The Shortcut to Wealth: Building a Million-Dollar Business

You can start your own thing, but you have to be prepared for what could be a pretty treacherous journey. Regardless of all your planning, imagine if you're hiking, you're creating your own trail. You are going off roading. You don't know what you're going to hit, what you're getting bitten by, but you're going to have lessons, lessons upon lessons. There's nothing wrong with it, but I know a ton of people that started with a franchise and then built that confidence, that knowledge. A franchise is truly creating your own trail, essentially like a road with guardrails. On this road for you.

Guys, I'm up with my good friend Lance Gralik. How you doing, man?

I am fabulous. Thank you for having me, Steven. Excited to be here.

Oh, my gosh. Well, it's not often you get to talk to a franchise guru. Right? So, you know, it's funny how many of our, how many of our folks that follow the show ask all the time, what kind of business should I start? I have this. I have an idea. Can I turn that idea into a franchise? I was just talking to some good friends I'm trying to help out who want to start a biohacking business model and would like to master, you know, we. You've used the old McDonald's approach. Right. You master the one and then you scale it to many. Right. So, yeah, they have some of that concept in mind. So I know we could talk about all kinds of different things, but let's maybe start with the entrepreneur who has an exceptional idea, or at least they think it's an exceptional idea. They need to run it past someone like yourself to validate it. Of course. And they have aspirations of franchising. Why is franchising a good direction for them to go in that, with that specific level in mind?

Yeah, I always look, I always talk about looking at the opportunities and the. In this case, you either do it yourself, raise all that capital, take it across the country. Stress over managing employees across the country. But many companies have done it. Howard Schultz created Starbucks, ran it across the country, In N Out Burger, slowly crawling across the country since 1940.

Exactly. So for me, in the world of franchising, and we could talk about what I'm looking for in a concept, but the reason people want to do it through a franchise, if you've created a great model, it is an amazing way to exit. Because we'll cut to the chase here. When you go to exit, you're valued at. In the old days, 10 times EBITDA. Yeah. You know, cash Flow, depending on the factor. But 10 times, and now I know of exits for 30 times. I know a home service brand. 3 million in EBITDA sold for 90 million bucks.

Are you kidding?

That rattled a bunch of cages in franchising.

Like, holy cow, I officially did my exit wrong.

Yeah, no, but. But in the world of franchising, private equity groups go where there's. Where the money is, and they love the world of franchising. And so that is the reason that anybody with a great business idea should look at franchising. I think it was last year, Ellie. Ellie. Mental health became a franchise. Some of my friends said, mental health franchise. So this is a franchise for everything, whether it's roofing or air conditioning or commercial cleaning or residential cleaning. Why not Mental Health? There's already med spa franchises. I think they literally did their thing for three years, Steven. Yeah, three years and exited for 100 million bucks.

Now that's what I call 100 million. That's what I call a return right there. Holy smokes.

Ex.

Wow. Yeah. Well, it's. It's interesting to me that, you know, as, you know, I. My first company, I. I started in the trash piles of a construction site and. And grew it and. And whatnot. And know, I. I always felt like we had something special with the business. And, you know, the. It's funny, the. One of the larger manufacturers at the time, the. The primary service we offered was turnkey siding installation, and James Hardy Building Products, who was one of the, you know, obviously one of the market leaders in building products for that. That segment was coming to me all the time, asking me what my special sauce was. Like, how did you scale a company from literally nothing, you know, to doing, you know, tens of millions of dollars in revenue annually on a regular basis, I'm like.

I just did it. Like, you know, I just. And then I started thinking about, like, well, you know, I was. I was adamant about a certain culture. I was adamant about refining systems. I was adamant about customer service satisfaction and, like, you know, always optimizing. I took it on a. I would take it on the chin a few times just to make sure the customers were satisfied, because my first mentor, Steve Mar, told me a long time ago, like, look, you tell you make one person happy, they'll tell 10 people. You make one person mad, they'll tell 100. Right? So the law of average was already against me. And then it got me thinking, you know, with. With so many roofing businesses and H vac companies and these. These other companies that are doing really well, in the franchise model, why hasn't siding taken off? And reason I say that is because when I was trying to exit, we got a lot of pushback on the siding segment. However, our roofing division people were very attracted to which was weird to me because we made more money on the siding side than we did on the roofing side.

Yeah, those are people that just don't know because we all know the riches are in the niches. When I became a Wingstop franchisee many, many years ago, a lot of my friends when I got into it go chicken wings. That's like an appetizer. That's not a business. Sounded like a shark tank episode. That's not a business, that's a hobby. And the reality is it was a big business. Became one of the best franchises out there even as a franchise. Is this thing going to work for me, my family? It's going to work in my local area. Sometimes people a little bit too much on the analysis paralysis side of that. But nevertheless there's no doubt the niche businesses are, can be fabulous. But look, I call it following your profit path. And in franchising there's a franchise disclosure document. You have to reveal data if you want to sell franchise. Yeah. So if I would have seen your numbers and known what kind of numbers you can do then I mean that's, that's half the battle is understanding what your projections can be as a franchisee.

Yeah. Well if you think about it too, that document reference that can, that may turn some people off and it ironically could turn some people on. So let's say that that document says, well, you know, the, the percentage of profit and revenue and whatnot. The, the model, the financial model there is less than desirable for certain investors or certain people that would buy franchise. But yet you come into a niche with a special skill set, a special understanding of how you might be able to elevate those numbers in your own right. Kind of the Wingstop approach. I know that one wing swap didn't do very well and one did killed it, you know, kind of thing. So what types of non financial factors should we be looking at in evaluating potential franchises as, as potential entrepreneurs who are looking for that next business endeavor.

Yeah. And when I looked at Wingstop and the item 19 which in every franchise disclosure document every franchise brand has to produce one and update it on an annualized basis. There's 23 items in it. Item 19 is the earnings claim. No one is required to put data in. But if you want to sell franchises and you want to be able to talk about anything it needs to be in that document. Otherwise you cannot talk about it. When you talk about non financial factors, you have to believe in what you're doing. I don't care if you're doing a pooper scooper franchise or roofing or wing stop. You have to believe in what you're doing and feel good about. Maybe it's easier to feel good about the food business. Somehow people think that's always a sexy business. Even though it is the absolute hardest with the worst employees and the most theft and perishable goods and whatever. I got good at managing those types of employees that didn't really give a rat's ass. But you had to care about them and build a culture where you supported them even more than their family in some instances.

Yeah.

So non financial factors, you're looking at the actual niche, you're looking at whether you think personally it's something that, that can grow. Because at the end of the day every early stage investor in Uber or any tech company, they were, they were betting on a horse, so to speak.

Yeah, yeah.

Amazon took a really long time to become Amazon as we know it today. Right. So it's no different when you get in the early stages of a franchise is you truly have to believe that this is going to work. However, if your risk tolerance is such that you're going to say, lance, I got a family, I got kids, which a lot of my clientele does. And that's a whole other story. Franchise owners today are skewing so much younger than ever. In the old days it was a 50 year old guy retiring from his one corporate job. Yeah. Now I'm talking to 32 year olds.

I was, it's interesting because I was thinking about different businesses. A lot of seven figure entrepreneurs that I know, right. They just crossed the seven figure threshold. They talk about building a business where your eight, nine figure entrepreneurs focus on assembling a business. So, you know, getting the pieces put together. And one of the things that I was thinking of specifically in the independent business model, which is where I would, you know, I, I was raised, so to speak, I paid a lot of stupid tax, a lot of stupid tax. And I would have much rather have had some frame of reference, some formula, something to follow, you know. You know, it's funny how many entrepreneurs I work with all the time now that a basic SOP is like something out of the, you know, something out of the, I don't know, the, the, the stratosphere or something. And almost all these different franchises I'M aware of. They have a proven system that they follow that tells you exactly what to do and when to do it, including learning how to read financial statements, which took me 10 years to figure out as a GD kid. You just gradient entrepreneurial. So yeah, maybe if you don't mind, break up a little bit more about kind of the standalone opportunities and risk with a franchise model and the same with the independent business model as you kind of see it.

Yeah, and it's such a great question. I honestly think the risk most in most cases is that the brand doesn't know you. They don't know whether you're going to work, they don't know what kind of leader you're going to be. Are you going to be able to hire people and build an appropriate culture? But franchises are absolutely designed to give you everything you need to know. I call paying that franchise fee to join a franchise. That could be 30,000, could be 50,000 bucks for the first territory, exclusive territory. And that's like your mastermind fee. I had Kelly Roach on my podcast a long time ago and she told me her mastermind was $80,000. And I said, okay, that's like more than joining a franchise. But in a franchise you're rubbing elbows with people doing the exact same thing as you. And in some cases I could point you in the direction of certain franchises in senior home care or home services franchisees doing $40 million a year. Well, you definitely want to know what they're doing because you're just starting and your goal is to get to your first million in revenue.

Yeah.

So the systems. The beautiful part about franchising, Steven, is depending on your appetite, depending on your risk tolerance, you don't have to be an early stage franchisee. At Wingstop, you can get into a developed H Vac company roofing, senior home care, business services, coaching type brand, depending on your skill set. Yeah, I have a brand. I have a brand that's been around since 1965 citywide. If anybody listening has sales ability, I feed them great franchisees that came out of tech or whatever and they're just calculating a well, see how quickly I can get up to 600,000 in net income a year from this particular franchise just because I have sales ability and I could follow their system. So the SOPs are all laid out. But here's the key to franchise when you work with me. Being that I'm a franchise broker, consultant, strategist, I'm going to listen to you and understand you. And then based on your needs and your Goals. I'll put you with the brands, I'll introduce you to the brands that are going to fit you. You just don't know that yet. And as you get in conversation with the brands, besides seeing the disclosure document, as you go down the path, you go through a stage we call in franchising. Validation. It's a thing every great brand has, a great validation process where you now get to talk to the franchisees, hear about their experience. So, Stephen, what was the hardest part of your first six months or year with this brand? When did you start cash flowing? You know, what was the best part? What was the hardest thing that you never even imagined would be hard? That was, how difficult is it to find employees? So again, the classic, you're in business for yourself, not by yourself. And again, unlike a mastermind, you're in a scenario where everybody's doing the exact same thing as you and nobody's competing.

Yeah.

So there's no reason not to divulge your secret as to how to run the best one hour heating and air conditioning location in the country because they're not your competition.

Yeah. No, that's such good insight. I was also thinking too, like one of, one of the intangibles are the things that we as entrepreneurs face early on. Well, really like a huge chunk of the business that you just touched on in a different kind of way is if you go with sort of independent business, you actually got market competition. So you're competing against the local market, doing what you do. In theory, if there's, obviously you're, unless you're super niche. But more importantly, I was alone. Like I was isolated a lot, building, building. You know, it was probably 10 or 15 years before I, I even found a, a light network to really tap into and run things past. And you know, and you know, so much about business to me is, is all about the opportunity and risk factor. There's a ratio, right? There's.

Yeah.

You know, historically entrepreneurs are like, everything's opportunity. We'll worry about the risk later. Then you got the analytical side. It's like, no, it's. Everything's risk. We'll wrap the opportunity later. And what I've discovered is so much of that's in the middle. And to me, hedging bets against your risk profile comes down to the network you have, the business model you follow and the niche you're passionate about. You know, it seems like if you do those three things with excellence, then you're going to succeed. Yeah. You know, so this, this, this idea, this concept of.

A partnered or peer to peer network where you can share ideas that are non conflict, you know, they're not conflicting, they're not hurting, they're not doing anything wrong. I think it's a big deal. Yeah. You know, because I'm just thinking through my last 25, almost 30 years in business, how many times I was literally, in certain cases, I'm just being honest with my audience, crying about not knowing what to do, knowing I had to make a decision, whether it's hiring and firing, expanding, not expanding, pulling back. You know, a lot of what I learned how to handle Covid when Covid happened was what I learned in 2008 in the downturn. Yeah. You know, I use the same principles to kind of weather those storms and then accelerate accordingly. You know, and, and I, and I look at all of these different types of things where I don't know that entrepreneurs really have really digested or really looked into franchising models. Because a lot of times we're. At least early on I was told that I was going to make less money if I did a franchise rather than starting my own standalone business. But then when I did some basic math, I realized how much money I spent on my stupid tax and my learning curve.

Yes.

I realized I probably would have made more money quicker, faster, earlier with a franchise.

Yeah. I mean, there's no doubt that depending on you, it all depends on you and what your skill set is, what your mindset is, all of that rolled into one, and what your real goals are. Some people are really aggressive. I have plenty of franchise friends that make 300, 350,000 a year. They don't work nights or weekends anymore. They're happy as can be. They have no hassles. They have an entire team at the corporate office, the franchisor that supports them. And they're good. It's what some might call buying a job. But to them, they're building equity and they can exit in that job for a million bucks to a million five.

Yeah.

And, and, and they're not even looking to exit it. At some point that's going to be a multigenerational thing like McDonald's. They're just going to give it to their kids. And a lot of the franchise contracts are easy to transition there. But let me also address something you said earlier. You know, in the old days, in my opinion, in the old days, there was a lot of people that followed their passion to do something, whether they watched their father, their mother, their grandfather, someone in their family, it was like an environmental thing. They were following somebody in a specific business for good or for bad. If dad worked for a roofing company, maybe he brought you along when you were in high school because they were short people. And then all of a sudden, you're a roofer and it's something, you know. But at the end of the day today, in my strong opinion, people are looking for that financial freedom to the ability to make whatever they need to make and to spend more time with family or to do with what they want. So what that translates to is it's not so much passion that people are following, like they really want to work with kids, or they really want to own a roofing company or a restaurant or whatever. They're really smart enough to open their eyes to say, what is the easy, easiest way that I can make money today so I could really do what I want, spending time with my. In this case, wife and kids or husband and kids. And the reality is there are more franchises today proven that people can fit into for under 250,000 SBA loans available. Go ahead and leverage your money putting 50,000 down and get into a franchise and start building that foundation, because anybody can do it. The problem is not everybody will do it because there's work. I've asked one of my favorite friends multiple times on my podcast, and I said, dennis, you have to tell me, why are people not successful in your brand? And he looked really close at the camera, and he said, lance, they don't work. They don't work. They become a franchise owner, a business owner, in most cases, for the first time, and they choose to do other things and basically piss away this opportunity. And it's the same reason people wake up one day and go, how the hell did I get to £450? Yeah, how did I get to be so overweight? I just remembered when I was 25 pounds overweight. Things happen quickly in life, and we get to control our destiny, but there's work involved in everything, whether it's health, wealth, or relationships.

Yeah, it's interesting to me because.

There'S a. I think there's a miss. A myth that a franchise is automatically going to be an ATM machine. So therefore, if you consider. If you're going into it with that scenario and you're not expecting to put the effort in, but yet you're expecting to get a return out. That's just foolishness. Like, you can. You can have all the wonderful systems in the world. You have the best sales team in the world, the best processes in the world, the best, you know, Raving fame retention plan is one of the things we preach about here. You can have all of that in place, but if you're not going to be the person leading, not be the person checking your financial numbers, not be the person watching your inventory, not being, you know, just. There's so many of these little subtle things that determine if Your EBITDA is 0 or 5 or 6 million 100, you know, so that kind of leads me down the path of what are some of the. And I'm sure that the intangibles are very similar with an independent business and a franchise business. But what are some of the intangibles or character traits or character qualities, value systems that you look for in entrepreneurs seeking to look at franchising?

Yeah, the entrepreneurs that come to me, I'm looking for people with a certain energy. When I'm talking to a low energy person on the other end of the phone, I give them the benefit of the doubt in the first call. Maybe they're just scared, maybe they're nervous. Maybe it's the first time they've ever considered doing anything for themselves with a big investment like this.

Yeah.

But high energy is very, very helpful. How is somebody going to come across. Anybody with a sales background, tremendous. For franchising. So people with a sales background generally have some sort of aptitude for interpersonal.

They actually enjoy the kill.

Absolutely. And they have some sort of interpersonal skills. They're used to persuading people. Those are all great skills. The classic grit or focus or determination, willingness and the I must succeed type of thing. You mentioned decision making earlier. People have to make decisions every day and there are some people that get stuck with all that. So at the end of the day, it just depends. I'll tell you something funny. I have a residential cleaning brand that sounds like just such an awful thing that half the listeners right now about to tune out, like residential cleaning. Lance, come on. Well, top franchisees, the top third, I think disclosed in the item 19 did over 2.2 million last year. And here's a fun fact. More than 60% of franchise owners of that particular brand have an MBA or another advanced degree.

Yeah.

Okay. Crazy fun fact. Why? There's something they see. There's a culture that's been built for smart people, for studious people that, you know, as they come through the system. Anybody I know with an MBA might get that brand shown to them, so to speak. Because like joining a fraternity or a sorority, whether the good or bad, there are people that want to be with people like them. And the truth of the matter is, every time I have a founder or CEO of a franchise or a franchise brand on my podcast, typically every Friday, they all tell me the same thing. If I ask them the question, Stephen, who are your top 10% of high performing franchisees? Where did they come from? They all laugh and say, you're not going to believe it. It's not that they were a lawyer, it's not that they were a doctor. It's not that they were some middle manager in a Fortune 500 company. They're from all over the place, they're from all walks of life. These are just people that get to a point. And I hate to sound salesy, but the reality is, when I teach franchise consultants for our organization, Brand New Folks to franchising, the reality is people that I'm talking to every day have pain. I spoke to a guy this morning, works for a huge company in a city to remain nameless. He's their attorney. A big company. He makes big money. He's in his mid-30s. And he goes, I make fantastic money, but I'm miserable. And I know at any point this company can get rid of me. My kids are young, I don't see them as often as I can. So the pain for him is that he doesn't have the time with the family. And by getting into a business, hey, he can create his own business. But we all know how much time. And let me give you a story on that. Spoke to another guy recently and his son. The son wanted me to talk to dad because here dad is getting older, he's in his 50s, I'm going to be 58 this year. And dad was anti franchise. So dad created his own H Vac company. Didn't know much about it. He paid that. Which tax are you calling it?

I call it the stupid tax.

The stupid tax. He paid a lot of stupid tax. It took him about eight years to get up to 850,000 in revenue. And now he's happy. He said, well, why would I have joined a franchise? Because my favorite H Vac franchise, you would've gotten 850 or more in year one. And you pay a $43,000 entrance fee, if you will, the mastermind fee, known as the franchise fee. And in year two, you're probably at a million and a half, 2 million. And the average franchisee is doing 4 million plus. And people are exiting for 40, 50, 60, 108 million as a franchisee. And in most cases, none of them knew anything about H Vac.

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Absolutely, I did.

There's exponential amount of time, energy and resource. I'll never, you know, my, my audience has now heard me say this. A lot of times. My oldest son came to me, gosh, probably two right out a year and a half, two years ago, he said, you're an amazing dad, you were an amazing husband. The only thing, if there was one thing we'd ask you to work on is to have, is to be more present. When you're present and when I Went to go stand, create a standalone business model. Now I innovated the market for the area that I was in. So for whatever reason, God chose me to walk out that, that path.

I did so sacrificing quality time a lot of times with people that I love because I was having innovate and create and systematize a lot of times on the fly until we got past about 80 million. Once we got past about 80 million, there was enough structure and things of that nature, enough of that, those pieces in place where I started to have some level of freedom, which is about the time I, you know, I basically exited. Right. So reason I bring that up is because it seems to me that the barrier to entry is so low to get into a quality franchise. So therefore there's a risk reduction there.

Yes.

There's also a team of people who are going to teach you how to operate a successful organization. If you're teachable and you're learnable and you got tenacity. I think tenacity is a character trait. You have to have an entrepreneurship. You also have, you also have to be teachable. I think that's a mainstay in any entrepreneurship, whether it be franchise or standalone. So you got a risk reduction component there.

On the back side of that. Let's say you go and you start, you, you have a low barrier to entry. You come into the business, you get taught you, you, you work your business three to five, 10 years, whatever, whatever the scenario is for you, you get yourself to exceptional, healthy ebitda and now you can exit, Right?

Yeah.

Then you'll probably have people come alongside of you again to teach you how to exit, which is a whole other skill set. Like my.

Yeah, I had a call with friends of mine yesterday. They help franchisees that are exiting for 10 million or more plan and strategize.

Yeah. And there's tax plan that goes into it. There's, there's, there's all, there's so many different things that go into due diligence and all kinds of stuff.

Well, now with the gift tax being redone in 2025, I think we were talking all about that and discussing how to get the word out on that.

Yeah, well, let's talk, let's, let's spend a little time there. Because where I was going to end with that is if you start, if you enter in with a franchise model, you're actually being taught how to build a business or how to scale a company, which means once you exit, you have more knowledge and insight to scale your own independent thing. If you decided to go that route 100%.

And that is the number one thing. I have a ton of friends that own multiple franchise brands. So I, I had a lot of Wingstop restaurants. I was president of the franchise advisory council for them. My partner and I did Krispy Kreme doughnuts in two states. And then I created my own brand from scratch called Pink Box Donuts. Because somebody called me one day and said, you know how to create stuff. Can you create that? It's now a pretty big deal in Las Vegas and expanding everywhere now, but I sold out of that, so. And you know, and like, like the title of your podcast, I'm a builder, not a maintainer. That's just been me in my whole life. Yeah.

I'm the same way.

I love, love to keep my hands in things. And you know, to your earlier comment about you, look at your audience now, today, that's why you're here. That's why God brought you here, is to spread, spread that word and help people. And that's what I do every day. Do a ton of pro bono work. Anybody listening this wants to have a conversation with no intention to buy a franchise, by all means, hit me up. I'm all over the place. But the reality is franchising. You can start your own thing, but you have to be prepared for what could be a pretty treacherous journey.

Yeah. Regardless of all your planning, you never know what you don't know. And imagine if you're hiking and there's trails and then you got the. You're creating your own trail. A franchise is truly creating your own trail. Essentially like a road with guardrails on this road for you.

Yeah.

And you want to create your own business. You are going off roading. You don't know what you're going to hit, what you're getting bitten by, but you're going to have lessons. Lessons upon lessons. There's nothing wrong with it. If you feel you want to take that path, by all means. But I know a ton of people that like me that started with a franchise and then built that confidence, that knowledge. I know attorneys that get out of law school, practice law for a period of time, hate it, and say, I need to be my own boss. Yeah. And what did two different attorneys I know in different areas of the country do? They bought a franchise because they could learn. They were smart enough. You mentioned being teachable, being coachable. They now need to learn about themselves what they don't know about business. And then once they master that and feel Comfortable. Maybe they're inspired by an idea and they get to create their own business as well. And I help tons of people. I got a text from a guy that was looking for a franchise years ago. Brilliant young guy. He decided we stayed in touch all this time. My team helped him set up a franchise system for a golf franchise. It's almost like an anytime fitness but for golf. You can swipe your key fob 24 7.

It holds all your metrics. It's for training purposes. They have colleges that use this facility on a rainy day if they can't get out on the course. And it tracks all their metrics. It's brilliant for serious golfers.

Yeah.

And it, you know, they're not serving alcohol. This isn't a, a fun entertainment facility per se. This is for serious golfers. So there's a franchise truly for everything. And if you're not sure, you have to take your first step. And this isn't joining a mastermind of mine. It's free entry to have a conversation. You know, the first thing any mentor of mine ever taught me was resource up. You need help, you need questions answered. Who is your best resource that you know of? And it's easy to find resources and mentors these days.

Yeah, especially.

And I'm free. That's what I do well.

And the other thing too is I, that I, that I appreciate about in, in. In many respects you serve two clientele from, from, from outside looking in. You serve the person who's aspiring to look into franchising and takes. And takes that, that search seriously. Right. This isn't for someone who does, who's not serious about at least looking at the, the opportunity seriously. And then you also have the, the different franchises you recommend that you represent, which is like I think 900 brands or something crazy like it's, that's a lot of brands.

It's heading towards a thousand pretty quickly.

Yeah. So with those two segments in mind, what I think is interesting.

My understanding is, is that when someone connects with you and you partner them with a franchise, the franchise is actually the one technically rewarding you for finding a quality candidate to enter there and enter into agreement with them. Which I think is really interesting. And the reason I think that's really interesting because that means you have an unbiased approach to helping said entrepreneur partner them with the right initiative that is in alignment with who they are as a person as well as a great brand to represent them along the way.

Absolutely. I get paid like an old school recruiter in the old days. When somebody wasn't really happy in their job and a recruiter called them and said, steven, I can get you a better paying job with a similar company that's looking right now. If you're interested and you join that company, that recruiter gets paid a piece of your salary, percentage of your salary. You don't pay it.

Yeah.

And it's the same thing as me. I get paid behind the scenes. So if you never met me and you joined a franchise, you pay the same franchise fee regardless.

Yeah. That's. Which I just think is, is so.

As such a disservice to the average person. This is why it, like, if somebody's looking at franchising, I want them to go talk to you. And we'll make sure we drop the links and stuff in the show notes and all that good stuff to make sure they can.

Because when it comes to this, I get this question all the time with entrepreneurs. Right. It's like, what business do I do?

What do.

What do I go? Where's my niche? There's so much time and I would call it mental energy spent with the, the wheels just going like this. Right.

It's opportunity cost, too. If they spend too many years looking for an existing business, for example, I have those people all the time. The gurus online told me I should look for somebody retiring that never invested in technology.

But then you're gonna pay a stupid tax again. You've never ran that kind of business. Entrepreneur wants out. They're, they're, they're like, you know what? Call me if you need me. They don't pick up the phone, post transaction.

Stephen, there's a lot of smart people out there that are talking about stuff that work for them that isn't going to work for the masses.

Yeah.

And you know, looking for an existing business is like a needle in a haystack in most cases. And you know, again, opportunity cost, the longer you look for something and don't find it, you know, time's ticking.

Yeah.

You know, well, again, this is where.

This is where a guide comes into play. Right. If you have a guide, you're 10 times more likely to succeed. And I don't care what it is. Golf, business, swimming, like, you name it, you're 10 times more likely to succeed with someone to show you the ropes ahead of time.

I tell people, I'm your personal trainer for business.

Yeah, exactly.

And I help my clientele after the sale, when they become a franchisee, they invest in that business.

Yeah.

I tell them all, I am here for you for Anything you need. I've actually been known to call and yell at a brand, yell at an executive of a company I did a deal with, in some cases a big company, not just a small company, saying, I don't like the story I just heard from my client. So I think you need to figure that out. And, and sometimes there's a misunderstanding. So I'm truly an advocate for my clientele.

Yeah, well, the other thing I was thinking of too is, is franchising a good vehicle for someone who maybe had a very large exit and they're looking to deploy capital. They want to get a good return on money. Is there a strategy for those types of franchise owners or buyers, if you will, who don't really want to be operators, but they want to, but they want to deploy capital and hire a great operator. Is there a scenario like that where it makes sense?

100%. I have tons of those people as well. Well, tons of those people. I have a lot. The majority are first time business owners, but I definitely have probably about 30% of my clientele are higher net worth individuals that have already made it in something that are looking to deploy capital. I had an uncle. So one thing I don't talk about often, my claim to fame is when I left Wall street, the family business, so to speak, I had a whole family of entrepreneurs. I had an uncle that called my father and said, I heard Lance's board. Is that true? Yeah, he wants to work with people or some crap like that. And I joined my uncle, who was an early stage tech guy before anybody knew what the heck tech was. And he made a fortune. And I. And he said to me over the phone, I'll never forget this, I want to build a billion dollar restaurant company. This was 1989. Billion Dollar Restaurant Company, 1989. And I joined him and within six years or so we got to over 200 million.

Wow.

Over 200 million. So I got to experience and see it. My point to the story though is that later when he exited, that he ended up investing with a friend and a whole bunch of Popeyes. There was a franchisee that wanted capital for expansion, was pretty tapped out with his banks and didn't want banks anymore. And uncle Stephen invested and I think they had 260 Popeyes in the Midwest, Texas, whatever, in that day. But I did help a family recently, a bunch of automotive franchises. Dad's worth about 700 million bucks and he wants to get the kids on the same page. And a franchise is a safe bet. I work very closely with his attorney and it's never perfect. There's work and, you know, there's a lot of the people side of it's tough. And you said it, be coachable and you got to focus and work and, you know, so, yes, it just depends because at that point, that family was not willing to deploy capital to create just another brand for what They've already made it. They already have the money. Yeah. Now, one of the kids was following their passion in the music industry, but Dad's like, I don't know how to help you with that.

Yeah. Yeah. Well, the other thing, too is like, I was just thinking you can create a brand from scratch, but then you've got to figure out how to get market penetration when you've got competitors in the. In the space that have already been around in the space that in many cases already have franchise models. So it's like, I don't know. I don't know. I'm the gritty kind of knucklehead that would probably try to fight against the system just because I'm. I'm built that way sometimes.

But. But you know what I get, I.

Get wiser about, okay, if I deploy X number of dollars of capital, I'm gonna get a. A returns, gonna be double what it would be here if I went to go try to do it myself, and it's gonna take me twice as long.

Yeah.

You know, but.

But Steven, you bring up a good point, too. Just because somebody gets to think for themselves and enjoys it, it doesn't mean they're not right for a franchise. When I joined Wingstop, I don't know if you can tell, but I'm a former New Yorker, so I like to get my way and I like to state my opinion. And I got voted on the Franchise Advisory Council, became president of the Franchise Advisory Council, essentially the guiding body for Wingstop in the early days. And it wasn't always easy. Food cost was high. We had to add menu items. You know, look, McDonald's added the big Mac and filet of fish because of franchisees.

Yeah.

It wasn't their idea. So there's a lot of collaboration in franchising. But, yes, if you join the wrong brand, it's like picking the wrong wife. I did that the first time around. Yeah. Franchising is truly about relationships. And, you know, if, you know, if you were never successful in a marriage and have no interest in a marriage, franchising might not be right for you. But I did it again, and I had it, had success in. In life as a married person. I have an amazing wife, but there's a give and take and the best franchise brands. There is a lot of collaboration to help grow the brand to, you know, higher, higher status, if you will. Yeah.

Kind of a spin off question. I'm. So nowadays obviously I'm, I, I'm in an environment where I'm trying to be wise with deploying capital and I'm, I've got obviously a strategy behind that. Part of my strategy is owning portions of or in or whole parts of operating companies. Right. So yeah, I'm looking at that. So I'm looking at all kinds of different things.

I have some stuff for us to talk about when we're done. There we go.

I figured you would. Right. So we start looking at these different avenues. Right. It's if someone wanted to build a, a billion dollar business, so to speak, could they get there through franchising?

You could, you could, but oh well, you know, if you got to a couple hundred million with nice profitability, with something running essentially on its own because you put a great team in place. Didn't take me long to get to 25 million a year with Krispy Kreme doughnuts in two states. And I literally, it was myself an office manager, a controller and a handyman, a maintenance guy because somebody had to fix all this equipment that's covered in sugar all day. Yeah, the conveyor belts and motors.

I love the Krispy Kreme donuts. They were big in North Carolina, so.

Yeah, yeah. Of course they were born in Winston Salem. So bottom line is it doesn't take much in a franchise when people are worried about marketing for you and so many other areas on how to be the best and how to stay the best and new product development and what have you. So you can get to a billion. I don't have stats on how many got are there or close, but I can tell you there's plenty that are several hundred million. I mean my, my uncle did it with TGI Fridays. TGI Fridays was most of the brand that he did and that was 93 by 94 by the time he got there. But look, I always tell people the worst thing that happens is the franchise business of yours is the foundation for things that you then do later. There are a ton of people. Junior Bridgman, for example.

Yeah.

Basketball player. I'm old, so there's a lot of people listening. If they're my age, they might know of Junior Bridgman, big time professional basketball player. A lot of people never heard of so many franchises. Made a Fortune in franchising far more than he ever made playing basketball. But then you have Magic Johnson and Drew Brees and Rick Ross and all these other athletes and celebrities that are doing franchises. Peyton Manning and it's a supplement. Shaq is a big one. Shaq's now a franchisor of his big chicken concept. But there's a ton of ways to make money. Even Guy Fieri from Diners Drive Ins and Dives has a franchise concept. It's a great diversification. You want to create your own stuff, do it. No reason you shouldn't have franchises as well and put people in place to operate. There are brands. The majority of franchise brands today allow smart business people to jump into their system, you know, and plug and play. I know a fast signs franchisee did, I think 42 million last year.

Oh, wow.

And he just joined another franchise, you know, likewise, Stephen. I know a guy that worked at a major roofing company as an employee, raised his hand and said to the franchisor, I want to be a franchisee. I'm tired of training future millionaires. Yeah, I know everything now. He didn't leave the company and start his own roofing company. He joined the franchise as a franchisee. In his first year, he did 8 million. More than 8 million in revenue.

Wow.

Yeah, because he knew what he was doing.

Wow. Well, in a couple of minutes we got left. I'm curious to know what are some real tangible risk when it comes to stepping into a franchise? Because with every opportunity, there's risk. I'm just curious.

Yeah.

What types of. You know, the one that comes to mind is obviously the franchises that probably got, I assume got hit pretty hard when Covid happened, for example, as being for sure that.

That's a. That's a big obvious that nobody knew at the time. Now we know. But most of franchising was incredibly safe during COVID and. And did really well. Fitness, hair salons, personal care, not so much.

The risks are this. Just like any relationship, there's always that honeymoon phase. You get married and you think everything's going to be great and what happens.

Soon enough money passes, gas when they're not supposed to, and you have to have a discussion or.

Of course. Yeah, yeah. No. But, you know, in any relationship, like a business, there's work and you start to ignore each other and all of a sudden, you know, friction happens, communication, et cetera. So some brands honestly have not matured enough. And there's no looking in a crystal ball to determine, you know, Wingstop just as easily could have Been a crap brand.

Yeah.

And it could have gotten worse because chicken costs through the roof. Maybe they, if they were a bad leadership team, which they were not, maybe they didn't add the menu items fast enough and every franchisee went out of business. That stuff happens. I can tell you right now. I know a friend that just lost a bunch of money in a medical related franchise that didn't work. He got in and it was too new and it didn't work. It wasn't proven enough. So you have to look at what your appetite is and understand are they mature enough that they've made it. Is there a possibility that the franchisor could screw this up? Look, TGI Fridays in the old days, my uncle, he had a cell at some point and you know, I could tell you what happened there. The, the, the president and CEO were amazing, amazing, amazing. They both left at different times. And by the time they both left, guess what? The guys that came behind him, the gals that came behind him. Yeah. Were not good. Yeah. And didn't. Didn't understand the essence of the brand. And the brand went downhill and chased Applebee's and Chili's to where they are today, which is not so good.

Yeah.

Opinion. So the bottom line is you have to share the vision with the owner of the group. Now the owner might still be the original founder.

Yeah.

Citywide Facility Solutions been around since 1965. Not private equity. You get into that, you got Savannah and her dad and her grandfather to have a conversation with. So it's kind of a no brainer. When I have smart people like you, Steven, that meet them and go, damn, I want in on this, you know, because I share their vision. I see why franchisees, the average revenue is over $8 million in this brand. You know, on something that's needed building support and facility management.

Yeah.

You don't need the experience. So yeah, that's kind of the sum up is, look, there's franchises for everybody. I want to show people the safest franchises for them. And all you have to do is really put in the work. But your skills, I call it your what, what is your role going to be? Are you going to be full time owner or part time owner and keep a job, hire a manager? What is your investment and what are your skills? You know, what are your skills that you have? I mean, if you don't have sales ability, you're not getting into Citywide. For example, if you're an engineer, you might be suited for this, this and this. If you have that coachability, if That's a word. If you have that teachability. I know. That is a word. More so you have that focus and determination to do something great. It is pretty easy for smart people to look around in the validation process and determine, hey, this is a place I want to be. I'm hearing that people are doing, you know, 4 million in their first year, 20% net. This is kind of a no brainer. And there are a lot of franchises, in my opinion, that are a no brainer. People ask me all the time, well, Lance, you owned all these businesses. How come you don't own franchises? And that's the thing. I thought I wanted to be a billionaire when I was growing up. And then I realized, you know what? I get to a point, I got to a point where I had enough money and I'm like. And I made mistakes, like, you know, the big divorce, some partnership breakups that caused me to sell things sooner. Sure. And then I got to the point where, well, I have enough money and I fell into being a franchise broker. And I love it. My favorite hashtag is probably your favorite hashtag, changing lives. That's right. Because that's what I do all day and every day, and I love it, dude.

Lance, thank you so much for coming on the show, man. I really appreciate it. We're going to find out a little bit more about you.

So, Lance, grallock.com is one website, but I'm all over Instagram. I have a unique, very unique name. My podcast is Ion Franchising. Eye on Franchising. But hit me up, shoot me, hit me with build in my DMs. So I know where you found me and I'll send you my free assessment. My free assessment is pretty cool. Takes you about 15 minutes. If you're looking for a franchise, it helps me understand, based on your mindset, skillset, life experiences, what brands might be best for you and you get a nice little report. If you're looking to set up a franchise system and you have an independent business, hit me up pretty easy. Or hit Stephen up. He'll send you to me.

Yeah, let's go. Yeah, absolutely. Lance, thank you again, my friend.

My pleasure.

All right, take care. I hope you liked that video. And if you did, make sure you check out this next video right here.

Most people are over educated underachievers or over awake underachievers. They know so much more in this information age that we're living in. They know so much because they read, they are on Instagram, they follow the gurus, podcasts, all this stuff.