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Have you ever wondered how long it will actually take for a franchise to replace your paycheck? You quit your job, you bought into this business, and then month after month you're still not there. And you ask yourself, did I pick the wrong franchise? Do I just need more time? Do I have the wrong team? Am I not good at this? Or is there a clear way to know when a business will actually replace your income? My name is Brian Beers. I help people create eight figure businesses through franchising. And if you want to learn more and follow along, hit that subscribe button. So the first thing that we need to look at is the unit economics of a franchise, not just averages. Sometimes when people say, well, how much does a franchise make? Well, they could make literally nothing. Like you can lose money or you can make millions. Flynn Group is the largest franchisee in the world. They do like 4 billion in revenue. My company does over 50 million in revenue. There's other guys that have great livings owning franchises and so huge range. You can't ask that question. It's not the right one. The right question to ask is how long until this one, the one that I'm looking at buying or the one I'm considering, how long until that one can produce the money that I need it to make? The first thing you have to understand is what's called unit economics. So in franchising you're going to hear this term and really what it means is like you have a unit of measurement. That unit can be a retail location. So for my Midas auto repair shops, it is a four wall, like that is a unit. It can be a territory. So for our artificial turf business, Waterloo Turf, we own a territory. I'm a partner in some mobile businesses where we go out and clean like commercial kitchen equipment. In that business, a unit, a measure is, isn't the territory even though we own territories. It's a truck, right? It's how much can a single truck produce? So think about it this way. Let's say we have a shop and my shops can produce on average, let's say $150,000 a year of cash flow, excluding debt payments. Just like, you know, cash flow and 150 grand. And so it depends on how much I'm looking to replace. If you make $300,000 a year and that's what you're looking to replace, then you're going to need two locations, right? $150,000 each. Pretty simple. Now there's a question of how long it takes. We're going to get to that and a couple other factors in a mobile business. So let' our like oil cleaning, fryer business, that one truck is able to produce $250,000 in revenue. Okay, now this is a little tricky here because you can't. It doesn't have this like direct margin because you're going to have a bunch of fixed expenses, right? You're going to have a manager, you're going to have all this insurance, you're going to have like a warehouse. And that one truck, all the money that that one truck makes goes to pay all your overhead. So really now we need a second truck. And let's say we have two trucks operating doing $500,000 a year. Let's say we make a 15% margin. We should be making about $75,000 a year. Then if I can go to four trucks doing $1 million at 15%, I can make 150. Do you see how this is starting to make sense? Where you start to see like there's these like units and you start to stack them and then based on the unit economics kind of tells you the size of business that you're going to need it to make. Then it's about nailing your margins. Now I mentioned 15% margin for example for this mobile business. And at the end of the day in these franchises there's like three big costs that of influencer that we can control. Number one, it is payroll. Like these are all going to be service based businesses. We are going to be hiring people and they're going to be out and performing a service. And if our payroll gets out of line, like we are paying too many people, we have more people than we need to, we're overpaying them. We allow this overtime. Like all those things are going to die by a thousand cuts because our payroll is going to get out of line. Same for our cost of goods. If we're not pricing things right, if we're discounting too much, if we don't know how to sell our cost of goods could eat us alive. And, and then there's your overhead just in general. What are the things that you're spending money on and your rent and your brand new trucks and like all these different things being very cautious of it. Okay, so that's like big part of it is knowing those numbers and then there's the ramp period, right? It's like well how long will it actually take to get to that? This is where it comes in to talking to other franchisees to find out, well, how long did it take you to go from zero to whatever. Four trucks. Now, if I was looking at a business, let's say the truck business, and I say, hey, well, I need it. My goal is to get to four trucks doing a million dollars within a year, okay? Because I want to be able. Within 12 months from now, I want to be able to replace my income of $150,000 a year. And you talk to all these other franchisees, and not a single one of them that you talk to hit a million dollars in their first 12 months. Like, on a run rate at least, right? Four trucks on a run rate. Either your expectations are wrong, right? That's just like, it's just gonna take longer. If they're gonna say, yeah, it took me two years, or if nobody's there, like you had a much bigger problem on your hands, then maybe this model just isn't scalable like that. And then maybe you talk to people doing 5 million, 10 million in this same model, Then you're like, all right, totally possible. They can do it. I can do it. And you build from there. Same thing for the retail. If you know that it's Gonna take you 12 months to get to the 150k run rate. When I read run rate, what I mean is like, the monthly cash flow. Sometimes, like, people think, oh, I make this much a year, but at the end of the day, it's the cash flow month to month that really makes you feel good. So in these, we're saying 12 and a half grand a month of cash flow. Like, that's how much we're really looking. So it's like in 12 months from now, could be making 12 and a half K a month. That's what we know. That's the next part that we want to look into is how long does it take? We get there by asking good questions. We build out pro formas. We really try to figure out, can I do it in this model in the time period that I expect? And it depends again, your expectations. If you only have three months to ramp this thing up before you're, like, in trouble, waters there financially might not be a good decision. Right? You may want to pick another brand or weight, or there's another option I'll tell you at the end here that you may have, but, like, don't extend yourself and give yourself a short timeline. You want to make sure you have a plenty long timeline of a ramp so that you personally don't have that stress on you. Okay? The next thing we want to look at is how are you structuring this the capital somebody who goes in with no debt or they use their 401k using a robs to fund the franchise. Another option, they got a lot less weight on their shoulders than somebody who loads up to the max with an SBA loan. Then they get the down payment using a home equity load and they have like no money into the deal, quote unquote. But then they have a huge debt payment every single month. And those loan payments are going to swallow a lot of cash flow that maybe you could have used for additional marketing to hire that better person person to do those promotions. You really want to be careful especially when you're building from zero, especially when you're brand new to all this stuff that you don't go crazy with debt. The worst thing you can do is drown yourself in debt and like run out of money before you even get started. I'd much rather see you start small in something that is like low cost. Maybe just one territory that you can self fund instead of going for this huge big swing and then getting absolutely crushed by it. Okay, so like that's a big part of this, answering this question of when will I start making money? It really depends on how much your debt is. If you have a $5,000 a month payment every single month, like that's money that could be going to you, but instead, you know, it's going to the banks. So keep that in mind as you structure and as you look to do this. And then finally it's really going to be what is your role? Right? Are you going to be the person who is going to jump into this thing with both feet and you're going to be the operator, you're going to be the salesman, the estimator, the project manager. Like you said, hey, I am willing to wear every single ha in order to make this work. And like I'll do anything. Like I have a friend who bought into a home service franchise, high ticket home service franchise and he was selling medical devices. I think he was making like 300 grand a year, 400 grand a year, something that range did really well. Excellent at sales, great at building relationships. First time business owner though and he goes all in and he buys three territories, quits his job, gets into this thing. And the first year I think he made three, $400,000. Like he pretty much hit the goal in his, in his first like full season. And then the next year he took the business and he grew it. I think he made distributions, cash flow, right? These are profit numbers I'm talking about here. I Think the next year he made 500, $600,000, something in that range. The next year he made 800,000. I think this year he'll be close to a million dollars of net income in his pocket at the end of the day. And so within a short amount of time, he more than tripled it. And he admits, like, it wouldn't have happened if he wasn't the one who was driving it forward every single day. And I think this is a big challenge, right? And the big fear. And I think what holds a lot of people back is it's a chicken and an egg, right? Like, in order to get what you want, you have to be all in on it. But if you're all in on it, it is risk. Like, you are walking away from a job insecurity and, like, a known factor to get into something that's completely unknown, that's completely, you know, all on you. And there's a lot of risk in that. And so there's this question of, well, how do you derisk it, right? How do you make a better decision? In some ways, franchising helps a lot because you've got a team of people around you. You should have a proven model that you're following. You should have systems, you have support, you have, like, due diligence that you can do, right? You can talk to other owners, like, there's a lot of work that you can do to get that rolling instead of saying, hey, I'm going to start this business, like, on the side and just try to figure out everything on my own without any of the support. There's a lot of risk in that, too. There's also the risk of, like, inaction, right? Like, you don't make this jump, like, and you lose your job and you lose this opportunity. Now you can kind of forget about the whole franchise thing or business ownership thing because now you have zero income. Now you're back on the hamster wheel to find another job. I don't know. I would think through that. So what is your role going to be? If you're an operator, you can go on in. You know, you're not going to have those employees. Plus, nobody's going to care better than you for getting it done. If you go the other route to say, hey, I'm going to be more the investor. I'm going to be the one, you know, from the sidelines. I'm going to manage the manager. I'm going to have all this freedom, and I'm going to wear my, like, CEO hat from day One, you know, you may feel good about that from like a ego standpoint, but I can guarantee you that your business is going to grow a lot slower because the person you hire is not going to care as much as you do. You're also going to have to pay that person a good amount of money who has the capability to build something from day one. You know, you're not going to hire people for nothing and get them expect to build this big business. If they were capable of doing that, they would just go out and own a franchise or start their own business. Why would they be working for you? So you need to think about this in a way that is like if you're going to go the operator route, where you're like, hey, I'm going to partner with people, that it is going to take you a lot longer. Now maybe you're still going to work your job and maybe you don't need it to replace your income, but at a certain point it's going to be pulling on you, it's going to be weighing on you and then that manager is going to quit. That operator is going to find a better opportunity, whatever it is. Now you're going to be in this buying because you've got this business, you've got this obligations, maybe you have this team and you're going to have to kind of make that jump in to do it or find someone else who's going to take the reins. And so anyway, it's like think about you're riding in a bike and you can go solo and you can go fast and you can get to that finish line or you're in the sidecar someone else is riding, you're going to go way slower. You may still get there, but it's going to take a lot longer and it's probably going to be a much bumpier road. The other option that you know, many people don't know about is there's like stepping stone franchises, I like to call them, where they are low cost, low overhead in a lot of ways, lower risk franchises that allow somebody to build it on the side, right? So I don't know. Frios Pops, for example, is a brand that I know pretty well where basically you're a gourmet ice cream truck. So instead of Kona ice, going to a birthday party or a neighborhood event or whatever, and selling just like red lace dye out of a syrup out of a pump to go on some shaved up price, you're selling a gourmet popsicle that's made with like real Strawberries, real mangoes, cheesecake. Like cotton candy. Literally cotton candy. You can pull it out of the popsicle. Anyway, they're awesome. But it's like a side hustle. It's low cost. It's like 75 grand or whatever to get into it. And then you can work it on the nights, the weekends, events. You can do B2B, like wholesale accounts where the franchisor just like drop ships the product and you earn the difference. Where you don't have to quit your job, you can ease into it, you can build up income on the side, you can get your kids involved. Like, there's just all these things where you can tiptoe into entrepreneurship and then at a certain point, maybe you're making enough money out of that where you have the confidence to then, you know, quit your job to then go, maybe go all in on that thing or find another business that you think has much bigger potential than the side hustle business. So you have a lot of options. I think the main thing is just like getting really clear, knowing what your numbers are and like starting to dive into this, right? And there's 3,000 brands out there. How do you pick a good one? What do you know what to look for? I mean, it's something that, you know, my team helps people all the time. Like we help people buy franchises, we help them scale them. I partner with franchisors, I have partners with franchisees. Like, it's my entire ecosystem. And my goal here is to help teach you about how to build an eight figure franchise business. And so if you want my help, there's a link below. You can book a free call on my team. You can also grab a copy of my eight figure playbook, which details a lot of what I talked about and more. And there's anything I can do, please reach out. Until next time. I'll see you. Cheers.