure.
I needed a job. I jumped in my car and called up a couple of my buddies when I lived here before. I slept on their couch for a week. I have one actual appointment or meeting with a business owner. I spent five days, Sunday through Saturday. I ended up talking with nineteen different business owners all around Denver. I was trying to work myself into a job. I was also trying to figure out what was the thermometer and what was the economy like in Denver because Detroit was its own little island because of the manufacturing.
Long story short, there was a small non-bank lender, an equipment leasing company that also did a loan. We did a little bit of both. They were focused on small business lending. The owner of that company had purchased a portfolio from Quiznos. Quiznos has a big lease portfolio, and so they can manage it. That gave him the idea that maybe franchising is a good place to be in. He didn’t have anybody to do the work to penetrate the franchise space. I was like, “How hard can this be?” I wanted to learn.
If you focus on learning, you’re 10x further down the road.
I started in project management and then had hardcore sales. Running a manufacturing facility is a hands-on operation. I thought, “What I don’t have is finance.” I took that job and moved my family to Colorado. At this point, my kids were little. I spent the next maybe seven years setting up finance programs for franchise brands that were non-SBA finance programs. We didn’t have to go through the red tape of the SBA.
We also have to get franchisees funded more quickly and get them going. I learned a lot about the inside scoop on how franchise brands grow and what’s important to a franchisor and what’s also important to look out for. I was in charge of managing the portfolio that I was building with the company. We grew our own portfolio, so we weren’t selling off loans or anything. That was fun.
I learned a lot about why banks underwrite some loans and don’t underwrite other loans and why certain industry segments are challenging for small business owners. Also, how to evaluate businesses and understand the whole finance side of the equation. That was fun until 2008, when we had the financial crisis. I learned another interesting and tough lesson. My success in placing a bunch of loans on the books with startup companies was the reason that our bank cut our line of credit in half during the crisis. I was essentially out of business. I needed to find something new to do.
That recession of 2008, pushed me out of my comfort zone. I looked at buying nineteen different businesses in 2008 and 2010, everything from a small pizza shop that I could buy with cash to a $10 million liquor store with real estate and juggling different deals. I looked at lots of different deals, a couple of small manufacturing companies. At the same time, a bunch of franchise brands was looking for a VP of sales. I was doing interviews for those.
A friend of mine came to me and said, “If you are going to sell franchises, why wouldn’t you consider being a consultant?” I was like, “I don’t know what that is.” He said, “You are helping people identify different businesses to buy but you are working with hundreds of franchise brands and not selling one particular brand.” I thought, “That was cool. What does that look like?”
I found that in the consultant role, you are not doing any sales. You are counterbalancing that sales process, which is quite interesting, and it was a difficult transition. That’s what I have been doing since 2010. In the middle of doing that, my wife and I bought franchise assets in real estate. That’s the full circle. I help people buy businesses or find the right franchise to buy, as well as do franchises on our own.
It’s awesome to hear people’s stories and how they ended up where they are. A lot of us have taken a nonlinear path to where we have gotten to. It’s always refreshing to hear how other people made it to where they are now. In terms of the business purchasing and the franchise stuff, are you helping as a business broker as well? Are you primarily working at helping people get into that franchise model?
A lot of people see a franchise consultant as a broker. It’s a completely different buyer’s profile and/or process. Having purchased existing businesses myself, the last franchise I owned was Elements Massage. We owned a couple of locations. We purchased those from an existing owner. We built them up and then sold them. I have done the full circle of buying, building, and selling as well as buying and not being successful and shutting down.
I owned a bar for a hot minute. That was a terrible investment. I had a decorative concrete company for a year or two right before the financial meltdown. That also impacted the housing industry pretty tough. That was a good learning experience but not a good moneymaker, so to speak. Without digressing, a business broker helps people buy existing businesses. I work with people to identify a business model to get into.
In my consulting practice, I don’t work with people to help them evaluate a business or buy an existing business. As much as I help guide them from something that they know, a corporate job or a W-2 income, to something that they want but they don’t know much about what being a business owner is all about. My process is educational-focused and gearing the candidate to make sure that they know how to ask all the right questions of the franchisor. Also, talking to franchise owners to verify the information that they are getting from the franchisor.
Buying a franchise or starting a franchise is quite a different process than buying an existing business. Frankly, I’ve got a lot of friends that are business brokers, and if that’s what the candidate is interested in doing, I will introduce them to the business broker. Sometimes they have the idea that they want to buy an existing business but they also like the idea of a franchise. I put the existing business into the mix, “Let’s evaluate them together. You can start a business with this franchise or you can buy that existing business. What are the pros and cons?”
I myself have purchased a business before and probably should have talked with you prior to doing that because it was not the best decision that I ever made.
What business was it?
It was in an existing marketing agency that was looking to transition away, and the owners were looking to get out of it. They came to us and made an emotional decision, thinking that this was going to solve some problems that we were having as opposed to digging into the actuality of the situation and getting a good understanding of what we were even buying. It was a fairly expensive learning lesson for us. You try things, and you go out there. Some of them work, and others don’t. This one for us was not a home run, which is okay. We survived it and are stronger for having survived it.
As entrepreneurs, you learn that learning is the game. People view business as all about money and how much money you can make and building a business and all this. If you focus on learning, you’re ten times further down the road. I evaluated nineteen different companies to buy. What I learned in that process is when you are trying to buy somebody’s business, the business owner that’s selling it is happy to tell you anything that you want to know. You have to know what questions to ask to get the information that you need. Sometimes that is the biggest challenge.
You have no idea what questions to ask. Everything sounds good. You get into it, and you realize that you forgot to ask them about X, Y, and Z. It’s a learning experience, which is great.
We learned a lot of tough ones at the Foundry as well because that was a much bigger purchase and a more complicated business. There’s lots of stuff that we missed. It is what it is.
You are probably never going to know everything. Going into it with an open mind, there are going to be some surprises, it’s probably healthy. Knowing what questions to ask, that’s a good lesson for people. With the people that you work with, it sounds to me like they are trying to replace an existing primary income with a new income. Is that accurate?
Sometimes. Usually, the conversation starts that way. Many Americans now are dual-income families. The best game plan is that one spouse is going to keep their day job while the other one takes on the business. That way, they can bridge that 2 to 4 years gap of starting the business until the business is taking off and getting to a scale that demonstrates enough income to the owner.
One of the things that I set the table for and tough for people to find without having a consultant in the next because franchise salespeople don’t talk about this is they can’t get into how much money you can make and things like that because of the Federal Trade Commission and Franchising Laws and rules. I guide them through a process of understanding how long it takes for this particular business model to get to breakeven. Once you get to breakeven, going from past breakeven to profitability in which you can survive and live on from a family perspective is the second period.
Some business models naturally breakeven quickly, and some business models are going to take a lot longer to get to cashflow positive. Understanding that on the front-end and also looking at business models that match your investment criteria or your risk tolerance is an important thing to understand. I spend a lot of time on this because, as a business owner, I talked to a lot of corporate executives, they are comfortable and used to managing a $10 million budget, as an example.
If it’s your own money, a $300,000 budget might be a massive emotional challenge because people get emotional about money, lack of money, and things like that. Preparing them for that on the front-end is valuable. With all of our colleagues, EO, and all the business owners that we hang out with, it’s a common phenomenon. It’s a skill. You have to learn and master to not be emotional about money.
When you educate yourself on what business you’re getting into, you’ll have the confidence to know what you’re paying for.
We see it a lot with sole proprietors, lawyers, and physicians. There’s a tendency to think of the investment that they are making in marketing as out of their pocket as opposed to their business. It’s an interesting psychological shift. I have certainly experienced it as well as a business owner. Sometimes I’m looking at things and thinking that’s going to come out of what I can pay myself. This is something that we talk about in the nonprofit space as well. If you come into the idea that marketing is an investment and it’s a calculated investment that should have a return, then it makes it a lot less emotional. It’s certainly a mindset shift that’s a challenge.
I laughed when you said that because I still struggle with this. I have been doing it for over ten years. Here’s another thing that is true and is such a hard concept to get your head around, marketing is something that you have to spend on activity but so is hiring. You have to hire people before you need them. You have to hire them when you don’t have the money or the revenue to pay for them. Marketing is the same way. If you can tackle those two things well, your company will grow quicker than if you do what most people do. I’m guilty of this myself. The start-stop. “I would spend money in the cold back, and I’m going to spend more money in the cold back.”
It’s so hard.
It’s an investment, so you have to track it like an investment. You have to gauge the number of clients that you are getting or however you measure your metrics. It’s critically important so that you can get over that emotional I’m-burning-money scenario. I had a candidate tell me that he uses 401(k) to fund the business. He’s like, “I’m lighting my 401(k) on fire.”
That’s not the best attitude to take at it.
It’s almost detrimental to success. Mindset is such a big thing. As you can tell, there’s a lot of my coaching that is around this subjective stuff, which is as important as financial analysis, cashflows, and all the other stuff we have been talking about.
I find myself struggling with the hiring thing, and there are a few other challenges that I have to overcome with that. One of the mindsets shifts that I have tried and has worked for me in the past and I try to coach people up on as well if they are struggling with hiring, is that you don’t have to come up with a full salary now. You have to come up with that salary in two-week increments. That reset can be helpful as well when you are looking at investing in people. A lot of us have the tendency to look at that entire $80,000 salary plus benefits and get overwhelmed by that as opposed to the fact that we only need to come up with two weeks of that at a time. $80,000 divided by 52 is 26.
That’s critical. I had an advisor tell me one time, “I hire people when I have half of their salary, and I would set them up for success so that they could ruin the rest of it themselves.” It’s the same thing that you are saying. It’s a challenge. The biggest thing that I have a hard time with is, what am I going to do with this extra person? That’s another whole workload to set them up for success and have the systems in place so that they can go and do whatever it is that you need them to do and be effective, then they can earn the balance of what you need to pay them and all that stuff.
It’s a common problem. I have heard it from many entrepreneurs, and I certainly experienced it myself. You get to the point where you are like, “It’s faster for me to do this myself than to explain it to somebody.” That’s a mindset shift that a lot of us struggle with as well.
Frankly, that’s what I fell in love with about franchising. I learned it the hard way. Implementing ISO 9000 quality control process is similar to what franchise systems deliver to their franchisees or franchise brands. In terms of hiring, some franchisors do a great job of this, and some do a terrible job of this. You need to figure out how much the franchisor is lifting for you as the business owner.
Some franchisors do a great job in terms of employees. This is the job posting ad that we have. Once you get a bunch of jobs, the franchisor will sift through those resumes and do phone interviews on behalf of the franchisee, and then say, “These are the five people that you should talk to, to be the manager of your store based upon our database or our expertise. Once you get them onboard, here are the training videos in the back-office system that onboards the employees for you, etc.”
All of that work takes an incredibly long time to get in place. I know that because I did it when I was working at the Foundry. It took me two years every single day. Part of my day was building this quality control system, which is nothing more than mapping up job descriptions, holding people accountable, and having a system of checks and balances. Anybody who’s managed any size of a company knows all that stuff. It’s not rocket science. It’s just hard to build from scratch.
One of the advantages of going into a franchise is there’s a lot of that stuff that’s baked in and pre-configured for the new franchise owner, is that right?
Sometimes. One of the things that I talk to my candidates about is, “It’s your job to determine the value proposition that this particular franchise is delivering.” I have this thing that I have developed over the years. People have this preconceived notion of, “All I have to do is buy a franchise, and I will have these things that a franchise delivers like good systems or brand recognition.” There’s a bunch of them.
Here’s another thing most people don’t know, there are 4,000 franchise companies selling franchises in the US. There are a bunch of good franchise brands out there and a ton of garbage but how would the difference be if you are talking to a sales guy, talking to a good salesperson? They are all going to sound good. That’s their job. That’s what they should be doing. As the candidate, you need to determine, “How robust is the system that I’m buying? What does that support structure look like that I’m getting? What are the questions that you want to be asking?”
What I get to is, “This is the lens that I want you to look through as we go through this process of educating ourselves on whether this business is a business I want to get into.” They then will have the confidence that they know what they are paying for in terms of franchise fees, royalties, and the different fee structures that naturally come with a franchise partnership.
There’s a lot to know. It’s valuable to work with someone like you so that you don’t reinvent the wheel as you are trying to learn all this new stuff.
That’s one of the common things that everybody says, “Why do you want to buy a franchise?” “It’s because I don’t want to reinvent the wheel.” There’s a lot to it but it’s not overwhelming. I have worked for over ten years. I have a process that’s methodical so that people can gather the information that they need to make a knowledge-based decision, an educated decision.
As people move into the franchise space, they are buying into the business, looking to grow that business, and then either have that become less of a day-to-day activity or at least enable them to scale that to maybe buy another similar franchise. What are some of the pitfalls that you see people needing to navigate as they are trying to make this decision?
I’m not sure where to take that question because there’s a whole bunch of them. There are landmines everywhere in terms of getting over the fear and anxiety of stepping out on your own for the first time or the fear of flushing my retirement down the toilet. I could go on and on because I have heard it all. What are the pitfalls of people starting their business? State your question in a different way.
What I’m trying to get to is, there’s probably a perception out there, particularly in the franchise space or even buying an existing business. For example, what Brett and I went through when we purchased the business, we thought, “This is all prebuilt, and it’s going to be plug and play. It’s going to be a moneymaker for us.”
For us, it was similar to what we were doing. We figured it was a built-in client base with some built-in mechanisms that we may not have felt like we had built effectively. We were getting those pieces of the puzzle as well. What we failed to either acknowledge or plan for was the relative health of all of those mechanisms.
Giving back is a crucial and gratifying aspect of anybody’s business.
I’m sure that there are people out there who think, “I can buy a franchise, and I can hire some people to run it, and it’s going to be passive income for me. Within some time, I’m going to be able to either free up a lot of my time to do other things or enable me to continue to build on this and repeat this process over and over again without a whole lot of input from myself.” I’m looking for big things like that that people should watch out for or think about before they start down this particular road.
That’s a common story within franchising specifically, the semi-absentee business owner. I can oversee it. I’m not going to have a manager. The franchisor is going to do most of the heavy lifting for me. That is so true. Assuming that you are working with a solid franchisor with good systems, excellent support structure, and all the stuff that you think that you will want, some of that is not present in other brands that do a fantastic job of that.
Let’s assume that the franchisor is an A player. Most people don’t understand the amount of work that it takes to get a business to the point where you can have this semi-absentee lifestyle. I have lots of friends in the franchise business. I have placed a lot of people in franchises that have executed on that and have fabulous lives because their businesses make money and they don’t live in the business. They are not working seven days a week and Sunday night at 10:00 PM. They don’t do that.
The speed at which that can happen is remarkably fast in franchising. By that, I mean you can achieve that in probably 1 to 3 years. The reason I say that is, that was our experience with Elements. We had two locations and inherited 50 employees. It was fairly chaotic. It felt similar to the Foundry. I didn’t react as nearly as aggressively as maybe my wife did to the challenges. In the first year, my wife was doing all the heavy lifting. The Elements was her business. I was helping in doing back-office stuff. She worked a lot in the first year.
In the third year, she was putting in a solid 10 to 15 hours a week. I am not exaggerating. We call them the fly button. She would drop in to the store for 30 to 45 minutes, talk to the customers, make sure that all the employees saw her, and then check on everybody. The rest of the time, she was on the phone with our manager and running the back-office systems from the house. That’s good business to him.
My reaction when she was like, “Let’s sell the business. This is the right time.” There are a couple of different factors going on with our kids going to high school and stuff like that. I looked at her and I was like, “You’ve got this thing pinned. It’s working. I don’t understand why you want to get rid of it.” She did, so I was supportive of that. We sold it, and everything was great. I was interested in closing the loopholes of what it’s like to buy a business and then sell it. That was a good experience to understand.
The idea that you can start a business and spend ten hours a week in your first year and think that thing is going to be successful is doable for some people. I don’t think it’s practical for most people. You have to be good at hiring people. You have to be excellent at delegating, running systems, etc. The people that have done it in the franchise space have also done it multiple times in the corporate world.
You can’t count that first year as a real first year.
Most people that are successful in the franchise space were incredibly successful outside the franchise space. That’s the other misnomer that the franchisor is going to do all this stuff. If you are a big player in the corporate world, you are probably going to be in the middle of the franchise. If you were a rock star in every corporate job you ever had, you are probably going to be at the top of the system. That’s real. The idea of this, “I can own a bunch of stores and I’m not going to have to work much,” is a tough one. It’s a hot potato.
I was thinking of it in terms of this idea that one could plug a franchise purchase into their portfolio of things that they do and somehow manage to make that work while they are either working their regular job or running their regular business. Allow those earnings that you get from that franchise to fuel, either philanthropic efforts or other foundational types of things that people might want to do. That sounds like a pipe dream to me in terms of that. If you have never done it before, you need to expect that first year to be hands-on, and then going further than that, the first three years, to require a fair amount of your energy.
The short answer to your question is, it can be an asset in your portfolio. I give a presentation on paper assets versus real estate assets versus business ownership. Franchise ownership slides between real estate and business ownership as its own asset class. I look at paper assets as an appreciation model, low time involvement, and nonexistent cashflow unless you are going to get into derivatives and such.
For regular people, you’ve got a money manager, and you talk to them a couple of times a year. You’ve got a money portfolio and that paper asset portfolio. A lot of people that do well in Corporate America or outside have real estate rental properties. That also has some appreciation business model with a little bit of cashflow. Most people don’t live on a rental property. I look at them as a savings account. If you can get a 15-year mortgage, 15 years later, somebody else’s pay for your mortgage, and that’s a good investment.
Business ownership is a lot about you as the owner, and a lot of entrepreneurs build that business around themselves. They are doing what it takes to make that thing go. That’s a lot of time involvement, but the cashflow aspect of the business is definitely there. You are paying the full tax game, as I say, in terms of depreciation, amortization expenses, playing the game, and all that stuff.
It’s because of the systems and structure, franchising can allow you to pull yourself out of the business and stand in the owner’s box more quickly than most people can get done in an entrepreneurial-type role. It absolutely can happen. This goes back to asking the right questions. If a candidate comes to me and says, “I want to keep my day job, buy a franchise asset and create additional cashflow,” that’s a common conversation I have. The answer is, it’s absolutely doable.
How flexible is your day job? When all hell breaks loose at the business, are you going to be able to peel away and solve problems or step in there and rehire a manager? It’s not hard to do. It doesn’t take long. We had to do it a couple of times. 3 or 4 days go by, and those 3 or 4 days are chaotic but it takes a couple of days and you can reset the clock and get things going.
The beauty of franchising is the business models themselves are not complicated. They don’t have as many moving parts as a manufacturer, Foundry-type business or a restaurant. For the record, I don’t work with a lot of restaurants for that reason. Restaurants are complicated businesses to run like manufacturing businesses.
You have purchasing, scheduling, and all of that. There are a lot of moving parts.
A lot of inventory, perishable inventory, and Health Codes. There are a lot of things that you need to worry about in the restaurant business that you don’t have those problems with a painting franchise, a cleaning franchise or something like that. You mentioned philanthropy. One of the things I talked to many of my clients about is legacy, “How important is a legacy to you? How does that fit into this idea of business ownership? What is your plan?” We talked about scaling the business. “Are we going to do 1 or 10 locations?”
Let’s assume that happens. Ten years later, you are going to a location every year and you have made it. You are one of the guys that everybody talks to, that talks about Taco Bells. Over the last couple of years, I have had probably ten different candidates that said, “I want to be the guy on The Blind Side. Bring home all those Taco Bells.” What is the end game? I see any business, franchise business or not, as a vehicle to get you where you want your life to go. A business is a vehicle for lots of stuff. Giving back is gratifying. It’s an important aspect of anybody’s business.
Not everybody is philanthropic but many people are. A business is a wonderful vehicle to fund those different things. Not only to fund it financially but it’s the time to dedicate to things that are important. In my business, I give back to three different organizations. I see them almost as an extension of my consulting practice, so it’s easy for me to do but it’s important to me that I do that, and I enjoy it. It’s a part of my business that I enjoy. I’m glad that I invest the time to do that. I don’t know if you want me to go into the different organizations and how I do that.
That would be great. What are the organizations that you are supporting through coaching franchises and everything else that you are doing?
The purpose of my business is to create as many business owners as I can because I feel like a business owner is in a position to create more impact on their employees, the community around their business, and through the customers that they serve. This idea of impact and the business vehicle creating more impact is something that I hold dear and is important to me. For the organizations that I support, the first one is SCORE. SCORE stands for the Center of Retired Executives. It’s an extension of the SBA where high-level executives and big companies will help small business owners with things like marketing.
Giving back is a crucial and gratifying aspect of anybody’s business.
Maybe you’ve got a CMO of Pepsi who’s retired. They’ve got a lot of insight and sharing on different marketing tactics. I tend to work with the folks that are startup companies because I’ve got a startup company or small business finance background. It’s an extension of if you are going to evaluate a franchise, these are the questions that you need to ask. “In a startup scenario, what have you thought of? Have you done competitive analysis? Do you know what the market will bear in terms of pricing?” A lot of the stuff that franchisors figure out for small business owners, I guide people through SCORE. I volunteer my time and through mentoring of folks that are wanting to start a business or maybe they have started a business.
An executive, let’s say he’s an operation guy or marketing guy can help a small business owner who is already doing $500,000 in revenue or $1 million in revenue and take them to the next level. Few of them do a good job on how you start from scratch because it’s completely foreign to them, and they don’t have a lot of experience around that.
There are people who are great at that startup phase who are garbage at running the business once it’s into the production phase.
I’m one of those. I like 3 to 4 years, build it to a certain point. Maybe I’m ADHD or something but I get bored. It’s working smoothly, it’s not as much fun. SCORE is a great organization. Sometimes people are talking about franchises. Hire Heroes is another awesome organization. It’s a nonprofit that focuses on helping ex-military transition to the civilian world, and military folks have a difficult time.
Not all of them but some of them have a difficult time transitioning. Military folks also make fabulous franchise owners. They are system-driven. They don’t question. It’s like, “Show me how to do it, and I will do it.” They are executed and implementers by nature of being in the military. Some of them are also entrepreneurial. The folks that are transitioning out of the military and want to start a business tend to be the guys that I get to talk to.
Every once in a while, somebody is interested in a franchise but usually, they’ve got an idea that they don’t know how to take the market. We get into basic, marketing strategies. What’s interesting about military guys is they usually have a product that they want to build, which is pretty cool, so they need to get it to a point where they’ve got a big enough business where they can go get somebody and make it for them and that kind of thing. That’s pretty fun.
The third organization is one that I enjoy watching grow, New Story Charity. This is a bunch of Gen Z guys that I learned of through one of the EO events, and they looked at how habitat for humanity and in historical solving the homeless problem and they took a completely different look at it and created this new charity called New Story.
They build entire communities in third-world countries, specifically Mexico, Honduras, Ecuador, etc. A couple of things that I love about their story is, they’ve got this big, audacious goal that they are going to solve homelessness. You tie this into all the noise that we have had over the last several years with the Trump administration, the immigration at the border, and everything else.
If you look at that and say, “The least people are coming from Mexico, Honduras, and Ecuador.” Why don’t we solve the problem by creating a community so that the big difference with New Story is they don’t go at it and say, “We are going to build 5 homes, so 5 families can live in 5 homes.” They say, “We are going to build 150 homes or 300 homes because of a community by nature, pride of homeownership. It creates its own economy, so people have jobs. It creates safety.”
The biggest reason these folks are coming from or whatever to the United States is because they are looking for safety. They are not looking for a big American dream as much as they are looking for. I liked how that all tied together but then came back to my mission statement which is, “Creating as many business owners as we can because business owners make the biggest impact on their community.”
That’s the tie into News Story because I want the business owners that I’m putting into a franchise to share that story so they can have the mindset that it’s their job to create a community through their business. It starts with building your team. That’s why I start with, “We make the biggest impact on our employees as business owners.” If we do a good job making an impact with our employees, those employees make an impact on our customers, and our customers spread the word about how great our business is, which is making an impact on the greater community. These are different ways that I see my business impacting. It’s a lot of fun.
I love that mission. It’s great because it extends from those values or that feeling and the way that one approaches all of those stakeholders within one’s business. This is B corp-focused. This is something that happened here at Relish when Brett and I made a little bit of a switchback in 2016. We started recognizing that as business owners, we had the opportunity to do things the way that we wanted to do them. In our minds, that’s “the right way.”
The way that we were choosing to engage with and the values that we were putting out there for all of our stakeholders, employees, contractors, clients, and vendors, the way that we were approaching things had the opportunity to spread out from this central hub. It spreads out to all of those people and perhaps would influence them to do things differently.
If you can instill strong values of honesty, hard work, and all of those things at an employee level, that employee is going to take that, and it transforms their life. They are able to take that and put it into play everywhere in their lives. Their kids, friends, and family are all going to benefit from that influence. I completely agree that business owners have a real opportunity to change the way that people do things in the world.
I firmly believe that impact is found in community. Another reason I love franchising is, good franchisors have a strong peer-to-peer network. The openness, honest and transparent sharing of best practices and what vendor is a good vendor and all of that stuff naturally flows in that franchise community. The community in your business with your employees is where the pride comes from.
Business ownership is hard. It’s like losing weight, lifting weights or whatever, your muscles grow when you put them under stress. Business ownership is hard, and franchising is hard but the feeling of ownership, the pride of ownership, the pride of building something that you are proud of, comes through this idea of community and having those critical conversations with employees or customers or whatever.
My wife’s proudest moment in her business had everything to do with her employees. We owned a couple of massage studios, and most of our employees were young, single moms. I feel like I’m too old saying this but we didn’t have baby daddies when I was in high school and college. That wasn’t a thing but it’s definitely a thing now. We have these single moms with 3 kids from 3 different people. They are bouncing around.
The impact that my wife had on her employees is something that she’s proud of. It was little things like noticing an employee was showing up late, had a different car or didn’t have a car. I’ve got an extensive network of friends and business owners, so we’ve got an auto broker that ended up selling 5 or 6 cars throughout our employee base. They were the best cars that these people ever had. They never had reliable transportation.
The challenges that were a daily part of their life were so easy to solve. I remember in the Foundry business, we would buy covers for employees and deduct their paycheck until they paid them off, a $1,000 car or whatever. It gets them to work every day. Some people never had somebody do something like that for them.
This one gal, we said, and when I say we, I mean my wife, did everything. She’s fantastic. She’s like, “You need to move into this apartment building across the street from the studio. We are going to get your daycare set up at our church, which is right down the street. Don’t move in with another guy for another six months and see what happens. Just focus.” She was moving around all the time. It seemed chaotic.
She had never had anybody in her life. Give her that much coaching, help, and direction, and she completely turned everything around. It was so cool to see. That’s the impact. You don’t have those opportunities to make that impact in other vehicles. I’m sure you can as an employee, as a manager of a business, and maybe it has been so long since I have been one. I don’t know.
It’s that latitude that you have as an entrepreneur, and a business owner, which could come from franchise ownership, for sure is incredible. I do gratitudes every day. Frequently, one of the gratitudes I have is the flexibility that I have created for myself to be able to take advantage of a lot of the things that come my way. I’m not tied to a desk from 8:00 to 5:00 with a 30-minute lunch or whatever. If you said, “Stu, let’s go meet in Boulder and do this,” I could probably rearrange my schedule to make that happen, where maybe that would be one of the more impactful things I have ever done in my life. I have an opportunity to go help or bail someone out of a problem. That flexibility is so powerful.
Don’t wait another year to be a business owner because now’s the time.
I have a gratitude journal as well. You’ve got to write it down and remind yourself that you have it because it’s something that we take for granted. As a business owner, I have talked to thousands of people over ten years that wanted to get into the franchise business. That is number 1 or number 2. “Why do you want to get into a business? Why do you want to start a franchise?” “I want freedom and control over my time. I want to coach my kids’ softball team. I don’t want to live on an airplane. I want to have dinner with my family every night at 6:00.”
You would think it would be, “I want to build an empire. I want to make X number of dollars or I need this kind of income.” Usually, the conversation starts there but as we went through my process and I asked some pointed questions, money is a terrible motivator. The other thing, coming back to the philanthropy question, most people, and for myself, personally, you have this idea that falling out the breeze is for people like Bill Gates that create foundations and feed people in Uganda or whatever.
It doesn’t need to be that. As soon as you have more than you need for your family, which is much less than what a lot of people would think, your mind goes to, “How do I use this business to help other people?” It’s this whole idea of impact. Where do we go with it? That’s the fun part. We have this fundamental conversation about revenue minus expenses, net profit, scalability, and I have 1 or 2 locations.
Once you get yourself to a certain scale, it’s no longer about adding an additional location, so you can go on a fancy vacation with your family. It’s about, “What am I going to do with this business to make a bigger impact or to accomplish different things in my life or legacy type things?” That’s when the conversation gets fun and the reason that I’m in this business and helping people.
If this country needs anything with all the crazy chaos that has been going on over the last couple of years, the last couple of decades or however you want to look at it, I truly believe this country needs more business owners. Business owners have an independent mindset, and most people, depending on how skeptical you might be, jaded or however you want to put that, want to do the right thing for everybody around them.
Most people want to create a great reputation, and business owners understand that better than anybody because it’s so important to have a good reputation, Yelp reviews, and all that stuff. If you have worked on that for more than ten years, that’s powerful. Independent is the keyword. This country needs more independence, in my opinion. Independent of thought and giving back in a way that’s material, manageable, and impactful.
I appreciate you coming to the show. I can’t believe we have been talking for over an hour. It has been fantastic to learn more about what you do over there and how you visualize the benefits that can be made from business ownership. I love it. How can people find out more about you and maybe if they are interested in exploring, owning a franchise or a business themselves?
I’m happy to take a phone call. My phone number is (303) 933-0890. [email protected] is my email address. You can learn more about my business at www.FranchiseYourFreedom.com or you can find me on the FranChoice website at FranChoice.com/dweaver. It will take you right to my landing page.
I love having these conversations. One of the things I look forward to most during my week is my opportunity to chat with new people and get some new understanding and learning. One of the things that I like even more than conversation is when there’s an action that people can take. If you had the opportunity to give somebody some advice or give them a tip on something to do after reading, what would that thing be?
As it relates to business ownership, don’t wait as long as I did. I waited until I was 39, I absolutely took the leap. I dabbled with it, and I had a couple of small businesses on the side, and I did real estate stuff. If you have always wanted to be a business owner and you think that you would be good at it, you will be good at it. Just do it. If franchising is an avenue that you want to take, give me a call, and I’m happy to help. My services are free, and my business is set up like an executive recruiter where the franchisor pays me for my consulting time.
If you can’t tell, I’m super passionate about helping people become business owners. If you have a great idea and you want to start your own business, SCORE is a wonderful organization. There’s a SCORE chapter in every city across the country. Call up your SCORE chapter, find a good mentor, and start asking a lot of questions. My call to action is don’t wait another year because now is the time.
Thanks so much for being on the show, David. It was great talking with you, and I will talk to you soon.
You are welcome. Thank you. Bye.
There you have it. Another great episode of Relish THIS. Thanks for reading. If you would like to learn more about how to apply the Audience Engagement Cycle to expand your organization’s mission, there are two things you can do. Now, you can go to MissionUncomfortableBook.com to download a copy of my book. While you are there, you can get your purpose-driven marketing score to see where you can unearth some gold for your organization. If you would like to read back episodes of the show or sign up to be a guest, go to RelishStudio.com/podcast. That’s it. I will be back for another great episode of Relish THIS.
About David Weaver
David Weaver has a diverse and comprehensive entrepreneurial background to draw on as a FranChoice consultant. Having honed his business skills in a variety of ways, he now looks forward to sharing his knowledge and experience with others interested in business ownership.
David embodies the Midwestern values of honesty and integrity in all aspects of life. He was born and raised in Indiana and got his first taste of business ownership by watching both parents build and operate successful businesses. David’s career took him down an interesting path that allowed him to develop unique skills and expertise in sales, project management, operations and finance. One of his most valuable career stops spanned over six years and included analyzing and underwriting franchise systems across the country in order to establish the “right fit” between the franchisor, franchisee and finance company.