Looking to delve into the world of franchising and the benefits of owning a franchise business? Look no further than Eye On Franchising, where we explore the ins and outs of the industry with experts like this weeks guests Stefan Figley, President of 1800 packouts, and Jerry Jones, Director of Franchise Development. These two share their stories of how they got into franchising and discuss their company that provides disaster restoration services for homes and businesses. Discover how this industry is recession-proof and essential during times of crisis. This podcast episode emphasizes the advantages of owning a business and highlights the challenges that come with it. And with a low perplexity and greater burstiness, you'll be hooked from start to finish. Don't miss out on Eye On Franchising, the ultimate guide to franchising success. - Franchising benefits - 1800 Packouts intro - Jerry Jones' background - Franchisee stories - Content management services - Advantages and challenges - Company growth - Recession-proof model - Investment requirements - Territory selection process - Thorough meet-the-team process - Specialized training - Insurance vs. moving industries - Ongoing learning program - Marketing strategies - Communication and networking - Benefits of joining a franchise - Efficiency for growth - Importance of profitability KEY POINTS [0:2:58] Franchising is an incredibly powerful tool for businesses looking to maximize profits quickly and efficiently. [0:2:58] With EBITDA, business ownership provides the potential to generate not just money, but significant lifestyle, wealth, and equity rewards - far beyond what a job can offer. [0:3:30] Through his varied background in carpentry, deep sea drilling, car sales, and now franchising, Jerry Jones has built a remarkable legacy of helping people transform their lives for the better. [0:15:30] For a fraction of the cost, aspiring entrepreneurs can unlock the potential of a 1800 Packouts franchise, with an initial investment ranging from $150,000 to $300,000 – a remarkable opportunity to jumpstart your business dreams. [0:18:22] With an average reconstruction process of only 4-6 months, ambitious franchisees can rapidly capitalize on the potential to fill up multiple warehouses! [0:23:56] At Packouts, aspiring franchise owners can enjoy a truly unique onboarding experience, with validations from a wide array of existing owners to empower and equip them for success. [0:25:24] By leveraging a national training center with expert staff tailored to their business, companies can quickly and effectively train smart, inexperienced individuals to maximize their potential. [0:29:22] Franchisees who participate in our immersive embedding program gain invaluable, practical knowledge through hands-on experience and cutting-edge training – far surpassing traditional learning methods. [0:33:19] With recession-proof opportunities and top-notch content management processes, 1800 Packouts is becoming increasingly attractive to savvy sales-oriented franchisees looking for the ultimate return on investment. [0:33:19] Being part of a franchise provides invaluable access to a powerful network of experienced professionals, empowering you to confidently tackle challenges without feeling overwhelmed. [0:35:39] At Packouts, our ambitious entrepreneurs have the unique opportunity to join a dynamic team and launch their own business in their own exclusive territory – all while receiving comprehensive training and financial support from our national training centers. [0:35:39] Franchisees can dramatically increase their local visibility and lead generation by attending trade shows and engaging in targeted outreach, while leveraging the internal notification process of their insurance companies for maximum impact. --- Have you heard the news? We are officially on YouTube. 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
Looking to delve into the world of franchising and the benefits of owning a franchise business? Look no further than Eye On Franchising, where we explore the ins and outs of the industry with experts like this weeks guests Stefan Figley, President of 1800 packouts, and Jerry Jones, Director of Franchise Development. These two share their stories of how they got into franchising and discuss their company that provides disaster restoration services for homes and businesses. Discover how this industry is recession-proof and essential during times of crisis. This podcast episode emphasizes the advantages of owning a business and highlights the challenges that come with it. And with a low perplexity and greater burstiness, you'll be hooked from start to finish. Don't miss out on Eye On Franchising, the ultimate guide to franchising success.
- Franchising benefits
- 1800 Packouts intro
- Jerry Jones' background
- Franchisee stories
- Content management services
- Advantages and challenges
- Company growth
- Recession-proof model
- Investment requirements
- Territory selection process
- Thorough meet-the-team process
- Specialized training
- Insurance vs. moving industries
- Ongoing learning program
- Marketing strategies
- Communication and networking
- Benefits of joining a franchise
- Efficiency for growth
- Importance of profitability
KEY POINTS
[0:2:58] Franchising is an incredibly powerful tool for businesses looking to maximize profits quickly and efficiently.
[0:2:58] With EBITDA, business ownership provides the potential to generate not just money, but significant lifestyle, wealth, and equity rewards - far beyond what a job can offer.
[0:3:30] Through his varied background in carpentry, deep sea drilling, car sales, and now franchising, Jerry Jones has built a remarkable legacy of helping people transform their lives for the better.
[0:15:30] For a fraction of the cost, aspiring entrepreneurs can unlock the potential of a 1800 Packouts franchise, with an initial investment ranging from $150,000 to $300,000 – a remarkable opportunity to jumpstart your business dreams.
[0:18:22] With an average reconstruction process of only 4-6 months, ambitious franchisees can rapidly capitalize on the potential to fill up multiple warehouses!
[0:23:56] At Packouts, aspiring franchise owners can enjoy a truly unique onboarding experience, with validations from a wide array of existing owners to empower and equip them for success.
[0:25:24] By leveraging a national training center with expert staff tailored to their business, companies can quickly and effectively train smart, inexperienced individuals to maximize their potential.
[0:29:22] Franchisees who participate in our immersive embedding program gain invaluable, practical knowledge through hands-on experience and cutting-edge training – far surpassing traditional learning methods.
[0:33:19] With recession-proof opportunities and top-notch content management processes, 1800 Packouts is becoming increasingly attractive to savvy sales-oriented franchisees looking for the ultimate return on investment.
[0:33:19] Being part of a franchise provides invaluable access to a powerful network of experienced professionals, empowering you to confidently tackle challenges without feeling overwhelmed.
[0:35:39] At Packouts, our ambitious entrepreneurs have the unique opportunity to join a dynamic team and launch their own business in their own exclusive territory – all while receiving comprehensive training and financial support from our national training centers.
[0:35:39] Franchisees can dramatically increase their local visibility and lead generation by attending trade shows and engaging in targeted outreach, while leveraging the internal notification process of their insurance companies for maximum impact.
---
Have you heard the news? We are officially on YouTube. 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
Stefan 00:00:03
Lance Graulich 00:00:06 Hello, everyone, and welcome back to another fabulous episode of Eye on Franchising. Hold on a second. That's for my guys for editing, so they know where to fix that. Hello, everyone, and welcome back to another fabulous episode of Eye on Franchising. This is Lance Graul, your host. Every single day.
Stefan 00:00:30
Lance Graulich 00:00:30 I'm talking to people and they say now more than ever. They're saying things like, Lance, can you show me a business that is a need, not a want? Something that is essentially recession proof, recession friendly, et cetera, et cetera. Well, today's guests are going to talk about a, uh, business. Let's just say when disaster strikes, these are the first guys you're going to call. How about that? So welcome to the show. Stefan Figley. And Stefan is President of 1800 packouts. And Jerry Jones, who's director of franchise development. Gentlemen, welcome to the show.
Stefan 00:01:09 Thanks, Lance. Thanks for having us.
Jerry 00:01:11 Thank you, Lance. Pleasure being here.
Lance Graulich 00:01:13 Awesome, Jerry. All right, Jerry, you go first. Let's talk about you. How the heck did you get into Franchising? UhI know you weren't in third grade thinking, mom, dad, I'm going to go into franchise.
Jerry 00:01:26 No, I'm going to give you the shortest, sweetest version I can. I'm a carpenter by trade.
Stefan 00:01:31 True.
Jerry 00:01:31 and through I was a union, contractor out of Los Angeles, formally trained, went through the two year apprenticeship program, worked my way up to general superintendent. Worked on everything you could possibly work on. Bridges, highways, hotels, high rises, clean rooms. Just I've done it all, medical facilities, and, kind of just relocated to New, Orleans in 2002, started a remodeling business and ultimately was recruited into deep sea drilling. Did that from four to 2010. Worked on everything that you could think of in deep sea drilling, building blowout preventer stacks. And when the Deepwater Horizon blew up, everybody lost their drilling jobs. And I just had this gift for Gab. And my wife, my current wife said, go sell some cars. And I did, three and a half years at Toyota and three and a half years at Chevrolet. And in 2017, I announced that I was going to retire from the car business. Just grueling hours, six day work weeks. Was going to start a remodeling business in a small, little company that some people may know about. It was Dwyer Group back then, but neighborly brands today, my old sales manager from Toyota was working there, and they headhunted me. And, it's funny a story because I turned them down initially. And, I think number five in charge, Brandon Hare, called me and said, did you turn the dwarf group down? And I told him why and yes. And then I wanted to be on a specific team. And, the next day he made me that offer. And, I started selling air serve heating and air in June of 2017. Did that for five straight years. had an opportunity for a promotion was bypassed for that. And at the same time, I was being contacted by five star franchising and, officially made the leap from neighborly franchising to five star franchising. April of 2022. So this is my anniversary month.
Lance Graulich 00:03:20 I love every year.
Jerry 00:03:21 So that's what got me into it. And my wife's owned a franchise for.
Stefan 00:03:24 A couple of years.
Jerry 00:03:25 Just recently sold it. I think we closed on that on May 2, so absolutely enjoy it. I can't imagine myself, really doing anything else than helping people change their lives through business ownership.
Lance Graulich 00:03:35 So, Jerry, I just have to ask one question. Is franchising better for you than deep sea drilling?
Jerry 00:03:44 The answer is, ultimately it's safer, yes. Or quieter. It's less strain on my body. I love drilling the science behind it, everything that was involved. And I absolutely loved every aspect of it. Even the 14 grueling days of 12 hours a day straight is just something to it. But, yeah, I'm happier. And, I think I'm going to have a better body for it.
Stefan 00:04:05 Love it.
Lance Graulich 00:04:06 Stefan, over to you, president of 1800 packouts. So, what's the whole story with you? How the heck did you get into franchising?
Stefan 00:04:15 Yeah, so, I started in the marketing side of the world. I worked for a large advertising marketing agency, leo Burnett out of Chicago. We did marketing all over the world. I've worked Europe, eastern Europe and, the US. And I, knew at one point I wanted to come over to the corporate side of things. I, moved over and started working with Service Master, which is known for a lot of franchising brands. But I actually worked on a non or a majority non franchise brand Terminix. And, they needed somebody to take over the franchising portion of it. And since marketing was one of the largest portions of what the franchisees were really wanting help with, said I volunteered and took it over so I did the franchising part, which was quite small for Terminix, really, enjoyed it, got to know the owners that were engaged and the difference between corporate and franchise and the franchise marketing elements. I then moved over to Mary Maids, which is almost 80% franchised still, within Service Master. And, really started to enjoy working with owners and figuring out how to help them succeed in their own business. So that's how it all got started. And from there became, a certified franchise executive with the IFA. and have worked on five, additional brands in, franchising. And, it's about the business, right? I wanted to be in business. I own a business, my wife and I do, separate non franchised. But, I find that always an advantage. When I speak to franchise owners, I know the headaches that they go through every day. whether it's hiring, payroll insurance, all the dynamics that come along with it. and so it's kind of nice to be able to talk and coach and work with franchisees on how they grow and to try to help them build their success. So, I learn every day talking to franchise owners on how they do it and why. And I find it's extremely exhilarating for me to get engaged with them and really try to make that success happen.
Lance Graulich 00:06:34 Awesome. Great stuff. So, first big question, gentlemen. Describe what 1800 packouts is for the audience.
Stefan 00:06:44 Sure. So, in the restoration world, as you were saying, when a disaster happens, who are you going to call? we are one of the first groups that are involved. So you call a restoration company, you have flooding, there's a fire, all the different elements that could be there. What we do specifically is we do the content management portion of the business. So, if there's a flood, if there's a fire, we are there to help package remove personal items from a home or from a business. If it is a commercial property, we remove them, we clean them, we store them, and then we return them when everything's back to normal. So, if you look through the restoration world, what happens to your personal items? to be taken care of and protected while, if it was a home, while your home is being refurbished, if you have the flood, they remove the water, they fix it. if you're doing redo floors, same deal the furniture can't be in there. It must be removed so that everybody else can do their work properly to get everything back together. So that's what we do. Ulove a nutshell.
Lance Graulich 00:07:58 Love it. Obviously a much needed business. so let's talk about franchisees. How many franchisees or how many territories do you have open these days and tell us a little bit about that. What's the history of the company?
Stefan 00:08:13 Sure. So I'll get it started. Jerry will jump in on this a little bit too. we started in 2016, Franchising. And we have 22 active franchise owners at about 51 territories. So many of our owners own multiple territories. they've been involved for several, the ones that are there now, the majority of them have been involved for multiple years and the open territories and what they service, these are what you do. And your dedicated, proprietary territories are one thing. What you can service may be a little bit more. And so we service a very vast geography, with that. But there are many holes what we call white space. Right in the franchise world, or the franchise or world, we call it white space, where we can't cover or we can't cover very well.
Lance Graulich 00:09:06 Blue ocean, right?
Stefan 00:09:08 Yeah, it's blue ocean, for us, because we deal with a lot of insurance world, and the insurance work when there are issues in locations that we don't have a territory and an insurance carrier needs some assistance we do get a phone call a lot of the times to see if we can help. And we, don't want to necessarily turn those down. So we get engaged with our franchise owners to see if anybody would be willing to travel and execute, uh, that job maybe, in a place that's 6 hours away from their location. And that happens every once in a while, but it gives our franchisees an opportunity to continue to grow their business but at the same time, we service the industry that we have is a majority of our business that comes from. But Jerry, is there some other things that you want to add to that as well? for our number of yeah, no.
Jerry 00:10:02 You covered it really well. One thing I want to add, Lance, is for everybody, is our territories are one to 1.5 million people in a territory. Wow, that's a big territory. It's a very big territory. And we don't get a lot of repeat customers. And anybody that is a repeat customer has just got bad luck so we do need a much larger territorial space to operate in. And so, some of our earlier owners were already within the restoration space. We're covering large territorial ground. And so they had multiple territories just because they exceeded the territory limit. So now when we're bringing people in, we're really rarely selling somebody 3 million people, right? So they can really get activated, build a really successful business with that first territory, and then have an opportunity to expand later. But our territories are very large. So I wanted to just clarify. I love that. And we plan to double our ownership this year alone to have just under 50 owners operating, here in the United States. That's the goal.
Lance Graulich 00:11:08 That's awesome. So talk about who it is. So let's put it this way. If you look at your top 10% of high performing franchisees, your top five, if you will, where did they come from and how did they choose? I tell people all the time, franchising is a two way street. So you chose them, they chose you. Where do they come from? Who is a franchisee of 1800 packouts?
Stefan 00:11:36 So, it's a dynamic that's actually changing right now in 1800 packouts. So if you look at our top performers today, the majority of them, let's go to the top five. Four out of the top five probably came from the restoration industry. They own a restoration company, that does water mitigation, fire mitigation, mold mitigation they had previous knowledge of the industry. What they saw was the gap of having to do the performance of the mitigation and then the specialty aspect in the detailed aspect of dealing with the content management. Right? So you have to remove folks property. You have to inventory it properly to be able to justify it to the insurance carriers. You have to clean it properly, which is a misnomer by many people. They think they can do the cleaning and they can't do it to the level of what the insurance company and what the customer and the homeowner would consider a viable clean in that situation. So because of that, they wanted the correct process, the best process to follow. So that's what drove, I would say, four out of our top five right now were from that arena. The other one was a top salesperson. He and his business partner. There are two that own and she's on the business side. She runs the operational financial side, all of the business. And he runs the marketing and the growth mechanisms of their business. And he did not come from the restoration industry. He had knowledge of some of the general area of the industry, but he came in looking to sell folks on a service that was specialized and he's been very successful at it. the two of them work very well hand in hand so that's the current dynamic. If you look at the new dynamic, we still have some of the folks from restoration coming over that want to add this specialty. But what we're finding is we're finding folks that have a sales background they find this as a very interesting topic to jump into for us specifically. And folks that have done due diligence and are looking for something that is more around the recession proof, not impacted by our but where the economy stands. This is heavily backed by an insurance base, uncontrollable types of activities. And so we're starting to see a lot of folks that were looking for a longer term investment. How do they put into this, how can they grow it? And then what elements do they need to bring to the table, to be a success in our business? So we have a different dynamic, a little bit of a shift coming on, in that when we're seeing our
Stefan 00:14:20 current folks, that are looking at 1800 Packouts.
Lance Graulich 00:14:28 Yeah, that's super. So interesting. But I love this part of the story where four out of the five are in the restoration business and really saw the gap. So you talk about the perfect proof of concept and we'll talk a little bit about validation later. You talk about amazing, validators that know exactly why this business exists. I love it.
Stefan 00:14:52 Absolutely.
Lance Graulich 00:14:53 Let's talk about investment. So, what's the investment to get in? I know there's always a range for those playing along at home. The franchise disclosure document that you will be given by any franchise company, including 1800 Packouts. You'll see the item seven which will lay out the investment. let's talk a bit about the investment.
Stefan 00:15:17 Sure. initially, and Jerry, I want you to chime in on this as well. when you look at this for us, there's the territory fee up front, but you have to have enough invested into the business to be able to perform the business that's there. And so we start somewhere that we think the initial investment is around $150 to $170,000 and can rise up to around the $300,000 mark for an initial investment. Now there are so many variations to why it ranges from one to another. How many vehicles are you going to put into the mix at the beginning? So this is where it's very important to understand as a potential buyer into a franchise, what do you need? What's in your pro forma to make the success that you think is successful? And we, as a franchise, or we can look back and we know what we think, but it's not us, it is you. As a buyer, as an owner, an entrepreneur, what is success for you in that buyer? And so from there, that's the differences. So there's full packages of cleaning, stations. There's different, aspects on the number of vehicles. There's the size of the warehouse that you want to go. We have a recommendation and a minimum requirement, but we have folks that, will jump on top of that and even go bigger, right out of the gate. But it all depends on how they have their business model, where are they going to see the growth, how they're going to do their marketing, et cetera. So when we look at this, that's how we range. It's kind of that I'd say around the 152, just under the 300 mark is what we think is a reasonable range, that we've seen in our business owners.
Jerry 00:17:02 I want to add a little bit more to that. Stefan, you hit the nail on the head. And another reason for the range folks is geographically right, east Coast, West Coast real estate may be a little bit higher than Missouri or Texas, right? so depending on where that is, labor rates can change, what you're having to lay out in that business. So whether, you buy a new moving truck or a pre owned moving truck, because we don't have a preference, it just depends on how that individual wants to operate that business. So that plays into the range as well. And finally, when you're dealing with insurance work, insurance pays on different cycles, like 30 to 60, maybe 60 to 90 day cycles. So that's additional working capital that you need on the payroll side to continue to float the team once you have that grand opening. And we really do strive for a 90 day opening which allows 90 to 100 day opening, which allows uh, our owners to onboard fairly quickly, and start getting those packouts and start filling that warehouse and generating that revenue.
Lance Graulich 00:18:04 Jerry, you just mentioned warehouse. So is that something you start with one warehouse, and as you become an incredibly successful franchisee, you have multiple warehouses because you're that busy storing everything?
Jerry 00:18:18 Absolutely. One of the advantages that we have is our business is fully assetable. So whether you lease your warehouse initially on a three or five year lease with an option to purchase and eventually buy that warehouse, an average water claim reconstruction process on a property is four to six months. So you have a grand opening for four to six months. That franchisee is packing out property, taking it to the warehouse, cleaning it, and storing it. So the potential to fill that warehouse up within that first year is extremely high. So a lot of our franchisees, especially our average operating franchises around that six figure mark, or seven figure mark, they're running two to four warehouses. We have franchisees that have 70,000 square foot of warehouse space, whether that's two or three buildings. Yes, sir. and fire jobs could take a year or longer.
Stefan 00:19:10 Correct.
Jerry 00:19:11 You get into some of these areas that north, Mississippi, where some of these tornadoes that have some seriously heavy damage, if not destroyed, you could have a lot of content in your warehouse for a long time.
Lance Graulich 00:19:21 Yeah. That's pretty, impressive and obviously a much needed service. Let's talk about the selection process. So how does this happen? So a broker consultant like myself sends you. Somebody or someone sees your website, finds you on social media. How does this process start from start to finish?
Stefan 00:19:44 Yeah. So I'm going to let Jerry take this because it's around the franchise development side, and he's the expert at it. so I'll add the color on this one. But Jerry, go ahead and walk through how we go through that.
Jerry 00:19:55 Absolutely, lance, that's a great question the simplest version is a territory check, we've got to make sure that the territory that they want to operate in is a viable territory, that it's available and it'll work.
Stefan 00:20:08 Right.
Jerry 00:20:08 North, Dakota, South Dakota, Wyoming, Montana, Anchorage, Alaska are not viable markets. There's not even 800,000 people in the entire states in some of those states. So, again, we need a million to a million five in population in a territory. So territory checks where it all starts from. There it is an information gathering process. Right. In the beginning, the first three, four conversations are me or somebody at 1800 packouts, providing information to the client, to the candidate, making sure that they can see themselves envision themselves operating a business of this magnitude, being able to handle logistics, being able to manage and work with a team of four, 6812 people. Right. and then getting them into a validation. I do something a little bit unique where every Wednesday I have a different owner on a zoom call, and they're sharing their story with a group of people. Last week, I had nine candidates on a zoom call with an owner out of ah, Charlotte and it allows these candidates to sit through a couple of weeks of calls and that really paints a broad picture. I mean it really helps them understand what this looks like. From there it's uh application, financial discussions. How are we going to fund this business? There is a big range. 150 to 300,000 is a big range. Where do we need to do, do we need to secure some additional working capital on their behalf? Where we can have national vendors to help and assist in that process as well so that they can get all the information they need so that by the time we all agree that this is a viable candidate, we want to get them involved into a meet the team. We try to do that in person in our national headquarters which is in North Atlanta, Ball Ground, Georgia where we can truly put them in our national training center, spend 6 hours with them and let them really genuinely see a behind the scenes look. Meet our team, we get to meet them and then I'll make a decision on if this is the right fit for everybody.
Stefan 00:22:03 I want to add something to that too. the geographies and the validations one of the things that we've tried to do and ah, been conscious of is on the validations. It's not just our biggest operators, we open it up to any of our franchise owners we vary from different east coast to west coast. We literally have some owners in California. We have owners in the East Coast like you said Charlotte. We have the Midwest so that we have different size owners. We also have now engaged some of our newer owners that have just opened up. Because as a candidate comes through this process, one of the things we started to see and I think it's a very valid point for those looking to buy what's the process, what's the onboarding process like? Is this something I can do? Are they there for me? Are they giving me that information that I need to be successful in that first twelve months, in that first 18 months of the business? And so we have started to add that into the validation rotation so that you always can call anybody as you're going through the process, you can ask for any of those but we try to give them that solution so they have options to be able to hear multiple different points of views uh, and get a full taste of what it is to be a packouts owners. Because one success of somebody that's the salesperson out of California is different than the person in Chicago that, owned a mitigation and restoration company that started it versus, somebody on the East Coast that was actually a fleet distributor and decided to leave that business and come on board and has been very successful. So, I think that's a really big part of what we do at Packouts is we're trying to show them everything that's possible so that they have a full range of what it is to be a Packouts owner.
Jerry 00:23:54 You brought something up. I'm glad you said that. We just signed up a gentleman that's very sharp young individual millennial that owned a pharmacy that is now in the restoration space and owns two territories for Packouts or about to. So the talk about that range that we have is absolutely phenomenal. Next week, umthe owner that's going to be on my Zoom call is a gentleman that's been open for two months.
Lance Graulich 00:24:20 Love it.
Stefan 00:24:21 Good.
Jerry 00:24:21 U point Stefan.
Lance Graulich 00:24:23 I love it. So let's talk about training. So you find these great individuals. Talk about the training process because, as you said, not, everybody's from the restoration business. And like with most franchise brands, it sounds like your future is more like just smart people that are coming in the business that had zero experience. So let's talk about that training process.
Stefan 00:24:44 Absolutely. In fact, I would say even the people that come from the restoration industry are not they're there because they don't have this capability. This is a specialty. So training is huge for us. We have a national training center, as Jerry mentioned and it's specific to our business. So we start with the basics, behind the scenes type of stuff. So the financials, the estimating capability, the software, all of that. We'll call it the soft side of the business. Right that's where someone in the office is going to be doing a lot of this. Or how do you evaluate, to do the estimate in the industry? There's a couple of tools that are very specific for the estimating portion. And so we have expertise on staff that can continue that help outside of just our initial training. But the other thing is there is a specialty on how you pack out a house, if you would. There's how much you put in the box that is right for the right padding and the protection of their belongings. That also you can't just put like one glass in a box and then tell the insurance company, hey, I packed out 100 boxes.
Lance Graulich 00:25:54 Hey, Stefan, I just have to say I haven't checked your if you have a TikTok or an Instagram, but I'm having visions of every time I ever moved, not having a clue as to how heavy this box should be.
Stefan 00:26:10 Yes.
Lance Graulich 00:26:11 And how much I'm actually going to break by the time everything gets there. So I have a vision of tutorials for America, regardless of whether they have a disaster or not.
Stefan 00:26:22 Well, we can't give all the secrets away, right? That's part of it. Never mind, forget it. Secrets. But Lance, you're absolutely right. It's like, oh, look at all these books. I'm looking at your bookcase. Look at all these books. Yeah. If I get a big or medium box, I can put all those books in one. Yeah, good luck on your back on that one.
Jerry 00:26:40 Right.
Stefan 00:26:41 But, the insurance company won't let you pack one glass and then a bunch of padding in it, like, oh, here you go. Because in the insurance world, we charge per box. We get paid per box. So the insurance company is worried about that. A mover is paying you by full weight so they don't have as big of a concentration of what gets put in what box and so forth. They can pack as many boxes as they want, based on what insurance the customer probably paid for. Right. Um, so there are some differences. And we actually have some moving companies that have converted over as well a couple of folks that were from the moving industry into the packouts world. but we go through it. We have, basically a house built, inside of our warehouse for our training center. And it is fully stocked. It's a one bedroom. And we have all of our new owners pack out that house. And so they have to pack it out. They have to inventory it, and keep it up to speed with our inventory tools and what we recommend. They then have to pack it into a truck, because there's certain ways we want it packed into a truck. And then, from there, we then show them the cleaning aspect and walk them through a cleaning, station that we have set up in our warehouse we talk about, getting everything cleaned, what it would go through the process, how it comes out of the process, et cetera. And then what do we do once it's clean? So we do it, and specifically how we box it. And we say, hey, if you put in 100 boxes, u that you pack the house out with, once you're done cleaning, you can't have 102 boxes because you're not getting paid for the extra two boxes. So there's some mentality I learned the hard way.
Jerry 00:28:29 I learned the hard way.
Stefan 00:28:31 There's some fun things we do with, wine glasses and so forth. our VP of operations will walk over to the table and knock it off the table and see if anything breaks. And did you pat it correctly? And so then we, uh, have them bring it back. And basically, a take back is what we say here in the business. In the industry, we do a take back, and we have to do it again and put it back into the house. And how do you move it, how do you unpack it properly, et cetera. So there's a full process to this. Now, you talk about training in this one. That's a pretty canned environment, right? we're in a wind tunnel here. We're in a nice silo. Everything's perfect. Uh, and so that's one of the. Hard things I find in the training aspect of it. You'll find it in every single franchise business when you're doing it as a mock versus the reality of the world. And so we're actually opening up, and doing an embedding program for franchisees as well as we have an operating location very close by our national Training center. And so we offer the franchisees the opportunity to embed with, another franchise. so they go like a ride along. A ride along, yeah. Hey, they're going to be in the truck working at 630 in the morning. They got two packouts today. You're riding with them and you're packing out with them. So you're learning what happens on the fly. you may run into some different scenarios when you're in the field. so we're offering some that's something we're launching here should, be launched no later than June of this year. And that's not just for those coming on board, that's for our existing franchise owners. So you're running a business and the staffing is always a big issue that you probably have talked about multiple times. I know owners talk about it all the time, especially in the service industry. And you got to rehire, you got to hire, and you got to train these folks. Right. It's a specialty. You make more money, especially if you don't break stuff. part of that is you have to take time away from your schedule or some of your employees schedules to train some of these new folks. But we're also offering that you can send those folks into the embedding program, at no additional charge, uh, except the travel to get there. And they can be embedded for two or three days and get someone else to have the ride along, not just your team. So you're adding that element of training. The ongoing aspect of training is extremely important. And so we are fine tuning and
Stefan 00:31:00 documenting our first twelve months to 16 months of owning a business with 1800 packouts. Because it isn't like, here you go. It's like teaching a race car driver, right? We showed you what it looks like on a video screen, how to race this car. And hey, here you go. you're in the Indianapolis 500 tomorrow. Here are the keys. Thank you. Good luck. Uh, wouldn't work great, necessarily. And u so we want to be there with them as they're going through their process. They're getting their first claims, um, and being there as they continue to build up their business because that's how we think we can help them get to that successful delivery in meeting their goals.
Lance Graulich 00:31:45 Awesome. When you talked about validation earlier and having the opportunity to talk to existing franchisees, what do they talk about with marketing? Because clearly you alluded to the fact that this ramp up period in the first year to 18 months is crucial. Well, six months certainly first, and then eventually a year. So talk about marketing and what's special about what you guys do with that to help the franchisees.
Stefan 00:32:13 Sure. I mean marketing is extremely important and it is in every single business that you're going to run. and for us, the one thing that I think you'll hear a lot of franchisors say we don't generate leads for franchisees. They do that. They protect themselves. It's part of our deal. We can't promise it because we can't guarantee it. What we do have is we have a marketing handbook. We have the suggestions of what they can do. We have marketing staff, at corporate that can I'm shocked at the lower number of folks, if you would, that I have currently that talk to our marketing director on a regular basis. So a new franchisee in zero to six months, six to seven to twelve. I would expect them to have a minimum of a once a month established phone call to discuss their marketing. And so we have the overall national SEO and the website. And of course we have our 1800 Packouts number and the call center that goes with that number. All of that's covered by corporate. Out of the marketing fund. There is a marketing fund that goes with that. We do the trade shows, which is extremely important in a B to B environment where a lot of ours come from insurance carriers or other folks in the industry. And so we're present and well accounted for at those major trade shows. All of that's taken out there. So the next part of it is what do you do in your local market? And this is something that is very difficult. It's easy I would say, for those that are starting up. if I was buying a franchise at 1800 packouts, I'd want to know who do I go after? What are my targets if I came from outside the industry? We provide that all in the upfront portion. well before they open, I, would start marketing. If I have a target date of June 1, I would be spending May, at least the second half of May marketing. is there direct mail? Is there email campaigns? do I need to go do face to face? I'd go introduce myself to all the restoration contractors that I don't think could handle a content job. That would mean anybody that has less than 5000 warehouse space, hey, go knock on the door, try to go talk to them. you're not going to sell them right then and there, but you're going to get, hey, I'm here. This is what I do. This is all I do. I'm focused on this. I can be a support mechanism to you. You don't have to worry about the insurance negotiations. I already handle all of that. We're a national company. You're taking a lot of pressure off of another business and you can take that portion
Stefan 00:34:51 for them and that reduces their risk. So we teach and work through all of those elements. What I've seen is when they get, as an owner gets pretty comfortable, they slow down on those elements. I've done it. I've talked to everybody in my market. Okay, when was the last time you talked to them?I talked to them two years ago. Oh, really? Their general managers turn over in the business all the time. they may not know about it. they may have tried to go after it and try to do the same business go find out what their new problems are, go be a solution to them. And so that's something that is the ongoing process, for franchise owners as they get past that initial part.
Lance Graulich 00:35:39 Stefan, I wonder, with the call center that you have and the connection with the insurance companies, obviously there's some sort of internal notification process for insurance companies to say this franchisee in California just came on board and then either the call center or the insurance company directly reaches out to that franchisee.
Stefan 00:36:05 Yes. So on the call center, we initiate a new franchisee that they're open. They'll be on the call center. And so, yes, carriers, agents, adjusters and restoration companies as well, they all can call the number and say, hey, I've got a claim. And here's the zip code, here's where it is. The territory will already be the service territory. What they're able to do without any second glance is already set in the call center. And so if it fits one of them, the call center will do the transfer right over to the franchise owner of the market. Get them the claim, get them the contact information. Sometimes it's even a warm connection, and then that gives the business owner the chance to go ahead and get engaged with it. If it falls outside of a territory that is currently said to be serviced, it comes to corporate, so we get it. And so it falls into one of the folks here at corporate. We then can figure out where it is. We can reach out to an owner that's fairly close and have them follow up on the claim to see if it's a claim that would be worth the extra effort. Meaning a drive time, maybe it's 3 hours or 4 hours away. But if it's a large multifamily, uh, fire, for example, I've got owners all over the place that will make that trek because it's a lot of business. Jerry made the comment. Fire tends to stay stored for around twelve months. I mean, you can ask all our owners, they're going to give you, oh yeah, nine months. I've got one for two years that's been into my warehouse.
Lance Graulich 00:37:40 My brother's house burned down in Malibu, at the Malibu, California, with 400 other homes. But I don't know that he had much to store. I think it was all incinerated in his case. And it's been five years plus, unfortunately.
Stefan 00:37:52 Yeah. And that's burns down.
Jerry 00:37:55 You got some loss.
Stefan 00:37:56 Yeah.
Jerry 00:37:56 Total loss.
Stefan 00:37:57 Yeah. That's a different story. But you can have it where the kitchen is a kitchen fire. And you say, oh, they just have to redo the kitchen. The problem is that smoke got in the suit. The suit got into the air system, and it got pushed all around the house. So everybody's bedding in their beds and their sofas and their chairs and their tables all have, need to be cleaned and prepared. And then even to the point of getting into the soft goods of their clothes and so forth, they don't want smoky clothes. You're correct. Uthe total loss.
Lance Graulich 00:38:31 Smoky food maybe, but not clothes.
Stefan 00:38:33 That's right. Absolutely.
Lance Graulich 00:38:35 So I want to go back to something that you said that was just so important. First of all, people ask me all the time, well, why should I invest in a franchise when I can do a business on my own? And I always sort of joke, but I'm serious when I say, this is America. You get to do whatever you want to do. If you want to start your own business and compete against all these very experienced business owners, by all means, go right ahead. But you said something so appropriate or so important about these restoration owners. Several of your owners that have already been in the restoration business, and instead of doing that, this packing, do the packouts on their own. They said, no, I'm going to buy a franchise that knows exactly what they're doing. So talk a little bit about that difference. Both of you have been in the business certainly a long time to share with the audience why a franchise, why packets.
Jerry 00:39:35 Well, I'll start.
Stefan 00:39:37 Yeah. Go for it, Jerry. No, go for it.
Jerry 00:39:39 I'll give you a rest for a second.
Lance Graulich 00:39:41 no fighting. No fighting.
Jerry 00:39:42 Unique analogy. I have a really unique analogy. If I'm in the need of a pickup truck, what's going to possess me to build one from the ground up in my garage for a year and pray and hope that when I turn the key, it actually starts versus go spend 4 hours at a dealership, 40 grand, and I got trucks that's warrantied guaranteed operate.
Lance Graulich 00:40:01 I love that, Jerry.
Jerry 00:40:03 That's it. You're buying a business that has already been proven to be successful. The key is, are you a person that can follow that business? That's the key.
Stefan 00:40:14 Right.
Jerry 00:40:15 So the second piece to this is the national name. Starting a business on your own is going to make you a great name in your backyard. It's not going to necessarily put you on a national level. It's not going to necessarily get you that competitive name. Especially, uh, in the industry that we're in. That is a very crowded industry. There's a lot of national accounts that national companies want to do business with national companies, just factual. Right. And so those are the two compelling things that I tell people. Stefan you can certainly add to that if you'd like.
Stefan 00:40:48 Yeah, no, I mean, that's it. You have something to rely on. it's a proven case, just like Jerry said. I think there's something else to it, that I think a lot of people overlook. It's the network that you're joining. You already have business folks that are doing the same work you're doing and not in competition with you that you should be able to share information with. And I think one of the big deals is, oh, I can start a business on my own. You absolutely can. Just like you said, Lance, 100%. Do you know every single piece of thing you need to get this type of business started? Yeah, we listened to it. We were just at a conference a couple of weeks ago, and we hear a restoration, owner of a franchise restoration company, small deal. And they said, well, I didn't have anybody to do the contents, so I did it myself. And my Whirlpool washer has never worked so much in its life. And right there, I'm, like, going, oh, okay, please don't tell the insurance company that that's how you cleaned it, because that wouldn't be satisfactory inside the industry. But it was like, we just solved the problem. Hey, that's great. That's what entrepreneurs do. They solve problems. The thing is, how do you solve it to the best efficiency and how can you make the most money off of it? Do you want to have to solve every single problem that's difficult? Hey, I'm a marketing expert. Great. I can do all the marketing. I don't know how to clean. I don't know how to pack it correctly. It's great. We get moving. Companies that come in, they say they know how to pack first of all, we say they don't pack it right for insurance worlds. Do they know how to do the financial side of it? Do they know how to do the marketing side of it? So we give you a head start on that. We give you guidelines. We are available. A franchise or is available and should be available for questions at all times. working. Our goal of success isn't just the number of franchisees that are engaged with us or the revenues. Our success is based on the franchisees success. If they're successful, we're successful. And that's the victory in the whole thing. we're not making more money than the franchisees are. That's the entire point is we only make a percentage of what it is to help them be successful at everything. The difference is, do you want to do it on your own or do you want to have some, like, a network and a relationship capability to learn more? And that's why I think the difference is.
Lance Graulich 00:43:21 Go ahead, Jerry.
Jerry 00:43:23 Stefan brought up a great point. When you have owners that are running an identical business as you, uh, a pack out in California, Texas, or New Jersey is a pack out. But when you are part of a franchise, it's like a country club setting. It's a country club feeling, right? You're with like minded people doing the exact same thing you're doing. And you can pick that phone up and talk to anybody that's a, franchisee and or a corporate person that has been there, done that, seen it, and experienced it. And that takes a lot of headache and hassle from an independent operator that's trying to figure it out on their own and does have nobody they can rely on other than family or friends that might give them advice. We'll leave it at that. Whether it's right, wrong, or not.
Lance Graulich 00:44:06 Love it. Stefan, on your LinkedIn profile, at the very top, it says EBITDA Growth Driver. Right at the top. And for those listening, EBITDA, you don't know what it is. It's cash flow. Earnings before interest, taxes, depreciation amortization. Very common business term. So you are an EBITDA growth driver. I was joking with you guys, but very serious before I hit record here, like, I want an EBITDA Growth Driver on my side. So what motivated you to put that there, other than it's true?
Stefan 00:44:38 Well, again, as I said, I started in the marketing world on the agency side. My entire objective for my client was to make them money. So it's a return on investment, right? So the better the return on investment, the better the EBITDA. Uh, that's how it flows. And to keep it real simple, it's the profit you can make off of your business. And so everything that I've done in my career focuses on the profit. And it fits with franchising. What I've found over my career is it fits very well with franchising. I like franchising because I enjoy the conversations with franchise owners to deal with their problems that they're having, their frustrations, and to help them reach goals of profit or growth to make their goals come true. And so to do that, you got to be able to put all of the elements together. It's an efficiency of operations. It's an efficiency of the marketing and the effort that you spend to generate the growth for the business and the revenues. So it's the combination of everything put together. And I've done it for my career, which is over 28 years. Um, but I've also done it in the franchising world. So it isn't just on the marketing side. I've been the chief operating officer, I've been a CEO, I've been presidents of other brands. But the thing that I've come back to more and more is I enjoy having to try and solve all those problems. that's what an entrepreneur usually an entrepreneur, most of them enjoy that. That's what they're good at. They're going to go do this this is mine. I don't have anybody else to deal with. This is mine. Well, we're giving you some roadmaps to do this and these are some efficient ways. And just like we just said, part of the network. And the benefit is so that you don't waste money trying to learn and figure everything out from scratch. There's no reason to waste that money. The franchise or should have a pretty good roadmap if they're a strong franchise or. And as you look through the industry of, franchising, many folks have good roadmaps in different types of industries. That's what it is. And why do I put it there? Because that's what I've done for almost 30 years. That's the goal you want to ask? I said, are you making money or not? If you're not, let's talk about that. They're like, well, I thought you were going to come in. I came into Packouts and I get an owner telling me, I thought you were going to tell me I got to get my software package up. Yeah, uh, that's one thing. Let's go talk about are you making
Stefan 00:47:09 money? No, I'm not making money. Okay, show me. Are you not making money? No, you're not making money. Okay. So let's go back, let's go back. What are the levers and dials we can turn to get you towards that? Efficiency. And so that becomes my goal in what I do as a president for a brand. And that's what we deliver. And so my team, that's our focus on operations and marketing and finance and everything. That's our focus. Because if we're delivering that, it makes it easy for Jerry to go out and deliver what we do. Because he's like, well, here's what everybody's doing. So that's why I put it up there is because that's really all my goal is to drive EBITDA for me or for the franchisees, that are part of my brand.
Lance Graulich 00:47:54 Good stuff.
Jerry 00:47:55 Well, Jerry, add to that. Well, you're going to add to it.
Lance Graulich 00:47:58 In your final thought. So roll that into your final thought. Final words of wisdom, Jerry.
Jerry 00:48:03 This is a perfect topic to end on. So I want to add to that. There's a lot of businesses that make money and have zero profitability. So when you're looking at EBITDA, what Stefan said is absolutely accurate. Being able to know the difference from making money and making money and being profitable through EBITDA. So that was a great segue. I want to close in, something that somebody taught me a while back. I think it was a very smart person, Robert Tunmyer. Some of you in the franchise world know that name the difference between a job and business ownership. Business ownership will provide you with three specific things. Lifestyle, wealth and equity. A job cannot provide you with all three of those things. Most people can get a great lifestyle out of a job. Some can create wealth out of a job. Most are creating equity for somebody else. And so you really want to look at what entrepreneurship and business ownership can do is those three things. Wealth. lifestyle, wealth. Equity.
Lance Graulich 00:49:07 Love it. Thank you. Jerry and Stefan, final words. Final words of wisdom, I should say, as well.
Stefan 00:49:14 Sure. as a potential franchisee, be ready to work. It's the bottom line. Uh, we talked about EBITDA and profit. If you put the effort in, you build it and you continue to work it, it will continue to deliver for you. And it's something you have, it's yours. Even if you're part of a franchise, that's the entire part. The franchise is just another lever to help build your business that you want to do. And I think that's extremely important because if you're not willing to do the work, this is not buying a job franchisees and joining a franchise system is not buying yourself a job. It is literally building your business. And it's a slightly different element. Jerry made a good point on that, and I second that. And it's just know that you're going to get happy. If you're successful at it, you're going to get happy at a certain level. Don't stop. If you're at that point, you're going to run out. And then maybe it's time to think of either an exit succession or a way to step back and let it run itself and be a little more absentee. But that is still a business plan. And it just don't stop. And you'll find the growth and the value that comes with it.
Lance Graulich 00:50:28 Sounds like a plan to me. Well, general in. Stefan and Jerry, thank you so much, both for being here and, we'll be, talking again soon. And, thanks again for listening.
Stefan 00:50:39 Thanks a lot, Lance.
Jerry 00:50:40 Thanks for having us. Lance been a pleasure.
Lance Graulich 00:50:43 My pleasure.