Create Wealth Through Franchising with Kim Daly

0:28Who's ready to rock today, Fire Nation. and create wealth through franchising podcast. And today we'll be chatting about the different types of businesses that are franchises. We'll talk about how much it costs to invest in a franchise, the epic failures of franchises, generational wealth, and oh, so much more. And a big thank you for sponsoring today's episode goes to Kim and our sponsors. Success Story, hosted by Scott D. Clary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversations on sales, marketing, business, startups, and entrepreneurship.

1:07A recent episode discussing the billion-dollar health secret with the founder and CEO of Whoop is a must-listen. Listen to Success Story wherever you get your podcasts. Fire Nation, you have a book inside you, and it's time to share your message with the world. That's why I created Author 100, a 100-day program where I will personally guide you one-on-one to create, write, publish, and market your book. If you want daily guidance and mentorship from me, JLD, then head over to author100.com to sign up for a free call with me to chat about the details. Kim, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:51I love it, John. I'm so excited to be here. So I think that most people believe strategy is more important than their mindset. And I will prove it to be the opposite all day long. It's how we think, how we talk, and how we act that drives the greatest success in our life more than the strategy. Fire Nation, we're talking today about creating wealth through franchising. And Kim, I mean, we've heard about the benefits of going the franchise route, but I want to get specific. I love getting really deep into the weeds on these topics because I want to know the true value propositions of a franchise.

2:30I love it. So most people, John, think, I think most people look down on franchising. If you have an MBA or you, you know, you're highly educated or you've been in a corporate background, you think, oh, franchising is for like other people. Well, I've spent 22 years helping all the people. I've created nearly 1 ,000 small business owners, Harvard MBAs to people who never graduated high school. Franchising is really for anybody who has the desire to build and scale wealth using business cash flowing assets. So most people think franchising is I'm going to buy myself a job or, hey, I don't want to own a Jersey Mike.

3:10So they dismiss franchising. That is why Kim Daly has a business as a franchise consultant to help you bust through those limiting beliefs and to really help you understand that franchising is all about buying down the learning curve of starting a business by partnering yourself with people who've already figured out how to make money. So you're going to pay them a fee and get all of those ready-made tools rather than spending two, three, four years trying to figure it out. You're going to pay a franchise fee and get ready-made access, buy down all that time. And in that same three to five years as an entrepreneur that you would be working to figure out a business, you could have three to five locations up and running.

3:53So when you step back and say, well, how is wealth created in a business? It's created by multiplication, just like it is in real estate. So the more locations you have, the more wealth you're building. Well, if it takes you three to five years to figure out a business as an entrepreneur, but in franchising in three to five years, you could have three to five locations going. Well, which one seems like the better value proposition now? Fire Nation, can you just not love Kim's energy? I mean, it's impossible not to. She's bringing the heat. She's bringing the fire. She's bringing the energy. And we have a lot of great stuff to talk about when it comes to creating wealth through franchising.

4:33Now, Kim, I'm a numbers person. I just love numbers because to me, that's what makes the world go around. So break down the types of businesses that are franchises and let's really get into those numbers. So let me back up and just say this. As a franchise consultant, it is never my job to tell you how much it's going to cost you to invest in a franchise. It's my job to be your resource. So when you come to me and say, Kim, I've been a leader of people all over the world. I love numbers. I love businesses that are long-term sustainable. So you're going to tell me the characteristics you're looking for in your ideal business Then using my 22 years of relationship and knowledge of what's out there in franchising, I'm going to curate a list.

5:21So instead of you going out there and trying to figure out what's the right business for you, you're going to come to me and I'm going to cut through all of that. And I'm going to curate three to five options that match your criteria. And then I'm going to teach you how to do proper due diligence with these companies. There's a lot of people out there who explore franchises. They kick the tires, but then they get to the end and they don't have confidence that they asked the right questions, that they thought through the right things. They might not even really understand how to figure out what drives top performance in a franchise.

5:55And so they never end up saying yes. They do all of that work and they walk away. So this is why Kim Daly has a business. You come to me. I am going to teach you step by step exactly how to kick those tires. So you'll know you ask the right questions. If you're a numbers guy and you want to know the numbers, I'm not going to give you the numbers, but I'm going to teach you the people who can give you the numbers. And most importantly, John, the people where you're going to actually hear it, which is not from the franchise sales guy. It's from the actual franchisees who've already said yes, right?

6:32They once were you trying to figure out how to make sense of a business model, and somehow they crossed that bridge. Well, they're going to be there to help validate that opportunity to you. I know that that like a lot of people on the outside are like, what existing franchise owners are going to tell me about their, you know, experience in owning this franchise. Yes, that is a big part of what we do in franchising. It's called validation. It's one of the most important parts of your due diligence process. And I'm going to coach you to it. I'm going to coach you through it. I'm going to give you the questions.

7:03I'm going to help you understand the psychology and the strategy of talking to business owners so you can get all those numbers that you are looking for, John. Now, correct me if I'm wrong, but I feel like some people that are listening might be saying to themselves, well, why would franchisees want to encourage me to get in and potentially be a competitor of them? But here's where I want you to correct me if I'm wrong, because I'm understanding that they're actually loving the fact that you're getting into a similar franchise as them or the same franchise as them. Because a lot of times there's these like geographical fences that they've already secured.

7:36So they have that geographical fence. It's not like you can move in next door to them because there's rules and regulations around that. So is that one of the reasons why they're fine and excited about getting more people on board? You got it. So if you step back and think, what is a franchise? We're building a national brand together, right? So when you, you're so right, when you say yes to a franchise, you're going to commit to one territory or one location or multiples. And so then the franchisor draws a map, an invisible line on the map that says that That territory belongs to John. And they give you like a timeframe in which you have to open those multiple stores or those multiple territories.

8:17So even if your goal is to be an empire builder and to own three or five locations, you still only enter the market typically by starting with one location at a time. So yes, when you go out to validate with your neighbors, they love that you're there because if we want to build a national brand where we have more buying power, where we have more marketing power, where we have more brand name recognition, which builds the equity in all of our businesses, right? It would be like me being, you know, Kim Daly's$10 a month gym or Planet Fitness. Like which one has more brand equity, John? So when there's locations everywhere and that raises the awareness and customers are enjoying the experience, that actually creates more brand equity.

9:04So in the beginning, I talked about buying down the learning curve and building this business faster, but I didn't mention you're also multiplying the potential exit strategy value by being part of a franchise when you are part of a business that is rapidly growing across the country and all the territories are sold out. Because when America's waking up and it's like, wow, I love this sandwich or I love this workout. I want one. And there's no more locations in their area. That's when those pioneering trailblazing franchisees who dared to come in and buy those first three, five territories. That's when they raise their hand and go, well, you could pay me, I don't know, six times my EBITDA and I'll happily sell you my business.

9:51And they'll get it. I've seen it happen because those businesses won't hang on to those numbers. and I'm not making any earnings claim. I'm not saying you're going to get a six multiple, but I've seen, I've even seen an eight multiple. One of my friends at Planet Fitness. So it's not like these businesses are going to necessarily hold onto that multiple, but there can be a moment in the market when it just times right. The brand is still growing. An area is sold out. Customers are saying, I want to own one. Well, supply and demand creates that higher exit strategy multiple. And I'm also assuming that if a franchise has a lot of franchisees as opposed to a little, then their budget to do like national ad campaigns increases and now they can do a lot more things that is gonna benefit everybody because of course they have more money.

10:43And Fire Nation, we're gonna talk a lot more about franchising and franchises and being a franchisor and a franchisee when we get back from thanking our sponsors. If you're a marketer, then you know what it's like to feel like you're moving in a hundred different directions at any given time, like you're spread too thin. Between creating content, launching campaigns, generating and nurturing leads, and more, you barely have a moment to breathe, let alone do your best marketing. What if there was a better way? This is where HubSpot and Breeze, its new built-in AI, come in. When you combine the power of Marketing Hub and Content Hub, you can have your best quarter every quarter.

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11:57Sometimes it's about knowing which steps to take and when to take them to make it happen. If you know you have a book inside of you but aren't sure where to start, then I have an exciting opportunity for you. It's called Author 100. Author 100 is a program I personally crafted to help you one-on-one every step of the way from drafting to writing to publishing and even marketing your book. When you join the Author 100 program, you'll have access to me, JLD, for 100 days. We'll have weekly one-on-one calls, plus you'll get daily guidance from me whenever you have questions or hit a roadblock. Over the past 12 years, I've self-published five books, including one of the top five publishing campaigns of all time on Kickstarter, The Freedom Journal.

12:42I've also traditionally published with HarperCollins, so I know a lot about the book publishing world and where most authors go wrong. I created Author 100 to share my experience and the lessons I've learned along the way, and I can't wait to share it with you. If you're interested in learning more, head over to author100.com and sign up for a free call with me. That's author100.com. Now, Kim, we're back, and we've all heard about an epic failure or two when it comes to franchises, but I just want to know why. Why do franchises fail? How much time do you have, John? That is a loaded question. Okay, so on the surface, I know your audience wants me to say the franchisors let their franchisees down.

13:30I know that's what everybody wants to hear. But the reality is the vast majority of people that are struggling in a franchise, it has nothing to do with the franchisor and has more to do. This is what I see happen, John. People come to me and they have the dream to change their life. So they get, they get bought in to the strategy. Let's go back to the very first thing I said. So they get bought into the strategy. I love this business. I love their numbers. And they, they open their business and they're, they double down on strategy and they lose sight of their goals and their dreams. They lose sight of like what they're talking about every single day, what they're thinking about.

14:13So when I am working with a candidate, I'll say, OK, the business is the vehicle driving your life personally, professionally and financially to a new place. But the gas in that vehicle is the clarity of your goals and dreams now in terms of saying yes to the franchise and forever as as as a franchisee. So if you find your your vehicle not moving, you've got to check your gas tank. Are you waking up and showing up with big, clear goals? Have you broken your annual goals down into your, here we go, wink, wink, your daily bite-sized goals? Are you leading your team with purpose? Have you created a culture that inspires your team to show up and give to the community such that your customers want to come and want to come back?

15:05Most franchisees, John, are focused on what is not theirs to control. which is the economy, what the franchisor is doing, maybe even marketing at the total expense of what is there to control. And there's so much more that we have to control than we think, but we have to think. And that's the key part. So that's my answer. Now, if you asked 10 different people in franchising that same question, you might get 10 different answers. So if you don't like Kim Daly's answer, keep asking. You might find one you'll like eventually. Can you break down the types of businesses that are franchises? Yeah, great question.

15:44So most people think franchising is, you know, your food and your big retail outlets. I will tell you that as one of America's top franchise consultants, you'll have to beg me to bring you food. There are just faster, easier, better ways to make money. So I've created nearly one thousands franchise owners over the last 20 years of my life. and probably less than a dozen of them are in food, no joke. So there are all kinds of franchise businesses from business to business, products and services. The sweet spot, a big, big, big market out there is anything that really caters to the homeowner, whether it's inside or outside.

16:25And to get more specific, if you think about it, if you were to go and build a pool, the pool goes in the ground and what has to happen? Well, now you need landscaping. That's a franchise. Now you need a fence. That's a franchise. Now you need a pool cleaning franchise. That's a pool cleaning service. That's a franchise. Maybe you need the mosquito sprayed at night. That's a franchise. Maybe you need outdoor lighting. That's a franchise. Like the list goes on and on and on. So from very simple services to more complicated businesses, there is a franchise that cuts sheet metal for machinists and auto body shops.

16:59And they do it differently than like the big sheet metal companies because they're local, they can cut smaller. So really what creates a great franchise, John, is a business that has a niche but can deliver their product or service in a unique or different way. There are many beauty businesses out there that really define themselves as high-tech companies. They, oh, by the way, we just happen to be actually putting eyelashes on people or giving facials. And what I mean by that is they've built out these small little studios that are all led by AI. They have an app. So the customer can be awake at two in the morning and go, oh, God, I need a facial and book into facial at two in the morning.

17:43You don't have to talk to somebody. You don't have to wait for the thing to open. If you have a question, the bot can answer your question. So there and we have home cleaning franchises that do that. I mean, you name it. So the what I want to do is like help people really expand their thoughts beyond what you think is a franchise. what you know, Jersey Mike's and Chick-fil-A and Planet Fitness, and come to Kim Daly with an open mind and say, let's just have some fun. Show me some things that I would have never thought of, but that match my goals and interests and that have really good leadership that could mentor and coach me to become a successful business owner.

18:23Now, let's talk about generational wealth. I mean, a lot of people that get into business, they're looking to build legacy. They're looking to build something that's going to stand the test of time. So how can we build and scale wealth within a franchise? Okay. And a couple of different ways. This is a really great question. So as I mentioned earlier, wealth is always created through scale. So it's not going to be about one territory of a, you know, a service-based business or one location of brick and mortar. It's all about how do we leverage our time, right? And scale using teams of people, trucks or equipment or brick and mortar locations.

18:59So that's how that's going to look at scale, right? How big do you want to go and then build that out? Now, when we talk about building generational wealth, there's two different ways I think that that can be accomplished. In your portfolio, you could have cash flowing assets like laundromats that really, or self storage. These are franchises that you put your money into and they're just long-term plug and play. They're not cash cows overnight. You just, it's like, you just put your money in it and you just let it do its thing, right? It doesn't take a whole bunch of your time. And that frees you up to have other businesses in your portfolio.

19:36And maybe those other businesses are more, they cash flow faster. So in your total portfolio, you have this diversified, you have diversified cash flowing assets from different types of businesses, some that are long-term sustainable, some that are like fitness, where you wouldn't think about necessarily getting into that for maybe more than 10 years, right? Because the market may change and too many variables there. It's a grind, you know, turning people over. So it really is up to the investor and how they defined generational wealth. You know, I'll back up and say, as a parent of two teenage boys, the legacy that I strive to leave my kids, John, is not the businesses that I'm building.

20:23It's the role model that I am. My two boys see me working from home. Now they see me working hard. They hear me say, mom is working, shut the door. I'll be down soon. Right. But they don't see me going off to corporate job. They never hear me complain. It's Sunday night and tomorrow I got to go to work, whether it's Sunday or Saturday or Monday or Saturday. I mean, I am passionate about what I do because all of my businesses are mine and I get total control. And so I really feel the definition of generational wealth, moving away from the traditional concept of building toward retirement and retiring into that and leaving assets for kids.

21:05The real definition I want to help people see is to be the role model to your children who dared to jump off that cliff and follow your dreams, whether it worked or not. Even if it didn't work, you dared to do it. And that is a role model to your kids that they need to see, right? And if it does work and you can pass on a business, awesome. But most important, pass on the conversations around the dinner table or bringing those kids to your job site and letting them have their first job in your business. That is even a greater generational legacy, if you ask me. Kim, you shared so much today. I mean, we talked about the true value proposition of a franchise, the different types of franchises, why they might fail, generational wealth.

21:52What would you want to say is the one thing that you wanna make sure Fire Nation gets from our conversation today? What is that key takeaway? way. So the one thing I haven't said is you do not need an MBA or prior business ownership experience in order to go and build and scale wealth and the life of your dreams as a franchisee. So please don't let any limiting beliefs. If you have a dream and a little bit of money, Kim Daly wants to meet you and I want to meet you right now. Now, if they want to meet Kim Daly right now, what is that next step? What is your call to action for Fire Nation, if they are inspired by your words, by your energy, by your fire, by your knowledge, what do you want Fire Nation to do next?

22:38Go right to my website, The Daily Coach, and my last name is D-A-L-Y, thedailycoach.com. That's also my handle on all the other social media platforms. So find me and I can't wait to meet you. Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with KD and JLD today, so keep up that heat. For links to everything we talked about, visit eofire.com. Type Kim in the search bar and the show notes page will pop right up. And Kim, give us that call to action one more time. TheDailyCoach.com Kim, thank you for sharing your truth, your knowledge, your value with Fire Nation.

23:17For that, we salute you and we'll catch you on the flip side. Hey, Fire Nation, a huge thank you to our sponsors and Kim for sponsoring today's episode. and Fire Nation, successful entrepreneurs are great at three things, productivity, discipline, and focus. That's why I created the Mastery Journal so that you can master those three things in a hundred days. And we're talking step-by-step. Visit themasteryjournal.com and I'll catch you there or on the flip side. Success Story hosted by Scott D. Clary is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

23:51Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversations on sales, marketing, business, startups, and entrepreneurship. A recent episode discussing the billion-dollar health secret with the founder and CEO of Whoop is a must-listen. Listen to success story wherever you get your podcasts. Fire Nation, you have a book inside you, and it's time to share your message with the world. That's why I created Author 100, a 100-day program where I will personally guide you one-on-one to create, write, publish, and market your book. If you want daily guidance and mentorship from me, JLD, then head over to author100.com to sign up for a free call with me to chat about the details.