$10M Fencing Business Aiming for $100M (Coaching Call with Mike Andes)

Hey, everyone, it's Mike Yandes. And today is actually a coaching call with a fencing company that has over $10 million in annual revenue.

It's really, really, really, really, really expensive to have a business.

He's thinking about either licensing the business or franchising or potentially just doing education. Everyone thinks I'm negative on franchising. The success rate is extremely, extremely low. So we're going to look at the different models to take it from a service business to actually scaling it across the country.

That's what my goal is. I want to simplify, standardize, and multiply and do this in many, many states.

He also has an entire fencing distribution center where he's selling materials. But what's really crazy is that a couple of his current employees have actually left his business and are now his competition. What can we do to prevent that in the future? That is the missing link that they cannot replicate or even take advantage of it. So right now, the business, around 9.3 million doing fencing. And so is that all residential? Is that commercial? Can I just give me a quick breakdown?

Yes. So I used to have a company called Inline Fence. Inline Fence. And we did residential and commercial. But I saw that how commercial is so different, how you have to wait 90 days to get paid. It's totally different model. So I separated that as a different company, Inline Security Fence, and I decided to rebrand. Inline Fans is a beautiful name. By accident, it became Cool Cat. It was supposed to be inline, and for some reason, it became a cool cat because I wanted a mascot and they gave us a cat. And then I'm like, let's go forward. Inline Fans with a cat. And my wife's like, I go, what are you doing? It doesn't. There's no correlation. So, like, okay, let's change the name. And then they gave us the names. I don't know those names. We picked Cool Cat. That's catchy. So it's working. Whatever it is, it's working. Let's go.

Good stuff.

And how long ago did you start Igor the fencing? In 2016. Got it.

Very good. Very good again.

Yes.

So.

So basically.

You know, I never really thought about, you know, about, like, franchise way. You know, I always thought, you know, I want to. I want to have it keep. Like, have you heard of who Tommy Mellow is?

Yeah, Absolutely. Yep. I'm on this podcast. It's coming out next week, I think.

Oh, nice. Really cool. So Tommy Melo, he. He. I think he's in 14 states and he owns everything, you know, and I'M like, yeah, that's the model I want to take. And. But I see the, the one negative thing about my business as what you mentioned at your conference, that it's seasonality in the winter time. It does slow down significantly this year. It was an anomaly. Anomaly because of the windstorm. So we are actually pretty. Doing pretty decent.

And I'm just looking how expensive it is to, like, have my business. You know, when I lease a van, 1,500 plus insurance. I have full insurance, 300 plus the camera on the van, wear and tear.

Tools. And I'm like, man, it's really, really, really, really, really expensive to have a business. I'm like, man, maybe there. So. So when I went to your con. Yeah, I went to your conference and like, maybe. Maybe I should try something like that too.

Okay, so basically you're considering franchising or do we continue basically corporate expansion through locations? Is that right?

Both.

Got it.

Okay. Because I want to go to the south states. We just started Portland recently, but the same climate as us, but I want to go in Texas, South California, but man, I know they have crazy taxes, but Florida, you know, state of Texas in the South, I think they're all gonna elevate. Help me out in the winter times.

Got it. Okay. All right, cool. So your thought is corporate expansion, but then also being able to offer this as a franchise model alongside along the way? Essentially, yes. Got it. Cool. So I'm assuming you have a lot of question about franchising.

Yes.

Cool. All right, well, let's jump in because I think the corporate expansion part is much more in your wheelhouse. You've already started the second one. Doing the second and third one, it literally just becomes copy and paste. Because if you can do two, you can do 20. That second one, if you just started in Portland, is you'll find out, like, as soon as you go to two, it just changes everything. The systems completely change. You have to figure out your management structure much more different. And so if you can figure out, number two, the corporate expansion part, you'll. You'll. You'll do very well at.

So what are the negatives, Mike, of franchising?

Several things. So first off, it's a completely different business. It has nothing to do with fencing whatsoever. It is. You are in the business of training entrepreneurs. And so as long as that's what you're passionate about, you'll be okay. And so. So then it's just a matter of this. And this is what I usually boil it down for most people, and everyone thinks I'm negative on franchising, but the reason I am because the success rate is extremely, extremely low. And that is, can you get above 100 locations? Now in fencing, you can make the model profitable a little sooner because you make, you can make margin on, on the materials. So I'll get into that in a second. But like I would say for, for your, for your model, you probably get profitable around 30 to 50 locations. And so if you don't have a clear roadmap to that, you will. You just get burnt out on this constant churn of trying to get 10, 15 locations. Let's say you take 10% off the top as a royalty or 10% of what they get. You're getting somehow, whether it be through materials or through an actual royalty. That means you have to do 10 corporate or 10 franchise locations to equate the revenue of one of your, just your, your locations. And, and let me tell you, they're not going to be able run a $10 million business. And so they're not going to run that size. They're not going to run as efficiently as you. They're not going to run as profitably as you. They don't know how, they don't have all your skills. So many times, like I would imagine you would make more revenue starting one more location by yourself than getting 15 to 20 franchisees. And so then it just becomes a matter of what's easier, starting one new location or going in a 15 to 20 franchisees. And so that's why for the vast majority of people, corporate expansion is the route to go. Now if you love training entrepreneurs and you love that aspect, that's great. Now franchising becomes a little more viable, then it's a matter of, okay, well if, if that's the itch I'm trying to scratch, and that is just like training entrepreneurs, can I do more of a licensing model where I don't have to get in bed with them legally? Can I do more of a content and education and edutainment type of style content, online books, courses, et cetera, school groups, Can I go that route? Because those will scratch the itch of training entrepreneurs without having to get in bed with them from a franchising perspective. So the downsides are one, very few franchises get to profitability. There's over 400 started last year and less than 6 of them will get above a hundred locations.

Because technically speaking, for less than a hundred grand, you can put all your documents together for a franchise disclosure document legally. And that's all you need to basically be a franchisor. And so it's very easy to just become a franchise. The question is, why would someone buy your business model? And so if there's not clear differentiation, you're never going to be able to scale it quickly enough to actually get profitable. Because it takes from day one you have to support franchisees as if you had 100 locations. It's like from day one, we had to build command center. We had to have the software. We have trainers and coaches. And so usually, usually it'll take three to five years before you actually like, oh, this was a good decision versus just starting one more location and you knowing how to do it already, like just copy and paste. So those are all the downsides. The upsides are you have great enterprise value. It's very rewarding. Once the systems are in place and you're able to see someone go from zero to a million dollars, it's very rewarding. You're also, you have skin in the game in terms of the brand. And so it's cool to see your brand just blow up because you're not going to be able to scale the equivalent in terms of capital as 100, 200 other people contributing to the trucks, to the asset, the capital expenditures that are required to grow very quickly. Right. So you know, in the past five years, the franchise on our end has, has scaled past 50 million. I couldn't have done that all by myself. Right. We would have still been probably like 10 to 20. And so it just, it's simply a game of which one do you want to choose? And those are kind of like the pros and the cons.

You guys said 50 million?

54. Yeah.

Nice. Wow. In I think in the lawn industry, that's like, that's incredible. Right? That's if you take H Vac model that's probably like would have been more than 100 million or you know, like because they have such a bigger product cost product and an average ticket. Wow.

Here's. So yeah, we're starting Portland. We already started and I think this year we're already gonna do, I'm thinking at least 2 million in revenue there there.

So here's another problem, Mike. So in my business it's really easy to start a B, you know, a very low entry level.

Yeah.

I had already like eight people leave me open their fence companies and are my competitors. They, they know what, what, what's working for them, for me. And they're copying that. Having said that, I'm still growing. They're not stopping my Growth. I'm still growing, so. But I'm like, man, is there a way how I. Instead of them opening their own, maybe like they can actually do like how you're saying franchise, you know, I mean, there's some kind of option because everybody, Mike, everybody inside, they have like this desire to work for themselves, to be their own owner. And I'm like, man, how can I leverage that? Human nature.

Yeah. Yeah. So this is the thing. Like, I think.

This would be my question. Like, why do you do 10 million and they. When they leave, you only do 200,000. What makes you different?

The guy, the first guy did 700,000 in one year.

And then right now I had actually a CEO and a CF chief technology officer. They were. They actually ran my business. I actually was kind of like, I let them run it. Both of them left me. Now I think they're gonna hit, like, I think they're that good that they're gonna go 3, 4 million. I think they're gonna hit Reason why they're already picking up people that are fired that are already trained. They're picking them up and you know what they're doing, Mike. So I only work with employees. All my guys are employee only. They work with contractors. So when you work with contractors, you can go scale faster because you don't have much faster and you don't pay payroll taxes, sick leave, and Washington state. I have to pay six year, six days of sickly. There's so many, you know, lni. So they just write a check, cut the check, and they keep bigger chunk, you know. So if. If they go.

If.

Let's say, let's say. But for them to hit formula, they're. They're going all out. They're also doing decks because deck is a bigger. Some. Some decks are 30, 50 man thousand dollars. So if everything goes good, our goal is to do 14 million this year just with residential. And when I was at your conference, Mike, I loved what you said. Simplify, standardize, and multiply. That hit me hard because my business school cat, my model is great customer experience and in and out speed. So the customers are calling me. I don't want it to. For me to actually come up for an estimate shouldn't be more than a week. And then after they. After that, we actually do. We have all the technology. We use several service titans, so we give an estimate on the spot. So other companies, you have to wait three, four days to get an estimate. We give them on the spot. So my thing is speed. And so my. And. But sometimes I'LL get a job where we do like a sliding gate where we had to weld it so our guys would come in and install the post. Then we have to wait three weeks for it to weld and then come back. And I'm like man, those kind of jobs, they, they're expensive. Some of them are 30, 40, 000. My average fence ticket is 7,000. But those jobs that are a custom, custom, that's when I have the most friction with customers, the most friction with my workers. That's when I have, I can't control. And I told Eddie after this conference, I'm like Eddie, we're not going to do any more of this custom work, regular work where we can come in two days, three days and get paid. Cash flow, I want the cash flow to be coming in and that's tied up to two, three weeks. I don't want those. So let's give those jobs to my other company, to this, to the inline security fence. So, so I want to go even more narrow, you know, so I really like that, I really like what you said. I, I, I mean don't be greedy because sometimes you get greedy. You want everything and that's when you, you can't. I like what you said is by how much you're saying no to your focus shows you what by what you say no to, you know. And I'm like hey. Because usually business people, they want to say yes to more money but sometimes yes actually it's not good. So that's what my goal is. I want to simplify, standardize and multiply and do this in many, many states.

Yeah. What's amazing like when it comes to fencing, like so for example next week I'm talking at a, a franchise slash dealer model and all they do, all they do is fencing around pools, the small kind of see through fence and they do literally hundreds of millions of dollars. It's insane. Like I saw the margins. It's insane. It's incredible. Like it's the niching down that gives you that aspect of like they can knock things out faster than anyone else. They have better margins, they have way better supplying. Like this is what Tommy crushes is because he's able to get these the door manufacturers to get his prices so much lower. And that's where he makes his margin. And so the, the economies of scale by standardizing and simplifying allows you to have better margins. And so because you can just, you buy in bulk, you buy more, you train your guys faster. Right.

So wow. I really like this so here's another caveat.

I also, when I started Mike, I had a problem. Like, my guys were like, hey, I go, where do we get the material? So they go to Home Depot, Lowe's, and sometimes it would take him two, three hours to try to find material. And they're like, hey, I'm going home now. So. And once when I started having my own material, and then I opened a store, and that store they solely provided for. So I came in with our credit cards and we paid for the material. So that store, my brother is half owner, and I'm half owner. So this year he had five and a half million in. In sales. So they provide for us and, and all the guys that left me, they opened their friends, companies. They're buying from him as well.

Yeah.

So another cool thing is so if I. If I don't, if I, you know, as I'm planning, you know, go to different states, we can go ahead and open the store, provide for us, and then keep growing. So you can. It's like, you know, this is going and this is growing.

What if you do more the dealer model? Igor, if you have the supply chain, why would. Why would you not give away all of the systems, procedures, and like, kind of like the secret sauce of the sales, but then make your money on the. The supply chain instead of a royalty or some sort of franchise? Because the franchise model, you get in bed with people legally. Like, there's a lot more legal tape. It's very difficult, like, to, like, sell someone on even that initial buy versus saying, hey, I will give you all of this stuff for free. You just have to buy the product from us.

That's interesting. That's very interesting.

Because the fact that they left you and then still kept buying from you means that you own something that they couldn't even leave with. Because, like, like you said, the knowledge is anyone can take it. Right. Technically, anyone can use the software you're using. Like, those are. Those are interchangeable. And I haven't heard anything that's like, completely custom, like you've built yourself. Like, no one else can replicate our website or whatever it might be. It's a matter of if they left and they're still using your product. That is the missing link that they cannot replicate.

It's hard. It's. It's. They can maybe in three years, but, man, it's. It's really. It's not easy. That's really hard.

Right. And so that. That's why I wonder if it's like, more of you. What if you went like the route of I'm going to educate people, I'm going to give them the systems and I'm going to do a licensing model by which when you license, you use cool cat names or not, doesn't matter. And, but, but by using all these systems and these frameworks, whether you do the back end for them in terms of sales or whatever, but then they're simply tying into your product line and your chain. Um, like there's a really good company called, I think it's called Forever Lawn. They do artificial turf and this is their model. Instead of franchising, they simply say, hey, we're gonna give you all the backend infrastructure. We're gonna help you with sales, we're gonna help you with installation, we're gonna give you everything on the back end. You just have to buy our turf.

Wow, wow, wow. But, but, you know, yes, I can teach them, but.

They'Re not legally married to the store. They can still shop whatever they want. I can't, like, you know, I can't.

Unless you tie the back end to your products. So, for example, if they're doing licensing, you can. Licensing agreements can enforce that they use certain products. So, so for example, with, I would recommend looking at Forever Lawn's business model. So foreverlawn, it's not a franchise, but it is simply a. You get a territory, you get leads from them. And so you would build this massive brand of cool cat fence. You are then going to get the leads, you then give it to them, then they can. They install it. But it's all governed by the fact that you get the lead. You know that they're supposed to be buying a certain amount of product and you can regulate that. But furthermore, it's a matter of like just making the product so much better to where they want to buy it from you. Like making the pricing better, making the packaging better. So for example, you know, you could really sell the fact that there's overages if you went into Home Depot or Lowe's and had to cut up everything versus, like, hey, when you buy this certain XYZ cool cat fence, you name it, you brand it yourself, it's going to come and it's going to be exactly the materials you need. You're going to give us the dimensions and we will give you exactly the product and your overages are reduced. You have to go pick it up. We will ship things to you in one carton is like all of your materials. I'm just thinking outside the box in terms of how do we do licensing instead of franchising. Because the licensing model will scratch the itch. If you still will train them and all the backend systems, how to install, how to train, how to sell all. All these aspects. But then you tie in to the product line instead of the franchise model. It. It's just an option. It could scale much faster.

So, so you're saying that the franchise. Because I know 100 junk, you know, the removal. I think they have their franchise model and they're the biggest home service industry company in America. I think, I think there's anybody bigger and they're doing franchise. They have such a strong brand. Huh. So franchising is. Is the brand. So how. How do you guys, for example, how do you guys keep. When people, let's say they buy into the franchise of Augusta Lawn Care. How do they.

How do they. You. You make them wrap the. Their cars?

Yeah.

What else?

So, yeah, so basically like they can wrap their trucks, but for us, we. They can leave at any time. So they can leave anytime. And they take their customers, and they take their customers.

So why would.

No penalty.

Why would they stay with a company?

Because you're con. Because we, from our perspective, we have to just convince them to stay with us. How do we do that? We just make it worth more and more every month in terms of the value we offer. So offering new coaching programs, offering training for their general managers, offering them better vendor discounts. So you're just trying to always upgrade the value. But the reason I do that is because I don't want to deal with franchisees that are unhappy if they want to leave. If they don't see the value, you can leave. There's literally no. No penalty.

Wow. So do you offer them your own CRM system?

Like, yes. Like, they use all copilot. So that way.

Do you own that?

Yeah.

Wow. Do you know, you know, service titan.

Oh, yeah, they're great.

I think their value is 10 billion.

But that company, 9.6 when they went public a few weeks ago, that, that.

Company, it's like, that's the biggest. The software, the technology. That's where the caviar at, you know?

Yeah, yeah. You're moving up the value chain, right? Like so. Like as you. You create this, this chain, having multiple locations immediately will almost double your valuation simply due to the fact that you begin to scale the model outside of one. Because now, now someone comes along with money, a private equity firm, and let's say you're doing 20 or 30 million and you have three locations. They look at this as like, okay, great, we will buy this for 15 million, but we're going to put 10 more million into it. We're going to a leveraged buyout, we're going to start five more locations and we can take this, what's doing 30 million and turn this into $140 million business. That's, that's the strategic buyer that will come along. And so when you do multiple locations, improve valuation. If you do franchising, it's going to be a grind for five years. But yes, your valuation improves because now you have the capital of 100, 200 franchisees that go into and fund your growth essentially. And so lower, lower revenue will get a higher valuation on something like franchising. Licensing isn't going to be a value play like from an enterprise value perspective because there's less legally, less legally tied to you, but it also scales much faster because now you don't have to convince people to join a franchise. And that's the hard part.

So let me ask you a question, Mike. So let's say if the franchise, let's say in Georgia that uses your brand gets a lawsuit, are you responsible for it?

Not technically, but I am put on almost every lawsuit from the franchisees. So yeah, it's like very litigious because, because if someone comes along and get, you know, they get an accident. This is usually what happens. A truck gets in an accident, the person that's going to go against them will just put the franchise as an entity on the lawsuit and I will have to defend myself. And so it's very litigious. Like you, it's an attorney game. You pay them a lot of money.

So everyone thinks I'm negative on franchising. The reason I tend to go that way is because it's so difficult the first few years to support the franchisees at the level you need to and make money. Very difficult.

Is there a reason why, Mike, why you went, why did you go to Tommy Melloway? Why didn't you like instead of you owning all the across America?

Yeah, because like I knew that if I was trying to own across all America, it take my whole career versus I knew that if I could do in maybe 10 years I'd be able to get 500, 600, 700 locations and achieve the impact I wanted. So like the impact was far more important to me. The valuation part, like the money part, like whatever, like the valuation of, of the entities that we're building. It'll be much more on the software than the robotics down the road. The Franchise though is the distribution network. And I need the impact. Like I knew I could probably by now five years maybe have 10, 20 locations. But if, but by franchising you tap into, basically you're using capital of other owners to join in. And so it simply came down for me. I knew in order to achieve impact I had to compete with people. That's when they started to listen to software or like implement software, use, pay for performance, et cetera. And so I could do it one at a time corporately, but I would be may be able to get to 100 locations in 20 years, like if I'm lucky. And so it was just like, hey, I want to go speed. And so if you want to go speed, you go franchising it. Just realize that from a profitability perspective and the amount of support that's required for those first few years is a huge step backwards. And at the same time you have to sell the franchise like you have to be selling locations.

It's just a tough game. And so as long as you're cut out for it, as long as you like know what you're getting into, you're good. But the reason I push so hard against it for most is you have to have a clear value proposition as to why would you join Cool Cats instead of going and starting Billy Bob's Fencing. And if that there's not cleared value as to why, whether it be better product pricing, whether it be better software, exclusive backend access in terms of admin, like if you answer their phones, if you do their pricing for them, if you train them and that's when it becomes valuable.

So see what I'm doing is basically usually when people do fence work, they just have trucks with a flatbed. I basically use vans, I took vans and I've wrapped them.

So my branding is, it's something, it's for fence industry, it's, it's a really, it's a disruptor and the speed, you know, so my, so I for I for financing and my guys come in to the customer, obviously it's a red car uniform and they give an estimate on the spot on an iPad. And then so the customer does such a. See I use service item and usually service it only allows companies that are doing 5 million and more to get their software. So it'll be hard for other companies to, they're starting out, they won't be able to afford service items. So if we do, if you go the franchise model, I think you have to have your own software CRM. That's probably the only option.

That's the concept deal with. Well, I'm listening as you say that. I'm trying to ask myself, why would I join yours if I'm doing 500,000 or a million and you just open up one and that is, hey, I can't get access to the leading software in the industry unless I'm at 5. Well, why not join a franchise and get from 1 million and grow my business this way? Because I actually have access to the best stuff. So, like, I think a value proposition you could have is like, hey, if you can cut a deal with service time, like, hey, we have a bunch of locations combined, we're doing 50 million. Can I give access to my smaller locations that are, quote, just getting started that do a million to access to the software?

Oh, I just found out today that Source Dining gives me a. Because we open Portland right now, we use Portland Seattle as one. But I found out that we get a free sub account that could be just totally separate.

So this is. This is the game, right? So then it's a matter of, okay, can you create a whole bunch of sub accounts for your franchisees, allowing therefore people to join before they hit 5 million?

Wow, that's powerful. Because. What. Well, my, you know, I'm disrupting the industry by great customer experience. Because when my guys, they dispatch customer gets a text message of a picture who's coming short bio and the live geolocation, how far they're from the house. So they're like, whoa. Because the company is different.

So I'm small on social media. I think I have like 700 subscribers. But I'm thinking, like, I'm picking up. I'm. It's working what I'm doing.

Yeah, I like how you said that. You're very limited. I'm just saying I can grow, but it's gonna take me a long time because it's a lot, a lot of liability. I like how you said it. Work through other people. And actually I like to inspire people. I like to share stuff. I am. My own competitors are watching me and kind of teaching them already. I mean, I. I mean, they buy materials from us, so we still win. That's an interesting model.

I. I was always like, no, no, I don't want to do franchise. But when I heard your how you can just motivate the whole army of people and, and like, that's what you know, Mike, that's when you love people, right? You love people you genuinely care about and you truly enjoy when you invest in them, see their growth. When they're growing.

And it's different too. When they're wearing the brand that you started, you actually feel like you did it. You helped them. Versus, you know, when you share a video and you say, hey, this is how you do installing the fence. Cool. Someone doesn't. They're like, oh, thank you so much, Igor. That really helped me. Versus they join cool cats. They wear your brand, your logo, and then you see them grow their business from 0 to 2 million. Like the level of satisfaction is, is significantly higher.

And then they're. It's. Do you have. Because I know if you want to buy 100 junk, it's a, I think like 400,000 upfront and then royalties every single month. It's like, do you have an upfront payment that people have to pay upfront?

24,000 is fresh, and then the monthly fee is just flat. So it's 1600 bucks a month. And that doesn't change regardless of how much they do in revenue.

So do. So 24,000. They have to give all that money up front or they can put it into payments.

They got it up front. They can, they can get like an SBA loan if they want or whatever. But like, they have to do it.

Up front, but you don't take them. They have to give 24K to, to. And then how much every month.

Sixteen hundred dollars flat.

And that's a normal. And nothing else?

Nothing.

Royalties, nothing. You know? No, I think that's, that's really reasonable because I'm thinking like, Mike, you know, when I began, I knew nothing about fences. I was just like in the dark. And if I knew what I know now, if I had a coach, someone that did it, like me looking back, it would be so much better if I would start a, A franchise, you know, the franchise model under someone else. Because if you build it faster.

Yeah. And if you build it in a way where as they grow, they don't want to get out. Right. So the reason I did the flat fee model is because otherwise, if you do a royalty, the bigger they get, the more they're paying you and the less they need you. And that leads to a lot of resentment because as they grow and they get really, really big, they figured out the systems. They now know what you know today.

Yeah.

And they're like, why am I paying more to this person as I make more money? And so instead it's like, hey, flat fee. And then what I recommend you do is tap into some other monetization strategy that is usage based so that as they grow they're using more of it. So in your case, it'd probably be the materials, it'd probably be training their technicians. So they send them to your corporate office, you train them. That's valuable.

So 1600 flat. That's not a lot. And so, so, so if they make more money, 1600 is going to be. That's not a lot of money. They, especially if you guys offer them the coaching and the CRM system, but they obviously, they pay extra for CRM system, correct?

Yeah. The 1600 is like, you're in the brand, you're going to get all your leads, you get a franchise territory, you get access to all the coaching. You know, you can send your general manager training. We have specific software that we can. But here's the thing you want to make. The reason the franchise will be successful is if you make an offer that it seems stupid to say no to. Like, the reason that most franchises don't succeed is they simply think that their good brand is going to somehow attract franchisees. The difference is a franchisee will show up when it, when it is. Like, that's too good to be true. Like, that's a little weird, the fact that you only flat fee and I can leave at any time. And so that's what got us to be able to grow past 100. Because most franchises are literally like, I have a good brand, I have one or two good locations and I should franchise. That's the vast majority of franchisors.

So. So, Mike, so you don't, like, you only do franchising. You don't do. Your company does. Like, you don't cut like, right. Your people don't cut grass. Like, like right now for me. Right? Actually, we do all the. On boots on the ground.

You.

You already knew. You were just, you're just the office now, right? You're just the brand and CRM and the. Right.

You got locations. I have locations that I own, but I don't, I don't, I don't ever go to them. They just run passively.

Okay, but. But that's not your main. Right, Your main focus. This is your main thing. Yeah, I just, I just like that part that you know, like, because if you think about it, why I. I think franchise could be really cool. Look at Uber, right? They don't owe even one car, but they own. They own a software where they people through it. And I think that's a genius because I just, I know how expensive to do business. You know, for me, when you, when you have to pay all your Overhead, you know, it's really expensive. So if it's, it's, it's so how important it is. So obviously when you're doing franchising, it's very important to have personal brand. Right. The more hours you have, the more exposure you have, the more influence you have, the more easier for you to.

To get people. So what helps you? Like, you have a lot, you have really nice videos. Like I watch your videos on YouTube, how you go out and it's really cool. Like, I really like those videos. Like what helps you in, in, in the social media, what helps you to, to grow?

Yeah, like it, it really come down to like simply investing in it. Right. The same way if you were trying to improve the brand image or trucks, like you're going to go wrapped, you're getting them nicer, you're going to lease them, et cetera. Like if you had a video editor, just one person, you'd probably 10x your amount of followers and the amount of views, et cetera. And then it's like, well, then I'm gonna get a second person, I'm gonna get like a creative director. They're gonna actually do like social media posts for me. They're going to schedule them out. I'm doing a podcast. You don't have the time for that, so you're gonna have to hire it out. And so like the reason the video has gotten better is because now we have like eight or nine people full time on those videos making those.

Whoa, that's a lot of money. Yeah, but, but in franchise model, that's, that's very strategic. That's part of the, part of the growth.

Well, the goal, the goal with having the media arm is that you have negative customer acquisition when it comes to getting franchisees. Because if you can make the media arm, where is generating revenue through ads, sponsorships, other products, you sell books, courses, etc. Now when I hire someone on the media team, that's my marketing expense, but it can at least break even. So basically what we do for the, the media team, like last year I think there's like 1.6, 1.7 million or whatever it was that is like, oh, we have X amount. That's our budget that we spend. And I know as much as I can, I'm funneling into that, that is the marketing engine for the copilot software for the franchise, for everything. And so if you can create products and services like say for example, book or a course or you do other little things that allow you to pay for the media People. So yeah, it's expensive though.

1.6 million for your media team.

Well, like the traveling, the turnaround stuff.

Well, that's a, that's a huge investment. Yep.

But we break even on it, right? So if I can break even on it and then all of that marketing is essentially free to all the other businesses. Like, I don't pay for ads for the franchise. We don't pay for brokers for, for the franchise.

No, except for, except for the, the, the conference.

Yeah, exactly. Yeah, I saw your ad.

Man. So, because I'm looking at you, Mike, you created a movement. You know, it's a movement. Like I was, I was at your conference, I was telling my brother, it's so nice. You got a great venue. So clean. It was so nice. I'm like, man, really, really, really interesting. But you're just saying that you can go faster in franchising, but in the beginning phase, it's just gonna take a lot of, a lot of work.

It's just being very, very clear in your value proposition. And I think based on what I've heard from you, there's several things that are really valuable that would actually warrant a franchise. One, you have a supply chain and that supply chain could give them discounted materials. Secondly, you can get them access to the industry leading software that they can't have access to unless they have a 5 million dollar business. So they use X out 97% of fencing contractors that would love to have it, but they can't. Right. Third, you have a great brand, you get leads and you know how to scale and that's the training aspect. So you have supply chain, you have software and you have training. There's your franchise. And so what I would say is like, how do I get someone in the door with an offer that's so good they can't refuse? Which literally the people who left you might want to join simply because of the fact they'd get a discount on the products they're already buying. So you'd come to people and like, hey, oh, you want to start a fencing company, fantastic. This is when you're going to go to all the fencing conferences, you're going to fencing trade trade shows, et cetera. It was like, hey, if you want to start a fencing company, fantastic. You do not have access to the best software. You can join us and you get access to it. Oh, and by the way, you get discounts on every single license. So it's actually cheaper just to join us, to join the software through us, because we have now a Preferred vendor agreement. Secondly, you now have access to all of our systems on how we install these very standardized fences that are very profitable. And we train your team on how to do it. You can actually send team out to our headquarters and we will train them all on exactly these certain types of services. Now, when they come out for training, you're going to train them on your products. You're going to rebrand your supply chain into. This is the cool cat fence. 1, 2, 3. You're name them like it's going to become a brand around the product and then you're going to provide those products at a price to them that they cannot beat. Now it becomes stupid not to join. Why would I not join you if you're going to give me the best technology? All this stuff you've learned for the past 10 years so I don't have to figure out myself, the branding, the marketing, et cetera. You're probably going to give me leads for doing nothing because you have a better website than me. And third, I'm going to get access to cheaper products. It becomes stupid where you would not join.

Oh, so, so does that mean, Mike, does that mean you. You invest in the SEO all across America?

Well, as you begin to get a bunch of locations, the domain authority becomes higher and higher. For example, go ahead.

Do you actually. So you don't. So the people that buy your franchise, are they building the. The website for that location?

No, we build it all.

You do it for them. Do they have to pay you extra for that?

No, it's all part of the monthly fee.

That's all part of the flat 1600 fee.

See, that's the. See how you're reacting? That Igor, is what you want. That's when you sell franchises. Otherwise you have to pay a broker 15 to $30,000 to convince people to buy a franchise.

I'm paying my SEO like 3,000amonth. Yep. And I'm like yelling at him, like, show me the results. Yeah, man. Like, so, I mean, yeah, but I do like your at the beginning fee. No, that, the 24,000. So, man, how do people come up with that? You know, so that's not your problem. Like, it's. You guys need to find out how you come up with that. But if they can come up with 24,000, that's already legit. You have to be pretty legit to come up with that kind of money.

Well, that's the entry, the barrier to entry. Right. You don't want a whole bunch of people that are wanting to be weekend warriors Building fences. So you have an entry level. Like entry get in the door covers your cost to train them up and then you just train them on using your products and then you make in residuals 4 or 5% of them buying through your supply chain. When they send a new technician out, you have a flat fee to train up their, their technicians five grand or whatever. It's like, hey look, do you want to train everyone or just send them over here and we'll train them for you and they're going to train them on your products.

Wow. So like, how do you like what happens? Like for example, there's a lawsuit. Let's say your guy crashes his car and it's his fault or he's, he was drinking and driving and he just kills someone and they, the family sues.

Yeah, it's happened.

What do you do in these situations?

So the franchise agreement is going to protect you, but you will have to still, you know, send a lawyer sent, go to their turn like send them to court, etc. So there's, there's costs. Like it's, it's, it's a pain in the butt. Every, every, every month. I get hit with a lawsuit every month.

Wow. The liability. So you carry enormous liab. I don't say liability risk.

Well, the thing is the franchise agreement protects me, but I still have to enforce it. Right. Because any litigious tor is going to try to throw me as a franchisor on a list and try to get a bunch of money.

Wow. So Mike, how important? Obviously it's very important to have coaches. Who are your coaches? Is there any coaches? Do you pay money to coach you at this, at your level already?

There's a few that I've gotten the past couple years.

My Dr. Cash is my main one, one on one and he doesn't really take anyone now unfortunately. But really it's a matter of like the challenging part is getting domain specificity.

Right.

So someone that's actually done what you want to do and, or people that are doing what you're doing. So like joining a group of people that are franchising would be helpful.

Someone that has franchise would be helpful. Someone has done a. If they've been able to do fencing and they've built 100 million, that'd be helpful. So it's like, well, where are they at? Right. But it took me a long time, like it took me up until a year and a half ago to find a coach because I, I wouldn't rush into anything. Like most of them are, aren't great.

Honestly, especially these days. A lot of them is just. They know how to sell.

Yeah.

But hey, like, but you, you want the real deal, you know, that's why I turned to you. I'm like, because I was in that room, I saw all the people. I saw what you're talking about. You know how you're like, very conservative about how important it is to have profits and cash flow. And I'm like, man, that's so important. Business.

For example. Can you coach me if you want to.

I don't really, like, have any program for it. It's more a ladder. Like, if someone needs something. I kind of give this venue here. But if this is helpful, you could book as many of these as you want. There's a few people that every quarter will check in and just book one of these. I just can't guarantee I can do it forever because it doesn't really make a lot of sense time wise.

I understand that. Like, are you here locally in. In Washington state?

Yeah, that's where I'm based out of. We travel a lot, but.

Yeah, but based out here, maybe, maybe. I mean, I don't know, maybe I can pay for like a half a day or something or so you can maybe meet in person.

It's really cool, you know, when to see someone that's actually doing it, you know, that's why I don't like to get those coaches that are just, you know, there's a lot of fake gurus out there, you know, like that. It's not, it's only show smoking, smoke and mirrors, nothing, you know, so.

Well, if you want a franchise, I'd be, I. I could be very helpful. Yes. Because I wish, I genuinely wish I could just talk to someone that had 150 to 200 locations. I was first starting and I would have saved years, like, years of pain because it's so easy to lose money when you start the franchising game.

And again, I really like what you said in your book. You said, you know, this pastor said, oh, I'm gonna take on loans because I know God's gonna bless me. You're like, nah, you just have to be smart, you know?

You know, I just, I. It was interesting, you know, like the other day, I had a friend, Yarrow, he called. He's like, he calls me. I'm like, hey, I'm basically calling back. He's like, I had a dream about you. I'm like, okay. I called him up. He's like, what's the dream? He says, me and you we were walking and you said, hey, cool cat. My business started taking off because of franchising. I want to use that in my hair. Went up. I'm like, what.

Andes? And that's when I had these thoughts. And I'm actually. And I screenshot it that we have that on Friday. I'm like, we'll see what happens. I don't want to, like, you know. Yeah, you know, I want to see what happens. But I think it's. There's a lot, a lot of it. But it can work because I'm already inspiring. People are already reaching out to me, the fans from different states and asking me questions and kind of already. And I'm only, I only have the 700. My influence is very low. I think if I can enhance it, let's say this year, let's say we're going to do 14 plus 5 in commercial, plus 10 in this. In the, in the store. That's close to 30 million. So the, the influence is going to grow.

Yeah, no, 100%.

And do you have any recommendations about maybe who to hire that can coach me in, in the, in the, in the personal brand sphere? Anybody that you know is actually like legit, maybe top of your mind, honestly.

There's a few YouTube channels that you'll get like 90 of it for free. Like, Patty Galloway is really good.

The. There's another one called the Film Booth.

There is Colin and Samir. There's a lot of really, really good stuff online.

To be honest. Like, there's some courses I've taken around YouTube stuff, but honestly, all of it's online. Like, because, because so much of them, what they do is they give like their best stuff on for free, hoping they get one on one consulting and one on one coaching. But like their best stuff is out there for free. So it simply comes down to, like, if you just talk about your business and the success you've had, that's going to be the best proof you can offer. Because what, what you have that none of the gurus do have is a $30 million business.

But I think very realistically this year. Can I, can I ask you something? Like, there's this company called Ergon. They're based out of California and they're revolutionary in defense industry. So what they do is.

When I'm getting, when my customer wants an estimate, our personal person comes out and we give them on the spot. You know, our guys are very nice. We have a sales actually training that company, Mike. They hire outside the country, people with really, really, really good English I don't know how much money they put into their training. They train them so good. And when a customer calls in for an estimate, they do it on the video through, they have like through the satellites. And based on the reviews, it's not 100, but it's. But based on what customers are saying people get right away. They don't have to wait for, for a car to drive. And they're now across many, many states. So I told our, my head of sales, Eddie, I'm like, eddie, look into this. I know our model is working. Let's keep working this. But, but we should work on a site because it's working. Technology, technology. If you don't go technology, it disrupts the world and how much money they can save. And customers are writing that they have really good experience.

And I'm like, and you know what they do also, Mike? The installers, they don't have their own in house installers. They use contractors. Especially in California. It's probably too expensive to have employees so these contractors. And it works. And I'm like, my model is great customer experience and getting speed, you know, speed. And it's working for me, but it's very expensive way. And I like your book. You're like, man, you want to decrease the expenses, you want to decrease the expensive operational and increase the profits. I'm like, you got to invest in technology.

I know that's what you want to do. That's your, that's what you're doing.

And even if you price average things, right, like even, even if you can't see the fence from ground level from the video, even just looking like, hey, what's our average per square foot or per linear foot? And be able to do that from satellite. And then the only thing that is required is the customer to believe in the brand. And so when you have enough of a large enough brand, they come to your website, okay, these people are legit. Great. I call them, okay, I'm gonna give you a price right now. Now if that was Billy Bob, without a great website, a great brand, they would not move forward. They wouldn't give you their credit card, however, because they are looking at proof and then you're on the phone giving them a price, they just want to take care of the problem and they're confident you're gonna do a good job because you have thousands of Google reviews and you have it all in your, you're legit. And so as your brand grows, you can lean into the fact that I have a big brand. Therefore you should Trust me to be able give this price over the phone and I'm gonna deliver on it.

Yeah.

So.

Yeah. And Mike, in less than a year, I got 619 reviews for cool Cat. And, and I think I can get thousands once I go into locations. But I think that I need to continue pushing the technology. Always you have to have the best technology. That's number one. Andrew Carnegie, that steel guy, I mean from 1800s, he would count every single brick. So, so tight on this. But technology, all the money into technology. He wanted to make sure he, you know, because his dad went out of business, because there was in 1800, there was a kind of technology put a lot of people out of work. Yeah, he's like, he didn't want, he didn't want that to happen to him. So that's why I think you, you're gonna like, I'm looking at you, you're, you're, you're prime to go really big. And so you own, you own Co pilot. Yeah, that's, that's, that's amazing. So you're just, you're going deep. You're going deep, but your foundation is really very broad.

Well, it's a matter of like vertical integration. Right. So like, if I can control every aspect, that's important. But back to your example of like Andrew Carnegie, when it came to the railroads, that was the linchpin of the billionaires in that day. Right. And so how I think about a franchise to back to your point is it is the distribution, it is the railways. And then where, where did all the cities grow up was around waterways and railways, I. E. Transportation getting things around as fast as possible. And so when you build a franchise and like, the software is the same thing as like, I need the rails, I need the railways, I need the highways to be able to connect these other aspects of the business that makes it stronger. And so when you start thinking about, okay, like, well, what do you do you do once you franchise? Well, do you create the actual distribution of the product itself? So you can create the product for 30 cents on the dollar and then be able to get even better margins. And so you just start to do vertical integration. Then now you create, you source the material. Now you actually package it, you brand it, like, and then you get the software for it that you create specific software that only you can use, and then you get a bigger moat. And that's why, like, you know, people like Andrew Carnegie made so much money is because they just created. They own the railways. And if you own the distribution, then you can go very, very deep on vertical integration, man.

That's like, you know, that's like owning all defense material, that you're. The only place that you can buy defense material. That's.

Yeah. Yeah. Mike. Wow. This is. It's really cool, what you're doing. Oh, man.

Well, hey, I appreciate it. I'm very humbled. I know you've been very successful locally, and I've seen the brand and things, so I appreciate you giving a call. Appreciate coming out the conference, too, and we'll stay in touch for sure.

Take care, Mike. Thank you.

All right, Igor, take care. Have a great weekend.