Episode Transcript
[00:00:00] Welcome to create wealth through franchising. I'm your host, Kim Daley.
[00:00:06] Whether you're a CEO, a military vet, a real estate investor, or simply in career transition and ready to take ownership of your future, with each episode you're going to learn valuable insights and hear inspiring stories from within the franchise industry.
[00:00:25] On that note, my guest stories are their own. And as a franchise consultant, I do not make personal brand endorsements or earnings claims, but I do educate, motivate and inspire dreams.
[00:00:40] Now onto the show.
[00:00:44] Welcome to American Wealth Strategies. I am your host, Kim Daley. So in this episode, I want to teach you about my core business, which is franchising. I've spent the last 22 years helping people just like you who are thinking about alternative ways to make money. Leave the w two job, build another source of income in addition to the w two job. Maybe diversify their investment portfolio from real estate, short term, long term Airbnbs, right? Looking for another way to build a cash flowing asset that would create some tax advantage, build some equity, and give them a little bit of something to have fun with. Right? So a business is a great way to change your life. It's a great way to build an additional revenue stream and create tax advantage and build equity. But not a lot of people have the courage, the time, the energy, the motivation and the money that it takes to launch a business from scratch, which is the entrepreneurship way. But a lot of people love the idea of owning a business. And if they could find the right franchise where they're not spending time figuring out how to make money, they're paying a one time upfront fee, called a franchise fee, and buying a proven business plan with all the ready made tools that allows them as the franchise preneur to hit the ground running, moving towards profitability. So I've spent 22 years helping people like that, which could be you. If you're the listener, figure out what's the right type of franchise. So let's back up. Before we talk about how to select the right franchise, let's talk about what is a franchise. So a franchise, as I mentioned, is a way for the average person without an MBA, without prior business ownership experience, without a great idea, without millions of dollars, without lots of time to invest in a proven business plan, buy down the learning curve of starting a business, buy up the ramp up speed, right. And move towards profitability as a business owner. So en franchising, we use the very cliched expression that you are in business for yourself, but not by yourself. So you're partnering with people who've already figured out how to make money. They've defined a customer avatar. They've created all of the business tools like marketing plans, and have technology to help you run your business. Even the most simple business out there today, let's pick one. Dog walking, right? That's a franchise. Has to have some software for client management, payment systems for customers, routing even, right? So that you're not crisscrossing the community, that your routes are optimized for drive time. There's so many different things that are involved in running even the simplest business that from the outside we may not think of. But if we really want to build and scale wealth and not just be like an owner operator in a business, we have to have systems and tools and technology. Well, that's what a franchise should offer to you. Even in the most simple business. Oftentimes people will say to me, well, Kim, why do I need a business for that? Like, it seems like a pretty simple business, but when you really get into the mind of being an owner who doesn't want to be an owner operator, because if you have to start a business and for the life of that business still trade your time for money, that's no better than you just keeping that nine to five job, right? So if you want to build something that has real value, that buys back your time over time, you need systems and tools, and that's what franchises, good franchises, offer to you. So in this franchise conversation, we're buying down the learning curve. We're partnering ourselves with people who are going to initially train us and provide ongoing support, and who we're going to together in a collective, collaborative way, build a customer experience nationally. So let's back up for a minute and let's talk about what is a brand, right? A brand is a consistent consumer experience.
[00:05:18] Well, how does a franchisor create a consistent consumer experience? When every franchise is independently owned and operated? They do it with what's called a franchise disclosure document, which is a legally binding document that allows the franchisor to maintain control over what all their franchisees are doing, so that franchisees are showing up and executing on these proven systems and delivering the same experience within plus or minus range, delivering the same experience to the customer. That's how the customer starts to know a brand as a brand. And so the advantage of being a franchise preneur over an entrepreneur, it's not just upfront in terms of buying down the learning curve, that's a big advantage, right? Because 90% of entrepreneurs fail before they even make money. And that statistic isn't even owned in franchising. But in addition to that, if the franchisor is successful in bringing on the right franchisees and carefully training and getting everybody to sort of row the boat in the same direction. Right. So we're delivering that consistent consumer experience over a short amount of time, they're able to build a national brand. And when you have that national brand recognition, that's equity. That's like you paying on your home mortgage versus paying rent. You have equity in the bank, that's yours. Should you go to sell that home, it's money back to you. Well, the same thing in a franchise. So building a business as a franchise, it's not like, oh, franchising is for dumb people. Franchising is for uneducated people. I have an MBA, I'm going to go be an entrepreneur. I'm not taking anything away from entrepreneurship, right? We need entrepreneurs, or we'd never have new franchises. But for the average person who's looking to build cash flow, create tax advantage, build equity, who wants to build and scale wealth? Franchising wins over entrepreneurship all day long, every day of the week. Because in this environment, we're already buying down, bypassing the hardest parts of starting a business, which therefore, then mitigates the risk. Right? I mean, that doesn't mean that there's no risk in owning a franchise, but it mitigates the risk, and it moves you toward being able to build and scale, which is always where wealth is created. Whether you're an entrepreneur or a franchisepreneur, wealth isn't about one location. Wealth isn't about getting one mosquito spraying truck or one junk removal truck on the road. Wealth is about leverage of multiple trucks on the road. Multiple locations. Well, the franchise is designed for you to be the CEO who works on the business rather than in the business from day one. And that's your leverage. Right. The entrepreneur often starts in the business with no systems and no tools and no leverage. Right. And so therefore, oftentimes they get stuck there. It's very, very difficult to scale to multiple units. And in many cases, you can shake your head out there and go, yeah, you're right. How many mom and pop businesses do I know have not just multimillion dollar businesses, but have more than one location, you know, or more than one location contributing to a multimillion dollar business? Not too many. But in franchising, if that is your goal, to build an empire, we start with that goal in mind, and I match you to opportunities that would allow you to have that kind of scale in a short amount of time as possible, right? You don't want it to necessarily take ten years. So in a franchise, just kind of like, that was a lot. But we're mitigating the startup risks, we're partnering ourselves with people, so we're doing it collectively and collaboratively, which is a safer environment all the way around in times of, you know, recession or pandemics where business can get a little bit challenging. You know, you don't have to get in the fetal position and figure out how to solve all the problems of your business on your own. This is a collective, collaborative environment where everybody's in this together and we put our heads together to solve these big problems, and that makes it safer and it makes us survive in tough times. So in a nutshell, that's kind of what franchising is. And as I said, you don't have to have an MBA. You don't need any prior business ownership experience to become very successful, very wealthy in franchising. What's another thing I want to teach you about franchising? Oh, what kinds of businesses are franchise businesses? Well, I know you know that Jersey Mike's and Chick fil a are franchise, but I also know that there's a lot of executives out there who love the idea of owning a business, but who are not intrigued by the idea of owning food. And I don't blame you. Right? Like, I built a whole YouTube channel with over 900 videos where I talk about how there are easier, faster, better ways to make money than in food. So what are they? Well, there are franchise businesses pretty much in any industry out there. You and I, as general consumers, we just may not be aware. So there are franchise businesses in the home services space. So if you look at your home and you think maybe you have your lawn mowed, maybe you have the lawn fertilized, maybe you have a fence. A fence is a franchise fencing. Maybe you have an irrigation system that's serviced a couple of times a year. That's a franchise. Maybe you have that fence power washed or your pool deck power washed. There are power washing franchises. Maybe you have your backyard sprayed for mosquitoes. That's a franchise. Maybe you have some outdoor lighting. That's a franchise. Maybe you have a pool and you have a pool cleaning service. That's a franchise. Right? So all of these, those are just services outside of your home. Flip that to inside of your home. Look around. The paint on the walls, the carpet on the floors, the window treatments on the windows, even doors and windows. All of those are franchise businesses. We move to the commercial kind of real estate environment, which is what most people think of when they think of a franchise. And, you know, you have all kinds of franchises, from health and wellness to beauty brands to anti aging brands, preventative health brands. I mean, there are thousands of options out there. There are options that are mobile businesses, like the ones that cater to the home. But how about like a senior care business or businesses that cater to, like, extracurricular activities for our kids where mom doesn't have to drive, you know, little Johnny to said thing, whether it's maybe it's a stem class or an art class or the daughter to dance class, but instead, the franchise brings those extracurricular activities right to the school campus. And so the kids stay after school, but participate in these types of franchises. And oftentimes those investments specifically can be very, very low startup costs, very low fixed costs, right. And you can build relationships with institutions, private schools, day schools, you know, and these can be reoccurring relationships for years. So there's just all kinds of ways to make money in franchising, it's probably not what you think or thought it was before listening to this episode. And this is why I have a business. Because if you go out there and you start researching franchising, where is that going to take you except down a rabbit hole? That's like, you don't know what to do with all this information. You could turn to entrepreneur 500 magazine and you could look at rankings. But what is that really telling you about our franchisees? Happy, is that the right business for you based on the skills that you have, the time commitment that you have, the capital that you have to deploy into a business. So you could go out there, you could do your own research, or you could come to someone like Kim Daley, a franchise consultant who offers a free service, by the way, and be matched to businesses that are going to help you achieve the goals that you're looking to achieve through the business? So that's what I do for people. So what else do I want to tell you about franchising? How about how much does it cost? This is another common question. So in franchising, like a lot of things in life, the more money you have, the more options you're going to have. But more money into the business doesn't equate to more money out. That's a fundamental thing that I want to get across to people. People think, oh, well, if that's like a $50,000 investment, you must not be able to make much money? No, absolutely. That is untrue. So the level of investment going into the franchise correlates to the owner's time commitment from day one, not the potential to earn. Okay, so when you see a relatively low investment of money, I'll categorize that as under 100,000, all in. Well, what that implies is owners are putting in full time effort to pretty much launch that business to drive a sales process, if you will, in the beginning of that business. Now, when you see a bigger investment, maybe an investment of three to 500,000 or above, what that implies is you're building out a location. So you've got build out construction costs, you've got ongoing fixed costs. So you need a big working capital pool of money, right, to pay your rent and your utility bill and insurance and whatever it is that your business does, until the business is cash flowing and can afford its own bills. So, again, this is part of what I do for you as a franchise consultant, is help you navigate all of this. You do not have to figure this out on your own. But to answer the question I initially posed, what does it cost to invest in a franchise? Well, there are franchise investments that are under 100,000. I'd say the lowest investment out there is probably ten grand. I do not work with companies that low. You know, I've been a consultant for 22 years, and what we really kind of focus on here is around 50 to 80 grand as the minimum investment. And there's a reason for that. Hey, daily Coach fans, if you're ready to begin your own journey to find the perfect franchise, please email me right now. Now at inquireimdaily tv. My services are totally free for you. That's inquireyimdaily TV. Now back to the show.
[00:16:08] Because below 50,000, the validation from existing owners can get a little bit iffy. And what's really hard to figure out is, are the people in it working at full time, or are they working at part time? And these are really businesses that should be work full time, and that's why the validation is iffy. That's why people aren't making the kind of money they want to make. That's why they're not really happy. So it's hard to discern, is the franchise, like, lacking something in their training or support, or is it just that the people are not putting in the adequate amount of time to really build that kind of business? But when you get over 50 grand, as the initial investment point, this is where people typically are like, look, if I'm putting in 50 grand or more. I'm going to be a little more full time focused on getting this thing profitable. And so it's just easier to discern, okay, this is a good franchise, and this is how it looks and sounds and feels when people are putting in the adequate amount of time to actually build this and make it profitable. So under 100,000 is considered a low investment. And then from there, the level of investment can go as high as building a hotel. Right. Marriott, that's a franchise. Holiday Inn, that's a franchise. So there's all kinds of levels of investments, like buying a car. The more money you have, the more options you have. But as I said, more money in does not necessarily equate to more money out. It's just more stuff from day one and it allows owners to be leveraged. Maybe that's the best way to say it. So that's something else I wanted to teach you today. I think another frequently asked question is around why do franchises fail? Or if I'm going to invest, how can I guarantee myself that I'm going to be successful? Well, there are no guarantees here. The guarantee is you, are you going to show up for your dreams? Right now, this is a conversation that is best had one on one. But I do want to color this a little bit. The number one reason that people fail in franchise businesses. It's probably going to be obvious, but it's not so obvious. It's because they don't follow the system. What do you mean, Kim? People pay a franchise fee and then they don't follow the franchisor's lead. That's exactly what I mean. Why would they do that? I don't know why they do it. No, I do know why they do it. I think everybody sets out with the right intention to follow the franchisor. However, if you have prior experience in a particular business and that's the industry that you've invested in, it's harder than you think it may be to follow the franchisor, especially if you've been trained a different way or you've developed a different way of delivering a product or service. So you buy that franchise because you think that you know something about it, and therefore it's going to be easier when, in fact, this could be the greatest hurdle to your ability to be successful. Right. So let me give you a specific example. Let's say that you're a mechanic and you change oil. You've worked in other mechanic shops, and you have a way of doing it, but you're like you know what? I don't want to work for somebody. I want to be the business owner. I'm going to go buy a Meineke.
[00:19:22] But let's say that the way that Meineke wants you to run the operation is different than what you've been trained to do working for other people. This is what I mean. It's hard for us as business owners. It's your money on the line. You think, well, I have experience. I know how it should be done. Why are you telling me to do it a different way? Therein lies the challenge, which is why I would not invest in a franchise. If you have prior industry experience or knowledge, I actually wouldn't. I would want you to do something where you sort of, you know, surrender your ego at the door and you come in humbled and say, you know, I am willing to do exactly what you tell me to do, Mister Franchisor, because I don't know. Otherwise, that's probably a better franchise for most people. So I don't think that anybody sets out to blatantly not follow the franchisor's lead. I think that there are these nuanced situations around our egos, which are good things on our business owners, because that's what drives us to be competitive, that's what drives us to win. But it can also get in our way, and then, I think, also fear. So if you get out of the gate and your business isn't as successful as you thought it was going to be, and you find yourself a little bit in a fearful state, then you may subtly stop doing what the franchisor said to do, because you feel like they've let you down. And so you start feeling like, well, their way isn't working, so I'm going to do it my way. It's these small, little nuanced situations that can get us in trouble as franchisees. So if you're able to check your ego at the door and really lean into the franchise door, I think you're setting yourself up for success in a franchise. I think other things that contribute to you being successful that are obvious, but also sometimes not obvious, are making sure that you're investing in a franchise that you can more than comfortably afford. Right. I don't want you putting every last dime you have into the startup of the business. I want you to have a cushion. In order for you to come from this abundant place, you have to have more than enough. So I need you to have more than enough money. So following the franchisor's lead, being properly capitalized, and of course, you know, as a business owner, you need to have a strong, powerful, motivated. Why, like, why do you get out of bed every day and show up? How do you show up for your team and yourself in your business? You need goals, and a franchisor isn't there to, like, give you goals. You have to have that on your own. You have to be internally motivated and self disciplined to show up every day for your own dream. Everybody wants to dream of the freedom and be the business owner who can do whatever they want when they want. But that freedom comes at the cost of building a business that doesn't rely on you every minute. It's going right because you have teams of people, you're leveraged through systems and technology, and all of these things will go and work properly even when you're not there. And that takes time to build. It may not take a long time. It could be six months, it could be a year, it could be five years. It depends on you. It depends on the business. But if you want the real freedom, which is the time freedom and the money, you have to be willing to put in whatever this business requires and whatever growth you, as the business owner need to go through.
[00:22:58] So the last thing I'm going to tell you about franchising and success is I know that every single candidate I've ever funneled through my process, and it's thousands, tens of thousands over 22 years. Everybody wants, you know, the financial gain. Everybody wants to know, well, how much money can I earn? But the reality is I can't predict how much money you can earn any more than you can predict how much money you are going to earn in any particular business until we see how you're going to show up for the business. So there's this like, what I call the silent killer in franchising. Nobody's talking about it, but it's literally killing millions of franchisees around the world, which is this subtle little thought in franchisees heads that says, you, mister franchisor, are gonna make me successful. Now, I know you're like, no, I know I have to show up and do the work, but do you really believe that? Do you really believe that? Because people think they're buying a name planet fitness, I'm buying the name chick fil a. So build it and people are gonna come. That is not the way that it works. Right. You still have to build a customer experience that's aligned with what that brand stands for, which means hiring the right people and being a boss to those people that those people want to show up for their jobs. If you're in a customer facing role, then it means delivering that service to those customers with the highest of integrity. And I this abundant energy that makes you a magnet that people want to do business with. So this is what I mean by it's a silent killer because so many people think, but nobody's talking about it, that I'm going to buy a franchise and it's turnkey, which means I just open it and people come and I just make money. And that is absolutely not true.
[00:25:03] You have got to become the owner who's worthy by growing personally and professionally because you have goals, because you're self disciplined, because you persevere when it's hard, because you're tenacious and you go at it every single day. Because you're able to manage your team, you're able to be kind to your customers, you're able to give. And when you give, then you receive. That's the law, right? You give and then you receive. Everybody wants to receive. But can you be the owner who can show up to give? So if you carry that away from this episode, maybe that's the only thing you take out of this. I'm satisfied with that. Let me tell you what I can do for you specifically. As I mentioned, my services are free. I am paid by franchisors to help you select the right franchise because they would rather work with more highly qualified, motivated, financially ready people whose expectations are aligned because Kim Daley has breathed life into you and taught you and educated you and helped you get ready for the one to two month due diligence process. So that's why they pay me. So it's free for you. I'm paid like a recruiter by the franchisors to help grow franchise systems. Now, for you, I'm going to build a franchise business model. That happens after two steps. I have you fill out a very basic questionnaire. Tell me a little bit about yourself personally, professionally and financially. And then we're going to get on the phone with your spouse. I want all the decision makers present. Everybody who's going to decide what this business is and if we're going to invest this money needs to be present because we all have to get educated about each other at the same time. I'm going to teach you a lot as I'm asking questions, I'm going to teach you. I'm going to teach you what your money buys. It's not fair to just ask you how much money do you want to invest? When you don't know. When you say to me an answer what I'm hearing right, it's more fair for me to explain to you what every franchise business costs and why, and relate that to the time investment in the role that owners play and where the business is going to operate from. So visually, you can form an idea in your mind, and then you can reply back to me and say, okay, based on the facts, Kim, I want you to build my model around these types of franchises. So wouldn't that be important for your spouse to hear? Yes. So a two step process that helps me gather information personally, professionally, and financially that then I use to create a franchise business model of you. And it's that model that I match up against my 22 years of knowledge of franchisors and relationships. In most of the cases, the people that these franchisors, they're my friends for life. It's like a college reunion when we get together every six months. We've been together for 10, 15, 20 years. Not in all cases. I certainly work with emerging brands who have new people that I get to meet and play with. But in a lot of cases, you're leveraging 22 years of relationships. And did I mention that I'm the number one franchise consultant in the United States of America? So back in 2011, I made history in my business by placing more people into franchise businesses than any consultant ever had in one calendar year. And then I've, you know, created a science of what I do, and I now teach other consultants how to do it, but I've mastered that. I've been running my business at that level and growing it for over a decade. So you get to benefit from all of that by working with me. And as I said, it's totally free, so there's literally nothing to risk and everything to gain. So the last thing I'll tell you about franchising and working with Kim Daley is if you're excited, you're sitting on the sideline, but you talk yourself into it, you talk yourself out of it. Don't do that. Just reach out to me. I'm not going to talk you into anything. I'm going to talk you through it. I'm going to help you get educated. And if now's not the right time, you're going to go away. But you're going to know exactly what you need to do and how much money you have to save and when to call me back. Right. So, again, there's nothing to risk, and I'm going to just help you get educated and make an informed decision. And if you're going to go on and say yes to a franchise, that's going to happen in one to two months, because this is a very well traveled path, you don't have to make it up on your own. I know the questions. I know where to focus your time. I know how to help you get financed. I know all the things that are going to trip you up and I'm going to walk you around them rather than you tripping yourself up. And then after that, if you're going to figure out that franchising is not the right investment for you or this isn't the right time for you, you'll figure that out in about one to two weeks. So it's one to two weeks to a no, one to two weeks to a yes. It's a totally free service. You have nothing to lose and everything to gain. And if I can be your franchise consultant, I absolutely want to be that along with your daily coach. Thank you so much for tuning into this episode about franchising. I'm excited to bring you this show, american wealth strategies, to help open your mind to the potentials and possibilities for how to build cash flowing assets in your life that create tax advantages and build equity for you. So that you can ditch the nine to five, so that you can stop trading your time for money, but that you can set yourself up to live the life of your dreams. God bless you. I'll see you in the next one.
[00:30:48] You can find more content just like this on my YouTube channel at KimDaily TV. And if you're inspired to take the next step to explore franchises matched to you, please email me right now at inquireimdaily TV. That's enquire at Kimdaily TV.
