Grant Cardone is DONE - Episode 041

Are you recording?

Yeah.

Jumping right in. Welcome back.

Thank you.

Apologies to everyone. We took a week off, so you were gone.

Yeah.

More turnarounds?

Yeah. Three in four days.

That's nuts.

Yeah. So in Massachusetts, New Hampshire, and Louisiana.

Okay.

Terrell and I just pounded them out.

That's awesome. So one of those coming out.

The first one's gonna be coming out this Friday, so probably when this is being released, it'll be with Simply Lawn Care. And, yeah, these ones are really, really good. Our first one outside the lawn care landscape industry or. So it's a roofing company.

Nice.

So that should be fun as well. I'll come out after conference.

Okay.

But, yeah, they're really good. We are still learning a lot. We're also learning a lot about, like, who to choose for the program. Because a lot. Like, I think the people at the beginning thought, like, oh, like, if I have my company videos, like, it'll be a great promotion for my business. It's like, no, like, you're coming for me, and I'm gonna come, like, dig into all your garbage in your business and publicly talk about it.

Yeah.

So if you have a problem with that, don't ask to be on the show.

Yeah.

And furthermore, no one thinks it's garbage until I show up. Like, they don't see it in their own business. And so we're getting better with, like, being very upfront and be like, hey, like, when we come, we're gonna talk about these things and it's gonna be really bad. And you're gonna look. You're gonna quote, unquote, look bad in front of camera. If that's your objective is to look in front of a camera, don't apply.

Yeah.

Like, if you want the solid truth of what your business is going through and you're okay with that being shown publicly, and then hopefully in a year, we can come back and you've turned things around. Awesome. But we are learning that some people apply because they think they're gonna get, like, free promotion and, like, share with their family. Like, that's not the reason we do the show. And if that's your goal, it's not gonna be a good show either, because you're not gonna share all your information with us. So we're getting better. But it's. I understand. It's not fund ask me to come, like, expose, quote, unquote, or, like, show everything that's going bad in the business, but that's why it's. The business is doing poorly. Right. And so if your goal is, like, I want my business to do better. You'll apply if you want to look good in front of everyone. Probably not the right show for you. And so we're getting better, like, making that clear as well as now. Before the video actually goes live, I'm going to send a video to the owners and, like, hey, this is how we're framing the episode, and this is why. And these are things we think you'd work on, and we're gonna build the show up in a certain way. Because this is what I was thinking going into the show, and sometimes I'm wrong and sometimes I'm right. So, for example, with Simply Lawn Care, I'm wrong in going in there thinking that, like, this is more of a drama between the owners, when in reality, the owners have a really good relationship. They've already gone through their drama a couple years ago and figured things out, and the issue is now completely different. It is like they struggle with creating roles and to find, you know, what. What each person should be doing, but there's not, like, drama between them. And so what we did is we built the episode like I thought it was going to be and then changed it. Gotcha. And so, like, we built it up, the intro and everything is like, oh, man, there's gonna be this drama and there's. And then we did what I, as I was learning in the episode that that was not the case. That's how we show it. So it's jarring, though, for an owner to hop on there and I'm showing what I was thinking in my brain, which is like, there's going to be this dynamic between owners and all this stuff. So we're just getting better, and hopefully we'll make it a little bit improved every time.

Nice. That's exciting. I'm pumped for those to come out.

They're really good.

Yeah.

The second one is amazing.

Second one is what's up next week. What's the business?

St. Laurent Property Maintenance. It's. They're bigger. So, like, there's just so much more storylines where there's bigger companies. You'll talk to, like, the employee that they have dynamics and, like, they say stuff about the owner and they give the true financials of the business. Yeah, they're just. And this person, the owner, was just a great person. I ended up having. I'm paying for the whole team to come out or four of them to come out to conference.

The summit.

Nice. Yeah. So they're just awesome people and. But then, like, there's, like, fundamental issues with the business. And, like, the employees are, like, super vulnerable and share about that, and then the owner's super vulnerable, and then, like, we separated them and had talks with both. So it's going to be a really good episode.

Yeah. Yeah. I think in order for it to make a good episode, and if you were a business owner that wanted to be on it, you have to approach it from. From a framework of vulnerability and ultimately humility. Right. Because if you aren't humble about the numbers or where the business is actually at, like, you can be vulnerable, but there's the extra step of being humble about it and saying, hey, like, I need you to tell me what I'm doing wrong, and it's okay if I'm doing things wrong because I need to know how to do things right.

Yeah. And we've had. We've had people already on the show that have responded back and not been happy with how he made the video. And the bottom line was because during. When we were in person, they didn't share everything with us.

Right.

And so I'm like, if I look at your balance sheet, I look at your profit, I'm going to find what the problem is, and I'm going to say it. And if you have a problem with that, it probably means you have more to do with how you are being portrayed than fixing the business. And that might be why your business is struggling. And so we're going to get better. And I think just having more episodes will filter out people that are thinking this is going to be, like, a promotion for their business or, like, fun. Yeah, no, you're getting free my time for free in order to be able to educate the community. That is what the exchange of value is. Right. I get views, you get free business advice, and the audience gets education for free.

Yeah.

All of us. Well, I have to pay for the views, but, like, that is the exchange of value, and making that really clear to people is important.

Yeah. Good. Well, speaking of business coaching, you have your business coach now, so I wanted to ask you. I know we're not saying who it is, obviously, publicly, but how's that going? How many sessions have you had? Meetings or whatever you want to call them?

Today's my third one.

Cool.

And so it's going good. The first couple were really more focused on me and as a.

As a person.

Yeah. Like, leadership, mostly.

Okay.

How to improve in certain areas. And, like, so I just kind of like how I have all my notes I want to go over. And so usually the best format I've found so far is I just come to the meeting with, like, things I'm struggling with or things I'm working on, like, things I know I'm not doing well at and I can improve at or something that went bad in the business. And then, like, we just break it all apart. And it ultimately always comes back to, like, it's my fault. Yeah, Right. But it's like, well, what could I have done differently? And a lot of times it's funny because, like, we talk about. I talk about him. He's like. He almost always can identify what the problem is, but then it's like, making meaningful, actionable changes is the part that he's good at operationalizing for me. So, yeah, so far, it's been mostly working on me. Insecurities, lots of the stress stuff that I have to deal with. And making that it's a conscious decision slash. You can make very operational changes in the business to affect that. And so he's very tactical. And it's funny. Cause he'll take a few lines of what I'm going through and then he'll say something and it's like, dude, that's exactly what's happening. And he's not even in my business. So. So it's very cool, especially with the franchisees. Like, that dynamic I really unloaded on him in terms of. There's this weird dynamic I've talked about with the franchisees, and it's something I struggle with, is that they're my customer, but they're my partner. And so I care about them. I want them to succeed, and I'm in with them for the long term. They're my customer, and they will complain.

But we're in this weird relationship where we both need each other, but they can complain and I can't complain. Playing on them. Like, so, yeah. Talking through that sort of thing. And like, my frustrations. And he had a really good analogy. I really, really helped me. Basically, it was like, if you. If a dog is raised inside of a kennel or inside of, like, a cage, that's like, they're just happy when someone comes and gives them a little bone. Like, they're thrilled. And if someone is raised outside of a kettle, a dog, and raised outside of a kennel, and then put inside the kennel, now they're, like, depressed. And so what that means is, like, someone that joins the franchise, what the current boundaries of the systems are, is. Is totally new to them. And, like, this is awesome. This is great. I'm getting new customers. I'm growing my business. But for someone who's been in the system for a long time and they see more constraints being added. It is, it is reducing their, their degrees of freedom. And he defines freedom as freedom of movement. Do whatever you want. So by by enclosing that, you can actually give someone, make their business more successful and give them more money, but they'll still act in a different way because you're reducing their degree of freedom. And so even though it's better for the dog to be in the kennel because you are transporting, you're making, doing an improvement to their house or whatever, it's like by giving it that level of, that degree of freedom reduction there is, even if you're giving them more money, they will choose freedom over money. They will choose freedom over like for example, let's just say that the lockdowns for Covid were good thing. They weren't, but let's just assume they were. No one wanted them because it reduced our degree of freedom. Even if it would have produced it contained the spread. Right. And so even though it was better for us by reducing freedom, typically like the immediate inclination is like against. And so, and some of it, we were talking about that and he's like, one thing you could do is like, just make sure like people opt into things instead of like making it mandated. Even if you think it's good for them and you, you have all the data and you can prove it a hundred times backwards. It's like, don't force it on them because they will act out against it. Just because even if it's better for them, they'll act against it. And so that was like a good unlock for me. And that's something we've already started doing.

Nice. Yeah, I think the opposite of it. It's funny, I had a conversation with a franchisee who I won't name, but they said I was a great employee, like an all star employee. But they're like, but I don't know if I'm a great or like an all star business owner. I think the opposite of what you're saying is true, that some people, if they, if they don't experience that freedom when they have it, they have to figure out what freedom is and how to constrain themselves, how to create a kennel around themselves. So that way they aren't just going in a hundred different directions. And I think we see that when we help a lot of small business owners is they have this ultimate freedom and that's what creates, you know, an octopus. Like the analogy that you said that I Love is that, you know, a lot of small business owners become an octopus. They have eight legs and everything comes back to them at the head. And they don't know how to constrain themselves in an environment of freedom where, where they are the owner. And at the end of the day, they could say yes or no to anything they wanted.

But see, that's the difference is they still have the highest level of freedom if they choose to build the kennel around themselves. Right. I put them in the kennel because there's certain systems and a framework and things that must happen a certain way. It is now my fault. So their degree of freedom is less because I put them in the kennel versus them choosing to do so. And there are successful business owners that do that. And like, hey, these are the systems. I can do whatever I want, but I am going to do these things because it's right for the business. That's ultimate still the, like, the highest level of freedom. And that's what we've always tried to, like, air on that side for the franchisees. And so. But like, I take, I take it really personally and stressful. When they complain, they react out against the freedom.

Right.

Because I'm like, this is the best thing for your business. I have all the math to prove it to, but it doesn't matter. And like, pushing against, like, the logical side versus, like, hey, this is a freedom thing. And what I need to do is, hey, here's a kennel here, here's. It's an option for you. If you want to get in it, you can, you can opt into this. Here's all the data as to why it's better. And then people in the kennel are like, hey, it's better over here. You should definitely come over and try it. So even like this morning, we saw with a new system that we were implementing, someone opting in and choosing to do it, and on the other, inside the kennel being like, this is so much better. And so that's the way we need to move. And so we already kind of operationalized that before the talk.

But.

But like, that in my mind was like, so crystal clear for, like, decision making for the franchisees going forward.

Yeah, I think a very tangible example too is when you rolled out P4P for the first time for our team, we had some that felt like it was. It was a constraining kennel and others felt like it was a freedom that they're like, oh, so I decide how much I make here. But then we had other guys who were paid a high hourly wage, but they weren't high performers. And so they were like, no, this isn't fair. This isn't freedom. Like, I need a guaranteed wage. I need to be at X an hour. And they felt like it was more constraining. So I think it's also, like, mindset, like how you look at the kennel, Right. And I think that's why you have the Franchise Advisory Council, which is, hey, step outside of the kennel. Just using that analogy. Let's look at this big picture as a team and then tell me your thoughts and opinions. Right?

Yeah. And I think the difference between, like, an employee and we've talked about this before is like, the employee can just leave and go get another job, Right? We have a part. And this is what I'm talking about with him a lot is like, I have this partnership that I care deeply about them. It's like a marriage. It's like if you really hated someone as much as, like, someone you know. You know, you get in arguments with someone, you typically, if you're a friend, like, I'm not talking to you for a few weeks.

All right, I'm not.

But if you're married to someone, like, you're locked in, you have to figure it out. You must. You both have a mutual relationship that is dependent on each other, and that's how it is with the franchisees. So if we disagree as we will, we must figure it out in the most expeditious way possible to get back aligned. Because, like, I can't just bail on them and they can't just bail on me. It's like, mutually. We are dependent on each other. So just a very different business relationship. And because I care so much about the partnership side, when the customer side, like, pokes its little head up, just like, it crushes me sometimes. So I'm working on it. I'm getting better.

Yeah. I wrote this down because I wanted to ask. And I wrote it exactly how I wanted to ask, which is with your new coach, have you had any whoa moments?

Yeah, a few things. Yeah.

Not that you have to share. It's interesting when those moments happen, right? When you go like, whoa.

Yeah. So I'll talk about this at conference. Because I took what he talked about and I built a whole framework around it, like management. So one of the things that, like, a woe for me was, okay, so I'll try to do this off the top of my head. So basically, I, as the owner, get agitated, stressed out when there's a complaint, when There's a bug when there's a fire, when there's a customer callback, when there's a complaint, when there's a yellow slip. Right. That's just because I care about the customer. Ultimately, I'm a good person and I care.

Yeah.

Therefore, I get stressed out because of that. It's not like, oh, who cares about them? Like, that's not my mentality. It is. I care. And for most owners, I think watching this, like, that's how you feel when you get a call back or yell. So that's first step. Next step is.

Well, you as a manager, hear about a complaint, you care about me, you're gonna protect me from that complaint because you don't want me to feel stressed and you want me to, like, live my life and keep operating inside the business and, you know, like, I need to be focusing on other things, etc. I find out about that, whether through you or just organically, like Facebook or whatever. So what do I do as the owner? This is like stage three. It's like, I step in and do it. Therefore, kind of handicapping you as a manager of doing your job and, like, taking care of the problem. But you don't tell me. If you hear about it, you won't tell me because you don't want me to feel whatever and get stressed out. But then if you, let's say you don't hear about it and I do, I will just step in and do it. So now there's like this weird dynamic, and that is you don't want to tell me because it's negatively reinforcing. Because if you tell me negative information, I will be stressed out. I will step in and take over, et cetera. And then on the flip side, you not telling me that information, I now don't trust you as a source of data that I, as an owner, can depend on what they aren't doing their job, they're not responding to these complaints, they're not taking care of these bugs, like, that sort of thing. And so it just. It really comes back to communication. I need to tell you, like, hey, I understand that I get frustrated and I get stressed out when I hear complaints and I hear about bugs and people being mad at me. But, like, I need that information. Here's what should and should not be shared with me. And if you don't share this with me, that's fine. Oh, I'll just expect you to be taking care of it. I will not step back in. I will not take it away from you. I Will let you deal with that problem and I will not take it off your plate. On the flip side, the manager should be corresponding back to the owner being like, hey, I'm not sharing this information. Because every time I do, you freak out and you come in and you do my job. And that's not how it should be. You stay over there, let me do my job. You hired me to do this job. So it's just better communication. I'm trying to put it a five step framework. What happens if it goes wrong? You kind of end up in this vicious loop of like, you don't trust me, therefore you don't share information because I'm gonna come in and step in and do your job. You feel handicapped as a manager cause the owner keeps doing what they hired you to do. And then I don't trust you cause you don't give me negative information. This is a vicious cycle. And so yeah, that was one thing that like I was like, because like I'm that way. And I also realize, like it could potentially lead to less information being passed to me because I'm negatively reinforcing, forcing someone by punishing them with my behavior based upon their feedback.

Yeah, that makes sense. And in the vicious loop, I feel like we've seen that in some businesses where it's just like it's not a give and take relationship. Like when you instate someone into a new position, like you let them be in that position. Right. So interesting. That's a good whoa moment. I think slightly related to that. We'll switch topics. Here is the all in podcast. Had their summit, so they're fantastic. Check out the videos if you haven't. But they had Jimmy Dahl Donaldson on Mr.

Beast. I did listen to that one.

Awesome listen. Nothing like crazy, you know, amazing was said, but just cool to see further how his mind works, how he approaches businesses, how like Feastables is going to be like bigger than his YouTube channel, in terms of revenue, which is crazy. But they had a short Q and A session at the end. I don't know if you listened to that portion. They only asked him like two questions. Someone asked Mr. Beast, they said, how do you stay so consistent with execution and having a spot on product every time? And his answer was three simple words. He obviously elaborates, but he said, train great people. And one thing he said that really stood out to me and I wanted to ask you about was he said, 95% of the time, if you ask my top people a question, they will have the same answer as me. And it Got me thinking, you know, about you, Chuck. I like to hopefully put myself in that group, is that we are very much on the same page operationally. So how do you feel like Jimmy Donaldson, Mr. Beast did that? How do you feel like you've done that with our leadership team? Like. Like how do you create cohesiveness so phenomenally that 95% of the time you and your top team are on the same page?

Yeah. Like two things. First, for context, for Jimmy, for example, I think he elaborated either on that question or earlier, is that even though it seems that from. Away from the outside, like operationally they're on the same page and everything, they've messed up a bunch of stuff.

Yeah.

Like Mr. Beast is getting. Or Mr. Beast or Beast Burger is getting sued. He's getting sued and he's closing it down. Finger on the app. The mobile app they created created all sorts of issues and they closed that down. And they're actually now like really getting rid of a lot of the other channels and focusing just on the main channel. So not say those things are failures. Right. It's just like, even with great communication and great people, if you're trying to grow a business, there's constantly, like, you have to shed off the old skin. And so that's painful. Like shedding growth, there's growing pains, etc. Even if you look like you're operationally looking good. That's the first caveat. Second thing is, I would say it's usually better if you have great people to lean in the direction of like, trust and let them run with it and not meddle inside their business. And the hard part is when people complain about something that they are doing, which they inevitably will do, is you give them more responsibility to not jump in. Cause it handicaps. Then it's bad for whoever is responding because you have incomplete data if I jump in. And so I think if you have great people, like, if this is true, then it should be like, when there's problems and you're made aware of them and it has to do with that manager, you need to not do anything because a great person will figure it out. And by me stepping in and trying to solve their problems, number one, I hire them to do that. And secondly, they will never grow or ever take risks inside their position because they just know if they take risk and they mess up, I will step in and take it back. So that would be like my two cents.

Yeah. Yeah. I just thought it was interesting because he basically said he has like 12 direct reports now. I don't know if that is like a fully accurate number for just an off the cuff number he spit out. But I thought it was just interesting that, you know, like you're trying to develop the team around you and the layers that we have at Command center and even, and even Command center as a whole, you know, now has departmental heads and things of that nature. And I was just thinking, you know, training great people, it's like, well, is there an asterisk there that you have to first find great people? Like, would you say that you have to find great people and then see the role that they fit in or can you make them a great person?

Great is completely subjective. Sorry, I'm gonna be this way more and more. Cause my coach is very much into terms.

No, you're fine. No, yeah. And I'm using it very haphazardly when I say great.

Yeah, like great person would be in this context, someone that inside of our culture will win based upon the rules that we subscribe to. And so I think a great person in our culture, we might, it might not work out for us in our, the rules of our game, but in another company that is different, they do great and they are great for them. So that's my first asterisk. The second thing is I don't, I'm not so much as like finding great people as like recognizing raw talent or where they can become great. So for example, like yesterday there was someone working at the gym and I recognized something. I'm like, okay, there's more than what they, they are there inside of them. And I say, hey, like, hey, like what, what do you, what's your plans for the future? Do you like managing people? Like, I just want to be on the same page. Cause I recognize like that's a talent. It can be polished. It's not, it's. It's raw right now, but it can be polished, it can be cut and it will work. Like the, the doctrine of how they operate works within the rules of our game. And all the other stuff can be polished. So for example, like on the internal mic minutes, which is not for the franchisee, it's for our internal team, command center franchise, our gm, et cetera. I was talking about kind of like, hey, here are the rules of the game and what I believe makes a great manager, leader, et cetera in this game, right. If you go to a different business, there's going to be a different game to play. And so one of the things I mentioned in there is like unemotional data transfer to myself. Like, I will not have a direct report that is going to conflate data because I will make a decision based upon that trust that I have with them that they're gonna give me good data. So the example I used in that is like, if someone comes to me cause they're like responsible for staffing and they're like, man, we have hundreds of hours of overtime, okay, My immediate inclination of like, yes, approved, hire a bunch of people. But if I go and look at the data and there was 30 overtime hours last pay period, I'm like, okay, I can no longer trust any information given by this person because they are going to take emotion, which is they're overworked, which I get. But you, if you're going to rise the position of like working directly with me, I can't take that because I'm going to react quickly based upon the data given. And so, like, that's just like one thing that is going to. I'm going to make that as a mark. Like, okay, that person's like not disqualifying themselves, but they are definitely like, that has to be refined or changed in order to ever work more closely with me. Because I'm not just going to like take someone's data and then go double check it, right? I am going to have trust built up to the point where when they give me data, I know it's true. And I can then make a reaction and make a decision with them in the moment and move quickly instead of like double checking everything, like, why do I need them, right? So.

That was one thing. And we talked about other stuff like creating slack and picking up slack. So that's another thing I look for in a manager. And someone that I want to work closer with is like, do they create slack for their peers and for their manager? And then the second thing is like, when slack is created by their coworkers, do they pick it up? Those are like the tell tall signs for me if I want to work with someone closer. So if someone like walks out because the time gets hard, they have a bad customer communication. Someone screams at them on the phone. A customer, you know, is mad at them over a broken sprinkler and they just like back out. That tells me they can't pick up slack, right? It also tells me that when everything's going bad and everyone's behind, especially spring rush.

They'Re the type of person that picks up everyone's slack, works overtime, grinds and hustles and just locks in. It's also the person I want to work with. Again, these are the rules of the game that I've created and that might not work in other.

Cultures and businesses and it might not be what's considered deemed successful or great in those cultures. For this I wanted to make it clear this is what makes it great and I want to work with. And you'll probably get promoted inside the organization.

Yeah, that's what I was going to say. You kind of brought it home there to get back to the Mr. Beast quote, train great people. So for the business owners listening, define what grade is, define what the rules of the game are, and then communicate that to your team. And if they're willing to accept that and play by those rules, fantastic. You'll have your next general manager, your next estimator, your next whatever. But if they don't want to abide by the rules or that definition of greatness, then hey, maybe they stick around for a while and then you find someone else.

And it gives my mid level managers like yourself, Liz, Chuck, etc. Like the rules of engagement in terms of what to say to people when they say, I want to get ahead, I want more money, I want more responsibility, I want more leadership. Okay, well, let's go over the rules of the game. And like you backed out of this issue with a customer when it got hot. You know, you asked for a break in the middle of, you know, spring rush when everyone you knew, the entire team was drowning in work and you asked for a week off. Like, these are the type of things that we're going to look at. So like here are the rules. If you don't want to play by them, that's fine. You might be successful in another, another game, but in this game, these are the rules and it empowers you all to be able to be like, hey, like if someone wants more, here's how you play the game.

Yeah, it's refreshing to like as your employee that I've had a lot of other jobs where the rules were never defined or it was. You know, the guys who get drinks with the boss or the person who's just been there the longest, they're not even high producer, they're not even good with customers, but they've been there the longest. So they get the best hours, the best position, the most breaks, whatever. It's frustrating when you don't know the rules.

Well, like with P4P, we fix that more like for the frontline team. And that is like, you get paid more the harder you work. It's, it's, it's A meritocracy. But when it comes to leadership, typically those things are not like P for P. It is a matter of like what? How do I get ahead? How do I get promoted? How do I manage other people? Like I don't have P for P on my managers. Cause like their job is to make sure that their frontline team members can make more P for P. That is their job. So I like their, their day is like handling drama and internal conflicts and, and personnel issues and stuff like that. And so like who do I want to be in that role? Like, here's the rules. And that's why I made that video the other day for internal mic minutes is like, hey, I just want to get really clear if you want to get ahead. This is the rules of engagement.

Yeah, I liked it. Now Liz and I were talking this morning and I don't know if this is something she was going to talk about with the command center team, but I'm going to bring it up. But she was saying that a good analogy for your relationship with you and a business perspective is that you have invited her to the table to make those decisions. To be a direct report and I, we further explored the idea of being invited to the executive table, if you will. And I said I think an invitation to your table, this is my definition for your rules. An invitation to your table is a vote of self confidence in your self awareness as a leader. Would you agree with that?

I think yes. An invitation. Yes, yes.

That's what the invitation means. Like you, you are self confident that Liz has self awareness to be a great leader.

Oh, I am confident, not self confident or.

Sorry, yeah, I doubled up. You are confident in her self awareness as a leader?

Oh yeah, 100%.

So that is what extends the invite.

Self awareness is required to pick up slack and not create slack. Self awareness is required to, to be able to cut out emotion and give data. It's like the rules of engagement require a lot of self awareness in just in general.

Yeah. So that was just kind of my definition of like the reason someone would get invited to the executive table to a management position is they you have confidence in their self awareness as a leader.

And ultimately like I think owners should make it more clear how to win the game because like the reason you're in business, the best thing about it is you get to choose who you work with. That is the best thing. Like money is okay after five or ten years in business. Like there's a lot of painful parts of business ownership. The best part is you get to choose who you work with.

Yeah.

And so why not make it really clear as to who that person is and what their type of, what their personality traits are in business. And so. Yeah. And if someone ever came like, I want to be a manager, it's like, well, X, Y and Z not correct. Not aligned with what we're trying to. The rules of the game. Right. So I just want to make it clear.

Yeah. And I think it's a tough spot to be when maybe someone doesn't have great self awareness. Right. And whether that, that's upbringing or their history or this, that or the other. Like, I'm not blaming anyone for their lack of self awareness. However, one of your managers had a tough conversation with the frontline employee recently and was basically like, hey, do you see how everyone acts a certain way at Augusta? You don't act like that. And I think it was an eye opening moment for that frontline employee. Now, I don't know if they were frustrated or hurt by it. The way it was presented was very tactful. So kudos to that general manager. But it's a hard conversation when you're like, okay, I have an employee, I have someone that, that doesn't have that self awareness. How can I express it to them? And I think the way he approached it was great. Which is, hey, look at how this person acts at Augusta. Look at how this person operates. Look at how they stay late, look at how they volunteer when. When the days get long, whatever. And then you just don't act like that. Have you noticed it? And making it more tangible than allow someone to have that growth or create more self awareness.

Yeah, sorry. Yeah, I gotta email Jack real quick.

Oh, you're good. We can be done.

Oh, it's 9:51.

Yeah, we're good.

Looking at your thing, it says 10 o'. Clock.

Oh, dude. Sorry. Yeah, it's 10 minutes fast.

You should leave that.

My bad, my bad. 951. Yeah, no, we'll get you there. To. Joel, I was watching your watch. Oh, sorry. 10 minutes fast. Dude, I gotta be early. My watch is 10 minutes fast. You got to be early. You know, you don't do that. You don't have fast watch.

Yeah, because then I have to do math all day long. Actually, I'm ten minutes ahead.

Yeah, my truck and my watch are both 10 minutes ahead.

I know, but then you have to, you know it. See, that only works if you don't know it's ahead.

Well, sorry, sorry. I'm an overachiever. I mean, we could talk about this other topic or we could just go to non financial advice, talk about other topics. All right, the other topic is. Now this, is this developed in like late July, but it's kind of coming to a head. There's more information that's come out publicly. Cardone Capital has been caught up in a class action lawsuit. So I can give you kind of the brief if anyone listening does not know, and I know you're pretty aware of it, but basically, what is this all about? This from an article by Biggerpockets and they said that Cardone included legal disclaimers on his website. The suit argues that these legal claims were insufficient.

This article is like two weeks old.

This Bigger Pockets article. Yeah, yeah, yeah. It's like one of the most recent ones. Yeah. Have you already read it?

Yeah.

Okay. Yeah. So basically Cardone is saying that we had enough legal disclaimers on our website that the suit is arguing that these legal disclaimers were not sufficient and they exaggerated the nature of his claims. For example, Grant Cardone said you're going to walk away with 15% annualized returns. He also said, and if I'm in that deal for 10 years, I'm going to earn 150%. You can tell the SEC that's what I said it would be. He then says, they call me Uncle G. Some people call me Nostradamus because I'm predicting the future. Dude, this is what's going to happen. So, yeah, so he is getting sued by a Louis pino who invested $5,000 into Cardone Capital after attending one of his breakthrough wealth summits. The case was initially dismissed in 2021 and it now has been reinstated as of last year. So, yeah, what are your thoughts on this?

Yeah, like I'm almost keeping an eye on it because, you know, down the road it's probably a play that we will use in terms of raising capital from outside investors. And so if you're not going to go in the public market where things have to go through a certain filter and there's much more regulation, if you're going to go, you're still going to be held to the SEC Security and Exchange Commission. So anytime you have a security or an exchange of something like a stock or a bond or equity or a, even a piece of a profit share, like if you actually get that inside of the articles and corporations, etcetera, there's a lot more regulation. And so despite having disclaimers on your website, if you say stupid stuff, it doesn't protect you. And this is why we Stripped out a lot of that stuff out of the franchise disclosure document because, like, look, I'm not going to rely on this garbled data that I would never talk about if I can't talk about it publicly. And so for him, what he should be doing is looking through his legal documents and stating all of that stuff. And if he can't say that and sell, then either, A, he shouldn't be selling, or B, he needs to revisit what the legal definitions are being stated as. And that is, like, we can pause your distributions. They are not guaranteed. We can sell the property whenever we want. These returns are no indication of future performance. That should all be stated in the upfront. Right. And so that's why, like, even with Augusta, like, people hardly ever hear me talk about it because, like, there's a lot more legal stuff of what I can and cannot say and, like, promises of revenue and things like that. It's like, look, talk to the franchisees. Make a good decision. Look at all their legal documents. That's what I would tell you if I was trying to sell you on it.

Yep.

And if you do all of that and you don't want it, great. I didn't try to sell you an upfront. Then you find out something later. And I think that's just the better way to do it is, like, if you're gonna sell, sell with all the legal jargon. Because if you can sell with the legal jargon, they're not gonna be surprised one day when they read the legal jargon. It's just all up front. And so I love Cardone for a lot of, like, the elements that he's taught me over the years. But, like, he sells. What happened is he went from a sales, like, mindset, background, background, everything, to where, like, you pressure people, you sell them. You go through, like, all these steps of selling. And then he stepped into something that's regulated. Yep, that was his problem. And so he could sell cars all day long. But it's not regulated as to whether or not you tell someone you're going to give them a warranty or sell their garbage. It's not regulated versus it is very regulated. If you tell someone promise of earnings and you can't deliver them. And what happened during COVID as he paused all his distributions? No. Investors got money, and they handled certain elements I thought pretty well with communication. But you just. You're. You can't. Yeah. You can't be flying on a private jet telling your investors you're going out of going bankrupt, and then Pausing their distribution. They're going to freak out.

Yeah, yeah. So the bottom line of this article, as they said, it's a prime example of a real estate investor who rose to fame by showing off good fortune on social media. You know, snake oil salesman. Not saying he is, but that's, that's a widely used term. His personal wealth inspired confidence in so many novice investors. He was able to move on from selling online courses to pooling money, securing large loans for more rental properties. And his future success hangs in the balance due to this lawsuit against him and the financial pressures he faces.

He'll be fine.

Yeah, I think he'll be all right. But how does, how does this end though? Like, does it, is it a payout to said to said?

It's a little. They've already buttoned down their marketing account capital. It's much better. They go after much more, you know, bigger pocketed people. That's who it. You should go after as accredited investors. As soon as you go to unaccredited investors like they're investing their last dollar, you react a lot differently with how that dollar is being spent.

Yeah.

Someone who's an accredited investor, it's like, okay, yeah, your positive distributions totally understand we're going through a crisis, health crisis, like, that's fine. Whereas someone's like, depending on that $50 to come to them every single month is going to act very differently. And so.

I learned that. And then what was the question you said, though, at the end?

Oh, how's it, how's it play out?

It will not affect them. They'll be fine as long as the real estate market keeps going up.

Oh, yeah, yeah.

So if the market ever corrected by even 15 or 20% in his markets that he's in, it would be catastrophic because he's so leveraged.

And he wouldn't be able to raise any funds because now you're underwater on properties and he's gonna have to eventually renew these debts. Right. Commercial. Commercial money isn't 30, 40 year terms. We're talking about 5 and 10 year terms. We have a balloon. Well, what you bought five years ago at two and a half percent on commercial debt is now going to be 7.58% debt. You will not be able to make the financial sense of that. So he'll have to start liquidating some properties. In my opinion, if the interest rates continue to stay high, which it sounds like they're going to, he's probably have to start liquidating, which will actually be good for the investors because the values are very High. So he'll be able to, like I predict in the next year he'll start pivoting that direction. Like, we sold this property and it doubled in price. And it's true.

Yeah.

But what's going to happen eventually, in my opinion, and what could potentially happen, I should say, is if you go into a market correction where you can't sell, values have come down and he can't refinance the debt because the values have come down so much and he's. Or he's refinanced them all and they're all still leveraged really high at these values. And then the values come down. And now you tell your investors, oh, we all need to put more money in because we have to pay this down. The bank is coming back at it. That gets really, really interesting.

Yeah.

And that's why I think leverage in a partner relationship just always adds complication to things.

Yeah.

Because it just. It's a measure of risk.

Yeah.

Right.

Yeah, it's interesting. I thought about getting in on Cardone Capital back in the day. I know I asked you about it years ago. I was like, seems like interesting way to get into real estate. I don't know, a ton. It could be education, educational, you know, obviously, hindsight's 20 20. Kind of glad I didn't with all this, but, yeah, I agree with you. He'll make it out in some way, shape or form. He just might lose, you know, some.

Followers and, like, the math work makes sense. Like, accredited investors come in and they spend quite a bit of money and they put like a million dollars in and they don't. They don't need the million dollars. They don't care about the million dollars, and they're just happy to get 3, 4, 5%. And then when there's a liquidation, they do get a gig chunk. They throw it out of their mind. They didn't do a single thing for it. Right. So I bought a little bit in way back in the day because I just want to learn his whole process and investor relationships. Like, going through that event in Covid, I'm always like, so careful to say on the video because YouTube. But anyways, like, going through Covid, like, how they handled it was like, I'm just taking notes, like, what this is. I thought that they did good at. This is what I thought they did poorly at. The same thing with Anytime Fitness. Like, that's why I became a franchisee there. Like, I wanted to learn what they did good at, what they did bad at, what I would have changed what they did really really well. And then just you pick and choose and what you can, you know, do down the road and figure things out.

Good. Not financial advice. Wrap it up.

My non financial advice relates to the United Auto Workers.

And then how anytime politicians get involved you should probably run away. Biden shows up with the UAWS and tell everyone they're awesome and everything on the Meanwhile the price.