Mike Minutes Mastermind 05/31/2024

And we're live. Hey, everyone. Hope you're doing amazing. Let's get started.

I'm gonna start off with some announcements.

All right.

Cool. All right. One of the things we got, I got quite a bit of feedback on during the.

Reviews or the surveys that Nick had sent out last month was about the first month or two after coming to training, being really overwhelmed with all the new stuff. So I'll show you this real quick. This will.

Boom, boom. So one thing we're doing is we're going to make sure that after training, there's actually scheduled six weeks of onboarding with Nick as the OSM scheduled with each cohort. So basically, whoever's in that class would run six weekly zoom calls with their cohort, and in this case, owner, success manager, maybe Nick for the first six weeks after training. So that's kind of cool. It'll be helpful. And one of the things that we got quite a bit of feedback on and about during those surveys.

Sick. I sent the wrong link out on text. Seriously, Michael. Sorry, everyone. I just realized I sent yesterday's link out. Ah, sick. Ah, give me a second.

Just resend this. Sorry. When I'm in YouTube, I have to copy from the day prior to get the description of the form link. And so I accidentally sent that link.

Send text message. I'm gonna resend this.

Sec here. Refresh. Sorry, Copilot.

Contacts. Owners.

Do not include those people. Very good. All right, sorry guys. Wanna give me one second here? I'm gonna send this message out again with a new link. Sorry. If you watched yesterday's. Again.

Let me put in the Facebook group. Sorry, everyone. May 31, 2024.

All right. And then I will send that text message out.

Here is today's.

Ah. All right, sorry.

Okay. Hey, so that was the first thing. Second thing, the FAC did make a decision on the thing I meant I was talking about yesterday. So again, thank you to all of them. The past three days, they've been really deliberating, lots of back and forth, thinking about everything from different angles. And so it's not really gonna affect most people, but it'll affect people down the road. And so basically what the decision was is to. In the past, we allowed. And you want to try to join Augusta and you didn't have to close your other business down. You could keep other competing businesses open. It was not a big deal. We are going to change that for new owners going forward. So if you've already signed and you have like another business, that's fine. I think there's Only one or two that have an adjacent business in lawn care, landscaping or Christmas lights. Going forward, new owners will not be able to do that. And if they have an existing business, they'll have to convert it within two years. So. So most of the time people convert it right away. But we want to put that restriction on there to protect current owners because what could potentially happen. Again, this has not happened at all. But what can potentially happen as we get more territories is someone wants to join. They have an existing business inside of your territory, so they get an adjacent territory, but then keep operating as their other business inside of your territory. We don't want to have that because it can be contention between ownership. So within those two years, they have to merge over to Augusta. And once they do that, then every new lead that comes inside your territory is obviously still going to go to you, but it prevents someone from being inside of Augusta Nation in an adjacent territory and opening up a different brand inside of your territory and indirectly competing with you. This has not happened. This has not been a concern. But we're trying to get ahead of this as we do have more and more people joining that are around and inside of existing territories. So the goal here is really just prevent just, you know, any sort of disunity. And we've seen massive collaboration between owners that are close to each other and huge synergies when new locations start around existing owners because there's already brand awareness. So you get a huge bump in terms of new leads. What we don't want to happen is where there's contention between owners because of this problem, as an existing owner just joins Augusta and operates their existing business inside of someone's territory and then starts an adjacent one or even an hour or two away, you know, but because they're an owner inside Augustination, you're kind of indirectly competing with. We don't want to. We want to prevent that. So we know that's going to be a little bit more difficult on our end to sell locations and it's going to hurt a little bit in terms of growth. But the number one priority is protecting existing owners from that happening and preventing that from ever being a source of contention between owners. So I appreciate the FAC is a very well debated topic for many, many, many different angles, different sizes of business, where people are at, et cetera. This will also really increase the value of the territories. And this is something that actually I experienced with Anytime Fitness most recently is from. For our territory, Washington State, for example, you cannot get in Anytime Fitness territory from where I'M at like the Canadian border, about two and a half hour drive. You would have to go to get a territory and get an Anytime Fitness. What that means is in order to join Anytime Fitness, you have to buy an existing location. Well, guess what that does to all of my value, like our valuations that have the territories all purchased up through the roof. So I've had people offer me lots of money in the past 12, 24 months because they cannot join Anytime Fitness without buying an existing location. And so my opinion is as we sell more locations, especially around like 3 to 500 marker and it's harder for people to join and we make these more exclusive, the value of everyone's business will go up dramatically because a lot of people, the only way they'll be able to join Augusta down the road if they have an existing business is to actually buy out an existing Augusta. If they're like so locked in and they have to take that one spot. Most of the time what happens is when people join Augusta from an existing business, they have way too wide of a service area they're serving sitting like 20 mile radiuses. So usually what can happen is they're like, okay, I'm going to join, there's another territory. I'm going to give up 15 or 20% of my customers. No problem, problem. And so it hasn't been an issue yet. And there's really good collaboration between owners. We always make sure we put the owners in touch with each other beforehand, etc. But going forward, we do want to have really good, clear guidelines around this so that as we get more locations, we don't have indirect competition and just any sort of perverse incentives to create disunity, that's really the goal here. And so I do believe in like 10 to 15 years when there's, it's difficult to actually get a territory in San Augusta if we have this type of lockdown where people can't compete indirectly and just start a different brand and then go inside someone else's territory. And if we remove that loophole, if we do that, it'll increase all of our valuations dramatically, as I've seen with Anytime Fitness. So that's really the goal. Especially in 10, 15 years, a lot of current owners will be looking to either sell or move on. If they maybe have three, four, five locations, they've created a chain around a certain city, they kind of lock that, that area down. The value of those will continue dramatically higher. If there's a huge pent up of demand of people that want to Join, but they can't because you have the territories. So we want to prevent someone from being like, oh yeah, I'll go to territory like five hours away and then I'll keep my existing brand and just compete with someone else in their market and use the done for you ads and all the systems that we talk about to basically directly compete with you. We just want to prevent that. It has not happened. There's not been these sort of problems, but we, we just want to get ahead of it and at all costs prevent any sort of owner to owner friction whatsoever. So appreciate all the fac, the leadership team collaborating on this again from, from our perspective as a franchisor, it is going to slow down our growth a little bit because it's harder to get a bigger location to join. It'll take a longer process for them to actually move outside of a territory, get new leads, etc. But we always want to stay focused. And this ultimate came down to the FAC is even though we know we might lose some really great operators that would join Augusta, we want to protect always the existing owners first. And I believe that in few years the existing owners will become those larger operators in terms of size and they'll be more concentrated by this as well. So yeah, that was the decision from the fac. They voted on it and it was overwhelming majority that decided that this is the best route for existing owners. And obviously there's pros and there's cons of both sides and there's so many different levels and layers we went through. But we decide in all in, as, as an aggregate, the pros and cons, the pros outweigh the cons when it comes to giving more protection to the territories and preventing any sort of future disunity between owners by having a loophole like that. So are there other loopholes? Yes, there are. And so we're going to make sure that in future franchise agreements going forward that anything that is around this topic that someone could try to weasel their way in or something, it come to the Franchise Advisory Council, come to the leadership team, we could snuff these out and we still have the ability to do that to keep bad actors out. And again, no one has done this. This is not like a big problem. We just want to prevent this from happening because we've sniffed it out on a couple recent people that have wanted to join Augusta and we just want to make sure it doesn't ever happen. So thank you again to the fac.

I will keep that update for next week. Okay, let's jump into questions.

Boom.

Nope, not that one.

All right, what do we got today? We got five questions. Let's see if we can zoom in a bit. There we go. Let me pull this up.

Okay, very good.

I don't want that wide.

Beautiful. All right, numero uno, Kyle Tarvin. Is it possible for CC to follow up immediately when we get an accepted instant quote on the website? Site? I can't always get to those instant quotes fast enough to schedule them. And when I do reach out same day to schedule, they've already found someone else. If they've accepted a quote, they're not going to get someone else. It's kind of a waste of a lead if we don't follow up quick. However, it's hard when I'm still out in the field and can't get to my computer. Lots of wasted potential, in my opinion.

Oh, I see you're not in scheduling. Ah, I got it. Okay. You see, if you're in schedule, if you're in the scheduling department. Okay, sorry. Now I'm getting what you're saying. What's happening is they are getting the quote, they're marketing accepted, you're getting notified, and then it might not be till later in the day or the next day that you actually are able to put them on the schedule and talk to the customer. So, you know, you could be on this, you know, go into the scheduling department for command center. That's probably your best bet. I would also say that this is, from what we have seen, very low amount of people doing this. They actually accept a quote and accept a bid. And even if you can't get to them on the schedule to like that evening or the next day, we're not seeing a lot of people doing this. So if you have, if you have like an actual stat of how many people have done this versus the number of quotes accepted, I'd be interested because I have not seen this across the board, but interested to see your experience, but I'm seeing less than 5% people right now accepting the quote. And then as long as it is put on the schedule within a day, I think you're okay. But if this has happened like 20%, please let me know. I'm just not seeing this across the board. And then I would also say, like, if you can get in the scheduling department at command center, then as they come in, they would be more probably beat you to the punch if that's a big problem you're facing. But yeah, that's the scheduling department. That's what they do.

Max from Burnaby.

It turns out I'm not completely inept at running a business. Hooray. After two years of really low profits, approximately $20,000 per year, we are finally making money. This is our third year, right? Yeah, third year. Let's go. Income for April is $32,000. $14,000 profit minus the owner's P4P, $12,000. 37% profit margin. Atta boy. Let's go. May income is 40,000, 43% margin minus the P for P of the owner, 35% margin. Let's go. Okay. Anticipate income for this location is 300,000 for 2024, which may mean $90,000 in profits after my P4P is deducted and winters accounted for 30 average margin for the year. Good job, Max. Very proud. I anticipate a manager plus one or two other employees can complete all the work for the season. Currently I have two employees in one van and I am in the other van other helping as needed. If I continue handle all the office work, how much do you think I should compensate a manager who is responsible for team meetings on Mondays and Thursdays, training new employees and handling the other physical tasks, dropping off equipment or van repairs. This manager would not be responsible for routing jobs, following up on estimates, or doing any work that can be performed from a computer or phone. Because I would. Oh, you'd still handle that. Okay, all right. They would only be tasked with the in person responsibilities. Maybe a better title for them, a crew lead rather than manager, given their responsibilities. I agree. Just by saying crew lead, this might be helpful. Now the thing is, whoever is responsible for team meetings is usually going to be looked at as the manager. That's a big. That's the big unlock. Or like the big.

Delineation would be if they're doing meetings, they probably are going to be looked at as the manager.

So I would call this a working GM because until they're above like 600,000 in annual revenue, they have to be in the field working. And so I would probably call this a working GM and I would pitch this as like, hey, you're mostly a crew lead, but I also need you to lead meetings. I need you to be able to these other tasks. And so you have run the business very profitably. You have 90,000 in profits. Looks like you're taking probably about $40,000 a year in P4P because you're doing work. So if you assume, okay, you're probably going to pay this person another $40,000 by full compensation package. So you could still get probably 3 to $5,000 in more passive distributions to yourself as the owner, assuming you know they are able to still do the same amount of work as you, assuming you're not growing the business or increasing prices, et cetera. I think the way to pad this if I was you, Max, is getting going into next season. If you do this going next spring rush is raise your prices right when you do this because it'll give you even more confidence that hey, if I can get an extra 3, $4,000 a month and due to price increases, then you really have yourself a good cushion.

And because like it is, it is so logical when you're making this much profit, like 40% profit to like I'm just going to hire GM. Great. Hiring general manager is difficult and in part the reason your guys are as efficient as they're because you're a great manager. So just keep that in mind. I've seen why locations are extremely efficient, extremely profitable. Hand things off to a gm sounds like you're still going to be pretty involved. But I've seen this happen and then the GM is just not there. Like they're just not able to keep the guys as efficient as the owner and then things fall off. So I would just put a big caveat next to that. The good thing is you know the capabilities of the location. If you have a good general manager, if you pad it with a price increase, they'll certainly help. But now your job, your job becomes managing the manager. And I would just make sure the expectations of that person is that they are working in the field 80% of the time. And then there's here's the other task I need you to do and there's other tasks. I'm going to give you a percentage of profits or distributions for those tasks, but you're going to be on P4P for everything else. You could do that. As you start getting above $40,000 in, in monthly revenue, there's going to be a lot of other tasks you're going to be asking them to do like equipment maintenance, dr, dropping trucks off equipment, etc, so you probably can't put them on P4P. And that's when the working GM model really kicks in, is when they are working mostly in the field like 70, 80 of their day, but you still need them to do other things.

Further context, I'm delegating the infield responsibilities because my family is planning on relocating to another province to purchase a duplex with my parents. We can buy an entire duplex for $450,000 versus here for 2.5 million.

Mercy. Yeah, gotta love Vancouver B.C. mercy. Goodness. Hey, if you can pull this off, basically cut your costs of living by like 60, 70%. Just your savings there would literally pay for the general manager, right? So first off though, for everyone listening, they're like, this is amazing. Max is very analytical and extremely good at management. And again, your third year is when you start seeing this sort of opportunity. So first off, kudos to Max. I just want everyone's expectations to be set for people that are new seeing this is he's extremely good at management. That's why the margins are where they're at. And if you're going to have a GM working gm, you better make sure they're really, really compensated on profits to expect this to continue. And then I would personally pad this by raising prices and hitting capacity the spring, next spring rush when this is instituted. Great job, Max. Very proud of you, dude. Most people quit in, in that second year when they feel like. It's like, I've done this for two years and I haven't seen any money in the third year. This is when it starts, you start clicking. Good work. This question is much less interesting than my last. Okay, this is still Max. Can Command center create to do rather than actually changing mowing jobs to bi weekly when they change services to bi weekly, often do not enter the correct ph or fail to change the off season. The off season for weekly mowing is different than bi week because biweekly is only offered at certain times of the year. Please let me know if there's another place I could submit this request. You could submit this as feed. I would personally submit this to Liz on the form, the Command center feedback form. Here's why we won't do this though. Max, the first part of your question, the second part of your question is in debate. That's why I would submit the form. But the reason we won't create to do is because it would be extremely annoying for 90% of owners that just want things taken care of and they don't want just a messaging service to make a bunch of to dos, right? So we always run this kind of risk at Command Center. Some of people would rather just a bunch of to dos and they knock them out the end of the day. But most owners, especially as they grow larger, it's like, can you please just take the payment? Can you please just change the schedule? Can you just please do the actual thing? And that's what we've defaulted to because it just takes More admin time off of the owner's plate. But submit this kind of in a format on that form for Liz. She'll see this and probably ask for some more context and reach out to you. But that's why we do not do to do's. We will continue to actually change if someone change wants to schedule done and we kind of need to do that across the board so the agents know if someone's on the phone. We have the power to be able to change the schedule. But submit that because Liz will then look at what you have set up in your wiki and see if that can be adjusted and how that could potentially be improved to make sure that it's being done the way you want, which is ultimately our goal there. Mr. Anonymous. Ken, I think there's only one Ken. Yeah, you should have the media team splice together all the times franchisees have given themselves nicknames in reaction to it. It would be a good viewing for Summit. And when we hit 500 locations, I'm assuming when we hit 500 to 1,000, we will only allow franchisees into Summit. Yeah. So in terms of the Summit part, Landscape Summit, the rebranding, it will now be only for Augusta. So like the first day at conference, the Thursday is going to be called Landscape Summit. It's just for Augusta Nation. Blue Collar Summit will be for all home service business owners. And by doing that we're able to get some of these bigger names. Like we're able to get Greg Crabtree to come, John Taffer, like these are people like you can't just pay the money. You actually need to have some sort of like interest for them to show up. And so it'll be good. Like you know, John Taffer requires security guards and the whole nine yards. So like it's a good entrance for us so that we can get bigger names. And then my hope is that as we get more locations like to your point, like 500, 1,000, I can get them to come to just the owner's part of Augusta, I. E. Landscape Summit and then stay for the blue Collar Summit. That's kind of my goal because most of them will not just come and show up and talk to 100 people or 150 people. They just won't. And so that's why you've seen like over the past five years of doing landscape summits etc is the improved quality of speakers because they're, they're running a business too, especially if they have like a book, especially they have do media on their own etc. So we got some really good speakers so far and then we got some more I'm trying to get right now, but they're all kind of like they're not sure yet. So there'll be some last minute speakers potentially that are pretty killer.

Constructive criticism. Okay, thank you very much. I appreciate that. In my personal opinion, I feel that the new truck wraps are nice, but I'm not a fan of the version of Max. I like the old version of Max with the thumbs up. I've had a few family members tell me that the new version is kind of creepy. They're the only peanut manners. However, I do like the thumb side thumbs up version of Max a lot more. Can we get a rap version of that or the decision made that this is the version going forward, no exceptions. It is the version going forward, no exceptions. Here's why we did that. First off, we want the name Max on the hat to be seen. Number two is seeing the whole like the, the. The height of Max with his, his chest and everything. You have to at least see his chest for it to make sense of the logo. And really you kind of want to legs too. The problem with it, it's very, very tall. And for most trucks it becomes so small once you actually put him on the truck. So I could show pictures. We went over this a lot when designing the new. The new. The graphics. And that is like, to actually understand this as a dog, you need to see at least his torso. As soon as you add his torso, the dimensions became about three to one, which means he has to be very narrow. He got so small on the truck, you didn't even see the word Max from like more than 2030 FE way. So this was really thought out in terms of considering what this looks like. And then the expectation is too that we don't actually lock the. The customer's perception to a certain type of Max. We want him to be able to change all the time. So that way we can put him in marketing pieces around raking leaves, around pulling weeds, around fertilization. Like there's like 30 versions of Max now. And now we have Max like with a hat on for Christmas. These are ways to be able to make it around the brand of Max and not the logo.

The same way that if you think of Geico, yes, they have a. The brand is Geico, but the actual brand of the gecko is all sorts of shapes and sizes. He's a 3D animated person. And for that reason we attribute more brand power to him because he's not a logo he is an actual thing, he's an actual person, he's an actual identity. And so we're trying to build the Max identity. And so whether it be Max calling Max, AI answering the phone, then Max is on the truck down the road. Max will be the robot. And we'll really tie that in down the road in terms of the branding, the marketing, etc. And they'll really attribute, like, Max owns Augusta. Like, that's really the goal that we want to go down. And you say, well, I own Augusta. Well, no, the goal is that you can copy and paste locations and the same experience is felt in every single one. And a great way to do that is have a brand associate that ties them all together. And Max, in my opinion, is. Is like the key to that, especially around residential lawn care, landscaping. I think it'll crush. Same thing with Christmas. We. If we can change Max to be able to do other things, he becomes omnipresent in terms of which services we he can offer. It's very powerful in terms of different services, etc. So, yeah, it's not negotiable. It is going to stay that way. We played a lot with the variations of the dimensions of how he would look, and it just did not work with the new branding. And most importantly, the sizing of it just got messed up. There's so many trucks in Augusta that only have about a foot and a half to two feet above their. Their wheel well. And, like, the dimension of many of them that it works the best. So hope that made sense. But that was, like, something we really played with a lot and made sure it was, like, the best thing for. For the branding side of things. So it'll be a slow evolution over the next, like, five years or so that Max is more and more integrated into things.

Because people will not remember your name, they won't remember the word Augusta, they won't remember the logo, but they'll remember Max the dog, and they'll remember the yellow trucks and how they look. So we just want to zero in on that and not lock Max to the logo because then it becomes two dimensional instead of three. So. All right, everyone, I hope you have a fantastic weekend. I love you all. We'll see you Monday. Take care of.