Build Financial & Time Freedom Through Smart Franchising - Giuseppe Grammatico

Speaker A: Foreign. M. Welcome to another expert Inside Interview. My name is John golden from Sales Pop Online, Sales magazine and Pipeline or CRM, joining you as usual from a sunny San Diego. And today I'm delighted to be joined by Giuseppe Gramatico, who is in New Jersey across the other side of the country. How you doing, Giuseppe?

Speaker B: Doing well, rubbing in with the, uh, the nice weather here. We just, uh, we just had rain the last couple days, so.

Speaker A: Oh, yeah, yeah, yeah, yeah, yeah, exactly. Well, it's, it's interest. Interesting. Yeah. Because even the World Cup, I saw one of the games got delayed in Philly for rainstorms. And you were a franchise veteran, coach, author, speaker and consultant who simplifies the franchising process and excels at guiding candidates to the business model that, uh, best suits their desired, uh, life. You're the author of Franchise Freedom, a new manifesto for your financial and time freedom. And you're the host of the financial of the Franchise Freedom podcast. And we're going to talk about today is, is, um, well, let's start off about, uh, there's a lot of uncertainty in the world today, let's be honest. Right. And especially when it comes to work. Um, you know, people are hearing all these AI Doom stories and then they're seeing lots of layoffs and stuff in the news. You know, they're saying like Amazon and place like that. And so, so, um, if you are advising people, right, if you're uncertain about the future and you don't know what to do, you, you kind of want to do something on your own, but you're not sure about that. Tell me why franchising is a good option.

Speaker B: Yeah. You know, at the end of that, you have to be proactive. You have to really, you know, it's not just like, I went to school for this or this is my job and nothing can change. And um, back in the late 90s and early 2000s, we saw the market crash. E Trade was taken over financial, uh, advisors. So I was, I was part of that. And there was just a major shakeout. So, you know, a franchise, the way I look at it, it's a business. We call it a business on training wheels. And it's a way to create and control your destiny, have an additional source of income and really for a low investment, be able to be part of a larger organization which is, you know, utilizing, uh, AI, uh in their business to offset costs, for example, with the call center marketing and things like that. So a franchise, given that it, it is a business, you're in control. But you have this parent company that's overseeing you, uh, providing you economies of scale, uh, AI various technologies. It's a great way to really protect yourself and create a safety net.

Speaker A: Yeah. What, what were some of the, what were some of the early lessons, uh, or insights that you gained when you switched from like Wall street to franchise to being a franchise owner?

Speaker B: Yeah. So you know, um, you, you're never fully prepared, right, to be an owner whether it's a franchise or not. There's difficulties, there's the acceptance of maybe not making money initially like myself. It took several months before I was able to pay myself a paycheck. Uh, there wasn't someone coming down to save you or let you know how to do things. You're really figuring things out yourself. And that's what I loved about it. Right. I love being able to make quick decisions when I worked on Wall street, uh, just to get a trade, you know, a trade in the stock market approved, took months or manager approval that and once it went up the chain, so it was, you know, not having to deal with all that. It was just, there was no more roadblocks. I was able to really function and maneuver quickly and that's what I really enjoyed. But at the same time, you know, you're responsible for everything. So you took ownership for the, for the good and the bad and the in between. So.

Speaker A: Yeah. And it's interesting, isn't it because I mean, I think sometimes people, you know, think of franchising in a very narrow way. I don't think they realize like the scope of options out there and often it just seems like, but it seems like you know, just continuing to invest in the stock market or real estate or whatever seems like the right way to go. Maybe you tell people a little bit more about the kind, you know, the, how, how diverse the franchising opportunities are.

Speaker B: Yeah, it's ah, I mean four ah, thousand franchise companies, 70 plus industries, every income stream, um, uh, every type of industry. So you can look at things like business coaching and expense reduction to something home services like roofing and cleaning all the way to salon suites, trampoline parks, uh, just to name a few, uh, you know, your, your fast food. So really there's a franchise in just about every uh, every industry. And to your point, uh, investing in the stock market, it kind of goes back to Robert Kiyosaki, the, the four quadrants and um, the stock market, which is where I started. I work for companies like UBS and JP Morgan. Those are more passive and there's nothing wrong with that, right, you're not controlling these large companies. There's, there's zero control. But, uh, at the same time, there's only so much research. Maybe you're putting it into an etf, uh, you're putting it into a, um, you know, just a mutual fund or what have you. So there's really not much control. But it's passive, takes all of a few minutes of your time. Whereas a business, a lot more control, a lot more income potential. There's also going to be downside and risk as well. Um, but I think you have a lot more control, many more tax advantages. So why not do both? Why not own a business and then fund your SEP IRA like I do in, in the, in the stock market. So you can, you can dabble and, or you can own both, but stock market is much more passive.

Speaker A: So how would you, how would you advise somebody, like, to prepare and how to look at the franchise option? Like, what do they need to have, what do they need to do to prepare themselves and what should they kind of expect in the first, you know, six months to a year?

Speaker B: Yeah. So, uh, it goes to the very beginning. I put my Dr. Phil hat on and you need to let your family know what's going on. People jump into what's the brand. But if you don't, you know, mom or dad are starting a business, just say that's the scenario. And first year is going to be rough. Maybe no vacations, but we're doing this so that we can attend the soccer games. We could be more involved in the, in the PTO at school. So that's the starting part. And then it's figuring out if you want a business, what does that business look like? Is it a startup or a franchise? And the reality is in a franchise is going to be much, much different than, than a startup because the franchise has already figured out the system, the CRM, the system, uh, the preferred vendors. It's really, can you follow through, uh, in the average day life of a franchisee, can you follow through with what that system looks like? Will you enjoy it? Um, and really the match comes down to your role. The, the investment, the time range, uh, the time, or I should say the investment and time investment, both are equally as important. The number of staff. So we take a look at all those characteristics. But ultimately, whether it's a franchise or not. You asked about the first year, um, I call that the builder year. You know, let's call it what it is. Stop looking at Instagram and thinking you're going to Create time and financial freedom immediately. It uh, doesn't work that way. I'm 25 years, um, 20 years fully self employed, 25 in owning other side businesses and there's no time or financial freedom out the gate. It takes time. So it may take you that first year, the builder year, to figure out the system, find the right staff. I know sometimes you have to replace a staff member and really build that infrastructure, build a foundation in order to start scaling. So uh, with that time and financial freedom, it will come. Be patient. But treat the first year as a builder year and reinvest as much as possible and in finding that right team and it'll pay dividends down the road.

Speaker A: So what are, what are some of, maybe some of the misconceptions that people have? Like if you're comparing, saying, well, real estate investment, that may, that's pretty straightforward, you know, or I perceive that to be pretty straightforward, um, franchising, I'm not so sure. But what are some of the common maybe misconceptions that, or myths that people have about franchising?

Speaker B: There's a lot, um, I did a whole, we did a whole show on this. So number one is it's all fast food.

Speaker A: Mhm.

Speaker B: Which we just said it's not right. It's 4,000 companies, so plenty more than fast food. And part of that is the investment. People think you need to be rich, millions of dollars. And the reality is, I would say most, most uh, companies fall between 1 to 400,000, um, which is a big number, uh, and there's different ways of funding it. But uh, you want to have at least, we'll call it 50,000 plus liquid assets, uh, maybe about 150,000 net worth in order to meet the requirements. So. Which is also a misconception. You don't buy a franchise, you're awarded a franchise. And yes, you are interviewing the franchise, they're interviewing you. But you need to qualify financially. The skill set has to be there. So if it's a donut franchise and it requires you to cold call just making this, uh, making this up, sure you need to have a sales background or if you're introverted, this will not work. So um, so you don't need millions of dollars. There are plenty of options between 1 and 400,000. There's plenty more and plenty less. Um, franchises are absolutely awarded. You're looking for that right fit. And um, you know, really it's uh, you don't. Oh, and um, do I need experience in the industry? The answer is absolutely not. Um, I Worked on Wall street and invested years ago in different businesses. But one of them was a building service business. I had no experience aside from using a building every day at work. And um, the franchisor said, we will teach you the system. It's simple but we need you to network. We need you to be able to network. Uh, um, you know, obviously do sales but you know, network within the community chamber of commerce. And that was my uh, my skill set.

Speaker A: Yeah, no, and I was uh, I did work for a, I worked for a franchisor at one stage. A New Horizons Computer Learning Centers. And I do, I do recall, just to back up what you're saying is sometimes at initial franchise training, I mean one time there was a, uh, there was a uh, guy who just retired, a German professional footballer, played for the German national team. He was now taking on a computer learning franchise. Uh, you know, completely different backgrounds. Um, so do you have, I mean some people maybe say okay, I want something that's semi passive. This franchising sounds like it's hands on all the time and I've got to dedicate all my time. Are there opportunities for people who want to a semi passive franchise?

Speaker B: Yes, uh, definitely opportunities out there. Not all the opportunities will be semi passive. The uh, franchisor will and it could be in the same industry. Each franchisor will say yes, we allow for semi passive which in simplest terms because there's all these executives, semi absentee, they all get thrown in the mix. And the way I define semi passive is that you're not running it full time out the gate. Maybe there's a key employee, there's a manager in place. Uh, but there are plenty of brands, um, in service based brands and brick and mortar. I would say for the most part we've seen a lot more semi pass in a traditional brick and mortar setting, which is a massage, ah, franchise haircutting, a gym, food prep, things like that, where everyone is showing up to that box, that venue, that one location. But there are, there is um, some semi passive opportunities, uh, specifically in the B2B space that we see on the service side. So yes, uh, first thing you do is you figure out the hours you can invest. You see if the franchisor allows for that. Some cases they may come back and say yes, no, or if you do have a key employee, they do have to have a vested interest in the business. That's the only way they would approve it. And you take it from there if you're obviously comfortable with that.

Speaker A: Yeah, no, M. That makes total sense. And um, and I guess though, uh, and the other part too is, as you said, is while you don't need the experience, I guess it's got to be something that you can at least, uh, get a little bit excited about, right?

Speaker B: Yeah. I mean, you know, the widget, the service, the product, you need to make sure that there is a, um, it's something that you see, there's a future. Right. It's ethical, there's a future in it. It's not a fad. Um, the biggest thing I tell people, and this is where I got stuck years ago, was the whole passion play, you know. You know, I'm a passionate soccer, um, fan. Do I have to be in a soccer franchise? Well, the reality is certain franchise that I looked at was a traditional retail brick and mortar. Yes, I was selling soccer equipment, but I was working holidays, weekends. Lots of turnover, lots of inventory. So, um, you know, sometimes I've had people say I just want to make really good money. And I, with the money, I will create the time freedom to take my kids and family to the soccer games on the weekends or in the evenings. Other people want that feel good aspect of the business. So, uh, we see that in senior care, helping seniors within the community, um, you know, helping small businesses reduce their expenses and stay afloat, maybe implement AI at some capacity to, uh, keep them afloat and keep them in business. Sometimes, you know, it's a, uh. And in between it's a. We have a painting franchise that, that does interior exterior painting. But within the organization they have a charity and they. And monthly they get together the franchise owners and they paint a home for someone in need. So sometimes it's directly in the business, sometimes it's from the financial efforts, you're able to maybe start your own charity or organization. And sometimes it's in between, uh, there's no right or wrong. It's really just understanding you do have options out there.

Speaker A: Yeah. And can you just describe for somebody what it's like interacting? I mean, I know franchisors are different and there's, you know, franchise, but just uh, in a very kind of general level what it's like interacting with franchisors and how that relationship works?

Speaker B: Yeah, I mean, you know, at the end of the day we, if we're working together, we've set the expectation of what a franchise is, what, what to expect, that, that it's not passive. You take a look at the financials. But we coach every one of our families and candidates on, on every call to really understand, you know, each call you have with the franchisor is going to cover a different topic. But ultimately you're looking for the right fit as they are looking for the right fit. Um, some people get into the weeds, into the franchise agreement. They're analyzing each line, which is fine, you definitely want to analyze, it's a legal document. But at the end of the day all of that is irrelevant. If you don't have faith that that franchisor, that founder who you maybe spoke with on a, on a zoom call or in port in person, uh, has no future for the business. You know, they're the captain steering that, that ship. And if they're, they don't know what direction they're moving in. And sometimes it doesn't have to be crazy like we're adding new product, but we're doubling down on national accounts. That's great. You know, we have something that we can walk into hopefully on, on a monthly basis. And then secondly, you know, having, you know, you see yourself in the role if the franchisor says in that first year is going to be heavy sales, but after that it's really, you know, managing of a team. Do you see yourself in that? I mean it's going to be a true grind at the end of, um, you know, if that's not a good fit. If, if you want to buy a fast food restaurant may have a couple dozen employees. Are you okay with that, that turnover that uh, we see in fast food in restaurants and not a guest restaurant, restaurants, we owned an Italian restaurant growing up, so. But uh, you have to understand there are other options. Yes, you could do well with option A, but option B is a one employee option that maybe subcontracts the work. Would you prefer that option? Uh, all things equal. So it's good to know kind of what's out there. So, so you don't pick what the hot franchise is or a lot of these franchise lists, that many of them are sponsored, you have to sponsor to get on the list. You're picking something based off of your requirements in the business and then, hey, show me what's available my market. So you're getting super selective and that's how you find the right match and that's how it becomes sustainable, in my opinion.

Speaker A: Uh, uh, have you come across any new innovative franchises that you, um, that are just interesting because they're new and innovative?

Speaker B: Yeah, I mean, you know, we're, there are, uh, we just started talking with a brand, um, that is all around A.I. you know, they'll, they'll essentially go into Your business uh, create AI agents still, still relatively new and we're still learning about it. Um, so that's, that's something new that we're, we're probably going to see more and more of, um, expense reduction. We've been seeing more and more of that. Um, not necessarily new but such a high demand for it as people just don't know how to even compare. Now bringing in AI. What can AI take off my plate? Um, as far as innovation, the franchise itself, a lot of the tried and true like uh, water and smoke mitigation, uh, and restoration have done well. The recession resistant type of businesses that ah, did well during COVID in the down economies and down markets. But it's really the implementation, it's um, what I coined in my, the phrase I coined in my book, the Unfair Advantage. These franchise companies are bringing in their own AI, uh, so that they're able to um. For example we have a brand where they have two employees on the call center and everyone else is an AI agent and they could take 250 calls all at exact same time in order to funnel those calls and then gets pushed up to an actual person if needed. So I think the brands are just doing business in a different way. So they're cutting down on the costs, uh, bringing in their own AI, you know, bringing in as many resources as possible, cutting down the cost and then saying okay, we are, we have now grown to 50 locations. We are now in the business of getting you national accounts. Accounts that the small, unfortunately the small mom and pop may not be able to bid on because they want some national coverage, they want to go to vendor. So um, you know, as far as new businesses, you know, you name it. Dog Waste removal is a brand that really took off. Not just dog waste, but cleaning up, you know, the HOA around, you know, the waterways and things like that. So that's another, another growing business. Even food, um, meal prep and nutritional coaching where this is an interesting spin. The franchisor does all the cooking, all natural, uh, they do all the cooking and they ship meal prep for the week directly to the franchisee. Franchisee now only needs two employees and no kitchen, you know, no knives, no burning yourself, no, not a whole kitchen staff. So they're doing business a little bit differently to make it a lot more efficient, economical for the franchisee.

Speaker A: Yeah, no, that's, that's fascinating. And, and obviously as you mentioned, like the franchisors in general are starting to look at how AI can impact and help. Um, so do you see, I mean do you, do you see that as like really helping efficiency and maybe even cost? And um, and you know, this franchising becoming even more attractive, I think.

Speaker B: So I, I see uh, dramatic growth in franchising just because it's going to be hard to, to compete. You know, a lot of the smaller. Mom. Sorry if my, my camera likes to zoom in and out, I apologize. But um, the uh, yeah, the Frank, the franchisor really wants to take advantage, keep, keep the cost low, the efficiency. And I see the franchise industry truly growing. They're literally going into just about every market out there. They're cutting down on the cost and negotiating, for example a painting franchise. Just the economies of scale alone. We um, have painters calling up saying can I convert my, my small business into a franchise? Just, just the savings on paint alone and the national accounts will help me grow my business. So uh, so we're seeing a trend there and just the reinvestment, the royalty that you're paying on a monthly basis is getting reinvested back into the business. It's creating the AI that's being directly built into the CRM. Uh, we have a lot of brands that had a four employee operation to start and they've cut those numbers in half because either AI replaced them or they're taking care of the call center directly at the HM home office. So I truly see this business, uh, the franchise industry growing exponentially.

Speaker A: Yeah, no, absolutely. Uh, uh, and hopefully with smart implementation it can become something that even more people can get into. Um, what would your last piece of advice be to somebody who maybe is, you know, considering is this the right time to move into franchising or should I just stay with some other passive investments?

Speaker B: Yeah, I mean just the reality is you're, there's going to be a much higher time investment, um, with more control and I, and I truly believe a much higher upside. So uh, with much better tax benefits, I will tell you that from the last 20 years. So if you want, if something isn't working, if it's a job and you know, is, is a business is the right fit, is that kind of the, you know, the next phase? It could be, and I encourage you, you can give us a call. Uh, we'd be more than glad to walk you through our process, uh, figure out together if a franchise is a right fit or maybe the timing is off and we'll talk about funding options and we'll, we'll talk about what to expect and there's no cost to anyone we work with. Uh, which is which, uh, is nice. We're paid like a real estate agent, uh, where all our fees are paid by the franchisor. Nothing is passed along to the, to the candidates. But really just figuring out what, what you want, what's not working at the job. Maybe it's just a new, maybe it's a new job. Um, maybe it's the control. Maybe you've just always envisioned yourself in a business so just figuring out what the ideal situation looks like from at day one and at day 365. What, what do you want your day to day to look like? Um, are you at a, at an office working from home? If you're, if it scares you, that scares the heck out of you. The, the investment potentially taking a loss. Keep your job. You know, look for semi passive opportunities. You keep your, your day job if you can run it full time. That's my recommendation. If you can. It's how I did it. Um, no one is going to scale the business like you. So if you bet on yourself, get educated right, do your homework and, and bet on yourself, you will grow that business much quicker than any key employee in the business. But as I mentioned, you know, get your financials together, how much you truly have to invest, including. There's, there's options, even using retirement or home equity. But get all the numbers out there. If you're, the, if you're going to be leaving the job full time, what's your monthly expense? You're going to need a three to six month buffer. You're going to need a buffer for the business. Let's, let's, let's put real numbers on the table, figure out if the uh, the options are there.

Speaker A: Yeah and I think that's probably the thing that catches most people is just underestimating those. So working with somebody like yourself and really getting into the wee and stuff is probably, you know, is, is obviously the way to go. Um, so listen, thanks so many m. Ah much Giuseppe. It has been absolutely fascinating. All of Giuseppe's information will be below this video. But before we go, please do remind people about what you do.

Speaker B: Yeah, so we, we help uh, people across the country figure out if franchising is the right fit and if it is, we will spend time getting to know one another and figuring out what the idea, what you're perfect for franchise looks like. And in helping you out throughout the entire price, uh process to create time and financial freedom.

Speaker A: Fantastic. Well listen, thanks again. Thank you for watching and listening. I'll uh, see you all again very soon. Thank you.