Bennett Maxwell continues by explaining how, when you are starting out, it is critically important to invest time and win peoples hearts.

Dave Young:

Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.

[ASAP Commercial Doors Ad]

Rick:

Told you, Brian.

Brian:

Told me what?

Rick:

This is part two of last week’s episode.

Brian:

Oh, yeah. And it was getting good.

Rick:

If you missed it, go back and listen to part one first. Take it away, fellas.

Stephen Semple:

It’s very compelling. I could put my business hat on and go 500 square feet, one oven timed single employee can do this and if the product’s really great, that’s quite compelling. But you still got to pound the pavement to find those franchisees and you still got to have a pretty good pitch. So if I’m a potential franchisee, what’s the pitch? A Dirty Dough franchise?

Bennett Maxwell:

I think I would kind of reiterate with just what you just told me as well. So it’s hitting on the team first. We have a really experienced team. Now our CEO, Jill, who I mentioned is now our president and our CEO is Gregg Majewski, who was the CEO for Jimmy John’s during all of their rapid growth and now he owns another X amount of brands. So okay, here’s the team, but that’s one thing. The other thing is cost. How much does it cost to open up us versus a competitor? And we’re going more towards the how do you lower the barrier of entry to entrepreneurship by allowing new people to become entrepreneurs? Well, what does it take to become a business owner? You need time, money, and expertise. Well, we’ve taken away the expertise out of it because you don’t need to be a baker. All you have to do is learn how to use an oven.

Stephen Semple:

Right.

Bennett Maxwell:

The time it takes to run a business is generally correlated pretty closely with the number of employees.

Stephen Semple:

Yes.

Bennett Maxwell:

If a competitor requires 50 employees before opening day and we require 15, which one is going to take more time?

Stephen Semple:

Correct.

Bennett Maxwell:

And then the money it requires, well if you only have a 500 square foot build out or even a thousand square foot build out in only one oven, you don’t have to buy all the mixers, nor do you have to have all the storage for all your raw ingredients because I’m shipping you a finished product. Now you no longer have to have all of the same amount of capital. So it’s less capital, less expertise, and less time required backed up by a really good product. Generally speaking, we get a little bit better reviews than anybody else. I mean a 4.8 star and some of the competitors are 4.6, but it’s also more by unique product.

Go try to make a three layer cookie at home or in Insomnia Cookies or Crumbl Cookies store by hand and you can’t do it. So we corner the market on having a unique product and the barrier of entry to competing with us is you go spend a few million dollars like the idiot that I was before you even have a freaking franchise open. You know what I mean? It was a high risk, but now I think it’s paying off because we’ve allowed our franchisees to sell a more unique product and nobody else has broken into that space yet, probably due to the cost.

Stephen Semple:

So what’s the typical investment that somebody would require to open up one of your franchises?

Bennett Maxwell:

250, 275 is average. If you get a good space that’s a second gen and your construction cost is low, you can open it up for less than 200.

Stephen Semple:

Right.

Bennett Maxwell:

That’s what we’re looking at.

Stephen Semple:

But in the grand scheme of things, not a massive investment?

Bennett Maxwell:

Especially if you could do an SBA loan with 40 grand down or something like that. And to my knowledge, and I haven’t checked in a little bit, but we hadn’t been denied or maybe one franchisee had been denied an SBA loan because they like the model. Because banks are also looking at risk and what’s higher risk? 50 employees out of 1800 square feet or 15 employees out of 500 square feet.

Stephen Semple:

Right.

Bennett Maxwell:

$700,000 opening investment or a $300,000 opening investment.

Stephen Semple:

And you’re also saying your cost of operating is going to be lower as well because you can run it with one person. You don’t need three people in the store at a time. I can see lots of advantages to it. So what have you guys been doing on the marketing front to get the name out there? Because it’s one thing to give people the operation and the name and the logo. What have you been doing to promote Dirty Dough to the world?

Bennett Maxwell:

The thing that’s been the most effective was definitely our response to the lawsuit.

Stephen Semple:

Right, right.

Bennett Maxwell:

I’m going to a franchise conference next week in Philadelphia, and the first time I went was two years ago and I went with my Dirty Dough shirt and I got stopped by dozens of people like, “Oh, Dirty Dough.” I’m like, “We just opened our first franchise two months ago, how do you even know who we are?” But it was for sure because of the Utah Cookie Wars, whatever. That definitely helped us out. Outside of that, what’s been mostly effective has honestly been sampling, going to businesses and just showing up because you have amazing product. I just did that a few weeks ago in San Diego with my little brother who just opened up a store. You go to seven businesses and say, “Hey, can we give you free cookies that you can hand out on your behalf of your customers after a karate class?”

And you could say, “Hey, free cookie, no purchase necessary on us. All you have to do is download the app and Dirty Dough is three doors down.” Seven out of seven said yes because we showed up with four cookies. So it’s like, what’s your cost for four cookies? And then we went to a handful of schools with a dozen cookies, warm cookies cut up, and you show up anywhere in the world with a box of cookies, warm cookies, and you get let in and you have great conversations with people. It’s like just get your product in front of people.

Stephen Semple:

I’m going to encourage people to go back and listen to episode 61, which is Fields’ Cookies.

Bennett Maxwell:

I listened to that episode and now I’m like, I just copied her.

Stephen Semple:

Right? Employee number one is from Mrs. Fields. And what did they do? Now they did it differently because back in the day that Mrs. Fields started, there was huge foot traffic through shopping malls. So what did they do? Gave away warm cookies in the mall. But it’s the same idea. You’re just going, we’re not in the mall, we’re not in a foot traffic location. I’m assuming you’re probably decent visibility location so people can find you. But we’re going to walk up and down the street. We’re going to go into every business. We’re going to go into every craft store and art store and karate studio and ballet studio and give away warm fresh cookies. It’s the same idea.

Bennett Maxwell:

Yes. And going back to our CEO right now, he came on at Jimmy John’s when they were like 28 stores and he left them when they had 300 open and 700 additional sold. And he is like during the whole time, you don’t really have a marketing budget. Your 3% that you’re paying doesn’t really even cover for your website and your tech and all that. So he’s like, it was just samples. And the advice that he gave everybody was, you need to give 50 samples a day, get your sandwich, cut it up to whatever pieces you want. And sampling is great. We did that, something similar with a hair cutting franchise, a kid’s hair cutting franchise. “Hey, will you give out free cookies to all of your clients on us. All they have to do is download the app and come into our store.” They gave out however many coupons, 360 people, unique visitors, kids with their parents because they’re only getting one coupon showed up to the store to redeem it.

So your product cost and everything on that is a few hundred bucks. It’s like, how else can you pay a few hundred bucks and get 360 people plus their parents to come in, download the app and try a cookie? You can’t. Now, the issue with that is bandwidth and how much can you do that and the good thing about ads is you just turn it up and down and it’s a lot more passive, and I think they both play hand in hand, but that boots on the ground, guerrilla marketing, getting out there and you’re on the high school, buy one, get one free discount card or whatever. Those are...