Fuld transskription af Why Differentiation Matters in Franchising | Building a Stronger Service Franchise

last, you know, three or four years, 71 00:03:24.110 --> 00:03:28.060 but really got to understand how important differentiation is from 72 00:03:28.080 --> 00:03:31.639 the consumer side. You know, the revenue quality, right? All 73 00:03:31.680 --> 00:03:33.699 these things that you hear in business, you got to 74 00:03:33.719 --> 00:03:35.580 be different. All these things that I kind of thought 75 00:03:35.620 --> 00:03:37.960 were things you read in a book, like I got 76 00:03:37.979 --> 00:03:40.439 to viscerally understand. And so, yeah, excited to kind of 77 00:03:40.469 --> 00:03:42.490 share a little bit more about that today, Dave. 78 00:03:42.930 --> 00:03:45.009 Yeah, well, thank you for sharing that because I think 79 00:03:45.569 --> 00:03:49.550 that you've been through your own unique journey but that 80 00:03:49.610 --> 00:03:51.849 is not a unique story, right? That is, I feel 81 00:03:51.870 --> 00:03:55.169 like every brand that ever gets anywhere and is memorable 82 00:03:55.210 --> 00:03:58.159 and grows, they've been through a similar kind of refining fire. 83 00:03:58.560 --> 00:04:00.659 And probably many of them started with the same kind 84 00:04:00.699 --> 00:04:03.280 of blind optimism of, oh yeah, I can do that. Like, sure, 85 00:04:03.379 --> 00:04:06.819 let's go do it. And my wife and I were 86 00:04:06.840 --> 00:04:09.780 kind of working with a young brand who's building something 87 00:04:09.800 --> 00:04:11.830 now and it's cool. But like, they were like, we 88 00:04:11.849 --> 00:04:14.150 should franchise this. And I was like, no, you can't. Like, 89 00:04:14.169 --> 00:04:16.509 you're not even close. Like, We're not differentiated enough. We're 90 00:04:16.529 --> 00:04:18.550 not ready for this. So it's been kind of fun 91 00:04:18.589 --> 00:04:20.339 to like talk to these young guys and kind of 92 00:04:20.379 --> 00:04:22.040 help them figure out a few things they got to do. 93 00:04:22.100 --> 00:04:26.360 But tell us about your journey, right? There's that story, 94 00:04:26.720 --> 00:04:30.339 the book, Differentiate or Die. I live by that. Like, 95 00:04:30.379 --> 00:04:32.819 I think it's right. You have to be different. But 96 00:04:32.879 --> 00:04:34.500 talk to me about like this journey you went on 97 00:04:34.519 --> 00:04:37.829 where you started to realize by not being different, we 98 00:04:37.870 --> 00:04:40.329 will not be successful. And then how did you decide 99 00:04:40.370 --> 00:04:42.509 to land where you landed by being a pay for 100 00:04:42.550 --> 00:04:45.819 weight junk removal company rather than, It's kind of like 101 00:04:45.860 --> 00:04:46.420 everybody else. 102 00:04:47.180 --> 00:04:51.170 Yeah, I think, you know, I think there's some stuff 103 00:04:51.209 --> 00:04:54.329 on the internet that'll make you think, especially in home services, 104 00:04:54.350 --> 00:04:56.829 like there's just so much demand out there. There's so 105 00:04:56.870 --> 00:04:59.720 many phone calls going unanswered by these terrible like boomer 106 00:04:59.759 --> 00:05:01.639 business owners. All you have to do is like throw 107 00:05:01.680 --> 00:05:03.240 out your shingle and you'll be successful. 108 00:05:03.279 --> 00:05:03.459 Right. 109 00:05:04.000 --> 00:05:06.689 And I viscerally believe that not to be true, but. 110 00:05:07.060 --> 00:05:08.480 that was, that was kind of also like one of 111 00:05:08.500 --> 00:05:10.100 the impetuses to get in. I was like, you know, 112 00:05:10.120 --> 00:05:11.680 there's plenty of demand. And then when you, when you 113 00:05:11.699 --> 00:05:13.800 finally get in the business and you realize like, Hey, 114 00:05:13.920 --> 00:05:17.029 you know, I know you know this Dave, like Legion sales, 115 00:05:17.050 --> 00:05:19.550 like it's the most important lifeblood. 116 00:05:19.009 --> 00:05:20.290 Oxygen of any business. Right. 117 00:05:20.329 --> 00:05:22.810 And it's actually very nuanced and very difficult to create 118 00:05:22.850 --> 00:05:27.470 Legion and sustainable Legion and scalable Legion. And so anyway, 119 00:05:27.850 --> 00:05:30.850 all that aside, I think for me, I do have 120 00:05:30.889 --> 00:05:33.449 a decent mind at like strategy, which, which, which has 121 00:05:33.470 --> 00:05:36.279 been really helpful for me. And so, I was listening, 122 00:05:36.300 --> 00:05:37.920 I was in a Vistage group and I was listening 123 00:05:37.939 --> 00:05:42.000 to this presenter talk about there's like two optimal strategies 124 00:05:42.040 --> 00:05:45.439 of business. You could pursue operational excellence, which is like, 125 00:05:45.560 --> 00:05:48.139 I'm going to go be the low cost provider. I've 126 00:05:48.189 --> 00:05:52.250 got to build out like Amazon, huge distribution warehouses. Like 127 00:05:52.290 --> 00:05:53.910 I've got to get this huge network to drive my 128 00:05:53.949 --> 00:05:57.290 marginal costs as low as possible. Walmart, Costco, all these 129 00:05:57.329 --> 00:06:00.689 models built on being the lowest cost provider, really great 130 00:06:00.740 --> 00:06:03.399 business model. but takes a lot of capital. You've got 131 00:06:03.420 --> 00:06:04.620 to be one of the first two or three in 132 00:06:04.660 --> 00:06:07.639 the industry. You've got to get in there and do that. Otherwise, 133 00:06:07.660 --> 00:06:11.420 you're going to be toast. Or you could have a 134 00:06:11.459 --> 00:06:14.459 differentiation strategy, which is go against an incumbent, find a 135 00:06:14.500 --> 00:06:17.860 new and different spin on it. Make a claim and 136 00:06:18.079 --> 00:06:21.430 stake out your territory as the only one that does this. 137 00:06:21.490 --> 00:06:23.529 And there's plenty of room for companies to do that. 138 00:06:23.569 --> 00:06:28.529 But the problem is when companies go into an established market, 139 00:06:28.850 --> 00:06:31.430 they try and be the 615th person to do plumbing 140

00:06:31.470 --> 00:06:33.589 the exact same way, right? And what normally happens is 141 00:06:33.610 --> 00:06:36.009 there's a really big guy and then about half their 142 00:06:36.060 --> 00:06:38.560 size is a second player and about half their size 143 00:06:38.600 --> 00:06:40.980 is a third player. In most brands and categories, it's 144 00:06:41.000 --> 00:06:46.040 a very tried and true process like in potato chips, right? 145 00:06:46.060 --> 00:06:47.220 There's the big guy all the way down to the 146 00:06:47.240 --> 00:06:47.680 little guy. 147 00:06:48.100 --> 00:06:49.339 And what you don't want to do is be one 148 00:06:49.360 --> 00:06:51.379 of the little guys pointing the gun up to the 149 00:06:51.439 --> 00:06:53.439 top and being like, I have nothing different about me, 150 00:06:53.459 --> 00:06:54.990 but I'm going to get to the top by golly. 151 00:06:55.050 --> 00:06:56.310 It's like, You're not. 152 00:06:56.370 --> 00:06:57.970 It's going to be so hard to get market share. 153 00:06:57.990 --> 00:06:59.589 It's going to be so hard to get any sort 154 00:06:59.629 --> 00:07:03.490 of mind share for your consumers. You don't have enough money, time, resources. Like, 155 00:07:03.529 --> 00:07:06.689 that's really dumb. And so what we ended up doing 156 00:07:06.709 --> 00:07:08.660 was like, well, how do we flip kind of like judo, 157 00:07:08.699 --> 00:07:10.839 the category on its head? How do we counter position? 158 00:07:10.899 --> 00:07:14.199 How do we find that differentiation? And we basically created 159 00:07:14.220 --> 00:07:16.639 a new category class. We were like, in junk removal, 160 00:07:16.660 --> 00:07:18.579 everyone charges by volume. We're like, oh, well, we're going 161 00:07:18.600 --> 00:07:21.399 to do weight. Yeah, we're the first and only pay-by-weight 162 00:07:21.420 --> 00:07:24.399 junk removal. So, like, we immediately got out of that, like, huge, 163 00:07:24.480 --> 00:07:28.689 large– you know, entrenchment of like all these different players. 164 00:07:28.750 --> 00:07:30.329 And now, hey, we're in a blue ocean. We're the 165 00:07:30.389 --> 00:07:33.180 only pay-by-way junk removal company, right? It has to be 166 00:07:33.189 --> 00:07:36.759 more sophisticated than that. Like, does the consumer have, you know, 167 00:07:36.839 --> 00:07:38.660 get value out of it? Do they understand the value? 168 00:07:38.699 --> 00:07:40.959 Can you communicate it well? Can you build a durable 169 00:07:40.980 --> 00:07:42.819 business model off of it? We've got a lot of 170 00:07:42.879 --> 00:07:45.670 other great stuff on it. But that was to me, like, 171 00:07:46.040 --> 00:07:48.139 If I was the first or second or third guy 172 00:07:48.220 --> 00:07:50.810 even in junk removal as a category, just go as 173 00:07:50.870 --> 00:07:54.189 fast as you can. It's good enough just to kind 174 00:07:54.230 --> 00:07:55.910 of run it as good as you can. But if 175 00:07:55.949 --> 00:07:58.649 you're not the top two or three first one in 176 00:07:58.689 --> 00:08:01.750 your category, I think it's really important to pursue a 177 00:08:01.769 --> 00:08:03.930 differentiation strategy if that makes sense. 178 00:08:04.310 --> 00:08:06.660 That totally makes sense. Tell me just a little bit 179 00:08:06.699 --> 00:08:10.240 more about the consumer. You mentioned a consumer. Can you 180 00:08:10.259 --> 00:08:12.879 explain it? Can they understand it? How is it that 181 00:08:13.360 --> 00:08:16.079 how is this resonating with the consumers or, or is 182 00:08:16.120 --> 00:08:18.050 it the consumers that you're really after? Or is it 183 00:08:18.370 --> 00:08:21.529 resonating better with like your commercial guys? Like who, who 184 00:08:21.629 --> 00:08:24.769 is picking up on this message and saying, Oh, that's 185 00:08:24.810 --> 00:08:27.870 a valid differentiator. I like this because they vote with 186 00:08:27.889 --> 00:08:30.310 their wallets. Right. But I see people that are trying 187 00:08:30.329 --> 00:08:33.230 to differentiate on things. I'm like, that's a waste of time. 188 00:08:33.250 --> 00:08:34.269 Yeah. They don't care. 189 00:08:34.289 --> 00:08:36.509 Tell me how the market react to this. A hundred percent. 190 00:08:36.580 --> 00:08:36.860 Yeah. 191 00:08:36.909 --> 00:08:39.220 So, so the easy one for us is like, we've 192 00:08:39.259 --> 00:08:42.879 got a great consumer value prop. Um, and, The way 193 00:08:42.919 --> 00:08:45.320 everyone else charges, it's roughly based off volume, but it's 194 00:08:45.379 --> 00:08:49.399 really like, hey, you know, 1-800-GOD-JUNGLE, book an on-site estimate. 195 00:08:49.440 --> 00:08:51.500 These two guys show up, they look around, they eyeball 196 00:08:51.519 --> 00:08:53.860 your stuff, they throw out, yeah, it's like 700 bucks. 197 00:08:54.440 --> 00:08:56.850 And it feels super arbitrary because it is super arbitrary. 198 00:08:57.210 --> 00:08:59.169 If you had the same crew go out to the 199 00:08:59.210 --> 00:09:01.870 same job one week, the next week, the week after, 200 00:09:01.909 --> 00:09:04.129 they would probably come up with three totally different prices 201 00:09:04.549 --> 00:09:06.330 based off of like what they had for lunch, what 202 00:09:06.350 --> 00:09:08.850 their girlfriend told them the night before, right? Like how 203 00:09:08.870 --> 00:09:10.889 close they were hitting, you know, their bonus that week 204 00:09:10.950 --> 00:09:13.720 or not. It's super arbitrary and the customers felt that. 205 00:09:13.779 --> 00:09:17.570 And so if your house is nicer, guess what? Like cha-ching, cha-ching, 206 00:09:17.610 --> 00:09:19.029 the guys are going to try and charge you more. 207 00:09:19.629 --> 00:09:22.570 And it was just a really dumb value prop for 208 00:09:22.610 --> 00:09:24.149 me as a business owner too, because I had to 209 00:09:24.190 --> 00:09:27.309 train all my 25-year-olds how to do sales. They would 210 00:09:27.330

--> 00:09:31.389 get scared and discount things unnecessarily. And then I would 211 00:09:31.409 --> 00:09:34.509 tell them, hey, I need higher average job sizes and unbeknownst, 212 00:09:35.070 --> 00:09:36.649 I didn't intend on it, but they would go out and. 213 00:09:36.750 --> 00:09:39.220 Overcharge a customer. And I was like, man, my margins 214 00:09:39.250 --> 00:09:40.399 are everywhere. This is crazy. 215 00:09:40.440 --> 00:09:43.320 My customers don't feel good about it. And so the 216 00:09:43.360 --> 00:09:46.200 insight for me came, when we go to dispose, we're 217 00:09:46.259 --> 00:09:48.620 just charged by the weight. We're not charged by volume. 218 00:09:48.820 --> 00:09:51.730 Why are we doing this convoluted thing? Man, in the 219 00:09:51.759 --> 00:09:54.289 landfill industry 50 years ago, we went through a similar 220 00:09:54.330 --> 00:09:57.230 transition where we went from volume to just scales and weight. 221 00:09:57.230 --> 00:09:58.629 I was like, man, if I could figure out how 222 00:09:58.649 --> 00:10:01.539 to do that, we could set a simple per pound price. 223 00:10:01.600 --> 00:10:04.399 It's not up to my drivers to figure out what 224 00:10:04.419 --> 00:10:06.320 they want to charge per pound. We'll set a flat 225 00:10:06.379 --> 00:10:08.340 per pound price, and then we're just going to show 226 00:10:08.399 --> 00:10:11.460 up and really just be more demand fulfillers. 227 00:10:11.759 --> 00:10:12.460 How much do you have? 228 00:10:12.500 --> 00:10:15.980 We could take one pound, 500 pounds, 1,000 pounds, 2,000 pounds. 229 00:10:16.019 --> 00:10:17.779 It doesn't matter, but we're not going to charge you 230 00:10:17.799 --> 00:10:19.860 any more or less based off what your house looks like. 231 00:10:20.840 --> 00:10:23.399 or what my guys feel like when they get there 232 00:10:23.740 --> 00:10:26.279 to the job. And so customers really felt like that 233 00:10:26.320 --> 00:10:29.179 was a really great, we're taking risk off the table 234 00:10:29.210 --> 00:10:31.730 of you getting screwed. I would much rather go to Tesla. 235 00:10:31.769 --> 00:10:32.409 I just bought one. 236 00:10:32.789 --> 00:10:35.830 And no, there's no negotiating off the. 237 00:10:35.350 --> 00:10:37.710 $ 42, 000 for that Model Y. Maybe I could have gotten 238 00:10:37.730 --> 00:10:38.289 a little better. 239 00:10:38.309 --> 00:10:40.110 Maybe I could have got a little worse deal. 240 00:10:40.129 --> 00:10:41.769 But I like just the flat rate. 241 00:10:43.210 --> 00:10:44.000 I know what I'm getting. 242 00:10:44.100 --> 00:10:46.509 I hate going to a car lot and being like, well, 243 00:10:46.529 --> 00:10:47.470 the sticker is like $ 39. 244 00:10:47.269 --> 00:10:47.370 99. 245 00:10:47.370 --> 00:10:50.389 I'm like, dude, I don't even care if I pay 246 00:10:50.409 --> 00:10:52.870 an extra two or three grand or not. I don't 247 00:10:52.889 --> 00:10:55.250 like this game. I don't want to leave here wondering 248 00:10:55.309 --> 00:10:57.169 if I got screwed. And that was the same value 249 00:10:57.190 --> 00:11:00.669 prop consumer-wise that we were trying to solve. And it's 250 00:11:00.750 --> 00:11:03.629 really been beneficial for us. And so we were able 251 00:11:03.669 --> 00:11:07.110 to get a lot of traction there. And we've shown 252 00:11:07.129 --> 00:11:10.309 that customers are willing to pay, not even pay more. 253 00:11:10.350 --> 00:11:12.490 Sometimes they pay more, sometimes they pay less, but they're 254 00:11:12.509 --> 00:11:14.480 willing to go with us and vote with their wallets 255 00:11:14.509 --> 00:11:15.820 because They just don't. 256 00:11:15.700 --> 00:11:18.080 Want to get screwed. And our model is inherently more 257 00:11:18.120 --> 00:11:19.059 fair and transparent. 258 00:11:19.600 --> 00:11:24.519 Yeah. I love that part. Being fair and being transparent 259 00:11:25.720 --> 00:11:30.210 from a software side, I completely agree with you. But 260 00:11:30.450 --> 00:11:32.850 it changes the way that consumers feel about you. And 261 00:11:32.870 --> 00:11:36.230 there's a ripple effect, right? So you guys, by creating 262 00:11:36.269 --> 00:11:39.710 a model that's now more fair and transparent, have you 263 00:11:39.730 --> 00:11:43.669 seen any ripples where that starts to build into referral networks? 264 00:11:43.690 --> 00:11:48.139 That starts to build into... additional business, additional trust, repeat business? 265 00:11:48.159 --> 00:11:50.519 Where have you seen it affect the way consumers interact 266 00:11:50.559 --> 00:11:51.259 with the brand now? 267 00:11:51.899 --> 00:11:54.929 Yeah. I mean, like for you as a marketing sales 268 00:11:54.970 --> 00:11:57.710 guy as well, Dave, like our conversion rate has gone 269 00:11:57.750 --> 00:12:01.389 way up. Like we're building more value on the phone. Like, hey, 270 00:12:01.409 --> 00:12:03.590 have you ever used junk removal before? Here's our story. 271 00:12:03.629 --> 00:12:05.169 The other guys do it this way that we think 272 00:12:05.240 --> 00:12:08.200 it's unfair. This is how we do it, right? We'll 273 00:12:08.220 --> 00:12:10.480 book the estimate at a higher rate. And then our 274 00:12:10.580 --> 00:12:14.299 onsite conversion rate basically went in normal junk removal, you'll, 275 00:12:14.340 --> 00:12:17.139 you'll about 10 to 15% of your jobs, you'll show 276 00:12:17.179 --> 00:12:19.700 up for an on-site estimate and they go, no, nevermind, 277 00:12:19.740 --> 00:12:20.940 get away from me, whatever. 278 00:12:21.340 --> 00:12:21.600 Great. 279 00:12:21.740 --> 00:12:25.120 Like there's an on-site cancellation, um, aspect to it with 280 00:12:25.179 --> 00:12:28.379 our model. We basically, again, are like order takers. We 281 00:12:28.399 --> 00:12:30.370 could show up if your budget's lower, we just load 282 00:12:30.379 --> 00:12:32.509 less stuff. If it's higher, we load more stuff. But 283 00:12:32.590 -->

00:12:36.149 our on-site conversion rate, um, you can see like skyrocketed 284 00:12:36.169 --> 00:12:38.149 to where like, we almost don't even track it anymore 285 00:12:38.210 --> 00:12:41.019 because like, odds are like we convert almost all of 286 00:12:41.100 --> 00:12:44.240 our onsite appointments to at least something. And so like, 287 00:12:44.659 --> 00:12:46.980 you know, when you're acquiring customers on the residential side, 288 00:12:47.940 --> 00:12:50.799 you know, close rate, booking rate, cancellation rate, all these 289 00:12:50.870 --> 00:12:53.429 things are really important to drive your customer acquisition costs down. 290 00:12:53.470 --> 00:12:56.129 And so like, we've seen a great uptick and like 291 00:12:56.149 --> 00:12:58.370 the story we could tell in a call center to 292 00:12:58.690 --> 00:13:01.850 the bookings, to our conversion rate, which is like driving 293 00:13:01.929 --> 00:13:04.809 real dollars, right? We can either pocket more of that, right? 294 00:13:04.850 --> 00:13:08.269 Like have a, have a more, you know, profitable customer 295 00:13:08.289 --> 00:13:10.909 acquisition strategy, or we could even spend more money to 296 00:13:10.970 --> 00:13:13.549 acquire more customers than our competitors because our cost per 297 00:13:13.570 --> 00:13:16.690 lead or our customer conversion, right, is better because of 298 00:13:16.750 --> 00:13:17.870 that trust. 299 00:13:17.470 --> 00:13:20.549 That we built in the sales process. Those are the 300 00:13:20.570 --> 00:13:20.990 big things. 301 00:13:21.370 --> 00:13:25.879 That's fantastic. Well, and one thing that we've observed is 302 00:13:26.379 --> 00:13:29.279 that the referral flow, right, can increase. We get a 303 00:13:29.299 --> 00:13:32.019 lot more referral business because somebody who'd had a bad 304 00:13:32.059 --> 00:13:34.259 experience with another software company, or in your case, another 305 00:13:34.299 --> 00:13:37.750 junk removal company, when they're talking to people about their 306 00:13:37.789 --> 00:13:38.659 experience and someone's like. 307 00:13:38.679 --> 00:13:39.379 Well, I want that. 308 00:13:39.940 --> 00:13:42.500 I would love to have that experience. Never had that before. 309 00:13:42.519 --> 00:13:44.000 I always feel like I'm kind of getting screwed when 310 00:13:44.019 --> 00:13:45.919 these guys show up with their truck and I'm intimidated 311 00:13:45.940 --> 00:13:48.919 and I want the tires gone. So I just pay 312 00:13:48.940 --> 00:13:52.259 them whatever. So have you seen any sort of ripple 313 00:13:52.299 --> 00:13:55.230 effect in that way or introductions into your commercial guys, 314 00:13:55.269 --> 00:13:58.669 which can be a huge operator for you? For sure. 315 00:13:58.730 --> 00:14:03.509 I know we've definitely got a lot more referrals, repeats. Again, 316 00:14:03.570 --> 00:14:06.720 when you hear junk removal now, It's harder to be like, well, 317 00:14:06.740 --> 00:14:08.539 call these guys. It's just a lot easier for you 318 00:14:08.559 --> 00:14:10.399 to say, oh, they're the only ones that do it 319 00:14:10.419 --> 00:14:13.320 by weight. Everyone has to be known for something. If 320 00:14:13.360 --> 00:14:16.580 we're the weight guys, it's just better for a referral mechanism. 321 00:14:17.299 --> 00:14:18.860 One of the things that I had a hunch when 322 00:14:18.879 --> 00:14:21.539 we pivoted to the pay-by-weight model, it would happen, but 323 00:14:22.200 --> 00:14:25.870 it's been very transformative for our business. We went from 324 00:14:25.909 --> 00:14:30.289 predominantly B2C consumer home services, which I still love. 325 00:14:30.309 --> 00:14:31.169 You can hear my voice. 326 00:14:32.009 --> 00:14:36.309 The majority of our business now is B2B. Um, apartments, 327 00:14:36.350 --> 00:14:40.009 property managers, they love the same level of transparency because again, 328 00:14:40.509 --> 00:14:43.450 they could order a junk pickup and one week it's 329 00:14:43.450 --> 00:14:46.110 500 bucks, the same guys, the same load. The next 330 00:14:46.149 --> 00:14:48.990 week may be 700 bucks. The third week it may be, 331 00:14:49.049 --> 00:14:51.230 I don't even know what it's just, it's so arbitrary. 332 00:14:51.470 --> 00:14:53.629 And it was really hard for the business to business, 333 00:14:54.029 --> 00:14:56.590 you know, this business owners or property managers to like 334 00:14:56.610 --> 00:14:59.330 have a, to feel fair. Like they just didn't compute 335 00:14:59.350 --> 00:15:02.409 in their brains. And so like our pay-by-way pricing model, um, 336 00:15:02.600 --> 00:15:06.639 is really unlocked. this huge blue ocean that was really underserved. 337 00:15:07.539 --> 00:15:09.480 And like where I'm most important, you know, I'm most 338 00:15:09.600 --> 00:15:13.559 excited really about our B2B and our commercial services going forward. 339 00:15:13.580 --> 00:15:15.480 I think as we build our national network, like I 340 00:15:15.500 --> 00:15:19.759 think we're going to be predominantly B2B commercial revenue, commercial services. 341 00:15:19.840 --> 00:15:22.480 And I think, again, another way to differentiate, one of 342 00:15:22.500 --> 00:15:27.860 Harry Gotjunk loves residential. They're 90%, 80%, whatever, residential, great. 343 00:15:28.220 --> 00:15:30.299 They've got a little model with little bitty trucks and 344 00:15:30.340 --> 00:15:32.669 kind of a weird way to price things. I'm happy 345 00:15:32.690 --> 00:15:35.610 to counter position that, be the pay-by-weight guy, take all 346 00:15:35.629 --> 00:15:38.230 the consumers we can from them, for sure, on the 347 00:15:38.269 --> 00:15:41.470 home side, but also build a huge recurring revenue base 348 00:15:41.490 --> 00:15:45.360 of our commercial work built on that same trust. That's 349 00:15:45.399 --> 00:15:49.600 what fires me up. We're continuing to try to differentiate. 350 00:15:49.639 --> 00:15:52.080 We're

continuing to try and find our place in the 351 00:15:52.120 --> 00:15:55.059 market like every good brand and business owner should. 352 00:15:55.519 --> 00:15:59.019 You know what's wild is that most home service brands 353 00:15:59.110 --> 00:16:04.100 that I engage with, they they almost all start residential, right? 354 00:16:04.480 --> 00:16:07.980 Home services, right? But then many of them, the wise ones, 355 00:16:08.019 --> 00:16:12.809 have kind of pivoted intentionally into the commercial because it's recurring, right? 356 00:16:13.450 --> 00:16:16.110 Rather than sell a single job to a single Tom 357 00:16:16.190 --> 00:16:19.690 every time you're doing a job, sell an account. And 358 00:16:19.710 --> 00:16:22.529 now like, you know, a construction group or the property 359 00:16:22.570 --> 00:16:25.299 management groups or, oh my gosh, I'm sure you guys 360 00:16:25.340 --> 00:16:28.200 are working with like storage facilities, right? Every time they 361 00:16:28.220 --> 00:16:29.860 got to do a clean out of a 10 by 362 00:16:29.860 --> 00:16:32.879 10 or whatever, they got to throw that crap away somewhere, right? 363 00:16:32.940 --> 00:16:35.559 So yeah, but that's every month they've got two or 364 00:16:35.600 --> 00:16:36.919 three that they need to clean up. So that's just 365 00:16:37.139 --> 00:16:39.440 great business, right? To build the recurring stream. 366 00:16:40.480 --> 00:16:40.759 Yeah. 367 00:16:40.799 --> 00:16:43.470 Another, another thing you get, you know, beat over the 368 00:16:43.490 --> 00:16:45.330 head with the business school or all these things. 369 00:16:45.350 --> 00:16:46.370 And you're like, yeah, yeah, yeah. 370 00:16:46.429 --> 00:16:46.789 I know. 371 00:16:46.850 --> 00:16:50.830 But like home services, it's all the rage. It's 21, 2022, right? 372 00:16:50.870 --> 00:16:53.549 Like we know better and I'm going to be undifferentiated. 373 00:16:53.600 --> 00:16:55.360 I'm just going to go and do, do home services. 374 00:16:55.419 --> 00:16:55.639 Right. 375 00:16:55.659 --> 00:16:57.980 And then, yeah, I think a lot of folks are, um, 376 00:16:58.379 --> 00:17:00.620 Trying to pivot to, if I was looking at a 377 00:17:00.639 --> 00:17:04.009 franchise to buy or start, definitely commercial services has to 378 00:17:04.049 --> 00:17:08.190 be kind of recurring revenue, differentiation that leads to higher 379 00:17:08.230 --> 00:17:12.130 gross margins or pricing power, obviously scalable business model with 380 00:17:12.150 --> 00:17:15.269 good ROI. Those are the things that are non-negotiables for 381 00:17:15.309 --> 00:17:18.529 me at this point. Really in the cycle, it's just consumers, 382 00:17:18.589 --> 00:17:20.319 I feel like, have had a harder time right now, 383 00:17:20.380 --> 00:17:23.559 like the last couple of years as well. I just 384 00:17:23.599 --> 00:17:26.829 think if you're only advertising Google products, They're so good 385 00:17:26.849 --> 00:17:29.309 at making money. And like with the search transition and 386 00:17:29.349 --> 00:17:32.490 with all sorts of digital marketing, like, you know, just 387 00:17:32.549 --> 00:17:35.349 so many things changing. If you're 100% reliant on your 388 00:17:35.410 --> 00:17:38.109 digital marketing and the channels that have worked the last 389 00:17:38.170 --> 00:17:41.269 five or 10 years, like I would be more nervous the. 390 00:17:41.230 --> 00:17:42.289 Next five years, right? 391 00:17:42.309 --> 00:17:44.269 Which is why it's also nice to go offline and 392 00:17:44.650 --> 00:17:47.019 hire account execs or sales reps or biz dev reps 393 00:17:47.059 --> 00:17:49.190 and like go build, you know, go build revenue in 394 00:17:49.380 --> 00:17:51.619 your local market. You're not relying on Google. It's more 395 00:17:51.640 --> 00:17:52.480 within your control. 396 00:17:53.460 --> 00:17:57.799 Yeah, that's actually a really interesting point because... all the 397 00:17:57.839 --> 00:18:01.460 digital marketing properties right now, they're a little bit, they're 398 00:18:01.480 --> 00:18:03.720 a little tumultuous. They're up and down. They're all over 399 00:18:03.740 --> 00:18:07.329 the place. You know, Google's trying to monkey with SEO. 400 00:18:07.390 --> 00:18:09.930 So it forces people back into PPC, right? It's kind of, 401 00:18:10.029 --> 00:18:13.569 kind of tough, but can walk me through a little 402 00:18:13.589 --> 00:18:15.430 bit of like, now that you, now that you guys 403 00:18:15.470 --> 00:18:17.680 have started going down this road, a little more B2B, 404 00:18:17.740 --> 00:18:22.240 more commercial, how are you seeing that stabilize the revenue flow, 405 00:18:22.400 --> 00:18:26.130 even while everybody else dependent upon the PPC stuff is 406 00:18:26.490 --> 00:18:28.269 really kind of up and down dramatically. 407 00:18:28.829 --> 00:18:34.069 Yeah, no, it's like, it's super important, obviously, that recurring, 408 00:18:34.170 --> 00:18:37.839 reoccurring work, like knowing that, hey, I've got my sales 409 00:18:37.900 --> 00:18:40.200 reps and I know every week and every month on average, 410 00:18:40.220 --> 00:18:42.799 they're going to do this. It helps for business planning purposes. 411 00:18:42.900 --> 00:18:46.440 It helps for, you know, just weird second order effects 412 00:18:46.519 --> 00:18:48.980 as well, Dave. Like the more we're out doing a 413 00:18:49.009 --> 00:18:51.410 route for commercial clients and I've got these two or 414 00:18:51.430 --> 00:18:54.769 three jobs that when a residential customer does call me, 415 00:18:55.490 --> 00:18:57.109 you know, and I've got trucks all out and say 416 00:18:57.130 --> 00:18:59.289 at our corporate location here in San Antonio, like it's 417 00:18:59.309 --> 00:19:01.690 a lot easier to just go and hop over and 418 00:19:01.710 --> 00:19:03.950 do that residential job real quick. So like our response 419 00:19:03.990 --> 00:19:06.950 times are lower, right? The

cost to go drive over 420 00:19:06.990 --> 00:19:09.529 there instead of all of us starting, you know, every 421 00:19:09.549 --> 00:19:12.390 day from the, whatever, the Southwest part of town all 422 00:19:12.410 --> 00:19:14.640 the way over here, like we're more dispersed and we 423 00:19:14.680 --> 00:19:17.000 could send, you know, doing these commercial jobs to where 424 00:19:17.019 --> 00:19:19.079 we just go and send the nearest truck over to 425 00:19:19.119 --> 00:19:21.039 do that residential job that just called. And like, there's 426 00:19:21.059 --> 00:19:26.359 a lot of weird, second-order effects that really can help 427 00:19:26.380 --> 00:19:30.960 when you build that commercial revenue. I just think it's 428 00:19:30.980 --> 00:19:36.009 all about revenue predictability. One thing that, again, is a 429 00:19:36.029 --> 00:19:37.849 way to differentiate as a brand, as a founder of 430 00:19:37.890 --> 00:19:41.390 a franchise brand, trying to protect and build moats for 431 00:19:41.470 --> 00:19:44.210 all of our franchise partners is how do we make 432 00:19:44.250 --> 00:19:46.009 it difficult to compete with? How do we make it 433 00:19:46.029 --> 00:19:51.000 difficult to copy? Like our biggest competitors are all residential focused, right? 434 00:19:51.640 --> 00:19:53.579 And the way that they've set up their business model 435 00:19:53.640 --> 00:19:56.299 is they pay all their people a certain way to 436 00:19:56.339 --> 00:19:58.380 where it's really relying on residential and trying to move 437 00:19:58.400 --> 00:20:00.500 that average job size and reviews and all of this. 438 00:20:01.039 --> 00:20:03.079 So we look at from a fresh perspective, how do 439 00:20:03.119 --> 00:20:06.359 we best pay or design pay structure to where it's 440 00:20:06.559 --> 00:20:07.640 more commercially minded? 441 00:20:07.680 --> 00:20:08.319 Like how we. 442 00:20:08.269 --> 00:20:11.450 Design our trucks and The little guys, the residential guys, 443 00:20:11.470 --> 00:20:13.349 they try and make their trucks as small as possible 444 00:20:14.150 --> 00:20:16.289 because they charge by volume. So the faster they fill 445 00:20:16.329 --> 00:20:19.130 the truck up, the more they could charge their customer. 446 00:20:19.170 --> 00:20:21.380 But then they're spending all day driving their full truck 447 00:20:21.410 --> 00:20:24.190 across town in the landfill and back. And it's so 448 00:20:24.230 --> 00:20:26.720 much waste and efficiency where our trucks are getting bigger 449 00:20:26.740 --> 00:20:29.000 and bigger and bigger because we want to go do two, three, four, 450 00:20:29.059 --> 00:20:32.339 five commercial jobs in a row. It doesn't do us 451 00:20:32.420 --> 00:20:34.039 any good because we charge by weight to fill up 452 00:20:34.079 --> 00:20:36.160 our truck fast and have to go spend half a 453 00:20:36.200 --> 00:20:38.769 day driving to the landfill and back, right? So like 454 00:20:38.789 --> 00:20:41.970

we're able to kind of design from sales incentives and 455 00:20:41.990 --> 00:20:44.230 structures to how we design our trucks to how we 456 00:20:44.269 --> 00:20:48.150 design our workflows. You know, that commercial revenue, if you 457 00:20:48.170 --> 00:20:50.859 do it right, you can counter position even further with 458 00:20:50.880 --> 00:20:53.220 your brand against kind of the incumbents, especially if they're 459 00:20:53.240 --> 00:20:55.579 focused on residential, which is kind. 460 00:20:55.440 --> 00:20:56.640 Of what our industry is. 461 00:20:56.680 --> 00:20:59.019 And so, yeah, it's kind of the gift that keeps 462 00:20:59.039 --> 00:21:03.240 giving for us, like just fertile ground to differentiate, you know, build, 463 00:21:03.380 --> 00:21:05.690 try and build moats and try and go build, you know, 464 00:21:05.710 --> 00:21:06.589 a big, big brand. 465 00:21:08.009 --> 00:21:10.589 I love the idea of a competitive moat. We talked 466 00:21:10.609 --> 00:21:13.210 about that quite a bit in executive team meetings here. 467 00:21:13.230 --> 00:21:17.029 I haven't actually, I can't honestly say I've heard another 468 00:21:17.109 --> 00:21:20.289 founder of a home service B2B service brand talk about 469 00:21:20.329 --> 00:21:24.259 it in that way. So for people who maybe aren't 470 00:21:24.279 --> 00:21:26.480 familiar with that term, like maybe break it down for us. 471 00:21:26.480 --> 00:21:28.599 Like what do you mean by a competitive moat? And 472 00:21:28.640 --> 00:21:30.880 then why is it so important to be thinking about 473 00:21:30.960 --> 00:21:34.119 these things as you're trying to build a national franchise brand? 474 00:21:34.740 --> 00:21:35.440 Yeah, great. 475 00:21:35.619 --> 00:21:39.220 Right on my sweet spot, Dave. I love thinking about this. Yeah, 476 00:21:39.339 --> 00:21:41.779 so like competitive moats, right? Like you're basically, you're trying 477 00:21:41.799 --> 00:21:44.980 to find some sort of differentiation, some sort of way 478 00:21:45.019 --> 00:21:49.539 that you do business that can produce basically durable, sustained, 479 00:21:49.880 --> 00:21:52.940 kind of almost abnormal profits over a long term, right? 480 00:21:53.279 --> 00:21:55.480 So like if you're just a ho-hum, your business is 481 00:21:55.529 --> 00:21:59.119 kind of good, it's barely profitable, like we don't really 482 00:21:59.140 --> 00:22:00.750 have to worry about this part. But if you're trying 483 00:22:00.769 --> 00:22:03.049 to make a business model so good, You want to 484 00:22:03.089 --> 00:22:05.410 make it durable, like Apple wants to make a lot 485 00:22:05.450 --> 00:22:07.509 of money for the next 30 years, right? They don't 486 00:22:07.529 --> 00:22:10.019 want to just, you know, fizzle out in a year 487 00:22:10.039 --> 00:22:12.740 or two. So like, how do I sustain my competitive 488 00:22:12.759 --> 00:22:15.160 advantage to where I could charge either a premium or 489 00:22:15.200 --> 00:22:17.700 my cost structure is lower than my competitors? And so, 490 00:22:18.299 --> 00:22:20.839 you know, one of them is like IP, like cornered resources. 491 00:22:20.880 --> 00:22:22.599 Do you have anything that no one else has, right? 492 00:22:22.619 --> 00:22:25.400 Like we've pursued a ton of intellectual property. I've got 493 00:22:25.460 --> 00:22:28.960 patent pending on all of our unique weighing systems and processes, 494 00:22:29.019 --> 00:22:30.849 like That's one way to be like, if I'm the 495 00:22:30.890 --> 00:22:33.119 only one that has the technology, that's a way that 496 00:22:33.170 --> 00:22:35.000 no one else, you know, it's harder to copy and 497 00:22:35.019 --> 00:22:37.680 that you can have sustained kind of competitive mode where 498 00:22:37.700 --> 00:22:40.339 it's harder for someone to come and follow you. Another 499 00:22:40.440 --> 00:22:42.980 one is like network effects, right? You could go try 500 00:22:43.000 --> 00:22:45.420 and start a new Facebook competitor, but unless you have 501 00:22:45.460 --> 00:22:47.720 a couple billion people that are interacting on the platform 502 00:22:47.740 --> 00:22:50.289 and making it better for each other, like you're going 503 00:22:50.309 --> 00:22:54.930 to fail, right? So like usually like network effects, multi-sided marketplaces, right? Um, 504 00:22:55.170 --> 00:22:57.349 but even like with us, the more we get into 505 00:22:57.609 --> 00:23:01.569 property manager groups and BNI groups, and we're the preferred 506 00:23:01.589 --> 00:23:03.630 vendor in these things, like the harder it is for 507 00:23:03.690 --> 00:23:04.970 anyone else to come along and be like, oh, we 508 00:23:04.990 --> 00:23:08.329 already have a junk removal, uh, provider economies of scale 509 00:23:08.349 --> 00:23:10.170 is a big one, right? Like if you're the leader 510 00:23:10.210 --> 00:23:12.319 in your field and you have purchasing powers and you 511 00:23:12.339 --> 00:23:14.880 can acquire, you know, things you need for a lower cost, 512 00:23:14.900 --> 00:23:17.740 cause you have so much volume versus, um, you know, 513 00:23:17.819 --> 00:23:21.809 small guy coming up, like that's a durable competitive advantage. Um, 514 00:23:22.049 --> 00:23:24.160 and yeah, like, you know, it could be talent. Like 515 00:23:24.220 --> 00:23:28.039 if you have a critical resource, like talent or again, 516 00:23:28.059 --> 00:23:29.339 like Pixar is a famous one. 517 00:23:29.380 --> 00:23:32.099 Like they've got the best animators in the world. I 518 00:23:32.119 --> 00:23:32.660 don't know why. 519 00:23:32.680 --> 00:23:34.259 And like, no one does, but like, if you're the 520 00:23:34.299 --> 00:23:35.900 only one that has it, like they had a great, 521 00:23:36.059 --> 00:23:39.200 a great run where, um, you know, uh, they could 522 00:23:39.240 --> 00:23:42.890 earn sustained returns on domestic capital without, without competition. And 523 00:23:42.910 --> 00:23:45.910

then like brands, another one, Dave, like if you're Hermes 524 00:23:46.009 --> 00:23:49.700 or you're, You've somehow like figured out Coca-Cola that your 525 00:23:49.720 --> 00:23:51.910 name alone over the last 30 or 40 or usually 526 00:23:51.930 --> 00:23:54.650 a very long time of marketing has put a picture 527 00:23:54.690 --> 00:23:57.849 in customer's mind that where they're willing to pay you more, seize. 528 00:23:57.650 --> 00:23:59.089 Candy, lots of candy stores. 529 00:24:00.089 --> 00:24:02.279 Like you can earn, you know, it doesn't matter if 530 00:24:02.299 --> 00:24:04.119 you try to compete against Coca-Cola right now, I could 531 00:24:04.160 --> 00:24:05.279 give you a trillion dollars. 532 00:24:06.180 --> 00:24:07.119 Maybe a trillion would work. 533 00:24:07.200 --> 00:24:09.559 I could give you multiple billions of dollars and say 534 00:24:09.579 --> 00:24:12.099 compete with Coke and I don't think you would even 535 00:24:12.119 --> 00:24:12.819 put a dent. 536 00:24:12.660 --> 00:24:14.349 In their market share. So like those are the things 537 00:24:14.869 --> 00:24:15.390 as a founder. 538 00:24:15.930 --> 00:24:17.990 The franchise brand, like how do you do that? How 539 00:24:18.009 --> 00:24:20.710 do you bring competitive moats to you as a brand 540 00:24:20.869 --> 00:24:23.349 in the hyperlocal markets of your franchise partners? Like, what 541 00:24:23.390 --> 00:24:25.339 are you doing to try and, I view it as 542 00:24:25.359 --> 00:24:27.970 like throw as many landmines as I can behind us, right? 543 00:24:28.039 --> 00:24:29.880 Like try and make it, try and make it really 544 00:24:29.930 --> 00:24:32.319 murky for anyone to try and follow behind us, focused 545 00:24:32.400 --> 00:24:34.839 on innovating in the future and then making sure that we, 546 00:24:35.180 --> 00:24:37.599 we build something that, that, that lasts and has, it has, 547 00:24:37.619 --> 00:24:40.200 you know, durable enterprise value. Anyway, I get fired up 548 00:24:40.240 --> 00:24:40.799 about that. 549 00:24:40.640 --> 00:24:41.099 Stuff, Dave. 550 00:24:41.119 --> 00:24:43.990 Yeah, that, that was awesome. I mean, what a good example. I, 551 00:24:44.390 --> 00:24:49.359 I talk to people about hooks and barbs, but I 552 00:24:49.500 --> 00:24:52.759 love the landmine example. It's really, it's not about being 553 00:24:52.799 --> 00:24:56.960 destructive in an industry, but it's about creating a competitive advantage. 554 00:24:56.980 --> 00:24:59.440 So if someone else can't just get right in your 555 00:24:59.700 --> 00:25:02.299 truck tracks and follow you down the dirt road and 556 00:25:02.519 --> 00:25:05.799 then catch up to you and pass you at some point, right? So, 557 00:25:06.299 --> 00:25:09.839 and as a franchisor, how critical is it, right? That 558 00:25:09.900 --> 00:25:12.180 you're thinking in those terms so that as you add 559 00:25:12.599 --> 00:25:16.950 units two through 50, right? They can reap the benefits 560 00:25:17.009 --> 00:25:20.430 of that competitive advantage, that competitive moat as they're trying 561 00:25:20.450 --> 00:25:21.539 to build their local brand. 562 00:25:22.259 --> 00:25:22.859 Yeah. 563 00:25:22.970 --> 00:25:26.259 It's normally the, like if you're an entrepreneur and you're 564 00:25:26.279 --> 00:25:28.359 a business owner by yourself and not in a franchise brand, 565 00:25:28.400 --> 00:25:31.220 like you've got to spend time thinking about how to 566 00:25:31.240 --> 00:25:34.700 do that, where you're going, innovating, what are your competitive dynamics? 567 00:25:35.440 --> 00:25:36.319 How are you building moats? 568 00:25:36.380 --> 00:25:37.579 But you also got to be like, am I going 569 00:25:37.599 --> 00:25:39.819 to make payroll on Monday? Like what about digital marketing? 570 00:25:39.839 --> 00:25:42.329 What about the AI shift? And like, There's just a lot. 571 00:25:42.349 --> 00:25:44.309 So like, that's one of the beauties, I think, you know, 572 00:25:44.329 --> 00:25:48.069 I'm sure you'd agree, Dave, like the franchise model is like, it's, 573 00:25:48.250 --> 00:25:50.410 it's in my sweet spot, my highest and best used 574 00:25:50.470 --> 00:25:52.910 a lot of times. Like I'm, you know, I love 575 00:25:52.950 --> 00:25:56.700 thinking strategically about thriving, creative destruction, where we're going, how 576 00:25:56.720 --> 00:25:58.880 to protect, you know, and like all day long, I 577 00:25:58.920 --> 00:26:01.119 think about all the different things that are happening in 578 00:26:01.160 --> 00:26:02.779 the market and where we need to be in position. 579 00:26:02.799 --> 00:26:05.890 And if, It's just you reap the benefit of that 580 00:26:05.930 --> 00:26:08.529 as a franchise partner where, hey, I'm also doing some 581 00:26:08.569 --> 00:26:11.029 of that, but I know Daniel and corporate's thinking about that. 582 00:26:11.089 --> 00:26:12.589 I'm thinking about how do I execute on the local 583 00:26:12.609 --> 00:26:14.910 marketing here? How do I go get this property manager 584 00:26:14.950 --> 00:26:17.569 in my brand to where, again, we can divide and 585 00:26:17.630 --> 00:26:23.079 conquer and we don't have to be thinking about competitive 586 00:26:23.099 --> 00:26:25.339 dynamics all the time, right? If you know that someone 587 00:26:25.380 --> 00:26:28.500 on your team is certainly who's looking out for you 588 00:26:28.539 --> 00:26:29.400 and trying to think through it. 589 00:26:30.079 --> 00:26:31.759 Yeah, and I kind of want to hit on that 590 00:26:31.799 --> 00:26:34.579 last point with you for a minute. So as you 591 00:26:34.619 --> 00:26:37.400 grow your brand, right, every franchise or that's got a 592 00:26:37.420 --> 00:26:40.019 couple of units, like it's not as prevalent, but as 593 00:26:40.039 --> 00:26:43.809 you grow your, you, you, there's a certain amount of, of. 594 00:26:44.640 --> 00:26:48.829 Almost democratization that happens when you

have more units, right. You, 595 00:26:48.869 --> 00:26:50.950 you almost democratize a little bit of the innovation and 596 00:26:50.970 --> 00:26:53.609 the creativity and like, then you, then it almost becomes 597 00:26:53.650 --> 00:26:56.289 a funnel, right. To say, feed me now some of 598 00:26:56.369 --> 00:26:58.549 the things you're seeing, so I can continue to build 599 00:26:58.569 --> 00:27:01.700 this boat for the brand. How are you engineering that 600 00:27:01.740 --> 00:27:03.880 now as you're kind of in that growth mode where 601 00:27:03.900 --> 00:27:05.680 you're going to start adding more and more units? How 602 00:27:05.700 --> 00:27:07.380 are you going to engineer that so you can keep 603 00:27:07.839 --> 00:27:10.079 the market feedback coming to you as you get busier 604 00:27:10.099 --> 00:27:12.759 and busier being a franchisor? You don't have, you have 605 00:27:12.819 --> 00:27:14.579 less and less time to be in market trying to 606 00:27:14.599 --> 00:27:15.200 figure that out. 607 00:27:15.599 --> 00:27:17.319 Yes. Great, great question, Dave. 608 00:27:17.640 --> 00:27:20.220 I think like philosophically for me, like the business principles 609 00:27:20.299 --> 00:27:22.779 I build on is like one of them is like knowledge, 610 00:27:22.859 --> 00:27:25.319 knowledge sharing, especially in a franchise system. Like we've got 611 00:27:25.339 --> 00:27:28.019 to design feedback loops to where we can learn faster 612 00:27:28.039 --> 00:27:30.519 than the world changes, right? Like, It's such an interesting 613 00:27:30.559 --> 00:27:32.319 time right now to be an entrepreneur, to be alive, 614 00:27:32.359 --> 00:27:35.140 but like things are rapidly changing, right? And the best 615 00:27:35.299 --> 00:27:38.089 advantage I think in a franchise system is having this distributed, 616 00:27:38.109 --> 00:27:41.329 you know, distributed group of entrepreneurs doing the same business model, 617 00:27:41.630 --> 00:27:44.190 but in different markets, like what's working over here, what's 618 00:27:44.210 --> 00:27:46.269 working over here. How do we have the feedback loops 619 00:27:46.670 --> 00:27:48.650 kind of built in and ingrained to kind of pull 620 00:27:48.710 --> 00:27:52.029 good ideas up? I fundamentally believe in a bottom-up architecture. 621 00:27:52.630 --> 00:27:55.410 I want the field guys and the truck guys bringing 622 00:27:55.470 --> 00:27:58.069 and looking and acting like entrepreneurs and figuring out how 623 00:27:58.109 --> 00:28:00.730 to get the information back to their managers and leaders. 624 00:28:00.789 --> 00:28:03.170 And I want to figure out a way to design 625 00:28:03.190 --> 00:28:05.269 a system where I'm taking all of that information and 626 00:28:05.289 --> 00:28:09.210 trying to bring it up into the knowledge system, the 627 00:28:09.250 --> 00:28:13.529 knowledge brain of the brand. And I just categorically reject 628 00:28:13.569 --> 00:28:17.670 the top-down hierarchical approach. ivory tower, I know better, and 629 00:28:17.990 --> 00:28:20.190 I'm going to push information down. I think that does 630 00:28:20.269 --> 00:28:22.069 not work. And I definitely don't think it works in 631 00:28:22.089 --> 00:28:24.190 today's day and age. Like how do we design a system? 632 00:28:25.390 --> 00:28:27.569 And a lot of it's that brings it bottom up. 633 00:28:27.589 --> 00:28:30.349 But like you said, I think it's culture. It's like 634 00:28:30.390 --> 00:28:33.309 the principles you build on. It's how in the FranDev process, 635 00:28:33.589 --> 00:28:37.029 when we're talking to clients or prospective franchise partners, like 636 00:28:37.369 --> 00:28:39.529 this is what's expected of me. This is what's expected 637 00:28:39.589 --> 00:28:41.970 of you, right? That's to share the information that you're learning, right? 638 00:28:41.990 --> 00:28:44.660 That's to be bought in. That's to And one of 639 00:28:44.700 --> 00:28:46.779 my commitments is that's to share what we're learning with 640 00:28:46.799 --> 00:28:51.339 the system. And we're doing cohort and different regional things 641 00:28:51.400 --> 00:28:54.670 and trying to make sure that we're really structurally creating 642 00:28:54.690 --> 00:28:57.289 an environment where we could pull knowledge up through the system, 643 00:28:57.690 --> 00:28:59.309 figure out what we want to do with it, and 644 00:28:59.349 --> 00:29:03.529 deliver learnings, best practices, and frameworks back down to help 645 00:29:03.670 --> 00:29:07.480 and just kind of replenish that cycle. So that, I think, 646 00:29:07.500 --> 00:29:09.579 if I had to design a system to fail, Dave, 647 00:29:09.660 --> 00:29:13.170 it would be to do hierarchical, assume I know everything, 648 00:29:13.470 --> 00:29:16.430 assume everything has to be top-down, to be super rigid 649 00:29:16.470 --> 00:29:22.079 and hierarchical, to prevent communication between franchise partners, to stymie 650 00:29:22.119 --> 00:29:26.640 and silo different informations in our corporate team as well, 651 00:29:26.720 --> 00:29:29.759 and to just kind of create this culture of fear 652 00:29:29.839 --> 00:29:33.089 and that we have it all figured out already. And 653 00:29:33.109 --> 00:29:34.869 the scary thing is like, how many brands do you 654 00:29:34.910 --> 00:29:37.589 know that probably operate that way, like by default or 655 00:29:37.650 --> 00:29:39.430 over the last, you know, however many years have kind 656 00:29:39.490 --> 00:29:41.869 of fallen into place there. So that's one thing that 657 00:29:41.890 --> 00:29:46.289 I'm hypersensitive to, to try and get right from the outset. 658 00:29:46.309 --> 00:29:50.069 Yeah, I love that. And I think to answer the question, 659 00:29:50.130 --> 00:29:52.569 it was rhetorical, but I was thinking about the answer 660 00:29:52.589 --> 00:29:55.049 to your question. How many brands do that? Quite a few. 661 00:29:55.210 --> 00:29:57.569 And in fact, it

seems like the larger they get, 662 00:29:57.589 --> 00:30:01.329 the more the more tightly they try to like create 663 00:30:01.609 --> 00:30:04.150 more control. And franchising does have controls, right? There are 664 00:30:04.710 --> 00:30:07.509 brand guidelines and service guidelines and things you have to 665 00:30:07.549 --> 00:30:10.599 do to maintain the franchise consistency or else you don't 666 00:30:10.619 --> 00:30:13.900 have a franchise, right? But there's all the other stuff. 667 00:30:13.920 --> 00:30:17.460 There's massive gray area with operators where when my wife 668 00:30:17.500 --> 00:30:20.500 and I ran our franchise, we first came on board 669 00:30:20.519 --> 00:30:22.460 and a bunch of the owners were like, yeah, we 670 00:30:22.480 --> 00:30:24.900 don't really chase that down. It doesn't really work. And 671 00:30:25.279 --> 00:30:27.019 I mean, you want to fire me up, just tell 672 00:30:27.039 --> 00:30:30.049 me something doesn't work. It seems like a good idea. 673 00:30:30.109 --> 00:30:32.069 I'll go figure it out. So we did. And then 674 00:30:32.430 --> 00:30:36.569 we started getting three-year contracts with recurring revenue models and 675 00:30:36.890 --> 00:30:40.230 biggest deals in company history. And we'd only been in 676 00:30:40.269 --> 00:30:42.349 it for like seven months. And people were like, what 677 00:30:42.369 --> 00:30:44.599 are you doing? And then we're teaching our peers who've 678 00:30:44.619 --> 00:30:46.980 been doing it for two, three years, how to try 679 00:30:47.019 --> 00:30:50.759 this new thing. It was fun. It was energizing for us. 680 00:30:51.079 --> 00:30:53.859 We worked in close partnership with the franchise brand. They 681 00:30:53.880 --> 00:30:56.849 were super open to the innovation. And I think That, that, 682 00:30:56.910 --> 00:31:00.150 that was my experience to kind of see how could 683 00:31:00.190 --> 00:31:02.759 it work. But then I, I am familiar with brands 684 00:31:02.779 --> 00:31:05.619 where it's just like lock it all down, super tight. 685 00:31:05.660 --> 00:31:08.259 Like you have two jobs, go sell crap and then 686 00:31:08.319 --> 00:31:10.460 get me your P and L by the ninth every month. Like, 687 00:31:10.500 --> 00:31:12.920 and that's, that's not an environment I could thrive in, 688 00:31:13.359 --> 00:31:13.660 you know? 689 00:31:13.859 --> 00:31:14.079 Yeah. 690 00:31:14.460 --> 00:31:16.599 And I think you want, you want that, you want 691 00:31:16.619 --> 00:31:19.789 to create this ecosystem of smart people operating in the 692 00:31:19.829 --> 00:31:23.150 same model. Cause that, that's, it creates innovation, right? 693 00:31:23.980 --> 00:31:28.799 Yes, that's the spark, trying to drive creative destruction. All success, 694 00:31:28.839 --> 00:31:30.980 we're standing on crumbling ground. You should have heard me 695 00:31:31.019 --> 00:31:33.880 this morning with our team. It's not good enough. We're never, 696 00:31:33.940 -->

00:31:36.680 ever satisfied. We've got to have an extra humility. We 697 00:31:36.740 --> 00:31:38.329 don't know it all. How are we going to get 698 00:31:38.349 --> 00:31:41.970 better today? Each and every job, how do we drive that? 699 00:31:42.329 --> 00:31:45.470 I care more about that culture getting embedded in the 700 00:31:45.509 --> 00:31:48.369 mindsets of everyone that touches this brand than maybe the 701 00:31:48.970 --> 00:31:50.809 you know, whatever. I don't need 10 good ideas every 702 00:31:50.829 --> 00:31:52.509 single week from every person, but I just want the 703 00:31:52.549 --> 00:31:55.089 brand to be full of entrepreneurs looking at ways to 704 00:31:55.430 --> 00:31:58.950 create more value for our consumers, create, you know, more innovations. 705 00:31:59.230 --> 00:32:01.349 How do we drive kind of that creative destruction? And 706 00:32:01.789 --> 00:32:03.230 that's kind of the fun thing, right? That's like the 707 00:32:03.279 --> 00:32:05.619 infinite game that we'll never be kind of finished with. 708 00:32:05.680 --> 00:32:07.339 But like, how do you create a system and a 709 00:32:07.380 --> 00:32:10.400 brand and a culture that like, hopefully for many years 710 00:32:10.480 --> 00:32:13.559 and decades to come is like, has that kind of innate, 711 00:32:13.779 --> 00:32:16.700 you know, building block and, you know, it's got that 712 00:32:17.200 --> 00:32:19.420 ethos in it that kind of keeps building on itself. 713 00:32:19.460 --> 00:32:20.579 That's the fun part. 714 00:32:21.180 --> 00:32:23.059 What I think you actually hit on it though, right? 715 00:32:23.099 --> 00:32:28.519 Because the only way to sustain that energy and creativity 716 00:32:29.500 --> 00:32:32.599 is people. Like you have to have the right people 717 00:32:32.640 --> 00:32:35.220 in place. So talk to me a little bit about 718 00:32:35.279 --> 00:32:39.180 your franchise development flow. Like what are you doing deliberately 719 00:32:39.220 --> 00:32:43.200 in that process to make sure that you're attracting, recruiting, 720 00:32:43.599 --> 00:32:47.500 and then retaining the talent that's going to be able 721 00:32:47.519 --> 00:32:51.859 to sustain that kind of flywheel of creativity and creating 722 00:32:51.900 --> 00:32:54.680 these moats of protection around your brand that will help 723 00:32:54.720 --> 00:32:55.259 you keep growing? 724 00:32:55.880 --> 00:32:57.279 Yeah, that's a great question. 725 00:32:57.319 --> 00:33:00.349 I know for us, I spent a lot of years 726 00:33:00.420 --> 00:33:02.009 going to all the events, and I've seen you at 727 00:33:02.140 --> 00:33:04.230 a lot of them, Dave, but I spent before we 728 00:33:04.269 --> 00:33:07.210 even really got started trying to figure out, okay, what 729 00:33:07.369 --> 00:33:09.450 do the best of the best do, like talking to 730 00:33:09.950 --> 00:33:12.349 you know, Jeff Duden talking to the, you know, all 731 00:33:12.369 --> 00:33:15.269 the OGs in the

industry, like what's best practices. And 732 00:33:15.690 --> 00:33:18.890 obviously like it's common sense, but it's like capitalize it well, 733 00:33:19.170 --> 00:33:22.029 hire a really good experience, you know, franchise support team, 734 00:33:22.490 --> 00:33:24.730 over support the heck out of your first owners, right? 735 00:33:24.789 --> 00:33:28.200 Create a great brand and, you know, culture. You have 736 00:33:28.220 --> 00:33:31.099 a really great defined sales process to where early on 737 00:33:31.140 --> 00:33:33.299 you're saying, here's what we stand for. 738 00:33:33.339 --> 00:33:34.099 Here's why, right? 739 00:33:34.119 --> 00:33:36.099 We're trying to get the wrong people out really quickly. 740 00:33:36.140 --> 00:33:39.230 We're trying to focus on the right people and We 741 00:33:39.269 --> 00:33:41.250 try to do that. And so we've got a really 742 00:33:41.289 --> 00:33:44.690 great team. We're a young brand. We've got our one 743 00:33:44.730 --> 00:33:49.349 Omaha location open right now, a franchise partner. We're going 744 00:33:49.369 --> 00:33:51.970 to be adding several more in the next couple of 745 00:33:51.990 --> 00:33:56.500 weeks as well. But we've already got a VP of operations, Brian, 746 00:33:56.539 --> 00:34:00.069 with tons of franchise experience from us. different brands, both 747 00:34:00.150 --> 00:34:02.150 in junk and other home service brands. We've got a 748 00:34:02.450 --> 00:34:05.630 director of onboarding, right? We've got a director of marketing. 749 00:34:05.670 --> 00:34:08.429 We've got marketing support. We've got multiple people in our 750 00:34:08.469 --> 00:34:12.039 franchise development team. We've got great talent here at our 751 00:34:12.059 --> 00:34:15.500 corporate stores, kind of with franchise experience and multi-location modeling. 752 00:34:16.719 --> 00:34:19.219 And so like, I really believe like it starts structurally 753 00:34:19.260 --> 00:34:21.559 with creating something that people want to buy into, which 754 00:34:21.619 --> 00:34:25.239 is normally great system, great strategy, great moats, great. And then, 755 00:34:25.360 --> 00:34:26.659 you know, what's in it for me, it's just like 756 00:34:26.699 --> 00:34:29.579 a really great support team. So like, Right now, especially 757 00:34:29.599 --> 00:34:36.050 early on, our franchisee to whatever, franchise or employee, it's 758 00:34:36.070 --> 00:34:37.710 probably like one to 12 or something, right? 759 00:34:37.730 --> 00:34:38.449 It's like flip. 760 00:34:38.489 --> 00:34:42.829 Most people are just like, hey, I've got 20 franchisees 761 00:34:42.849 --> 00:34:44.969 to every one employee. It's like, well, we got probably 762 00:34:44.989 --> 00:34:48.360 a dozen employees for every one franchisee right now, which 763 00:34:48.429 --> 00:34:51.500 will change over time. But to us, it's just getting 764 00:34:51.559 --> 00:34:54.090 really clear on What are we looking for? Like who 765 00:34:54.130 --> 00:34:56.309 this brand is, who it isn't for? What are the 766 00:34:56.349 --> 00:34:58.829 core values we ascribe? Like what are the core principles, 767 00:34:58.869 --> 00:35:01.030 which I just talked about? Like how do we think 768 00:35:01.090 --> 00:35:06.000 about building a business? It's bottom-up, it's principle-based, it's driving 769 00:35:06.039 --> 00:35:09.199 creative destruction. At every point in the process, it's being like, 770 00:35:09.559 --> 00:35:11.480 we're an emerging brand. This is going to be hard. 771 00:35:11.500 --> 00:35:13.360 We're trying to build a really big brand. Our vision 772 00:35:13.400 --> 00:35:16.019 is to be the largest junk removal brand in the galaxy. 773 00:35:16.920 --> 00:35:17.840 I believe that if. 774 00:35:17.800 --> 00:35:21.179 We have, if Junk Start actualizes its potential, I believe 775 00:35:21.239 --> 00:35:23.289 over time that we should be the biggest in the world. 776 00:35:24.070 --> 00:35:25.909 And so like to do that means it's going to 777 00:35:25.929 --> 00:35:27.590 be hard. It's going to be, you know, an arduous 778 00:35:27.650 --> 00:35:30.869 process and it's going to be anything but easy. So 779 00:35:30.889 --> 00:35:33.389 like at every state, you know, I want to be like, hey, 780 00:35:33.409 --> 00:35:34.869 this is going to be really hard. Do you still 781 00:35:34.889 --> 00:35:35.429 want to learn more? 782 00:35:35.550 --> 00:35:36.250 Okay, yes, great. 783 00:35:36.510 --> 00:35:38.010 Like, hey, this is going to be really hard. Here's 784 00:35:38.050 --> 00:35:39.960 all the reasons we're, Try to tip the scales in 785 00:35:39.980 --> 00:35:42.039 your favor, but it's still going to be really hard. 786 00:35:42.860 --> 00:35:45.159 You want in? Okay, great. Here's the next step. 787 00:35:45.440 --> 00:35:47.599 And so we have a well-designed sales process just to 788 00:35:47.639 --> 00:35:50.679 make sure that it's not rose-colored glasses. We're doing all 789 00:35:50.699 --> 00:35:54.309 the things to equip them for success on the support side, 790 00:35:54.329 --> 00:35:58.510 on the business model side, differentiation, IP, B2B, all of this. 791 00:35:58.550 --> 00:36:01.329 But ultimately, if we don't get the right folks that 792 00:36:01.349 --> 00:36:04.309 are well-capitalized that can go on the journey with us 793 00:36:04.349 --> 00:36:06.469 and then have the right mindset, to where, hey, the 794 00:36:06.510 --> 00:36:08.110 first time we get punched in the mouth, we're not 795 00:36:08.130 --> 00:36:10.530 going to freak out, right? We decided to be entrepreneurs. 796 00:36:10.550 --> 00:36:13.929 That means by definition, right? We're now amateur boxers and like, 797 00:36:13.949 --> 00:36:15.750 we're going to get some jabs to the face every. 798 00:36:15.550 --> 00:36:15.929 Now and then. 799 00:36:15.949 --> 00:36:18.969 Like, don't freak out, okay? It's part of the process 800 00:36:19.469 --> 00:36:21.170 and just trying to make

sure that we're, you know, 801 00:36:21.210 --> 00:36:25.030 to the extent we can, just rock solid on aligned 802 00:36:25.070 --> 00:36:27.110 on what the vision is, what the values are. We've 803 00:36:27.130 --> 00:36:29.739 got complimentary skill sets and we're going to go after 804 00:36:29.820 --> 00:36:32.110 and and build it and so like i i don't 805 00:36:32.130 --> 00:36:34.010 need a million people i don't even need a thousand 806 00:36:34.030 --> 00:36:37.670 franchisees like we're looking for 100 like 140 150 franchise 807 00:36:37.710 --> 00:36:40.650 partners that'll fill out our brand and like that's not 808 00:36:40.690 --> 00:36:43.260 that overwhelming to me dave like we don't need we 809 00:36:43.280 --> 00:36:46.079 don't need a thousand people that they kind of achieve 810 00:36:46.199 --> 00:36:48.139 you know and adhere by all those principles like we 811 00:36:48.159 --> 00:36:52.119 just need 100 150 or consolidate down over time um 812 00:36:52.360 --> 00:36:54.489 so again that's kind of like our strategy is is 813 00:36:54.679 --> 00:37:01.039 uh you know, highly selective, over-indexing on culture, brand, you know, missional, 814 00:37:01.599 --> 00:37:04.219 you know, importance and values. And then like obviously doing 815 00:37:04.320 --> 00:37:06.719 everything we can to stack the odds of success on 816 00:37:06.739 --> 00:37:08.119 their side once they join. 817 00:37:08.139 --> 00:37:11.860 Yeah. Well, I love all of that. And I want 818 00:37:11.880 --> 00:37:13.989 to circle back to something you said, because I think 819 00:37:14.050 --> 00:37:16.070 it's one of the most important parts, but it's hard 820 00:37:16.789 --> 00:37:20.150 right now. When you're early on in franchising, boy, you 821 00:37:20.190 --> 00:37:23.780 want some units, man, you want some royalty revenue. boy, 822 00:37:23.800 --> 00:37:26.619 you'd sure love some franchise fees, right? It doesn't hurt 823 00:37:26.639 --> 00:37:28.320 the balance sheet at all to put a little cash 824 00:37:28.380 --> 00:37:32.420 on that side. But that draw, and I know you 825 00:37:32.460 --> 00:37:36.500 feel it, like every new franchisor feels that. How do you, 826 00:37:36.900 --> 00:37:40.280 like what's your personal philosophy to stave off that pressure 827 00:37:40.940 --> 00:37:43.809 and to really stay dialed in? Because it's hard. This 828 00:37:43.829 --> 00:37:45.449 is one of the hardest things I think for emerging 829 00:37:45.489 --> 00:37:48.070 brands to deal with is the pressure to take the check, 830 00:37:48.190 --> 00:37:50.079 the pressure to bring the guy on who's who's a 831 00:37:50.159 --> 00:37:52.289 solid B, you know, he's not going to suck. He's 832 00:37:52.309 --> 00:37:53.690 going to be a B, but he's not going to 833 00:37:53.710 --> 00:37:55.030 be an A or an A plus. 834 00:37:55.090 --> 00:37:55.289 Right. 835 00:37:55.309 --> 00:37:58.630 So how do you guys stay disciplined around the recruitment 836 00:37:58.670 --> 00:38:01.469 process and to say no more than you say yes. 837 00:38:02.789 --> 00:38:04.150 Yeah, it's a great, it's a great question. 838 00:38:04.230 --> 00:38:08.059 I think my, my mind has changed since, um, you know, 839 00:38:08.079 --> 00:38:09.179 taking a lot of live bullets. 840 00:38:09.280 --> 00:38:09.480 Right. 841 00:38:09.519 --> 00:38:13.059 I had, I had a hypothesis and it's since, you know, uh, 842 00:38:13.840 --> 00:38:17.219 maybe got some, anyway, got refined a bit, but you know, 843 00:38:17.260 --> 00:38:19.199 the main thing I was been very fortunate in life and, 844 00:38:19.590 --> 00:38:21.139 some stuff early on. So I got to capitalize it 845 00:38:21.179 --> 00:38:24.420 the right way. I really don't have to make any sense. 846 00:38:24.440 --> 00:38:26.719 A lot of brands aren't in that position and like, 847 00:38:27.340 --> 00:38:29.019 you know, just super fortunate for that. So like that, 848 00:38:29.059 --> 00:38:30.659 that's number one, like if you can capitalize it the 849 00:38:30.679 --> 00:38:33.099 right way where you don't feel as an immense of 850 00:38:33.159 --> 00:38:35.579 a pressure to add units. But you know, the second one, 851 00:38:35.599 --> 00:38:38.280 what's been interesting, Dave, which I didn't, I didn't necessarily 852 00:38:38.320 --> 00:38:41.900 have on my bingo card is, um, I have yet 853 00:38:41.980 --> 00:38:44.400 to ever be like, Oh, this person won't be good. 854 00:38:44.440 --> 00:38:47.599 Like my team is really getting those people out. And 855 00:38:47.659 --> 00:38:49.340 by the time they talk to me, you know, I 856 00:38:49.360 --> 00:38:51.960 think they're bought in, they say the right things. Um, 857 00:38:52.320 --> 00:38:54.019 but you also like, there's still a part of you 858 00:38:54.039 --> 00:38:57.539 that like, you're never sure that they're going to do great. 859 00:38:57.599 --> 00:38:57.760 Right. 860 00:38:57.820 --> 00:39:00.559 And we all have examples of a franchise partner that 861 00:39:00.599 --> 00:39:02.699 you think was going to be a rock star and 862 00:39:02.719 --> 00:39:04.389 then turned out not to be right. And we think 863 00:39:04.730 --> 00:39:06.829 people that weren't going to be very good, like, and 864 00:39:06.849 --> 00:39:07.949 they turn out to be rock stars. 865 00:39:09.849 --> 00:39:10.570 Right. We get that. 866 00:39:10.610 --> 00:39:13.050 But like, just what I said right there, like that's 867 00:39:13.070 --> 00:39:17.179 been an interesting, like, um, you know, on the two shoulders, right? 868 00:39:17.199 --> 00:39:19.579 Because like even that could be me trying to justify 869 00:39:19.599 --> 00:39:22.159 and find reasons to like take a candidate maybe I 870 00:39:22.199 --> 00:39:23.159 don't actually believe in, right? 871 00:39:23.199 --> 00:39:24.099 Well, I'm like, well, who knows? 872 00:39:24.139 --> 00:39:26.269 Maybe they'll kill it because, you know, Kyle over in, 873 00:39:26.670 --> 00:39:29.130 you

know, whatever, Delaware did good. And it's like, how 874 00:39:29.150 --> 00:39:33.059 much of that is actually common sense and like smart, thoughtful, um, 875 00:39:33.860 --> 00:39:35.400 thinking and how much of that is me trying to 876 00:39:35.420 --> 00:39:37.880 like find some sort of justification for letting someone that 877 00:39:38.000 --> 00:39:39.920 I'm not really all that confident is going to do well. 878 00:39:39.960 --> 00:39:42.039 Like that's been the thing that, you know, cause your 879 00:39:42.059 --> 00:39:44.409 brain's crazy, praise tricks on you. And like, that's been 880 00:39:44.429 --> 00:39:47.909 the one that I've been kind of noticing lately. Like, uh, like, huh, 881 00:39:47.949 --> 00:39:50.500 is that really like, wisdom trying to talk, or is 882 00:39:50.539 --> 00:39:52.440 that me trying to convince myself to like let someone 883 00:39:52.460 --> 00:39:57.590 in that probably I shouldn't? What would you say to that? 884 00:39:57.610 --> 00:40:01.469 No, I think it's right. In fact, even like hiring, 885 00:40:01.550 --> 00:40:03.429 in my world, because I don't work on franchises, but 886 00:40:03.469 --> 00:40:07.210 even hiring, I've been through the same mental exercises. I 887 00:40:07.230 --> 00:40:10.070 think anyone who's ever hired and had to fire people, 888 00:40:10.090 --> 00:40:14.230 you know, there are certain things I've seen, Daniel, in 889 00:40:15.030 --> 00:40:19.389 hiring like really high quality salespeople. that have been pretty consistent. 890 00:40:19.429 --> 00:40:21.289 Like some of the best guys I've ever worked with were, 891 00:40:21.590 --> 00:40:26.320 they're driven and internally they're motivated, right? So often I 892 00:40:26.380 --> 00:40:30.199 find people that are, you know, high performing athletes, either 893 00:40:30.219 --> 00:40:33.460 high school, college, or something like, they tend to be 894 00:40:33.480 --> 00:40:36.179 extremely good. So I actually, I've hired somebody once who 895 00:40:36.239 --> 00:40:38.340 checked all of these boxes and I was like, this 896 00:40:38.380 --> 00:40:40.320 guy's going to be great. And then he was a 897 00:40:40.380 --> 00:40:43.510 total C plus. And he knew it, I knew it, 898 00:40:43.650 --> 00:40:46.289 the numbers showed it. And so the departure process was 899 00:40:46.329 --> 00:40:50.269 pretty clear, but But yeah, so every now and then, 900 00:40:50.289 --> 00:40:52.469 it doesn't matter how good your systems are, even your gut, 901 00:40:52.610 --> 00:40:55.690 you still miss. And in franchising, that can be a 902 00:40:55.750 --> 00:41:01.019 seven to 10 year challenge. So yeah, I wish I 903 00:41:01.039 --> 00:41:03.320 had a great, there's like no magic bullet here other 904 00:41:03.380 --> 00:41:07.699 than diligence, right? Intense diligence and making sure you spend 905 00:41:07.739 --> 00:41:10.739 time with them, see how they react when things don't 906 00:41:10.800 --> 00:41:14.130 go well. Like sometimes I know people that they always 907 00:41:14.150 --> 00:41:16.269 take them out to dinner, they always take them out 908 00:41:16.289 --> 00:41:18.639 to drinks. And they always try to take them somewhere 909 00:41:18.659 --> 00:41:20.539 where they're going to have an interesting experience at a 910 00:41:20.579 --> 00:41:23.079 meal so they can watch how they react. It's almost 911 00:41:23.099 --> 00:41:26.619 like a psychology test with these people, but you got 912 00:41:26.639 --> 00:41:27.880 to do it. You really got to do it. 913 00:41:29.170 --> 00:41:32.929 Yeah, I think the in-person stuff is important in getting 914 00:41:32.949 --> 00:41:36.309 in front of folks. I know I like doing like 915 00:41:36.570 --> 00:41:39.559 extreme things or like, you know, grew up kind of 916 00:41:40.119 --> 00:41:42.039 in the outdoors or hunting and fishing and going on 917 00:41:42.099 --> 00:41:43.860 like really hard things. Like you always get to like, 918 00:41:44.199 --> 00:41:46.019 I wish I could take everyone on like a whatever, 919 00:41:46.079 --> 00:41:47.059 some like five day. 920 00:41:46.920 --> 00:41:48.219 Backpacking trip or something. 921 00:41:48.239 --> 00:41:49.860 Like we can't do that, but like that would be 922 00:41:49.880 --> 00:41:52.179 a really boring that, like that's a really good way 923 00:41:52.219 --> 00:41:55.570 to see how people like handle adversity. But yeah, how 924 00:41:55.610 --> 00:41:58.469 do we kind of recreate that like a sales process 925 00:41:58.510 --> 00:42:00.710 and then like a, you know, confirmation day over a 926 00:42:00.750 --> 00:42:03.010 day and a half or something like that's something I'm 927 00:42:03.030 --> 00:42:05.829 gonna think about like how to try and take that 928 00:42:05.849 --> 00:42:08.309 and get that kind of more institutionalized for us. 929 00:42:08.909 --> 00:42:11.550 But why, I see you can't do that. Well, maybe 930 00:42:11.570 --> 00:42:15.000 like a five day backpacking trip. Do the Amazon? Okay. 931 00:42:15.039 --> 00:42:18.400 Like Jaguars, you know, maybe not, but, but could you 932 00:42:18.420 --> 00:42:22.300 go camping with them like overnight? Could you do something 933 00:42:22.340 --> 00:42:24.769 that makes them a little uncomfortable? You probably, I mean, frankly, 934 00:42:24.789 --> 00:42:26.510 it doesn't cost a ton to go camping, but take 935 00:42:26.530 --> 00:42:30.030 them on a hike, right? Like you could. 936 00:42:30.929 --> 00:42:31.489 No, you could. 937 00:42:32.730 --> 00:42:33.150 You could. 938 00:42:33.889 --> 00:42:35.119 I like it. I'm going to think on it. 939 00:42:35.130 --> 00:42:37.889 Yeah. Anyway, bring them here. Like bring them to Utah. 940 00:42:37.989 --> 00:42:40.670 I'll hook up with you. We'll go hike a Canyon 941 00:42:40.710 --> 00:42:43.670 or something, do some canyoneering or, uh, yeah, I would 942 00:42:44.030 --> 00:42:47.329 man climbing a peak that's a different matter that's uh 943 00:42:47.349

--> 00:42:49.150 you don't want to get people up to 13 000 944 00:42:49.150 --> 00:42:52.389 feet because there's their physical limitations but there's stuff why 945 00:42:52.409 --> 00:42:54.670 not why not dude that could be your brand that 946 00:42:54.690 --> 00:42:56.789 could be your brand people would be like if you 947 00:42:56.809 --> 00:42:59.050 can't pass the test you know if you can't go 948 00:42:59.090 --> 00:43:01.429 on the how was the crucible hike for you oh 949 00:43:01.469 --> 00:43:03.969 wasn't that good i don't know creates camaraderie too with 950 00:43:04.010 --> 00:43:06.909 people when they go through like joint hard experiences i 951 00:43:06.949 --> 00:43:07.690 don't know i don't. 952 00:43:07.590 --> 00:43:11.030 Think it's a terrible idea you gave me an idea 953 00:43:11.070 --> 00:43:14.070 yeah um Well, awesome. That's why I like talking to 954 00:43:14.489 --> 00:43:16.750 fellow entrepreneurs. So you're like, why can't you do it? 955 00:43:16.750 --> 00:43:18.710 And you're like, dang it, Dave, you're right. I can, 956 00:43:18.809 --> 00:43:20.389 I could think through this and if we come up 957 00:43:20.409 --> 00:43:20.869 with something. 958 00:43:21.329 --> 00:43:24.909 Yeah. Well, so Dan, this has been awesome. I love 959 00:43:24.989 --> 00:43:27.460 all these nuggets. I want to recap a couple of 960 00:43:27.480 --> 00:43:28.920 things and I'd love for you to share maybe a 961 00:43:29.219 --> 00:43:31.699 kind of a wrap up thought with folks about this 962 00:43:31.739 --> 00:43:34.880 journey of entrepreneurship and how to differentiate. You shared some 963 00:43:34.900 --> 00:43:37.559 really good insights about kind of like some of the 964 00:43:37.599 --> 00:43:39.500 myths that people have when they go into this about 965 00:43:39.800 --> 00:43:42.460 how it's going to be easy, lead gen simple. but 966 00:43:42.500 --> 00:43:45.880 it's how strategy is driving everything. You have to be 967 00:43:46.619 --> 00:43:50.820 diligent in creating something that's unique about your brand. You 968 00:43:50.860 --> 00:43:54.480 have to be unique, differentiate or die. You can't just 969 00:43:54.519 --> 00:43:56.139 go into a market and do the same thing everybody 970 00:43:56.179 --> 00:43:59.820 else does and be successful, let alone repeat success 50 971 00:43:59.820 --> 00:44:02.059 times over as you go into 50 different markets and 972 00:44:02.079 --> 00:44:06.679 do the same thing. Talked about leading out on innovating 973 00:44:06.719 --> 00:44:10.309 into the B2B space. I think that's brilliant in your space. 974 00:44:10.369 --> 00:44:13.840 Building creative moats. making sure you're building a profitable business 975 00:44:13.900 --> 00:44:17.280 as you do it, and then creating a process to 976 00:44:17.300 --> 00:44:20.570 have sustainable innovation and sustainable growth so you maintain and 977 00:44:20.610 --> 00:44:25.090 build on these moats. So anyway, Daniel, tell us parting thoughts. 978 00:44:25.329 --> 00:44:28.230 Like what's one thing that you've learned as you've gone 979 00:44:28.250 --> 00:44:30.030 through the journey that you just want other people to 980 00:44:30.210 --> 00:44:32.269 know as kind of a wrap-up thought? 981 00:44:33.489 --> 00:44:35.809 Yeah, I'll go one off the wall, Dave. 982 00:44:35.869 --> 00:44:40.170 Like I've been real into– into architecture the last like 983 00:44:40.190 --> 00:44:42.909 couple months. Like, I don't even know for any reason 984 00:44:42.949 --> 00:44:44.960 other than, oh, I'm going to build a house one day. But, 985 00:44:45.800 --> 00:44:48.420 you know, as folks do, you buy like 15 architecture 986 00:44:48.440 --> 00:44:49.780 books and you get real into it. And so like 987 00:44:49.800 --> 00:44:51.780 that's been me for a few months. But I've learned 988 00:44:51.940 --> 00:44:56.599 so many just amazing business tidbits, like more so than 989 00:44:56.719 --> 00:44:59.500 the last, you know, 20 business books I read. But 990 00:44:59.619 --> 00:45:02.340 one thought that I'm really thankful that kind of I 991 00:45:02.389 --> 00:45:04.889 lucked into like kind of doing, but it's a term 992 00:45:04.909 --> 00:45:07.880 called the party, right? It's like the one every building, 993 00:45:08.519 --> 00:45:11.630 every town even has like one organizing thought that the 994 00:45:11.670 --> 00:45:14.289 rest of the decisions are made kind of in light of, right? 995 00:45:14.630 --> 00:45:16.469 And so it has. 996 00:45:16.349 --> 00:45:18.409 To do with like, hey, is this house for like 997 00:45:18.449 --> 00:45:21.300 a young family or like an aging widow? Is it for, 998 00:45:21.719 --> 00:45:25.340 you know, affordable housing for, you know, multifamily or is 999 00:45:25.380 --> 00:45:28.500 it for like, just imagine just those questions alone would 1000 00:45:28.539 --> 00:45:31.869 dictate like, you know, where, how many playrooms you have, 1001 00:45:31.889 --> 00:45:34.389 how many bedrooms you have, like, it all has to 1002 00:45:34.429 --> 00:45:37.000 flow together and everything from like what size pool you 1003 00:45:37.039 --> 00:45:39.699 to to like where the bedrooms are located like what 1004 00:45:39.760 --> 00:45:42.059 size lots you need where's the sunlight coming from like 1005 00:45:42.659 --> 00:45:44.780 imagine like not having any idea and being like I 1006 00:45:44.800 --> 00:45:47.929 want a house like okay like but you've got to 1007 00:45:47.969 --> 00:45:49.969 have a party and so like with a business you've 1008 00:45:50.010 --> 00:45:52.949 got to have a a party like this is the 1009 00:45:53.150 --> 00:45:55.250 ethos of the mission of what we're trying to do 1010 00:45:55.289 --> 00:45:58.780 this is the central organizing thought behind it and like 1011 00:45:59.239 --> 00:46:01.219 it's going to be downstream. Every decision that you can 1012 00:46:01.239 --> 00:46:04.329 make could be downstream from like those, those, that

value vision, 1013 00:46:04.389 --> 00:46:07.570 like kind of that party that is so easy to ignore. 1014 00:46:08.030 --> 00:46:10.670 But in hindsight, like imagine building a business, not knowing, 1015 00:46:11.349 --> 00:46:13.070 you know, kind of what you're really trying to do, 1016 00:46:13.110 --> 00:46:15.449 what you really believe, what you're really trying to accomplish, 1017 00:46:15.469 --> 00:46:19.110 what the strategy really entails. Like it's every decision you 1018 00:46:19.150 --> 00:46:21.050 make every day that goes by, it gets like further 1019 00:46:21.070 --> 00:46:23.929 and further away and more and more unraveled. And imagine 1020 00:46:23.989 --> 00:46:25.670 even you do franchise your brand and you go to 1021 00:46:25.710 --> 00:46:27.909 a hundred or 200 units, like it's just going to 1022 00:46:27.949 --> 00:46:30.510 be a, it's going to just keep deteriorating over time. 1023 00:46:30.840 --> 00:46:34.900 Whereas if you get that central organizing party up front, 1024 00:46:35.179 --> 00:46:37.880 it's just that central organizing thought that it could shift 1025 00:46:37.920 --> 00:46:39.460 in the beginning. You don't have to claim that you're 1026 00:46:39.480 --> 00:46:41.659 the first one you ever do. It could change, but 1027 00:46:41.719 --> 00:46:44.929 over time, you still got to have one. One idea 1028 00:46:44.969 --> 00:46:47.070 is if you never change it and it's not working, 1029 00:46:47.110 --> 00:46:50.110 your business will die. You can move off from it, 1030 00:46:50.130 --> 00:46:52.130 but you still got to end up with the central 1031 00:46:52.170 --> 00:46:56.010 party up That's maybe from startup product market fit to 1032 00:46:56.070 --> 00:46:57.909 now we're scaling it. We've got a new party, but 1033 00:46:57.949 --> 00:47:00.889 at least it's coherent. I'm rambling at this point, Dave, 1034 00:47:00.929 --> 00:47:03.150 but that has been the thing that I've been thinking 1035 00:47:03.210 --> 00:47:07.139 about the last few weeks and months is just how 1036 00:47:07.199 --> 00:47:10.340 every brand, I wish I could take that knowledge and 1037 00:47:10.400 --> 00:47:13.719 instill in every founder and every executive team. If you 1038 00:47:13.739 --> 00:47:15.960 don't stand for something, how do you plan on making 1039 00:47:15.980 --> 00:47:19.780 decisions anywhere from hiring to the logo to where you target, 1040 00:47:19.800 --> 00:47:21.519 what you target, who you bring on your team? 1041 00:47:21.920 --> 00:47:22.789 What's it all based on? 1042 00:47:23.559 --> 00:47:26.719 I love that. Well, you've played highly competitive sports. I've 1043 00:47:26.760 --> 00:47:31.719 coached high school athletes, played sports through high school. I'm 1044 00:47:31.760 --> 00:47:33.760 guessing when you were at SMU, there was a party. 1045 00:47:33.800 --> 00:47:37.010 There was like a theme. There was like a code 1046 00:47:37.429 --> 00:47:39.369 or something that you guys all kind of

believed in. 1047 00:47:39.389 --> 00:47:41.630 A lot of guys have got like quotes that are 1048 00:47:41.690 --> 00:47:43.449 over the archway. If you're going out to the field, 1049 00:47:43.469 --> 00:47:45.309 you slap the wall. Did you guys have one of 1050 00:47:45.369 --> 00:47:46.690 those at SMU when you played there? 1051 00:47:47.010 --> 00:47:47.929 Yeah, we did. 1052 00:47:47.989 --> 00:47:50.239 And like one, one that like, I realized now just 1053 00:47:50.280 --> 00:47:52.380 watch this documentary, but like Nick Saban's would be like 1054 00:47:52.400 --> 00:47:55.239 the process, right? It's all about the process, right? It's like, 1055 00:47:55.440 --> 00:47:57.360 what are the inputs you need to do each and 1056 00:47:57.400 --> 00:47:59.139 every day? Like what are, you know, in order to 1057 00:47:59.179 --> 00:48:00.900 get the output that you want, like we're not competing 1058 00:48:00.920 --> 00:48:03.539 against a scoreboard, we're competing against a standard, right? 1059 00:48:03.579 --> 00:48:05.059 How good could we possibly be today? 1060 00:48:05.340 --> 00:48:07.530 And like ours was kind of the process at SMU, 1061 00:48:07.570 --> 00:48:10.639 but it's like, um, uh, exactly. That was like the 1062 00:48:10.659 --> 00:48:13.489 central organizing party. And then like every day, like even 1063 00:48:13.550 --> 00:48:17.309 if you, um, were doing workouts or going to, you know, 1064 00:48:17.429 --> 00:48:21.070 the cafeteria or whatever, it's like the central organizing thing 1065 00:48:21.110 --> 00:48:23.630 is like the standard, you know, it's the standard, right? 1066 00:48:23.690 --> 00:48:25.719 Like we're protecting it. We're trying to get a little 1067 00:48:25.739 --> 00:48:28.139 bit every day, working on the process, not the results. 1068 00:48:28.199 --> 00:48:30.480 And like, um, I can hope that, you know, junk 1069 00:48:30.500 --> 00:48:32.900 start as we, as we grow, like can, can have 1070 00:48:32.940 --> 00:48:36.500 that same kind of party feel. Um, and, uh, yeah, 1071 00:48:36.539 --> 00:48:37.860 every brand out there needs one. 1072 00:48:38.340 --> 00:48:41.480 Yeah, I agree. Fantastic thoughts. So Daniel, somebody wanted to 1073 00:48:41.500 --> 00:48:43.099 connect with you because they said, I love what you're 1074 00:48:43.119 --> 00:48:45.280 talking about. I'd love to pick your brain. What's the 1075 00:48:45.320 --> 00:48:47.659 best way for somebody to connect with you? Yeah, great. 1076 00:48:47.699 --> 00:48:51.539 You could, as far as brand F stuff, the junkstartfranchising.com 1077 00:48:51.619 --> 00:48:52.960 is a good one. Other than that, like you find 1078 00:48:52.980 --> 00:48:56.449 me on LinkedIn, Twitter, Daniel McCarty, Junkstart, I'll pop up. 1079 00:48:56.940 --> 00:49:00.179 My email is just danielatjunkstart.com. Feel free to shoot me, 1080 00:49:00.360 --> 00:49:02.590 shoot me a note and I will get back to you. 1081 00:49:02.969 --> 00:49:04.730 Yeah, well, I appreciate you being on. Thanks for sharing 1082 00:49:04.750 --> 00:49:08.710 those great insights today. Really enjoyed it. Thanks, Dave. Thanks, man.