Pete and Nat are joined by Trent Halvorson, the Vice President of Franchisor Relations with FranChoice on this episode. Trent has a unique perspective on franchising because he works directly with the franchise companies and sees what they are doing and where they are going.
He talked with the guys about where he sees franchises evolving and what new areas might start to become really popular in 2021. You can jump on the future of franchising by reaching out to a HIRE YOURSELF consultant.
Here's a Full Transcript of Our Podcast Episode on the Future of Franchising
Pete: Well, good morning Nat, how are you?
Nat: I'm doing awesome. Happy December.
Pete: Happy December. I got to tell you, these holidays and stuff like that. My question for you is, were you naughty or nice? Did Santa stop by and drop off anything for you?
Nat: I feel like he dropped off a pile of bills. Get to pay for everyone else's Christmas presents.
Pete: All right. So you want to hear my story? So first, I always like to share learnings, right? So I learned earlier this month that I was working on a Sunday, and I had my cup of coffee, big cup of coffee like 16 ounces. And I decide that why not just tip over that 16 ounces of coffee on top of my laptop keyboard, right?
Nat: That sounds good.
Pete: I've never seen so much coffee on top of a laptop keyboard, and certainly the thing just shut down immediately. This is terrible, right? And of course, I'm not as good as you where I have everything kind of backed up the way I should. So the advice is, rice doesn't work, put it in rice, so yes.
You put it upside down so that it's kind of like almost a tripod or kind of a tent-looking thing. And then you let it dry out for two days, and then you go to try to turn it on. And so, unfortunately, doesn't always work that way. It doesn't work out; things just don't start back up. So Santa got me a new laptop, right? But my point of this whole thing is don't pour coffee on top of the keyboard of a laptop. That would be the lesson learnt.
Nat: Right.
Pete: So speaking of lessons learned, welcome to the hire yourself podcast. Nat and I are here every weeks talking about business and sharing all kinds of good information for people. And so today we've got a very special guest, why don't we let our guest in. Welcome, Trent; how are you?
Trent: I'm doing great. How are you guys?
Pete: Very good. Trent, I know you're the vice president of franchisor relations at franchise and a guru when it comes to franchising. And we're so excited to fit you in here in the last podcast of the year, here in December. And so what I wanted to do is you get a chance, you got probably one of the best jobs in the whole world, right?
You get to talk to different franchise companies and learn about emerging ones, and basically ones that have been around for a long time. So you get to see the whole thing. And so, what I wanted to do is pick your brain today. And I want to for our listeners to one, have you talk a little bit about what you've seen in regards to the last nine months, this crazy covert world we lived in.
Then we'll talk a little bit about where you see us going in the next year. Then we'll talk about the overall franchising industry, where you kind of see the strengths and where that's going. Then maybe we'll ask you a couple of random questions, just to have fun with you. So let's get rolling right away.
And the first question is tell me what you've seen; I mean, you're talking to franchisors every day. What have you seen in terms of the experience of the last call it nine months?
Trent: Yes, definitely. Talking with not only the folks we're working with but franchisors across the country. The last nine months, I almost say, is like getting a four-year degree in that nine-month period because so many things have impacted their business. And their ability to really shift and start to look and adapt to the new environment that we live in.
I think the first thing that comes out is the franchise systems were leveraging quickly their franchisees. So it wasn't just the franchisor trying to change the dynamic; they quickly reached out to all their franchisees for input, for impact. How is it working in your current location? And then from there, really whiteboard strategies going forward.
So I was just amazed, every day hearing this success stories, the great pivoting stories that franchisors across all industries were doing back in March and in April.
Pete: So they were kind of leveraging the partnership, right? It is a partnership, a franchiser and a franchisee are partnership, right? And so together, as we had this black swan event, they were figuring out how they adapt their business model.
Can you give me kind of just a quick example of a franchise company that quickly pivoted when this black swan event did to adapt their business model to kind of deal with this?
Trent: Yes, absolutely. And I think we pretty much know the brick and mortar space was probably impacted the most because that's where you saw the shutdowns. The service businesses they took off like rockets.
So for one example, boutique fitness quickly turned on the jet boosters for their online streaming service. So typically, you're going to a location to go work out, and these folks quickly pivoted and really enhance the online experience for their end-user.
Pete: Oh, that's great. So I mean, they were able to leverage all their resources to help franchisees continue to provide services to their members, so that's great. And I think even service companies I've heard some stories about how they even adapted their business model, like do you have any examples there? Have service-based businesses adapted their business model?
Trent: Yes. I think for a few that come to mind are just the ability to work inside the constraints of the environment of COVID. So whether it's new safety measures that were quickly implemented or additional services that they quickly realized that consumers are looking, but I think, for the most part, the service businesses were small pivots.
There are a few that added new revenue streams, added new services. But overall, I think it was kind of in their toolbox that they were ready to go to market with.
Pete: Yes. I think of the, like the blinds company, right? Window treatment companies. Where they went and started doing virtual estimates, right? So almost like a zoom time, we come, show us the window, right? All right, do the measurements for us, show us the surroundings, okay what are you thinking? And I mean, it's amazing.
So do you think as we look at the last nine months, and we'll talk a little bit about this idea of a franchiser, franchisee that partnership? Do you think that's a real competitive advantage over being a mom and pop, right? If I'm a mom and pop out there trying to make it through the last nine months?
Trent: Yes, absolutely. I think just the dynamic, the experience of each franchisee brings to that franchisor that is a big muscle for that operation. And not only that, I'll mention this too, across industries and even competitors inside the franchising world. We're sharing best practices, things I've never seen before, and a high level.
Direct competitors sharing how they're operating, and then across industries, how are you handling discovery days. Meet the team days, confirmation days. The whole world kind of got flipped upside down, and people came together inside the franchising space like I've never seen before. And really leverage that best practice sharing.
Pete: Yes. It's great that you can leverage other franchisees, right? So you're dealing with issues. You get that whole group of other franchisees that you can drop on, so great resources. All right, so certainly, as you go through tough times, it's extra support, better chances of making it through.
Give us some examples as people went through the last nine months, how they've added services, how they've actually taken COVID-19 and used it to generate more revenue.
Trent: Yes, let's just take in the service industry, right? All of a sudden, disinfecting and cleanliness became so important for those. And whether that's commercial cleaning or home cleaning, those folks were able to add a quick service of that disinfectant operation.
And maybe it's somebody at high risk inside a residential house or living environment that they're able to come in, maybe more frequently. But their ability to add that total disinfectant service just added to it. Same thing on the commercial side, there's a lot of folks that still had to go to work.
But the safety and the cleanliness was so important. So adding that call it disinfectant service to their portfolio was something that came on very strong and very early.
Pete: Yes. And I was surprised, so companies you wouldn't think would do that, like restoration companies, quickly added where they would come in and disinfect facilities for lack of better terms. You got the trucks, and you got the crews; why not? And I wouldn't have thought of that. So that's pretty cool.
So many different opportunities to generate revenue from all this stuff, so we've had kind of a crazy nine months, and everybody's learning and working together just to get through this. And I think that's what we do. So the next question is that I think COVID is going to be here for a little bit longer, just a fair guess, right? The big vaccine.
I don't think we're all going to have it here in 30 days. But the idea is, where do you see franchising going forward? So kind of, let's pick the next year; what do you see happening?
Trent: Yes. I'm excited for just about every industry. So even the service spaces, as we know, COVID or viruses will be around a little bit longer. So that type of environment, I think those service businesses have really latched on to improve their business model and going forward. I think they're going to be doing great.
And even the brick and mortar, I think the strong survive in this arena, that you go through such a big experience like that, real estate, let's just take real estate, because I know that's kind of top of mind to a lot of folks in the brick and mortar space. Not only the concessions they were able to get for folks that have been franchisees, and with the work of franchisees, franchisors they kind of took care of that.
But the deals that folks that are getting into real estate right now are just amazing. And I think when you sign up for something like that, that you're really reducing your cost to get into a business, affects your bottom line long term, right? These are five or ten-year lease deals that you've significantly had a great deal, and that's going to affect how you do business.
Pete: All right, so let's break that down a little bit, right? So brick and mortar, right? So a lot of these facilities are shut down or being shut down for periods of time. And so we're going to see real estate; it's loosening up, right? So vacancies and stuff like that. And landlords are motivated to fill these spaces again, right? It's their revenue opportunities.
And so what I hear you saying is that we're starting to see that already, the opportunities. But you see that going forward that they get more what? Like TI money, tenant improvement money to build out the facility, or rent abatement, is that kind of what you see?
Trent: Absolutely. And just price per square foot, I think they're going to be getting deals. But definitely ten improvements. And the franchise system brings safety and security to those landlords, and that's what they like because they are really bringing in the full system. Not just one franchisee, it's the full system.
And you've got some great national brands that are out there, and folks that are growing very strong, financially backed, and that's the safety and security for the landlord, so they can give up whether it's a price per square foot or help them out on that tenant improvement, all kinds of deals are out there right now. And not just like I said long term that plays so well into that brick-and-mortar space.
Pete: So the lens that we looked through today when we talked about facility-based franchise concepts and the lens that's going to be six months or nine months or 12 months from now is much different, right? So the idea is we're going to be freed up from a lot of this craziness. But you're also going to have a maybe better rent, which improves your profitability to your point.
So that looks really good. And then service, service is one where as we've been going through this, service-based businesses seem to be on fire, right? There's all this pent-up demand, I'm sitting in my house, and I want to paint and carpet. And our house is as an example, my wife repainted stuff, put carpet in.
We've ordered blinds, but we've had to wait a long time to get this stuff. So tell us a little bit about where you see kind of service going forward.
Trent: Yes. I think for a lot of those franchises that quickly booked out the remainder of this year and have already started booking in the next year. My wife has a few of those ideas, and we're trying to get stuff scheduled in the next year. And folks are starting to schedule, so yes, I think that continues.
And I think just the household has looked at their home a little bit different, right? We've kind of all changed our lens that we view where we live and work, and that will continue. And I think only on the improvement side, right? So painting and carpeting might be step one, and then you're adding blinds, or you're adding additional storage space because you've just taken a storage room and made it into an office now.
So now you're looking to kind of revamp a few of the others. Maybe it's the garage that's next you're going to improve, and then it's the yard. And there are franchise systems that touch all of that.
Pete: Yes, it's amazing. And so let's talk a little bit about that, so there's always people coming with new concepts, right? And maybe it's an industry where it could be something as simple as roofing, right? Roofing has been around forever, right?
But they have a new spin on it. So tell us a little bit about how franchisors, they take industry, and then they kind of come up with the new idea or how to do it better or provide better customer service. So tell us a little bit about what you see there.
Trent: Yes. I think the franchise I'm talking to is, they see a product or service that might be out there for a long time, and they're adding a few things. Whether it's a technology platform, a better foundation.
But I think most importantly, they're bringing business ownership into your local market, right? And that's the telling part that let's take roofing; I think everybody views roofing at least in the Midwest as storm chasers, right? They're going to knock on your door after a hail storm, and you got to decipher whether they're in Minnesota or elsewhere.
And when you bring in a franchise system, there's a local owner that knows and operates inside that local market. And that alone does so many advantages because they know the customer in their own neighborhood. So I think typically, you're seeing sophistication for a product or service because they're leveraging the franchisor that's operating east coast to west coast, everywhere in between, and you're bringing benefit when you do that.
And sometimes it's a cost-saving, sometimes it's a better product, sometimes it's a better service. And most cases, it's all of those when you bring in a franchise system to tackle, whether it's roofing, whether it's painting, what have you. I think you just leverage the system overall for significant benefits.
Pete: Yes, they're doing some really cool things. And I like how they are leveraging technology. There are companies where they'll say, hey, we're a technology company, we just happen to be in whatever, painting from somewhere. And that's pretty cool, and I think that's right.
And some of the stuff they're doing just in terms of being able to do estimates, right? Where you can take a picture from a satellite of a roof, and you can do the estimate from a satellite picture which is actually better than somebody going up on the roof and measuring it, it's crazy the stuff that we're seeing.
Trent: Yes, absolutely. You talk about technology, and I think a lot of these franchisors view that technology is going to be here today and into the future. And how they can simplify but yet bring in technology to make it easier for the end-user, for their franchisees to operate the business is always something they're really looking for.
And they have the capital, and the [Inaudible 00:16:23.03] and the resources to bring that in, to really make it full circle.
Pete: Yes. And I think the mom and pops, I don't have the money to put us into that technology and stuff like that to the level, so there are some real advantages. All right, so franchising we know is hot, right? We've got a lot of people that are executives, they're in their 50s, and they get thrown into career transition.
And they're exploring their many different options. But as you see this from your standpoint, we talk about franchising as a path for them to leverage their business acumen, to take control of their destiny, to create career and income security. How do you see franchising going forward?
Trent: I'm so excited about the future for a couple of reasons. One, the folks that are thinking ahead, right? And starting to say, hey, what happens when I retire and I live an extra 20 or 30 years? Or what happens if my company does downsize? That thought today will do so much in the future, and the vehicle of franchising can help them out.
Even if they have a job currently, they can get it started. Now there's a lot of options that they can run it still with a full-time job, or if they are out of job, they found themselves recently in the last nine months and last 30 days out of a job. There are options where they can plug in and be that full-time leader of a business opportunity.
And I think the quality, the talent, the number of folks that are called 38 and older that have had a tremendous corporate-run, or tremendous whatever they've done for the last 15 -20 years. They're going to bring all that knowledge, all that experience, to a franchise system. That will do so much for themselves.
Pete: Okay. So I'm an executive, I had a great career. I've got good business acumen, I've got leadership skills, and I decide that I'm going to keep my corporate job, and I'm going to start a franchise on the side. Now I still have to mind my business; I still have to watch it 15-20 hours a week, right?
But the idea is I can kind of diversify my assets, my income, create that bridge to escape the corporate world. So I can do that kind of semi-absentee for lack of better terms. Or I can be involved in it full-time. But when I talk about franchising, everybody thinks of well; I don't want to be the guy in the subway making sandwiches.
I don't want to be spraying mosquitos for mosquitoes stuff like that. So when we talk about franchising, it's not about that, right? It's about building a business where you're working on the business, not in the business. Do you see that?
Trent: Oh, absolutely, all day. I think the misconception and a lot of people see the handful of franchise systems that they pass going into work or driving throughout the day. And the fact is, call it 4,500 different franchise systems out there.
There's something for everyone if you want to call it that. And yes, there is whether you want to start it today. Diversify, start it in preparation, start a business for the kids or be in the business; there's options.
Pete: Yes. Well, I was raised in the world where job was security, right? You had a job that was income security. And I think in today's world now where people are on jobs for four years, that's kind of the average time to what is it 50% of 50 plus corporate executives get thrown into retirement for the ready.
I mean, it's a different world. And so if you're employed, there is no income security. I mean, today you could be gone tomorrow. And the idea is when you're a business owner, nobody can take that away from you, right? Nobody can walk in and say you're downsized. You'll be the last person standing with your business. And I think that's so cool.
Trent: Yes, absolutely. And sitting here a couple of miles from best buy headquarters and target a lot of friends there, and I know there's some angst, right? Because of what we've just gone through, because of let's just say retail looks like in the future, there's a lot of people kind of scratching their head.
So absolutely, and not only can they not take it away from you, that asset when it does come time if you want to sell the business or hand it off, you've got something of value right there.
Pete: Yes, right. So you're not renting your income as Nat always says, right? So you built this asset, and you got control of it. And if you're not the artisan, if you're not the business, you can certainly sell it.
Got it, so that makes a lot of sense. When we talk about going forward from a standpoint of franchising, where do you see some kind of emerging kind of alcohol concepts or segments? Anything you want to give us a kind of little secret out there what you're seeing?
Trent: Yes. I think this pandemic has really put the spotlight on a couple. One is just the health and wellness category. So I think the fitness has been around for decades. I think the fitness era is going to continue; I think people are going to look at themselves and say, look, virus world or not, the wellness of my being is important, and they're going to take strides and look to make sure that their bodies better.
The mind, I think too this pandemic has put people in a crazy state of mind, that I think from an industry perspective we need to as a country do better to help people with mental illness. And I think franchising can step up in that space because I say franchising; it's kind of like dog years in reverse.
So what a corporate can do in seven years, franchising can do in one. So I think the ability to scale a mental illness solution.
Pete: That's brilliant; I hadn't thought about that. Certainly, the health and wellness. I mean because when we go through tough times, whether it's a recession or a pandemic. People can only control stuff about them, right? I can control about how I feel about my body; I can feel how I look and stuff like that.
I can't control the COVID, I can't control my job or anything else like that, but I can be in control of those things. And so I think this Medispa, where people are, there's some crazy treatments out there, right? This cryotherapy. Nat and I are going to go try it, so. I think he's going to try to lock me in there and freeze me to death. But I actually just watched a movie where that happened, where somebody got stuck in one of those things and became a big ice cube.
But anyway, so some cool stuff merging. So we've got a huge thing, so franchising continues to grow. It's a great path for people to explore; it's not for everybody. But if you want to be in control and want to leverage your experience, your leadership skills, it may be a path for you. Is that fair?
Trent: Fair to say, absolutely 100%.
Pete: All right. Well, it's always great to talk to an industry expert. At the end of a podcast, we always like to ask our guests some random questions. So my first question for you is, what's your favorite book? What book would you share with everybody?
Trent: And it's one from this year, and I'm reading it for the second time because I just feel like I probably missed 25% of it. It's the infinite game from Simon Sinek. And just his perspective on business and competition, and just viewing, I guess, life in a bigger picture. Just so many things kind of ring true through that book.
Pete: Yes, he's a great author. I've loved reading a couple of his books. So I'll pick that up, so that's perfect. All right, second is, and it is we're now about ready to approach 2021, we're real close. So do you do any kind of goal setting? A plan for either business or personally, do you do goal setting?
Trent: I do more a little bit on the personal side, and then the business side.
Pete: Okay. Do you use any kind of, like I used Darren Hardy's living your best life ever, that's one of the techniques I used? And smart objectives, all kinds of stuff. Is there any kind of platform you use to set your objectives?
Trent: A lot of scratch paper and post it. I get them on there, and then it's just trying to remind myself constantly. So whether it's inside the car or on the back of the bathroom door. So when I'm getting ready, I'm staring at these things because it's just that constant reminder for me.
Pete: Yes. Nat and I talked a little bit about goal setting in a podcast, and we talked about decade goal setting, right? And I admitted I've not been good at that. Did you do that goal setting?
Trent: I don't, probably something I should do. But yes, that's it's a big reach. And then I think just staying on top of it too.
Pete: Well, I just think trying to think out ten years, I'm going to be that much more balder and that much older, so it's hard from a standpoint. Well, Trent, it has been a pleasure having you on. Your industry expert and we're so pleased that you could spend some time with us. So thank you for everything that you share today.
Trent: Well, great to be here and always great to connect with you guys.
Nat: Thanks, Trent.
Trent: Thank you.
Pete: Let's rock and roll.
