How Much Fight Do You Have? SimpleSnapFrame Company is Putting a Copycat Business in Their Place.

Dave in Colorado. How are you doing?

Good, sir. How are you?

I'm amazing. What's going on?

Yeah, I want to know, is that just colored water sitting on your desk? Are you really drinking?

I'm really drinking. I'm not like, you know, we're not in college anymore. We're sipping the cigar is more my focus.

I'm sorry, I just had to ask.

Oh, no, I like it.

Hey, I've got a couple questions for you. Is it okay if I mention my company name?

Sure.

Okay, so I, I own a sign shop in town here and we, we manufacture a product.

Via the Internet and we send product nationwide using a. Mostly for hospitals. It's simplesnapframe.com. i've got an issue where I say that again slower.

Simple.

Simplesnapframe.com snap frame.

Okay.

Yep. And that's actually our company name is. We included the dot com with that. So.

I've got, I've got a company on the Internet that's using our name to attract customers to their website.

I have, I filed for a trademark on the name, but I keep getting declined because of the name. The Snap Frame is too, too general of a term. Do you, do you have any advice or is there any other avenues that I can go to kind of protect ourselves from this type of.

Type of copying us? I guess I should say.

So you sent them a cease and assist.

I did and they basically told me to pound sand.

And so then the next step is to file in court.

Well, but again, I don't have that name trademark because they won't allow me to trademark it. So do I really have a leg to stand on? I guess.

Do they have a trademarked.

They do not.

And so did you quickly trademark it?

Well, like I said, I've been trying to trade market. I keep, I continue to get declined because of the general name type.

So I guess my question to you is without being able to get the trademark, they don't have a trademark. I've been using this name multiple years prior to, prior to them. Is there, is there like a.

I don't know how you put it, like a grandfather to the name. Are we, Is that anything legal or. I mean, I understand you're not a lawyer, but I was just curious if you had any ideas on that.

Okay, let me ask a couple more questions. So your simple snap frame.com and they're simple snapframe.net.

No, they're, they're a totally different name.

And what do they say on their.

What, what did they say they're copying our product. So, so, and I, I don't have a patent for this product because it's fairly general product. Does that make sense? I mean, but they're, they're, they're using our name for advertising on the Internet to get people to their website. It's a totally, they're actually totally different name is. And I've sent them a cease and desist to stop using the simple snap frame. And they basically told me, you know, too bad. So with the via being the Internet, is there, is there any recourse that you know of or.

Well, I mean, in the, in those situations being me and the way that I would handle this is I would get a really aggressive attorney that's really good at this and I would serve them with a lawsuit that if they were to lose the lawsuit, they would go out of business. It would be, I would sue them for a lot of money and I would basically, you know, I would spend my way, if it was worth that much to me, into success because at some point they're not going to want to fight the lawsuits and they're not going to want to fight it. So you, how committed to this and how much money do you want to put into it?

Yeah, good question.

Well, let's, let's pour ourselves a little tequila and light a cigar and talk about it. How much, how much fight? It's not the size of the dog, it's the size of the fight in the dog. How much fight and money do you want to put behind this?

Well.

Right, right now I'm not sure. I mean we're doing well as a company. I haven't heard any other comments. I haven't heard any, any issues of us bidding against them for projects.

I don't think they're doing that great with it. So that's my question. I guess you're, you're right. I mean that's. How much do I really want to put into it, I guess.

Well, it sounds like if they're not doing that good with it, they, you could probably push them over pretty easy. But do you want to spend 10 grand on it? 100 grand.

Right. So find him, Find an aggressive lawyer, send a letter. Just kind of feel.

No, no, you're gonna, you already sent a cease and assistant. They told you to pound sand, right?

Yeah, well, I sent that myself. I didn't actually send it through a lawyer. Maybe that would hold more weight.

Yeah, but I, A lawyer is gonna write that letter like. So we're telling you to cease and assist and Then here's the deal. If you don't, we're going to sue you for this and this and all your sales and all your back sales. And then there just becomes a point where somebody doesn't want to. They don't want to go through that, they don't want to fight that, and so they'll. They'll stop using your name. And.

It would happen pretty quick. But, you know, the thing that they have to understand, and as soon as you file a lawsuit, they're going to have to retain a lawyer. So they're going to have to retain a lawyer that's going to cost 20 grand. Then you're going to immediately do due diligence where they're going to have to turn over all their sales records, all their SEO, all of their email. Like, you're going to go at them pretty hard, and then they're going to get that. They're going to get that discovery and they're not going to want to do it. And so then they're going to leave you alone. So it just depends on how hard you. If you're in the right and you believe you're in the right and you believe you had this before them, then it just depends on how, how fast and how much you want, you know, you want to spend. But usually you can make these kind of things go away with, with a.

Good lawyer, I think I might. Yeah, I think I'm going to go that avenue. You know, they. Well, one of the things they did is they went through my website and took some of my pictures and posted them on theirs.

Oh, that's dirty.

In that season. That. Yeah, right. That's dirty in that. In that cease and desist letter, they, they did remove the pictures acknowledging that they were mine. But as far as the name go, they basically said if I don't have a trademark, there's, you know, too bad. But I think, yeah, that's good. I think I might just do that with a lawyer just to. Just to end it, I mean. Yeah.

And if they. So you're gonna have to file. So it's gonna cost you, like, probably $5,000. But they're going to have to retain a lawyer for 10, 20 if you file. And then right after that, your lawyer is going to serve them with the discovery. And then once you serve them with the discovery, now they have a bunch of work to do. And so then all of a sudden, nobody has the stomach for, let's not mess with Dave anymore in Colorado because we got to turn over our emails and they'll, you know, it'll all go away.

Good point. Awesome. Well, thank you for that. I appreciate that. I got one more question for you.

No, I told you, it's real tequila.

I've been. I've been approached to purchase another sign shop here in the local area.

I've never done that before. Can you kind of direct me on some things that I should look at other than P. Ls? I mean, I know that kind of basic stuff, but.

Any business experience, anything I can, like, look for that might help me decide if this is a good option or not.

How long. How long have they been in business?

About 20 years.

And why do they want to get out?

Well, they. I should. Let me rephrase that. The name. The company's been around about 20 years. Over the past four years, they have new, New owners that took it over. I think financially they're doing okay, but they're losing their. Their location, their building. They didn't purchase the building. They're leasing it and they're losing that. And in this area, Colorado, with the weed industries, pretty much, there's no industrial spaces in the area. They're all.

Everybody's growing.

Everybody's growing. Yeah. Yeah.

And so rents are going up.

Rents are quadrupling me. Fortunately, I bought my building that I'm in, so I'm secure, but they've got really nowhere to go and nothing to do. So they're trying to. Trying to sell, but.

So how much are they doing?

About 250.

250. Okay. And so what in a sign shop, if you're doing 250, what are the margins on. On that? Like, what are you netting?

You know, I can tell you what my margins are. We're. We're about 700 with three employees, and our margins are 40 to 60%.

So would you assume that.

I'm assuming that they must be last with. With what little they're doing or they've got. They don't have that. I don't know. I mean, I. I haven't had a chance to look at the P. Ls yet, but like I said, with. With your business experience, I was hoping to gain some knowledge of some different stuff that I could look at to really make this.

So let's. Let's say a sign shop is making a hundred thousand dollars a year in profit or the owner's paying himself a hundred or whatever. What would the multiple be that it would sell for?

They're wanting 100 grand for it.

And so we're guessing that the thing's making 40 or 50 grand. And so they're wanting two times earnings.

Two times earnings? Yeah.

Okay. And then that 250 coming over to you. How much with your. Are you going to absorb it into your company?

That's what I'm thinking, yeah.

So you take their phone number, their website, their client list. Are you going to take any of their employees?

Possibly. I'm not sure about that yet. Possibly. At this point, I would probably have to.

Is there any equipment?

There's some equipment, but it's older. I've got mostly newer equipment, and it's more updated. So I'm not all that interested in their equipment.

But, you know, I mean, do people really buy customer lists anymore? I mean, is that. I know it's not a guaranteed thing. I just. That's one thing that bugs me about this. I don't know.

How does their customer list look like? Do they have a good customer list?

They. They claim that they do and that they. That they're fairly dedicated customers, but I'm sure everybody kind of feels that way, you know what I'm saying? I don't. I haven't dug that deep into it, but I don't. I'm kind of on the fence about it.

So what I, what I would do is I'd go spend a couple days over there, and I'm different. Like, I like to just get to the simple, you know, okay, pull up. How do you track customers? Pull it up. Okay, show me some. Who are your best customers? I would go through invoices and, you know, you go through six months of invoices, you're going to see that McDonald's or, I don't know, whoever is buying signs on a regular basis, you're going to see that. You're going to see patterns by going through their sales records, and then you'll have a good idea whether that's true or not, what they say. And. But in a couple days, just going through their numbers and understanding getting really organic and close to the numbers and the people and spending a couple days in the business listening to how they answer the phone, listening to, you know, if you're sitting there and they're answering the phone and people are complaining and they're all complaints, then it's an issue of culture and how they're running it. And then maybe the thing's worth 50 grand to you, and so I just go spend a couple days there and poke around. But once you get past the financials and what you're paying, you know, times earnings and you understand the Equipment's of no value to you. And so I wouldn't pay a hundred grand for a signed company's list, which is basically you're just buying the assets on the list.

Right, right.

And so I would say, like, if you bring over, if you buy their company, let's say 200,000 of that's going to come over, and so not 250, because you're going to lose some people. So 200 is going to come over. And so on that 200, you, you'll net 75 or 100 because you're going to absorb a lot of the overhead. You won't have the same overhead. And so if you paid 50 or 75 for it, you'd pay for it in the first year. And so I, I always think, like, if I can pay it off in two years, I'm. I'm doing good. So that part works. So the thing I'd want to do is just spend time in there and really understand, like, are the c. Is the customer list of values? Is the way that they do business of value? Do their numbers make sense if they track things the right way? Are things in some sort of CRM where you can tell.

Who'S coming and going and you know, the customer's contact info, maybe talk to some customers if you can. Do you lose a lot of business to them?

No, not at all. We're, we're kind of in different categories. My business is geared more towards the hospital industry and they're geared more towards just general decals, real estate stuff, that type of stuff. So we, we do get some of that at my shop. But.

For, for my business, what I've done over the past couple years is I went through all of my product list, whatever has the highest margins and focused on that, pretty much did away with the lower margin stuff. And it's made us. Our longevity, you know, it's made us a much better shop, much more profitable.

So you don't even want the business that they have? Is that what I'm understanding? It's the same?

Well, it's, it's. They've got a portion of it. The real estate stuff that they do is pretty, it's pretty stable.

But could you just start doing that right now and competing with them?

You know, actually, I could, I could if I wanted to. Yeah.

And so you don't market that part of the business right now and you could market it and go after it?

I could market they. That portion of the business. They've kind of covered the area. I mean, they've got a good hold on it. That would be the only reason why I would kind of pique my interest.

So yeah, then I, I think go in there, spend some time and see but if my, my personal philosophy and what I've seen kind of work is if you can make a deal like that where you're not the assets, the biggest asset is going to be the fact that they're going away and their customer list.

Right.

And you can pay for it in a year. You're I would do that deal.

But yeah, the ROI on it's pretty decent. I guess so.

Yeah. Because you're not going to have the overhead.

Right, Right, yeah, no overhead at all.

So it's just plus plus for you. So all of a sudden you're doing a million a year.

Yeah.

For 100 grand you're doing a million a year. And you can raise the prices because they've gone away.

That's a nice goal for a three person shop, I think we're doing pretty well.

You might have to add a fourth person. Dave.

I would, yeah, I would maybe, maybe.

Have to add two people but that's, that's a pretty good deal because you can, if they go away and there isn't a lot of competition in town, can raise your prices a little bit. Like you raise prices 20% pay for it.

Yeah, that's true. Good point.

And then.

Right on. Chris, I, I, thanks, thanks for chatting with me man. I really appreciate it.

Well, toast to you, the real tequila here and I hope you have a great week and keep us post.

It.