S2Ep125: Ever Considered Opening A Franchise? Start Here

In today’s episode, Allan welcomes Scotty Milas. Scotty has been an entrepreneur dating back to his teen years when he started small businesses mowing lawns, raking leaves, and shoveling snow. He could not ignore the calling of his entrepreneurial spirit, so his journey to pursue a business career began. Allan and Scotty explore the advantages and disadvantages of owning a franchise. Franchises have an established business model, brand recognition, and ongoing support from the franchisor. On the other hand, there are potential drawbacks, such as limited flexibility and creativity. Listen in to discover if owning a franchise is a suitable decision for you.

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HOME | Franchise Consultant | Scott Milas Franchise Coach

Scott Milas | Franchise Coach/Career Transition (@scottmilasfranchisecoach) | Instagram

Direct Office/SMS: (860) 751-9126

E-Mail:  scott@scottmilasfranchisecoach.com

Allan has started and grown several multimillion dollar businesses. His mission is to help you do the same. Welcome to The Business Growth Pod, building the future one entrepreneur at a time.

Hey, everyone, Welcome to The Business Growth Pod. As always, Allan Draper, I’m your host happy to have you thankful that you’re here with me. If you get a second, one way that you could say thank you for our guests for our content that we put out. Go ahead and leave me a review. whatever platform you’re listening to this on. Also make sure to hit the subscribe button so that you get notified when I drop new episodes. Today, I am excited to welcome Scotty Milas. Scotty has been an entrepreneur dating back to his teen years, actually, where he started small businesses, mowing lawns, raking leaves and shoveling snow. That sounds familiar to me. As early 20s, he began a career with a major news organization, as a cameraman for the White House press corps. Several years later, Scott cannot ignore the calling of his entrepreneurial spirit. And so he left the news industry to pursue a career in business. That sounds intriguing. We’ll have to get into that a little bit. Scotty, welcome to the show.

Hey, it’s great to be here. I appreciate the opportunity to speak to you and your audience.

Awesome. So tell me a little bit about that entrepreneurial spirit that you have. It sounds like you started really young, I was the same way. You know, go door to door with my lawn mower offering to mow people’s lawns, rake their leaves, whatever. What is it that makes up that entrepreneurial spirit?

I guess the easiest way and the most humble way to put it is that I just did not like school. I just you know, I, my mother and father, my mom has since passed. But my father You know, you know, I love them dearly love my mother. But, you know, they pressed education, education. And for me, it was all about business. Just kind of, you know, putting my hands on the oven and it was hot. I knew not to put my hand on the oven again. So and that all started really, in my you know, when I was eight, nine years old, I got hooked up with an Italian family. I grew up in New York, they owned a pizzeria restaurant. So I started working for them. And they nicknamed me Gino. And I just fell in love with the restaurant business. So that’s really where business came. And of course, there was different directions from there. But it was really just didn’t like school. Just it just wasn’t for me.

So I you know, that’s an interesting point. And I have three small children four, eight and 10. And I get the question a lot. i Hey, Alan, and I actually have a law degree. So I went to my fair share of school that I use occasionally. But I don’t practice law anymore, full time. So I get the question like, Hey, are you going to tell your kids to go to school? And I think you know, and I wanted to get your feedback on this. But for me, I’m going to tell them to go to school, if they want to go after a particular industry that requires school, right? You can’t be a veterinarian, unless you go to school, get license, whatever it can be a physician’s. Now part of the problem with that line of thinking is, you don’t know if you want to be a veterinarian until you’re a veterinarian, like you can volunteer and you can kind of see what they do a little bit. And that will give you some experience. But I did not know what it was like to be a lawyer until I was actually a lawyer practicing law. And I worked for law firms. I was in law school for several years, obviously. So that’s kind of my take on it is like if you have this course that you want to pursue, but I think with certain people definitely with my parents, it was almost like a badge of honor Scotty for them to say yeah, my, my son just graduated from college. And it’s like, okay, I get that to some extent. But now with the cost, the cost of school, how much you’re missing out in terms of just experience, right? Like just real world experience during that four years. And then you know how much you’re missing out on being actually paid. I don’t know that it’s worth it just to say yeah, go to go to school, get a bachelor have arts and, you know, medieval studies or something? Right?

Right, right. It’s interesting. You know, I, over this past weekend, I was speaking at a conference Expo conference. And we’re talking about business ownership. And one of the things that I talk about is education, and putting yourself in a position to learn. And we were talking about education from college or high school and elementary school. And my point was to the audience’s that we don’t go to school, and are taught that we should open our own business, we’re taught that we should go learn, and go out and get a job and work for somebody else. And I always kind of questioned the fact why we’re not taught more in education, about business ownership, going out and being able to start your own business with all this information and knowledge that you’re learning in school. I’m not anti school, it just wasn’t for me, you know, so, yes, you know, my father was an attorney. And, you know, he wanted that badge of honor to tell, you know, you know, he had a son that was, you know, working in the firm or taking over some of his trust, but, you know, it never happened. And I think it took him about 3540 years to figure out that I wasn’t going in that direction. And to figure out what I actually do. Yeah,

that’s interesting. And I think, you know, with education, how it relates to business, if you want to be a successful business, Owner, entrepreneur, whatever, the best way to do it, is to do it. Now. Now, there, there’s some great coaches out there, there’s some people that know, some things, I, you know, just had an interview, and somebody was telling me about how their life got disrupted, their business got disrupted by COVID, like a lot of people, but they still have this foundation of, hey, I had been doing it for two decades before that. So I didn’t start from zero. You know, I took a couple of steps back, but I didn’t start from zero. So there are some resources out there, there’s books, great podcasts, you know, things like that to help entrepreneurs. But it’s really tough to replace that, you know, that experience that comes from just doing something you you agree with that.

I agree, you know, I tell people that it, it’s a lot harder in business to fail than it is to be successful. So but being successful does take a lot of work. You know, it’s, you know, I learned one of the first things that I learned in the first business, you know, real business outside of mowing lawns, or whatever, and my father kind of preached this, to me is that numbers don’t lie, you know, you know, your balance sheet, your p&l, you know, is a true indication unless you’re putting in the wrong numbers. So, there’s a lot to know. But the beauty about business ownership, at least in the aspect, where I come from, you know, in that kind of franchising world, is that you don’t have to be an expert at what you’re doing. You just got to be able to manage and delegate, the system’s in the best practices, you know, within the franchising system. So, I’ve done it all. I mean, I’ve been a franchisor. I’ve been, you know, a franchisee in some ways, and then an independent, you know, there are equal challenges,

I think it’s really cool that you have that experience you have, you’ve seen it from all different types of angles. Because I’ve thought about this a little bit. And I’m actually working on there’s a franchise that I’m a huge fan of, that I’m trying to bring to Arizona, but all of my businesses, I’ve started a lot of them with partners, but we start from scratch. And I think there’s pros and cons to, you know, being on both sides of the franchise situation, and also just starting something. And I think it’s important for entrepreneurs to know that going into it, and there are a lot of things about our franchise, even though I don’t own one yet. But I can imagine there’s so many things because I’ve started a business on my own from scratch, and a franchise, like fast forward, see you right, as I’ve been investigating this one particular franchise, it’s like, okay, oh, wow, they’re going to, they already have all of the products. This is a restaurant actually. So the menu, all that recipes, all of that is already laid out. So if I were to start a restaurant versus, you know, going into business with a franchise, it’s like, okay, I have all of those answers. I have the software system answered, they show me how to hire, they show me what my logo is, I have the name all those things, which is a huge benefit for somebody that doesn’t really want to deal with that aspect of,

you know, the best analogy that I can give the audience about the difference between being an independent and look, I have a lot of a lot of respect for independence. People that have start businesses develop the systems, the manuals, the best practices, you name it, but the best way to put about a franchise and investing in a franchise and that business model If you’re a sports fan, you’re starting on third base, and going home, or you’re kicking the extra point and not worrying about getting a touchdown. So there’s a lot of, you know, depending on the brand, I mean, and that’s what we coach people through at my, you know, consulting organization, is the validation checking on the systems, the support levels, is that you’re starting on third base. And it’s a lot easier than developing all the systems. But there are people that want to develop all the systems, you know, I tell people that if you want to open your own restaurant, that’s great. And if you want to get up in the morning and make a soup and serve it, you can in a franchise, you’re not going to be able to wake up in the morning and decide that you want to serve a soup or make a hamburger a different way. So that’s the difference.

And that’s the, that would be the con, in my opinion, is the lack of and some franchises, I know you have more control than others, but there’s going to be less control, less creative, control less autonomy than you would have with your own startup. So I look, and maybe it’s maybe I’m oversimplifying here, but I look at a franchise as Look, they’re gonna give you answers to 90 plus percent of the questions of the situation that you need to resolve or decide about before you start a business and throughout the process of operating the business. But then the other side of the scale is because they give you those answers, there’s not a lot of wiggle room, if you want a new recipe, you have a new soup that you want to create, then maybe a franchise isn’t for you. Because to be able to implement that stuff. Because one of the values, one of the main values of a franchise in addition to them providing information and the system’s which is huge. That’s huge. Coming from somebody that started several businesses from the ground up. The other thing is the continuity and brand recognition. So you can imagine it makes sense to me. It makes sense that if you’re, you know, you’re a hamburger joint that you’re not going to be serving fried chicken, right? That makes sense, because the brand is needs to be protected so that when people go McDonald’s, for example, I used to live in South America and I go to McDonald’s. It’s the same logo, same packaging, same food in another country. Love it or hate it. They’ve got it now, you know where it’s consistent?

Yep. Well, the other thing to think about franchising is is that, you know, great ideas are part of the franchisor reaching out the franchisees but the franchisee, who’s coming up with that idea or wants to change something has to understand that that change has to be good for the complete system. It can’t be just good for them, you know, a perfect example. I mean, you know, take it or leave it as the $5 footlong. You know, with subway, I mean, you know, that was the idea of a franchisee that wasn’t the corporate marketing department that came up with that. So that was implemented. I mean, look what it did the subway, you know, a lot of people say that the $5 footlong, even though it had its challenges, you know, eventually save subway, but there’s a lot more to franchising than the $5 footlong or the golden arches. So, but you know, great ideas do work, but they do take time to implement and then they have to work through the system.

Now, a lot of people think that franchises are bulletproof. And that’s not the case. Right, Scotty there are? No, there are cases where a franchise in a particular location, even though it’s successful in other locations, it won’t work out. Well. Why is that?

Well, I can tell you the and not to blame franchisees versus franchisors, but a large percentage of franchises fail, franchisees fail, because they’re not following the system. You know, they’re trying to reinvent the wheel, they want to, you know, fly the plane a different way. That’s the best way to do it. I mean, you know, I always use the analogy when you’re flying a 747. You know, there’s only one way to fly it. You can’t get up there and say, Well, I’m going to try something different because it’s just not going to work. So, you know, people fail in franchising, because they’re not following the process. They fail because they’re undercapitalized. They fail because their thinking is that the franchisor is supposed to be doing everything for them, and that’s not the case. But then franchisors feel they might fail or lead to franchisee pain because greed sets in, you know, they just want more and more they want to take a piece of the pie from everything. I am a firm believer that franchisors if you cannot, you know, pay your bills and be successful based on the royalties that you’re collecting. You should not be in franchising, you should not be a franchise. So, you know, those are some of the reasons but you know, people that are undercapitalized not following the process, franchisors that you know are greedy and you know are constantly trying to train the train or not providing support to their for Anchises that’s why franchising failed.

That’s interesting, because one of the reasons was because they, they wanted more control than the franchisor. And then another reason was they wanted less control than they have than the franchisor. Right, they thought the franchisor was going to do more than more than they did. But that does offer some, you know, some promise for somebody that’s looking into a franchise where it’s like, look it, capitalize yourself properly, do basically what you’re expected, don’t necessarily do, do more, don’t do less, just do what you’re expected. Is there anything that’s to be said about the location? You know, because that’s going to be different than from the other stores, right? There’s, the location is going to be different, lots of other things are going to be same, almost all of them, but the location is different. So how does a franchisee like, say, okay, you know, I’m looking to put in a store in this location, you’ve had success in these other locations, how do they set them selves up for success with that specific decision

for all franchisors, at least, you know, if you’re looking at brick and mortar business models, franchises, you are going to have to trust the franchisor in the real estate department or the company they’re contracting with, to make sure that they’re helping you find and working with you to locate what I call an a location. Now, the a location, location is one thing, but then you get into lease negotiations. So it’s important that the franchisor is involved in the lease negotiations. So if you can dot all your I’s and cross your t’s on the location that it’s in a location, I’ll give you an example of a poor location. I remember when we were building the burger concept that I was involved with. One of our potential franchisees came to us and said, We want to open this location in this particular spot in this particular town. But when we did our homework, it was a burger concept that had already failed and left. And we said, Well, why would you go there, it already proven that it will work. And there were some certain things about the traffic pattern. And our real estate department was trying to explain this but they insisted on going there. So usually typically boils down to the franchisee has the final say, So long story short, they did go there. And six months later, we had to get them out of the lease, and renegotiate a new lease and move them so it’s it’s it’s really working with the franchisor to find that a location. And I and it’s like I tell anybody if there’s any doubts, keep looking. That’s all I mean, don’t try to put a square peg in a round hole.

So tell me about what you do what your role is with fringe. I know that you’re a franchise coach like what? Tell me how you help out? Are you on the franchisor side, the franchisee say what? Give me some details about that.

I’m square in the middle, I guess is the best way to put it. i There are two parts to my company. The first part is Scott Majlis franchise coach.com. And that is a consulting organization where I help people research and explore business ownership. So I take individuals whether they’ve been displaced out of corporate America looking to transition out of corporate America, I do a lot of work with existing multi brand multi unit operators franchisees already who I help diversify their, their portfolio. But in a nutshell, what I do is I help people determine what their y is. I help them to have a better understanding of what their skill sets are. You know what they’re good at what they don’t want to do. You know, how many moving parts do they want? Do they want brick and mortar? Don’t they want to work from home b2b b2c, I take that you know, you know, an hour and a two hours consultation, put a business model together, and then introduce them to the brands that fit and help them through the process, making sure that they’re asking the right questions, to make a validated decision at some time down the road. Because in franchising, there’s eventually a decision you have to make and it’s not maybe it’s either yes or no. So a validated decision versus an emotional decision. You know, the process that we work with and I work with, for my clients, you know, can take anywhere from 90 to 120 days before someone’s going to make a validated decision. So we’re gonna help on the financing side help people you know, I have a financial consultant that I pay for my clients to speak to get a better understanding of what they would qualify and funding, how the best way to fund their startup is. And then there’s the legal side making sure that they’re getting their documents reviewed by a franchise attorney, understanding their responsibility, the franchisors responsibility and just kind of you know, really solidify that decision.

So then is your fee paid by the franchisee? You know,

my fee is paid by the franchisor or the brand. I have over 600 brands that are in my portfolio, all different categories, all different investment levels. So once that client of mine signs their agreement pays their franchise fee, the franchisor that they The brand they invested in pays me a fee for helping them bring someone to

fund a finder’s fee. But it’s nice that you have 600 options. Yep. And growing, it’s growing. The industry is really tough. So it’s not like you’re just trying to cram somebody into the two options that you have.

I mean, look, I told somebody last week that, you know, this is an exercise in futility, and that, you know, they really should just not go into a franchise, if you want to do an independent business, you know, that’s something you can look into. But a franchise is not for you. It’s just not going to work. You know, it’s just you don’t have the right mindset. And there’s a mindset to owning a business. I mean, as you said, In the beginning, you know, it isn’t all it isn’t all roses and ice cream. There’s some thorns rosebush.

Yeah, no, that’s absolutely true. And you know, what’s funny is that we always talk about entrepreneurship and starting a business like that. But there’s also thorns on the rosebush of not doing exactly right. Yeah. It’s like, you know, would you would you rather work for somebody? Or do you know, nine to five, like, not have flexibility? Not, you know, whatever. And there’s some great jobs out there. Oh, yeah. Knocking that? And I don’t think everybody should be an entrepreneur. I really don’t. There’s some people that, you know, like my mom, for example, she when five o’clock hit, it was like the old like Flintstone Flintstones, cartoon. Yeah, that yeah, do you sliding down the dinosaur tail work was over. If that’s your personality, don’t start a business. You because the business doesn’t. And you do have to find time. So unplug. I just spent a week in Florida with my family and, you know, unplugged quite a bit. But you know that it’s mostly upstairs. That’s the tough part to turn off. And what’s interesting is, as an attorney, I struggled much more with shutting it off, after I left the office than I do as an entrepreneur. I just let stuff go now. But as an attorney, I, I don’t know why. And I think that just comes down to my personality. So there are some people that it should be for, you know, certain businesses for and some that it’s not. Now, if somebody is considering a franchise, what are some questions that you ask? Or how do you filter whether a franchise is right for them? Or maybe not the best fit? You know, that’s

a great question. My first question to my clients is that if you found the right business opportunity, and you invested in it, five years from now, and let’s just say you’re successful, how would your life be different? So we kind of work from that platform, where are you going? And what do you want to do? I mean, you know, you don’t go out and invest, you know, $100,000, or a half a million dollars or a million dollars, because you don’t like your boss, you know, there’s got to be something of a change, or what you’re looking for, whether it’s work life balance, you want to be home more, you want to take more days off, you only want to work two days a week, you want to build the legacy, you want to build wealth. So we start with that question. And then we eventually get into exit strategies, you know, what are you looking to do when you’re, you know, when your time is up? What’s your exit strategy? Do you want to build something that you could sell? Or do you just want to, you know, have something and then be able to turn it off and walk away from it, because there are certain businesses, you know, I’m in one of them, I’m in a consulting business, I own my own consulting company, you know, my business can’t be sold, I’m not building anything that somebody can buy, because my business is based on relationships, and building those relationships and referrals. So if that person who buys my business does isn’t going to get those, because nobody’s going to refer somebody they don’t know. If you’re building a brick and mortar or a service based business, and you build it up to locations, then you have something to sell. So exit strategy, work life balance, you know, what kind of hours do you want to work? What kind of employees do you want, there’s what we call the, you know, the hourly employee, then we talk then we talk about the skilled labor part of it. So there are a lot of aspects that we talk about to get somebody to start looking at and talking to franchisors and potentially are an interest. And my goal is to take people outside of their box a little bit, get them a little uncomfortable. You know, I mean, you know, there and then we talk about ego. Yeah, because let’s face it, there are some people that want to be able to sit at the dinner table when they’re out with friends, and tell everybody that they have this kind of business. They don’t want to set tell people that I know the business and or I’m in the portable toilets business. So there’s an ego side of it that we have to talk about as well. That’s funny.

So I own a group of pest control companies. One of is in Massachusetts, where you’re located I own a pest control company in Boston services, Boston in the Metro West area. And it’s not A sexiest business. But it I’m just telling you exactly it is an incredible, incredible business. So I don’t have any problem telling people, I’m a Bug Guy. And, you know, I love that.

For sure people that won’t be there are people that would be, and that’s okay, there’s nothing wrong with that, we just have to find that, you know, that business that fits kind of fits into all aspects of what they’re looking for. I don’t believe in perfection, I don’t believe there’s a perfect business. But there is an ideal business that fits comfortably. And then the big one we have to talk about, and you’ll probably chuckle about this is sales aptitude. Because there are people that don’t like, in front of other people, there are people that don’t like to network, I’m not talking about Willy Loman, knocking on doors or cold calling. What I’m talking about is networking, making a presentation. And if you don’t like that, and don’t want to hire somebody to do it for you, then you probably got to lean towards retail, you know, people are coming to you. So sales aptitudes, another big one.

Yeah, no, I think you bring up a really good point. Because it when you start a business, regardless of you know, the structure is going to be difficult, right? It’s a lot like a marriage, where looking at marriage is difficult it is any type of long term relationship is difficult. It requires work, it requires persistence, it requires not giving up and all these things. So you might as well get some things out in front that align, right, marry somebody that you know, whatever it is religious, super important to you, that’s a really important one that you aligned with financial decisions, things like that, you’re still going to have some concerns come up down the road, you’re still going to have those and disagree, you’re going to disagree, there’s going to be something come up with business, you want to put those big rocks in the jar, hey, you know, I don’t necessarily want to be out in front of people. I don’t want to be in the bug business. Because you’re still going to have your share of concerns and issues. But if you get those big ones, I agree with you, Scotty, I think it’s a great point. Try to get as many of those things figured out in a marriage to try and get those figured out as much as you can. And then, you know, address the other issues that come as they certainly will.

Yep, I know, you’re spot on it having spousal support partner, a partner support is also very important. Whew. And, you know, I always challenge the couples I’m working with that, you know, sit down at the dinner table after the kids are in bed, you know, whether it’s a cup of coffee, or a bottle of wine, you know, eat up, grab a piece of paper or legal sized piece of paper. And each of you write down what you think the others responsibilities are going to be within the business. And I said it’s going to, it’s going to open a lot of, it’s a great idea. You may need another bottle of wine by the time you get figuring it all out. But it’s an important part of the process. So and I always tell people, Look, if you both can agree on the business, walk away and find something you can agree on. Too many times businesses shouldn’t say too many times. But there are times when businesses have really impeded friends, families and have made it difficult for families to function.

No 100% And that reminds me of Stephen Covey’s concept of Win Win or no deal. Like it’s either going to work for both of you or you know, you agree to find something else or not do it so, well. This has been great, very insightful.

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