In this engaging podcast episode, we welcome back Dennis Schooley, the founder of Schooley Mitchell. We discuss the intricacies of selecting the right franchise and caution against choosing a business solely based on expertise. We emphasize the importance of evaluating return on investment, financial viability, and long-term goals. We also stress the need to avoid selecting a franchise solely based on personal interests or passions. Instead, a combination of emotions and logic should guide franchise decisions. Tune in to learn more about the transferability of skills, the benefits of owning a franchise, and the innovative Abatement program for royalties offered by Schooley Mitchell. Don't miss this captivating episode! - Choosing the right franchise: Return on investment, financial viability, and long-term goals - Transferring skills across fields: Schooley Mitchell as an example - Work ethic and commitment in running a franchise: 80-20 rule - Cost reduction consulting franchise: Expertise in 15 categories - Different franchise models: Builder and Developer options - Benefits of owning a franchise: Building an empire, equity, recession-proofing - Impact of recession and beliefs on business dynamics - Training and support for franchisees: Lifelong learning, selection process - Marketing strategies: Referrals, networking, paid systems - Abatement program for royalties: Emotion and logic in franchise decisions --- 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 engaging podcast episode, we welcome back Dennis Schooley, the founder of Schooley Mitchell. We discuss the intricacies of selecting the right franchise and caution against choosing a business solely based on expertise. We emphasize the importance of evaluating return on investment, financial viability, and long-term goals. We also stress the need to avoid selecting a franchise solely based on personal interests or passions. Instead, a combination of emotions and logic should guide franchise decisions. Tune in to learn more about the transferability of skills, the benefits of owning a franchise, and the innovative Abatement program for royalties offered by Schooley Mitchell. Don't miss this captivating episode!
- Choosing the right franchise: Return on investment, financial viability, and long-term goals
- Transferring skills across fields: Schooley Mitchell as an example
- Work ethic and commitment in running a franchise: 80-20 rule
- Cost reduction consulting franchise: Expertise in 15 categories
- Different franchise models: Builder and Developer options
- Benefits of owning a franchise: Building an empire, equity, recession-proofing
- Impact of recession and beliefs on business dynamics
- Training and support for franchisees: Lifelong learning, selection process
- Marketing strategies: Referrals, networking, paid systems
- Abatement program for royalties: Emotion and logic in franchise decisions
---
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 00:00:07 Hello, everyone, and welcome back to another fabulous episode of Eye on Franchising. I'm your host, as you already know, I hope. Lance Graulich. And today we have a repeat offender. No, not necessarily an offender, a repeat engagement with my good friend, the founder of Schooley Mitchell, the amazing cost reduction franchise. It's on my favorites so Schooley Mitchell, Dennis Schooley, welcome to the show for round two.
Dennis 00:00:36 Well, thanks for having me a second time, Lance. Most people would throw me out after one time, but, here we are.
Lance 00:00:42 Nope. I like you that a lot. We have a lot of new stuff to talk about, which is a good lesson. I get a lot of people that ask me on a regular basis, how do I know how to pick a franchise? So I want you to answer that question for those listening. How do you know what is, the right franchise for?
Dennis 00:01:04 You know, there's no perfect answer to that, of course, Lance. But, what I would caution against is people thinking that whatever they're good at already should be the business that they enter. That's a big mistake. Sometimes if I can cook, that doesn't mean I should get into a restaurant. If I, am a fashionable person, doesn't mean I should get into a lady's shop or a men's shop franchise. That's a mistake. You need to look at the return on investment, the investment you're going to make. Can you finance that properly? Is it going to make you uncomfortable? Is it a business you would enjoy? For sure. But does it have a financial return? And is it reachable in the future that you need? Meaning near or long term? I think those things are much more important. Of course, you've got to look at the culture of the franchise and all those things that go into making a good decision. The biggest mistake of people get into a sports business because they're a good athlete. That is the biggest mistake. Because sometimes the model isn't very good. And all of a sudden, not only you get into a bad business, you actually lose the passion for the thing that you had passion about in the first place because it becomes a pain to you. So I would caution against that. And really, there's always a combination of emotion and logic to making the right decision. And, you really have to engage both those things and then set out a path for yourself and do it logically. But just don't get involved with something just because you're good at it.
Lance 00:02:25 Yeah. And it seems that years ago, people would follow their passion. So if they were a good cook and enjoyed it and slaved away working at a restaurant for, uh, so many years, they'd go looking for a restaurant business because logically, they think, well, that's all I'm good at. Now, I tell people all the time that your skills and you know this, of course. Um, your skills, whatever they are, are transferable. And it doesn't mean that you have to be a plumber to own a plumbing business. You might be a great communicator. You might have leadership skills. You're used to managing employees and things like that. So tell us with schooly, Mitchell. Schooley Mitchell is an amazing franchise. You have franchisees that are netting over a million dollars a year on a $68,000 investment. There are multiple people that have exited. Everybody listening. Is my microphone working? There, uh, are multiple people that have exited Schoolie Mitchell for well in the millions of dollars on a $68,000 investment. However, you and I both know, Dennis, that not everybody is a fit for Schoolie Mitchell.
Dennis 00:03:38 Not at all.
Lance 00:03:39 So who is a fit for Schoolie Mitchell and who is not?
Dennis 00:03:43 Well, the first test, and there's really two simple tests for this one is we need someone that's comfortable talking to other business people. If you're not comfortable in that environment, if you've never had a, business discussion and you've had a career that has been a great career, but it's not involved in the business world, you have to make sure that you're going to be comfortable in that world because that's what it takes. You've got to be talking to the business owners or the controllers in smaller businesses, or the CFOs or the CEOs in larger businesses and be comfortable having a conversation to explain what we do. I mean, explaining what we do isn't that difficult, but you've got to be comfortable and relate to them. And if you can't do that, then you really shouldn't be considering a professional franchise like us, because that's what we are. We're very much like, and I always make this comparison to an accountant or a lawyer. We don't do tax or law, but we're advising businesses. And so if someone's comfortable talking in the business world, that's who we're looking for. So that generally involves executives and management, sales and marketing consulting type people. That's who it's going to be. Then the second test, are you willing to work? Just a regular work week, 35 hours a week. As long as you're willing to commit to that in our normal franchise, then you're going to be successful. And that's really all it takes. We're going to give you the rest.
Lance 00:04:59 Dennis, I'm laughing because you said, and I quote, we need people that are willing to work. It boggles my mind that there are people that do get into a franchise that don't ever work, don't ever follow the system. They hand somebody the keys and they let them run.
Dennis 00:05:22 It's the silliest thing, and I always talk about this, that, ah, the model is 2060 20. In a business like ours, where 20%, they kill it. That's the pareto rule, the 80 20 rule. The 20%, they kill it. 60% are more lifestyle driven, and that's just fine. They want to make 100 grand, 150 grand, whatever that is and they stay there. But then 20% are what you just said, they think it's going to be an automatic fill my pockets thing. It's not. Now, the work plan is fairly straightforward and you don't have to work 80 hours a week. It's just a matter of you got to commit to it and you got to realize there's going to be yeses and there's going to be no's along the way. And if you can figure all that out, man, you can change your life in our business, but nobody's going to call your house and ask for cost reduction consulting. That's the point.
Lance 00:06:08 Yeah, exactly. So now let's share what exactly for those listening that are probably googling Schooley Mitchell right now, what is Schooley Mitchell? Give me your description of what this franchise is all about and then we're going to dive into some of the new things you got going on.
Dennis 00:06:25 Yeah, and the name doesn't really indicate what we do. It's like a professional firm, an accounting firm, a law firm, something like that. They're just names of myself and another person that was a founder in the beginning schoolie Mitchell. Like price waterhouse. That's what it is. So what we are is we're a cost reduction consulting company. We help businesses. Now we don't deal in the residential world. We help businesses or charities or churches, things like that. Anybody that's an organization like that, we help them reduce their costs. And I'm not talking about the cost of their labor or their steel or those main inputs that they manage very well as a business. I'm talking about all those other things below that gross margin line that are costing them dollars and nickels and dimes and tens dollars over and over again. And we always talk about it as death by 1000 cuts. It's something you don't pay a lot of attention to, but it's making you bleed and those blood drops are accumulating at the bottom. And so we help people fix that because we've got great experience in 15 different cost categories where not only do we help them reduce those costs, we don't charge them a fee to do the analysis. To do that, we only share in the results. So if we don't find results for our clients, we're not going to charge them a nickel. So that's really, in a nutshell, what we do here at Schoolie Mitchell.
Lance 00:07:39 Yeah. And look, I know your story and this business truly came about because you realized as a CPA professional guy yourself that your clients might feel they can have the revenue improvements or sales promotions all handled. But when it came to looking at their PNL, everybody always wants to make more profit. But nobody that you seem to know was doing a great job at protecting their bottom line through, I guess, bidding on the expense categories on a more regular basis. I mean, that's your secret sauce.
Dennis 00:08:17 And knowing how to do it too. Lance I mean, that's part of it as well. I mean, ourselves, we were our first client for ourselves, and we realized we were paying 30% more than we should for our telecom costs because we didn't know how to look at it properly. And that's when we found out just what you said we found out. All of our clients were sort of in the same boat, and that's kind of how it started. But looking at it properly, being able to summarize it into manageable reports, and then get to the best solution, that's what we do for our clients, so they don't have to bother with it.
Lance 00:08:45 So you started with what, three categories initially? Credit card processing, telecom, courier, small freight, possibly. Those were the first three years ago, right?
Dennis 00:08:55 Actually, we started with just telecom. That's all we did for that was it? Yeah. We added merchant services after that, and then courier, and then waste. And now we're up to 15 different categories. But for the first ten years, all we did was telecom. And that world in itself is huge in terms of the waste that's out there.
Lance 00:09:10 Yeah, I can imagine some of your oldest franchisees with the additional revenue streams are so happy because all this is is incremental revenue going back to their client base and just saying, hey, by the way, let me check this out now, too.
Dennis 00:09:24 Of course, because you've got trust with that client, because you've already helped them in that original area. Or one or two of those original areas. And now the trust is there, so it's easy to look at the rest.
Lance 00:09:34 So let's talk about, the candidates or the actual candidates, what we call somebody before they're a franchisee. So the candidates you've been talking to for years, since I've known you, you were always looking for somebody that was full time, dedicating their full time to the business. And then recently you came up with really two additional methods or modes of your business for somebody that maybe wants to only start part time. And then you added a developer type model where somebody owns a huge market for Schooley. Mitchell so talk about both of those.
Dennis 00:10:12 Okay. And you're right. Up until even just about twelve months ago, all we had was our full time model. And we knew that if anybody was willing to commit a regular work week, I mean, 35 hours a week, they're going to succeed in our business if they just keep doing it. And that was our model. But then we did run into several people that they wanted to start to build that professional business, and they didn't want to pull the trigger on their job. Maybe their spouse wouldn't let them, or they needed the health insurance, or they just simply needed the income flow or more confidence. And so we developed what we call the builder franchise. And it allows someone to start on a part time basis, maintain their job, and work at the business on a little bit slower level. Now, we do say if you don't have five to 10 hours available during normal business hours, then you shouldn't do it because this is not a business you're going to operate at night and on weekends. It's not a hobby type business. It's a business business. So as long as somebody's got some flexibility in their schedule, then they can start to build that business. It's going to build slower because you're not spending 35 hours, you're spending 8 hours. But if you can get a client a month or two a month instead of a client a week, maybe after six months or two years or whatever that time frame is, you look at it and you say, okay, I've got enough confidence now. I can pull the trigger, and I can be full time because I got a revenue flow. So that builder franchise is aimed at those types of people. So that's the first one.
Lance 00:11:30 And the builder franchise is a different investment, technically, than the full time model.
Dennis 00:11:37 It's the same amount, although we finance a portion of it. Our franchise fee is 68,000 right now, and that's the full time franchise. It is the same for the builder, but it's only 44 up front and then 1000 a month for 24 months with no interest. So it's still 68. It's just over time.
Lance 00:11:55 Yeah. You made it so palatable. For the average person that essentially is stuck at a job where their spouse is saying, honey, please don't quit yet. Let's build some incremental, sort of reserves that maybe we didn't have. And I call it the bridge scenario. Build your bridge so you can cross over from two to full time boss.
Dennis 00:12:22 That's exactly right. And we know there's people in that situation that still have that desire to build that future asset, to build that independence, that autonomy, and yet just can't pull the trigger. So the builder is for that person that wants to start that on a slower level. Great.
Lance 00:12:38 Now the developer the other side of the equation.
Dennis 00:12:41 Yeah. Now we know we've had people that approach us, and how can I build a really big business? Now, like you said, we've got people that make seven figures with a franchise. And beyond that but one thing that's unique about our business is we allow anybody that has a franchise to get clients anywhere they want, however, they are restricted in terms of where they can hire people. So if I've got a franchise in Dallas, I can hire as many people as I want in the entire Dallas Fort Worth area, but I can't go hire people in Denver, Detroit, or Toronto. So we've built this developer model so that anybody that wants to build a big business and hire people to manage individual locations, they can do ten at once. And so we're allowing them to designate ten cities of their choice, and then they can build business in those ten cities, even though any one of those ten can also get clients anywhere else. They're going to focus, of course, in the cities that they're centered in, and naturally, they're going to pick, the bigger cities. But that's fine with us because there's so much business out there. So we've got that part time option, we've got the regular option, and then we've got the developer where someone really wants to build something significant. Now, the franchise fee on that is 250,000. So it is a bigger bite, but it allows you to build a multimillion dollar business if you're able to manage those managers, I was going to say.
Lance 00:13:59 And now do that through people, which is when people hear about growing and scaling, nobody really builds an empire. Although let me be careful in what I say, because you're the Rarity, because, people have built an empire with ah, Schooley Mitchell years ago, working by themselves. And then as they build that empire, they then add team members to it to continue to expand on their empire. In this case, it seems like you're now giving people the opportunity to build that empire that much quicker through other, right?
Dennis 00:14:33 That's right. And you're right. We do have a leverage model right within our model because our franchisees the one out there building the relationships, getting the clients, presenting the reports, but we're the ones doing all the nitty gritty work, all going through those bills and the analysis and all that stuff that takes all the time. That doesn't have to be done by the franchisees. So you're right. Somebody can build an empire just working on their own, but this one just allows them to multiply. That empire is what it is.
Lance 00:14:59 Yeah. A lot of people today, you look all over social media, you don't want to just buy a job. You're buying a job. Well, first of all, a job doesn't have an equity component, right? Normally speaking, 99% of the time. So when you buy a franchise, even when you're working by yourself, the traditional or original famous, Schooley Mitchell model, if you will, you still have the ability to build a tremendous amount of equity. But I love what you've added here with the other two components. it's pretty exciting. Let's talk about, my favorite question I get every single day, literally every day, Lance, I don't know what's going on with the economy the world is going crazy. Our country is going crazy. I don't want a business that's a want. I want a business that's a need. I want something that's recession proof. Talk about that. For those listening that maybe didn't hear it yet on what you do, you're in a perfect position in any economy because you're saving people money on their bottom line.
Dennis 00:16:06 We are. And we don't charge money to go in the door to do it. So there is no resistor at all in a recessionary, period. Lance I can't tell you how many times a business will tell me they're recession proof and they're really not. Unless it's essential goods or services, then it's not recession proof. Doesn't mean it's a bad business. It's just recession takes disposable dollars away from the economy and there's just no money to buy what they sell. So, not their fault. It's just the way it is. But with us, like you said, what we're doing is the opposite of that. We're helping companies cut costs when revenues can't be increased in a bad economic time. And we don't charge money to do it. We only share in the results. So we are 100% elastic to economic conditions. And so that's really the difference. And if you think about what would be the perfect model in a recession, well, it would be a cost reduction type business, or it would be one that's based on a contingency model. Well, we're both of those things, so we kind of address that. But the overall subject of recession is kind of intriguing to me and interesting to me too. You've got that whole, group dynamic and the personal beliefs and how those beliefs and those fears and those anxieties actually multiply the effect and make that a self fulfilling prophecy, the recession. And then you hear somebody else that's anxious and it's that confirmation bias that makes them buy into it even more, which makes that whole scenario worse. So we're more on the positive side. We don't want to buy into that stuff. We want to talk about success during bad economic times. And, you know, people that actually can sit back, take that emotion out of it, where I'm, not being driven by what everybody else is saying, by what it looks like is happening, and just stand back and say, I'm going to act when nobody else is acting. Those are the ones that end up being the big winners. So it's a different reaction in a bad time.
Lance 00:17:57 Yeah. And I don't know if we mentioned it. You have that residual. You mentioned all the great attributes of the brand and, uh, the old, what's in it for me? For franchisees. But they're getting, what is it? Three years worth of residuals on whatever is saved in the business. Right? you'll say it better than me.
Dennis 00:18:19 Yeah. Well, that's how we actually make our money. Meaning our franchisee, they will do all the work with no fee to the client, so there's no risk to the client. But when they create results for the client, then they're going to share in that 50 50 for a 36 month period. Now, they also in part of what we do at our head office is we continue to analyze that client's records throughout the whole three year period, too. So it's not only just a one and done and I share in that we're actually going to find some more savings later on because things change. Maybe the client does things differently, or maybe the marketplace is different, or maybe special of the month comes up. Well, we're on top of all that, and we bring that to our clients. So it ends up being a perpetual, residual flow, so to speak, if you treat the clients properly.
Lance 00:19:03 Yeah. I love it. So let's talk a little bit about training. What does the training entail? I mean, the baseline for training for all these years is the traditional model. Now you have the part timer and then you have the developer. How has any of that changed?
Dennis 00:19:18 The training won't change. I mean, we offer the same training no matter which of the three models that you choose. And, the one thing I'll say is we do have a real commitment to lifelong learning here. So our initial training class, and we have one every month, is six days Monday through Friday, and a couple of half days the next week. That gets a person in business, and they're able to get clients the very next week, so there's no dilly dallying around. But that's not the end of their training. Every franchisee is assigned a one on one coach, so they will be able to work with that one on one coach and continue to get advice and training. We've got an entire distance learning system within our intranet that we call the Warehouse. We have monthly webinars with all of our franchisees. We have an annual conference. So all of these things really go into making sure nobody's left on their own and lacking for training and continued education. So we're really committed to that here at school eventually.
Lance 00:20:13 So, Dennis, if you're going to look at your ten most successful franchisees, 20 most successful franchisees, did they all have some sort of sales background? Or did somebody just happen to have the willingness to follow, the system and have the skills that they became? Great.
Dennis 00:20:32 That's all it is. Lens now, some of them do. But no, it's not all people like that. It's people that are willing to work that 35, 40 hours a week and do the things that we do. And there's a lot of different choices there. It's not, a quarter ounce of mustard in every burger kind of franchise. There's a lot of autonomy here in how you do it. But there are systems to follow the people that commit the time, meaning a regular work week, and continue to do the things in the system. Those are the ones that are at the top, and they're all kinds of different people. We've got accountants there, we've got, a doctor there. We've got sales and executive people there. They're all kinds of different backgrounds. It's about the commitment to the business. That's it.
Lance 00:21:13 Yeah. No, I love it. So let's talk a little further about, uh, overall support. You mentioned that a coach is assigned. Well, let's take it a step back. Let's talk about the actual selection process. At what point do you get involved? I mean, a broker like myself can refer people all day and then all of a sudden there's a phone call. I call it the coffee date. You get to know each other, the one on one. how's this person that Lance just sent us. So take us through the process a little.
Dennis 00:21:45 We've and you know this yourself because you've gone through it with us before, but we've got a really highly developed step by step process with a number of steps, a number of conversations, a number of presentations, discovery, day that's virtual. All those things are part of the process. And it's all about us being able to evaluate the candidate to make sure it's a good fit. And of course, for them to be able to evaluate us and understand that we're the right business for them and that they're going to get the support and the tools and everything that they need. So that process has a lot of steps. We send people regular emails, little snippets each day to help fill in a little bit, tell the story. We have a number of conversations. We've got a team of people here. First of all, the first team will talk to them in that initial conversation, make sure they give them that 30,000 foot view, a little bit of information, more just to say, are you interested to learn more? And if so, then our next team takes them and there's four of us. I'm one of those people. Um, and we just talk to those candidates at every step that they need to have a conversation. We answer all their questions, we give them this information. Of course, we provide all the important documents as we go along as well. And it's real step by step system until we all get to that point where, yeah, we want to do this or no we don't. And we just ask for people to be honest, that's all.
Lance 00:23:01 Yeah. And I tell people at that point, as you get further with a brand, you should feel like you belong at this brand. And it's hard to pull away. It gets pretty magnetic towards the end. Let's talk a little bit about marketing. Everybody that gets into a franchise always asks, well, how do they help me? Bring me customers or find me customers? Well, obviously in your world it's b to b. So you teach them where to fish, right?
Dennis 00:23:27 We do. And it's not where we're going to go land all the customers and put them into their basket. It's not going to happen that way because a lot of our business is through referrals. Now we've got really strong executable strategies related to that referrals from clients. And the clients can refer us quite easily because nobody is a cost reduction consultant and we don't charge money so they can refer us to their neighbors and their vendors and their customers and the people they network with. But then we have paid referral systems and we've got referrals with other professional people and we've got networking strategies. So it's more that than us going to put on 75 Facebook ads, and it's going to bring you a whole bunch of clients. That's just not going to work in our world anyway. Nobody knows what a cost reduction consultant is, so it's much more of a ground level executable system. But our training and our support is very good. It's just the individual has to do that.
Lance 00:24:19 Yeah. I love it. So, a lot of great stuff. Schooley Mitchell is moving and shaking. You still have an Abatement program for royalties, so anybody that joins doesn't have to pay royalties for the first you.
Dennis 00:24:35 Know, we started that at the beginning of the Pandemic Lance, and we just thought it was a good thing to do for our new people to just try to get know in a bad time and keep some positivity and show that we're willing to work along with them. But we found that it worked so well and helped people that we just keep extending it and we've just extended it further into,, at the end of March of 24, we're still going to keep doing it because we just think it's a way to help new people.
Lance 00:25:00 I love it. No, that's absolutely fantastic. So, Dennis, as usual, you shared tons of great information. Final thoughts, tips, words of wisdom from Mr. Dennis Schooley.
Dennis 00:25:11 I don't know if I have any wisdom here, but I guess the critical thing is for, and I said it sort of earlier, too, is for a franchisee to use both their emotion, because it should be a business they can see themselves in. They can picture a future there. They can picture what they're going to get out of it, and they can see emotional attachment, but also logic. in the book called Switch, written by Chip and Dan Heath, they call it the elephant and the rider. Well, you have to engage both. You have to know that you can build the future you want. That's an emotional thing. But you've got to know the bricks are there that you can follow step by step to get there. And if somebody does that right, that's who we're looking for. And that's the advice I would give to somebody else. Make sure you engage both. Don't let emotions overrun your logic. And also don't let logic drive you into what we all call analysis paralysis. Right? We don't want that either. So you need to engage both of those things.
Lance 00:26:03 I always tell people, don't get stuck. And that analysis paralysis puts you there. So, Mr. Dennis Schooley, my friend, thank you so much for being here. Dennis Schooley.
Dennis 00:26:14 Mitchell thanks, Lance. Very happy to be here and very grateful. For you to have me.
Lance 00:26:19 Always my pleasure to have you. Have, a great day.
Dennis 00:26:23 You, too.