TRASHING Subway Franchise Model - Episode 038

Hello.

Another pod.

Another pod. We're back, baby. I had. I had a thought.

Okay.

The other day. I think I've officially made it as a content creator. Yeah. Guess what metric I'm going off of?

Oh. Hours watched?

Nope.

Comments? Number of comments?

Nope. You're in the right. You're moving in the right direction.

Someone recognize you?

Nope.

No.

Definitely not. Not a chance. No, no, no.

I don't know.

The last five videos all have at least one dislike. Oh, really? Yeah. So I feel like that means, like, yeah, we're making waves, you know, probably.

More based upon their impression of me.

Yeah. So I was like, wow, last five videos, I'll have at least one. One of them has. Or one about church has three dislikes. Oh, yeah.

Very good.

So, you know, sorry. I guess if you dislike that, it was divisive.

Yeah, but. But. But that one has a lot of more views, doesn't it?

I.

Probably not three times as many views, though. Yeah. It's the percentage you want to look at.

Yeah, well, I'm always looking at the percentage, but I'm like, oh, cool. People are disliking it on a regular basis. Like, that makes me feel good. I feel like I'm in the content space. You aren't making content until you have haters. Yeah, that's. That's my philosophy. So you're back. You're fresh off the jet, so.

The jet.

The jet. I mean, you don't have a private jet yet, but eventually. So you went and did another turnaround. Do you want to tease that at all? It's probably not going to come out for, I'm assuming, at least a few days.

Oh, yeah. It won't be till next week. And so it was a good one. It was the first one we did done outside of Augusta since like five, four, almost four years ago when we did, like, master cuts and we went over with Josh and I. So it's. It's a good foray into outside of Augusta because it'll open up the door to any more casting people, people wanting to do it, and then it opens up our ability to get bigger companies. So I really want bigger companies. So probably today I'll. I'll be posting a thing like, hey, if you have more than five employees, we're gonna prioritize you. And you can. You don't have to be in lawn care. You can be in all these other services. And so I kind of have a framework, kind of like the Marcus Lomonis did with the problem. He talks about people, process and product like I kind of have a similar framework that I want to use to diagnose what the problem is. And then we'll just get better and better at refining the story. But I think it opened me up to, like, doing other industries and, like, interesting stuff that, like, I'm passionate about, like, just like, learning about instead of, like, when it comes to lawn care, landscaping, 99 of the time, I could do it over a zoom call because, like, I know the industry.

Right.

I know what to tell them. It's a matter of just going there and shooting. It's like the other day we went there in less than half a day. Like, we shoot the whole video.

Yeah.

Because we know exactly what shots and we know exactly what I need to tell him. Like, we have all the framework because we've seen their P and L, we've seen their balance sheets. It's pretty basic.

And then you do, like, some voiceover stuff after the fact, the story together correctly.

Right. And to make sure it's cohesive. But we'll just keep getting better and better and better. So I'm hoping eventually we can just get it really refined. The challenging part is the travel, because it takes like two days solid travel to a location. And even if you did, like, say two or three in a week, it's like, it's very intense traveling. It's like in out hotel, wake up early, go to the shop, shoot all day, then jump back in the car. Like, it's very intense. And so it's tough to actually keep even. The media guys, if I was do it once a. Once once a month, for example, and get like three of them in a week done. It's draining for your job once a once a month to have to do that because it bombs like a whole week.

Yeah.

And so I can't really ask of anyone now. So we'll see. I think we could rotate between three current team members of the media team. They're all good at traveling and filming, and that's actually a tough combo to find. Like, sometimes you got a really good filmer, but, like, they're not going to travel well with me, and they're not going to, like, be able to do a quick shoot with people and, like, ask them questions and stuff. So I think the three guys we have now currently, we could make it work. I think if we refine the process. So we'd probably end up hiring someone's like, your job is like, to travel a lot and get film. Yeah, but we'll see. We'll see. I don't Want to. Like, I just feel like we've done been doing a lot of different things and we can figure out what works, what doesn't. And now we have this thing that we think we can like, really make it better and better as time goes on, get into other industries. And it's kind of like my way to like, keep my entrepreneurial chops sharp by getting into other industries. Because, like, I truly believe if you're a boating company or you're a tenting manufacturer or whatever, like these same principles, a lot of them apply in business. And so. And if I didn't know something, I would just tell them, like, that'd be part of the show. So. Yeah, it'll be interesting to see what we can figure out.

Yeah. I have two thoughts from that. The first thought is a little peek behind the curtain for everyone. Are you saying that traveling with you is not easy?

Well, it's a crazy schedule, right. So like, we're usually. This one wasn't so bad, but like, usually it is. You're traveling the same day you're shooting, you're leaving the same day you're shooting.

But you also almost missed your flight.

Yeah. Well, it's just part of it. When you're doing everything so tight, missing flights is like a big deal because now it's like, oh, if I missed this flight, I'm. We lose the whole shoot because we're scheduled to be at the next one. And so when you PI. You. When you're trying to get three in a week, it is like everything must go perfectly in terms of flights. Yeah.

So I just think traveling with you, having traveled with you for business, I don't think a lot of people can match your energy because you are expecting like, we show up, we work.

Yeah.

And then like you sleep for three, four hours and then you work again.

Yeah. But if it's only a week, it's like, you know, you can do anything.

Oh, totally. That's how it is when we go to the Expo and what it'll be like at Summit. It's like we just. We show up all day to work non stop, and then if you can sleep, you can sleep. And then you're back the next day.

It's just fine. When it's once a year, if I'm expecting someone to do it once a month. Yeah, that's pretty tough to ask for the guys. So we'll see. Like, I think if we can just really perfect it, refine it, they'll enjoy the process of creating way more than like headshot Videos type stuff. And we really want to create stuff that like we feel only we can create. And I feel like I can do this and we can just make it better and better and better. And as we like financially it makes more sense. We can just make it better and better production.

Yeah. My second thought on that was there are a few comments in the last. So not the most recent turnaround, the one that was in Boise, Idaho with Cameron. There were a few comments that mentioned how jacked Terrell was. Oh yeah, because there's one shot where he's like holding the gimbal like perfectly and it's like he's, he's flexing unintentionally. And I was like, dude, he does look huge.

Dude. Holding the camera, especially if you're holding the gimbal, you are literally doing a workout like the whole time you're holding it. But no, he is jacked in general. He plays rugby, he's awesome. And he watches this video so he's feeling good right now. Cool. Yeah.

I was like, dude's an animal. Like he. I literally went like, I saw the comment and then I was like, I need to find where this is. And I went back. I was like, dude, he does look huge in that shot. So, yeah, shout out.

Shout out.

Terrell.

So.

So we just. Well, we, you and the media team just released the most recent turnaround. You were down in Madison, Alabama with Kyle Turner. So how did that go? You said when I asked you to give us a teaser, I asked you to give us one word for each of them. You said with Cameron it was leadership and with Kyle it was coaching. So how do you feel like your in person coaching went? What are some of the takeaways you had that we didn't see in the last video?

Good. Like reason I say coaching is because like, you know, he hadn't had coaching for quite some time. And so a lot of the coaching that could have been done earlier in the year would have prepared him for what he's currently going through. And then it's like you should over hire if you're going to be growing this fast and there's just, you know, raising prices should have been done like two or three months ago, not when I showed up. So a lot of like the pain that someone can go is going through. If it was, if it was remediated like three or four months prior, they wouldn't have to be going through that pain. And so it stinks that when we get there, like, yes, I can't find employees in one day. And. And like. Yeah, and that stings. And it was kind of like a down. Like, we wanted to show that, like, we kind of failed. Yeah. But also, it's like, we shouldn't have got to the spot where we require full. We require someone to have experience because we should have had the time in the spring rush to train people up, have them ready to go. He should have been outside of the field and being able to train people so that they don't require experience. And that could have been, you know, if you. If there was more coaching previously. But. But we live and learn. And when you grow that quickly like he did, and if you're not getting the coaching, it's. It can be you just. You just. You have to pull the band aid off fast. And that's what we did. And so I think after. I think in the video I said, like, two or three customers dropped because I was like the next day. But I think in all, I think like, 10 to 20 customers dropped. So it's still like, less than, you know, 6, 7%, right? Yeah. And still he's struggling to find people, and I think he's still raising prices and stuff. So it's not a bad thing. Like, that location, like, in two or three months is very, very profitable because if you can keep your three or four, you know, know, current team members on and so, but if he can just figure out the employee thing. And so, like, I talk about it in this most upcoming turnaround, but, like, there's always these four different ways of the bottlenecks in the business. And he just happened to be at Labor. Right. So he's figured out, you know, from a capital perspective, he's figured out the leads perspective because, like, he has tons of leads coming in. He's turning them off. It's the labor that's the next bottleneck. And so. And then once you figure out labor, then you got to figure out leadership. And so we'll talk a bunch at conference. But like you, there's going to see, like, this constant theme now in the turnarounds where I'm like, always identifying the four bottlenecks, seeing where they're at, and being like, okay, once you figure this out, you're going to have this issue. I can guarantee it in six months. This is going to be the next problem once you figure this one out. So it's cool. I think it's like a good framework I can share.

Are they all L words? Leads, labor, leadership.

So it's capital. It's like llc, but like llc.

Oh, okay, cool.

Labor, leadership and capital.

Capital. That's sweet. I like that. Trying to think of an L word for capital.

Yeah, I had one. Loot.

Loot. Okay.

It doesn't seem very serious.

Not super professional. Yeah, yeah, yeah, that makes sense.

So if anyone has a word for L, that is a cash. Capital. Anything that is typically a C, put.

In the comments below.

I was thinking M, like money.

What's it called? Like a multi level marketing.

Oh, mlm.

Mlm. Yeah, like that's not good.

So I like the triple lc. Yeah, that's cool. I like that. So with Kyle, okay to dive into that. So labor was the bottleneck. Now I feel like inside that bottleneck, then there are different variables that create the bottleneck. So with him, was it, and I'm just spitballing here, was it, you know, hourly wage? Was it his interview process? Was it the work conditions? Was it just the labor force? Like, there wasn't enough people applying? Like, what do you feel like was the main issue? Or was that kind of a combination? Yeah.

So like, I'll talk a bunch of this conference, a bunch of different frameworks on this. But like, I truly believe if you ever hit a bottleneck in any of those cases, it actually all comes back to capital. So even though it's lllc, it's technically C ll because.

If you hit a roadblock at labor, technically what you should do is either a fix it, like you could go find more employees or what you need to do is figure out capital. Like go back to the beginning of the chart and restart.

Yeah.

And so I have some drawings and I'll share it at conference. Like, I want to talk about in my book a lot. But if you hit that roadblock and you can't figure it out, like, the solution is always more money. Like, money solves a lot of problems in business. And so by raising his prices like we did, my hope is that like next year we go back and he was able to raise his weight wage to the employees and thereby fix the labor problem by having more capital.

Gotcha.

And so ultimately, like, you know, money doesn't make you happy, but it fixes a lot of problems in business. And so I think that's what kind of strategy we ended up taking with him because we just couldn't find the employees in that one day.

Yeah, no, that makes sense. Any other final thoughts on that? I didn't. I thought it was great. I think Kyle's gonna do great things, but I don't know if there's anything else you wanted to Share.

He'll do great. It's just a different mode. Like, he, he was going so fast. Growth, right? Like, like literally went within a. Like, I think it was like 16 months. He went from basically zero to six. Five trucks, four trucks and six employees and basically. Or five trucks, I forget. But now what he needs to do is either A, quickly accelerate to meet his capacity in terms of trucks by hiring more people, or B, he needs to like really constrain, cut out the extra secondary shop, sell a truck or two off, really can train a whole bunch of cash, get in the next spring rush, raise wages, and then like hire four or five people and really take it fast. Either way, he'll be successful. He works very, very hard. My biggest concern with him is just burnout. Cause he does work so many hours. And so even like what we didn't put on camera or anything is like, we talked that night with him and his wife and like, it was like the next day he was planning to go like, do 20 lawns. And like, dude, you've worked seven days a week for several weeks in a row. You, you have a whole bunch of billing to do. You need to raise all these, like, you know, put all these pricing things. A commander, I guess did that. But like, there's always billing. It was like end of the month, so they had to do a whole bunch of billing. And I'm like, dude, just cancel those customers. Like, they're the ones that were pretty far away. And he didn't want to let them go because he had already been pushing them off. And so I'm like, they're all going to be overgrown. And yes, canceling on them does feel bad. But like, you've been working. You can't let 5% of your customer base hurt you from serving the other 95%.

Right? 100%.

And so. No, it's 95. I'm just joking.

Yeah.

But he. I was like, you gotta just like, let them go. I know it's like not ideal and you can apologize for that, but you can't burn yourself out. And then next week now you're going in to serve your 95% of your customers that you just raised prices on. And you can't serve them appropriately. So I think that's the biggest thing with him is like, he was such a hard worker. I hope he doesn't burn out. He has a great wife behind him to support him. And she's like, she also works very hard. So they'll be fine. It's just a matter of getting to that kind of like that burnout stage where you're in between profit mode and growth mode.

Yeah, that makes sense. Well, I think that's kind of a perfect transition because I wanted to talk about a friend of ours, Johnny Blades. So Blades of Grass. So he put up a video. This is at time of recording yesterday. Brand new video. In the title of the video, I.

Must not be subscribe. That's horrible.

Oh, no, we'll. We'll cut that out. We'll bleep that out. We're both subscribing. Like, Johnny.

He put out a new video. 96% of lawn business owners stress themselves out. This one thing will help you de stress.

Wait, isn't it Blades of Grass? Like, that's his channel. Right? Blades. I'll, I'll listen to this later.

Yeah, you're good. I got, I got the, I got the bullet points.

Okay, go ahead.

So he put this out there and I was like, okay, clickbait got me. Right. I want to listen to this. You know, he's, he's a, he's a real veteran and a veteran of this lawn care industry. I was like, I'm sure he's got some good points on this. It really reduces down to two bullet points. He tells owners, specifically new owners, that this industry gets old fast. I think that's very good. And I want to hear your thoughts. I feel like a lot of people are like, oh, I love cutting my grass on the weekend. Okay, well, do you want to cut everybody's grass five days a week? Probably not. So he does say, like, this industry gets old fast. Just accept it. And you will get tired and burn yourself out very fast. If you're just in like, hyper growth. Kind of like the turnaround we were just talking about.

John, address that first.

Yeah, let's address that. So that's kind of the premise of the video.

That's the start. So I think we just, like, we are in this echo chamber of our industry where it's like, oh, man. Like, lawn care is so repetitive. It's like it's the same old thing. You get into any industry, it feels like that. Yeah, like every single one. I don't care if you're talking about software where like every single day it's like, okay, the same code problems and we're trying to figure these things out. It's like we're dealing with PHP and like my sequel and aws. Like, it's just different problems to what is now currently the blades and the employees aren't showing up and like, the software isn't loading correctly. Like, it's the same stuff. It's just. It's going to feel repetitive. And the only way you don't have repetitive. And this is what everyone is craving. This is that they're craving. Their craving is hyperbolized in the entrepreneurial space, which is you have a ton of money to literally burn through, and you're literally, like, buying offices and you are creating massive teams and you're hiring departments and you're doing acquisitions when, like, those companies, majority of them don't make any money.

Yeah.

And so if you actually want to make money, like, yeah, it's probably going to be a little boring because, like, doing the same thing is where the profit comes into play. Like, creating a building is not where the profit is. Like, I'm a prime example of this. Like, yeah, like, a huge amounts of revenue. Like, we don't. We're not really profitable because it's. Matt. All grow, grow, grow. The profit is made in doing the mundane and doing the same thing over and over and over again. And the same way that, you know, any athlete or musician or, you know, actor, they perfect their craft and they become the best when they start doing the same thing over and over and over again. And so the trap and the balance there is, like, you want to keep doing the same thing, but you also don't want to then fall behind in 10 years. Like, oh, my word, I'm way behind because I kept doing the same thing.

Yeah.

But in terms of that point, I have a lot of problem with that because every industry that I talk to outside of lawn care, they say the same thing.

Yeah.

And they look at lawn care and they're like, man, like, it'd just be so nice to be outside and be, like, physical stuff. Like, I'm just tired of behind my computer and, like, zoom calls. So, like, every single industry eventually falls into this trap. And that's why, you know, the shiny object syndrome, you know, is alive and well, is because it just reinforces, like, not only is a better opportunity, it's more exciting, and it's gonna make me more money. It's gonna be less stressful. And so we just sell ourselves out of, like, the most profitable years of the business, which is, like, years five and above. And so I highly disagree with the fact that lawn care is repetitive. I highly disagree with that there's something wrong with this industry or that it will stress you out any more than any other industry.

And I don't think he's making that claim.

Right.

He's not necessarily saying it's the most stressful industry. I just want to be clear on that. He's just saying this is why you stress yourself out.

I would say it's for 96% of business owners.

Yeah.

Like, lawn care operators are just a microcosm of entrepreneurs and business owners. And it's the same way in every other industry. And I say that not knowing what he said, and I don't think he's making the claim that's just lawn care. But in general it is business.

Yeah.

Because I talk to people outside the industry and they are thinking the same thing.

Yeah. I think what's frustrating too is that now in the digital age, it's so easy to have shiny object syndrome. Like even myself. Like, I'm like, man, that would be cool to like open that business or do that thing. Or like that could be a side hustle. And it's like, no, just stick to the same thing. Like think about in 10 year swings, like, I've been in Augusta for almost six years. It's like, all right, 10 year swings at year 10, let's reevaluate. Where are we at? Where do I want to be in 10 more years? But it's like, stop getting distracted by like the side hustle, this idea, whatever, and just focus on your one thing and anything. If you think in 10 year swings is going to get repetitive.

Right.

If you do anything for 10 years, it's going to get repetitive. So I agree with you on that point. I don't think he's saying like, lawn care is explicitly stressful or explicitly the most repetitive industry. I think it's more of a cautionary tale to guys getting in to the industry because they see him, they see Brian Fuller, they see the Spencers. Right. And they're like, they're successful. And that looks fun and that looks awesome. I. I can do it. And he's like, hey, be careful. Just because it looks and seems awesome. Like grain of salt, right? Yeah.

And I think too, like, I believe that the person who is most diligent in the mundane and the repetitive is the person that ultimately has the highest reward in the end goal in the end. The person that can stay.

Content with just perfecting their craft. Like shooting free. Free throws.

Yeah.

It's a repetitive task. The difference between me shooting a free throw and LeBron James is millions of dollars difference. And the reason for that is because he spent 20 or 30 years shooting free free throws. I go once a year and go shoot around and just like goof off.

Yeah.

And so to me, it's an exciting game to him. He's done the same thing millions of times. And that's why, because he got so anal about perfecting it, everyone comes to watch him and he's pay a lot of money. And what. What people don't realize is, even when someone gets the mba, goes, the MLB starts making on business in business or making it in media, they have worked 10, 15 years of just shooting free throws. And most people just can't get through that because they're looking for the next thing or they feel stressed out or they give up due to the fact that something else looks easier. Right. And so. Oh, man, like, these free throws are so boring. I'm gonna play football where I can get, like, I wanna be in the. In the touch, in the end zone. It's like, look, keep doing the free throws. You're built for this. And in 20 years, wake up one day and you're, you know, now you're getting paid millions of dollars to do it. And so that. That difference between the 98th percentile of basketball player and the 99.9 percentile is a difference of the someone that can stay 10, 15 years on the line and keep shooting free throws and not get distracted.

Yeah.

And so I think the same way in business. Yeah.

A franchisee recently sent me a quote, something along the lines of, you know, hard work beats out talent every time. And it reminded me of a meeting we had with our team one morning. It was like, right after we started franchising. And you were like, people are going to say we're winning the game because we have, like 50 locations or whatever. Right. But you were talking to the team and, like, it's easy to get full of ourselves. And actually, in that video, it was really cool. Like, Josh is recording, Austin's in the room, Nick's in the room, Marcus is in the room. Like, three guys that have another 3F program, Liz and I are in the room. It was probably one of the last times, like, the core was all in the same room. And you were like, I don't care, like, how much talent you have. You were like, you have to work hard. And he's like, that's why guys burn out. And you were like, name, name one college prospect that burnt out in the NFL. And Austin named, like, three, right? Johnny Manziel, Baker Mayfield. And you're like, these guys burnt out because they got there on talent and they weren't willing to put in the hard work. And now there's this recent documentary about Johnny Manziel about how he never watched tape, he never did any extra work. And it's like he just relied on his talent to keep carry him. And he is phenomenally talented. One of the greatest college athletes of all time. But the NFL, he's, he's a joke. Like his name is a joke in the NFL now. And that's harsh to say, but it's true, right? He didn't put in the hard work. So, so what Johnny said after that, he gives us cautionary tale. His fix. He said in quotes, load up on four days. That's his exact words, load up on four days and give yourself three day weekends. That was his fix. And one of his main reasons for saying that is so that you never neglect your family. And I thought that was a great reason. He said a lot of guys, you know, it's a, it's a, what's that self fulfilling prophecy. They're like, I have to provide for my family, so I have to work long hours. But then I never see my family, so my family's upset, so I have to provide.

Right.

And so I do agree with that. Like a lot of guys will get in this industry and they like, they will grind hard and they will neglect their family and they'll do seven hour or seven days a week, week, you know, 12 hour days. So I thought that was good. But what are your thoughts on that?

I'm, I'm okay with it. And I think if someone's intentional about like, hey, I'm gonna grow my business slower. I don't need to make it, you know, I don't need to optimize it for profit. I'm gonna only work four days a week. That's fine. And I'm not against four day work weeks. I, We've tried it at Bellingham Shop during the winter, we typically go to four day work weeks. But it's just a matter of, it's like, what, what level of pain are you willing to exchange in order to have what you want? And if you are willing to have a conversation with the family and say, hey, for the next three years, like I'm not gonna be able to be here every Saturday and I'm not gonna be able to be here every evening for practices and things like that. But I'm doing this for this reason. And this is the level that we need to get to in terms of revenue and profitability in order for me to then step back, hand some stuff off, have a manager in place, have systems in place, increase my prices so that I Can be away from the business a bit. And unfortunately, most people can't. They like, for example. I love Johnny, by the way.

Yeah.

Love him a lot.

I think he's a great guy.

But I think in general, you have to look at what someone did, not what they're saying. And the fact is he has 400,000 subscribers or 350 or whatever. I just saw subscribers on YouTube. He could work one day a week and make good money. And so we need to take that as a grain of salt. Second grain salt. That's not easy either. That's extremely difficult. That's taken years.

Yeah.

And I promise you, those videos were edited in the evenings, on the weekends, on holidays, and late at night when everyone else was sleeping. So, yes, I agree with the sentiment. But if you also want to say you want to have 400,000 subscribers, have a business where you can run four days a week and still be profitable, drive nice cars like he does, et cetera, you're going to have to realize that either A, it's going to take me 10 years, or if I want to do this in three to five, it is going to take more pain.

Yeah.

And if you are willing to wait the 10 and you're. That's important to you, for the family's sake, great, awesome. But if you're going to try to say that you want to do this in three to five and you want to get out of the business, you want to have operations managers, you want to have all, you know, multiple locations, blah, blah, blah, be really profitable, it's going to be very, very painful. And so I'm just overall against the ideology that you become successful and then you tell everyone else that what I'm doing now is going to make you successful. In reality, what really got you there was the grind and the fact that you put in 80 to 90 hours what everyone else is putting in 40, basically doubled your productivity. So, yeah, like where I'm going to get in 10 years working 40 hours a week, if someone else is willing to put in 80 hours, they will just mathematically get there at five out in five years in comparison to 10. And so it just comes down to how long is your horizon for success. And then if it's shorter, you're going to have to put more time in. And it's the same thing like diet, exercise, nutrition, people always looking for the shortcut. They want the 10 years in five years without the pain, it's like, no, if you're going to get 50 pounds of muscle, expect your diet to change. Expect radical changes in your body. You're going to have to be going to the gym very often. You don't just happen. And so I always, when someone says anything about work, life, balance, I just say, okay, great, fantastic. Do I want what you have? If the answer to that is yes, I'm gonna go back and say, what did you do? How would you say, but what did you do? And when someone, if I ever get old and I'm like, everyone needs to like, chill out. Everyone should be getting a boat, everyone should have multiple houses, take four or five weeks off every year and just like leave the business and don't talk to anyone. If I ever say that, someone needs to say, have the maturity to say, okay, great. He's been doing this for 25 years and he's probably a little burnt out. Priorities have shifted to family and let's see if I want what he has, let's see what he did. And that was 10 years of like, never stop working. And if you're not willing to do that, it's gonna take you 20 years. And that's fine. It's just a matter of like, I just get really annoyed when people are like, you should, like, take things easy and to avoid burnout. And I agree. The thing is, if you avoid burnout, you ultimately can get to success because you just gotta stay in the game long enough. And that's where I think he's coming from. I haven't watched the video and that's very, very important. And that's what I was like telling Kyle. Like, cancel the customers, don't work tomorrow because you can't burn out, you just can't stop.

And that's important. And I think that's his point. And I'm not bashing him at all. It just as a matter of. I just get very annoyed with people that get very, very wealthy, very, very successful. And then poo poo are on everything that basically made them successful. And I don't know if this is a coping. And I'm not saying this about Johnny, I'm just saying in general, I don't know if this is a coping mechanism to keep competitors away. Because if I tell you not to sleep in a closet, work 80 to 100 hours a week, guess what? You'll never get to where I'm at because I'll be so far ahead. And so if I just tell everybody to relax, take it easy, guess what? If people listen to me, then I can just take over. And so I don't know if it's.

That well, from his perspective, I would.

Say no, no, not Johnny. No, Johnny's just the coolest dude.

Yeah, he's awesome.

Yeah. No, he has pure intent and what he says is 100% true because you have to avoid burnout at all costs. And if that means working a four day week, work week, yes. But if your goal and ambition is 400,000 subscribers and a business that can run without you and it's very profitable and you just make videos whenever you want now, like, and you have the money, like you're going to be putting in years of time. And I guarantee you, if you talk to him, if I sat down with him, he has put years into like making videos, perfecting his business, refining a lot of pain, employees, issues. Like all of that is part of where he's got to now. And thinking that you can somehow get what he has without that recipe is stupid.

Yeah. So, yeah, I think he isn't coming at it from that perspective of like trying to keep people away or trying to compete. I think it's, like I said, I think the best description is it's a cautionary tale. If you want to get into this industry, great. It's a great industry and I think the disadvantage you have is you haven't watched a video. I have. So I think he's like, hey, if you want to get into this industry, fantastic, good, hard work. It's a, it's a great industry to be a part of. But maybe start at four days a week, maybe make sure you prioritize your family. And then if you want to scale up, yes, you're going to have to grind. But I think it's indicative of, like you said, the bigger philosophy out there. And you've said this about Gary Vee. His content changed drastically over the last couple years and it's now all work, life balance, take care of yourself, mental health, all good things. Now make a knock on that. But you go way back, five, 10 years, all his content was grind, sell, get after it, pick up couches with your buddies on the weekend and sell them on Craigslist. Like, that was his content. Now it's like, chill out, take care of yourself, connect with those you love. And it's like all good things.

But my favorite lines from Gary, and he says it less now, but he still occasionally will say it. And like when someone says something like, you know, they can't make content or they can't find time to do something, he's like, would really like to like audit the four hours of when you're not Working. So you work six or you sleep six, you work ten. What about the other eight? Like, I love that, that's the Gary that I know. And like, I feel like the, the message of like mental health is extremely important. Everything he talks about. But I feel like people want and aspire to have what he has and they think that the route is like what he's currently talking about. Talking about? It's like, no, no, he's talking about that after like 25 years of just dirt. Right. And you want the clouds, use his analogy without the dirt. And that's problematic. And that leads to a lot of unsatisfied people because they think that doing what he's currently talking about is going to get them there. We're like, no, no. He has worked his brains out for 20 years and now he's saying this stuff. And I'm not against Gary either. Like just in general. I just don't like this notion that somehow doing what someone has. Successful, successful is somehow going to get you what they have. That's not true. It is doing what they did that will get you to what they have. So.

Yeah. Well, I just wanted to say I appreciate Blades Grass Johnny. We're not going in on him. I don't want anyone to think maybe the title of this will be a little Clickbaity. Oh, are you serious? Oh, dude, I'll make it clickbaity. But I mean just we have to, right? But no, I think he's a great guy. I think it's good content and I thought it was just a, interesting concept talking about.

So speaking of which, if Johnny, if this gets to Johnny, I would welcome him to come speak at Landscape Summit.

Oh, Johnny, there you go. That'd be awesome. We'd love to have you. Yeah, that'd be great. Yeah, great content. Give him a subscription if you haven't. Yeah, good guy.

I like his temperament around business.

Yeah, yeah, he's good. Cool. Well, there was one thing I wanted to ask you about. Completely unrelated to us whatsoever.

Subway, yes.

Sold itself to a private equity firm. Do you have any initial thoughts on that? I have an article here from CNN Business. It's not that exciting, but hey, it's big, big headline in business.

Feel free to recap it just for people listening that have no idea what's going on.

Yeah. So Subway sold itself, this is last week to a private equity firm, Rourke Capital, ending a six month long search for a buyer. It brings an end to the sandwich change. Near six decade run as a family owned business. In a statement, Subway Said it was a major milestone in their multi year transition journey, combining Subway's global presence and brand strength with Roark's deep expertise in restaurant and franchise business models. Roark holds investments in a large number of restaurants such as Arby's, Auntie Ams, Buffalo Wild Wings and a bunch of.

Others, notably Dunkin Donuts. Yeah, and Dunkin Donuts.

Yeah, Dunkin Donuts and Jimmy John's. They also have Jimmy John's. So it's like now they, now they control both. Yeah, two of the biggest ones.

Yeah.

So any initial thoughts on that?

The valuation is interesting. They basically like a little over 1x on revenue.

But really like if they would have been able to sell 2015, they'd probably make more. Probably not in terms of dollar amount compared to what is now just because private equity so much more competitive. But their location count has gone down like 30%, 40% from its high. And a lot of that is just like mismanagement of franchisees. And there was quality issues like in terms of the food itself, but the actual franchisee relationships were like pretty brutal and they have been for a very long time. There's just tons of lawsuits. There's been a lot of mix up at the leadership level and just kind of a rotating door and some bad decisions they made. So the biggest thing that they, they did that led to so many locations and quote unquote success, but also led to their demise is they didn't have any territory constraints for their, their franchisees. So you could have a subway here and across the street have another subway.

Which is wild.

Yeah. Which is crazy. So that, that puts the franchisees in a spot where basically you can pull the rug immediately and it's in the best interest of the franchisor at the detriment of the franchisee. And the goal is always like when we wrote our franchise documents, like how as much as possible in the constitution, that is the franchise agreement, make sure that everything is aligned. Like when the franchise wins, the franchisee wins. Right. And so they really messed that part up for the franchisee. If they didn't, if they wouldn't have done that, they would be probably only like 10,000 locations now. But they have much happier franchisees that are all very successful and are profitable. A lot of subway shops do not make money. And, and it's, it's, it's, it's evident by the fact that 30 down like 30% of their locations in the past 10 years.

Yeah, they, so 2015, they peaked at 27, 27,219 locations now they're at like 20, 20,576 in operation.

Yeah. And I think it even is even worse if you look at just us versus international.

But yeah, these are quality issues. Obviously, the whole Jared thing with marketing was kind of a flop for them and tough. They have kind of a rotating door at the top. And then just the whole fact that, like, they could literally put four Subways on the same street, it just. No one wants to be a franchisee. And what's happening is. And when people get to the end of their 10 or 15 year term, they're just canceling. Like, I'm not making money. I just want to get out of my lease and then I'm done.

Yeah, the menu rebrand was wild too. Like, as simple as that sounds. Like my wife loves Subway. We take franchisees when they come to training to Subway, and I see people struggle with that menu all the time. Like it's a completely new menu. And I think that's. They're trying to rebrand, trying to change the image, if you will. Now they say they have freshly sliced meats, so they're trying to compete with places like Jersey Mike's. But this is something really interesting from this article is that Jersey Mike's, Firehouse subs and Jimmy John's all pull in around $1 million per unit. The average Subway is less than half a million in the U.S. yeah. That's crazy. I didn't realize that Subway was like pulling half.

The cost to build out and make one is like less than half too. So your return on capital is about the same.

Well, Jimmy Jones is actually pretty low. Jimmy Jones is very competitive in terms.

Of build out, though.

Well, I was thinking of like, initial franchise fees and things of that nature.

Yeah, your build out, they usually want bigger space. Right. And you got to have the, the insurance for deliveries. Right. So, like there's. They're just like. Their cost is usually, I think like 3 to 400,000 for some design.

I think their initial fee is like 80. Whoa.

For one or you have to do three for.

I think that's. Oh, I think they're just one.

Okay.

I looked into. I looked into it years ago because I love Jimmy John's.

I was like, it's kind of like. It's kind of like the solo model of the sandwich. You know, fast food restaurants. But yeah, I was gonna say something. Oh, yeah, no, that was not. I forgot. I said it on the comp, on the, on the, the mastermind the other day because this was a question they talked About.

Yeah, I don't remember what your response was.

Oh, man, I totally forget. It was like, like, and I think a big thing too. My takeaway from the Subway, you know, what they've had to do over the past 10 years and like, really restructure things is why we don't have the marketing being done from corporate. Like, the five dollar footlong kills Subway because it got so ingrained in everyone's mind that $5 is how much I pay for a footlong. Like, they can't break out of that brand. Like, it's just like. So it was so pitched and it did so well in terms of revenue. And they kept pumping it because again, the royalties that Subway gets is based on top line revenue. So they were losing money as franchisees on the $5 footlong, but because revenue was going up, Subway just like, let's go, keep going. And so that is, that's why, like, at Augusta, we do not have a marketing fund. We don't control what they, they their pricing is because that's the result is a $5 footlong in San Francisco looks very different than a $5 footlong in Alabama. And so that is a, a mistake. I think that franchisees, franchisors do is like, is national marketing and national pricing because, like, there's just no change. Like, there's so different. The pricing needs to be different. So that was a big mistake I think they made because I specifically remember when they took the $5 foot long away and people like, their revenue tanked.

Yeah.

And then they're like, everyone was just like, very freaked out. It's like the franchisees were ecstatic. They can finally make some money here.

Why do you think? And be interesting to research this, but just a thought that came to mind is why do you think Subway had such pushback with five dollar footlong change, but now McDonald's doesn't have a dollar menu anymore.

What do you mean?

Like, there's no dollar menu at McDonald's anymore? Because that used to be a big deal.

Right over the value.

They did.

Yeah.

So you think it was just the slower transitioning of the. The menu.

Yeah. I also think that like, a dollar wasn't like, I didn't assimilate a dollar with like a burger at McDonald's. Like, it wasn't like, pitched that way. Like, there was Big Macs. There were more. There's other stuff. There's meals and stuff.

It was $5 foot long. Yes. One sandwich.

Subway, it's like, it's a sandwich and I'm paying $5 to I'm. I should go there and get a $5 sub sandwich and like you just can't have the labor, the cost of goods which is like the bread and everything. And then now if you're at increasing quality like in slicing the bread, slicing the meat, that's an increased cost.

Yeah.

And so they can't, they could not improve the product because by doing so they were making their franchisees lose money. And so I think that's just a cautionary tale to like even us is like you never tell the franchisees what pricing should be because it should vary and you never tell them how they should market or what promotions they should run. And I see why they do it because it creates a cohesive brand and they can promote across the whole country, etc. And that's why they got franchisees and that's why so many people bought into Subways because we all know the name. And so when it comes to a franchise the value of is either a systems, trainings, procedures and efficiencies gained and using technology or it is.