It’s often the details that separate professionals from the amateurs. The same can be said of highly successful entrepreneurs and the average business owner. Where the average business owner focuses on coming up with products to cater to current industry trends, the successful entrepreneur is busy polishing his/her products to address current demands and create future demands. That’s exactly how The Grounds Guys stay on top of the game! Today, we’ve got John Dobelbower and Josh Sevick tell us secrets to providing year-round services through multiple revenue streams! Josh Sevick was named president of The Grounds Guys, a full-service grounds care company offering commercial and residential landscape management services, in July 2019. In this role, he is responsible for the overall leadership and growth of The Grounds Guys throughout the US and Canada. Josh has more than 20 years of business experience in both large and small organizations. John is the Director of Franchise Development at Neighborly for The Grounds Guys. He works with families all around the country who see entrepreneurship as way to take control of their futures, achieve their goals, build teams, and have a healthier work/life balance! Together, they bring to light what makes The Grounds Guys a leading brand in their industry. They believe in the value of C.A.R.E. (Customers First • Attitude • Respect • Enjoy life in the process). By leveraging powerful systems that cater to these values, they are able to manage even the smallest details to ensure top quality service is rendered for their clients. Moreover, the same systems allow them to provide a variety of services for any and all seasons without jeopardizing quality. What kind of services do they offer? How can a single franchise offer so many services that provide year-round revenue streams for franchisees? What systems do they use to maintain high-quality standards? Tune in to our Podcast to learn more about everything you WANT and NEED on franchising, investment, financing processes and options. This is Eye On Franchising, where we share our vision for your franchise future. https://www.facebook.com/lance.graulich https://ionfranchising.com/
It’s often the details that separate professionals from the amateurs.
The same can be said of highly successful entrepreneurs and the average business owner.
Where the average business owner focuses on coming up with products to cater to current industry trends, the successful entrepreneur is busy polishing his/her products to address current demands and create future demands.
That’s exactly how The Grounds Guys stay on top of the game!
Today, we’ve got John Dobelbower and Josh Sevick tell us secrets to providing year-round services through multiple revenue streams!
Josh Sevick was named president of The Grounds Guys, a full-service grounds care company offering commercial and residential landscape management services, in July 2019. In this role, he is responsible for the overall leadership and growth of The Grounds Guys throughout the US and Canada. Josh has more than 20 years of business experience in both large and small organizations.
John is the Director of Franchise Development at Neighborly for The Grounds Guys. He works with families all around the country who see entrepreneurship as way to take control of their futures, achieve their goals, build teams, and have a healthier work/life balance!
Together, they bring to light what makes The Grounds Guys a leading brand in their industry.
They believe in the value of C.A.R.E. (Customers First • Attitude • Respect • Enjoy life in the process). By leveraging powerful systems that cater to these values, they are able to manage even the smallest details to ensure top quality service is rendered for their clients. Moreover, the same systems allow them to provide a variety of services for any and all seasons without jeopardizing quality.
What kind of services do they offer? How can a single franchise offer so many services that provide year-round revenue streams for franchisees? What systems do they use to maintain high-quality standards?
Tune in to our Podcast to learn more about everything you WANT and NEED on franchising, investment, financing processes and options.
This is Eye On Franchising, where we share our vision for your franchise future.
https://www.facebook.com/lance.graulich
[00:00:00] LANCE: 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, skillset 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, franchise owners 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 [00:01:00] learn the A to Z of franchising
[00:01:06] Hello everyone. And welcome back to another great episode of Eye on franchising. I am your host, Lance Graulich. So today the first individual I'd like to introduce, He's been in the home services business. He's been in the commodities business. Think pork bellies. Now we'll talk about that later. Uh, financial services business, he's been there as an owner, and today he is director of franchise development for the grounds guys.
[00:01:33] Welcome John Dopplebauer .
[00:01:35] JOHN: Thanks so much for having
[00:01:37] LANCE: well, I'm so happy that you spent some time with me this morning, or we'll be spending some time with me this morning next up he is the president El Presidente uh, 20 years of business experience. He's got an MBA from university of Pittsburgh, Pittsburgh, boo Steelers, uh, and he previously led a company all the way to 800 locations. [00:02:00] So this gentleman is Josh Sevick president of the grounds guys, a neighborly company. Welcome Josh
[00:02:08] JOSH: well, thanks, Lance really appreciate you having us here, even with the Steeler digs. And I'll tell you that my steelers are the worst team I've seen in a long time and they still made the playoffs. So we'll figure that one out, right?
[00:02:21] LANCE: You know what I give you all the credit in the world for that. Cause that is so true. So gentlemen, as you already know, by now, this is a show. It's everything. I have my eye on franchising, all about franchising. You have plenty of people listening that have plenty of business experience and maybe don't know much about franchising. And then we have the first time franchisees. So people always love to know. Everything about a brand and why they should invest in, in your particular brand. So before we get to the meat of that matter, uh let's, let's start with your background. Uh, John, give us a little, little additional, uh, sort of backstory. How [00:03:00] did you get into the franchise world?
[00:03:01] JOHN: Yeah. So it's actually pretty interesting. I'm somewhat of a serial entrepreneur. Lance. I've done all sorts of different things in the past started my first business. When I was in college, it was actually in the home service business. So we did a house painting and that's where things grew. Multiple locations ended up selling that business after college to go into the financial services world. Right. And I started at Northwestern mutual. And so I, I thought I was a financial planner. In reality, I was a life insurance salesman. Right, right, right. Tried to kind of figure it out that whole business, but. Yeah, no, of course, of course. So had some success there. They asked me to open a location here in Waco, which is where I'm from originally. So came back to Waco, started that location. Uh, one thing led to another one of my customers in the financial services business actually asked me to invest in this commodities business that you were talking about. It's Scrap metal recycling Lance uh, and so I [00:04:00] ended up investing in that business, grew that business quite a bit, ended up having really high revenue, uh, and that sort of thing. So everything was kind of rolling. Right. But I found myself working, you know, 90, a hundred hour weeks, and I had a one-year-old daughter at the time, stayed home why she said, Hey, this isn't going to work. And, uh, and I realized. Man. I don't have any systems in place for my family. And, uh, it was kind of a God thing, right. At that point, one of the neighborly people reach out to me and said, Hey, what do you think about franchising? And some just kind of clicked for me, Lance. Cause it was like, Hey, if I could put people on the path of entrepreneurship, uh, I can show them the way and the lifestyle that I've been able to enjoy and live, but I, they don't have to do the 9o 100 hour weeks. Right. And they can by have flexibility in the schedule, uh, that really resonated with me. So. I came over and the rest of the history.
[00:04:54] LANCE: I love it. I love it. That's a good, that's a great story. Perfect. Josh. Let's hear it.
[00:04:57] JOSH: Yeah. Well, I don't if know. The mines is [00:05:00] fun, but I didn't, I didn't start in franchising. I'll tell you that. I, um, I started my career in the late nineties and, uh, I was a financial analyst for one of the big banks and realized I really was into kind of the analytics and the finance side of the world. So I spent probably the next decade and, uh, in healthcare and technology companies, uh, focused on finance and analytics primarily. And, uh, it was, uh, I just happened into franchising. So I had started a small business, uh, working with entrepreneurs that, you know, had. Uh, generational companies that no longer were going to be generational because the next generation didn't want them and they needed a plan for, Hey, how do I monetize this? Right. We built this for, uh, for generations. And how do we monetize this through working with them? I ended up coming on board with a, a private equity group that focused on, uh, on franchising and. The first deal we did. We had acquired a small, uh, services organization about a hundred locations and [00:06:00] 50 of them were, were failing. Uh, we acquired that and during the, uh, during the transition. And we realized the management team wasn't fit to actually run the business. And so I was asked to just step in, I didn't know much about franchising. Right. Um, I knew McDonald's and a few other things, but, uh, so I stepped in yeah, exactly. I didn't leave. Right. I was there for six plus years. Uh, I ended up as the CEO of that company long-term and we took it from those a hundred locations and I grew up to about 800 locations and 17 countries, and ended up in 2019. We, um, we sold the business to, uh, one of the major insurance companies that needed a network for that service. And so it was a, it was certainly a wonderful experience in bride, but what I learned. In that process, just, you know, just happening to trip into franchising. What I learned is that I love it and I love it because it's one of those businesses and this is, uh, a general tagline you hear now, but it's so true with [00:07:00] franchising is, you know, you can do good or you can do well by doing good. And with franchising, it's about changing people's lives. It's about helping people achieve their goals. I want to become an entrepreneur. I want the independence. I want the ability to provide for other people, right. To be generous to. And these things don't happen on their own. If you look at their rates of entrepreneurial failures, they're not great, right. But then you look at them and juxtapose them to the franchising industry. And what an increase in probability of success is whenever you've got a partner, a good one. Not all franchise orders are created the same, uh, when you've got a good partner behind you, that's supporting you. That's, you know, um, helping you achieve success. It's powerful. And I am, I'm fully addicted to, um, just the fulfillment that I get in the franchising space. And I, I built a team, uh, right now that, um, that feels the same way. And so we are having fun, uh, and we're doing really well.
[00:07:59] LANCE: It's [00:08:00] always good to have fun. . You know, it's, it's interesting. You, you said you got to unpack some of what you said because that's a perfect place to start. You know, I I've, I've certainly failed in my first marriage. So personally, your personal life, like, like your business, you have to pick the. Partner and franchising is no different. So when it comes to what you said about some of the failures, the failing businesses that you inherited, let's start, let's start with that with you and John, from what you've seen in your lifetime, um, you know, why do businesses fail?
[00:08:33] JOSH: Yeah, that's a really, um, it's interesting because I've had. Uh, the luxury, the opportunity, and frankly, a disappointment sometimes to see this firsthand. And what I would tell you is this, and this isn't the bottom line. This is factual. This is my opinion. Right? Right. I've had the opportunity to sit over, you know, well, more than a thousand franchise owners to see them to see them starting their businesses, growing it rarely ever is it that [00:09:00] business owners aren't able to deliver a good service. That is so rare typically people that get into this, they want to deliver a good service they're in it because they enjoy that. Right. And it's, it's difficult to run a business, but I also see them doing pretty well at running a business, right. Uh, managing multiple teams and crews and managing customer expectations and billing and invoicing, all of this kind of stuff. I see them do. Well. The thing that kills, especially small businesses and absolutely startup business. Um, it's cashflow it's cash flow and financial management. That is the thing that kills them because usually by the time they figure out there's a problem it's too late. And so we focus so heavily on mapping out in the first year for our entrepreneurs. We don't want them over buying equipment, resources, staffing. We say, you know, conserve the cash. We'll tell you when it's time to expand. We'll tell you when it's time to buy [00:10:00] the additional equipment, the vehicles, et cetera, um, business is tough at, on its own, right? You don't need to make your own problems. And so, um, we're pretty paternalistic in that regard, right? We, we think, Hey, it's our responsibility to make sure that our new. Understand the impact of what they're doing and we have to have a plan for them to quickly get to profitability yet. John, how do you think about that?
[00:10:23] JOHN: No, I, I feel exactly the same way, Josh. I think ultimately it does boil down to cashflow, but, but I think overarching. How do I develop a system to manage not only the cashflow, but all the other things that go along with business ownership, you know, everyone says business ownerships, like running with the chicken, with your head, cut, checking with your head cut off. Right? So it's, it's one of these things. You're running 9 million different directions, all the mom and pops out there. Listen, these guys are. The accountant right there, the marketer, they're the head broom pusher. They're doing every single business, wearing every single hat. And I know, you know, the [00:11:00] startups that I've been involved with, right. I was no different. I was working all these different hours it's because I didn't have those systems in place. Well, listen, Josh, it's really easy to take your eye off of cashflow, right? It's really easy to take your eye off of. Responding to a review or any of these other sort of granular things that you need to do on a day-to-day basis to run an excellent business. It's hard to do when you're one person. Right. But the thing that's nice about franchising is when you have a system, when you have a support network and Lance neighborly has over 5,000 franchise. Right. 5,000 of your closest friends are going through the exact same thing. We have franchise business coaches. We have local marketing specialists. We have 130 people in our marketing department alone. Right? All these different people were there to support our owners to take some of those hats off of them so that they can focus on what they really need to focus on. Which is growing a significant, substantial [00:12:00] business.
[00:12:00] LANCE: Yeah. And I know having been in a business owner multiple times, myself, five times, I think capital is cash is certainly king, but it still never ceases to amaze me how there are people that just don't want. They finally get to business ownership and they kind of feel like they take a breath and, and they're good. Now they're their own boss. They can do what they want. They can hire their family and they forget to work and, and really follow through. So it's kind of crazy to me. And then of course, people hire the wrong people. I've never S I, you know, McDonald's certain franchisees you notice in consistencies, you walk into a store and say, It's just a corporate store or is this a franchise store? And I don't know what's better, but it's different. It's not the same. And, and, uh, so that inconsistency in some brands I see fairly often, but, uh, you know, I certainly have an ops background for sure. And I always pay attention. My wife can't stand that. I'm always looking at everything that's going on. So let's get to the good [00:13:00] stuff. Now, the grounds guys, let's talk about what is the grounds guys? What's the investment level? Who are you looking for? How many franchisees do you have now? All that good stuff.
[00:13:11] JOSH: That's great. John, why don't you, why don't you just kick us off and then I'll, uh, I'll come in and kind of clean up.
[00:13:16] JOHN: Yeah. Sure. So, so the grounds guys is actually part of a group of home service franchise brands called neighborly Lance. And you might be familiar with a couple of the other brands, so we own, uh, besides the grounds guys right? Yeah. Um, so, you know, besides the grounds guys, of course we own a plumbing franchise called Mr. Rooter plumber and a glass company called the glass doctor, Mr. Electric, Mr. Appliance, et cetera. Right. There's 29 different brands in total, uh, which makes. By far the world's largest home service franchisor last year
[00:13:48] LANCE: you guys do a couple of billion dollars a year, right?
[00:13:51] JOHN: Yeah. I was just about to say last year we did about 3.1 billion in business so we're, we're pretty big. Right. But more specifically for the grounds guys, the grounds guys is the [00:14:00] largest residential lawn minutes company in the United States, as well as. Uh, but we don't just do lawn maintenance. That's actually a small part of what we do. We're a full service landscaping company. And what I mean by that, right. We do things like weeding fertilization treatments, kind of like what you think about with TruGreen or the lawn doctor. That's their one service vertical. We have 26 different service verticals. Would you think that. Yeah. W we do things like hardscapes, irrigation systems, artificial turf, snow removal plants. We even put up Christmas lights in the winter, right? Like pretty much anything that takes place outside of the home or office. That's kind of where we live
[00:14:39] LANCE: yeah. And, you know, John, everybody today, even if they don't know if a franchise is right for them. And we'll talk about that point later, um, everybody's talking about multiple revenue streams. How many different revenue streams can you have? So I love that you're talking about.
[00:14:54] JOHN: Yeah. Well, and why do we have all those different strings lands? It's really to have a service for every single [00:15:00] season. Yes. Whether it's spring, summer, fall, or winter. What we know is that business owners need consistent cashflow really for two reasons. Right? Number one is the obvious you're going to want consistent cashflow as business owner. Right. Uh, but number two, you also want to retain top quality. It's going to be really hard to retain top quality people if you're having to lay them off at the end of every season. So yeah, I always start with that, Lance, because I think the biggest misconception about the grounds guys is that all we do is cut grass. We do it six to nine months out of the year. That really couldn't be further from the truth.
[00:15:31] LANCE: Love it.
[00:15:32] JOSH: That's great, John, good overview Lance. It's an interesting industry and I'll tell you how we got here. The grounds guys didn't just happen in terms of the space in the market that we've carved out. So landscaping, uh, right now just in the U S alone will exceed a hundred billion dollars in 2022. Um, so we're talking a massive industry and it's highly fragmented, so there's no concentration. So when we look at that industry, the largest [00:16:00] player by far is maybe 3% of that and they, and they don't even play anywhere near our space. Typically they, the other thing you see is there's about 500,000, um, businesses within the landscaping industry. And you've got this very, um, think of it as is bi-modal or you've always got these polar opposites, um, in terms of the, the players in our industry, you've got a couple really massive. Large commercial. They only focus on commercial business providers. And then you have hundreds of thousands of, you know, we, uh, we call them kind of chucking the trucks, uh, not disrespectfully, but that's our category for. Exactly. Exactly. So there's one or two man operations that are out there doing good work, right. And they're hitting maybe 30, 40, 50 lawns. Right. And they're doing that. And that's, that's what our industry is made up of it primarily. And so when we look at this industry, we say, Hey, there's a beautiful opportunity for us. And we think of [00:17:00] high-end residential and we think of local commercial. Those two markets look very similar. And so we don't want to ever uh, be providing services for someone that say needs their grass cut, because they just want to make sure they aren't getting, um, you know, notices from the community saying your assets do have, that is not our customer. We focus very much on folks that want to have the best looking lawn and landscape in the community. And whether that's a high end residential customer or whether that's a local commercial customer, that's our guy. And what we've done is we've carved out a niche that gives us long-term recurring relationships. Um, typically these things are four or five years long, um, with significant margins as well, uh, much higher industry margin than what we see in the industry at large.
[00:17:46] LANCE: So the investment for a franchise and how big is the territory? Let's talk about that
[00:17:53] JOSH: Do you wanna say something John
[00:17:53] JOHN: sure. So w if you go to our items down in our FTD Lance, it's going to say newer between 80 and [00:18:00] 200,000, right? Here's what I'll tell you. The vast majority of our owners come in with about $150,000, whether that's through an express SBA loan, or through ROVs program or cash or whatever. It doesn't matter. They'll come in with about one 50. That is enough to buy a new truck, new trailer, new mower, new equipment startup marketing, pay the franchise feed full the whole nine yards and still have about 50, 60,000 left and working capital to go out and really run and ramp up the business. Okay. So from an investment standpoint, it's pretty low. Uh, the franchise fee is obviously a subset of. It's a very low franchise fee. Uh, and because of that, Lance, we do get way more people applying for business ownership than we work franchises do so what we're really looking for are people that have a proven, successful track record, right? Someone that, uh, can understand how to run a business, whether they've done it or not. Right. But they have sort of those intrinsic traits. Those are the people that we look [00:19:00] for and ultimately who we award franchises to. So.
[00:19:03] LANCE: Got it. If you're going to look at your top franchisees, if I gave you guys a minute, although I don't have to, uh, but you know, if I gave you a minute to commiserate and compare notes, and you came up with the list of your top 10 franchisees, what do they all have in common?
[00:19:20] JOSH: Yeah, that's a great question. And we spend a lot of time looking at that Lance so it's pretty easy for us to answer those questions. Uh, number one. Uh, they're great, great people managers. So when we look at our top owners, we say all the time, Hey, like any business we think of this, this is a people business. So our top owners have adhered to the systems that we put in place. And we can talk about those at some point, if you'd like we have some very specific processes and systems that we have in place to manage people. And so they do a great job at managing people. Um, they manage the customer really well. Uh, when you look at the grounds guy, [00:20:00] Our net promoter score. So think of it as customer. Uh, our customer satisfaction rates are incredibly high. We're talking high eighties, meaning that we are higher than the brands you would think of Ritz Carlton. Uh, apple, uh, whoever it is that you think of as being, Hey, the gold standard, we have a hobby or a customer satisfactory net promoter score, then these brands, and it doesn't happen by chance. It happens because we're proactively targeting these types of behaviors. And so those are really, those are largely the things that we see, somebody that comes in. Uh, is diligent about focusing on what we're asking them to do in the business. You do not have to no landscaping to be a grounds guy, right? That's not what this thing is all about. Certainly a lot of our owners maybe have some experience or just really liked the idea of the space, but that's not what it's about. And I'd say the third thing is the owners that achieve really significant levels of sales and scaling of their organizations. Have [00:21:00] done a great job at building up leaders in their organization so that they can focus on the business and it didn't start that way. They were probably, you know, they were probably working in the business early on, right. Trying to sprint through that break even, you know, so that they're making money, but they've learned, Hey, how do I actually run a business? And that's what our coaches do. They take owners from day one and they groom them to become, you know, somewhat sophisticated businesses. People that are managing the financials, people that are looking at planning and long range planning, people that are saying, Hey, what are the specific activities that we're going to do this year to drive up our margins? Right. Things that, that take intentionality. Those are the things that we see our top owners do.
[00:21:46] LANCE: It's pretty amazing how, when, I mean, franchising just works and let's, let's dig in a little bit more. What if I was going to ask you those times? Owners those top 10 owners, where [00:22:00] did they come from? How old are they? What did they, what were their, what were their occupations or careers prior to joining the grounds guys as franchisees?
[00:22:08] JOSH: Yeah. Yeah. So we have in, in John, feel free to hop in at any point, but when I look at the top 10 ranked. Uh, we have a few that came in were existing, had small businesses, just like a lot of what we see in the industry. Couldn't quite figure out how to scale and came into the grounds guys. And we help them scale. Uh, we've got folks that were, um, you know, executives and organizations, things like John Deere, uh, head of engineering and things like that that have said, Hey, we're interested in actually running a business, building something for ourselves. Um, we've got that group, uh, in that top 10. And then we have people that literally came in, never having done anything in the landscaping industry, um, that have built businesses, have followed the practices and have learned how to manage people, how to manage process, uh, how to keep customers happy. Um, so in [00:23:00] our top 10, we have all of those segments.
[00:23:03] LANCE: Yeah, perfect. John. Anything to add to that?
[00:23:05] JOHN: Well, I would say this, I would, every single one of those owners has a servant's heart though. Right. And, and even previous to, uh, business ownership, we we've got a guy, Jeff Baker, for example, he's one of our franchisees Lance this guy. Uh, was in the military before, before he ended up transitioning into business ownership, he actually was a police officer. His wife was on him saying, Hey, this is a really dangerous occupation and we're not going to get to where we need to be financially. He took a huge leap of faith. This guy had no business background, had no landscaping background. Yeah. I was in law enforcement as a public service officer, but he brought that servant's mentality. So servant's heart. Right. And he was able to really grow significant business. There's a million of those stories, Lance and that's, that's what gets me going in the morning is seeing a guy go [00:24:00] from. Uh, a situation that maybe wasn't ideal right. For his life. And now he's, uh, invested not only back into himself and his family, but all of his employees as well. So
[00:24:12] LANCE: yeah, I love it. I absolutely love those stories. It's it's always amazing. It never ceases to amaze me as a broker and as a franchise, broker and consultant, I talk to people as like you guys do every day, uh, prospective franchisees. Some of them definitely come with very specific passions based on what their current career is and what they think they want to do with a franchise. And as you guys certainly know, but I want to share with the listeners, I explained to people, I said, most often I'm finding people, a franchise that has nothing to do with their current career. They're just working. Off of the talents or skills that they've developed in their current career. Like you said earlier, the people skills, communication skills, whatever. It might [00:25:00] be to be a great franchisee because at the end of the day, when people want financial freedom, they want that flexibility. And obviously most importantly, they do want a profit at the end of the day. So, you know, what is best for them. So let's also jump into. With the grounds guys, you can be a semi absentee owner. Let's talk about, you know, in the world of franchising, there are brands that do mandate. You would have to be an owner operator. You have to run this 40 hours a week. That is not necessarily certainly the case with the grounds guys or most of the neighborly brands last I've checked. So tell us a little bit about how. You launch as a semi absentee owner, or what percentage of successful owners launch and just hire a manager and, you know, tell me a little bit about that
[00:25:49] JOHN: but I do want to clarify one thing before we begin. So when we say semi-absentee, the emphasis is on semi and not on absency. Right. So [00:26:00] what I mean by that is listen to you. You have to have a finger on the pulse of your business on a day-to-day basis. You need to know and understand what's going on. You need to know your team, right. Does that mean that you need to be. You know, running the day-to-day operation of the business. No, I think about like this lens, you know, I think about the most well-known franchise out there. Right. We brought it up a couple of times. McDonald's wait. It's when's the last time you walked into a McDonald's you just saw the owner standing behind the counter doesn't happen ever. Right. So the same thing is true here. We're an executive level ownership. Right. Our business owners are tasked with running a business. They're not tasked with going out and being on the tools. They're not tasked with being the best landscape designers, right. It to go alongside that. Right. That's how semi absentee owners. Works with us because ultimately if they have the capacity to go and hire those right personnel, whether it's a general manager, landscape designer, whatever it is, if they have the [00:27:00] capacity to do that, there's nothing saying that they have to be there on a day to day basis. So I'd love to get Josh's take as well.
[00:27:06] JOSH: Yeah, no, you're, John's right on that. And John has really helped us to find some of these things as well. And what I'll tell you. Uh, with the grounds guys, we, we can't really profile, Hey, this is the background, or this is the previous experience that we want you to have, because exactly what we said, our top 10 is still with people from all over, all over everything. So what we've done is flip it to, Hey, here are the things that we want to see. Right? We want to see that you've had some achievement in the past. Right. We want to see that you have a desire to be in this industry, and we want to see that you really care about taking care of people. Um, because it's all about, we have a code of care that we operate on if the ground guys, and, uh, and I'll just, I'll say it for you here. It's the ground guys, the rounds guys, we show that we care by putting the needs of our customers first, by always having a [00:28:00] positive and helpful attitude. And by treating everyone and everything with. By living our of value values. We enjoy life in the process and that isn't window dressing. Our owners they're successful. They use that in their business. And at some point maybe we talk about how we start our day. Every owner starts their day. The same way with their people gets them centered and focused on serving the customer. Our owners are focused on serving their employees, right. And it's a, it's, it's a special circle that we have for us right now. I believe John can tell you the stats. I think maybe, um, the folks that reach out to us once we get everybody through the funnel, I, John, it's less than 5% of folks that would actually kind of clear kind of our approval process. Right. And it isn't always who you would think. Um, they're people that we think I want to be in this business will follow what we're asking them to do. We'll be diligent and have the right heart and we take care of the heavy lifting. So when you come into this business, [00:29:00] You come in with the best business management software in the industry, day one, the best landscape design software, the best financial software, the best talent acquisition software, the best market. We have these tools crafted. We've got an entire portfolio of this stuff, right? We're looking for the right people to plug in that will do the work. And it's not a no brainer right. This is tough stuff. And I always laugh when I hear people saying, just, just show up and you can print money. That's not it. This is business. Business is inherently tough. No matter what you do, we get you farther. We've got consultants that meet with you every couple of weeks, right? That are coaching you, helping you understand what's. I always kind of operate off of the perspective that there is no finish line business, right? It's, it's a game that lasts forever. And so you'll want to make sure that you've got people around you pushing you to always be better to focus. Doesn't mean you have to work harder or more hours, right? It means we have to work a little bit smarter. And I, and I heard Lance, [00:30:00] what you said earlier, uh, it amazes you sometime that people think at some point they get to the place where they put it in cruise control and just roll on. And the people that really get in trouble with that are those that haven't built an organization and sustain that has persistent past their day to day interaction. Right? Exactly time you can step away is when you build a business with all of the leaders in place and you put yourself out of a job, right. Trying to step away from a business that needs. Is his big trouble
[00:30:28] LANCE: absolutely. You know, both of you guys have mentioned so far, a lot of different things about, really about your culture. One of the things about franchising that's so many people don't realize is not only is it the amazing training and systems that you would get and coaches from the grounds guys, it's the existing franchisees. And the best practices that are in place, because, you know, normally in business, not being a franchise, you're going to have a hundred different questions, almost daily [00:31:00] about how should I do this and how should you know, whether it's marketing, purchasing, operations, whatever it might be, cleaning issues. You know, with your brand, having all of those great franchisees as resources as well. You know, everybody, everybody has a vested interest in this. Everybody has the same common goal of building equity in their franchise so that they can sell for. You know, uh, a nice multiple Sunday. Is that not the reason that that, I mean, in some cases you might have multi-generational franchisees? Uh, I mean, I would imagine you do, but others build up a nice business and sell it after seven years
[00:31:39] JOSH: right. That's right. And I, the thing I would say, and I tell every new owner this we meet with, um, in very small groups, sometimes individually, uh, with folks that are candidates that are looking at the business and I want to talk to them and tell them what it's really like. And, uh, I want to make sure they want to be here with the right expectations. And one of the things I always tell them is, Hey, [00:32:00] I'm not asking you to place a value on this right now, but I'm going to tell you this. And we can talk in a couple of years. You can tell me. The number one return on investment that you'll get. Whenever you invest in the grounds, guys, it's going to be the people to the left and the people to the right of you. My job and our team's job is to make sure you have everything you need, the right support. Sometimes it's the right kick in the rear end. Um, we're here to provide you with systems ectcetra. But the, the value that is it's somewhat intangible and you can't actually build it. If you don't have it, is it's that internal franchise owner, the franchise owner, um, commitment, connection. I just read some research recently is I've been looking into a few health oriented things and they say, Hey, whenever you're doing any kind of a health program, you know, the persistence or your success rate goes way up. Whenever you're doing it with others. That's what happens in a franchise organization. I've run three of them and I haven't seen one like this and I'll give you an example. [00:33:00] One of our franchise owners, uh, somebody that just has a great heart for this business, uh, as many of ours do years ago started a Facebook group for owners only he started it. He moderated it. He put the criteria out there and, you know, we have, since we've, you know, it got to be too much, right. Obviously, and we appreciated it, but he said, Hey, can you guys manage it? And obviously we were happy to put this Facebook group. What you'll see is owners all over Canada and the United States. That have been in the business for a long time and they'll come up on something they've never seen before. Right. And so they'll, they'll put it on there and you will see immediately some of the largest owners in our network on there. Hey, I know what that is. Here's my phone number. . And it also creates just a great forum for guys to share just the happiness that they're bringing to customers in the pride, in their work, right through pictures. And that's one of the unique things in this industry is it's, it's very photogenic, right? Nobody wants to see that [00:34:00] you're plumbing work. But man, when you look at the landscape industry, people want to see a beautiful lawn and landscape, right? That's like that's, that's beautiful stuff.
[00:34:08] LANCE: Check out that lawn! . So John, take us through the process. Obviously, if a candidate comes to you, I send you a candidate. I make an introduction. You have a first phone call. Take us through that until, until the investment has.
[00:34:25] JOHN: Yeah, sure. So, uh, it's, it's a pretty multi-pronged approach when it, so what would happen is I would have an initial conversation with whoever that candidate was and really it's, it's more of a, get to know you, right? Like, uh, get to know a little bit about their background. Of course, I'm going to tell them some information about the grounds guys. Right. And we're going to see if there's mutual interest there to even have a second conversation and assuming that there is mutual interest there. Uh, what we would do is we'd spend about an hour together. I would show all the different systems that we have in place, uh, for the grounds guys, but I don't want them to [00:35:00] believe anything that I'm telling them, Lance. Right. I, I understand. So, uh, what I would do is I'd put them on the phone with some of our individual franchise owners, like some of the guys that we were talking about, anyone in the system that they want to chat with, typically they would have. Two, three of those conversations, whatever. Uh, we would also go back to those same owners by the way, Lance. And we'd say, Hey, how do you feel about this candidate? Do you feel like he'd be a great brand ambassador for us, things like that, assuming that we still have interest in each other at that point, uh, we pull up a map, we'd go over the demographics of the area and we'd figure out an worst-case scenario. What size and type of business could we. Right. Assuming that we still had interest in each other. At that point, I would get the candidate on the phone with one of our executives, uh, for formal approval to attend what we call, meet the team day, Lance. And just so you know, our meet the team day at the grounds guys is not like most franchise owners discovery days okay, this is not some big sales seminar. This is literally your opportunity to meet with the executive board. They are the ones that decide whether or not you get awarded the franchise. [00:36:00] So we go to meet the team day, uh, at the end of the meet the team day. I'm not going to say, Hey, why don't you write us a check, right? That's not the way it works. You haven't been awarded the franchise. So I w about two days after me, the team day, I typically call the candidates and I say, Hey, do you have any other questions regarding the ground guys at that point, the answer is probably going to be no right. Cause we spent several weeks together and they've talked with owners and they met with the executives. So they probably don't have any, but if they do all answer them uh, and then the final question that I'll ask the candidate is, are you ready for me to present you to the executive board? And they'll say yes, right at that point, Lance, my role really completely shifts. It goes from me presenting the grounds guys to the candidate. Now I'm presenting the candidate to the grounds guys. I, Josh, I Pat Hyland and some of the other executives right uh, at the end of that board, meeting someone from the executive board will call that candidate and let them know the decision that's been made. And there's really only three decisions, right? Either congratulations, you've been awarded [00:37:00] the franchise, in which case we all throw a party, right. Because that doesn't happen very often. The second thing that could happen to be conditional approval, so they will be awarded the franchise, but maybe there's some on the background that we have to figure it out or. Maybe it's contingent upon following a certain timeline or whatever it is. And then the third possible outcome would be a denial. But the thing that I love about neighborly Lance is that we're not just going to leave our candidates hanging, right. We're going to let them know exactly why and we're going to steer them into direction that we felt made more sense, given everything that we've learned about each other throughout the entire process. So in a nutshell, that's kind of how the process works.
[00:37:37] LANCE: So let's talk about validation, a lot of people. Um, and I've explained before in other episodes, in case somebody listening for the first time, you know, the franchise disclosure document has an item 19, which is an earnings claim. That'll give you some information to build your business plan. And obviously you guys will help with some of those pieces. And then. You have [00:38:00] validation where you have an opportunity to talk to existing franchisees. Do you do that in a group format? You tell me how you do validation
[00:38:09] JOHN: we do a little bit of both. So typically we invite our prospective candidates on a group call with one individual owner. It's a great way, especially for your first validation call. Cause you get to hear the questions from everybody else, right? Questions that you may not even have thought to ask. Uh, eventually though we will put typically a candidate on the phone one-on-one with an owner so that they can have a more private conversation, right. And of course the owners can tell them things, uh, financially, right? That, that we legally cannot. So all we can say is what's in our item 19, we're very proud of our item, 19 Lance it's a. It's significant revenue.
[00:38:48] JOSH: I think I just want to echo, I think Lance something that you were implying earlier and, uh, and this is for listeners that are maybe thinking about going through a process with a franchise organization, [00:39:00] um, make sure that if you're going through that process, if you get the sense. Um, the franchise or the development professional you're working with, don't want you to engage with franchise owners in that particular system. That's a big red flag. I'm passionate about, uh, about that and making sure that we, we are transparent, uh, that is how you really understand and kind of lift the hood to make sure that there's an engine in there it's by getting out and talking to owners. And so I encourage people not to shortcut that process because it's, um, it's a healthy one. It's one you need to do
[00:39:35] LANCE: absolutely. So gentlemen, when it comes to the item 19, which is the earnings claim and the franchise disclosure document. Tell me a little bit about how profitable people are and how well you can do as evidenced in that item.
[00:39:50] JOHN: Yeah, sure. So one thing that I will say, Lance, is that we can only say what is actually in the item 19. So we can't speak so much to our profitability. We can't speak to [00:40:00] margins, right? Because there's all these different, uh, earnings claims laws through the federal trade commission. Okay. What I will say though, You know, our, our top territory last year did about 3.1, four 7 million, which is, you know, right. And I'll, I'll say this average guy three years and over did about $703,000 last year. Of course we break it down even further from that. Right. What about the guys that are three years and under, it's also a big number, Lance, what are your lows? They're also big numbers. So. Whenever we go through the FDD with our commerce, through the FDD conversation, I could tell you with our candidates, we really dive in all those different details of that. They have a firm understanding of what revenue looks like, but honestly, Lance, it's more validated by the owners themselves. Whenever we go through and set up those calls with the owners, they'll, they'll have opportunities to get answers to a lot of those calls.
[00:40:54] LANCE: Great. Great information. Well, gentlemen, this has been fabulous, but we have [00:41:00] time for some final thoughts. Anything I missed today?
[00:41:02] JOHN: The one thing that I would tell you is that there's no way we can encapsulate everything in half an hour, right. 40 minutes, but I'll break it down to an analogy for you. Lance you're familiar with golf, right? You play golf.
[00:41:15] LANCE: Of course. Not very well, but I've played.
[00:41:18] JOHN: So Lance here's the deal. If I could give you on the card at the master's program and golf's most prestigious event. And I can give you one of two things, either the best set of clubs ever made, or the swing of any player throughout history, and you get to choose the player, which one would you choose the best clubs or the best swing all day, every day, right? Because you and I both know the tiger woods can get on a plane and go to a garage sale, buy three clubs and beat the crap out of you at mini golf. Right. So here's why I bring that up. What does that have to do with franchising? Listen, every franchise or worth. We're going to have really pretty clubs, right? Oh my gosh. Look at how great my marketing is. Look how great my recruiting [00:42:00] retention programs are. And listen, neighborly is no different. We have the finest clubs out there, but at the end of the day, it's about our franchisees going on playing the game. Right? So what we want to really differentiate ourselves on is not be a club manufacturer. We want to be a swing. We want to come alongside of our owners, show them how to play the game, how to play it in a very, very big way. Does that make sense?
[00:42:24] LANCE: I love it. I love it. Getting the swing of things. . Perfect. Josh, you get the final word today.
[00:42:31] JOSH: Boy I'll tell ya That that was, that was good. And I'm sitting over here feeling bad about my golf game after that. And so I, I won't have, I don't have much, what I'll say is, you know, if anybody listening is interested in helping maintain, enhance and create the best looking lawns and landscapes in the community uh, we'd love to talk to you. And I think at the end of the day at a minimum, you'd probably learn some interesting things by going through our process. Um, John and John's team are fabulous. [00:43:00] They're the best that I have seen. And, uh, and they're true professionals. So Lance, I want to thank you for having us on here today. Really enjoyed talking to you and getting to know you a little bit. So thank you,
[00:43:09] LANCE: absolutely. gentlemen thank you both very much. This is, this has been fantastic. Look forward to speaking to you both. Have a great day.
[00:43:18] Thank you very much for listening today, please like follow and subscribe so you don't miss anything here at Eye on franchising visit our website. Eye on franchising.com E Y E O N. franchising.com and complete our free assessments so we can assist with. Finding your perfect franchise this is Lance Graulich until next time.