I’m all-in on this emerging franchise | 322

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Transcript

SPEAKER_00 0:00

Welcome to the Business with Beers Podcast, your daily dose of tools, tricks, tips, and stories to help you build an eight-figure business. Today I want to talk about an emerging franchise that I'm all in on. So, in late of 2024, might be around, I want to say it was November or so, I was approached by a couple guys who were going to launch a brand new franchise. And the founder had been in the business for about three years and had a ton of success. He had his first market launched in Austin and then his second market he launched actually that he was about to launch in 2024, I think it was in January, in San Antonio, and brought it to a team of people who had a bunch of experience in franchising and said, hey, we we wanna we wanna take this thing, we want to launch it and make it national. So they came to me and asked me if I was willing to invest in the company uh and also be a board member to to advise them. And I said, you know, I looked through all the numbers, I looked through the business plan, I met the team, I and you know, dove into the whole thing and realized, man, they've like this is they've got something here. And as part of it, I said, listen, if I'm going to put my money into this thing, I also uh want to be a franchisee. Like I think this is an awesome opportunity. And so I went out and found a partner and we purchased the Houston market. Now, what is the brand? It's called Waterloo Turf, and it is the first and only national company, national franchise, to install and maintain artificial grass, right? Fake grass, right? And so I'm like on this thing. I I am on the franchise or cap table, so I'm an investor. I am a board member, and you know, we own now, um, I forget the count. Maybe it's I think it's like eight territories. We we own Houston, and then we ended up buying more in Dallas last year. Uh, and so we're we're we're still getting those kind of off the ground. So I want to go over today just kind of what I see in this opportunity, why I'm excited uh by it. And if it's something that you guys are uh you want to learn more, and you're like, hey, this sounds like a pretty good opportunity. I want to see if this could work in my market, then there's a link below to send me a text here on the podcast like app wherever you listen, and shoot, shoot me a text, or you shoot me an email if you're on my my newsletter, you just respond to one of my things, and I can get you connected and we could we could see further if it's if it's a good fit for you. But here's kind of my thesis. So, what do they do? They install and maintain artificial grass. We talked about that. Now, the turf industry is booming, it's growing every single year. Now, most people think of turf, they're thinking of commercial, right? Like football fields, that you go to a hotel and it's like a courtyard and like other massive projects. Now, franchisees do some commercial work, but the focus is primarily residential, which is growing even faster than commercial, and it's massively underserved. Most of the competition in this business, like there are regional players for sure, that install turf, right? But a lot of them are like landscapers that like also do it. Some of them are uh distributors, so like they're manufacturers or you know, distributors of a manufacturer who then install it, but like not the same as you know what we're doing. We can buy from any distributor, we can get any product people want. You know, it's it's more focused on marketing and more focused on brand and more focused on like building all these relationships and really just like driving sales versus like these distributorship models are more about like moving product, if if that makes sense. So um a big part of it is putting greens. So like we can install these awesome putting greens in people's backyards with chipping pads, and you think of like adults, right? I mean, I got young kids, my kids are you know, my five's my youngest, so we have a pretty, pretty nice size play set, but when they you know don't want to do that anymore and play in the play set in maybe 10 years, like I'm gonna have an awesome space that well, it's just gonna be grass, but flowers, but what if I could put uh you know a 500 square foot putting green, 800 square foot putting green? That'd be pretty sick. So we're doing a lot of those, all right. Low startup costs and operating costs. So it's a hundred percent mobile business. So the startup costs are super low in comparison to you know ones that have high retail and build out and all this stuff. Two territories, which is like 700,000 people, so pretty, you know, pretty good size chunk of chunk of territory, starts at $175,000. Like that's the total investment, including franchise fee, working capital, a cash in the bank, initial bargaining, marketing budget. And you know, they're an SBA approved vendor, which means SBA will provide like 70 to 80 percent of that startup cost, meaning, you know, might be 60 grand of cash into the deal. Now, definitely recommend and anybody who starts a franchise or any business from scratch, you really should have more money than you think you need in working capital because sometimes things get you know, they take longer and you never really know. So you'd rather have more money and just be okay than then be just super tight. So you you you probably go a little bit higher, but you don't need tools or equipment. Like the crews, if you're gonna hire crews, they're gonna have all the stuff that they're gonna need, and then operating costs, you can run it from home, no warehouse, no lot, anything like that. Most franchisees are starting as owner operator, which means they are the one estimating the jobs, selling them, project managing, doing literally everything from end to end. My operating partner, his name's Rick. Uh, he ran solo for I want to say nine months, maybe like six days a week, busting his, but he's an extremely hard working working dude, and uh, I'm really grateful to have found him and to be partners with him. And he he, I mean, he's had a ton of success. I'm gonna talk about that in a minute, but like nine months of grinding it out before he felt comfortable on bringing on additional payroll. And so, first hire was a sales rep, and today we now have two full-time sales reps because we have so many leads coming in that you know we need you know multiple people to help handle it. And we have a remote project coordinator based in Latin America who is helping with job cost and job coordination and payroll and like all the different things, so that Rick then can be fully focused on the project management, which is you know, he he's like really good at. And so most people following this model, it helps keep payroll uh very low or if not zero, until you're generating enough you know, revenue on a consistent basis to be able to make that next hire. One of the mistakes that I see a lot of people make, I personally made, is you hire too many people up front, like when you're just getting started, and not only do you have their payroll costs, but like no one's gonna care more than you as the owner, especially when you have like everything on the line. And so you are gonna give it 100%. You aren't gonna let any leads fall through, you're gonna estimate every job correctly, you're gonna do your best to close them, offer financing, come up with solutions, like you are gonna juice that orange as much as you can uh compare to other people who are gonna be like, yeah, it's a nine to five, they punch a clock, they tried, whatever. And in the beginning, you just can't afford that. It's it doesn't work, all right. Number three, strong unit economics. So the 2026 item FDD item 19. This is where like the brands are able to disclose financial information, and what they provide is awesome. They have three years of itemized PLs for their two corporate locations. So from Austin, they're providing full PLs from 23, 24, and 25. And San Antonio, they launched from zero in January of 2024, so they're providing you know full 24 and 25. Both these markets have full-time managers in place. And for context, this is what's disclosed. Uh, in 2025, Austin did $1.47 million in revenue for the year, so $1.47. They paid their manager $112,000, and the net income after ad backs, they had to like, you know, they weren't paying royalties, so they had they had to show all those um to be more like what a franchisee would have was $313,000. So 20% basically, including paying the manager, pretty strong. San Antonio launched, um, like I said, in 24, they did $771,000 of revenue in their first year. I don't have the exact profit number, so I'm not gonna say it, but it was profitable. And then in year two, they doubled that to $1.4 million. So I love the transparency. A lot of brands only show like top line sales or cherry pick some sort of numbers, but I think it's pretty good that you know they're they're showing it all, it gives you a better expense profile, and then you can go from there. Now, they also have a decreasing royalty structure. This is one of the things that I helped implement and suggested and design, which was the more revenue a franchisee does, the lower the incremental royalty becomes, similar to like paying taxes, but in reverse. So it starts at 6% and then it goes as low as 4% as you grow your uh sales. All right, how are franchisees doing? Well, today they have 102 territories sold to 27 franchisees across the country, but only eight of them had launched in 25. Remember, this is like a merging brand, like this thing's like going. Like I launched in me and Rick launched in April. We were the we were the second one, right? Uh, and so they didn't really have enough data to be meaningful to report since many of them only had a you know a couple months. So instead, what they highlighted was the speed of signing the franchise agreement to collecting the first dollar. So my team in Houston, we had the fastest launch. It was 42 days from the day that we signed to the day that we collected our first dollar in revenue. The average was 79. Now, that's fat, that's like pretty fast, right? Because you think about like if you're in a retail or some sort of build-out, I mean, you could be six, nine, twelve plus months before you're getting your first dollar, but you have all this money coming going out and nothing coming in. So, pretty solid. I think somebody beat that 42-day record here in 2026. Um, I'm not sure they'll they'll probably have it next year. So, how are my territories performing? What are we doing? Well, because I'm an investor in the franchise awareness, I can't share any financial performance that's not disclosed in the item 19. So I can't personally say like what our revenue numbers or profit numbers or any of that stuff are. But I can tell you is that last year we were the number one franchisee in terms of gross revenue and a bunch of other things. Rick went home from the award show with like an armful of stuff. Uh, I did buy more territory in Dallas because I was so you know confident in the opportunity. Year to date, we are number three in revenue, and I'm not upset about that. Like, you know, Rick Rick wants to be number one, I so do I, but like the two other markets are absolutely crushing it. These guys are doing a great job. And as part of like due diligence in you know this brand or any brand, you are gonna talk to a bunch of other franchisees. You can talk to as many of them as you want, and they can share with you every single thing. So I'd recommend asking revenue and and margins and and um cash flow and you know uh lead gen, and there's lots and lots of different things. If you end up uh you know shooting me a text and you want to introduce I'll just give you a checklist of like all the questions that I would ask uh when looking at a brand, and you could you could use that. So that's uh the part. All right, so who are they looking for? What's an ideal franchisee? Now, all of the best franchisees fit a similar profile. First, they love sales, like this is a sales-driven business. The average job is like $10,000 to $15,000. So you have to be able to sell. And that doesn't mean you gotta be like Jordan Belfour or whatever, but you you gotta be able to talk to people, you gotta be friendly, you gotta be able to like build a relationship, you gotta over, you know, people have objections, you gotta be curious and ask questions and like continue to get to the truth. And they do have a bunch of stuff to help train and coach people on how to be better uh salesmen. It's it's a big topic because this is a sales-driven business. The second thing they're looking for is team captain. So somebody who has experienced leading sports teams, military. You know, my partner Rick spent 22, 24 years in the military, working side by side with the Navy SEALs, uh doing construction projects in active war zones all over the country. He's an awesome, awesome like team leader, you know, kind of kind of guy, and thrives in this environment. Or like maybe you've you worked in corporate and operations, but you've like led teams at a high level and you know, you know what it what it takes. Third, you gotta be doing, you gotta be willing to do whatever it takes. Building any business from zero, franchise or not, is a ton of work. Like it takes a ton of energy to get the plane off the ground. I think planes burn like 70 or 80% of your fuel right on takeoff. It's something like that. And like it's very, very similar when you're launching anything new. And so anybody who's looking for an easy route should not apply. To be honest, you shouldn't really try to get into any of these things if you're looking for the easy button. None of these are easy, but they become worth it if you're willing to do the work. So if you want to learn more, as I said, shoot me a text. I can check if your territory is available, I can send you a bunch of resources, I can connect you to their team, you can go through it. I've also on YouTube had a couple videos, if you go to my channel at Brian Beers on YouTube, where I'm spending the day with my partner. We're going on a bunch of job sites and bids that we're working on, talk about the backstory. I did another one with the founder, so yeah, I have a ton of stuff there. But anyway, I'm all on to this thing. I love the brand, I love the opportunity, I love the progress we're making. Really excited to see, you know, where this thing is in a in a couple of years. I think it's gonna be um you know, number one turf company in the in the US. Hell, but anyway, I'll see you next time. Cheers.