2 Stores to 118 in 14 Months: Scaling Boring Businesses - Alex Smereczniak I DSH #1523

Summary

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Digital Social Hour – Episode Summary

Episode Title:

2 Stores to 118 in 14 Months: Scaling Boring Businesses – Alex Smereczniak | DSH #1523

Guests:

• Sean Kelly (Host)
• Alex Smereczniak (CEO, Franzi)

Original Air Date:

September 5, 2025

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Episode Overview

In this episode, Sean Kelly sits down with Alex Smereczniak, the founder and CEO of Franzi, a platform described as the “Zillow for franchise buying.” Alex shares his unconventional route from college entrepreneur to scaling a laundromat business and then launching Franzi. The episode dives deep into the world of franchising: what makes these “boring” businesses so lucrative, the hidden dynamics of franchise brokering, why regulation might be coming, and actionable advice for aspiring business owners. Alex also provides insights on current and future trends in franchising, leveraging technology, and why the safest path to wealth may not be the most glamorous.

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Key Discussion Points & Insights

1. Why Franchises Are “De-risked” Entrepreneurship

• Alex explains that franchising offers a much higher chance of success for new business owners compared to independent startups.
  • “Franchising is just a de-risked way to get into entrepreneurship... Franchises, 80% of them succeed in that same window [five years], while independent businesses, over 50% fail.” —Alex [00:00 & 03:13]
• Many millionaires are made in “sleepy” or “boring” businesses rather than flashy startups.

2. Franzi: Making Franchise Buying Transparent

• Franzi is likened to “Zillow for franchise buying.” It uses AI to match individuals with franchises based on location, risk tolerance, budget, and experience.
  • “We have the most powerful AI recommendation engine and data set in franchising that we then curate... to help you ultimately find the best fit business to buy.” —Alex [00:53]

3. Problems with Franchise Brokering

• Huge broker fees (up to 60% of the franchise fee) incentivize brokers to push any deal, not necessarily the best fit.
  • “These brokers... make a 60% commission on the franchise fee. So you think in your head, I’m paying $100k for the rights to this business, but... $60,000 has gone to that broker...” —Alex [01:46]
• There’s no regulation, licensure, or disclosure for franchise brokers, making it the “Wild West.”
• Alex advocates for more regulation to protect buyers.
  • “I hope regulation comes... it’s too lawless and Wild West.” —Alex [02:23]

4. Franchise Success Rates and Lifestyle

• Franchises offer safer, more reliable revenues, but aren’t “sexy.”
• Entrepreneurship, especially in tech, is over-glorified and carries high risk: “Tech startup, like what we're doing with Franzi, 95% failure rate.” —Alex [04:00]

5. Choosing the Right Franchise: Interests Matter

• Money isn’t everything; choosing a franchise you’re passionate about is crucial.
  • “If you hate working out, you probably don’t want to buy a health and wellness concept.” —Alex [04:42]
• Franchising can be a family affair and a platform for teaching entrepreneurship to children.

6. Case Studies and Trends

• Pop Up Bagels: The next “Crumbl Cookies” phenomenon, with Sold Out territories in 14 months. [05:45]
  • “They have already sold out the rights from Maine to Florida, all of California, most of Texas... the Crumbl Cookie of bagels.” —Alex [05:45]
• Similar patterns: Crumbl valued at $2 billion, Dave’s Hot Chicken sold for ~$2.5 billion.
• Raising Cane’s and In-N-Out: Examples of alternatives to franchising, with slow, quality-focused growth.

7. Scaling Boring Businesses

• Alex’s own story: From 2 laundromat locations to 118 in 14 months. [10:44]
  • “When we opened the laundromats, we had two corporate stores open, and within 14 months, it sold 118 of them.” —Alex [10:44]

8. Overcoming Fear to Start a Business

• Many people hesitate to buy a business but don’t hesitate to spend even more on college.
  • “People spend six figures to go to college... but they'll hesitate to spend $100k on a business, and that could unlock and change their whole life.” —Alex [12:27]
• 80% of people are held back by trivial worries (e.g., forming an entity, finding a contractor), which are easily solved. [13:09]

9. Franchise Trends for 2025

• Food & Bev is saturated and high risk unless you’re a category leader.
• Home Services: Window washing, power washing, turf installation (especially with new water-use laws) are hot sectors.
  • “The categories that I like... home services, these things you don’t think about, like window washing, power washing, artificial turf...” —Alex [16:03]
• Technology & AI being used to streamline operations (e.g., Pink’s Window Cleaning uses drones).

10. Concerns About Job Security in the Age of AI

• Up to 50% of white-collar jobs may be eliminated in coming years; blue-collar/franchise businesses as a hedge.
  • “50% of white-collar jobs are going to be eviscerated in the next like three to five years.” —Alex [17:22]

11. Franchise Ownership Models

• Passive income is possible, but scaling requires operational expertise.
• Stories of people owning 100+ McDonald's or 140 other franchise brands—achieving massive scale and income.
  • “He owns a hundred [McDonald’s], doesn’t eat it... makes like probably $80 to $90 million in cash flow a year.” —Alex [21:23]

12. Most Profitable Franchises

• Chick-fil-A: Tops at an average of $9.8M per location, but difficult to get approved and owner-operator model required.
  • “Their average revenue per location last year... was $9.8 million. Average, out of one location.” —Alex [23:47]
  • “It is harder to get into Chick-fil-A than Harvard, Stanford, Yale combined.” —Alex [24:39]
• Chick-fil-A charges only a $10k franchise fee, but takes 50% of profits.

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Notable Quotes (with timestamps and speaker)

• “[Franchising] is just a de-risked way to get into entrepreneurship.” —Alex [00:00]
• “Boring sleepy businesses... are the ones that make millionaires and build wealth.” —Alex [00:08]
• “These brokers... make a 60% commission on the franchise fee. It’s the Wild West.” —Alex [01:46]
• “People are making the second largest decision in life behind who their spouse is — buying a business.” —Alex [02:23]
• “Tech startup... 95% failure rate.” —Alex [04:00]
• “You might as well pick the right [business partner].” —Alex [02:55]
• “80% success rate after five years for franchises. 50% failure rate for independent businesses.” —Alex [03:30]
• “[Pop Up Bagels] is the Crumbl Cookie of bagels.” —Alex [05:45]
• “When we opened the laundromats... within 14 months, it sold 118 of them.” —Alex [10:44]
• “People spend six figures to go to college... but hesitate to spend $100k on a business that could change their whole life.” —Alex [12:27]
• “Chick-fil-A’s average revenue per location... was $9.8 million.” —Alex [23:47]
• “It is harder to get into Chick-fil-A than Harvard, Stanford, Yale combined.” —Alex [24:39]
• “50% of white-collar jobs are going to be eviscerated in the next like three to five years.” —Alex [17:22]
• “You can build a massive, massive empire in a relatively short amount of time. Running the franchise playbook.” —Alex [22:49]

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Timestamps for Major Segments

• [00:00] Opening: Why franchising beats independent entrepreneurship
• [00:53] Franzi explained — “Zillow for franchise buying”
• [01:46] Hidden world of franchise brokers and their wild commissions
• [02:23] Should franchise brokering be regulated?
• [03:13] Franchise vs. startup failure rates
• [05:45] Pop Up Bagels case study (next big thing)
• [10:44] Scaling laundromat business from 2 to 118 locations in 14 months
• [12:27] College vs. business investment fears
• [16:03] Franchise concepts: Trends and categories to watch
• [17:22] AI, automation, and the coming white-collar job crunch
• [18:41] Franchises Alex owns now (indoor golf, etc.)
• [21:23] Mega-franchisees and the “compound effect”
• [23:47] Chick-fil-A’s unmatched revenue per location
• [24:39] Entry barriers for premium franchises like Chick-fil-A

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Memorable Moments

• Details of how franchising brokers operate with minimal accountability — “Wild West” analogy paints a vivid picture of the industry’s lack of regulation.
• Colorful case studies: From Pop Up Bagels’ 14-month sellout to the ex-banker owning 140 franchises.
• Discussion of Chick-fil-A’s ultra-exclusive, low-cost/wealth-building model, compared (hilariously) to college admissions.
• Food franchise fads and failures (Subway, yogurt shops, claw machines) vs. the reliability of home services.
• Unsexy, everyday businesses make “quiet millionaires”—a repeated, energetic theme.

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Actionable Offer (for Listeners)

• Franzi is offering $5,000 toward your grand opening for any franchise bought via the platform before the end of the year ([14:55], [30:24]).
  • “If you sign up at Franzi.com/socialhour... we will give you $5,000 towards your grand opening if you buy a franchise... between now and the end of the year.” —Alex [14:55]

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Closing Thoughts

Alex’s central message is that wealth is quietly built through franchises—the safer, “boring” route to entrepreneurship. Using AI via Franzi, anyone can now find a franchise that fits their capital, lifestyle, and goals, and avoid the pitfalls of high-pressure, commission-driven brokers. The looming shadow of AI job automation makes such pathways more relevant than ever.

Final Advice

• Try the Franzi Fit Score—12 questions to get AI-powered franchise matches and free coaching, all with minimal risk.

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[End of summary]

Transcript

[A]

Franchising is just a de risked way to get into entrepreneurship. 80% success rate after five franchises. 50% failure rate, independent businesses. I own franchise myself. Like these are like the boring sleepy businesses, the ones that make millionaires and build wealth. If your goal is to be entrepreneurial and to produce cash, franchising is one of the best ways to do that.

[B]

Okay, guys, got Alex here from Franzi. Just flew in now and leaving right after from Charlotte. Was there a direct route from there?

[A]

Yeah, direct flight in and out, taking the red eye. And we've got Bennett, who's working with us over the summer. He came with.

[B]

Nice.

[A]

Yeah, we're here to.

[B]

Busy, busy, huh?

[A]

Busy, busy. We just closed a 2 1/2 million dollar capital raise.

[B]

Wow.

[A]

And so we were like, we got to get in and out, get the message out and back to the grind.

[B]

Congrats, man. So for people that don't know what Franzi's about and why you're raising money for this company, could you explain what's going on?

[A]

Yeah. So in the shortest terms possible, Franzi is think of it as the Zillow for franchise buying. So you can go to the platform, you can say, hey, I'm from Miami, I've got 200k to invest. Here's my risk tolerance, here's my operational experience and background. And then we have the most powerful AI recommendation engine and data set in franchising that we then curate. You know, your top five, Sean's top five from all this data that we just collected on you to help you ultimately find the best fit business to buy.

[B]

Sounds like a good product. Because right now, isn't it a little old school to get a franchise if you're interested in one, Depending on who you're going with, I guess.

[A]

Yeah, right now. So I think if you've been on LinkedIn, you know, and haven't been approached by someone at some point saying like, hey, Sean, you'd be great, you know, as a gutter franchisee or whatever it is. These brokers will reach out like that. And what they don't tell you though, is they make a 60% commission on the franchise fee.

[B]

60%, six zero. So if you pay 100,000, they get 60.

[A]

They get 60 grand. So you think in your head, I'm paying 100k for the rights to this business, but they're probably going to reinvest it back into training and marketing and support for me, but we don't realize is out the door. Three days later, 60 grand has gone to that broker because it's the Wild West. The brokers have no disclosure requirements. There's no licensure. Like, you know, if you were, you and I were to become a real estate agent, you got to take a test, right? Become licensed. You and I can become franchise brokers right now in this moment, like you're dubbed the franchise broker right now. That's it.

[B]

So do you think that's going to change anytime soon?

[A]

I hope so, because I think people are making, you know, the second largest decision in life behind who their spouse is buying a business. It's not an insignificant cheap decision. And you've got some of these actors that might not always have, you know, your best interest in mind. So I hope regulation comes. It's. I can't believe I'm saying that, but usually I'm not a proponent of that. But I think in this case it's too like lawless and wild West. And I've seen a lot of people get burnt working with a broker who they think has their best interest in mind.

[B]

Well, they say your business partner is your second wife.

[A]

Yeah, exactly. You're going to do this for at least 10 years, you know, so you might as well pick the right one. And that's what we're trying to do with Franzi is flip the whole the old traditional model on its head and just make this way more transparent, way more accessible.

[B]

Well, I wonder what the success rates are for franchises. I guess it depends on the industry, right?

[A]

Yeah, it definitely depends. But so Gallup poll did this thing where independent businesses, after five years, over 50% of them fail, but franchises, 80% of them succeed in that same window. And so franchising is just a de risked way to get into entrepreneurship.

[B]

80%.

[A]

You said 80% success rate after five years for franchises. 50% failure rate for independent businesses.

[B]

What do they consider success is profitable? Is that certain revenue?

[A]

Yeah, like the business has paid itself back and it's achieved some level of profitability.

[B]

Got it. 80%. That's way higher than starting a business on your own.

[A]

I bet drastically, probably 10 times drastically.

[B]

Yeah. Because I know entrepreneurship lifestyle is, you know, kind of glorified these days, what we do, but it's not easy. And the success rate is really low.

[A]

Yeah. If you throw in a tech startup like what we're doing with Franzi, it's 95% failure rate.

[B]

Crazy, right?

[A]

So high.

[B]

Crazy.

[A]

That's what I like about franchising. I own franchises myself.

[B]

Right.

[A]

It is like these are like the boring, sleepy businesses, but the ones that make people millionaires. And build wealth. It just might not be as fun as what we're doing now or you know, going out and building a product and hiring a tech team. But if your goal is to be entrepreneurial and to produce cash, franchising is one of the best ways to do that.

[B]

Look, high risk, high reward. I say when you're younger, you know, you could take some risks. As I get older, I want to be more safe with my money because I have a family and start to have kids. Franchising would be something as I get older I'd probably be interested in.

[A]

Yeah. And there's. And like it's. People have joked with me like, oh, what's the one I'm gonna make the most money on? I'm like, it really depends by category. What are you gonna like doing again? You're gonna do this for five to 10 years. If you hate, I don't know, working out, you know, you probably don't wanna buy a health and wellness concept. Cause you have to go in there at some point and be involved in the day to day at some point. 100. So it really depends on what are your interests and you know, what resonates with you.

[B]

Yeah. For me, like I'd probably be willing to make 3 to 5% less a year on something I enjoy than to just invest in something and make a little more.

[A]

Exactly.

[B]

I'm not as passionate.

[A]

We have some clients that they want to do something with their kids. Like I want to show my kids entrepreneurship. Franchising seems to be a good like family business we can run. It's an ice cream shop or you know, whatever it is. And they've got, you know, their kid working the counter. And you know, some people are just doing it for that. It makes money. But it also is a good kind of role model, platform experience for their kids to become entrepreneurial.

[B]

There's a lot of high growth franchises. Right. Especially in like the fast food and fast food.

[A]

There's one right now that I'm, I'm personally really trying to get involved in. Yeah, it's called pop up bagels. It's a, I say bagels funny because I'm from Minnesota, but pop up bagels out of New York. They have already sold out the rights from Maine to Florida, all of California, most of Texas. And they're not, not selling anymore. They just started like 14 months ago. It is like the crumble cookie of, of bagels. A new flavor every week, new schmears and stuff that they have a huge social media following for.

[B]

I think I Saw an article about this business.

[A]

Yeah, it's like it's the same kind of craze as there was around crumble cookies. People lining up to like oh they have cookies and cream flavored schmear and a cinnamon bagel, I guess that kind of thing.

[B]

I want to try one because I grew up in Jersey so I know a good bagel.

[A]

So I've had a bunch of New Yorkers that have had it in Miami because I have a few locations already open that are just like this is like better than a lot of the bagels in New York. The guy who started it knows what.

[B]

He'S doing and see that's a major issue he's solving.

[A]

They, they pre, they use common commissaries to, to make the dough and, and they're using all of the New York, you know, limestone filtered water to get that same. That's how they're doing New York flavor.

[B]

And yeah, on the west coast of pizza and bagels and probably in Miami too, they don't hit the same, not even close. So if he's actually able to pull that off as scale, that's a multi million dollar.

[A]

That's going to be the, the true question is can he figure that out?

[B]

Right. Crumble grew quick, man. I feel like they came out of nowhere. Now the owner's a billionaire, right?

[A]

Yeah, they got valued at I think it was $2 billion a couple months ago.

[B]

Holy crap.

[A]

With Dave's hot chicken it was just a. He knew that the hot chicken concept hadn't taken off.

[B]

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[A]

Hired a franchise team around it and same thing they just sold the Roark capital for. It was like two and a half billion.

[B]

Jeez. I just saw some video Raising canes is growing really fast too.

[A]

They're taking off. And his story, Todd Graves story is insane. He's from outside of. Where is it? New Orleans I think. And when he was trying to get started he couldn't, he wasn't bankable. He Couldn't raise the money and so he moved to Alaska and worked on like Deadliest Catch type boats, like super dangerous jobs to save up enough money to open his first location. Came back, opened it. He owns the whole thing. It's not a franchise either.

[B]

He owns the whole thing.

[A]

All those restaurants are corporately owned.

[B]

That dude's gonna be, if he's not already a multi billionaire. Yeah. Holy crap. Shout out to Todd, man. We've emailed a few times. He's coming on the show eventually.

[A]

That would be awesome.

[B]

I'm really excited.

[A]

The story is crazy.

[B]

Yeah. I like when fast food owners are like face fronting. Like they show the, the CEO behind it. There's not a lot of them like that.

[A]

Well, another one that's going crazy too is these like dirty sodas. Like swig is a big one. It's always like out of Utah too.

[B]

The Mormons.

[A]

Mormons love sugar.

[B]

Can't drink alcohol.

[A]

Exactly.

[B]

I went to one.

[A]

Or caffeine. I think that. No caffeine.

[B]

Yeah, yeah, some of them. Yeah.

[A]

It's all like crumble cookies, swig, etc. You had me thinking about it with, with whatever this is.

[B]

Yeah. Shout out to Magic Mind. There's a sponsor of the show, but I'm all about natural caffeine, you know, staying calm and Magic Mind does a great job of that. Have you ever had one of these?

[A]

No.

[B]

Oh, you might have to try it, man. It's all natural.

[A]

Magic Mind.

[B]

Magic.

[A]

There's no caffeine.

[B]

No, it does have caffeine, but it's. It's natural. Like it's not from like fake stuff. So Magic Mind, mental performance shot. I take one for every episode. Check them out.

[A]

Very cool.

[B]

But yeah, I went to that soda spot in Utah. I forget which one it was.

[A]

Swig.

[B]

It might have been. It was like a drive in and everything. I didn't like it. Yeah, to each their own, you know. Have you been to one of those yet?

[A]

I haven't been to one, but I've seen. I see the menus and it's like Dr. Pepper infused with vanilla syrup.

[B]

No, you mix them. I mixed like Sprite and Fanta and like. Yeah, it was weird. But I don't like soda anymore, so it could have been that too.

[A]

Me neither.

[B]

What's your go to Fast food spot?

[A]

So it was funny before we came over here, we were trying to go to the Canes. It's like right down the road. Yeah, it's not open yet.

[B]

Oh, it's too early.

[A]

So we got dropped. No like, it's not even open. The locations, it's on Google Maps, but the location is not physically open. So we just got dropped off in the parking lot. We're like, let's go to this.

[B]

That's awkward.

[A]

What was it called? Egg Woken Egg or something.

[B]

Okay. Mine used to be Chick Fil A and Chipotle. Right. Now I would say in and out.

[A]

In and out's fire.

[B]

It's hard to beat that.

[A]

It is.

[B]

Is there any in Charlotte?

[A]

There's no in and out.

[B]

Damn.

[A]

In and outs like Cane's or. It's not franchised either. That's all corporately.

[B]

I feel like the franchise strategy. You grow quicker though, right?

[A]

You grow way faster.

[B]

Like, you could go from 0 to.

[A]

100 real quick, really fast. I mean, when we opened the laundromats, we had two corporate stores open, and within 14 months, it sold 118 of them.

[B]

Holy crap.

[A]

So you can go very fast. The issue is, if you're not smart and thoughtful about it, quality can, you know, slip out the door.

[B]

Right.

[A]

That's why I think Todd Graves and the In N Out family is, like, so methodical. Meticulous and methodical about how they do it.

[B]

Yeah. Because they won't even go to the east Coast. Right. Yet, at least, which is crazy. Whole coast of the country is missing out on in and out. I did want to ask about the Laundromat. You. You grew that while in college, right?

[A]

Yeah, so I. I really got into entrepreneurship in college. I moved from Minnesota down to North Carolina, went to Wake Forest and started a laundry and dry cleaning business my freshman year and learned more doing that than any class I took in college. It was just the best experience I ever had.

[B]

So you went from two locations, you said, all the way to 100 something.

[A]

Yeah. So the one in college actually sold. So I started out, we scaled it up, we sold it for, like, just under $300,000. So we're 22 years old. We got the most money.

[B]

That's a lot back then.

[A]

Yeah. We think we're like, we can retire now. But then I go work for EY for a year and a half. Ernst and Young.

[B]

Yeah.

[A]

And hated it. I was like, this is not as entrepreneurial. This isn't as fast. And started 2U laundry up in 2016 when all the Uber for X businesses were taken off, like, shipped Instacart, Wag Rover. And so we launched in 2016. Eight years later, we raised, over that period, $33 million in venture capital.

[B]

Geez.

[A]

Scaled to a few dozen Cities or so, and then started franchising in 2021.

[B]

Well done, dude. That's impressive. Did you learn anything of substance at ey?

[A]

Honestly, some of the politics is, like, helpful as far as, like, how to navigate people's different kind of goals and motivations. Definitely. How to speak to clients and like, navigate some of those tougher conversations with external facing folks. But outside of that, it was just really good people to work with. But the work is just so excruciatingly slow and not as fulfilling. I think about that a lot. It's like people spend six figures to go to college, to then go work this job that they don't necessarily enjoy, but they'll hesitate to spend 100 grand on a business, and that could unlock and change their whole life.

[B]

I think a lot of people are scared to invest. Right. Something they grew up with, trauma or something.

[A]

I think it's. They're scared they don't have access, they don't know where to start. And so it's just like, you get complacent and you stick in your kind of regular rhythm. And what we've realized with Franzi is as long as you like, open it up a little bit, give people a little bit of a nudge. Half. More than half. Like 80% of the things that people are worried about are like the silliest things. Like, I don't know how to form an entity. And they're like, dude, we can do this today in like an hour. Like, where am I going to find a general contractor? Like, all right, Google our network, the brand's network. Like, all these things are solvable. And then you eventually see them almost like working out.

[B]

Yeah.

[A]

They flex this muscle of like, okay, it's just like, start and try and it's okay if it doesn't work or doesn't fail. I think so many of us have been conditioned our whole lives to like, all right, get good grades in high school, to get into a good college, and then get good grades in college. So you go get your Fortune 500 job. Yeah, we're all just so, like, I think scared and sheltered of going to take that thing that deviates from that kind of societally pushed path. And our goal with Franzi again is to, like, how do we break that mold, give people that chance and like, it's fine to go take that risk and go for it 100%.

[B]

Plus, we mentioned earlier, franchising is painted in a bad light in certain circles.

[A]

Right.

[B]

With the broker fees.

[A]

Yeah, the broker fees. And I think there's A lot of, you know, brands that maybe haven't done, you know, the level of foundation building that they should have. And again, our goal, Franzi, is to say, hey, this one only has five locations open. If you're comfortable with that risk, it could still be the right fit for you. If you're looking something for more, something that's more safe, look at all the other brands that we have on the platform that have 50, 100, 200, 300 units open already.

[B]

Yeah.

[A]

And again, there's something for everyone. If you, if you really want to do it and you're, you're willing to take somewhat of a risk and work hard, there's a concept out there for you.

[B]

And before we forget, how can people watching this make $5,000 right now?

[A]

Yeah. So something we're doing because again, it's this easy to open a business and this easy to find a franchise is if you sign up for, for Franzi, which is free, and we provide all this coaching, all these resources. If you go to franzi.com socialhour we will give you $5,000 towards your grand opening if you buy a franchise, any kind, between now and the end of the year.

[B]

Is there a minimum amount they have to spend on that?

[A]

No. And there's franchises that range from 10k to get into all the way up to, you know, these swim schools that are 5 million bucks because you're putting six, seven pools inside.

[B]

Damn, that's a no brainer. I might do that myself. I might buy a 10k franchise and get 5k back.

[A]

There you go. Now you gotta. The 10k one's called called, there's a couple of them, but there's one called Card My Yard. And it's these little yard signs that are like happy birthday Sean or Congratulations, yeah, graduation or whatever. 10k to get in kicks off 20 to 30 grand a year in revenue.

[B]

Damn, that's a no brainer.

[A]

Nice little side hustle, guys.

[B]

If you're watching this, you want 5,000, go get that card. Business, what industry do you have your eye on right now for franchises? Like any trends you're seeing, I'd imagine it's hard to franchise an AI company, but is there anything you're seeing there?

[A]

So a ton of brands are using AI to make their operations way better. But the categories that I like Food and Bev is always like sexy and the first thing to think about, but they're actually declining. You have to be in the top 5% of food and Bev for it to really take off the concepts that I like though are like home services, these things you don't think about, like window washing, power washing, artificial turf that we just talked about. Vegas, you know, not allowing people to grow grass anymore. That turf franchise is going to just destroy it here. I mean, it's going to do incredibly well. I really like home services like health and wellness a lot. And then again, businesses that are using technology to make things easier. For example, there's one called Pink's Window Cleaning. They're using drones to help do some of the window cleaning.

[B]

That's cool.

[A]

And Window Hero is another one. But they're using technology to replace some of the labor or make the booking faster, marketing more efficient. And that's the kind of business I think people should be thinking about because it's, you know, AI is coming and it's drastically going to impact how all of us do anything.

[B]

I wouldn't mind investing in a blue collar company these days because I know how lazy my generation is and there's a lack of those workers. You know what I mean?

[A]

That and have you read the AI 2027 article or have you seen this at all?

[B]

No, I didn't.

[A]

When did I send it to you? But they're Talking about how 50% of white collar jobs are going to be eviscerated in the next like three to five years.

[B]

It's already starting.

[A]

I'm seeing way faster than people.

[B]

That's a lot though. 50%. Holy crap.

[A]

Like what are they going to do?

[B]

Not a lot of them because some of them might be too old to do blue collar, some of them might be too young or inexperienced. Right.

[A]

So my thought is like, I'm not just, you know, pushing franchising here. It's like go reinvent yourself. Go, go bet on yourself. Whether it's short term rentals or crypto or day trading, you start to learn how to do or become that top 50% that's using the tools in your job better than anyone else. Or go buy a business, go buy a franchise, go buy an independent business. Because I think that wave is coming and you have to prepare yourself for it. And you have to start, I think preparing now. I mean, three to five years is going to go by quick, very quick.

[B]

Is this mainly US businesses that are on the site?

[A]

Yes, all us right now. We have some brands that have, you know, locations in Mexico, Canada, Europe. But we're hyper focused on the US right now. I think it's one of the best places in the world to start a business. To be entrepreneurial means the American dream. Right. And go after this thing that's your own. And Franz, he's just trying to be that advocate and be that guide in a small, small section of that. That space.

[B]

Nice. Which franchises do you own right now?

[A]

So I own five locations of a concept called Another nine. It's an indoor golf simulator franchise. No employees, no food and Bev. But it's private based. So if you and I want to go just play pebble beach in an hour, we can go book a room, go play for an hour or so. It's 30, 40 bucks.

[B]

Okay.

[A]

Versus five hours. And you know, like the whole commitment. I love playing golf outside, but not all of us have, you know, a whole day or half a day to give up.

[B]

Like that's a whole day ordeal.

[A]

So I love those for that reason. Very passive. No employees, good revenues. And then that Papa bagel, when I mentioned, I'm like really trying to figure out a way into. Into that.

[B]

I need to get in that one too. Speaking of golf, I heard topgolf struggling. Yeah, I just saw a video on it yesterday.

[A]

The entertainment stuff, it's such a huge build out. Super expensive. And it's mostly just like corporate events and happy hours.

[B]

They were pricing people out too. It's super expensive to go there.

[A]

Yeah.

[B]

Entertainment, that's a. I'm gonna start using that word. Entertainment. Yeah. I guess when they make their money, is it off the food? With places like that, like, what's the margin?

[A]

The bay is actually not crazy.

[B]

Right?

[A]

If it's like 50 bucks an hour or whatever.

[B]

Yeah.

[A]

But they're hoping you sit there and just eat and drink and eat and drink.

[B]

Right.

[A]

That's a huge chunk of the revenue.

[B]

Yeah. The liquor, I'd imagine is the highest margin.

[A]

Yep.

[B]

What about owning somewhere where with a liquor license? Wouldn't that be pretty good?

[A]

Yes. What I like about the another 9 thing again is it's BYOB. Cause you don't have staff or food and Bev. But most states actually allow BYOB. People don't realize that's like opening 5, 10 of these. Low employee headcount, good revenues, pretty passive. BYOB. So people can still, you know, go drink and be social that way.

[B]

Okay.

[A]

But you don't have to have 30 people on staff.

[B]

So you missed the crumble cookie wave.

[A]

I missed it.

[B]

How much was that one? Crumble cookies are probably like 100k plus. Right.

[A]

Revenue or.

[B]

No, franchise it.

[A]

Oh, so. So most franchises charge a franchise fee. It's like 50k to get in tiers down from there. The more that you Want to buy, then you got to do the build outs. Like a crumble. Cookies is probably half a million to 750k to get open.

[B]

Okay, so you won't make that back for a while.

[A]

Well, they're doing these crazy revenue numbers and they're doing 2 million or so in revenue and kicking off each location.

[B]

Holy crap of cookies.

[A]

The bagel and I told you does $2 million. Average unit volume, 25% margin. So they're kicking off half a million in profit a year.

[B]

That's insane. Insane off one physical location.

[A]

Bagels?

[B]

Yeah. That's nuts. Because if you multiply that by 10 locations, it's 2.5 in probably one state. You could fit 10 locations, right?

[A]

Well, if it's off of 10, you'd be doing 5 million in profit.

[B]

That's insane.

[A]

Dude, some of these guys. So I know a guy that owns almost 100 McDonald's. Yeah, he hasn't stepped foot into McDonald's in like three years. He's got a whole team, GMs, a COO that runs everything. He legitimately has not been in a McDonald's in like two years. Owns a hundred of them.

[B]

Yeah.

[A]

Doesn't eat it. Doesn't, you know, you know, doesn't get high off of his own supply. And he makes like probably like 80 to 90 million in cash flow a year. He has two planes, he's paid like a NFL quarterback that's for the rest of his life and doesn't have to operate them because he's got a team built out now. He's just scaled into that. When I first met him four years ago, he had 46 locations. So he's doubled in like three or four years.

[B]

Why not, if it's doing well?

[A]

That's the thing is once you get one or two going, like that's the hardest part. Like anything, it's that the first one or two and then you get to the next one. It becomes inevitable. You just have a team now. You can go look for 3, 4, 5, you get to 5, you start to buy up other people's locations and now you're buying portfolios of five of them and next thing you know you've got 50, 60 plus of them.

[B]

That's cool.

[A]

There's another guy I met, he was ex like banker. Started buying butcher shops in New York. 2018, he bought two Orange Theory Fitnesses. Fast forward, what is that? Seven years. He owns 140 franchise locations across Orange Theory. Dave's Hot Chicken, Marco's Pizza, Pop Up Bagels, some health and Wellness concepts.

[B]

So the compound effect gets pretty nuts. Once you're like, five plus, you're willing.

[A]

To do the work and dig in and, like, build an operational team, you can build a massive, massive empire in a relatively short amount of time. Running the franchise playbook.

[B]

How hard is it to get those big brand names? Like, I'd imagine they have a waiting list or something.

[A]

So some of them you can buy, like, existing or, you know, resales fairly. I don't want to say easily, but they're easier to come by. But once you. You really have to get kind of that reputation almost of. All right. Sean's done this before with five locations. We now trust that he can do, you know, five of ours. And so you got it. The hardest part, again, is getting that, like, zero to five, you know, wave. I don't think it matters what brand it is, as long as you've shown, like, I can operate one of these businesses, and I'm good with retail, and I'm good with employees. Other big brands and, you know, these hot concepts that come out, they're just looking for some level of operational experience before they just go to the average person.

[B]

Which franchise that you've seen had the highest revenues per location?

[A]

Chick Fil a crushes every. I mean, like, their average revenue per location last year that they announced in their franchise disclosure document was $9.8 million. Average average out of one location.

[B]

Wait, that's what, $300,000 a day? Something like that. 250 a day?

[A]

Yeah.

[B]

Holy crap.

[A]

It is a lot.

[B]

Dude, that's insane.

[A]

That's not a day. That would be every. Well, it's like 30 a day.

[B]

Oh, my bad.

[A]

30 a day.

[B]

30K still.

[A]

30K a day?

[B]

Yeah. That's like, what, 3,000 sandwiches? They're like, 10 bucks each ton. That's crazy.

[A]

And there's one. The one that does the most is right outside of Charleston, South Carolina.

[B]

Yeah.

[A]

They do like, 13 or 14 million dollars out of that box.

[B]

Wow. So 10 mil average revenue. What's the franchising cost for that one?

[A]

So Chick Fil A is interesting. Like, their franchise fee to get in is only ten grand.

[B]

That's it.

[A]

Only ten grand. But they make you work in the store for six months before you can even, like, apply. Like, they put you through this rigorous thing. They're super choosy. It is harder to get into Chick Fil A than Harvard, Stanford, Yale combined.

[B]

Totally.

[A]

Their selection rate is. And they don't let you own more than one, typically.

[B]

Wow.

[A]

They let a few of their like best operators own like a second or a third maybe.

[B]

Why don't they raise the fee though? I don't get it.

[A]

They purposely make it cheap so that anyone can do it because they, they care more about how good is the operator operator going to be versus how wealthy are they. The thing about it, you might have this person who will work circles around you and I like, they've got this crazy work ethic. They'll go 100 hours a week, but they only have 10k to their name because they've just, I don't know, they had a tough upbringing or just didn't ever figure out the right career path. Good work ethic though. Chick Fil A wants access to anyone. So as long as you can come up with 10k, they buy the land, they pay for the build out, they wow. But they take crazy royalties. Most franchises, it's like a 6 to 10% royalty. They will take 50 of your of your cash flow.

[B]

That's the revenue.

[A]

So 50 of the profit you make.

[B]

Oh, okay. The profit that's still really high. But I guess if you're only paying 10k though, you're gonna make that back super.

[A]

The average Chick Fil A franchisee, you know, makes like 4 to 600 grand a year.

[B]

Passives, right?

[A]

Well, so no, they Chick Fil A franchisees got to work in them.

[B]

Oh, they have to be in there.

[A]

That's like Chick Fil A is almost this like very abnormal franchise. Most franchise. Yeah. You could hire someone, you can go to the beach, you can have a portfolio of them. Chick Fil A is like if you're going to do this, you got to be working basically as the GM of the store. You're going to eventually get to a point where you hire someone and get less involved. But the first few years they mandate that you're hands on in the business, like really, really taking care of it. And that's why the quality is so good, it's so consistent. Because Chick Fil A just has this thing dialed in and they pick the best operators in the world because they.

[B]

Can them and in and out have the best fast food customer service I've seen.

[A]

That's because they've, they've retained full control for the most. I mean Chick Fil A is still a franchise, but they have so much control, more than the normal franchise does.

[B]

What about a Starbucks? Do they franchise corporate owned? Corporate owned Dunkin franchise. Okay, so that's interesting. Starbucks. I prefer Starbucks over Dunkin though.

[A]

Yeah. The quality is just quality.

[B]

The branding, the marketing the feel inside, it feels more luxurious, if that makes sense.

[A]

People in the northeast love their Duncan. It's like wild how loyal they are.

[B]

Yeah. I grew up in Jersey. It was big out there. Yeah. Not Starbucks to me is way better though.

[A]

Yeah, agreed.

[B]

Would you ever go the drink route? Like coffee or something like that?

[A]

I don't know. There's a few. Like, it always depends on the cat or like the. Is it a category winner or not? For me, like, there's a company called seven Brew right now where it's all like, drive through quick, good quality still. But they're just cranking out volume again. It's kind of like the bagel thing. They're doing a couple million a year in revenue. High margin.

[B]

Yeah.

[A]

Like I would do something like that. I don't know if I would do like a Dunkin though, because it's just the foot traffic is different. There's too many of those. Too many of.

[B]

Because I know subway struggling right now.

[A]

Way too many subways. Subway will sometimes intentionally build a location right down the street from another franchisee and like, all right, which one does better? We'll shut the other one down.

[B]

That's messed up.

[A]

So, so messed.

[B]

Messed up. Yes. So it's like that sweet spot, right? You want to get in while it's like on the come up Y but you don't want to wait too late to the subway point because then you're too late.

[A]

Totally. Like I. It depends on your preference, but like, I love getting in somewhat early where they have a lot of the systems figured out, but they still have white space. And you can go buy 5, 10 of these things and start to build that empire again.

[B]

I guess it's also more risk if you're too early. Cuz then it could be like a yogurt land situation too.

[A]

They'd be like too open. You have no idea. Was this just a. A fluke or a fad in this, this area or this location?

[B]

Right.

[A]

Like, it depends on your risk tolerance. Some people come in and they love that. They're like, I'm gonna go buy the whole state of Texas and I believe in this product and I've tried it and I know the owners and they're super good operators. That could make sense. But if it's like this thing you're unsure of and you're looking to get into this for the first time, like find something that's a little bit more de risked and a little bit more stable.

[B]

Makes sense. Yeah. Cause those claw machines were hot for a bit too yeah. You saw those?

[A]

Yeah. The claw machines.

[B]

Were those in Charlotte too? Yeah, yeah, there was a ton in Vegas and now they're all gone.

[A]

Yeah. It's like things are fads and you got to watch that too. Especially some of these build outs that are a couple hundred grand to get going. Like, you don't want to make that kind of bet on something you're not. You're not sure of.

[B]

And that was always my issue with getting into retail businesses, honestly, was that upfront cost?

[A]

Yeah, that's the hard. I mean, that's what makes retail, I think that risk reward again, like some restaurants, if you get the right one, millions, you know, millions of dollars in AUV and potentially profit, but more expensive and it could be a fad. That's why I like, you know earlier when you're asking like which categories and stuff, home services, it's like you're getting a truck maybe. Yeah. A team and you just go start selling work. And it's not a huge risk or as big of a risk or initial investment to get started.

[B]

Right.

[A]

And everyone needs some of these home services.

[B]

Everyone, bro. Every week I have a new home bill. It's insane. You know, my pool just broke. Like, I have to do the roof.

[A]

Like there's a pool cleaning franchise. There's a roof, you know, roof repair, franchise, window cleaning. It's these unsexy, boring things, but they are printing money, dude.

[B]

Even cutting the palm trees at my house is $3,000.

[A]

Holy.

[B]

Like, that's probably a franchise.

[A]

There is one called Joshua Tree that.

[B]

Yeah, but imagine that times every house in Vegas is palm trees pretty. Like in the neighborhood, the nicer neighborhoods. So like you can make probably millions off one neighborhood, I imagine.

[A]

Done easy, you know?

[B]

Yeah. So that's interesting. Well, dude, yeah, we'll link below the offer. $5,000, guys, if you buy a franchise. And that lasts 30 days.

[A]

Yeah. If you sign up from 30 days of hearing, you know, this episode, we will put you into the CRM that way. And if you buy a franchise by the end of the year, we'll put five grand towards your grand opening.

[B]

Amazing. Anything else you want to close off with Alex?

[A]

No. I appreciate you having us. I think if you've ever wondered about buying your own business and haven't been sure where to start, just give us a, you know, give us a try. @Franzi.com we've got this thing called the Franzi Fit Score so 12 Question Survey. We use AI to then curate Sean's top 10. And then we give you access to free coaching every step of the way. So nothing to lose. Go try it out, see what brands get recommended, tinker around on the platform and who knows, maybe you'll find yourself leaving your 9 to 5 and becoming an entrepreneur.

[B]

Let's go. Got your chick Fil A guys.

[A]

Appreciate it.

[B]

Wherever you guys are watching this show, I would truly appreciate it if you follow or subscribe. It helps a lot with the algorithm. It helps us get bigger and better guests and it helps us grow the team. Truly means a lot. Thank you guys for supporting. And here's the episode.