Understanding the Franchise World with Lance Graulich #superentrepreneurs #shahiddurrani

Welcome to Super Entrepreneurs Podcast. Today we have with us Lance Growlick. How are you, Lance? Shahid, I'm fantastic. Thank you for having me on. No, it's my pleasure, my pleasure. I'm so happy that you came on the show. Excited to learn so much about you and what you do. But to start off, I want to just kind of give you the floor. You can talk about, explain all the wonderful things you do. Well, let's see, how do I make this brief? We don't have that much time. Well, we have lots of time. I'm old already. We have lots of time. So I grew up in New York in a very entrepreneurial family. Both of my grandfathers were entrepreneurs, and I guess that was an advantage. I got to see the opportunity to be free, so to speak, in this world and not have to be a W-2 employee. So I learned a lot. A lot of people, as you know, Shahid, are talking about the nature versus nurture discussion, argument, how do entrepreneurs become entrepreneurs? And I believe in my case, it was purely because I looked at the family. I looked at what both my grandfathers did and how they sort of became their own bosses. And I did get a real job. I started on Wall Street working for my dad's company, and they were the largest over-the-counter trading house on Wall Street in New York, I grew up. But then I realized as I got out of high school and then went to college, I kept thinking I was going to do that. And then I said, why would I be sort of restrained or constrained to that environment, the concrete jungle of New York City? I want to spread my wings and do something else. So I followed a tech uncle that made a lot of money in tech before anybody else knew what tech was. And he wanted to build a billion-dollar restaurant franchise company. And that's where I really got my MBA or even my PhD in franchising in the trenches with him. So I moved from New York to Phoenix, Arizona, and we built a TGI Fridays franchise from four locations in the late 80s, four locations to about 65 within five years. And I learned a lot, $225 million in revenue later. I said, you know, I'm going to do this. He got bored and ended up selling the company and went back to Korea to go build another company. And I ended up staying in Vegas where we had some interests and I liked Vegas a lot. So that's where I still am today, Las Vegas. But that was when I got the bite of that franchise apple, if you will, where I got to understand what systems were and procedures and working through an established brand, using somebody else's trademark or license and know-how so you can kind of step into those shoes and grow a franchise brand. So many years later, I became a franchisee of Wingstop, a franchisee of Krispy Kreme Donuts. I created my own concepts and sold them and really certainly became a serial entrepreneur. But today to fast forward, and we can certainly fill in the blanks, I'm a franchise broker. I represent more franchise brands than anybody over about 600, well, 650 plus brands today in every imaginable category, not just restaurants. I have about 185 restaurants. But franchising has changed a lot over the years for the better, certainly, especially with technology being what it is today. So I do two things in the franchise world today. Well, I guess you could say three. I mentor a lot of CEOs of sort of young, emerging franchise brands. But the two main things that I do is I find people, many of your listeners, of course, would qualify. I find people their perfect franchise brand. And the other part is I take independent businesses and set them up so they can franchise and they can grow and scale through the franchise model. So that keeps me busy. Yeah, of course. So you create a system how to go to market in the franchise world for a business. Absolutely. After you and I are done, I have two calls back to back that are entrepreneurs that have successful businesses already. And people get to a crossroads, as you certainly know, and they don't know what the next best step is for them to grow their business. If they have a $2 million business, do they get the capital to expand their business themselves and continue to work incredibly hard? Or do they allow somebody else into their system and grow and scale through franchising? And one of the things that people forget about the franchise world as a franchisor, your business is worth up to, well, minimum these days of 10 times cash flow. So you could very quickly, if you have a business doing $1 million, $1.5 million in sales and some decent profitability and you create a system, I help you and my team creates a system for you. And you could pretty quickly have a company that's worth $15 million, $20 million or more. There's a brand I know in our portfolio that is such a, it's a cleaning company. It's a cleaning company with a specialty. And that CEO started the company when he was 27. It was quite unique in the US at the time. And he sold out to a private equity group for, I think the number was $27 million to be exact. Just a cleaning company, nothing extravagant. He wasn't Elon Musk. He didn't invent the coolest electric car out there. So there's a lot of ways to make money in this world, as you certainly know. And I'm here to share the franchise route as an option. Yeah, it's great. And you're really, you're taking other people's money. They invest in your idea and your concept and you're growing, you know, and you're actually helping people generate an income and a business at the same time serving more people. It's absolutely incredible. And there's so many people that just don't know. Most people, the extent of their knowledge, doesn't matter how smart they are. We all don't necessarily pay attention to things that maybe don't concern us. And at the end of the day, most people think McDonald's, that's where their education in franchising might begin or end. And at the end of the day, it's a great franchise. In the old days, you did have to be a millionaire to own a franchise. But I speak to people every day. I have franchises that you can start for $65,000 out of your house, where people can net $400,000, $500,000, $600,000 a year from your home. And in fact, that franchise I'm thinking of right now, someone sold that franchise on a $65,000 investment for one and a half million dollars. They became a millionaire from a home-based franchise that they knew nothing about prior to being a franchisee of that brand. So could I like, for example, a startup that just started an idea, they have a little proof of a concept, meaning they did a couple of sales here and there and they have a really good model and they know that it's going to create so many opportunities for so many people. Do you recommend them actually contacting you and discussing that, or do they have to wait until they hit a certain amount of sales or growth? That's a great question. I love to talk to people as soon as they think they might have a desire at all. Number one, if anybody listening has a desire to grow their company and they're not sure how, reach out to me because my services are free. Now, I do, I have a gentleman in mind, it was a fitness concept. He contacted me about six months ago and he said, do you think I'm ready? And I said, no, you're not ready. And I gave him a list of reasons. This gentleman was so fired up after our call that he would give me weekly updates as to what he's done and the progress he's made. You struck a desire, right? Absolutely. And he had the desire. He heard me on a podcast, he reached out and we're getting closer now. It was about six months ago, seven months ago, and we're getting much, much closer. We've had calls almost on a monthly basis. I've seen emails from him. So some brands just aren't ready. Now, part of the reason that myself and my team love to set people up for franchising is we love to be the turnkey solution to also sell their franchise, to find them franchisees. And this isn't necessarily a sales pitch. I like to kind of thread the needle and let listeners understand the full circle of what happens and how you grow a business, because a lot of people think, well, oh my gosh, that's wonderful. We set up the legal part of a franchise, but how do you sell it? And part of what we look for is a phenomenal story. We look for franchisees or franchisors, I should say, that have a great story, that have a great history, even if they only had one location. I mean, look, I became a Wingstop franchisee in the early days of Wingstop when nobody really heard of it. And their average unit volume was only 600,000 in revenue. That was it. That wasn't much. And their cost of goods was way too high, but I shared their vision. I knew they were going to be a force to be reckoned with in the restaurant business in a very narrow niche that I think had room. And I was right. And that's what it is. But as you know, everybody out there, if somebody has a specific desire, like Mark Zuckerberg did to create Facebook, if you have a desire to create a concept, or I mean, go for it if you do. There are plenty of resources. Find the resources for you to help you with it. If you don't have a desire to create a specific brand that's burning inside you that you feel needs to happen, like Elon Musk did with Tesla, then a franchise could be the perfect thing for you. And even if the franchise route isn't the best scenario for you for the next 30 years of your life, maybe it's good for 10 years, boy, it'll give you the confidence and the know-how so then you can be inspired to do your own thing. We're actually launching a startup, so we should talk after we're done this call. I don't want to talk live, but definitely. We don't want to give away your secrets. Yeah, but it's pretty incredible. So yeah, we'll talk about it. Definitely. So back to TGIF. The name always fascinated me. It makes you feel happy, right? It makes you feel excited. It makes you feel like, yeah, let's go drinking, you know, kind of thing, right? Every day is Friday when you go there. Yeah, you feel good, right? Who came up with that name? Well, Alan Stillman is the gentleman. He was a very famous entrepreneur in New York. Alan Stillman created the TGI Fridays brand, I think it was 1965. The year before I was born is when that brand was created. Wow. And he wanted a fun environment, and it was an incredible company culture. But you know, that is a classic example, in my opinion, of a brand that had incredible leadership for the longest time. And I got to actually, in my opinion, again, see the downfall of the brand, sadly, where everything was done fresh in the old days, and then all of a sudden things, even the French fries became frozen, as opposed to the fresh cut fries they used to do in the old days. And, you know, people want quality. People want, people are, you know, even today, people still want quality. Maybe today, it's more customization. Maybe it's a little more speed back in the 80s. People are smart. But yeah, it's, TGI Friday's leadership changed. They left the brand. And that's what really was symptomatic of what I think was the downfall of Fridays, where they chased brands like Chili's and Applebee's. And it really wasn't about quality anymore. It was about, you know, cutting costs and making it easier, the higher, high turnover in their kitchens. How do we make it easier? But life, life isn't always about easy. You know, what's best for your customer. Customer experience. It's about quality food still. It's about the customer experience still. And every industry, right, is quality's number one. And people are very, very intelligent now when it comes to their purchases, right? Well, and nowadays, to your point, everything's on social media. So if something isn't quality, you're going to hear about it. You're going to hear somebody's opinion on it. Whether, whether they're an expert or not, it doesn't matter. You're going to hear it. So this, your company is called Ion? Ion Franchise. Oh, nice. So do you have, you don't go at a specific niche or niche, whichever you want to call, but do you, it's just, it's open to any kind of concept. No, it, you know, I, I always, I do a lot of mentoring with restaurant brands and small, young emerging brands, restaurant brands. But no, when it comes to me helping set up franchises, well, we do a thorough competitive analysis. We have a multi-step process. You asked the question earlier, we're looking for a brand secret sauce, whether you're a restaurant or not, what is that secret sauce? What is so exciting about your brand that it needs to be a franchise system? Why would people be interested in your story and joining your brand? But, you know, like anything really can be a franchise. These days, it tends to be so tech based. And what I mean by that is even, even an old school moving and storage brand like College Hunks hauling junk and moving. It's a franchise. College Hunks has a funny name. It's sticky. People remember it, but about 80% of the franchisees business in any part of the country is generated from either the call center that the franchisor owns and manages or through the website, through local search engine optimization. People are, are Googling moving Las Vegas, you know, to see who's out there. So it's amazing how these franchise brands really have become tech companies. It's hard to compete with that when you, when you were the small mom and pop trying to dominate the, you know, the internet. Do you ever find yourself, like when you get an idea come to your, to your plate, do you, do you ever feel like, Hey, I'm going to jump on this. Let me partner with these guys. Do you ever do that kind of stuff with your client? There have been plenty of occasions. I mean, look, I got a call years ago. You're in a good position for that. That's why I'm saying it was, it was 2011. So you're talking 10 years ago. I got a call from a guy that I met at one of my restaurants who calls me. It was, it was early 2011. He goes, I got an idea. Can you help me? I said, what is it? He goes, I want to start a gourmet donut shop. And I said, okay, sounds good. There aren't any in Vegas. Sounds like a great idea. I said, what do you got so far? And he goes, the name. I said, okay, the name, that's it. And the name was great. It was called, he was going to call it pink box donuts. So I created the concept, literally all the recipes. I hired a baking friend of mine and, you know, we, we hashed it all out, created about a hundred donut recipes and boom, we were open in late 2011. The bottom line is pink box donuts is a thriving. And it's a thriving and successful brand today. And, uh, it was, it was one of the last times that somebody said, Hey, can you help me with this? In that case, I, you know, I went in, I got equity, I got paid. Well, um, got a nice chunk of the company. I sold my interest, but yes, it does happen fairly often. I hear enough about good ideas. Yeah. So, uh, yeah, why not? Yeah. Why not? It's a good position to be in. Yes. Um, so did you find any, any kind of, uh, a difference in your business with COVID like with the pandemic, like when it comes to franchise ideas, concepts, have you seen something shift? Yes. Um, so there was a lot going on during COVID as you remember the first sort of 30 days or so of the lockdowns, depending on what state you were living in. Everybody kind of Canada. Yeah. Well, there you go. Every, everybody froze. Like nobody knew what to do. You know, initially people weren't spending money. They weren't doing anything. They were like, is this, is this real? Has anybody, have we ever experienced this? And then once the initial shock wore off, people started redoing their homes. They were stuck home. And so in the franchise world, all these home repair and home remodeling brands, whether it was a flooring company or a window coverings or, uh, you name it, you know, uh, our Mr. Electric or appliance, uh, repair, anything people were at their home in their homes. So the franchise world got hot, like hotter than ever with all of these things. But, you know, so franchising really didn't, uh, really did perform very well during the pandemic. Um, there were a lot of independent businesses that got hurt because they're by themselves. They don't have the support. Uh, they don't have, you know, I'll give you an example, perfect example with PPP money or the economic disaster loans that were out there. You know, a lot of franchisors rallied around their franchisees to, you know, by calling their attorneys and saying, so what's this about this PPP money that the U S was going to give out or the economic disaster loans. And a lot of franchisees got this money because their franchisors helped them. There were a lot of very small businesses that didn't have that kind of support that maybe didn't got left out, which was very sad. So, um, but you know, I'll give you a third sort of example, besides the success in franchising, I could also tell you a lot of small restaurant brands that were doing a tremendous amount of takeout or delivery even prior to the pandemic. They just kept thriving. I mean, I have friends that have franchised sandwich shops that are up. We're up 10 to 30% over the year before the pandemic, which was incredible because everybody seems to think restaurants are a bad place to be during the pandemic. And it's not true the big restaurants because of seating issues. And, and especially if the dining rooms were closed down, that's where there was a problem, obviously during the pandemic. Um, but I'll tell you the other thing that was incredible during the pandemic is getting to see the adaptation or the, the pivot, if you will. I hate to use that word. It seems so overused, but the pivot that brands did, I have, I have a brand, uh, M3 linked is what it's called. And it's a great, tremendous business development, networking brand that was just face to face. They love the idea of shaking hands and seeing each other. And that's what they did for years. So the pandemic hit and they started doing Zoom calls like we're on, but guess what? They didn't like Zoom. Zoom wasn't functional like they wanted it to be for their breakout sessions. So they spent, I think it was over $200,000 creating their own Zoom like experience, which was incredible. Like really walking into a ballroom, like, uh, like at a little hotel or something with amazing breakout rooms and great effects. And that's what they did. So prior to the pandemic, they never did anything online, nothing. And they, and they completely pivoted and added that feature to their toolbox, so to speak. And with incredible results, because as you know, when you're a busy executive, instead of driving cross town to attend an event, like they allowed before the pandemic, or like they focused on before the pandemic, now you can jump online and participate, you know, with people from Canada. Yeah. I love it. I love the virtual world. Um, yeah, yeah. For me, it's been the best thing. Absolutely. I agree. Yeah. You get to do so much more being online. There's no replacement for the face to face when it can happen, but, but absolutely to really establish rapport and relationships and be able to see each other. It's fantastic. Yeah. Yeah. That personal connection, uh, face to face is, it just has a totally different type of vibration to it. You know, you get to kind of intuit the intuition connects and you get to know the person at a different level, but still you can achieve that virtually as well. Uh, but of course there's a little bit more. Um, we always like to ask our guests what their superpower is, that inner superpower that got them to this point. Yeah. For me, my inner superpower, uh, a lot of my clients will tell me it's, it's my x-ray vision. Even if they can't see five years from now, I tend to be able to, I don't know why. I don't know how you play the stock market. I, well, and I grew up in that. So yes, but I, I tend to be able to see trends and see the future. And, uh, and, and I don't mean it in sort of a hokey way. Um, I, I listened to people and I find out what their special skills are, what they like and what they don't like in an effort to find them their best business, or if they have a business specifically in mind, how we can, we can grow and scale that, uh, most effectively. So the answer, answer your questions, definitely vision, or in some cases it could be referred to as x-ray vision. That's good. Future vision, future vision. Yeah. That's excellent. And entrepreneurship, that's for sure. I would think so. It's worked for me. Any, any like a recommendation or suggestions you can give anyone that's listening, um, about kind of having an idea they're working in a job, for example, and their big dream is to franchise all over the world, but they're just having a thought. What would you recommend to them? Yeah. Well, I mean, I always tell people to resource up, look for resources. Um, there are local, uh, community development groups. Score is one of them. The, uh, score agency you'll find, uh, as a government agency nonprofit that helps people with small businesses and business plans. You can certainly reach out to me by the way, I do have a free assessment tool on my website at ionfranchising.com, which it really, uh, it's a combination of skillset, mindset, comfort zone, uh, to determine what franchise business could be right for you. So that assessment tool, in addition to a whole slew of questions I'll ask you, uh, helps me kind of size up what's good for you. And believe it or not shade, you know, you're talking $25,000 is typically the minimum that I ask people to come to me. If they're going to come talk to me and they're interested in a franchise. And some people come to talk to me with less money in their pocket because they want to understand the planning aspects. So, uh, reach out to me. Um, I, like I said, I'm a free resource. Excellent. Sounds great. You know what? It's been a pleasure having you on the show. Um, it's such an amazing information and I'm so happy to hear things are still, you know, kind of growing and everything is good. I've never been busier. So thank you for having me. I appreciate it. No, no problem. Have a, have a great day.