Michael Jacobson – CEO of French Florist on Turning His Uncle’s Struggling Flower Shop into a $9.5M Powerhouse

Welcome back to the Casey Adams Show. Before we dive into today's episode, I want to talk about the biggest lesson this show has taught me. Since starting this podcast in 2017, I've interviewed over 400 guests, entrepreneurs, creatives and innovators. And there's one theme that always comes up the edge goes to those who keep learning. That's what makes the Adobe Digital Academy so powerful. It's a program to help people up level and learn new skills. And their new content on Coursera brings real practical learning to people everywhere, offering courses and certificates that help you build critical skills in AI, marketing, design, storytelling and more. These aren't generic videos, they are curated programs made for the way we actually work today. Wherever you're at in your creative journey, the Adobe Digital Academy gives you the tools to grow personally and professionally. You can get started with a seven day free trial. Head to Coursera, search Adobe or tap the link in my bio or the description to check it out. Welcome back to the Casey Adams Show. Today we are joined by Michael Jacobson, the the CEO of French Florist. Michael, thank you so much for coming the show today.

The pleasure's all mine, Casey. Thank you for having me, I appreciate that.

Of course. So I mean first off, Michael, we're neighbors here in la. We are, you know, learning about your story and the history of French florist was so incredible and just to give context to the listener and then I'll, you know, have you jump in but you know, you acquired this brand, this company from your uncle family business that's been in LA for over 40 years, since 1978 if I'm not mistaken.

Exactly right.

And you know, taking your context of someone that's, you know, not historically in the, you know, floral business, to bringing in all of these modern marketing strategies, franchising strategies, to then raising capital for the business, it's, it's really is a story that I was so blown away by because hearing the context of what went into it and just the industry pov, I just wanted to first say like congrats on everything and I'm super excited to, to dive in today and same.

Thanks, thanks.

Yeah, so pumped to have you on, so appreciate all the context.

Yeah, I can't wait to share a bunch of information. I think that our industry is very special. We feel very lucky to be able to work in it, so we're excited to deep dive.

So you know, take us to that point. Michael, you know, as I mentioned, this company, family business, 1978, what led to you wanting to acquire the business. And what did you see, most importantly, that maybe your uncle or a family member didn't see about the future of this industry?

Yeah. Such a good question. I think that there's a few different approaches to answer that. One is what drives me as a person. The second is the opportunity that existed in the marketplace. The third is almost what didn't exist. And what I mean by that is when you're purchasing flowers, especially online, it's such a hit or miss experience right now. And we've learned through time. I didn't know this always, but the more I've been involved with the industry, the more I understand this, how special flowers really are and what they mean. And to mess up somebody's experience when they're ordering flowers for somebody is an act of love. That's a shame. And that shouldn't happen in the marketplace. So just the opportunity that the marketplace wasn't and isn't currently being served to the potential that it should and could. But more tactically, I mean, I was, I think, probably like a lot of folks that listen to the podcast that have a little bit more of an entrepreneurial spirit that initially sparked for me when I was in middle school and our school had just banned soda from the vending machines. And everybody was pissed. Can I say pissed on the podcast?

Yeah, of course.

And I was fired up because I was like, wow, I have a fighting chance. Maybe I can convince my parents to take me to the grocery store. We could buy some 12 packs of soda, put it in my locker, and, you know, the supply got wiped out. I'll be the supply. And I remember. So I convinced my parents to do that, started selling soda out of my locker room. And the first challenge I had, after a few days of doing it was like, I didn't have time at lunch to eat because it was, like, busy selling. And so I brought my buddy into it and was like, okay, you do it for the first half and I'll do it for the second half and we'll split the profits so I could, like. And it was like. So I got a business partner and, you know, we had to stop because we started having a line around the. Around the corner, and we didn't want to get caught. So we wound that down, and I was like, okay, I need to find, like, illegal, for lack of a better term, a legal way to do this. But that's. That's really where the kind of fire in my belly started. We're like, whoa, this is really interesting, this whole, like, entrepreneurial type of thing. And I didn't know what the word was back then, but yeah, since then it's really fast forwarding quite a bit. Graduated college and needed to figure out if I wanted to join a startup or start a company or go into the corporate world. I studied finance or finance and.

Had.

The opportunity to work on Wall Street. Kind of did some soul searching there and was like, man, I don't really want to push papers and do a bunch of financial. I didn't feel like it was providing real value to the world. And so, long story short, ended up joining corporate consulting. Not that that's any necessarily better than Wall street, but I figured I could learn a lot from big companies that were, you know, seemingly doing cool things. I worked with a lot of Pacific Northwest based brands like Starbucks and Nike and like all these cool companies, right?

Yeah.

But really didn't feed that fire in my belly. I think I joined corporate consulting right out of school because I didn't want to take the chance. You hear the stats of how many startups fail. Yeah. And so I only lasted a year there and it was a great year. But you know, I, during that year I realized that this was not going to satiate my, my want to be my own boss and like all of those things that a lot of people feel. So I had my ear to the ground for new and different opportunities. And that's when I got a call from my uncle. And he said, mike, you know, I own this flower shop, it's called French Florist obviously. And I had, I knew that and, but he called and said, I want to sell the business. And I'm sure I wasn't his first call, but he's like, you studied finance and can, like, can you help me sell it? So. And that's, that's how the journey began where I originally came in to help him sell the business. I did not think that I was going to get involved in the way that I am today. But when I came in and looked at his business, he. I went to other flower shops. What are they doing well? What are they not doing well? What comparables are they selling for? And what I saw was every florist is struggling with these same systemic issues out there and we can dive into what those systemic issues are and were. But there was.

Just to interject real quick, I heard you talk about just in terms of the systems around a flower shop, where the flower shop, you were spending $1,300 a month on a phone, you know, phone line and like just kind of understanding and finding the efficiencies. And, you know, I'm curious during that process, something that I talk about a lot on this podcast, which is like this white space in a founder journey where, you know, maybe you're working at a company, you want to start something, you don't know what it is yet, or maybe you sold your company and you don't know what the next thing is yet, but you're like tinkering and trying to figure out, like, what it is you want to do. And you're kind of going down these idea paths for you when you, you know, when you uncle calls you, you start, you know, just wanted to help him, you know, potentially sell it. What was on your mind and what led to thinking about the alternative of, hey, like, what if I took control of this? You know, what if I figured out all these nuances of, you know, how to make it more efficient? Like, talk to me about that process and really try to put us in your shoes. Because I think it's, it's maybe, you know, we talk about a lot on this show, like, easy to hear the stories, but trying to make someone recognize where they are in their own journey and kind of taking us back to how you feel, felt the hardships and what you were looking for, in a sense.

Yeah, it's awesome. Thank you. The questions are, like, totally spot on and are really the driving force of like, what makes us want to continue to run the company today is still the same reasons and why we got into it. You know, I think that two things, one is a personal and one is more kind of objective from a business sense. I'll start, I'll start with the business sense. The reality of the statistics are that, you know, there's different numbers, but 90, 95, whatever, percent, a lot, a lot percent of businesses, startups, fail. And so when, when I viewed this opportunity, it was like there were a lot of good bones to the business. The culture was really good. There were a few employees that were great customers, were satisfied with the product. There were. There was a lot of supply chain issues, a lot of technology issues, a lot of stuff that was getting away in the way of the client experience. But if we solved all of those issues that, like, there were really fundamentally good bones underneath and we could just solve a little bit of that. I think, like, that we saw a really clear path to elevate the client experience even more. But instead of taking something from 0 to 1, this was a company that already existed. You could see the things that needed to be fixed. We also saw a Path to innovate on top of that. And that became really, really attractive. And I was scared of taking something from 0 to 1. I've been a part of other startups before. Some of them have gone on and continue to do well. A lot of them have failed. And that's the nature of the beast though. Right. But this was a business that was already generating revenue. It was not profitable, but we knew what it was going to take to get it to profitability. And then so just the difference of 0 to 1 versus 1 to you know, 10 or 50 or 100, you know, is, is a different game. And that was something that was really attractive. And we've actually taken that. We're expanding through a franchise model right now. And that's like the whole premise of what we're doing is somebody can come in and acquire a flower shop and convert it to a French florist and put all the infrastructure and the engine of what we do in and kind of do it in the same way. So we're getting a lot of folks that are interested in the program in the same way that I got into it. And so it's been like a really cool full circle.

That's amazing. Yeah, just, just to pause you for a quick like what was, you know, talking about that zero to one phase? You see the business that's. Yes, it's doing revenue not profitable. Like what were, what was the model then? Right. When it comes to business models. Because I know you guys have been super innovative, this franchise model and kind of what that means for the, the floral business, which we'll, we'll talk through. But, but to kind of take a step back, what was the company, the process, the business model back when you were getting involved and what were some of the first steps you took to change that?

Yeah, I mean imagine going to your local mom and pop florist down the street from you. There are thousands, or really actually tens of thousands of florists in the country. 99% of them are single unit owner operator. Yeah, this flower shop, French florist. When I came in it was, there's green and purple paint on the walls. There's three printers and three fax machines, papers flying everywhere. Yeah, spending the amount that we were spending on really old, you know, copper line based telephone systems and an extraordinary amount on printer ink because it was so paper process driven, chaotic and organized. I mean also this one of the systemic issues of the industry that is changing now, thank goodness, but it's still very prevalent today and was the case for Us. When I first came in, I'm hesitant to talk about it because we, we're here to make our company the best that we can be. We're not unaware of the competition that exists. And you know, if I ask you what company you think of, if I say coffee, what company do you think of?

Starbucks.

If I say French Fries, what company?

McDonald's.

And then if I say flowers, what company?

I mean, right now, French floors. Let's go, baby. But no, you're right.

You're ahead of the curve.

Share some thoughts on that context. Right. As someone who recently got married, got engaged and has been in a relationship who's been in the flower market now for many years, I've lived in LA during that period of time. And I got to say I've probably been a disloyal customer. I've tried different places I've expect. Excuse me, I've. I've received some that I love, some that I don't love. And yeah, and I'm not just saying this to say this now, but when I received a bouquet from French florist recently blown away, not only myself, but my wife. And I mean, it's one of those experiences where you don't forget it. And it really is that like, wow moment of like, okay, from price experience, like the gifting ability to look and feel like it was, it was gorgeous, man. So. And I'm not just saying that to say that like, I've already even spoken to other friends of mine who are in relationships. Got to check this out.

That's very sweet, thanks. We will get into our secrets on how we do what we do, but. But that's nicely to say and I think, I mean the answer just is like totally spot on though. I appreciate the answer of being French florist, I think the goal, not we're not ambitious for ambition's sake, but ultimately we do want to be able to provide that type of experience across the nation and be a reliable, consistent, quality player that folks can, can come to. But I think that when we look at who the number one player is, it is really fragmented and there's not really a number one player. But I was going to ask like.

Who is that even in your perspective? That's like in the niche in the business are there again, there's like brand companies that maybe a section of the US would know in certain markets versus like a national recognized brand.

If I say 1-800-Flowers, what comes to mind? Yeah. Okay.

That's the only thing that I could think of and I Instantly go like, eh, this isn't what I'm looking for.

Yeah. And the reason for that is that I was told recently I should stop bashing the. We call them wire services. I was told that by a wire service. And I told them if they could give me a compelling reason why I should stop bashing them, I will. And they did not convince me. So here we are. The reality, the objective truth on how they operate though, is that they will take your order online and they syndicate it to a local florist. The issue comes in is that they take a 40% commission after all of their fees on that order. So they're destroying 40%.

Top line.

Top line.

Oh my gosh.

And so obviously the florist is not gonna be happy with that. And then if you're not happy inside, you're not gonna reflect a great experience outward either. Right. So that client experience gets heavily degraded very quickly. The problem that we faced is we, you know, French florist, when I came in, 60 plus percent of our revenue was dependent on these wire services, 1, 800 being one of them. And we were stuck between a rock and a hard place. And a lot of florists are, again, this is changing less and less. Florists are reliant on.

So just real quick, like 1, 800 is their business model. I'm kind of. You learn. I'm learning. This is like they're this company that passes it off to local floral shops. And they're like, their business model is taking that 40%. Therefore you as a company, you're, you know, you're getting leads, you're getting customers from them, but your margins and the ability to have like the direct relationship is not there.

Correct. Yeah. And they don't give you the data, it's their client. Yeah, Right. They'll give you the recipient address and name, but no emails, no sender data. And so, yeah, their base commission is 27% to their fairness. But on top of the membership fees and technology fees and payment processing and all that other stuff.

And I would assume even just like, this is a great conversation, like, I would assume a lot of local boutique flower shops are sort of dependent on this as a, as a section of their business outside of like, you know, unfortunately. Yeah, makes sense.

Yeah. Yeah. So that was really interesting to us. Right. It's like, there's clearly an issue here where the dominant market player in the industry is not creating value. It actually goes so far as to say they're destroying value in our ecosystem. And look, that model doesn't work anymore. I mean, maybe it worked pre Internet where it was hard to get connected to your local florist. It's remarkably profound to us, honestly, that that model still is working today. And it's, it's not actually. Their model is on the way out the door. The writing's on the wall, which is good for the consumer marketplace, but somebody needs to step in and fill in that gap and provide a great experience. So we're taking a swing at that. And I think that there's some other things that attracted us to the business on a tactical level, but I want to move more to the emotional side. The other tactical stuff was the technology and the software and all of that stuff was super outdated. There's a blue and white screen. You have to push F12 to get to the next page. It was a DOS based operating system that was the best floral technology that's still used today by some of the largest florists in the country. So we scrapped all of that, built a bunch of proprietary tech. Our supply chain is incredible where as we've grown, we've sourced directly from the farm, the best farms all over the world. As opposed to going through the farm to the consolidator, to the processor, to the distributor, to the logistics agency, to the wholesaler, to the retailer, to the consumers. Like, oh my God, that's a massive supply chain. And dealing with a highly perishable product here, there's a few days between every one of those steps and by the time it gets to the client, it's going to die in two or three or four days. That's also not okay. So, you know, we're sourcing directly from the farms. We're getting not only higher quality product, we're actually getting them at a, at a better price because we're cutting out the middlemen on the bottom side of the supply chain. So again, everything in service to providing a better client experience, that being the North Star, but so ton of tactical stuff. Right. And similar to the selling sodas out of the vending machine, I was solving a pain. It's the same type of decision making that we make in the organization today of when it comes to innovation, then we will come up with crazy ideas and we don't necessarily have to be solving a pain in the traditional sense, but generally speaking, most of the things that we pursued and how we got to where we are today, we're solving real pain that actually exists. And so the supply chain, the tech, the dependency on the wire services were all huge pain points. And so that was just like, where there's pain, there's opportunity, though. So that was our perspective. And this is where it gets interesting to us, though. And this is where everything kind of shifted. I could sit here and say all day long, we have the best quality, we have the best technology, we have the best customer service, we have the best client experience. Super boring. Who cares? Every company says that. I would probably say that the companies that tout those kinds of words probably are not the highest quality companies out there. It's like, I, ironically, we'll say this, I guess I, I'm, I'm, I don't say that I'm passionate. I just am. Right. Like you, you can tell. But I, I, but so like, we don't need to say we're quality. It's not even our place to say those things. I can say where they're the highest quality, but it's, it's not up. It's the, the marketplace. We get to put that into the marketplace. And the marketplace tells us if we're the highest quality. The marketplace gets to tell us if we have the best client experience. It's not our place to say that. So where does that leave us? What differentiates us if, if we don't have. Sorry, don't get me wrong, we do have the highest quality. We do provide the best client experience. But if we're not saying those types of things, what are we saying? And where it got really interesting to us is that we are a floral brand and a floral company. I think that the American culture of buying flowers right now needs a little bit of work. But even if you meet the market with where it's at today, we are buying flowers for happy birthday. We're buying flowers for happy anniversary, congratulations, Mother's Day, Valentine's Day.

Yeah.

Very occasion specific purchasing. We view flowers as a luxury for the occasional purchase. We want to shift that a little bit. I think if you were to buy your mother flowers for any other day except for Mother's Day, I would argue that those flowers are going to be more meaningful on a day outside of a Hallmark holiday.

Yeah.

So no reason is the best reason. That's what we're trying to shift to. But again, even if we're meeting the culture where it's at today, that's okay. That's great. No matter what you're sending flowers for, even if it's for something sad like a funeral and you're sending your condolences, what you're telling that person when you send flowers is that you love them and Love. I'm yet to be convinced otherwise again, that there's a more powerful emotion that exists other than love. And that's the industry that we get to work in. That's pretty cool to us. So we view our responsibility of delivering love or creating a more loving world through flowers with a lot of weight. And when somebody sends flowers utilizing our company, I think that we understand how meaningful that experience is and that gift of what they're giving and more than any other company. And so. And I think that's what helps differentiate us. When somebody does receive a French florist arrangement. It's. Yeah, it's high quality. Yeah, it's a great experience. Like, if anything were to come up and you want a custom order, you can call our client experience or kind of our floral representatives and consultants to like help design something really cool. And I highly recommend doing that. Our customer arrangements for the. But you can just really feel the passion of like everybody on the team cares so deeply about that experience. That. And not taking for granted the trust that's being put in us to deliver a great experience. And so that kind of that soul and that feeling is brought through in the final delivery. And so. And I don't think 2100 Flowers is doing that.

I love the perspective of delivering love. And you know, as someone as, and I'll say it again, as someone that recently got married and I've been in a relationship and like flowers have been a huge part of occasions or special days or even, you know, on the, the random occurrence. I, you know, I think everyone has. If you're in a, you know, if you're in a relationship or you give flowers to your parents or friends, whatever it may be, like the impact and the appreciation that an act like that can have. And, and it's the, you know, the, the gift that is present in so many lives that I think until you are like, oh my gosh, like, like for example, in the past, it's, oh my God, I forgot to get someone something. Let me send them flowers. Like the occasion driven. I'm curious to know the mindset and something that you said, which I picked up on. That's really cool. Which is just changing that customer behavior. Right. And I'm curious to know how you see that maybe in other parts of the world and different cultures around like flower buying behavior and kind of what you and the team see and what it, what in your opinion, does it take to shift that behavior over time as a brand and as a, you know, as an industry as overall.

Yeah, it's a fascinating question. We think about it a lot. Look, we are an American brand. Our name is French florist. How does that make sense? It makes sense because we, we are giving a nod to the European culture that flowers are a little bit more of a way of life. And we want to bring that into our American culture a little bit. So our, we don't. I think that the conversation around shifting consumer behavior becomes really interesting because that is a very expensive, very difficult thing to do. I'm going to say impossible, but it's close to that. You know, I think like one kind of case study of shifting consumer behavior was the Got Milk campaign. But I would argue that you're not really shifting consumer behavior. I think you're harnessing the, what the marketplace already needs or wants and leveraging that to almost educate or inspire them to make change. And in the case of Got Milk, it's, I think they were promoting whether it's correct or incorrect. I don't know what the science is, but that milk is healthy, right? Like Got Milk, I have milk in the morning and that kind of stuff. And people want to be healthy and it's about that. And if like milk will help him be healthy, then they will drink more milk. I think for us it's, it's not that we necessarily want to shift consumer behavior. I think that people already have an understanding really deep down on how special flowers are. We just need to resurface that a little bit. And I have a lot of faith that people do understand how special flowers are. Because our industry, if you really look at it from an objective viewpoint, we are growing orchids that take seven or eight years to grow in a greenhouse before they're going to get cut and enjoyed by, by somebody in their home. When we cut our roses in Ecuador, or our tulips in Holland, or any of the flowers that we grow, and the extraordinary amount of effort that goes into the farm level, through the processing, through the air, freighting them in a cold supply chain across the world and having them land in one of our facilities, processing them, designing them, delivering them, doing that last mile delivery all the way through the full supply chain, all of that effort, all just to get that, those flowers to your table for them to last 8, 10, 12 days. I think, I think people do appreciate flowers, otherwise we wouldn't be going through that effort. I think that we've lost our way a little bit in understanding how powerful flowers really are though. So people know it deep down. But we're trying to resurface that I really do think the most powerful gift that you could possibly give someone to express any feeling but in particular love. And absolutely, again, that whole no reason at all is the best reason. I think like that's, that's kind of what we're trying to tap into. So it's, it's not, it's not changing people's minds, it's just reminding them.

Yeah, no, it's, it's really cool to hear you speak about that. And even too, you know, for those, I think there's like that instinctual nature of appreciation for obviously receiving flowers on the receiving end and the underlying, especially now when you hear someone like yourself talk about this on the show, to understand the process, right, to see how it shows up on your kitchen table in a beautiful display, to really understand that supply chain. I'd be curious just from a business standpoint of have there been any. I would assume so like horror stories of supply chain issue, large scale flowers die, can't use them. And kind of like taking the objective business lesson of how you've solved that. If there was any like specific moments when you're, you know, reverse engineering and sort of creating this new system in the process of supply chain from top to bottom.

Yeah, totally. I mean I would love to sit here and say that it was a great journey and like look at all of our success. It's just not the reality of how it's worked. It's more we've gotten, we've reached our success that we have today so far by pretty much the inverse of like figuring out what hasn't worked and making mistakes. So yeah, there's like a lot of horror stories. We work through them though, through the values and principles that we have. Make our decision making pretty easily. Like we do the right thing and make sure that the customer is put first. We view money and the financials of our organization as a means to be able to invest into the mission in the North Star that we have further. So if it's ever a question of like this is going to be expensive to fix our mistake or whatever, it's like, well, if it's going to help us become a better company and serve the client better, like that's. The money will come back. It's not a problem. So. But, but I mean, yeah, some examples are during COVID they were only flying PPE and we were, it was Mother's Day, we just opened back up because we had to shut down our store for a couple months. And I think Columbia was like having some massive conflict, civil Conflict at the same time. And no flights were coming out of Columbia, which is where we get all of our lilies. And hydrangea. And hydrangea are such a core flower of what we use. It's like roses are number one, hydrangeas number two. And we got a call pretty much like two days before Mother's Day saying all of our hydrangea, which is pretty much in all of our arrangements are grounded. They're not coming in. And so we ended up chartering a flight ourselves alongside a few other wholesalers and like got a private. Not a private jet, but like a, like a private cargo plane to fly.

All of our product.

Yeah. So it was like nuts. Yeah. There definitely have been some challenges, but by going through those challenges and like the obstacle is the way. Right. Anything that we run into, we protect ourselves from that. And so, you know, but tariffs are another thing. But it's. I don't know, we're not too bothered by some of the supply chain issues. It's a challenging thing because it's a perishable industry. But we've really learned how to navigate all the mistakes to this point that we don't make a lot of mistakes anymore with it. It's gone it down to a pretty solid process. Yeah.

Even hearing that story of sort of the founder perspective of, you know, when, when the buck stops, you got to figure out what to do and how to do it and you know, like getting a private cargo plane, like these are the stories that I'm like the, the. If only people knew. Right. Like the horror stories that goes into it and also too like to take that lesson to their own business of, you know, I was interviewing. Was it either. Oh yeah. Eventbrite CEO last Friday in SF and you know, their live event business and you know, to think about their pivot from COVID and how they were able to just change gears and you know, survive that moment in time. It's. I always think, obviously there's any founder that has been in business for the last five plus years has a Covid era story that I think we can all learn from. So appreciate you bringing up the context there something I want to pivot to. And you know, you spoke about where the business was coming out of that zero to one phase and to now have scaled the business from what I've seen online and different interviews like to over nearly $10 million a year in revenue. What has gone into creating that type of growth in a business like the floral business. And when you think about the future of growing beyond this through franchise model. I want to talk about that model, but to first just talk about growth. Love to hear your perspective on what's gone into this dramatic change of business and what's led to some of these high level growth moves.

Yeah, 100%. So in the early days we were really able to identify the systemic issues that existed in the space. And so the three main buckets of things that we ran into were the supply chain ecosystem, the technology was really, really old. And then demand generation, which is kind of like marketing. There's both a creative essence of marketing but also like the quantitative performance marketing side. But like how do you get clients in the door, especially with 1, 800 flowers in the room. Right. And not wanting to take orders that have a 40% commission on them. How are you going to generate your own type of orders? So you know the supply chain we talked about a little bit. So just sourcing directly from the farm, getting better quality product at a lower price, passing those discounts along to the consumer as well. So while we don't compete on price, we're able to show up as price competitive in the marketplace and provide a better experience for a vase life perspective too. So supply chain was a big one. Technology we touched on a little bit. We developed the best floral operating kind of proprietary software that exists in our space right now. Had the opportunity to like license it out and become a tech company to other florists.

I was going to ask because like I was going to say like you guys, I heard you talk about like the proprietary side of it. So you guys have licensed it out in terms of, think of it like a vertical SaaS product for we have the opportunity to.

No, we're not licensing it out because of the, particularly the franchise program that we're, that we've launched. We have a responsibility to make sure that anybody that joins our franchise system that there's a not, not a 5, a 10, a 15% competitive edge, but like order of magnitude competitive edge compared.

To all franchisees will get access to this internally built exactly side of it. Wow, that's amazing.

So, so it's just a part of the French florist ecosystem and that alone it's helped us a lot. But it's just one pillar of support that helps us basically operate the business smoother, ultimately giving us our time back to focus on the more important stuff, the client and the client experience. Like our designers. Now there's no papers flying around, it's all on an iPad system. All of the orders are there, there's recipes in the system, the inventory system is digitized and we have kind of. Our first integration of AI was a predictive inventory system that makes flower buying a lot easier. It's like using the technology. We're super boring stuff. We did raise a round of capital and like, when I was like, we're a tech company, like, got investors attention. We're definitely not a tech company. We're a floral company. We're tech enabled for sure.

Yeah. So what went into that type of investor conversation then? Was it in terms of capital intensive for the tech to bring on engineers, or was it just operational capital or. I'm curious to know your perspective, and.

I'm happy you asked that. I mean, our company has definitely been described as a company that likes to kick up dust. We, we like to cause trouble. We, we, we will lean in. One of my least favorite sayings is, if it ain't broke, don't fix it. I think that if you can make it a lot better, for sure, change it.

Yeah.

That being said, you know, there's. There's other folks that have done phenomenal work out there, and if somebody has developed a process or a system or a procedure or a framework that works really well, we'll lean into it, no problem. But if we think we can build something better, we will. And so when we raised capital, we also did that in a little bit of an unconventional way. We, we didn't need to raise capital. Our corporate stores that we own, because we own and operate a lot of shops. And that's, that's where we started. We are a floral company, especially with the franchise ecosystem. We're not a franchise brand. We are fellow owner operators of French florists. And we're building a community of owners that, like, we can join forces to create something that's, I don't know, the floral industry, it's all mom and pop. It's beautiful. We don't want to change that. The local ownership is like, great. And that's why we've chosen to franchise as opposed to opening 600 corporate locations across America. Yeah, but so, but when we raised capital, it was a little bit of like, okay, we brought this company to, you know, 10 million in revenue between a few stores, and we've opened up, you know, opened up a second location, a third location. It's going really well. Like, what are we, what are we doing here? What do we want to do? And so we came up with franchising for, you know, a lot of the reason, A lot of those reasons that we covered. But it was just a. I think a recognition that going from 0 to 1 or like 1 to 10 million and then going from that to 10 to 50 million or 100 million or beyond, a different game. And as. As smart as I think I am, there are a lot smarter people out there that. That know different things than I do. And I've definitely, definitely learned from running the company that anytime we have the opportunity to bring somebody in who's way smarter than I am, whether it's in operations or marketing or supply chain or technology, like, whatever it is, do it. And so, you know, there are some investors out there that have been around the block that have seen what's worked and what hasn't. And we said we want other people to have skin in the game who want us to succeed, who can help us succeed based on the knowledge that they have that our company doesn't have yet. So it wasn't about the financial capital at all. To this day, we raised a relatively small round. It was $3 million. That money today still sits in a money market account, and we have not touched it at all. So it wasn't about the capital. It's nice to have a war chest and be opportunistic if there's any opportunities. Sure. Our franchise owners are. There's no, like, threat of the company, you know, being at risk, even if something unexpected were to happen. So we have it for a lot of those reasons. But, you know, we raised capital from folks that have deep expertise in building great franchise systems. And there's. There's not a lot of great franchise systems out there. They're far and few between. But the great ones out there, we seek them out. We asked them if they wanted to invest. You know, folks that have deep financial or operational or those types of expertise. It was really a, like a intellectual capital type of financial raise, but that's why we did that, and it's helped us a lot.

That's amazing. Bringing in the right partners, the right reasons. I mean, that's the best place to be as a founder and to have that viewpoint on. That's really cool to hear. In terms of the franchise model, something that you said which makes total sense is you don't want to just have a bunch of corporate locations. Being able to partner and have a franchise model with owners and operators that, correct me if I'm wrong, you could have a floral shop and say, hey, I want to turn this into a French florist. Or am I mistaken that on.

Yeah, you can. There's the traditional model, which works really well, we've done both. We have a lot of folks that come in from corporate or something like that, and they're, they're ready to make the leap and be their own boss. Typically, you know, they've done well for themselves, but they're ready for that, you know, chapter of their career where they're, they're in control.

Yeah.

And so you can build a French florist from scratch. All of our corporate units are typically built from scratch. We, we're looking at doing an acquisition for a store soon coming up, and we'll run that as a corporate store. But. But yeah, and then we have folks that come in that, you know, the whole entrepreneurship through acquisition buy an unsexy business. And yeah, we're getting a lot of. Surprisingly, we didn't know that people would be interested in that, but some of our best franchise owners are coming in with that kind of a background and wow.

So it's like, yeah, you'll see that on X all the time. It's like, oh, buy in a car wash franchise and have a bunch of.

Those totally, like flower shops are selling for unbelievably low multiples. And then particularly when you add the French florist engine and you have that value add play, you're buying a good. If you can get a good deal on a flower shop in and of itself, great. And then you put the value add with the French florist system and ecosystem in place. It's really like scale, revenue and profit. It's good.

That's amazing. And I'm just curious, and if you can't share this, there's no worries. But in terms of like the franchise model, like, what is a cost to get this off the ground? And like, if someone's out there listening to this podcast and they're like, you know what I have, I would be interested in starting this. Or hey, my mom's friend has a floor stop and I'd love to help her, like get on the French florist wave and like turn her shop into a French floor. So how does that work and what is the typical cost for that? If you're able to share.

Yeah, yeah, absolutely can hear. I can share anything historical. So I don't have a crystal ball. And so we don't like to share kind of future and projected revenue, but I can share all of the historical data, no problem. So typically our A unit from the ground up is typically doing about. We've never launched a store that's done less than 800k in revenue in the first year. Typically on a franchise system, after all of the revenues are considered, they're running at between a 15 and 20% profit and then it costs about anywhere from 150,000 to about $300,000 to build it. And that's a brand new unit. So new construction site selection, lease negotiation, the first three months of operating. So. So yeah, the cash on cash return on that even in year one is pretty compelling. So like the unit economics work really well. It's even more cost efficient to acquire a unit if you can get a good deal. We have some owners that will come in and acquire a flower shop and there's probably about 60 or $70,000 worth of renovations to do that on top of the purchase price of the business. But you can buy a flower shop for like 100 grand, put 70k of kind of improvements on the place, and now you have $170,000 cost on converting that unit. But then you don't have to go through site selection, lease negotiation, physical build out. All of that process can take three to six months and you're not generating any revenue on building a unit from scratch for that six months. So if you have the capital to go and buy a unit and convert it, you're buying the unit, you have revenue from day zero. And then the other aspect of that, just keep it rolling is on, on the marketing and acquisition side, when you have an existing floral business, you're buying their full client list as well. And typically you're the how the the current state of the industry. Again, we're trying to change this and increase the frequency of purchasing. But even if you take the market for where it's at today, the average flower buyer buys flowers 2.2 times per year for occasions. Right. And so for easy math, say that's once every six months on a startup unit. You're really putting a lot of money into client acquisition for the first six months. And it's not until the second six months where you really start to see revenue ramp typically in a historical what we've seen because that's when you start to get repeat customers and continue to invest in client acquisition. On an acquisition, you already have a great client base. You can put fuel on the fire on what's working with additional client acquisition, but it allows you to start with a little bit more speed immediately on acquisition.

That's. I really appreciate the breakdown there and I think it's so fascinating to sort of put myself in your shoes and understand like the types of partners that are either doing this already or see the Opportunity to kind of step in gear here and to talk about what we were talking about at the beginning. Right. Where one of my favorite books, I'm gonna tell them right off the top of my head, was about just the story of Chick Fil A and their franchise model and, like, finding good brand, great partners. And I'm curious to know, you know, you talked about the fundraising, and I believe, if I'm not mistaken, in one of the articles I read, you want to open up, like, 15 locations by the end of this year, if. Is that correct? In terms of.

We are. Yeah, we're. We're ahead of that goal now, which is great. We're kind of pumping the brakes and saying, okay, like, we. Just. Because we can exceed goals we don't necessarily like. I think the number one risk that we have as a franchisor is if we grow too quickly, there's a risk that we degrade our quality. Right. And we've seen it before with Subway and 7 11. And like, that's. Again, there are some good franchise brands out there. You brought Chick Fil A up as a great example of one. But there are not great systems out there. I think the not great systems tend to scale a little bit too quickly, make decisions from a private equity standpoint or something. So we're very, you know, didn't take investment from that side of things. But yeah, so we'll have. We have quite a few locations open right now, so we'll have maybe about 20 or 25 stores open by the end of the year.

Amazing, amazing.

And then we'll probably open up another probably 20 to 30 stores next year. And that's pretty much our max capacity.

Yeah, that's so good to hear. And again, I could jam out on the business front, like, so long, man. And we can definitely going to be going over the 45 mark here when it comes to the, like, the personal perspective, Michael, from, you know, taking this flower shop that your uncle gave you a call about, and, you know, you didn't even think about initially buying it. You just wanted to help them sell it. You wanted to be, you know, helpful to him. If you look back in time as a founder, as a CEO, how do you feel about the, you know, the business, the industry, like, this journey? As someone that, you know, I know you mentioned earlier around being scared to take that leap or like, scared to take something from 0 to 1. It's so incredible to hear you articulate just from an industry, a purpose, like completely revamping, like, consumer behavior as a goal and to Hear the success that you and your team have had is just remarkable. So first, congrats. But we'd love to kind of hear your perspective on, like, your daily internal dialogue of how you think about the business. Now, do you take time to reflect often or what does that look like in your life?

Yeah, definitely. I think it goes to why are we doing what we're doing? Right. I mean, I think that's a pretty important question.

Yeah.

And just to leverage what I do think is a great framework out there. There's, there are a lot of them. The whole unreasonable hospitality, I think, is a great one. The Simon Sinek start with why, right? Like, why are we running the company? Why do I get up in the morning and why am I, like, doing. Why am I working so hard to push this mission forward? I think that, you know, I look around and I have friends that are in the emergency room becoming doctors, literally saving people's lives. I was talking to a franchise candidate a few days ago, and he was a Marine veteran and, you know, has fought in wars with wars going around the world seemingly. You know, it's a chaotic world that we live in and, and here we are playing with flowers and know, how does that make sense? How do we rationalize that? Yeah, I, you know, I, I do think that while we're not saving lives, I think that our, our North Star and why the company exists is to create a more loving world. And that trying to find that intersection, I, I like, I, I. My nature, that fire in my belly is, is business and entrepreneurship. I like it, I love it. But trying to find an intersection of business and doing it responsibly, ethically providing it, putting the effort in the fire that we do have in our belly towards something that will leave this earth a little bit more loving, a little bit better. And I think through flowers, we can do that. As, as funny as that might sound, I think we can kind of create a more loving world and we view that as a worthwhile mission. So that, that alone fires me up. It, you know, definitely there's a few different types of kind of owner operators out there. There's, you know, folks that are wartime CEOs, some are peacetime CEOs. I like a good challenge. It seems like a worthwhile mission for us. There's nobody else is doing it justice in the space. And so again, like I think I said earlier, we're not ambitious for ambition's sake, but there is a really great opportunity to provide actual, real value to the marketplace and put something into this world. That I think will leave it a little bit better. So. And if we can make some money along the way and use that to go on vacation or spend more time with kids or sort of charity, like whatever it is. Right. Using that as a method of freedom to do even more and better stuff.

That's amazing. Very, very cool to hear that as we start wrapping up here. Michael, when you think about the future of French florists, what excites you the most when it comes to the mission, the model and just everything from a business perspective and personal perspective?

Yeah, totally. That's an easy answer for me. I think we've definitely been pressured by a lot of folks that make decisions strictly from a financial perspective of like, just open more corporate stores. The unit economics are really good. Slice out the tech and license it and become a tech company. Do you know what multiple technology companies are going for? And it's like, yeah, I do. And, you know, we made the decision to franchise. And I'm really excited by that because I think that it is going to become the way that we become the dominant player, at least in the United States. But more importantly, the best ideas in our organization have come from the most unsuspecting places. And again, like, well, I think I have good ideas. I think that our franchise, we're building a community of owners. And like, yeah, we do own and operate different flower shops. We happen to be, you know, the owner of the franchisor or the, you know, the owner of the brand at large. But we don't necessarily view it that way. We view ourselves as a part of the ecosystem in the community. And we're bringing fellow owners alongside us, not above or below us, alongside us, to create this ecosystem of florists that are operating under a unified brand for the ease of the marketplace, to have a quality, consistent, reliable company that they can go to. But yeah, just creating a community, a community of owners where we can share ideas. Everybody wins. All of the territories that we have are exclusive so that you're not going to see six French florists on the same block. It's like everybody's territory is protected, all of those important things in the governance structure. So we're excited just to be expanding in the way that we are. And as opposed to doing everything from a dollars and cents standpoint, like trying to change our industry in a way that our company can be around 100 years from now still providing value to the market.

Yeah, that's so amazing, Michael. I mean, I know we've talked a lot about different things. The business, the personal side of things again. And I want to say it many times now, I'm just so blown away by the story and the ability to take this idea and this, you know, what you saw as an opportunity to see where it is now and to understand how you and the team think about it. It's really genuine, really cool to hear and I'm just so stoked for you and I couldn't be more excited to just continue to be a happy customer and just have the best experience as well. So that's great.

If I've done only one thing on this podcast, if I've convinced you to purchase flowers for no reason at all.

More than twice a year, absolutely. We're changing the stuff by one. And then last, last question before we wrap up. Where's the best place for everyone watching or listening to learn more about French florists? To, you know, to buy the flowers and of course, just to stay in touch with you and the journey overall?

Yeah, totally. I mean there's been so many people that have given to me and continue to and so I'm always happy to return the favor to be a sounding board like wherever you are, if you're of emerging or want to bounce ideas around, even if our companies are at a similar stage, always happy to. You can reach out to me directly. My email is michael frenchflorist.com Otherwise, if you want to purchase flowers French florist, you can just throw us, throw us up on chat, GPT or Google, whatever you're searching on these days. And then the franchise side is french floristfranchise.com perfect.

I love it. Well, Michael, thank you again for taking the time to come on the show today. Very excited for you and we'll talk soon.

Thanks, Casey. Be well.