In this captivating episode of Eye on Franchising, I am thrilled to welcome Andrew Mengason, an esteemed Chief Growth Officer at Five Star Franchising. Together, we embark on an exciting exploration of the countless advantages that come with joining a large franchise family. Our engaging conversation ventures into a vast array of industries, ranging from bathrooms and curtains to the ever-fascinating world of mosquito control. Andrew mesmerizes the audience with the tale of his own journey into the world of franchising. Starting as a tenacious entrepreneur in the moving and storage industry, he found his way to the remarkable world of franchising. His story is a testament to the possibilities that lie within the realm of franchising. Throughout the podcast episode, we unravel the intricate webs of knowledge and expertise we obtained through our relentless pursuit of operational and sales opportunities. By capitalizing on invaluable networking connections and becoming actively involved in industry organizations, we learned the ins and outs of the franchising universe. We proudly recount the chance we had to run a highly esteemed, well-known brand before ultimately finding our rightful place with Five Star Franchising, nestled comfortably in the picturesque state of Utah. It's here that they've have been able to make a significant impact and help others achieve their dreams of business ownership. Intriguingly enough, we bring up the concept of a platform company and artfully illustrate the stark contrast it holds against being an individual franchise owner. We grip the audience's attention as we masterfully unveil the underlying brilliance of a shared services model within our franchise network. This ingenious model adeptly provides an array of services such as legal, accounting, marketing, and franchise development through a centralized platform company. Such an approach allows franchise owners to concentrate on nurturing their businesses, thus effortlessly facilitating the scaling and integration of new brands. Throughout the podcast, we emphasize the importance of selecting franchisees who possess proper funding and share our organization's unwavering core values. These cherished core values, collectively referred to as the "five-star drive," serve as a beacon of guidance, illuminating the path towards identifying and attracting successful franchise owners. In a monumental moment of transparency, we delve into the harsh reality of business ownership and the challenges that often arise, particularly within the first year or two. With unwavering candor, we shine a beacon of hope, highlighting the quintessential characteristics essential for success, including drive, grit, and an unwavering willingness to follow a proven system. We stress the paramount importance of franchise owners who continually listen and incorporate feedback to propel their brand to new heights. Within this enlightening podcast, listeners are treated to an invigorating discussion about the sacred art of validation. We stress the need to engage in a minimum number of validation calls when contemplating the purchase of a franchise. Demonstrating our expertise in financial planning, we delve into the realm of pro formas, meticulously crafting robust financial projections based on the performance of other owners in the network. This potent combination of data and expertise allows candidates to assess the brand's long-term potential, serving as a guiding light on their path to success. We touch upon the motivations that drive individuals towards the enthralling world of franchising, such as the timeless quest for freedom and the alluring promise of wealth creation. We also briefly lift the curtain on the intricate domains of marketing and training, emphasizing their paramount importance in the success of a franchise business. In this thought-provoking podcast, we shine a relentless spotlight on the pivotal role training plays in a franchising empire's ascension to greatness. We unravel the captivating tale of how physical training, ongoing field visits, and unwavering support from franchise business coaches form the holy trinity essential for franchise owners' triumphant journey. We also unveil the ingenious concept of creating a scorecard to illuminate progress and punctuate dialogue revolving around goals. Training, as we passionately proclaim, should never come to an end. Within the enticing realm of this podcast, we share the unique story of Pronexis, a franchise service provider brilliantly daring to fill a critical gap in the industry. Pronexis delivers end-to-end marketing support, accompanied by an immaculately designed sales center. This groundbreaking combination ensures prompt, unparalleled customer service for franchise owners, delivering a tangible boost to their profitability and brand equity. We emphasize the importance of financial data and validation in the franchise buying process. We urge listeners to seek invaluable financial information from the franchise owner and leverage the experiences of existing owners to construct impeccably crafted performance projections. Armed with this invaluable arsenal of data and insights, candidates are empowered to make informed decisions and embark on their own transformative franchising journeys. In the closing moments of the podcast, we share our final words of wisdom, extending a guiding hand to listeners on the precipice of franchising. We implore them to do the hard work, immerse themselves in the pursuit of knowledge, and trust the guidance of consultants, brokers, and coaches. We stress the significance of due diligence and the importance of finding the right fit. We encourage listeners to seek the assistance of franchise broker consultants, illuminating the path every step of the way. With boundless gratitude, we express our joy and appreciation for the opportunity to share our expertise and uplift the franchise brands we hold dear. We are grateful to all the devoted listeners who have carved out precious time to partake in this transformative journey. Join us on Eye on Franchising and let's explore the world of franchising together! - Introduction of Andrew Mengason, Chief Growth Officer at Five Star Franchising - Discussion on the benefits of joining a large franchise family and exploration of different industries - Andrew's journey from an entrepreneur in the moving and storage industry to franchising - Emphasis on collaboration, training, and support within the franchise industry - Highlighting the concept of a platform company and its advantages in the franchise network --- Ready to watch these great conversations? Come check out a few videos have have and give me a follow! https://www.youtube.com/channel/UCwoAdrkPZmveJt5AQRDk8WA --- Lance Graulich Franchise Consulting Services from ION Franchising Eye On Franchising
In this captivating episode of Eye on Franchising, I am thrilled to welcome Andrew Mengason, an esteemed Chief Growth Officer at Five Star Franchising. Together, we embark on an exciting exploration of the countless advantages that come with joining a large franchise family. Our engaging conversation ventures into a vast array of industries, ranging from bathrooms and curtains to the ever-fascinating world of mosquito control.
Andrew mesmerizes the audience with the tale of his own journey into the world of franchising. Starting as a tenacious entrepreneur in the moving and storage industry, he found his way to the remarkable world of franchising. His story is a testament to the possibilities that lie within the realm of franchising.
Throughout the podcast episode, we unravel the intricate webs of knowledge and expertise we obtained through our relentless pursuit of operational and sales opportunities. By capitalizing on invaluable networking connections and becoming actively involved in industry organizations, we learned the ins and outs of the franchising universe.
We proudly recount the chance we had to run a highly esteemed, well-known brand before ultimately finding our rightful place with Five Star Franchising, nestled comfortably in the picturesque state of Utah. It's here that they've have been able to make a significant impact and help others achieve their dreams of business ownership.
Intriguingly enough, we bring up the concept of a platform company and artfully illustrate the stark contrast it holds against being an individual franchise owner. We grip the audience's attention as we masterfully unveil the underlying brilliance of a shared services model within our franchise network. This ingenious model adeptly provides an array of services such as legal, accounting, marketing, and franchise development through a centralized platform company. Such an approach allows franchise owners to concentrate on nurturing their businesses, thus effortlessly facilitating the scaling and integration of new brands.
Throughout the podcast, we emphasize the importance of selecting franchisees who possess proper funding and share our organization's unwavering core values. These cherished core values, collectively referred to as the "five-star drive," serve as a beacon of guidance, illuminating the path towards identifying and attracting successful franchise owners.
In a monumental moment of transparency, we delve into the harsh reality of business ownership and the challenges that often arise, particularly within the first year or two. With unwavering candor, we shine a beacon of hope, highlighting the quintessential characteristics essential for success, including drive, grit, and an unwavering willingness to follow a proven system. We stress the paramount importance of franchise owners who continually listen and incorporate feedback to propel their brand to new heights.
Within this enlightening podcast, listeners are treated to an invigorating discussion about the sacred art of validation. We stress the need to engage in a minimum number of validation calls when contemplating the purchase of a franchise. Demonstrating our expertise in financial planning, we delve into the realm of pro formas, meticulously crafting robust financial projections based on the performance of other owners in the network. This potent combination of data and expertise allows candidates to assess the brand's long-term potential, serving as a guiding light on their path to success.
We touch upon the motivations that drive individuals towards the enthralling world of franchising, such as the timeless quest for freedom and the alluring promise of wealth creation. We also briefly lift the curtain on the intricate domains of marketing and training, emphasizing their paramount importance in the success of a franchise business.
In this thought-provoking podcast, we shine a relentless spotlight on the pivotal role training plays in a franchising empire's ascension to greatness. We unravel the captivating tale of how physical training, ongoing field visits, and unwavering support from franchise business coaches form the holy trinity essential for franchise owners' triumphant journey. We also unveil the ingenious concept of creating a scorecard to illuminate progress and punctuate dialogue revolving around goals. Training, as we passionately proclaim, should never come to an end.
Within the enticing realm of this podcast, we share the unique story of Pronexis, a franchise service provider brilliantly daring to fill a critical gap in the industry. Pronexis delivers end-to-end marketing support, accompanied by an immaculately designed sales center. This groundbreaking combination ensures prompt, unparalleled customer service for franchise owners, delivering a tangible boost to their profitability and brand equity.
We emphasize the importance of financial data and validation in the franchise buying process. We urge listeners to seek invaluable financial information from the franchise owner and leverage the experiences of existing owners to construct impeccably crafted performance projections. Armed with this invaluable arsenal of data and insights, candidates are empowered to make informed decisions and embark on their own transformative franchising journeys.
In the closing moments of the podcast, we share our final words of wisdom, extending a guiding hand to listeners on the precipice of franchising. We implore them to do the hard work, immerse themselves in the pursuit of knowledge, and trust the guidance of consultants, brokers, and coaches. We stress the significance of due diligence and the importance of finding the right fit. We encourage listeners to seek the assistance of franchise broker consultants, illuminating the path every step of the way.
With boundless gratitude, we express our joy and appreciation for the opportunity to share our expertise and uplift the franchise brands we hold dear. We are grateful to all the devoted listeners who have carved out precious time to partake in this transformative journey.
Join us on Eye on Franchising and let's explore the world of franchising together!
- Introduction of Andrew Mengason, Chief Growth Officer at Five Star Franchising
- Discussion on the benefits of joining a large franchise family and exploration of different industries
- Andrew's journey from an entrepreneur in the moving and storage industry to franchising
- Emphasis on collaboration, training, and support within the franchise industry
- Highlighting the concept of a platform company and its advantages in the franchise network
---
Ready to watch these great conversations? Come check out a few videos have have and give me a follow!
https://www.youtube.com/channel/UCwoAdrkPZmveJt5AQRDk8WA
---
Franchise Consulting Services from ION Franchising
Lance 00:00:00 Welcome to Eye on Franchising. Are you looking for business opportunities? Well, you are in the right place. We represent over 650 franchises and business opportunities. We will help you find your perfect franchise for free. We even have a free assessment on our website that will help us determine what the best businesses for you based on your investment level mindset, skill set and life experiences. This is Eye on Franchising where we share our vision for your franchise future. I'm your host, Lance Graulich. Each week we will speak to fascinating folks from the world of franchising, franchisors and founders, franchise funders and franchisees. Are you looking to find your perfect franchise? Or perhaps you are an independent business owner looking to grow and scale your business by setting up a franchise. Either way, our team can help you Eye on Franchising, where you will learn the A to Z's of franchise. Hello everyone and welcome back to another fabulous episode of Ion Franchising. I'm Lance Graulich, your host. But you know that of course. So today's guest, boy, he is uh, an old timer like me in the world of franchising. And we're going to talk about things like the benefits of joining a franchise family, a large franchise family like his, perhaps. From bathrooms to curtains to getting rid of mosquitoes. We're going to talk about it all today with Mr. Andrew Mengason, my friend who is chief growth officer at five star franchising. Andrew, welcome to the show.
Andrew 00:01:45 Lance, an absolute pleasure to be here with you today. Thank you.
Lance 00:01:48 Well, I am so happy you are here. And I love to start off with the first question always being how the heck did you get into the world of franchising? What in your background got you here?
Andrew 00:02:01 Absolutely happy to share this one. so I actually started off, shortly after college as an entrepreneur and got, into the moving and storage industry and owned a Mayflower agency and very similar to franchising, but it was an agency model. But it had very similar feels to, what I presumed was a franchise and, owned and operated that for 16 years. Was very fortunate to be able to sell that 16 years later and was kind of trying to find my way, after that. A little too young to retire, but trying to find my way into what was the next big venture that I wanted to do. And kind of bumped into franchising inadvertently like a lot of people do. Don't think you plan on getting into franchising ever, but I did and, I landed with, an independent franchise or that was in the restoration space. And, I learned a lot very quickly, around how to build, run and support franchise owners and really liked the operational aspects of it, and then they slowly gave me a little bit of sales opportunity and helped, support some franchise development, helped some national account sales for this brand. And, we quickly grew that particular brand from right around 60 locations in the US. Only to north of 270 in the US. Canada and the UK. Uh, so expanded beyond the borders and really learned a lot from that, as I learned, I got a little bit more exposure. I will say this quite often, I highly, highly encourage everyone to get very involved in the IFA, as I did. And I got to meet a lot of great people with a lot more talent than I had and knowledge and I leveraged it. And, next thing I know, I had a little bit of a name for myself in the space and a large platform company was looking for someone to run the brand. Had a very well known CEO that, stepped away to, take on a different venture and this opportunity in Ann Arbor, Michigan, I will not say the name of the brand, but, this great opportunity showed, itself and had the ability to move from a single franchise or to a multi brand platform company and embraced it. Those of you that know me know I'm up for the challenge. I love growing things. It's, why I love being involved with private equity. And a lot of people say that I'll give our private equity firm a quick plug, here. But I'm going to talk about them a lot more a little bit later on in the conversation because we do have an amazing private equity partner here at Five Star Franchising, which is Princeton Equity. But to get back to the story a little bit about the platform
Andrew 00:04:38 company, really, amazing, backed by a large restoration company, great culture, great vision for being a dominant player in a space, that, there are only a couple at the time and really, had the sights on growing to north of 16 brands. And, we put our heads down and we started acquiring brands and finding nice complementary brands to bring to the portfolio. Did that for a while and again, through some very great success in what we built, was given yet another opportunity with a platform company and landed with Five Star Franchising here in, uhSpringville, Utah. Lot to share about it and more to come.
Lance 00:05:29 Love it, love it, love the know. When you mentioned the support that you give franchisees, a lot of people ask me, as you already know, but there are a lot of listeners on a regular basis, they reach out and they're like, lance, I have an idea. I think I want to start my own business, maybe even my own brand. I want to build something big. And I always have the same conversation with people because some people don't understand exactly what it takes and we're going to talk about that and break it all down. But a lot of people do. Forget about all the collaboration that goes on between not only some of the most successful franchisees in all brands and sharing of those best practices, the training that goes on from the corporate level and, franchise or level and the ongoing support in the field as well with success coaches, franchise business consultants, whatever. So like when you mentioned the IFA, the International Franchise Association, for those of you with your bingo scorecard, it's the International Franchise Association is the largest governing body, if you will, association that helps franchisors, and of course franchisees. But big political action committee to make sure our federal government, the US. Government is being fair to franchisors as well as franchisees, of course. But got to take care of the mothership so the mothership can take care of the franchisees, of course. Having said all that, let's dive right into where you are with Five Star. You've been with Five Star how long now?
Andrew 00:07:12 I am at a year and a half mark. good. A relatively new, venture for me. When I started, they were at four brands. And we've since jumped up to six brands in the portfolio, since joining the company. And, got heavy A happening right now. Hopefully here in the very near future, we'll be announcing two to three additional brands coming into the portfolio.
Lance 00:07:38 Love it. So when you talk about a platform company, it's a fun industry word. Define what that is, because people listening that are interested in franchise opportunities, they never know. Like, I had a gentleman that really wanted to get to know an owner. He was a little bit old school, he admitted that. And he wasn't even an old guy like me, but he was old school in his thinking that I want to know who the owner is, I want to understand his history. And not everybody's like that. So describe what it's like being with an individual franchise or on their own versus within a platform company.
Andrew 00:08:21 Absolutely. it's a question I get very often, Lance, that I love to dig deep into. I think that the true value around a platform company, if set up correctly, like Five Star franchising, is we considered a shared services entity. So we have created a shared services model that each of our franchise or businesses can leverage. So everything from legal to accounting to it marketing, franchise development, all those services are provided by the platform company rather than the franchise or. And with that shared services model, I think the true benefit and value comes with the fact that it puts the franchise or very focused on the franchise owners, both new and existing. That's value number one. Value number two is actually the ability to scale very easily as we look to integrate new brands in. When you have all that shared services model created, the technology, the departments, the processes, when we acquire a new brand, it makes it very easy to transition them in to our platform and, get them very focused on their franchise network as well.
Lance 00:09:35 Wonderful. So with all of these brands, and you said you're adding more brands, how does anyone determine I mean, look, I said in the intro from curtains to mosquito control, to, bathrooms with Five Star bath solutions, all the way.
Andrew 00:09:55 To contents restoration, you name it, we're.
Lance 00:09:58 A very diverse home services platform with 1800 packouts. I mean, are you looking at what you don't have? I mean, obviously, uh, like a professional football team. Do you need a lineman? Do you need a quarterback? In your case, you're just looking for additional great brands, right?
Andrew 00:10:17 I think it's great brands. but at the same time, we're looking for great fits in two ways. One, culture fits, and we're going to talk a lot about culture, and core values, because it's something that really differentiates Five Star from a lot of other companies out there. But we're really looking for those complementary brands. So the goal is, when a consumer needs something done in and around the home, they're going to call Five Star brand, and that's what we're trying to achieve in the best in class, companies that are providing those specific services to customers out there each and every day. And we're trying to find our way to those specific businesses. And while there may be 50 painting concepts out there, there's only one that fits in with Five Star, and that's one we want to acquire and roll in and be part of what we're trying to build here. Because it's not just about the dollars. It really isn't. I think, for people to realize that the platform company here we are looking, trying to find that great founder that has built something that is looking for us to assist, to take it to the next level. Take it to where they're ready to stop and us to step in and take it and take from that foundation that they've built and make it into that vision that they had actually put to paper many years ago is where they wanted to take this thing. And in some cases, they stay on with us, many cases they can exit. But in reality, the Fit is the most important thing for us when it comes to identifying great, acquisitions to come into the Five Star platform.
Lance 00:11:52 Let's talk about the fit when it comes to franchisee selection. For those listening that are looking for a franchise or a business, they're not sure if a franchise is right for them. How do you define in your capacity, and how does your team define, as you're talking to a candidate for any of your brands, how do you know if they're good fit?
Andrew 00:12:15 Yeah, great question. It's one that I think we continue to hone, each and every day, where we think we had it perfected. We get a little bit better each time. It's a couple of things I would tell you. Number one, single biggest question I get is what makes a successful franchise owner? and I will tell you, coming down to capital, having the right funding, coming into a business, is probably the single biggest thing that I tell people. when you're on the cusp and on the edge of it, it creates new challenges you don't need as a new business owner. So coming in properly funded is important. What do we really look at? Like I said before, Culture Fit, we have very strong core values in our organization. Not just at the five star level, but those core values are shared at each and every one of our six brands. and then we also look to the candidates. Do they share our values? And when you're able to transcend from the platform company all the way down to the owner network, that you are sharing those same values, it is powerful. and we just don't talk about it. It's not a plaque on the wall. It's not a statement in a company handbook. We live our core values. We hire by them, we fire by them, we evaluate by them. And we actually look at evaluating our candidates by our core values. And I'd be remiss if I didn't give them to you. we call it the go right ahead.
Lance 00:13:45 I was going to ask you.
Andrew 00:13:46 There you go. The five star drive. D is driven, r is real, I is innovative, v is vital, and E is enthusiastic. and we live them each and every day from the executive team down to, our league qualifiers, all the way down to the next candidates. Looking at our brand, we're looking, what does that mean to you? How does that resonate with you? And can you live them every day, as you work with your customer, u in any of our businesses.
Lance 00:14:18 So, as a candidate, a prospective franchisee is a candidate. And as they get into your process across any of your brands, you're checking this, so to speak. There is this drive checklist to ensure that they're checking all the boxes. We know that franchising is a two way street. You have to like them. They have to like you, like dating. And at some point, there's a marriage, a business marriage in this case. So is there anything special to that process, uh, through Meet the Team Day and validation, talk a little bit about that?
Andrew 00:14:57 Yeah, great. So, obviously, our director level, our franchise development folks, those team members are really, inquisitive around the Culture Fit of those core values throughout the entire process. But I can promise you, when Meet the Team Day comes up, the team as a whole is really looking for that. and then obviously, finding the right assessment tool that you can incorporate in your development process to measure some of these specifics, I would highly recommend to franchisors out there that may not be using them, that find that right tool that fits, that helps give you the documentation around, not just the feel from the call. We've all been fooled before. We want something to back it up. and I think that combination of consistently asking about it throughout the entire process gets you the true answer in the end. And it's backed up by the evaluation that every candidate is also given.
Lance 00:16:00 So also, for folks listening, you mentioned the investment. Obviously, there are people that run out of money before they hit gold, so to speak. It's sad it happens. Other than money, once they have the, financial requirements that you desire, what is it after that? Because the crazy part about franchising is there are people that are teachers, that are doctors, that are attorneys, that are engineers. It folks. People literally come from all walks of life and could be in any of your franchises. So how do we know what's best? Obviously, some brands attract different types of individuals. But what are your thoughts on that?
Andrew 00:16:53 Absolutely. So I'll go back to our core values again. I think anyone that is starting a business needs to have that drive and a special type of drive, because my development team cringes sometimes as I get on with their candidates. Because I'm the realist I'm the one. That scares the candidates a little bit. Brings them down to reality, grounds them even more so, in the reality of business ownership and what they're about to face. The rewards are amazing. But the journey can be challenging, especially in year one or two, depending on your brand. So that drive, that grit, that moxie to get through that challenging first year, we look for that. We want people to have that number two prepared to follow a system. Trust that the people before you have followed a system and it got them to their success. Trust, the process. Trust it. Understand that it does work. Now, great franchisors. How do you differentiate great franchisors, they listen. They listen to their owners, and they get feedback on how to make the brand better. So, while there may be a system in process today, great brands will always take that feedback and apply it and modify the process, improve the systems, the technology, whatever it may be, to make the brand even better. So, making properly financed, being driven, following the system. And then I say this one a lot. This is a sign of strength, not weakness. Raise your hand. Ask for the help. There's a reason why you're in the system. You have the franchise or to support you. You have all your fellow classmates that went through training with you. You have the entire network to leverage, to ask questions and work through your issues. So take advantage of that. It's extremely important.
Lance 00:18:51 So when candidates, uh, are finishing up your process, obviously, with validation yes. You mentioned culture fit, big part of the process. I had a young lady go through, looking at brands, and, boy, she kept coming back to me with culture. No, that doesn't fit what I'm looking for. This does better. I'm like, oh, thank goodness she knows what she's looking for, because some people don't. Isn't validation the best methodology in the final stage? Best check, if you will. So you have existing, successful franchisees that are telling you, you know, Andrew, that guy Michael is a great fit, or that gal Susie is a great fit. Is validation not that great? Sort of stopgap?
Andrew 00:19:41 it is amazing. I'll put it this way. We recognize we have an award at our annual conference for all of our brands called the brand builder, and it's really hard to pick one person. And I hear it from my brands all the time because they have so many great validators. But the fact that we want to recognize people that are taking a vested interest in helping us vet future candidates, coming in, sharing, the journey that they've been on, helping people understand what they're about to face, going through purchasing one of our brands, validation is critical. And anytime I talk to a candidate that is not taking the recommended minimum number of validation calls, it's a red flag for us right away.
Lance 00:20:32 And what's your minimum these days?
Andrew 00:20:34 Three to five. I love to see a minimum five. My brands are three, but most are up to five. You got to get out there. That's your ability to start building the we also like to encourage candidates to use pro formas and building out their financial pro forma to what they would like to achieve based on the performance of the other owners in the network and then pulling our item 19 data along with it. That combination of, what they can extrapolate from owners and what we represent in our item 19s gives our candidates the ability to really lay it out there and see, will this meet my expectations in year 1234 and on? and I think it's really important. And people that take the time, that's who we want in our brand, because they're taking this process seriously. It's not just the flash and the glamour of the brand or the branding or the trucks or the equipment or the product, whatever it may be digging in. And actually, this is a business venture. I'm investing significant money into something for a reason. Everybody has their purpose. We know one of the questions we ask everybody, what's your why? Why are you doing it? We want to know your why.
Lance 00:21:46 Because there's because I hate my job.
Andrew 00:21:48 And that happens quite often.
Lance 00:21:51 I want freedom.
Andrew 00:21:53 I want freedom. I want to create wealth. Uall those great reasons that motivate people to the wonderful world of franchising yeah.
Lance 00:22:02 No. Wonderful. So let's talk about marketing. So being, if you're part of Five Star franchising, any one of your brands, things like marketing, things like, training, talk a little bit about both of those. Let's go with, training first. So you find the right individual, you onboard them. Talk a little bit about training and how that works, learning, management system, et cetera.
Andrew 00:22:31 Yes. So all the brands kind of have different tracks depending on the brand itself. Most, are somewhere around two weeks of training, some are two weeks, go back to the business, run it for a little while, come back a little bit. So a little bit of a variation, depending on the specific brand, but training is everything, and I use this rule of thumb, and it's a general educational rule of thumb. You retain about 40% of what you hear in a presentation or in a learning environment. So I think the post actual physical training is very critical, helping the ramp up, because, again, that is the most important thing. How do brands help owners get from zero to where they want to be at the end of year one? And I think training is a huge component, ongoing the field visits that happen from the franchise business, coaches getting out there physically and verifying what's being done, helping support the right processes, I think, is the next piece of great ongoing training. And then the last part is creating a scorecard and measuring what they're doing against where they want to be and where we would like to see them be. And talking about that regularly, quite honestly. And then training really does never end. The fact is, I think great brands continue to offer whether or not it's through LMS systems, uh, regional meetings, all the different mechanisms. the site visits continue to drive home more and more training, because what does that get you? It has people following the system consistently delivering the service that we promise in our guarantees across our brands. So, again, once I leave, I take my franchise development hat off, and I put my operational hat on, uh, working with the brands that I think training is one of the key successes to people launching the way they expect they would do so with a franchise brand.
Lance 00:24:26 I love it. Yeah. Training is all about walking people through the systems, through the procedures, through the secret sauce, if you will, through the gears, and putting everything in motion. And, that's why you get into a franchise. Someone else figured it out for you, right?
Andrew 00:24:40 Absolutely.
Lance 00:24:41 How about the marketing pieces? How does that work?
Andrew 00:24:44 across five star brands, we are very unique in that we actually have a separate division called, Pronexis, and they offer both the marketing arm, but they also offer an inbound and outbound call center. and so, actually, I got to be careful. The president there is going to scold me for saying sale. It is actually a sales center. Inbound and outbound sales center is a proper terminology I should be using there. And so we support, depending on the brand and their needs, both the ability to take in inbound calls for our franchise owners, but we also have an outbound sales center to drive sales for the brands that are, very B to C, so a very successful business entity, for us helping support our brands. And believe it or not, we go beyond the five star brands and actually service quite a few other franchisors that actually are not under our portfolio.
Lance 00:25:40 I heard that. I thought that was quite impressive, that you guys filled a hole in the industry, you realized that, and now you're offering those services to the franchise community. Pretty amazing.
Andrew 00:25:55 Absolutely. Same thing goes on the marketing side that we offer SEO, the digital, piece of it, any type of marketing support, that a franchise or may need, pronexis has the ability to provide that both internally to our brands as well as externally to non competing.
Lance 00:26:12 Know, Andrew, it fascinated me years ago when I started understanding through friends of mine that have been in franchise home service brands, a lot longer than I have. And they clued me into the fact that compared to an independent, like a mom and pop business versus a franchise, they tend to not have any great systems. They're working very hard on their own, generally all by themselves, and they don't answer the phone. They get to the phone when they can. So these sales centers, that's what I'll call them, right? These sales centers are genius ideas to make sure that somebody's answering a phone, booking an appointment for an estimate or whatever job it might be. that's very impressive and a heck of a tremendous benefit for franchisees.
Andrew 00:27:12 Lance, we're going to use you in our next promo because I couldn't set it any better.
Lance 00:27:17 Well, I'm glad you liked it. So, moving on, let's talk about the money. Tom Cruise used to always say, right, in that movie, show me the money. So when people come through the process myself, being a franchise broker and a franchisee in the past, multiple times, there are people that are pioneers that get involved in brands. Like I was with Wingstop in the early days when their item 19, their earnings claim in their franchise disclosure document was not so great. And if you waited for all of the brands in the universe to have an amazing item 19, there probably wouldn't be territory left. So you got to basically be able to take a look and understand based on the leadership, team and a lot of other factors. But I want to hear it from you. I know most, if not all of your brands have a very nice item 19. But how do you help people through that process across five star brands?
Andrew 00:28:16 Absolutely. We talked about it briefly a little earlier, but at the end of the day, the process of validation, is, I think, the critical component in gathering, additional financial data that a buyer looking at a brand really needs to have. And so if you're not doing that proper validation and really digging in and asking, an owner to share their financials with you and go through kind of the whys behind how they got there and what some of those challenges were in order to build your own performa is super critical. We obviously place a lot of value on trying to create the most informative item 19, because I think it is so imperative to provide as much as you can to help, a candidate make a decision. But, sometimes, as you said, there's examples where you just don't have the data available.and so you've got to redirect a candidate to, uh, your existing owners out there and have them share their information. But I think just generally, doing the right due diligence is extremely important. And for any of your viewers, if they're exploring franchising and they're thinking it's something they want to do, spend the time on the financial piece of it, not just to validate what you believe is happening at the brand, but what you need to get out of the business. Because everyone's unique in what their needs are and what they're trying. Some are trying to just replace income, replace the salary. Some are trying to create a wealth mechanism for themselves or their family. And so everybody's a little bit different. But knowing that, and I cannot stress this enough, do the due diligence on the numbers of the brand independently. Go through it. Go to as many of your top performing brand owners. Again, no reason to go to the bottom. Why bother with the bottom? I heard that somewhere before. Go to the top performers, listen to what they've done, what they've been able to accomplish, and see how that's backed up by their numbers. And then build your performer from there.
Lance 00:30:33 Yeah, I once, was talking to a friend of mine about what you're describing with validation. Every once in a while, I have candidates that say, I want to talk to some of the poor performers to find out what's really going on. And I said, look, if you want to be the best in the Olympics, do you talk to the people that are unsuccessful, that have never won a medal?
Andrew 00:30:58 No.
Lance 00:30:59 You want to talk to the people that won medals. You want to talk to gold medal holders and find out what are their secrets to success. And the question really then becomes, can you do that? You don't have to win a gold medal.
Andrew 00:31:13 Absolutely.
Lance 00:31:14 But can you be at least an average franchisee? And I do ask that question of people, andrew, are you going. To be average. Are you used to being average your whole life? No, Lance, I'm used to being a little above average. Okay. If that's what your answer is, great. That's probably where you can expect to be as a franchisee when all things settle out. Maybe you'll surprise yourself and you'll be in the top 25%.
Andrew 00:31:41 Very true.
Lance 00:31:42 Yeah. don't talk to the bottom performers. So let's talk about purchasing and your vendor relationships that you have. Talk about the benefits that new franchisees have from your network.
Andrew 00:31:57 Yes, so great question there, we have placed a very high value on, finding ways to drive down the operating cost of our franchise. Really, really important to us at the platform level at Five Star to find ways to get there. And so we've actually created Apartment. Ah, and I think the value proposition really comes down to how do we find great supplier vendor partners that, number one, owners can have access to that they might not have ever had access to as an independent business owner. Two, can we negotiate on their behalf? With now, north of about 750 locations across our six brands, we've got buying power, uh, to drive down the cost, uh, and negotiate some of the best contracts on their behalf. And then finally, the trifecta comes down to creating, a rebate program whereby the owners can share in the rebate, by the volume of purchases happening. And so five, Star has done exactly that, and we built that department. we're scaling, anywhere from ten to twelve new vendors every two or three months, that are either broadly across all of the brands or specific to a single brand and so we're very proud of what we're doing there. And ultimately, our, franchise owners are very appreciative of that focus of the platform company to really be concerned around what does it cost me to get a job done and how can I drive that cost down?
Lance 00:33:42 Yeah, sounds like you're on it. So, impressive stuff here. So what have we not covered? Share your, u final thoughts, final words of wisdom for those listening, however you want to sum it all up. I mean, we covered a lot of good information so far.
Andrew 00:33:59 Yeah, I would say, I think for your listeners, one of the most important things is that, there is this fit on both sides. And while you are interviewing us, we are interviewing you. And, it's important to arrive at that good fit, and many people never thought of the brands they end up buying.
Lance 00:34:23 So, Andrew, you certainly dropped a lot of great information on us and the listeners, I should say. And, final thoughts for today, final words of wisdom, let's call it your final tips, for that matter.
Andrew 00:34:36 Absolutely, Lance. Number one, it's been an absolute pleasure speaking, with you. Always, always enjoy listening to your show. and, joy to be with you today. so with that kind of final words of wisdom is just do the work. Do the hard work as a candidate. Really look hard at everything. Be open. Trust your consultant, your broker, your coach, whomever you are working with. Trust them as they guide you. And open your mind up to these opportunities that are out there. Don't, uh, be too closed off with it, because you'll be very surprised where you end up. Ultimately, when it comes to the fit of the brand. The last part is really going back to the hard work. Do the due diligence, do the validation calls. Look hard at the item 19. Build your performance. Really take the time to make sure this particular brand, this decision you're making, is what you're looking for as far as this next step in your life. and it's very critical. So put the time in, work your timeline. Trust the process that the developer is taking you through, but at the same time, make sure you're digging in deep and digging in hard, uh, and doing the work you need to do to make that decision. And as a franchisor of many, many brands, as much as we hate to hear, no, we understand it, and we're okay with that, no, is actually an okay word in our business. It really is, because it's not the right fit. And we want to be partnered with folks that want to be with our brands and see what we have built and where we're headed and what the vision is for that brand. We want people driving forward with our brands. And so, again, do the hard work. And in the end, most amazing part of franchising is the rewards at the end of that journey.
Lance 00:36:34 Absolutely. Hallelujah. And guess what? Franchising is a team sport. So don't do this all on your own. Find a franchise broker consultant like myself, and we can help you through this process. So, Andrew, thank you so much for being here. Five star franchising, lots of amazing brands and even more brands. Great brands to come. Thanks for being here.
Andrew 00:37:01 Thank you, Lance.
Lance 00:37:03 My pleasure. Thank you very much for listening today. Please, like, follow and subscribe. This is Lance Growlick. Until next time. thank you very much for listening today. Please, like follow and subscribe. This is Lance Graulich. Until next time.