As a seasoned franchise broker, Jane Stein unravels the fascinating process of linking people with the perfect franchise. She shares her expertise on how to align your lifestyle objectives, budget, and personality traits with the right franchising opportunity. Jane also highlights the importance of understanding the team culture, regulations, and due diligence involved in joining a franchise, and how a franchise broker can aid in navigating this journey. But the franchising world is not without its myths. we addresses several common misconceptions, clearing up the notion that the franchisor runs the business for you, or that passing the business on to your children isn't an option.
Connect with Jane Stein:
Website: https://www.yourfranchiseiswaiting.com/
LinkedIn: https://www.linkedin.com/in/yourfranchiseiswaiting/
Facebook: https://www.facebook.com/YourFranchiseIsWaiting
Twitter: https://twitter.com/JaneStein1
YouTube: https://www.youtube.com/@yourfranchiseiswaiting6087
Follow the podcast at @itsjustbusinesspodcast on all the major podcasting platforms.
Connect with us:
To get in touch with us, email the podcast at itsjustbusinesspodcast@gmail.com.
Join us on Facebook, Instagram, or LinkedIn - we appreciate your support!
www.itsjustbusinesspodcast.com
You can find Dana @adashofboss, @dana.dowdell and @hrfanatic
Dana Dowdell – Boss Consulting – HR Consulting
Google - https://tinyurl.com/y4wxnavx
You can find Russ @reliable.remediation
Russ Harlow – Reliable Remediation – Disaster Restoration
Google: https://g.page/r/CXogeisZHEjMEB
As a seasoned franchise broker, Jane Stein unravels the fascinating process of linking people with the perfect franchise. She shares her expertise on how to align your lifestyle objectives, budget, and personality traits with the right franchising opportunity. Jane also highlights the importance of understanding the team culture, regulations, and due diligence involved in joining a franchise, and how a franchise broker can aid in navigating this journey. But the franchising world is not without its myths. we addresses several common misconceptions, clearing up the notion that the franchisor runs the business for you, or that passing the business on to your children isn't an option.
Connect with Jane Stein:
Website: https://www.yourfranchiseiswaiting.com/
LinkedIn: https://www.linkedin.com/in/yourfranchiseiswaiting/
Facebook: https://www.facebook.com/YourFranchiseIsWaiting
Twitter: https://twitter.com/JaneStein1
YouTube: https://www.youtube.com/@yourfranchiseiswaiting6087
Follow the podcast at @itsjustbusinesspodcast on all the major podcasting platforms.
Connect with us:
To get in touch with us, email the podcast at itsjustbusinesspodcast@gmail.com.
Join us on Facebook, Instagram, or LinkedIn - we appreciate your support!
www.itsjustbusinesspodcast.com
You can find Dana @adashofboss, @dana.dowdell and @hrfanatic
Dana Dowdell – Boss Consulting – HR Consulting
Google - https://tinyurl.com/y4wxnavx
You can find Russ @reliable.remediation
Russ Harlow – Reliable Remediation – Disaster Restoration
Google: https://g.page/r/CXogeisZHEjMEB
Hi Russ.
Russ:Dana, what's happening?
Dana:How are you? I'm doing well, we are going to travel down the path of your former life today.
Russ:Yes, indeed, and this is one of the ways that, if you want to get into business, this is a legitimate route in order to pursue, and our guest helps people who do it.
Dana:Yeah, so we're joined by Jane Stein. She is the founder of your franchise's Waiting and she helps individuals and companies, I guess, find franchising opportunities. So we're going to talk all about that. Jane, welcome to. It's Just Business.
Jane Stein:Why thank you so much and happy 4th of July.
Dana:Happy 4th of July weekend. So you started in the corporate world and then got into entrepreneurship, so tell us a little bit about your journey into being a business owner.
Jane Stein:Oh great, I was a stockbroker for 25 plus years we don't call it that. I was a senior wealth manager with what is now Morgan Stanley and during that period of time, which went through many iterations and different business cards and ownership changes, I ended up creating kind of a very unique environment because I built a team, I brought people in under me, I paid people out of my pocket. At that time nobody was doing that. They were either going independent or you just did the normal brokerage route. So when I think back and of course I grew up with an entrepreneurial family my dad was a jeweler. He ended up having five stores all through the Midwest. We all worked there in summers for what I like to say as minimum wage and all the cheapest jewelry you could steal. But that was how I grew and I ran the engraving machine and I mean you know, we all it was all hands on deck at Christmas. And so when I did the brokerage route, I was like what do you mean I I have to share my assistant with five other brokers? No, I just paid for the best one I could find and same I just brought in. When I would meet people and they were like killer, communicators and salespeople. I brought in one guy who was the top salesman at the biggest haberdasher you know in Houston, and another one who had been doing something else and trained them, brought them in. So I guess, in looking back, I I viewed that as my business. I didn't view it as being owned by Morgan Stanley, although they got a lion's share of the commissions.
Jane Stein:But you know, I was an entrepreneurial person and when I got out of that and I retired quite young I was 47 when I retired, believe it or not, and I wanted to, you know, be at home with my boys. We had recently moved to Colorado. I had a child on the spectrum. It was important to me that I was in the classroom with him. This is elementary school, when they want you in the classroom and I did that for about eight years, nine years, and then you know they don't want you around anymore, you're not needed, and I got bored. I was doing some pretty heavy duty, volunteer work, but I realized I missed business. I missed talking about business. I missed, you know, being just just having those conversations, having someplace to go every day, having structure in my life and, frankly, I'm miss making money. Is that okay to say? I, you know.
Russ:Yes, it is.
Jane Stein:And so I thought I would buy a franchise because I capital not a huge amount, but I could throw some you know, a couple of hundred, maybe it's something. And I, my perception was they were going to run it for me. We're going to talk about this in common misperception, misconceptions. But I'm like, oh cool, they run it for you and I'll be able to say I'm a business owner and I've always wanted to be and I've always wanted to own a little brick and mortar supplement. Cool, you know, I didn't think through like, no, you'll be in there every day, all weekend.
Jane Stein:So my journey was I Google best franchises for women, best franchises for Boulder, colorado, best, you know, I'm doing these sophisticated research, right, and I start clicking on all these links that says tell me more about this opportunity and blah, blah, blah. And, of course, for anyone who's ever done this, what you quickly realize is that doesn't connect you to the franchise. That connects you to franchise brokers. That's how franchise brokers get their leads. So, right away, I started engaging with a couple of franchise brokers and I quickly started thinking, wow, this is an interesting profession. It's psychology, you know. They were doing disc profiles on me and we were discussing, you know strengths and not so strengths and lifestyle objectives.
Jane Stein:I was like, wow, I love this, this is what I love. That's how I loved about my business talking to people about their goals and lifestyle objectives, and then you get to do the research and then you get to connect them with businesses. Anyway, I just that's what I wanted to do. I didn't want to get dressed every day, for gosh sakes. I wanted to be able to, you know, be all over the country if I want to travel and just connect with people on the phone and internet and do my deal, and you have deep relationships with people and then you get to help them. It's very satisfying. In that way, you're changing lives, but you're not having the same conversations every day with the same people for 25 years, like I was in my last business, so it just fit my personality better. Anyway, that's my journey.
Russ:That I went. That's a great realization because there's an interesting franchising. In and of itself is a strange industry.
Jane Stein:Yeah.
Russ:And I learned by getting into it kind of like you did. Right, yeah, and not a lot of people are aware of how it works, but everybody in the industry pretty much knows each other. Like it's still a pretty small pond, right. So you realize connecting people to the businesses that they want was important and was going to fit your needs. So how did that start to develop? You know, I mean, what are some of those stories? How do you start building relationships with brands so that you know you can start bringing them Because that's the great thing for the franchisor?
Russ:You vet clients for them. You know prospective franchisees and that's why they like using this system, because it's not like just some random guy on the internet. Found this franchise and contacts franchise development and you know and he has $12.
Jane Stein:Yeah.
Russ:Right. So tell me how. That kind of, because again you've got to build those relationships in the industry. So how's that been working? How did that start? How did that? You know? How does that become successful for you?
Jane Stein:Yeah, it's interesting, you know.
Jane Stein:I'll just say for your audience that franchise brokers work with brands that are not yet McDonald's and Subway right, because those brands don't have territory availability.
Jane Stein:So most franchises that start with two locations or 10 locations and before they get to a thousand locations, will be happy to pay a referral fee to a broker who brings them a qualified and, by the way, pre-educated candidate on a silver platter.
Jane Stein:I've had conversations when I introduce a client to a franchise, that client has already per previewed their selling materials, their brochures. They know the cost, they know the royalties, they know the franchise fee. So the conversation that they have with the franchise or immediately gets to the meat of the matter how you get them is as a franchise broker, you have to align yourself with various listing agencies, I would say. And so, for example, I am associated with two different organizations that work with independent franchise brokers and between the two I have all the contracts, all the commission agreements, all the FDDs, all the marketing materials on probably 600 brands. Then, over the years that I've been doing this, I have also developed independent contracts with another hundred or so that aren't part of the listing agencies, but they will work with brokers and so that just happens over time.
Dana:What does someone need to know before going to work with a franchise broker? Like it's never been in my business journey to want to join a franchise, so like if I was baby Dana and I'm like I want to be a franchise owner. What do I need and need to know before making that first call to you?
Jane Stein:You don't need to know a lot before making the first call to me because obviously I'm in the business of educating first-time business owners. But I would say you could pick up a book and read a good book on franchising 101. In fact I generally recommend a couple of books to people and, happy to say, I recommend it. Competitors has a great book. People have said to me, why haven't you written a book? I'm like because I just refer people to my friend's book and it's called the Educated Franchisee by Rick Bisio. Great book, quick read. If you want to educate yourself, first read that.
Jane Stein:The other thing I would think about is really take a look at your financial wherewithal. Making a franchise isn't more expensive necessarily than just starting a business, with the exception of the franchise fee. So you're going to always have to be able to write an upfront check for a franchise fee and that can be anywhere from $10,000 to $100,000 or more, depending on how many territories you buy and what kind of a franchise it is and stuff like that and in general, because the sale of franchises this gets to an earlier conversation we had is regulated by the Federal Trade Commission and as a result, franchisee's ores have minimum net worth requirements that they're looking for and minimum liquidity requirements that they're working for, and I would say there's no great opportunities. I'll probably be harassed for this online for saying it, but there's really no great opportunities unless you can pull together at least $50,000 liquid, and really the better opportunities are all $150,000 and above, and that's even service industries where there's no brick and mortar. You really ought to have the ability to get or borrow $100,000 and have a $50,000 liquid. But that is all part of the process, dana, of working with a franchise broker. They're going to take you through all that. They're going to pre-qualify you, they're going to have you complete a little financial form so they have an understanding of what your budget could or should be, if at all.
Jane Stein:So I didn't answer your question. That was long roundabout way of saying you don't really have to know anything because you're going to get educated along the way and, truthfully, it's kind of like working with a realtor. It's not as if you have to buy. You know I mean, as your rust can attest to this, probably 50 to 70% of my clients I work with for a long time I don't buy. That's cool. That's the nature of the beast. It's not right for everybody and you won't know it's not right until you literally go through the official vetted program. And we do want to get to that too. But anyway, you don't have to really pre-think it. Do you have any capital? Are you curious at all? Let's have a conversation, is what I would say.
Russ:Yeah, and as a prospective business owner who did buy a franchise, you know my process was. I knew I wanted to go into business. I didn't have a ton of money but I, you know, I was there. One franchise orders love veterans because they tend to be able to follow directions and that's the whole idea behind a franchise is here's how our way of doing business and veterans just eat that up because they just jump right in and go. I can follow orders.
Russ:Yes, so my experience is I ended up looking for a couple of local businesses and then I randomly found a franchise expo locally and I met a couple of consultants and work with two different consultants. I never would have gotten into the business line that I'm in now if it hadn't been a franchise, because I had no experience and I had to learn that from the franchise. Or, and I never would have been able to fund a business in the same way, because I was funding a franchise and you have a lot more funding opportunities, both through the SBA and, you know, roll over for business, startup and different things that I never would able to I would not have been able to do on my own. So there are some real positives about going this route, jane. So after we've kind of figure some of those things out, how do you start to figure out what's good for a client, bringing them brands and different models?
Dana:I'll give you here I'll set you up with an easy one.
Russ:If I have some painting experience in my background, are you going to bring me a painting franchise?
Jane Stein:No.
Russ:Please tell me why.
Jane Stein:Well, first of all, most painting franchisors would not accept somebody who's a painter because they want to teach you their way and they're going to assume that you have all kinds of bad habits. That's not to say that you can't get approved in a painting franchise you could. But one of the things that you said was I never would have thought of this business, and I will tell you that that's what's interesting about what I do. And this gets to your question is when we, when you go through my process and probably many other franchise brokers process, you're going to be shown businesses that align to your lifestyle objectives, budget strengths, weaknesses, in other words, that they can compensate for that or that you won't have to do that If you're an introvert. Not going to show you a B2B business where you have to get out and network. So bottom line is every placement, almost every placement rarely have I done a placement where somebody came in wanting XYZ and that's what they ended up in. Because what happens is your eyes get opened to all kinds of things that you hadn't thought of. In terms of business attributes, people come in frequently thinking they want QSR and then, as you talk through what that means for your lifestyle that you're going to have 50 part time minimum wage employees, that you're going to be there on Saturdays and Sundays because your people don't show up, that the margins are rarely very far north of any double digits. And then you show them other businesses that are maybe better aligned, because the person maybe only wanted to work Monday through Friday or not have 50 employees. Maybe they wanted to have four employees.
Jane Stein:So bottom line is, what I do is we start with a conversation about what is the perfect business look like. Who do you like to engage with? Do you like engaging with women? Do you like engaging with children? Do you like engaging with men? What have you done in the past? What's your? And that's just convo.
Jane Stein:Then I send them a zorical assessment. That's simply the brand I use. There's other ones, there's this, there's this, there's that, but mine is unique to the franchise world and that assessment is going to tell me whether, culturally, you might be better aligned with an emerging brand or a more established, structured brand that has a lot of infrastructure and support and you're get onboarding and official daily calls with your coach and everything in between. It's going to tell me if you have the aptitude to get out and drive business and be the rainmaker. It's going to tell me if you're weak on the financial side or strong on the fit, et cetera. It also tells me and I never use this their recommendations, but believe it or not, it also privately tells the broker not the client what franchises they most closely align with their top performers, who have also been profiled using this same profiling tool. And so that's very useful for me because I will then have then, on our next conversation, which is an hour long zoom. I say you know, it's interesting, you've been very closely aligned with XYZ franchise. Can you think of why that might be? And so we end up having these very interesting and fairly deep conversations, if the person's willing, about what the right business opportunity might look like, and frequently it's just not at all what they thought they wanted.
Jane Stein:So then once I have and we go through industry categories on that call, you know, here's what this, here's what remediation looks like, fantastic margins You're going to love the margins. Might not love the emergency calls, but this brand has a call center and eventually, once you've been in it a while, you'll have a. You know a GM who's taking those blah, blah, blah, as you know, russ. So anyway, that was just an example. So we go through all these industry categories and they say one through 10. Then we hang up, then I start doing my research and I start with a little market analysis of where they're wanting to be or live. What's there, what's not there, what's the demographic population base, blah, blah, blah. Then I go to those industry categories and I go through my database and I'm thinking best in class, best in class remediation.
Jane Stein:I have my opinions about that, as you can imagine. I have opinions and for every category and I immediately then reach out and do territory checks. What does the territory look like? Often I love the brand, it's fantastic, I hope it's available. And the and the brand rep will say oh yeah, we have territory. And then I say send me a map. And the territory is awful. So I can't show it because I know my client might be sucked in and be convinced that's good territory. No, it isn't. It's what's left after everybody cherry picked the good ones. So anyway, this is all part of what I do and then at the end of two weeks, three weeks, however long it takes me I'll come back to the client. I'll stick seven brands in a Google Drive with their marketing materials, their territory maps, why I like it for them.
Jane Stein:We jump on a call and we talk through all seven of those brands. Then they'll say to me what. I'm really only interested in these two. They immediately usually eliminate one or two. Sometimes they say, oh, they all sound good, that's great. Let's start with the three most interesting.
Jane Stein:At that point my work is not done. But the heavy lifting is done, because now I have your permission to introduce you to the franchise, or Now I'm going to coach you on how to handle that. First call what to ask, what not to ask yet blah, blah, blah. But basically now you're in the hands of the development team at the franchise and that's who now you're going to be speaking with. Every week They'll be revealing more and more and more information. You'll get a disclosure document, that God-awful 200-page legalese thing like a prospectus, and you and I will have a coaching call to look at it together briefly and show you what's important.
Jane Stein:I'm just popping in every week. What are you hearing? What are you not hearing? Are you still interested? If you're not interested, it's my job to just tell the franchise or we're moving on. Thanks for your time and you don't have to do a thing. That's how the whole thing goes down. Ultimately, something will rise to the fore right away. It's interesting it's usually by the third call with the franchise, or or it won't. If nothing rises to the fore, you may decide franchising isn't for you. It's like it's just whatever happens all the time, or I have to go back to the drawing board. I've had clients that I've had to do that two or three times, but usually if they're patient and I'm patient we'll get there. If they really are motivated to own a business, we'll get there.
Dana:We Russ and I have a dear friend who just ended working for a company and then bought into a franchise. He was saying that he was just really impressed on the franchise's vetting process and how they flew him out and just the way that they basically on-boarded him into the brand. I'm wondering what people should be looking for with a franchise, or in terms of their on-boarding process that is, like you said, best in class. What are these best in class franchisors doing to make sure they're they're getting the right franchise owners?
Jane Stein:So the interesting thing about the sale of franchises, again regulated by the Federal Trade Commission you're going to be getting a document and in it is the name and contact information of every single franchise or in the system, as well as anybody that failed, meaning they dropped out of the system in the last three years, and some of them keep them in there, even if they dropped out five years ago. So the most arduous part is when you, the prospective investor, has to reach out and call those people, and different franchisors do it differently. So I would say one of the red flags for me is when the franchisor has weekly validation calls. That process is called validation and they have a weekly validation call which you can jump on and the franchisor is not on it. So you're allowed to ask how much money do you make? How much money did you make the first year? Some people are shy about it, but I always tell them jump in there, this is your chance. And the bottom line is it's kind of a red flag for me if they will only say to the client well, we have weekly validation calls. I always suggest well, then ask can you randomly call anybody in the document? First of all, even if they say no, yes, you can, you are legally allowed to do that. But by asking permission you are ruling out being eliminated by the franchisor for being a problem right from the get-go. But if they say no, we'd prefer you didn't do that, goodbye. Goodbye, because you're putting forth every week the best franchisees. So I would say you are wanting to have a good feeling when you so when you're speaking every week. Let's use your friend's example Every week he's having conversations with the rep.
Jane Stein:The rep usually is an outsourced sales firm, not corporate. The very first time you will meet corporate and the leadership team and the marketing team and the onboarding team if they have one and the operations team is when you fly to their corporate headquarters for what's called Meet the Team Day. Every brand does that. During COVID they went to Zoom and some of them have gotten lazy and are still doing Zoom. But my suggestion is tell them you want to fly there, you want to meet those people eyeball to eyeball. You want to feel comfortable that they're good people and look around. For just keep yourself open, because when you sign that contract, people don't realize you are in a tenure contractual relationship with the franchise and so sometimes I will give you a crazy story.
Jane Stein:I have a client. She was all in on a brand. The rep was fantastic. She flies to Discovery Day. They fly her in that's common that they'll split it or they certainly pay for all the dinners. They may or may not pay for the airfare, depending on how rich the brand is or more established. They usually pay your own way and they'll pick up dinners and you have a hotel room that you'll pay for. But they've arranged. She goes to the opening dinner. The CEO gets so hammered he can't walk Absolutely nonsense. I will never show that brand again until there's a new CEO. She did not move forward. She came out of corporate.
Jane Stein:She said it was the most unprofessional thing I've ever seen. There are a bunch of yahoos and you just don't know that kind of thing until you physically go meet with them. So there's all kinds of things you should be looking for but it's a gut feeling and you don't make any decisions until you've met the team and spoken with a lot of franchisees and asked the franchisees how was onboarding? How is your coach? How often do you hear from them? Is it helpful?
Jane Stein:You know that's one of the best things about franchising is honestly that regulation where you can have all those intense, deep conferences. There is so much vetting you can do before you buy a business, way more than in an actual business. Yeah, they give you the P&Ls for three years. You have a reasonable idea, but honestly, how many times do you think they pretty those up? You don't get to ever talk to the employees. They always say, oh, it's confidential. You can't talk to our employees. You don't know what you're getting. Franchising. You really do kind of know how it's going to look if you do it right, if you talk to enough franchisees, you know the struggles are going to be the first. You know what your struggles are going to be. It's either going to be marketing or it's going to be employees, and right now it's all about employees.
Russ:Yeah, and when you're doing that validation process and they give you that list of five to 10 franchisees to call, pick some other ones, because they are cherry picking, for sure, because that's human nature. Yeah, we want you to hear the good things. This is a sales process for them.
Russ:Yeah, you're being sold and nobody makes any money until you spend it. You know not you, jane, not the franchise or not anybody yeah, I mean you really got to do your homework. It's I mean, it's not just set it and forget it. When you start getting these brands and start bringing them information, they've got to dive in, they've got to dig in and figure out is this really good for them? Is it a good match? Talk to people about culture. Talk to people. You know it's hard work, but it is a legitimate way to really get in and dig in and figure out whether this is for you or not.
Jane Stein:Yeah, I mean, franchising has a lot of pluses, one of which is it does allow you to your point, russ, earlier. It does allow you to completely jump fields. You know, like, if you've always been wanting to own a children's ballet school and you have absolutely no background, I mean you can jump into some crazy things. Basically, you know you, they don't want people with any background in whatever the business is. So if your passion is whatever it is, you can jump ship and dive into that career. You will be an expert in the first three years of owning your business in this whole new area. And the second thing is that whole what has to be disclosed piece under the Federal Trade Commission guidelines. There's so much information you can uncover, but what you were talking about is them telling you oh, talk to these three people. There's actually a rule against steering. They're not allowed to steer everybody to the top performers, but on the other hand, they do find ways.
Jane Stein:Sometimes I've heard people say well, we have a. We have, if it's a big enough system. We have people that have volunteered to do validation, because not everybody think about it If there's, if there's a brand, and they only have 50 locations and there's 70 people a month going through this process. Nobody wants to have an hour long call with 20 people a week. It's just too much. So that's why a lot of these brands do go to weekly taped, not taped, you know, weekly validation calls with anybody who wants to can jump on, and that's a great, that's been a great game changer.
Jane Stein:But you still have to talk to a, figure out a way and and yes, sometimes they don't return your calls. I mean I always tell clients look, you're going to have to reach out to them. You have to reach out to 20 people to get two conversations done. They're busy. They're small business owners. If they're only up in their first two years, they are peddling as fast as they can. Not everybody's going to call you back. It doesn't mean it's a bad business, they're just busy and they don't have to do this. They're not being paid, it's totally voluntary. Some franchisees are like I'm just not going to do it, it's just a waste of my time.
Dana:So we were talking offline that the industry of being a broker for franchises is not the life there's like no licensure or anything like that. So if someone is choosing to, if someone wants to become a franchisee, what should they look for? I mean, aside from working with you, but what should they? What should they look for in?
Jane Stein:terms of just stop.
Russ:No, what are some important?
Dana:characteristics or qualities of someone who's a broker.
Jane Stein:Yeah, I would say I'll tell you a funny story about my first experiences that I told the guy exactly what I was looking for, this one I was looking for and when he sent me his list of what he wanted me to research the three of them I was like, was this guy listening at all? No, no, anyway. So a couple of things. One is a very first of all, see if they have any sort of an online presence. Honestly, if the person hasn't invested in a website or a really solid LinkedIn profile with a professional photo, I don't know, that's just me, I'm biased I would say do they have an online presence? You could certainly Google them because, guess what, if there's bad reviews, they'll be on the web. I know somebody who's a very successful broker, but the first time I Googled her name I was like holy crap. So Google the person, see if they have an online presence, ask for references. There should be testimonials on my website. I beg my clients to write testimonials. But also I'll give out. If somebody says just give me the names of the last three people he placed, I'll be happy to. No one ever does. It's interesting. And finally I would say are they listening? Oh, here's the big one From the first call. Ask them how many franchises they represent. If you are with a franchise to be a franchise broker not to diss any of those people they can, only they are restricted to. It's in their contract. I get referrals from other franchise brokers. For this reason they cannot show a brand outside of one of the brands that are in that network. That's usually about 200. Those brokers tend to show and, by the way, about 80% of brokers work like this because I don't know why, but I'll just tell you they show the same brands over and over and, over and over again. They show their favorite painting brand, their favorite blah, blah, blah. They do that because they've had successful placements in the past and so their brain goes there. They know the rep's good. They know the business model is good.
Jane Stein:Two things you could ask how many brands do you represent Of your last three, five placements? Were they different companies? I don't know if they will answer truthfully, but I rarely place people in this. I'm trying to think if I've placed anybody in the same business twice, because what I do is have a clean slate when we're talking and I go into my database and I have fresh eyes and I see what matches up and then I preview the FDD on behalf of the client. I'm looking for lawsuits and all that.
Jane Stein:New brands are constantly coming into my radar and so when I'm presenting to a client the six brands I'm really only super intimately familiar with, probably three of those, three of those are going to be like and I will say I have never shown this brand, it just got on my radar. I think it's a good fit. Here's why I guess just A are they listening? B are they showing the same brands over and over and over again? Any way, you can try and find those things out is good. Are they a good listener? As number one, of course.
Russ:I think that's great advice, Jane, and just to break it down a little bit more for listeners so there's actually franchise consultants out there that bought a franchise consulting franchise and those are the ones that are representing only 200 brands, because that franchise brand only represents. There's a really, really great questions to ask, because you want access to the best, not just the best that these guys have to offer 100%.
Russ:I'm going to ask you, when you were first looking for a business and you're like, oh, I want to buy a franchise and they'll run it for me, what other misconceptions are there about going into franchising the top couple ones that people you've run into often?
Jane Stein:Yeah, I actually wrote those down. I thought they're going to ask me this question Number one is that they're going to run it for you, and that translates to a lot of different things. I work for Unsophisticated Obviously. I work with very sophisticated guys wanting semi-absentee. They already own franchises. This is not their misconception. But first time your friend got out of his corporate job looking to the next thing, he's going to be an owner operator for a period of time. Those guys that have never really gone into franchising not just thinking that they'll run it for you they assume if you're pretty savvy, you know they're not going to run it for you. I wasn't very savvy, but even beyond that, thinking that they're going to do everything that they run your marketing. Some brands do, some brands don't that they're going to hire your people for you or help you interview your people. The extension of they will run it for you.
Jane Stein:People generally assume for the fees that they're going to be getting a lot more than maybe they really are and that I just was having dinner with a guy the other night. He's a very successful business owner has a chain of bakeries. He said oh, you're a franchise broker, you can't make money. Nobody can make money in franchising because of all the fees. I'm like really, because some large percentage of all businesses are franchised. Why would anybody buy them if you can't make money? That makes no sense. I mean, yes, there are fees, we can talk about that separately. But yes, many, many, many millionaires and multi-millionaires have made their money in franchising.
Jane Stein:Here's a misconception that is kind of a shock to people. If you own this business, russ, you can't necessarily pass this on to your children. It's not really up to you. There's contracts that you've signed for 10 years. Typically, at the end of the 10 years you can choose to renew at the then fee and whatever they're at the new agreement that they have in place then. Or they can choose not to renew you if you've been a pain in their thorn or for whatever reason, or and or if you want to then pass it on to your boys and have them run the business. They have to be approved by the brand. So when people talk about leaving a legacy and this is their primary goal just a little bit of a caveat there. It's not necessarily a given that you'll be able to lead this legacy business to your boys or daughters. I just said that because it's remediation. I don't know why, but women love remediation too. Anyway, yeah, it's up to the franchise or they have to prove whoever buys your business or whoever you pass it on to, and also they can choose not to renew you at all.
Jane Stein:Another big misconception is it's all food. You know, obviously we've dispelled that here. I don't think I've placed more than one or two people in QSR. It's mostly non food, because most people, when they see the margins and the labor model and especially now that is the worst population base to try and retain and recruit, it's just. It's just become too much of a problem for people.
Jane Stein:Again, common misconceptions is that it's expensive. We already kind of talked about that. You do have to come up with a franchise fee. That's an expense that you wouldn't have in any other business. But once you own the business, and on an ongoing basis, basically what you're looking at is royalties, and royalties should be anywhere from four to maybe eight percent of your gross sales, and presumably you wouldn't get to that gross sale number had you not been part of the franchise. That's why in most franchises that are service based like remediation, like painting, like whatever a big part of their business is what we call conversions, that's, people that already owned a remediation business and were struggling and whatever, and they see the benefit of being part of a bigger system vendor discounts, support, marketing, hr support, blah, blah, blah.
Jane Stein:And finally and you kind of alluded to it, russ, a little bit, when we were talking about the salespeople, and I do agree it's a sales process they say, oh no, it's an awards process.
Jane Stein:You know you have to be vetted, but there is a little bit of a misconception that if you have the money, they'll, they'll, they'll sell to you and unless it is a brand, new brand trying to get their first 10 off the ground, and, by the way, that's when they should be the most careful, because those are the 10 that are going to have to do validation for your next 30. So but truthfully, sometimes in an emerging brand, they'll sort of take the wrong kind of people in the beginning. But it is a vetting process. It really is, dana, as you were talking about with your, with your friend. You know, a good franchise is going to be vetting you the entire time. You're vetting them and I certainly have had people not be approved, and every broker has and sometimes they won't even tell you why, they'll just say just not a good fit.
Jane Stein:You're like what did he say at Discovery Day? But you know it. So it's not the case that anyone with the money can be, you know, can buy a franchise. Most franchises can be varying degrees of pickiness on who they take in. I guess that's it. That's my list.
Russ:That's great. So again in our industry, I think some women are some of the best owners.
Russ:I've heard in disaster restoration, because, one, empathy and compassion comes much more naturally for them, or dealing with people with disasters, and two, they don't get stuck in the field. Like me, I'm a technician and I like being really good at what we do, and now I'm trying not to be chucking a truck which I know we throw around in the in the industry a lot. I will say one final thing about if you're interested in going into a franchise. There is no brand or franchise available, no process, no business you know, development or anything else that any brand can offer you that can substitute for a good owner. You have to be a good business owner period. There's just no substitute for that. There is no making up for that. There's no franchise you can buy. There's no consultant you can use that can make up for that. Ultimately, your, your responsibility it's on you 100%.
Jane Stein:Everybody's looking for the magic brand that's so successful that you open the doors and they come and you make and you print money and, with the exception of maybe Chick-fil-A, which nobody can get in, you know it is. You know people always say brokers always say, well, it's 85% systems and culture and brand and 15% owner execution. You really have to do a gut check. Am I willing? Do I have the grit? Am I willing to just work a ridiculous amount of hours for a year? Am I willing to suffer through five general managers before I find the right one? Do I, do I have the wherewithal? I mean honestly, it's, it's not. Everybody can do it, I agree.
Russ:Jane, this has been really great. It's kind of been a flashback for me too.
Russ:Yeah, I bet it's a PTSD because I I was working full time while searching. I know we looked at probably 12 or 15 different brands through two different consultants and I was working two full time jobs just doing the research. But here we are, I'm a business owner now and I wouldn't go back. Yeah, I wouldn't go back to it. You know, being a W to Jane, we're doing a lightning round with all of our guests. We prepped you a little bit with the questions and we love hearing the responses from all of our guests, and I know our listeners do too. What is one thing you wish you'd known before starting a business?
Jane Stein:Well, in my business, what I didn't think through? Because I had been a broker on a team and went to a fancy office and there's a lot of satisfaction and fun which comes with being somewhere and the people around you and the energy around you and me being alone in my dark basement. You're seeing me in my bright new condo, but anyway, me being alone in my dark basement, you know very, very lonely being a consultant of any kind, I guess I would say. And it just took me a long time to find my people and my support systems and get on mastermind calls and I certainly would have done it anyway. I mean, there's no real downside to being a consultant, right, but I didn't realize how lonely it was going to be. What is your?
Dana:favorite way to market your business Really.
Jane Stein:Obviously referrals at this point, have been in it long enough. But I would say LinkedIn. I've used some LinkedIn programs with some success. The absolute worst way is to buy leads and have to call people. I did that my first year. Never again. But yeah, just LinkedIn. I would say I'm not a networker. I hate going to networking groups, so I don't. That's not my thing.
Russ:That's funny and maybe this ties into our next question Is there a business platform that's changed your life?
Jane Stein:LinkedIn yeah.
Dana:What is your favorite business book?
Jane Stein:Well, because of this business, and I had read it before years ago, and it changed my life when I was a stockbroker too, and that's the E-Meth by Michael Gerber, right, is that who it is, michael Gerber? So when I was a broker and somebody turned me onto the E-Meth, a light bulb went off. I'm like, holy crap, we need processes and systems and checklists for everything, and I spent years developing those in my last business, morgan Stanley, and it just made our lives so much easier, and so franchising really appealed to me because of the E-Meth. Yeah, so it changed the way I think about business and the way I operated my last business, and I try and give a copy of it to every new client because I think it's a brilliant book, absolutely.
Russ:Absolutely A must read for anybody going into business. 100%. Just go get it, listen to it, I don't care. Have somebody read it to you, very good. When did you feel like you made it?
Jane Stein:When I got my first commission check, nice, I'm like, hey, this really does work. Okay, because at first you know you're talking to all these people, nothing's happening. It's, by the way, it's a long sale cycle anyway. People take between two months and two years to make a decision. So you know, I'm out there doing it and it's been six months and I'm spending all this money on leads and blah, blah, blah, and I'm like is this, is anybody ever buy one of these things? I don't know. So, yeah, that first commission check, I would say.
Russ:I know that's probably not the politically correct answer, but no, it absolutely makes sense to me, because that's why we go into business and there's no shame in making money, and so, no matter what you want to do and you want to go into business, there could be a business and you helping other people find a business, just like you do, jane. So I just want to. Where's the best place for people to find you and connect with you?
Jane Stein:Just to go to my website, which is called your franchise is waiting, and you can also simply Google my name, jane Stein, and that'll take you there.
Russ:Fantastic and I'm sure people will look you up on LinkedIn as well. It was. We like sharing our episodes there. So I want to thank you for spending time with us talking about franchising kind of getting a peek behind the curtain, if you will. I want to thank our listeners for being here. Listen, if you're interested in getting into business, franchising is a real opportunity and it could be for me. It was the only way I was really going to get in, based on all the things that happened, even though it didn't work out well for me. I'm so grateful that I had that opportunity and you can get that opportunity to connect with Jane. Check her out online. Your franchise is waitingcom. We'll have all the places where people can connect with you on the show notes and remember, it's not personal, it's just business.