The Laundry Business Secret: Why Owning Your Facility Changes Everything

People, to me, are the biggest thing that'll make or break you. And so how I go about hiring is very tactical. There's a method to it that I follow to, you know, to a t. To make sure that I'm getting the right people in or having the highest chance of success of getting the right people in, because it's kind of a crapshoot. No matter how much interviewing you do or back channeling or references you do, people might not be the right fit for the right stage and the right time. And so people and how I hire and how I fire, I fire pretty quickly if it's the wrong person.

Hello, everyone. We're talking to Alex Smirznak. And, Alex, you know, congratulations on all your accomplishments at such a young a dad comet. You know, I think. I think by the time I was about your age, I'd already had one successful career, that the economy killed me and put me out on the streets, and I was on food stamps and unemployment with a wife and two young babies to support. And so I'm kind of jealous of where you are at a young age. Way to go.

I appreciate that. It's definitely been a roller coaster for sure. But my dad, at a young age taught me a few lessons where it was like, you can either work for someone else, work for yourself, or have people working for you. And I've been working my way towards that my whole life.

Well, Alex, what did your dad do? What? See him.

He was a financial advisor. So I remember growing up, he would golf. All. I grew up in a small town in Minnesota called Red Wing, and so he would golf all summer long. And I'm like, dad, how are you doing this? All my other friends. Parents are working. What are you doing? And he's like, well, so. And that's when he told me. He's like, I. I make 100% commission, so I work for myself. And, you know, throughout your life, as you think about your career, you can either work for someone else, you can work for yourself. You're gonna have people working for you. And he's like, if in your. One of the. If you're in one of the last two buckets, you probably have a lot more kind of financial freedom, but also just freedom with your time and how you spend it.

Yeah. And so where are you talking to us from today?

So I am now in Charlotte, North Carolina. So I ended up down here for college, but I'm in Charlotte right now.

What college?

Wake Forest University. The Demon Deakins.

Oh, okay. Well, I was 27 years building a business over there in Greensboro. So we had lots of offices in Winston.

There you go.

Yeah, very familiar with Winston and so great part of the country. So you decided to go. You know, Charlotte is such a great location for business, you know, and population center, transportation center there. It's no surprise how fast that thing is growing, that area. And so I'm not surprised you're there. But do you find yourself a lot of entrepreneurial community down there? Are you a lone ranger down there? What attracted you to Charlotte?

Yeah, so honestly, convenience. When I graduated from Wake Winston, Salem's an hour and 20 minutes north, and you either end up in D.C. or Charlotte was kind of the, you know, where most. Most grads went. And so I had a job here in Charlotte out of college for Ernst and Young, doing financial services consulting. Yep.

Yeah, I'll be flying through there in about three weeks.

Oh, no way. If you're here, if you're here for a while, let's get a coffee or something.

Yeah, let's do it. My. My son is actually still up in High Point, and a lot of friends and a lot of business still, still up there. Still reasons to go up there about three or four times a year, but we'll. We'll have to connect along the highway. So what side of town are you on?

So I live uptown, so I'd run a laundry business in college that I'd sold. And with that money I bought a condo in uptown or downtown Charlotte and have been in and out of it ever since the last 10 years.

So let's talk about that now. Right now you got started. Let's start about that. Start in the laundry business and you where that led. But now it's led along road up to Franzi. Tell us about franzi.

Yeah, yeah. So franzi think of it as the Zillow for buying and selling small businesses. So just like Zillow, you can go and online shop for a house and see, you know, prices, taxes, school districts, you know, look at pictures of the house. You can do the same thing for small business, for franchises specifically. So you can say, hey, I'm Larry, I'm in High Point. I've got half a million to invest or net worth. Here's my operational background. I'm really good at sales and I like being outside. And we'll use this AI recommendation engine to say, hey, Larry, here's your top five brands that you should consider. And then we help you with finding the financing for that business, getting your entity formed, finding the right franchise attorney, franchise cpa soup to nuts. From idea to open. We help you buy a business.

Yeah. And so. So you obviously studied finance or business or something at Wake Forest. That's really fun because I've got a ton of people. We were located over in Greensboro and there's a ton of people who came out of Wake Forest. They've worked for me their entire career in financial services. So they do a good job training business people over in Wake Forest, as it turns out. Yeah. So what got you thinking about the laundry business?

It's a funny story. My freshman year at Wake, I actually worked for the student run laundry and dry cleaning delivery business to make some extra beer money or, you know, college spending money. And I fell in love with it. I thought, this is cool. This could work at Duke and Chapel Hill and Vanderbilt and you guys are graduating. I want to buy it. What are you going to sell it for? And they're like, oh, $25,000. And my jaw hit the floor. This is the most money I've ever heard of. I'm, you know, 18 years old. I don't have 25,000 DOL dollars. That's crazy. And I said, well, you know, you got to figure it out or someone else will. And so I'm knocking on all the finance professors doors saying, I want to buy this business. I don't know what the heck I'm doing though. Can you show me? And so they watch me, you know, they walked me through how to do a discounted cash flow analysis and a seller financing a seller, you know, an earnout. And so I'm 18, getting a crash course on how to buy this laundry business and thankfully figured it out. And we 10x the revenue the first year we bought it. We went from like 30,000 in revenue to just under 300,000 in revenue in our first year. And I was hooked at that point. I loved small business entrepreneurship, trying to grow this thing. I treated it like a. A game almost. It was, how do we level up here? How do we level up this thing? And I'd be in my classes texting our employees and our vendors, and I loved it.

18, you must have been a freshman.

Yeah, I was a freshman working for them freshmen.

You get to school and you immediately think, you know, thank goodness for your, your thirst for beer, man. And you, you could, you could say, thank goodness, you know, if, if I hadn't wanted my beer drinking money, you know, I wouldn't be here where I am today. So now I do know people that, that caused him to start making beer in their bathtubs while they're at college. And they have breweries today. So I guess the thirst for beer has led all kind of businesses, but not to the. This is the first time I've known about the laundry business and all, but the. So how do you find this up on a bulletin board? You know, the job at the. Of the school?

So it was. I was in the fraternity of the guys that owned it. And so when I heard about, I'm trying to make some, you know, some extra money. And I go, well, we need guys to, you know, run dirty laundry bags from on campus to off campus. So I would load up my 2007 Jeep Liberty full to the brim with stinky undies and bedding and socks and drive it off campus to unload at the laundromat.

Fantastic. And so this was a business. How long have they been running this thing?

One or two school years. It actually started as a classroom project. A professor said, I'm going to give groups of three or four of you 100 bucks or 200 bucks for the semester. And you're going to use that money to ideate a business, get feedback from the market, launch it, and then collect feedback. And they started out as a classroom project.

Yeah. Now, the funny thing is they didn't have the vision or the appreciation of. They started it, but they didn't have the idea of where it could go. Isn't that funny?

Yeah, it was a class project and they thought, oh, this kind of worked a little bit. Let's do it again next year. And then I said, this could go to Duke, Chapel Hill, all these other colleges, and eventually beyond that, I want to buy it. And the one thing that they were missing out on was as incoming parents come in and their students or their kids, they've got to get their meal plan, they've got to get their parking pass, they got to get their dorm keys. And so we went to the university and said, this should be a checkbox option for all those incoming parents. And they gave us a booth at orientation. It was a premier spot right next to all those things you have to do. And so parents are coming with their checkbooks already out and like, all right, what's this booth? What's this booth? Oh, laundry. All right, we got to do that now, too. And I was like a late night infomercial salesman. I was like, step right up. This is the premier laundry service. And the parents loved it. They thought it was cute. And we 10x the revenue in our first year went from, you know, 25 to 30 grand in revenue to 250 to 300k in revenue, 80, 70 to 80% margin because it was subscription.

Now when they started the project, you know, there's a lesson in there for, for me and you in there that your vision, you know, you could be a prisoner of your perception of an opportunity by how it's brought to you. And that was born as a nice little project to make some money at college. But you didn't come in with that limiting type perception. And you were kind of free to see instantly really the potential and do so much more with it. And so that's something to think about, isn't it? Where the idea first comes from, the don't be limited by. I think that's what AI is going to do for a lot of people in terms of expanding the vision of where this thing could go. If we could get this problem handled easily, you know, in quicker time, we could do this, that the other, you know, combat 10x, just about everything, you know, and I've noticed in businesses, offices, my entire career, it's been one of my things. Before the 10x deal became a book and, you know, conventions and everything like that, that, like, you know, that was one of my mantras when I go into an office, it's like without opening one more, recruiting one more person, or getting one more square footage of space, you could easily be doing 10 times the business out of this facility. And it's like almost everybody's underperforming and underachieving for the opportunities there. And so you took this thing. How many employees do you think they had when you started?

Four of us. Three, four of us. There wasn't a lot we'd hustle into the dorms on a Tuesday. I was like a meal, a pack meal. I had all this laundry bags on my back running down the hallway. Yeah, three or four of us.

Yeah. And. And then how big did it get?

We had. We ended up buying a van. So we used to have kids. You know, we were driving our own vehicles at first, and then we got so big we started buying, you know, delivery vans up and we'd drive them and we'd have three guys, you know, jump out of the back and run into the dorms and grab all the bags and then load them up. Because we, we paid them per shift. So, you know, whether it took them 30 minutes or two hours, we'd pay them the same thing. And so they were all incentivized to just get in and get out. So we sweating. It was a good workout. You Know, you'd run down the hall and carry as many bags as you possibly could instead of having to make two trips back and forth. But we got up to probably, you know, 12 or 14 employees or so. So we were able to do it a lot much, you know, more efficiently. Even though we 10x the revenue, we didn't have to 10x the team because we bought the van and we were just, we, we lumped the orders on one day of the week instead of a couple days out of the week.

Now would you, you know, what a great opportunity to apply lessons you're learning about business and everything and also see the. Just to visualize the practical application of some of these concepts that are in books. I know when I graduated from Georgia Tech with a degree in building construction, I was really not totally ready to even build anything more than a birdhouse. But you know, because I had been out on the job site, you know. But after, you know, a month or two out on the job site, you know, then it all kind of the pieces came together for me, you know, and there are 27 stages and this, that and the other and all of these terms come in there. But with the practical application, it makes that stuff much more powerful. Maybe I could have got better grades than my 2.3 average if I maintained.

That was the thing.

Yeah, go ahead.

I said that was the thing. As soon as I started running this business, I would be in a financial modeling class where we're talking about how many more passengers can you fit on this 747. I was like, this is so boring. How many more bags of laundry can I fit in the van? And so I would, you're exactly right. I'd take what we were learning in the class and just apply it to the business. And it made it that much more entertaining. It stuck with me more. I mean, there's nothing you can do to replicate actually rolling your sleeves up and running a business. It's the best experience, most fulfilling thing in the world.

Absolutely. The. Now how did, did you ever take the idea to the other Atlantic coast schools around there?

Acc we went and pitched High Point, Duke and Chapel Hill. And we, we realized universities are very bureaucratic and there's a lot of red tape. And Wake loved their students doing it because it was a good kind of branding messaging. Look what our students are entrepreneurial. But as soon as we entered another university's territory, it was, this is a liability. You're getting access to the students dorms. What happens if this? What happens if that? And no one on Campus has an incentive to sign an agreement with us and do it. So we didn't really go after other universities. We sold the business when we graduated. And then I eventually started another laundry business going after apartment buildings, commercial businesses and single family homes, you know, dual income.

Did you do that right off the bat? You know, you seems like you could have franchised that thing into the colleges.

We probably should have in hindsight. There was one that did something similar and sold to Tide. They sold the Procter and Gamble. So there was a company that or a business that did that. I didn't go right into the other business. I worked for Ernst and Young for a year and a half doing financial financial services, consulting and, and hated it. It was as exciting as it sounds, you know, going into banks and helping them improve processes and I learned a ton. But I just was not as excited and fulfilled doing that as I was doing that small college laundry business.

So I, the lure of the laundry sent a siren call to use that. It was a lot more exciting doing the laundry business.

I had more fun doing that than all right, how do we make Wells Fargo more efficient at risk compliance? I was like, oh, this is putting me to sleep.

How did you get back into it?

I was feeling that way at Ernst and Young and I saw all these Uber for X businesses, pop ups like Instacart and Shipt and Wag and Rover, these delivery businesses. And I thought, someone's going to do this for laundry and dry cleaning and if it's not me, I'm going to hate myself for, you know, not going after it. So I quit my job at ey, found a co founder that I've known since third grade in Minnesota. He was doing sales and marketing at startup up there. Today you should come down to Charlotte. We should give this thing a shot. And so we launched a company called to you laundry in January of 2016. And the idea was we'll go pick up, you know, dual income households, laundry, dry cleaning, we'll bring it to the vendors just like we did at Wake Forest. Instead of college kids, we're going to target the busy families and the busy professionals. And Larry, over the course of an eight year period, we raised 33 million in venture capital. We scaled about 18 markets and we were doing, you know, we're still doing 17 million a year in revenue now.

Walk me through that now. Well, what would you come, I'm in a subdivision. You guys come by. I mean, is it like piling out your trash at the curb, you know, a couple times a week or you know, how did your pickups work and how did the turnarounds work?

Yeah, so we were one day turnaround and this time we had to serve, you know, almost every day a week besides weekends because people wanted optionality, they wanted their laundry quickly. So it was a one day turnaround. You'd set out your bag of dirty clothes on your front door, on your, your, you know, delivery day and you could pick any day of the week. We'd come by, pick it up in the morning, go back to the facilities, unload the previous day's laundry was done at that point they'd load up the vans and they'd go back out to do the drops that afternoon. So yeah, you'd set it out on your front step and the next day you'd have a fresh bag of clean, perfectly folded, ready to put away laundry organized by family member.

I can see how that turnaround would be the magic because I'm, you know, I alternate between Palm beach and Aspen. And in Aspen I don't have a staff, but you know, I got staff back in Palm Beach. And so, you know, the, I don't have to worry about the laundry in Palm Beach. I got people there to do that. But unfortunately in Aspen, smaller place. Plus I don't want, you know, I come here to, I don't, I don't like to have a lot of people around me, but I gotta do my laundry, you know. Cause mainly because I don't wanna have to walk four blocks to take it over there and then walk four blocks, you know, or take the car and you know, back and forth. And so if I had a one day turnaround, you guys have got to get an operation started here in Aspen. If I could put it outside and have a one day turnaround, I can see how that would be just a simple little thing like that. And even moms, you see the moms that have, I know how many ladies with the kids and the one thing they hate is folding the kids clothes, you know what I'm saying? It's like everything about parenting is okay, except for washing the clothes, folding clothes and then, and so I can just see how you could, that could be such a powerful, basically automatic. It's almost like a utility.

We had two hilarious stories. I mean it was predominantly moms that were our customers. It was like 78%. And there's been multiple times I had a mom call me audibly crying on the other end saying, you have no idea how much laundry I'm doing every day. And this is the bane of my existence. You guys have saved my life. And like she's crying, I'm like oh my gosh. About laundry. And then we had this one customer. She, you know, early on we were talking to every customer. We were doing the deliveries ourselves. We were, I mean we were in the trenches of building this business. And I had a customer text me and say, hey, it's you know, it's 4, 4:30, the laundry' not here yet. Is it going to be here soon? And we're like, oh, it's going to, you know, be there in 15 minutes. And she's like okay, good. My, you know, my husband's not home yet. And I said wait a minute, does your husband not know that you're using this service? And she, she's lol. She goes, I use that. Daddy don't know money for this. So husband would come home and the laundry would be all perfectly done. And she, she would say she did that during the day and it was really us doing it.

Talk us through the scaling of how you scale up something like that. You know, I know a lot of people would be interested in, in, in the, the steps of that, you know.

Yeah, the short answer was a lot of just brute force, blood, sweat and tears. I mean we had five guys living in a three bedroom apartment. The condo that I bought, it was my mattress, my co founder's mattress on the floor next to me. And then a guy that we brought down from Minnesota to be our first driver, his mattress on the foot of our bed and we were doing the laundry ourselves or doing getting the customer acquisition ourselves. And so, you know, really had to just force ourself to the next set of milestones each time. So we bootstrapped to about 60k in monthly revenue and then we raised some outside capital. We raised, you know, 40. Sorry. We raised 400 grand in friends and family pre seed capital raise. We use that to start hiring a team and scaling into, you know, more technology, more markets. And then over time just kept growing and growing the business at a pretty fast clip.

Now would you target a subdivision and try and work that subdivision? Put flyers out on the doors and go knock on doors and things like that to get your first clients and then hopefully scale from word of mouth or something.

Yeah, so our first customers, we would drive Uber in the morning at 6am and then at night to just, you know, not eat into our savings too much. But those Uber customers were people going to the bank, going to the law firms, going to the consulting firms and they were our first customers. We'd hand out cards. And then, yeah, we would go to apartment buildings, we give away free laundry and, you know, pizza and beer for the residents. And they would sign up. That way they'd hear about the service, they fell in love with it, and they'd be paying customers afterwards. So we'd give it away for free for the first order. And then we'd go paper neighborhoods. We'd target a wealthy neighborhood. We'd knock on doors, we'd hang, you know, flyers. We got a lot of customers that way. And then next door was really good for us. It's this, like, face, you know, community group where you could post and say, hey, have you guys heard of this service? You should check it out. And then, this is a little cheeky, but we would create fake Facebook profiles of moms. You know, one of them was Stephanie Ekstrom. And we would join these mom Facebook groups and say, hey, ladies, you got to check this out. This is the biggest hack of the year. I haven't done laundry in 3 weeks. I've been doing 2U. Laundry has been doing it for me. But it was really us posting aesthetic that account, and that got us so many customers. So many.

Wow. And so I don't think they, once they found out about it, they probably, they wouldn't even care that you did that. You know, it's such an advantage. And so as you went in this thing, Steph, where did you get to the break even, the break point where you said, you know, now we've got a, you know, we know this is going to work, and we're picking up. We're picking up, you know, we're profitable. We're starting to make a profit.

Yeah. So in Charlotte, we got to a couple million in annual revenue doing pickup and delivery. And we were outsourcing it to, you know, wholesale dry cleaners and then mom and pop laundromats. And the issue that we ran into first was laundromat owners aren't operators like the dry cleaning operators are. They don't. They don't have a team and a staff. And so quality really started to slip because we'd go to these laundromat operators and say, hey, we'll. We'll double your top line revenue with all this delivery we're going to bring you. But we need you to be running a team here. 10, 15 employees, good quality control, checks in place, and, yeah, yeah, yeah, I'll figure it out. They heard I'll double. You know, they heard me say, I'll double your business. They didn't think about the lifestyle change that was going to come with that. And three months would go by and they'd be, ah, this, you know, this is a lot of work and this is hard and they mess up the quality. And so we started moonlighting in other people's laundromats. We'd hire our own staff to go into someone else's laundromat. That cut cost and quality improved significantly. But then we outgrew that. We were in four or five other people's laundromats with a third shift going in and you know, processing all this volume. So we eventually partnered with Electrolux in 2018 and started building physical laundromats with them. And that was the turning point. Once we owned our own 6,500 square foot facility that you could pump as much volume through it as you could imagine, plus the walk in revenue that we were generating from walk in customers. That was when it really started to get profitable and get exciting.

I didn't even know Electrolux made washing machines.

That's one of their core lines, our big industrial washers and dryers.

Really, really. I've sold the Electrolux vacuum cleaners when I one of my 800 jobs growing up, but I never, never knew about the washing machine. So how did you, how did you get to the point to where now when you built your own facility, you could consolidate and you could get it all done there?

Yep. Yeah, exactly. We took the volume from four or five different locations all into one and designed the location and the layout exactly how we needed to. Almost like an assembly line style. It was open seven days, it's open seven days a week to the public. But Monday through Friday, when people aren't doing laundry, they're out working. We have these roll up doors that close off and partition part of the store and that becomes like an assembly line for the delivery business.

Now is that where the laundry lab came from?

Yeah. So we started opening these facilities are like, all right, this is working. We need to open hundreds of these though, if we want to be a national brand and we want to be at scale. But laundromats aren't cheap. They're $1 million with all the equipment and the build out the electrical, the plumbing. And so we thought this is either going to take 30 years or we've got to go raise a boatload of outside capital or debt to finance how many locations we want to open. And we had been approached numerous times to franchise, like, oh, can I open this in Miami, can I open this in Austin? And we'd always said no.

Where were those inquiries come from? How would they find out about you?

They'd see news articles, podcasts, episodes. They, they'd hear about us raising capital. They'd see us, you know, launching the delivery arm in other cities and they'd say, I want to do that in my. And so we thought maybe we should start franchising. Just the brick and mortar component of the business. That's the part that's capital intensive. And if we had franchise partners coming on, they've got skin in the game. They'll develop these locations in these markets and we'll bring value in the form of bulk discounts on equipment, know how on site design and selection, all the delivery volume that we'll bring to their location and additional revenue. That's how we'll do this. And so we started franchising in 2021 under a subsidiary called Laundry Lab. And we sold 118 locations in about 14 months. And you know, it was going gangbusters, you know, throughout Covid and then we had to, oh shit, we got to open all these locations. Now we gotta open, you know, 20, 30 stores a year. And so we started building out a construction team and real estate team and training and marketing team to support all those franchise locations.

So how many locations have, you know, is that ongoing or did you exit from that?

Yep, so it's ongoing. I've personally exited, you know, from it. I've still rolled most of my equity into the business. I sold a little bit of my, my shares. I'm still on the board of that business. But about a year and a half ago, hired a CEO once we were at like 30ish stores open and I had a bit of a kind of self reflective moment and thought, hey, this started out as a technology company with, you know, marketplace business and evolved into one that has trucks and washers and dryers and retail locations. I was like, I don't know if I'm the guy that takes us from 30 to 300 and frankly, I don't know if I want to be the guy. So hired a CEO that has retail experience, intense logistics and operational experience. So brought him on about a year and a half ago and I'd had this idea for Franzi. As soon as we started franchising and seeing how people buy franchise businesses, how big the franchise model is, it's 8% of our country's GDP, it is massive. It covers food and hospitality, health and wellness, childhood development, entertainment, et cetera. And I thought people got to know about this if they want to be an entrepreneur, they don't know where to start. Franchising is a great landing spot to do it, but the method, and the method, you know, channels to discover and educate yourself on franchising is pretty kind of broken and a bit of a rabbit hole. So our thought was, let's build Franzi and build the Zillow for franchise buying and selling.

Yeah. And so let's dial back before you made that move, the way you got known, how much was that related to your market? Did the marketing campaign, was it just spontaneous? They found out about you in the paper and they wrote articles about you in magazines like that? Or did you guys have an outreach to get on podcasts, to get in magazine and you know, to make that happen?

Yeah. So it was a little bit of inbound interest of, oh, this is an interesting story, we want to cover you on our podcast or we want to write an article about what you're doing. And then once we saw it worked from some of those inbound requests, we're like, holy crap, we should start doing this a lot more outbound and more intentionally. So we started pitching other podcasts, why we should come on and having articles written about us. And that got a lot of attention around, you know, what we were doing from the franchise perspective.

So you could see a noticeable uptick from that outreach. And so as you got into the where did the idea of the franchise thing came in your mind and started to crystallize.

When, when we were selling our franchise licenses, we worked with franchise brokers. We worked with what's called an fso, a franchise sales organization. And I started to just see, you know, the ins and outs of the franchise business model, how brands would scale to, you know, traditionally from just an idea to a thousand units and all the different tactics they would use in between. And I saw all these brands using brokers, and then I saw brokers taking a 60% commission on the franchise fee. And I was like, that's a, that's a lot. My dad was in sales for 35 years, my brother's in sales. None of us have ever heard of a 60% commission. You know, maybe 10, maybe 10%, maybe 15 in some cases, but 60, what's going on here? And the more I dug in and I peeled back the onion, I thought they're just doing kind of top of funnel lead generation, light qualifying and light matchmaking. I think a lot of that can be replicated with a software like a self help discovery portal, a lot of data, and then still have a human in the loop, have a coach guiding you, but they don't need to be paid 60%. And that's where the light bulb went off. I started asking our franchisees that came through brokers, you know, which broker did you work with? And they couldn't tell me the name of the individual. So I thought, maybe this relationship's not all that important.

Yeah, 60%. They can't even remember the guy's name.

That's what I went da ding. All right, we can do it for 40%. If you don't remember our name, that's fine. We're cheaper for the brand.

Inside. The laundry business, are they still expanding? I mean, is that. But that. You know, we were talking about you and your business, you know, looking at your bio and everything, as earlier today, and it was like, I was thinking, like, occasionally you have to go into a laundry and, you know, if you're traveling or so especially a long time, and sometimes you do the wash and fold, you know, if you're, you know, you got to get it washed, you know, you're just going to be gone too long. And they. There are a few wash and fold places. But, you know, going in a Laundromat, by and large, is an opportunity for any normal American citizen to visit the ghetto area of a third world country. And you walk inside the door, and immediately you're in another unpleasant land. You know, the smells, the odor, the dust, the dirt. You know, it's just like it's enough to have to go find it and pay for it. It's another thing to have to experience it. And it sounds like you guys have found a way to kind of reinvent that model. Is that correct?

Yeah, we flipped it on its head. When we built our first Laundromat, one thing that we were always really good about was incredible curiosity about what the customer wants. We would obsess over the customer. And you. A lot of entrepreneurs, I think, think this is what we're going to build, and it's going to be great and build it and they will come. And I think that works for Steve Jobs and the unicorn founders. But for the most part, people. People will tell you what they want if you ask them. And you, you, you know, you. You listen with these instead of with your, you know, with your mouth. And so we would go and ask these people, you know, what. What's important to you? Like, well, there's a lot of single parents. You know, there's a lot of single moms, single dads, and they're bringing their kids in and they're like, we're going to be here for 60 minutes because that's how long this takes. So we put a play, you know, kids play area in. We put a reading, a literate, a financial, sorry, reading literacy program in the laundromats. White, you know, very white space, open security cameras everywhere, well staffed, well lit. All these different amenities that we had customers come in. I'll never forget our grand opening. We were giving away Electrolux appliances as a, you know, as like a giveaway at a raffle. And this one woman came up crying. She won an air purifier. She was crying. She latched on to me and I thought, oh, she, she wanted a different appliance. She doesn't want the air purifier. And I was like, what's, what's wrong? What's wrong? And she said, no, nothing's wrong. But no one ever builds anything nice for us. And she pointed across the street and there's a rundown strip center with trash all over the parking lot and burglar bars on the window. And I looked back at what we had built and it's this like, super nice, well lit, and people, you know, appreciate being treated like, you know, like, like human beings. And we took that traditional kind of dingy, dirty, rundown laundromat that you, you know, that I think a lot of people are used to seeing. And we flipped it on its head. And that laundromat is constantly busy. The community loves it. They feel safe there. They feel respected there, and they, they treat it like their own. They're, you know, they're not damaging things or vandalizing things. And so we really just flipped the head, you know, flipped the model on its head and built something with them in mind.

Yeah. I hope people. I hope some people listening out here, not really sure whether they want to. Direction they want to go in, will start thinking about businesses in these areas that are run down and dingy and think about how they can flip it on their head like you did with the laundry business. And so I'm hoping that thing spreads all over the country. So if I ever need to go, If I ever get forced into having to go look for a laundromat, I could find one of yours. But as you got into the franchise business, you know, where did this. Was this your idea? Where did the Franzi, obviously franchise, but where did the frenzy idea come and how did that crystallize?

Yeah, so it was really. When we were selling licenses like crazy and a number of them came through brokers and when I was asking our franchisees, which, you know, which broker did you work with? And they couldn't remember the name, that's when the light bulb went off. And I said, all right, maybe they're not as critical in the sales process as we initially thought. And they definitely, they definitely shouldn't be commanding a 60% commission because that cash should be going back into the franchisor to reinvest in training and marketing and operations. And the franchisee doesn't have any clue that that much money is leaving. They know that the broker is getting paid something, but they think it's probably five grand, ten grand, not 60 grand. And so, you know, I looked at the whole thing and thought, there's got to be a way to democratize this whole process, make it more transparent, make it more aligned for both the brand and the prospective franchisee, and make it more accessible as a pathway to entrepreneurship for would be entrepreneurs.

So how did you make it come alive now, you know, start actually shifting from that, the laundry franchising business to where you're doing the franchise business?

Yep. So I hired, you know, I hired the CEO at the laundry business. I moved to a board position. I took a few months to spend time with my, with my dad and my wife and you know, with the family, and then started working on this idea full time really about last year, and started to structure it from a perspective of like, what's the problem? You know, as a brand we were paying too much in commission, so that's one problem. But we needed leads, we need franchisees. So what does that look like? And then from a prospective franchisees perspective, what do they need? They need access to good brands. They want help with lending and financing. They want help with negotiating and understanding how this whole world of franchising works. So, all right, there's a content piece here. We have to build educational support, blogs, podcasts, newsletter, short form content, and then other educational pieces. So there's this educational pillar and then they need to match with the right brand and there's 4,000 plus brands out there. How do we do this in a simple way? Take the complex and make it simple. And that's where the Franzi platform comes in. We use AI to say, hey Larry, here's everything we know about you, your financial background, your operational background, your risk tolerance, and the area that you're looking at. And then we use AI to say, hey Larry, here's your top five brands. What do you think? You like them? Not like them. Why do you like them? Why do you not like them.

You know, one thing I'd like to point out to everybody is that this, you know, there's time involved in this. You know, when, when I look at you, it seems like everything's just been a magic carpet ride. But you know, you know, you got on the top of the mountain and woo, you know, I, we just slid to great success right at the bottom of the hill and we just enjoyed the ride everybody. But you know, the time you go through to sort these things out, you know, you run success is great and then you run head on into some problem that showed up dramatically because you were moving fast and you didn't have time. You're focusing on all that you did that was getting you pick up speed and growth, but you didn't have time to notice, you know, the Titanic, the, the big glacier blob out there in front of the Titanic. And so that's what happens so much is like these obstacles come, these problems come and it takes a while to absorb it, think about it, make an adjustment, get information and regroup while you're maintaining the things that cause you to keep going. You know, just a normal maintenance of a business type issues. And so how did you. I think I'm going to hold the, you know, some of this stuff for our second part, our kind of a closed door session when we get in the locker room, talk about some of those things. But how do you go from an idea, you're thinking, you're checking, you're gathering data, you go off by yourself and now come back into step by step putting it to where you got a functioning business now, where you're a new business. You know, how many years did that, how long did that take and how much money did that take?

So for Franzi, because we were living it as a franchisor, we were selling franchise licenses through broker. That was a lot of our initial discovery and market research almost on the job, right? Like we saw it happening, we experienced the problem ourselves. And so I had been percolating this idea a few years since 2021, 2022 and didn't hire the CEO for 2U and the laundry business until 2020, you know, four late 2024. So I had all this these years where it was just in the back of my head. And so whenever I'd go to conferences, I'd talk to other brands, hey, is this a problem for you guys? You know, what would you want to be done differently? And I talked to franchisees, you know, what's valuable about the broker to you or you know, what things were missing in your search and your process. I'm constantly doing this kind of market, you know, research and just getting a pulse. But once we decided to go after it, we knew the idea was good. We needed to go validate it though. And so that's where you start to build an mvp, a minimum viable product. And so it's what, you know, at the base level, do we have to build to start getting more feedback? Because again, the market will tell us where we need to go and what we need to build and how we need to build it. And so we put just a little bit together, put it out there, got feedback and then we put some more together, put it back out there, got some feedback. And so we spent six months doing that in 2024 last year until we officially launched in January of this year. So we're still, you know, very early days, just getting after it and starting to close our first deals this year.

And who is the we behind the Franzing?

Yeah, so it's me and my co founder, Chris Wright. He's another serial entrepreneur. He's more of a technical, product oriented individual. And so he's the one who brings all these ideas and the platform to life from a technical perspective.

But is he an ACC graduate? That's what I want to know.

He is the University of South Carolina. Are they in the acc?

No, that's sec. That's sec.

Yeah. So he's. Yeah, so he's. No, he's an SEC guy. He's a gamecock.

He's an alien. But anyway, you find a way to, you know, you have found a cross conference way of making it work, I guess professionally, people down from the south don't understand the rivalries of the conference allegiances, but how strong they are in Tobacco Road, you know.

Oh yeah.

So anyway, you right now, so you're picking up steam on that thing. What do you carry forward? This is kind of wrap up our first section. What do you carry forward from your early days that lessons that, you know, where you really stubbed your toe and you know, it could have been something that happened to you from the outside, that things change. You know, we're not talking about COVID and all of that, but the, you know, maybe something you did because you misunderstood, you had a wrong idea. You know, the great thing about life is when you're in business is you get a chance to operate what you think is right and then you find out how stupid you really are. I used to train people in offices and I told them that as Quickly as possible. We're going to get you a team in place. We're going to get you your own location so you can find out how stupid you really are. Because when you're, you're in my training center, you're sitting back there, you're not paying the bills, you're not putting your training programs together. I'm making all the decisions, I'm running all the programs. And it's very easy for you to sit back and see all the flaws. But wait till you're running things. That's when you're really going to learn, when your name is on the lease. And so when we are young, we just thought there's no way we could know what we don't know. But we find out. We find out by implementing our stupid ideas. And so what kind of learning experiences still stick with you today that will never leave you, that you've experienced?

There's a couple, I mean, people to me are the biggest thing that'll make or break you. And so how I go about hiring is very tactical. There's a method to it that I follow to a T to make sure that I'm getting the right people in or having the highest chance of success of getting the right people in. Because it's kind of a crapshoot. No matter how much interviewing do or back channeling or references you do, people might not be the right fit for the right stage and the right time. And so people, and how I hire and how I fire, I fire pretty quickly if it's the wrong person.

So you've made some, you've made some bad choices in that area?

Oh yeah. Oh yeah. Made some, plenty of bad hires. I mean, I had a guy steal $60,000 from us. He was embezzling money and everything else in between. So I know how to, I got a good picker now for, you know, high moral, high ethics, you know, folks. And how we interview is very kind of scientific.

Let me make a educated guess. If that was 60 grand you did not have.

Right? Exactly. Exactly.

Oh Lord, have we all. Yeah, I think I've got you. I think I'm, you know, until you get up into the million dollar level of having embezzled by a million dollar, you haven't really been in business yet.

So I got a ways to go talk. Hopefully that never happens.

Talk. Well, no, you know, it's just like a big tax bill, you know, it's just, I think it's just part because you cannot believe how good people are at conning you. You know, I Mean. And so the lesson is keep your, you know, keep your eye on the money and don't trust anybody with the money. If anything's going to go wrong, it's going to be what the tax attorney told me was at the bank. It's the. No offense because I'm a big fan of Italians, but I lived in Italy for three years. So it's not the silver, it's the silver haired grandmother that makes cookies for everybody at the bank who's embezzling the million dollars. It's not, it's not the guy in the nice suit with slick black hair that everybody thinks, well, it's going to be, it's going to be, you know, he was probably the guy. No, it's still here. It's the one you don't suspect usually. And so just make sure you keep up with the money and don't let anybody get their hand in the till. But how, what is that process you go through on people?

Yeah, so it's called the a method. There's a book called the Whole. But it's fascinating. Instead of this behavioral set of questions like Larry, tell me about a time you were on a team and you failed. It's Larry, I want to hear your whole life story from high school until now. What were you like in high school? Were you athletic, academic, quiet, reserved? What did your parents do, what did your siblings do? And you start to see patterns of how they made decisions throughout their life, good, bad and ugly. And it's not to be a gotcha exercise, but if they did make wrong decisions, are they reflective about it? Are they introspective and you're self aware about it was the wrong decision and here's why, and this is what I learned from it. Or are they stubborn and be like.

Oh no, I have never made any.

Wrong decisions and everything happens for a reason and it was just great and dandy. So you start to see how they think. And that matters a lot to me is are you self aware enough to realize when you've done something right or when you've done something wrong? And when you've done something wrong, do you take ownership of it, learn from it and move on?

Absolutely. Well, thank you so much, I appreciate that. We're going to use that as a great place to wrap up and kind of a final word for our listeners on our public portion of the podcast. Thanks so much for coming on, Alex. Looking forward to seeing how Franzi expands. And you know, I think you're getting ready to head in some real growth years so that means you're going to have to come back and talk to us. So thanks so much.

Yep. Thanks for having me. And if you want to check out Franzi, go to Franzi.com or check my profiles at Alex from Franzi on Instagram, LinkedIn and X and Twitter.

All right, everybody. And if you've got something you, you know, you really enjoy from this, you know, you can give us, we appreciate any kind of love you can give us with checks and clicks and buttons and all of the things that, you know, I have to. It'll get the producers off my back if you do that, because I'm supposed to ask for those things and I do a lousy job of it. But I would like to get is comments. I'd love to hear your comments and the things that maybe stuck out to you about what we covered here today, because we're always looking to improve and always looking to connect and see what, like, one thing you heard from Alex is he's always talking to his customers, and that's kind of informed his correct decisions there. Thanks so much, Alex.

Thanks for having me, Larry.