Can You Keep Your Job and Still Run a Franchise? | Franchise Fridays with Jeff Dudan #206

Hey, everybody. Welcome back to Franchise Fridays on the Unemployable Podcast. I'm Jeff Dudent, and today we're tackling a question I hear all the time from people exploring franchise ownership. Can I keep my job and still run a successful franchise? Here is the deal. There's a massive difference between owning a business and running one. And if you don't get that distinction right, it could cost you big time, in time, money, and a whole lot of unnecessary stress. So in this episode, we're going to break down what it really takes to succeed as an owner. Operator versus a semi absentee, or as I prefer to call it, executive model. Franchise business owner really sounds like the best of both worlds, doesn't it? Adding the tax advantages, cash flow, the equity building benefits of business ownership while maintaining your wages, your commissions, your salary, and of course, your benefits. It's easy to see why so many people ask the question, and can I run a business and keep my job? The answer is, it depends. Well, that's all we have for you today. Good luck. Thanks for listening to Franchise now. Just kidding. That's it. There's more than that. Then it depends. All right, but first we've got to start by getting the terminology right. You've got the owner operator, the semi absentee model, and something called, as I said, the executive model, the owner operator. This is obvious. This is your baby. You are the face of the business. You show up every day, you're all in boots on the ground, sleeves rolled up. You're running sales generally to start with. You're leading and building a team. You're solving any problems as they come up operationally, sales, customer issues. You're wearing all the hats at the beginning and taking them off one at a time as your business grows and you add to your team. Now, as opposed to that, let's talk about the semi absentee or the executive model. I think these roles shake out almost the same thing, with the exception of expectations. And this is where I think people get in trouble when they buy into a semi absentee franchise thinking that all they have to do is write a check and get checks. When someone enters a new business with the expectation of being semi absentee, they tend to believe that the business has sufficient structure to run smoothly with minimal involvement or oversight. News break. There isn't a business that can run with minimal involvement or oversight. Somebody has to run that business. And that's when the real test begins. When the business faces a challenge, who jumps into course? Correct. Who handles unexpected employee turnover, a customer crisis or Chasing down accounts receivable because you've got that payroll coming up on Friday. These are everyday situations in a business. And in a semi absentee model, especially if the business has a lot of variables, there's a greater likelihood you'll have to step in from time to time. That's probably why fast food restaurants lend themselves well to semi absentee or operating model groups. Customers come to you at your location. There's very little variation in how the business works. You get performance metrics every day, sometimes every hour or and you can hold a manager accountable for following the plan and following the procedures to finish the day. When it's over, it's over and the next day starts anew. When you operate in the home services or property services industry, like the ones we offer at home front brands, we prefer to speak about an executive model rather than semi absentee because executive implies that the franchise owner is directly responsible when something needs to get done. Somebody with your shirt on it with the word somebody has to do it and you need to be willing and able and most importantly available to jump in. There are several characteristics that make a business fit for the semi absentee or executive model. One, as I mentioned, variation or the lack thereof, minimal day to day decision making at the business level is best. Compare hiring someone to sell chicken sandwiches using a point of sale system versus hiring salespeople to go into other people's homes, assess the situation, create estimates and manage production on other people's homes, businesses and properties. Number two, location. Where is the work performed? Like I just said, is it. Is it performed in a controlled environment or are you doing jobs out in the wild, wild world on a customer's Property? And number three, systemization and controls, all your KPIs and business processes need to be reviewed and managed. With proper systems you can manage things remotely or more remotely even in real time, which would lend that to be more of an executive management and oversight model. Number four. I don't know, people might push back on this, but I'll throw it out there. It's ticket size. This matters, but it's not an absolute because I did. I have seen pest control businesses that are route based with recurring revenue that can be scaled with a general manager model. And also you see this a lot in H Vac, even residential H Vac because you've got huge ticket sizes, you've got a big equipment component to the business. And even though that might lack recurring customers, although a lot of H Vac companies use clubs and affinity and loyalty programs to do it, but you know, these types of businesses generally are harder to scale on a semi absentee basis. Number five, I'd say maturity of the industry. Has the industry reached a level where quality managers can be paid and trusted to operate well without you on site? And again, I referenced the H Vac industry because you've got all of these equipment dealers that provide a lot of training, they provide a lot of software technology. There's all kinds of resources for you to build an H Vac business and not necessarily have to be the technical expert or the salesperson or the general manager because these businesses can scale. But not all businesses in the property services might have some of those characteristics. What is the biggest difference between a owner operator and a semi absentee or executive model? I will tell you, it's the capital investment. Nobody, and I mean nobody, is going to look after your money and efficiency of the business as well as you will. If it's your checkbook and your name on the line and you're in it every day as an owner operator, you'll likely be paying market rate salary or if not above, to incentivize people to take full responsibility for the business. You might even have to incentivize them with equity. And that could delay your profitability because you're paying other people to do the things that you would be doing yourself and probably doing more efficiency with a little bit more focus and great intensity. And now you're creating a risk if you're not close to the business of key people leaving, especially salespeople that could walk out the door with relationships and key customers. You don't have privity with the staff, meaning they don't necessarily know who you are. You're not in a deep relationship with them. So if your team is more loyal to a manager who quits, you could be in a tough spot short term. So how do you decide which path to take? There's a few questions that you need to ask yourself. Number one, do you have 15 hours a week to put into a business or do you have 40 hours a week or more to commit to the business? That's going to be an indicator. If you don't have the time, then you're and you have more money than time available. Then you're probably going to need to look for a model that you can make the investment and do executive or semi absentee. Are you even looking to quit your job? I mean, do you have a great career going, great benefits, you got some upside and are you looking to keep that job and to build some sort of, of a side asset that's a huge determinator. I mean if you're not willing to own or operate and leave your job, then owner operator is not for you. Do you have strong leadership and hiring skills? Look, even if you're semi absentee or executive model, like there is a leadership cadence for reporting and accountability and making sure that you're using something like traction or scaling up to be able to make sure that you know the business is absolutely aligned with what you see it doing and that you are able to track alongside a strategic plan for everything that matters. Do you have strong leadership and hiring skills? Because you are going to want to make sure that your executive team, whoever is running the business is aligned with your vision for the business, with all of the things that matter, all of the KPIs and that you are hitting the numbers necessary. So using something like traction, using something like scaling up is very important in terms of running a semi absentee or executive model. Because at the end of the day there has to be an agreement and absolute clarity upon what the outcomes are, are supposed to be. And are you okay with a slower ramp up in exchange for a little bit more freedom and not having to be in the business. And finally, as we said, you have the financial Runway to do it. I mean like you, you can do a lot with a little when you're got your hands on the controls of the business and you are taking the actions that need to get taken to make the business cash flow as quickly as possible versus hiring a whole team and paying them. But you know, a lot of times, I mean that's how professional business builders do it. I mean they're, they don't get caught up in the business even from day one. They make sure that they have absolute clarity around the business plan and then you go out and you hire all of the best people, the exact right people that have already proven that they're successful in the roles that you need them. And you will have a much greater chance of success with your business in a short time. So if you are serious about building your future through franchising, I encourage you to head on over to homefrontbrands.com we do have multiple franchise models, some perfect for owner operators, others. Look, we will consider executive owners in some of our brands and we have had success with that. But there are requirements. We got to make sure that you are understanding what you're getting into and you're up to it and you can afford to do it. And don't forget my book Discernment is available as a free download for podcast listeners all the time, every time. It's a decision making framework for entrepreneurs. Your life and your velocity of your business and the quality of your life will be a direct relation to the quality of the decisions that you make. So if this is one of those decisions that's going to define your future, click on the link in the description, grab it for free. Just give us your email, you'll have it immediately. Of course, you can get it on Amazon too for a couple of shekels. Well worth the investment in discernment. So whether you're building your business on nights and weekends or you're going all in every day from day one, remember you're you can't outsource your dreams. And even as a semi absentee or executive owner, you've got to show up with the leadership, the vision and the accountability. Thanks everybody for tuning in to Franchise Fridays on the unemployable podcast. I'm Jeff Duden. Let's get you unemployed in the very, very best way possible. Thanks for listening.