0512 | Patrick Elsner

This is Patrick Elsner, Franchise Insider, and you're listening to EA interviews.

EA interviews, episode 512, inspiration, transformation, success stories and the imperfect action round. Seven days a week, join Mario Ficcini for today's Expert Authority effect interview. Expert Authority World. You probably have a business. You might be thinking about starting one. But what if you want to exit? What if you want a proven system? Do you own a franchise? Have you thought about one? There are so many great opportunities out there and I know when we're talking about business, people think of local businesses, small businesses, medium businesses. But have you ever considered a franchise? I have. There's actually a few that are on my mind right now and I'm super excited to have none other than Patrick Elsner on today's episode. Where we're going to be talking about is a franchise right for you and how to find the right one. And maybe it's a compliment to an existing business or maybe you're tired of it, you want to exit and you want something simpler to deal with. I'm going to bring him up right after we thank our sponsor. Every business needs a book, including yours. And that's why I'm launching my new book to help you, regardless of where you think your current writing abilities are. Visit eapublishingmethodbook.com today to learn the seven steps to publish and promote your nonfiction, lead and profit generating business book in eight weeks. Once again, that's eapublishingmethodbook.com Here he is, ladies and gentlemen, Patrick Elsner. Patrick, how are you feeling today?

Great, Mario, thanks. How are you?

I'm doing pretty good. I have always been fascinated by franchises and the pros and cons to them and everything. And I know you're the expert. So with your extensive background and helping successful companies, how did you choose franchising?

So my career started in selling advertising to local businesses and a lot of them were franchise owners. And I couldn't articulate it at a young 20 something, but what I understood was that the difference between that small independent business and that franchise or the systems and infrastructure that are warranted and needed in any business, whether it's a McDonald's or, or an independent flower shop. And so I could see the differences. And that's how I got to embrace franchising, because a number of my clients that I sold advertising to were franchise owners.

Okay, was there any, any franchise that drew you in more than the other one?

Yeah, you know, probably Stanley Steamborough. There's a guy here in St. Louis named Phil Dean, who's one of the largest, most successful franchise owners with Stanley Steamer and he's built this huge apparatus and, you know, got probably 80 trucks on the road that cover the metro area. And he has built this huge, you know, empire, you know, sucking water out of people's carpets. And he's really built this huge business out of cleaning carpets. And Phil was probably the inspiration. The interesting thing about Phil was he has then built businesses that sell ancillary products and services to other Stanley Steam or franchise owners. So if you're an entrepreneur but took the franchise model and really built a huge multimillion dollar operation.

So you had alluded to something that about the systems and processes that most small businesses don't have that you need. Can you speak on what you feel are the most important? If you're saying, well, I want to do my own business on my own or start a franchise, what should to be looking for as far as these better be in place if you even want a chance of it being successful?

Yeah, I think the continuity is what customers expect. I mean, that's why franchising like, you know, McDonald's has been so successful. Because whether you go into McDonald's and Keokuk, Iowa or Los Angeles, you're expecting that continuity. And that's what systems and infrastructures mean for the customer experience. They want that, that commonality and oftentimes that small independent business really doesn't have that and they struggle. The book that I always recommend, Michael Gerber's the E. Myth, he talks about why businesses need that infrastructure. And it could be a small business or a large business, but you know, having that roadmap for the employees to follow and the customer, customers to embrace. Really this key thing here, what would.

You say second most important next to the systems and processes?

I would probably say common marketing. I mean the message that you're putting out there to the marketplace, to the consumers, they want to understand the business, the value proposition that the business is offering, whether it's, you know, a $5 foot long or a 99 cent hot dog at 7:11, you're looking for the marketing message to have the continuity to reach out and grab the customer at the point they're ready to buy.

Let's go into more detail with that because I see you've worked with so many companies here. Ford, bank of America, American Airlines, Anheuser Busch, State Farm. These are not small companies. And I love that you have the advertising background, because one of my favorite things is marketing, messaging and helping people. I mean, if you don't have your message dialed in. What do you have?

Yeah, you're really flying without a plan. I mean, you can't imagine, you know, going out and flying an airplane not knowing where you're going. And it's the same thing with business ownership. And for those people that I placed in franchising, borrow, they'll often say to me, patrick, I don't have a business idea. Well, the franchise is that business in a box. It's like buying furniture from Ikea. They're going to give you the instructions. You just got to be able to follow that plan that they give you, that roadmap. And that's really the key. It's going to mitigate your risk. Doesn't guarantee success, but it's certainly going to mitigate your risk as a business.

Owner when you're working with people. If I said, all right, I want you to pick the best franchise for me, do you find that certain franchises have a stronger value prop or marketing message? Or would you say across the board, everything's very dialed in and you're just left with, do you want to deal with fast food or do you want to deal with a cleaning business? Do you want to deal with housing, or do you want to deal with something online? How do you decide?

How do you decide that for the people you're helping?

Yeah, well, so 21 years in the business, Mario, what I do is I have to vet the franchises because my reputation is on the line with these candidates. The last thing I want to have candidate come back and say, patrick, why did you suggest XYZ brand? It's a terrible concept, and franchise owners are all failing. So I do my own vetting on the front end. And I always tell people, you're never going to find the perfect business. But at least when you talk to these owners, you know, it's the. It's. I think it's the 20 60, 20 rule. 20% of the owners are superstars. 20% of their struggling 60% are in the middle. The question is, why is one guy struggling? Why is another guy doing extremely well? You know, what's the difference? A lot of it still comes down to the owner operator. But, you know, if you have the right infrastructure, you're giving people a really good shot at being successful.

So there's no perfect business, but you'd say that if you find one that's a fit for you and has the right systems and they have the marketing message dial, then you're probably 80, 90% of the way there.

Yeah, it's all about risk mitigation. I mean, that's why, you know, people say to me, well, Patrick, why do I need a franchise for that? I said, well, you're 50 years old, you've been working at Motorola for 25 years. You've never owned a business at 50. You know, you're not 30 anymore. And so you need to curb that, that learning curve, shorten that learning curve rather. And so that's why people get into a franchise. It's not a guarantee, it's not a silver bullet, but at least, you know, you get closer though, fighting chance.

Okay, that's. You bring up a good question. So if someone is 30 looking to get in versus 40 or 50.

How.

Long should someone expect, hey, if I outly 100 grand, 250, 500, maybe only 20 grand, you know, tell me the pricing someone should expect. Because I know there are franchises for 25 grand. And there's also, like you mentioned a few times, the golden arches. Last I knew, they were what, 1.52 million just to get started, right?

Yeah. The number one reason businesses fail is under capitalization. And it doesn't matter if it's a franchise or independent, you can't run out of money. I've seen this so many times. We've all seen it. Businesses opening up, they have a grand opening, they have a flurry of customers, and then six months later they're out of business. And it has oftentimes to do with they just ran out of money. So getting into the right franchise, it's like shopping for a home. Mario, we don't look at million dollar homes if our budget's 250. We focus first on the investment, the return and the role that the franchise owner is going to play.

I see. So when you're helping people with that, that 250 to million dollar, is there any difference in the profit margins? You're saying you don't want to run out of money. So do you feel that most people are just trying to throw more customers at it and they have too thin of margins or are there certain businesses where you go, you know what if you have interest in this, this and this, these are statistically like, let's use the Stanley Steamer. I would just venture to say, you know, you don't need, and correct me if I'm wrong, I completely could be. But a restaurant, you for sure need the building, you need a lot of staff, you need the lights, tables, all these other things. Having owned lawn care, power washing company as my first business.

I know that the overhead is Just less. And I would imagine with Stanley Steamer, if you have enough trucks and equipment and maybe a warehouse somewhere or just somewhere to store it, I would just bet that it's less capital than a restaurant or anything that you need a brick and mortar for people to walk into. Do those type of businesses have more profit built in inherently than other ones?

Yeah, any non retail service business is always going to have a higher profit margin and a lower cost of entry. I mean if I'm building a $1.5 million, you know, Wendy's restaurant with a drive thru and a, a play area.

I used to work there too.

Okay, there you go. So 1.5 million. Now to open up a Stanley Steamer, your investment might be a quarter of a million.

Because only real estate you probably need is a light warehouse space in the middle of your territory because people are not coming to you. You're going to the business, you're going to the homeowner providing that service.

What are some other good businesses next to Stanley Steamer that are in that category? So you're saying non retail? I picked up on that. And service based, like, like carpet cleaning, window washing, stuff like that?

Yeah. Monday we had the lawn mowed by a third party company. Tuesday we had the windows cleaned. Thursday we're getting the gutters done. Next week we're gonna get the house painted. We live in a service based economy. We pay other people to do the work whether we don't want to do it or we're not capable of doing. I don't, I don't want to get up on a ladder and paint. Don't have the time to do it. Either way, you re both paying other people to do the work.

Yeah, it's, it's, it's always good because. And what would it be for a window cleaning company would you say to get started? So you're saying quarter mil for Stanley Steamer, but what about window cleaning or the gutter?

Yeah, probably 100, 100 and a half. All in everything you need. Yeah. These are reasonable businesses to get into. Again, it has everything to do with a time starved society. That dual income and you've got kids and you're running them to soccer practice, you're making dinner, you're willing to pay other people other to do the work for you.

So who do you, who would you say a franchise is the best fit for? Is it someone 30 that has 40 years left and can really knock it out of the park or is it really for someone that goes, you know, I am 45, 50, 55, I have a. A substantial amount of expandable income. I want to be more passive with it, and I can get people to run it.

Yeah, it's really more about your end result that you're looking for. If you want to keep that job and corporate America and do something on the side, you know, there's nothing wrong with that. There's a guy that I placed in Northern Virginia that is opening up Great Clips. And then there's a guy here in St. Louis that owns 85 great clips. The guy in Northern Virginia is keeping his job. The guy with 85 great clips, he doesn't need a job. 85 great clips. You know, you're making some serious bank.

Talk to us about that. With the. You start with one. Do you generally recommend people start with one franchise or multiple? And how long does it take? I mean, that's impressive. So the Wendy's, I literally worked there for about a month and a half or two when I was in college. But Brian, the owner, I think he owned 13 at the time. And twice a year I'll swing by, be like, hey, how's it just, you know, just whatever. And I'm like, does Brian still own this? And he's like, yeah, I. Last I heard, he has like 47 now.

Yeah, you're never going to make money with one, typically. So you need multiple. What most Franchise wars do, Mario, is they work out a development schedule. You're going to open up one Wendy's.

Say today or this year?

Yeah, you're going to open up one Wendy's, you know, per year, whatever it is going to be, and you roll out that development schedule.

Interesting. So why do you say you don't really make. Do you not make much money with one or you don't make any money with one?

You don't make much if you own the Great Clips. And I'm just throwing out, you know, back of the envelope calculations. Let's say a Great Clips does $400,000 in annual revenue and you're taking home, say, $60,000 of that. You know, that's not going to replace your corporate income. But if you have 85 of those, well, run the numbers. It's pretty significant.

It's more.

So when you're helping people, what are the first few things you look at? Because I know we've talked about a variety of businesses and, you know, you find the best fit for them. How do you determine, hey, I'm going to put you in this type of industry versus this one. And what would you say the average budget is? Someone coming in, you know, skill sets.

Are the biggest determinant after, you know, capital requirements. So there's a book called now discover your strengths. He says you can't teach a rabbit to swim, you can't teach a turtle to hop. And so if you do something that plays your strengths, that's going to be the biggest factor. So when I interview candidates, talk a lot about skill sets, that, and that alone is probably the biggest driver. Then in terms of investment, you really need to have at least $100,000 cash. It's kind of the low watermark, and then it just goes up from there.

Do you work with Subway, Wendy's, McDonald's and those, or do you stick more with the service? I know we've used them as examples because everyone knows them, but I used to consider a Subway at one point. Do you work with any of them?

Yeah, some of those brands we do. Some of them we don't. You know, different brands are willing to work with consultants. Quite frankly, there's a lot of brands that I would not represent because I know enough being on the inside that they're junk. Like any industry, you've got your bad actors. So they're definitely brands that I would avoid, and I would never show whether or not they're willing to compensate me or not.

Interesting. You. You have my curiosity piqued. Is this something you're willing to share any or do I have to wait till the camera's off?

Well, look, you. You can go on and Google SBA loan failure rates by franchises. You'll see your own damning information. Or if there's a franchise you like, you know, go on there and put the name of the franchise and then follow it up by scam. Put the word scam in after the name of the franchise. Do your own research. You know, again, like anything, you're going to have some bad actors in there. And that's the. The challenge. If I'm a novice and I just decided to start Googling franchises, you know, your eyes are going to glaze over. And I got my copy of Entrepreneur magazine's Franchise 500. There's 500 of the best brands. And, you know, where do you even begin to start? I mean, it's. It's overwhelming for anybody.

So it's the due diligence, like anything.

Yeah, you're going to do your due Diligent. Exactly right.

So 500 on entrepreneur. How many options are there total?

There's thousands of franchises that are out there. A couple hundred come in every year. A couple hundred go out, but I'm going to say probably somewhere between three and 4,000 franchise licenses. Now, some of those are going to be regional. Some of them aren't going to be available, you know, in certain states, in certain regions. But sure, probably three to 4,000.

Okay.

So let me ask you this. I know we're getting short on time, but who would you say is your. Talk to me about your biggest success story.

Do you have anyone that's in addition to the Stanley Steamer? Because that's impressive. But is there anyone in addition to or even bigger than.

Yeah, probably not as big. I would say there's a couple of people that I've placed that I would say have gone on to build multi million dollar businesses. I placed a gentleman down in Houston that built a restoration business last year. He did $19 million in revenue. I placed a gentleman down in West Palm Beach, Florida. He works in senior care, helping seniors age and place in their home. Probably did $10 million last year. So there are definitely success stories. And look, there are people that I placed in franchising that have gone out of business. And that's something that may, a lot of consultants may not want to talk about, but that's a fact. I mean, business ownership is not perfect. It's not for everybody. But guess what? So is a job. Citigroup just laid off 20,000 people and everybody thought, oh, I'm going to retire from Citigroup. No, no, you're not. You're going to get laid off.

Google too, with the sales department, replacing it with AI I think it was like, I don't know if it was 5,000 or 50,000, but it was a substantial amount, right?

Yeah. And that's the thing. None of it's perfect. So. And I'll also say this to your credit, when, when you have a successful business like you do, you're not only placing five people a decade. So when you have some volume, no way it's ever going to be 100% in any industry. Just like real estate. Like, you might sell nine houses in a row or 90 in a row, but you start doing volume.

Everyone'S going to have that one and a half bad. Mine is like one and a half percent. One and a half percent. Like out of 100.

It's like, okay, this was just a weird scenario or something, but yeah, I don't think that's a failing rate. Night. Was that 97 and a half or 98 and a half?

Yeah, yeah, it's, it's pretty good batting average. Look, George Brett used to come into my Buddy's restaurant. You know, he would say, if I can bat.350, you know, one out of every, you know, three at bats, I'm doing great. So amazing numbers when you think about it, for major league batter. So it still comes down to figuring out working with the right consultant. Just like anything, realtors, you know, 80% of the volume is done by 20% of the real estate agents. You want to work with the superstars in your market to figure out which house to buy. It's the same thing with consultants. I always tell people, look me up on LinkedIn, look at the reviews.

Watch the videos, do your own comparison. See. See what you know, who you think you want to work with.

Yeah. So much comes down to the relationships and the trust and everything. When we're doing books for people, you know, one of the first things I always ask them, I was like, show me your testimonials. Like, you know, those reviews, those testimonials. It doesn't matter if it's a book, if it's a client, if it's, you know, guest for the show, host for the show, anything. One of my favorites. I'll give everyone a secret right now. Speaking public, speaking. Most people go, oh, here's my client testimonial. Here's, you know, this testimonial, like a referral testimonial. Here, if you're speaking to a room, everyone in the room is a legit testimonial. Don't. I would never advise anyone say, oh, have them give a client testimony if they're not a legit client. But I would go up to people and just say, how'd you like my presentation? You know, and then there was a point. And truthfully, they were coming up to me saying, I enjoyed it. And I say, I appreciate that. Would you mind saying that on video? Pull out your cell phone. You know, I got. There was 35 or 50 people in the audience. I got 11 alone in about eight minutes just from asking. So anything can be social proof. So that's great that, you know, you have helped so many people with it. Before I ask the next part, what would you say if someone's considering a consultant like yourself, what should you. What should they look forward to? You know, obviously, yours is all legit, but what usually would be a red flag if someone's checking out, you know, 10 different people, what you should look out for?

Yeah. Again, it comes down to tenure, Mario. Again, I don't want to work with the rookie real estate agent. Whether I'm looking at commercial or residential. Bring me the real estate agent who's been in the market for 25, 30 years, who sold thousands of homes because ultimately anybody can show you the home. But who's going to negotiate the contract? It's the same thing with franchise consulting.

Okay.

Being in this industry now for more than two decades, I'm going to bring a wealth of experience. You can't buy that. It's, you know, being. It's time in the chair, it's placements, it's working with multiple franchisors. This is what I do. This is all I've done for the past 20 plus years.

Yeah, that experience that you're not going to get from just watching a single YouTube video and helping three people. I gotcha. All right, I got a question for you here for the Wheel of whatever. Yellow or black?

Black.

Nice.

All right, you said you've been doing this for 20 plus years. If it wasn't for franchising, what else have you considered?

Well, I wanted to be Tom Brokaw, but that ship has long since sailed.

Okay.

What?

Sounds like for a second that I thought you didn't know.

No, no. Newscaster. I, I remember him.

What intrigued you about that?

Well, ever since I was a little kid, I was like a radio geek and, and I was always fascinated with, you know, radio and TV personalities and that's really what I wanted to be. And then ended up getting into advertising and here I am, you know, after this long, illustrious career.

Well, it sounds like you found something you like, but yeah, it's. I actually, it's surreal to be hosting the show because I've always liked public speaking and helping people, but I actually have cassettes and I've joked about bringing them on for some episodes. I have these color coded cassettes with this. You know, when you're a kid, you have that toy, that little cassette player, you can talk.

Sure. Fisher Price. Yeah.

Yes. And I would commentate on just TV shows like, oh, I can't believe they did this. Oh, that's funny. And yeah, it's surreal. Like I didn't do anything with it for 20 years. Then all of a sudden I'm like, now's the time. So it's interesting.

That's right.

We're going to thank the sponsor and come back for the imperfect action round. You've heard me say every business needs a book, including yours. And it's true. And that's why I'm launching my new book@eapublishingmethodbook.com so you can learn the seven steps to publish and promote your nonfiction lead and profit generating business book in eight weeks. But you know what, don't take my word for it. Take it from a few of my authors like Lori, I went from having an idea and a possibility to actually.

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Hey, their words, not mine. Visit eapublishingmethodbook.com to get your copy and I look forward to hearing your transformation as our next video success story. Once again, that's eapublishingmethodbook.com and we are back with the imperfect action round. Patrick, are you ready to take imperfect action?

Absolutely.

Got three questions for you. The first one is what is the fastest path to the cache.

Doing something that you're, you're good at and you plays your strengths. That's absolutely the biggest, fastest way to doing something that we can make a lot of money.

Okay, number two, what is the biggest problem you see your prospects making and the fastest way for them to fix it?

Yeah, it's the fear. They're going at it and they get scared and they whimper away because of fear. The, the people that I place in franchising, especially ones that have gone on to be really successful, they just go forth and, and whatever hits them, they, they're able to conquer it. And that's the biggest thing is is the fear. It gets in the way of people.

So it sounds like what I'm hearing and I actually was telling our team the other day is it sounds like you're saying rolling with the punches is one of your greatest assets.

You have to, I mean again, business ownership isn't easy. I was listening to a podcast of the the woman has the Atlanta restaurant. I think it's called the slutty Vegan. And. And, you know, her business burned down. I mean, talk about a buzz kill. But when your restaurant burns down, you know, how do you even get back and get out of bed in the morning? And she got back up and she's built this huge restaurant enterprise.

Wow, that's. I can't even imagine that beyond major buzz kill. Yeah, I've had stuff happen much less than that. And it was kind of. I remember someone 10, 12 years ago. It sounds like the wind got knocked out of your sails. And I'm like, yeah.

I can't even imagine that that would suck. But.

You know, this just came to me. How would you define resiliency versus rolling with the punches? Because I think there's a difference, but they're very closely related.

Yeah, it's. It's remembering that life and business ownership is a marathon, not a sprint. I mean, what happens today is not going to derail your success or your journey. It's just a simple, you know, pothole in the road. And then, you know, you're going to have some smooth roads, you're going to have some good times, you're going to have some wins. And so it's like what I said about George Brett. You know, one out of three times at the bat, he's going to get a hit. That's really what you're looking for. Is that keeping that batting average high?

Okay, very good. Last one.

Third.

Not the last one, but third one. What is the best way to maximize customer lifetime value?

Well, I think it's delivering on the promises that you offer right out of the gate. I mean, if. If you. Are you. If you're derailing your process and people are not seeing that, you know, the horse isn't going to leave the barn, you got to have a promise he can deliver on every time.

Very good. I agree.

As a publisher, I got to ask you about books. You mentioned one. What other books would you recommend? Expert Authority World.

Well, you know, again, I like now discover your strengths. I like.

Michael Gerber's book as well, the E. Myth. You know, in terms of franchising, I like Street Smart Franchising by Joe Matthews. I think those are really key as well.

Very good. Thank you. For those. Where would you like people to learn more?

Real simple. It's a very easy URL. It's Fran Inside.com. so Fran Inside.com you can find all my contact information in their FAQ page. Over 100 plus written testimonials. As well. Wow.

Impressive. I'll make sure that's on the interviews.com for your episode. Patrick, it's been a pleasure. Thank you so much for sharing what you have.

Thank you Mario.

All right, Expert Authority World, we have another great episode here today. I'll see you on the next one. Have a great day and God bless. You're already the expert, but have you transformed your expertise into a tangible asset that will generate qualified leads while increasing profit for you 24? 7? And if so, how well are you promoting it? With my new book, the Expert Authority Effect Publishing Method, I take you through my process step by step. Visit eapublishingmethodbook.com today to learn the seven steps to publish and promote your nonfiction, lead and profit generating business book in eight weeks. Visit eapublishingmethodbook.com to get started. Now once again, that's eapublishingmethodbook.Com thanks for listening to today's episode. I would love to know what you enjoyed most from it. If you haven't done so already. I invite you to connect with me on my new LinkedIn. You can go to it directly at eainterviews.com LinkedIn Once again, that's eainterviews.com LinkedIn lastly, check out the full eainterviews.com site for complete show notes, the full interview video experience, links to the resources we mentioned, and more. Have a blessed day and I'll see you on the next one.