The “Godfather of Franchising” shares why you don’t need to love what you are doing to become a successful franchisee.
On today’s show, we are joined with the godfather of Franchising, a man who has helped more than 10,000 people out there just like you, to create both time and financial freedom as a result of helping place them up, match them up, or coach them up to find the right franchise of choice. So if you’re out there, you’re thinking about buying a franchise, you’re thinking about becoming self-employed. You want to listen to today’s show, today’s interview with Terry, who boom, POW, the godfather of French.
Hold. On today’s show, we’re interviewing the godfather. The franchise makes me to put the horse head in the trunk of one. It’s getting message across. It’s weird. How many times did we have this conversation? Don’t ever bring up where to store the capitated horse heads while I’m doing the thrive time show breed. This is very important show. So I was saying before I was rudely interrupted. While you don’t have to love what you’re doing to become a successful franchisee for the past 35 years, Terry Pool pump dose and some people just like you to find the right franchise opportunity for your family, for my family. Terry booboo pal. How are you sir?
Clay Clark. How you doing buddy?
Brother, I’m excited to have you on the show because I don’t know if this is a fact we can prove or a claim that I’m just making, but I think you have probably helped more families and more people to become self-employed with a franchise than maybe anybody else in the world. Am I off or um, are you, are you in the top 10 there?
Oh No, we’re right at the very top. We, uh, we were the very, very first organization to move into what’s called the referral network type of group back in the early eighties. We were the first and still the form those in that, in that group. And we’ve introduced more individuals to be self-sufficient by using a franchise as a business model to build income, lifestyle, wealth and equity for themselves and their family. So we’re real proud of that,
you know, Terry, for the listeners out there, they’re not super familiar with your background like I am. Could you share with us how you first got introduced to the world of Franchising?
Absolutely. I’ve kind of been a a, a serial entrepreneur all my life and had been following lots of things, entrepreneurial and got tied into looking into Franchising and following it through Entrepreneur Media and entrepreneur magazine back in the early days, back in the eighties, and then I was going through a transition of business ownership and decided to partner up with a with a gentleman here in Southbury, Connecticut and we lost a multi, multi-business and franchise brokerage firm and we had about 1415 brokers working with us back in the early eighties and we were really working on selling retail businesses and brokering franchise businesses that were for sale or for resale. And that’s how I got introduced to that whole idea of putting people together with businesses. Unfortunately for me it wasn’t something that worked out well from a value proposition because I just didn’t feel like in the broker arena where we were really representing the best interest of the individuals who were looking. It was really just about getting them connected with businesses we had listings with in the hopes of selling them that so we could get a commission and add that to our sale price.
Got It. That’s how I got started. You got started. How many were 35 years ago. Is that right?
I started, I started the company, the entrepreneur source 35 years ago this January and I discovered it about 36, 37 years ago. As a byproduct of moving away from that broker is arena where we were qualifying people out more than anything. So what call about interested in businesses and franchises. We gave the brokers three minutes or less to qualify them in or out and if they didn’t do it in three minutes they got penalize and lost their next rotation up. So they got pretty serious about that. So we basically were pushing away 95 percent of the people that call as not being ready, willing, and able. And I really got really enamored by what was going on by these people that kept calling back and asking about new businesses and franchises even though we had pushed him away and tell them to come back and see us when you’re serious and you know, how much money you had to spend and you ready to do it pretty quickly. So I, I really
interesting one more what was going on over there by that will enable 95 percent will be pushed away.
And so I told my partner, Ryan, that I was going to be leaving the venture we were in selling my partnership back to him and wanted to spend the next six months talking to as many of those people we pushed away as possible to really find out what their why was. And Chris, he laughed at me and said, why would you want to spend your time with those tire kickers? And then he added another word and he said, and dreamers. And when he said that, I knew that I was onto something because I always considered myself as a dreamer and I really admired people that were dreamers and always looking to be to taking control of their destiny.
Could you describe for our listeners out there many of which who want to become self employed? You know, Forbes says now that 67 percent of the American population wants to be become self employed. Can you explain to the listeners out there what you do kind of on a third grade level that I can track with you and what would exactly do you do?
Yeah. It’s kind of interesting. You talk about people wanting to be self employed and we know that about 75 percent of the adult population has a strong to very strong desire to be sufficient. And I call it the entrepreneurial itch. They want to take control of their destiny. But actually in our experience of 34 plus years is most of those people are scared to death about being self employed because they fear what will take to get to that self employment. And they think that there’s a lot of failure that comes from that. So what we’ve learned is that at the very, very large number of people want to be in control of their destiny and be self sufficient and our role as a coaching organization is to help them understand how to transition that through education, awareness and discovery that allows them to see how to use a business as a vehicle to accomplish their income, lifestyle, wealth, and equity goals instead of buying themselves a job, which is the challenge with people they get excited about, you know, going into businesses. They frequently go about picking a business the same way they think about what their next job might be.
Terry, you said that you help people took note here to help people to achieve their income, lifestyle and equity goals. Am I correct there?
Income, lifestyle, wealth and equity.
Okay. That order income, lifestyle, wealth and equity. And I’ve heard you talk about this quite a bit at great length. I’ve seen videos you’ve been on, I’ve actually seen you present at conferences, that kind of thing. But for listeners who are not familiar with what you mean by that, how do you help people achieve their income, lifestyle, wealth, and equity goals?
Yeah, it’s really rather simple. It’s a paradigm shift from what most people look at when they think about going into business and they look at replacing their income as they were employed and they ended up sometimes choosing the right, the wrong decision or the wrong direction because they want. They really want to have a role in that business as they did in the job and rather than using the businesses a vehicle and helping them understand that the dream of being self sufficient, the business isn’t a dream. It’s just a vehicle to accomplish income, lifestyle, wealth, and equity, so you and your family can live the dream of ownership. Got It. Now, many, many years ago in our, in our coaching tens of thousands of people, we realized that really no one wants to buy a business or a franchise or be sold one. They just want to own the outcome of that, which is the income, lifestyle, wealth and equity.
Okay? As an example, I have a friend of mine who’s very successful, who’s one of the top franchisees and the franchise. Some people might’ve heard of called Domino’s and this just justin. He does not eat pizza now. True Story. I’ve met the guy. We’ve talked quite a bit. I met him at a conference. If you’ve got to be friends about a year and a half ago, he does not eat pizza. I said, hey, you know, dominoes. I’m just asking. Just them all talking. I’m just joking with them, hey, what’s your favorite kind of pizza? And he goes, honestly, I totally avoid carbs right now. Um, so I do not eat pizza Pepperoni, but I don’t eat pizza. I think it’s a good pizza, but I’m going, if I eat pizza, I’ll eat it. But I typically don’t eat pizza. I think a lot of people feel like they have to be a pizza fanatic to buy a dominoes or they have to love carpets to buy an Oxi fresh or they have to be. Can you break that down for someone out there who maybe has a misinformation in that regard?
Interesting about franchising. You know, most people have followed the myths of go do what you know, love and enjoy and success will follow, and
Franchise orders don’t really want
the background in that business or necessarily a love with the product or service they want you to be able to manage, market and promote a successful business venture. So the, the idea that you need to love and enjoy what you’re doing or have a desire to be in the pizza business really has no bearing on using the business as well as the vehicle to income, lifestyle, wealth, and equity. In fact, if you were a baker, Dunkin donuts wouldn’t consider you if you were an auto mechanic, you know, um, Amoco transmissions. And I kind of want you as a franchisee because you’ll become a technician. You’ll be out in the garage.
Okay? This is big. You just said that if I was a passionate, passionate about baking, who wouldn’t want me? But they can do it too. You’re saying Dunkin donuts with me.
Dunkin donuts. Once you [inaudible] you [inaudible] you want to be in the back, they can do donuts and that’s not what the owner’s role is and that’s a big paradigm shift because most non franchise businesses, the owner is really the technician and that’s one of the reasons why non franchise businesses don’t have as high of success level as franchise businesses. In fact, franchise businesses have the highest level of success with the least experienced, knowledgeable background, active individuals as owners of any business in our society and had the lowest failure rate. Just the opposite of what all the books that talk about go do what you know love and enjoy and success will follow, hasn’t really proven out for for a non franchised businesses because they have a very high failure rate as high as 50 percent
material is that right? There is probably enough of a knowledge bomb right there for someone to marinate on for the next several hours because I think some people feel like you have to go out there and do what you love and enjoy and I’ll give an example. There is a person very close to me in my life who is, they went to college, Terry and they have a skill in the world of coding. They’re very good at coding computers, that kind of thing. And they get paid about 75 to $100,000 a year depending upon where they’re at. I’ve heard them jump to different jobs and you’re closer to 100,000 dollars a year and they work all the time. Twenty four slash seven tech support. And he was asking me about buying an Oxi fresh, a franchise, you know, and he’s like, dude, I know you talked about on your podcast, but really, I mean $52,000. Can somebody really create time freedom and financial freedom, you know, could somebody actually build wealth equity? Is this possible? And I said, yeah, yeah, it is possible. They go, but do you don’t know anything about carpets? And I always hear that part but I don’t know anything about carpet. So for somebody other specifically who’s thinking about buying an oxi fresh carpet cleaning franchise, which you guys have helped many seekers to be placed with that, with that franchise, what kind of person is ideal to buy an Oxi fresh franchise?
Well, that’s a great question. It’s really not a matter as to what type of person is ideal to invest in or Oxi fresh franchise. It’s about helping them understand how many other individuals who are successful owners of fresh, who came from all types of backgrounds and experience have you just simply use it as a vehicle to grow their income, lifestyle, wealth and equity. So it’s really moving away from connecting yourself and the type of individual that should own a particular caliber or quality or sector of franchising like carpet clean. But you know, it’s, it’s Kinda, it’s Kinda moving away from that mindset is how you really empower yourself around income, lifestyle, wealth, inequity, and start looking at the businesses only the vehicle and then looking at business models that have a successful track record who have unbelievable execution by their team members to launch and support and train franchisees to continually grow. And succeed and increase the return on that investment. That’s what you want to look for in a franchise operation. Whether they’re doing carpets or or candy, you know, candy machines, it doesn’t matter as long as you take a look at that organization and make sure it’s a fit culturally for that’s the big bucks.
Here you are kind of like the godfather of franchising. So it’s like maybe if I’m going to confess to somebody about being a technician, maybe I should confess to you, I’m back in the day my company. I built DJ connection Dot Com. Long before I met you was the largest wedding entertainment company in the country. Dj Connection Dot Com. It’s still around today. I mean there is. We would do cherry. We, before I sold it, we were doing 4,000 weddings a year. But Terry, do you want to guess how many weddings a year that I personally wanted to dj?
I personally am not kidding. The last year before I sold it, I personally did over 200 events because I loved it. Like I was all about it and I always like every time a lead would come in and they’re like, oh, this one’s at the skirvin hotel in beautiful Oklahoma City, and I’m like, oh, I haven’t been there before, or it would come in a cruise ship would ask. They’re looking for a Dj to go on a seven day cruise and I’m going, Oh, let me do it, let me do. And so I was a technician and I don’t feel the same type of pole with any other business that I’m now involved in. So now I have the financial freedom and time freedom, but I was so in love with the art, with the art. I know it sounds weird to everybody out there who’s an they’re going, really you wanted to teach is a living. I was so addicted to the technician aspect of the business that I could not pull myself away from it. Can you speak to somebody out there who’s bought into that lie that your income has to come from your passion, your profits have to come from your passion?
I think the best way to help people understand it, because this question comes up a lot and we’ve coached lots of people through it, is to think of it from a perspective of franchising in general, in the US economy. Franchise outlets represent about 20 percent of all the outlets out there and in all businesses, but yet they account for almost 50 percent of all the dollar sign. So think about that. Twenty percent of the businesses are doing almost 50 percent of the dollar volume. The other 80 percent of businesses out there are only sharing it the other 50 percent. So just think about what the typical franchise outlet does in volume compared to a non franchise outlet is anywhere from six to eight times more business.
You know, I want to give you an example to this, uh, for this, uh, there is somebody who I knew very, very well. They had a business, a terry downtown in Tulsa, Oklahoma. This is probably a, you know, close to a decade ago. And they wanted to make this new. They wanted to basically become the best local sandwich shop in Tulsa. And they were located, if those people who know Tulsa, there’s fifth in Boston and to fifth in Boston. There’s a Schlotzsky’s right there and there was at the time a subway. Now there’s a Jimmy John’s and let me tell you what happened to this woman. She got destroyed by all of the brands because I. She was thinking about her logo and what to charge and what should be included in the sandwiches and how to market and what our website should be like and what kind of space she should find and what system she should do and how to make a checklist. Her competition was just serving sandwiches at a profit. Can you speak to just how much time you save when you buy a franchise as opposed to trying to reinvent the wheel yourself?
Yeah. Well just the fact of 20 percent of the outlets are doing 50 percent of the volume gives you a sense of the. The aspect of what a franchise model can create for you without having any background or experience or knowledge, but take into consideration the aspect of you know, what, what’s involved in being being a business owner in and the things that you want to do to make that happen. Lots of people make the mistake of thinking that franchise businesses are different, but so remember every franchise business out there, including my company, which is a franchise now had to be started by some crazy entrepreneur that was willing to build that into something that can be replicatable and duplicatable. So all France successful franchise companies today, we’re all started as an individual privately launched business. That was one of those ones that succeeded and decided to grow and expand using franchising as a business model because that’s the only difference is franchising is a different form of expanding a business than what other businesses do. And it’s just been proven to be one of the six most successful formats of business ownership and our society and people are using it to be able to replicate and duplicate success over and over. But it all started with some entrepreneur that had an idea that decided to franchise and that lady with her sandwich shop could have been one of those. Unfortunately she was consumed by the market that was already generated and already successful in the franchise world.
It was unfortunate. I remember meeting this lady and she was such a nice person, but she was just getting every day. I mean, you got Jimmy. John’s just opened subways right next to Ya Schlotzky’s there, and they’re all have lines wrapped around the door. Meanwhile, she’s trying to figure out what kind of sandwiches to make. And if you’re out there and you just feel overwhelmed, you want to be self employed, but you don’t, you don’t want to reinvent the wheel. You just, all you want is time freedom and financial freedom. Uh, Terry, that’s essentially what you guys do as, as, as a franchise coach. But one of the things you have to do and that franchises have to do because franchising has now evolved quite a bit, is you have to, uh, as a franchise or you have to provide somebody who wants to buy a franchise, a potential franchisee with what is called a franchise disclosure document. And you can correct me if I’m wrong, but I believe that if I want to buy a franchise, the franchise or the company that I want to buy from, they have to give me the franchise disclosure document and I have to have it in my possession for, I believe, 13 days to review before I’m even allowed to purchase. Is that correct? Or educate the listeners out there about the franchise disclosure document?
Yeah, absolutely. Franchising is the most safe investments you can make because the federal trade commission has regulated for many, many years. In fact, it’s more regulated than securities and exchange regulates the offering of stocks and bonds. So they require every franchise over in order to be able to offer their business to meet the requirements of providing this very large franchise disclosure document that really covers every element that anyone would ever need to know about making an evaluation and then comparing and contrasting franchise wars and then franchise owners have to also go out and hire a auditors to audit their financials and provide three years of audited financial statements for you before you can be considered as a franchisee. So we give that offering franchise disclosure document to everyone who’s seemingly interested in. Once we’ve gotten to a point in that discovery process where we as a franchise or a believer, we want to offer them to become a franchisee because most franchisors are awarding licenses to people not selling franchises. People you want to make sure it’s a good fit before they provide that franchise disclosure document and then they have a minimum of two weeks to have that document and review that document before they can enter into or invest in a franchise. And most times it takes considerably longer to get from that fed through that process and be awarded in a franchise.
We’ll put it on the show notes are a show observer, Andrew, we’ll put this in the show notes, but the franchise disclosure document, it’s regulated by the Federal Trade Commission and there are 23 items that you’re gonna find in that document. You’re going to find their business experience, any litigation that’s going on, whether it’s some of the founders of at bankruptcy in the past, initial fees, uh, you’re going to find about other fees, estimated initial investment restrictions of sources of products, the franchisees obligations, financing, the territory’s, the advertising, the trademarks, the corporate. It’s a lot there. I mean it’s, it will put it on the show notes so you can find all 23 of those items. But I want to ask you, if I’m out there listening and let’s say I’m interested in buying a franchise, I want to create time freedom and financial freedom and I only have $75,000 available. Can I get involved in franchising? Is that possible?
Absolutely. There are many, many, many franchises today that are in that range. You mentioned Oxi fresh and our Franchisee entrepreneur sources is well under that $75,000 investment range, so today there are many, many opportunities that are under $100,000 and some as well as as 45 slash 55 slash 65,000. That’ll allow you to have a very successful business model and that includes enough operating capital to get the thing off the ground to the point where it’s starting to generate positive cash flow for you, which is really the key. So not all franchises are super expensive. Now you can invest, you know, many, many millions of dollars into a franchise, but that’s not necessarily the norm for the majority of people that we’re working with because most of those franchises are are already very successful household words and they’re not. They’re not actually awarding licenses to new franchisees anymore. If they’re going to grow their brand and they’ve got 500 successful franchisees out there, they’re not going to take the Terry Powell and as a new, as a new owner to see how he works out. They’re going gonna, they’re gonna work with those existing owners to have multiple units, which is 52 percent of all franchises out there are owned by multiunit operators.
I want to, I want to tee this up here just to give some proof of concept of what Terry’s saying because Terry, you do this every single day and I’ll put this on the show notes, so anybody listening out there you can verify that what Terry’s saying is in fact true. And then we’ll put the requirements on the show notes as well. Andrew, that way everybody can see this, but if you wanted to buy a floyd’s barber shop right now, floyd’s Floyd’s is a very successful barbershop chain. You can find them in Denver, Colorado. Uh, full disclosure, I own the elephant in the room franchise, which were franchising, but just as an example, if you wanted to buy a floyd’s right now, they’re saying that you have to have a net worth of five point $4,000,000 or a million and $2,000,000 or greater of securities and cash, not including retirement accounts. And you have to have five years of experience as a multiunit management experience in, in related industries. Why would they be so stringent and so specific and have such high standards over there at Floyd’s or some of these big companies?
Well because of the, you know, the game for retail organizations like that retail service organization doing, you know, doing haircuts, a, they’re really looking to replicate and duplicate that model with very successful proven track record types of operators that have done other types of multiunit development in franchise growth and it’s a matter of being very selective in that awards process and they’ve come up with a, with a criteria that they’re successful with that they’re, that they’re making sure that the future of their brand is going to be protected by carefully selecting in awarding licenses to only those individuals that meet those qualifications. That’s an award’s process.
So Terry, if I’m out there today and I’m saying, okay, I am interested in potentially buying a franchise and I don’t know where to start, what is the first step you recommend our listeners take? And it doesn’t matter how a self serving it may be, should they call you, so the email, usually they go to a different site. So they read a certain book. What do you recommend as the first step?
Well, there’s a great book out there called Your career two point. Oh, the survival guide of the batter career and battered investor syndrome that’s written by our entrepreneurs source coaches. And that’s a great resource you can pick up on Amazon. I’ll give you a lot of insight on how to look at getting into franchising and making sure you’re taking it from a standpoint of it’s a, it’s a growth situation. That’s why we call it career two point. Oh we actually help our clients move from career one point, oh version. And you know, something that they, you know, they had a lot of experience in but didn’t work out for them in other ways and wanting to shift to the two point, oh, version where they take control of that destiny and invest in themselves and have a higher income, which you can have from a job also. But you can’t have income, lifestyle, wealth, and equity from a job. And you said the word many times. It’s all about freedom. And when you have income, lifestyle, wealth, inequity combined, you have freedom.
Terry, for people out there who are just little fun facts, and I hate to put you on the spot, but I want to ask you, uh, approximately how many franchises do you think you’ve helped people to secure over the years? How many people do you think you’ve helped to, uh, get into a franchise? I mean, is it hundreds? Just to give a context to listeners, you’re 35 years. How many people do you think have helped? How many people have you helped to buy a franchise and to get that time freedom they’ve been looking for?
Well, you know, what’s our target is not. Our goal is not to help someone buy a, buy a franchise, but you know, the coaching gives them to a point of clarity where they can understand how to use a franchise is a vehicle to accomplish that income, lifestyle, wealth, and equity. But over those years, and especially since we franchised 22 years ago and really started to expand and we now have 150 coaches nationwide know we’re well over 10,000 individuals that we’ve helped go from employment to empowerment and achieve the two point, oh, version of their careers and that number is growing, you know, even even greater greater numbers or on an annual basis as we expand our franchise system.
So what’s the biggest challenge for people out there when it comes to buying a franchise? What’s the biggest challenge of the average person faces when it comes to thinking about buying a franchise? We’re actually buying a franchise. What’s the biggest challenge?
We’ll listen to the statistic and uh, and, and I’ll, I’ll explain the challenge. Ninety five percent of our clients over the last 30, 40 years has ended up investing in a franchise that they admitted Lee would have never ever looked at on their own without the coaching or had looked at it already and prematurely dismissed it and said no to it. Ninety five percent. Because most people are trying to connect themselves to the business or the product or service. It’s really about creating a possibilities approach of looking at things outside of what your one point, oh, career was in your current perception criteria. Everybody has perception criteria or perception biases that we only look at certain things that we have some knowledge or understanding of our coaching methodology expands that education, awareness and discovery, so you can use that knowledge base to be able to look at lots of different vehicles that can accomplish that for you. Naturally. The key that holds most people back is they think it’s a needle in the haystack. They think it’s about finding the perfect match for the perfect franchise. We’re the only franchise that’s right for me and really that couldn’t be any further from the truth. Once you’re using the business as a vehicle to understand how to build income, lifestyle, wealth, and equity, hundreds, if not thousands of different concepts could be the right vehicle for you. Once you help the coach, helps you get into that mindset.
I’ve got two final questions for you. You’ve had a lot of success, a lot of people out there listening have not had a lot of success. What is one thing that you do on a daily basis that most people don’t do, or what are a couple of things that you do on a daily basis that most people don’t do that you think that has allowed you to have such a massive fan of success in your career?
Well, number one is something that we coach on is that one of my biggest reasons for my success has been that I’m very possibilities driven and I’m very open to possibilities and the other one is the key to that. The reason I built this business is that a mentors back in my early days taught me that you always need to be adding value and creating value and that’s the reason I left the brokerage business because we weren’t adding or creating value. We were getting in the way of people that were going to buy a business anyway so we could add a commission. So it’s always about adding more value in creating more value for our franchisees and for our clients that are franchised coaches work with. Those are the two things that are most important that’s driven my success for 35 years.
Final question. Everybody out there who says, you know what, I liked this Terry Powell guy. I want to learn more. I want to talk to one of your coaches. I’m, I’m interested in potentially buying a franchise. Maybe I am. Maybe I’m not. I just want to start the conversation. What’s the best way to get ahold of your or or to get a hold of you specifically
entrepreneur’s source.com. Or you can go to a, a, a, a platform we have called franchise match.com. And either one of those will connect you with the opportunity to have a coach help
and is always like to end each and every show with the boom. So here we go. Boom.
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