How Horse Power Brands Is Building A Multi-Brand Franchise Platform And Disrupting The Franchise Industry Without Third Party Investors

FM 2 | Horse Power Brands

 

Large PE companies don’t want to be in the trenches. They buy existing businesses, let them grow, then sell. Horse Power Brands does it on a whole different level. Join Dru Carpenito as he talks to a Co-Founding Partner at Horse Power Brands, Zachery Beutler about what they’re doing differently. Zach takes Dru on a deep dive into Horse Power’s vision. Discover the unique moves they are making to create a portfolio of leading franchise brands in the home improvement sector. From their first brand, Mighty Dog Roofing, to their newest brands and acquisition, Zach explains why and how they expand so quickly! Learn how to support franchise owners uniquely today.

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How Horse Power Brands Is Building A Multi-Brand Franchise Platform And Disrupting The Franchise Industry Without Third Party Investors

Zach Beutler, Co-founder of Horse Power Brands, shares some insight into how Horse Power Brands is disrupting the franchise industry by building the first and only multi-brand franchise company without third-party investors.

We have on the show, Zach Beutler, the Cofounding Partner of one of the companies making the biggest moves in franchising, Horsepower Brands. Zach, welcome.

Thanks. I’m excited to be on here. I have been waiting for you to ask me.

I’m honored that you accepted my invite. I’m excited to drill down into what you are doing at Horsepower Brands because you are one of the companies making the biggest moves in franchising and making moves in a different way than a lot of other companies that are expanding and stuff like that. I’m excited to talk to you a little bit more about that. You have one of the more interesting stories too. Everybody has a journey in franchising and you have an amazing story from massive success at a young age to what you are doing right now. We would love to talk a little bit more about that as well.

I have a unique background in franchising. I have sat on almost every single seat of the franchise bus. I have been a part-time associate at a franchise location. I have been the manager. I have been the multiunit franchisee. I have been the franchisee that lost everything and filed for bankruptcy. I have been the franchisee that rebuilt a $40 million, 68-location retail empire. I have been in franchise development franchisor, digital marketing agency supporting franchisees. I have sat on almost every seat of the bus and that gives me and my partner a unique perspective of how we approach things.

What’s been your favorite position, opportunity or thing you have done in franchising so far?

It’s got to be digital marketing. It is the most fragmented industry out there and being able to learn to pull back the curtains. We acquired a digital marketing agency that we were working with and we added over 100 employees to that organization and we pulled back the curtains of what creates results. What is the cost to do those things and how do we take it from performing well to times ten?

It’s fascinating at the things that you can do when we are creating multiple GMB pages and multiple websites at no cost to the franchisees and building micro-sites and online directories. These people in digital marketing have not had customers that are like, “Let’s do it all. Let’s not do one. Let’s do 3 or 4.” Getting into that, we can see the results from a revenue. We can follow the data on how well that is working for us and there is a substantial difference.

That’s a huge behind-the-scenes massive building block that you guys have put together. I want to take a deeper dive into that because at the end of the day, it’s not the sexiest idea unless you love the idea of being able to put money into an advertising campaign and generate leads that come to your business. A lot of first-time franchise owners, don’t appreciate how significant that can be compared to the allure of what the business is.

If you look at it from a pure entrepreneurial perspective, at the end of the day, every business starts with getting customers. If you don’t have customers then you don’t have a business. Customer acquisition is one of the things that can separate the good franchise companies from the companies that maybe they have a nice, shiny toy on the outside but when you start peeling back the onion, they don’t have a lot behind the scenes to support customer acquisition.

I don’t want this to come off as arrogance but I don’t think that there’s anybody doing it at the level we are doing it. I have talked to so many franchise owners and everyone is clueless. If you think about the people that have the most experience in franchising, those people have not built a franchise system in the last years.

They are all 10, 20, 30 years into it long times with the big neighborlies and etc. to build a franchisor from scratch to drive leads to franchisees is not the same. One of the benefits that we had is that we have done this seven times. We have built it from scratch and here’s what I always explained to people. As a franchisor, we have had two exits in the past. We know the value that can be generated and the capital that we can sell businesses for.

If we know that and we know that in the first year, if we can take average unit volume, for example, from $500,000 to $1 million in the first year of franchisees life cycle and we do that for every franchisee, fast forward in five years, that business is on a completely different level. To do that, we might only need to spend $100,000 or $1 million upfront before we even sell a franchise into proving the digital campaigns, creating backlinks, online directories and investing in those different activities.

 

There are less than 300 franchises with over a hundred active territories, and one out of every two franchise systems does not make it. Click To Tweet

 

If we know that we can ramp up profitability and sales, we get to collect more royalties which is great. If franchisees make a lot more money a lot faster, they are more willing to tell everybody else about how good they are doing and what their experience is like. They have less gray hair and stress going down that path. We are going into that at a completely different methodology than any other franchise there.

Let’s drill deeper into that because we went hot and heavy real fast. Let’s back up a little bit and give folks some context around who Horsepower Brands is and what you are doing. Which brands do you have under your belt and the vision that you are marching down because it’s pretty unique?

In franchising, there are less than 300 franchise brands with over 100 active territories and 1 out of every 2 franchise systems does not make it. The biggest reason for that is capital. My partner Josh and I partnered up and we launched Monster Tree Service back in the day. That’s where you and I first met and we were awarded 100 territories in the first year.

We built that up. This up to 240 locations and we did have the opportunity to sell that business to authority brands. Then we moved to redbox+ which was a roll-off dumpster concept. We acquired that company with four locations and we awarded 300 locations in three years. We had zero closures. We opened every single location and we were fortunate to sell that business to Belfor Restoration.

We have taken $100 million worth of capital into our Horsepower fund from no one else. That’s from him and myself and we launched Horsepower Brands. Our goal is to launch emerging brands in the home service industry that have high average unit volumes where we can get the right franchisees in the beginning and that’s important.

There’s this bell curve called the Law of Diffusion of Innovation. You can look it up. Simon Sinek has a big TED Talk on it but it’s at what stages people make decisions. There are the people that buy the $40,000 flat screen and then there are the people that still have the flip phone. The best franchisees you typically get are not early adopters. They are typically in the middle. To get those people to buy an emerging brand, you have to have a lot more support.

The first brand that we have was Mighty Dog Roofing. We launched that business in January of 2021. We have over 200 franchise locations across the country. We are one of the largest residential roofing companies in North America in less than fifteen months. Our first-year average unit volume is substantial because of how much capital we put behind that brand.

When we launched that brand, on day one, we had fifteen employees before we even sold the franchise. There were only two existing franchise locations and our franchisees are doing more than their first year than our founding location did this tenth year. There is a lot of value there. We then moved to our second brand which is Blingle! It’s an outdoor lighting concept.

We launched that business and we are approaching 60 or 70 territories with that business. We have iFoam insulation which is spray foam insulation going after new construction and residential retrofit. We have Heroes Lawn Care that does fertilization, irrigation repair and leaves removal. The acquisition that you have not even heard of yet that we will be launching is Gatsby Glass. It’s a shower door glass, partition glass, mirrors, etc. Those five brands but along that journey, we decided that we grow franchisors.

Along that journey, what we realized is that we grow at such a fast pace that very few vendors can keep up the support that they provide on day one as we go. We made a decision to acquire a lot of the verticals that support franchisees. We have our own call center that supports our franchise brands. The lighting company, there was not a company that could support the growth of our initial light orders. We imported $10 million for the lights ourselves from China and then distribute those to the franchisees at better costs. We worked with a digital marketing agency that was fantastic but they were not an agency. They were lead generation. It was a different mindset.

We got some fantastic results but we realized that we were growing at a pace that they were not going to be able to maintain that. We ended up acquiring, controlling interests, moving the entire team to Omaha. Now that team has more employees than all of our other entities combined. It has been fantastic to pull back the curtains and learn about that industry. How it takes and how to get results with different digital avenues.

 

FM 2 | Horse Power Brands
Horse Power Brands: If franchisees make a lot more money faster, they’re more willing to tell everybody else about how good they are.

 

What you dropped on us is you say it very casually and you are making moves. The moves and the pieces of the puzzle that you guys are putting together are significant. You have the resources, capacity and capabilities of what might take a franchise company ten years to accumulate. You are growing these individual brands in 12 to 15 months, which might take regular brands 5 to 10 years to get to. You are doing it over and over again with these brands that you are finding. It’s significant in a very big way.

Being in franchising my entire career, I don’t think I have ever seen it before. I have seen it from the PE side. The PE companies coming in and dumping a pile of money but even if they double pile of money, a lot of times the management teams don’t use that money in a very wise way or they bring in these vendors that then gouge the franchisees and it does not move the needle as much as it should. Just because you have a bunch of money behind you does not mean anything. It’s how you use that money and what you guys are doing and bringing everything in-house and not third partying, whatever you need to out. For the franchisees, this is the most significant thing which is cool.

We are the only company in existence that has franchised multiple concepts from inception to be on 100 units. No one else has done it. There’s a reason why no one else has done it because it’s not easy. It’s expensive. The big PE companies don’t want to be in the trenches and they are not the ones that create the model and deal with figuring it out.

They want to buy the existing business. Let it continue to grow on its three-year run rate and then sell to someone else. We are doing it on a whole different level where they could never do that. They can pile the capital but they don’t have the experience in starting, growing and mentoring the franchisees at an early stage. We are the only company in existence that’s doing this.

I always try to remind candidates in our process. There is only one way to get experience and my favorite quote is, “Good decisions come from experience and experience comes from bad decisions.” Every emerging brand has never done what they are doing before so they don’t know what they are doing. There’s no way they could. For us, we have built 1 to 4 brands to beyond 100 territories in twelve months from the launch of those brands. We know how to start, launch, support and acquire customers. We know that or else we would not be able to do it to the rest of them.

I even get a lot of pushbacks. Sometimes when I’m working with folks, I’m like, “What Horsepower is doing at their level is pretty interesting. You should check out some of their franchises.” When people hear about roofing, exterior lighting or installation, it’s not the sexiest widget in terms of what the business provides but you are not looking for folks that want to be in the van, roofs and ladders hanging holiday lights. You want business people that can come in and take the infrastructure and the systems that you provide to them and then build a team of people and manage that team to go out there and run the business day-to-day.

We made an acquisition of our insulation business and we said, “We are not going to allow people from the insulation business to be franchisees.” How will this ever work? I said, “When we look back with Monster Tree Service, not a single franchisee that was successful came from the tree industry. We have two franchisees that came from the industry. They both failed.

With redbox+, no one came from the waste or construction industry. With roofing, not a single franchisee that we have is from the roofing industry. Because of that, we can get them to that 85% to 90% knowledge-based fairly quickly. We can help them find the people to do the work or installational labor and we can drive the leads.

What we have to have are people that have the capital from a monetary and intellectual aspect to run the business and work on the business. Those types of people have to have a certain type of grit. They have to have a certain type of executive experience and people management. They have to want the widget. Nobody comes in and looking at, “I want to do a roofing business. That is my dream.” I don’t think so.

I wish we could talk numbers. Unfortunately, we can’t because at the end of the day, we are talking about all these conceptual things. It’s playing out. The unit-level economics that the franchisees are experiencing are big. You guys do a great job of publishing that in Item 19s of all your concepts. You are as transparent as you can be with candidates but I can promise you that there is more money in these brands and what Horsepower is doing with each one of these then than anybody probably thinks reading this.

We can’t tell people what the numbers are but we did our work in 200 locations in the first 12 to 14 months. In 2022, we will do more than that. There’s only one way to sell a lot of franchises and they keep selling a lot of franchises. They all opened within 90 days. They have to open. They have to get profitable and they have to start doing big numbers or else no one would want to buy the concept. If that gives anybody confidence, you get into a process and validation where you get to talk to people that are eating, sleeping and living it every day. The proof is in the pudding. It is going well beyond what we had anticipated for our first year.

 

The best franchisees typically aren't early adopters. They're in the middle of the adopting period. Click To Tweet

 

Another indicator for folks to look at is because there are not 100 franchisees of Blingle! yet but there are 100 franchisees at Mighty Dog Roofing that can validate a lot of the Horsepower playbook and systems. You also are seeing some franchisees cross-invest and acquire some of your sister brands.

Firsthand from your base and development but the first candidate that we placed in Mighty Dog Roofing bought the first Blingle! Rarely does the first person that buys into an emerging brand, buys another brand from that franchisor. I don’t know if it’s ever happened to be honest but that’s something that they were excited and they are doing extremely well. They are fantastic individuals.

You never have 100% of the information to make a decision on getting into any business or franchise. You have to look at these indicators to understand, size the business up and figure out how much of the real deal it is and whatnot. I would love to maybe take a little bit of a deep dive on that candidate’s profile and who that person is if you don’t mind coloring it up a little bit at the franchise owner level.

There were partners. One comes from investment banking and he’s more semi-absentee in the business. The other gentlemen are childhood friends. He has more of an executive background. He did not go to college. He is a super smart individual and hardworking. There are people that are book-smart and there are people that have the intellect to make good decisions and this gentleman is both.

He runs the day-to-day of that business. They got to a level quickly where they put a general manager in place and that general manager was managing the day-to-day. The franchisee that was in the business full-time focused their attention on strategic partnerships, local networking, creating a brand in that market and now on Blingle! They would like to be able to open the third brand but one of the things that I was impressed with is that they have been open for less than a year. They went out and they raised $500,000 on a 10% equity stake.

It’s $5 million valuations on their business. They raised $500,000 paid back their initial investment in its entirety and then did the same thing on Blingle! at a 25% equity stake at $500,000. Out of the $2.5 million or whatever that comes out to and they have not even opened it yet. They did not have to raise any money for that second concept. They pooled investment with the success that they have had. They got all their initial investment back and now they are going to the next. They are in a validation process of telling their story. It’s fantastic.

An investment banker and childhood friend, not from roofing and have been able to scale it up pretty quickly. The first one is there are some learnings that come along both ways with the first franchisee but it sounds like they are off and running, which is awesome. Do you have requirements in order for a franchisee of one of your brands to be able to acquire another one of your brands?

We do. They have to have proof of funding. They have to have the liquidity to do another concept. We verify that first. The second is they have to be completely removed from the day-to-day of that business. We have to have a general manager that’s running the day-to-day that is our main point of contact to where our success coaches, brand presidents or marketing managers are working with the general manager, not the franchisee.

The third is that they have to get unanimous approval from the leadership team of that brand. If they are hard to work with or they are not the right culture fit, they have to have unanimous approval from those five people. There are five people in that leadership team for each brand. We have had a few that have not that have come through to try to that did not have that unanimous approval. Those things are getting addressed. I think that they will come back and be able to do it later. We don’t want to rob Peter to feed Paul. We want people to have success, be an empire builder and have multiple brands under that umbrella but we are not going to sacrifice their first business to do so.

This is huge because there are franchise systems out there that are interested in selling franchises. Especially with some of these larger group-based portfolios because their leadership teams don’t talk to one another at the top. They are not on the same page all the time. They are very siloed. Each one of their brands is working with different vendors, which does not make a lot of sense.

You guys are doing everything that a lot of franchise companies say they do or aspire to do but then when you boil it down, they just don’t do it. Everything is with the franchisee’s first mindset of their satisfaction, success or unit profitability and if they can prove it in one of your brands, there’s no better way to grow a franchise system than to work with the fewest amount of franchise owners operating the most amount of franchises. That’s the mountaintop.

 

FM 2 | Horse Power Brands
Horse Power Brands: IDS stands for identify, discuss, and solve. That is so important because if you don’t give your team a place to bring issues to you and discuss, they won’t bring them to you to discuss.

 

I was a franchisee when I was twenty years old and in 23 months, I built up seven locations with $8 million in revenue with the retail location. I thought I was God’s gift and I thought I was the man and then it all came crashing down and I lost everything. I had to file bankruptcy. I started that back to negative or zero. It’s important to me personally, when we do this that we make it sound that it’s not easy.

There are going to be bumps in the road and the support that we provide is beyond what is our obligation. We are providing support on how to be a better leader, entrepreneur. How to offset tax liability? How to be more financially prepared and then budgeting and forecasting. There are things that we are doing that there are franchisors that don’t do because it’s not their responsibility to make sure people are constantly improving, evolving and developing themselves.

For us and for myself personally, it’s important that we look at it and go, “Most franchisees are first-time business owners.” They are not qualified to be a business owner yet because they have never done it. You have to go through that process and you have to learn and you have to evolve to do so. If we can put the systems in place to help them that first year build a good foundation and educate them and give them the tools needed to be successful then why not do it? For us, when I go home and I kissed my wife and play with my kids, my phone’s not ringing off the hook about pissed-off franchisees or franchisees that are about to file bankruptcy. We don’t have any of that. The stress for us as franchisors is far less as well.

One of the things that you do that a lot of franchise companies at the parent level won’t touch is recruiting. A lot of franchise companies say arm’s length, if not more and say, “It’s up to you because of all the co-employment stuff that’s out there,” but you have figured out a way to help franchisees especially first-time business owners that are in a new business that is looking for the right people to build their business around. That’s a big deal.

That’s one of those little things that a lot of people get intimidated about. Candidly, it’s a big reason why people end up not moving forward with a certain business that they could be successful with because they still don’t have the confidence that they can bring on the right people. You have figured out a way to help franchise owners hire the right people and get the right team in place. Can you talk a little bit about what you are doing on the recruiting side?

This stems back to Josh and I working together. Josh Skolnic is my partner for those reading. When we had Monster Tree Service and this was like a month in. I said, “I’m having a tough time. These people are hearing from existing franchisees that they are having a hard time finding talent to produce the work and that’s the biggest hurdle I have.” Josh goes, “Let’s bring on a recruiting team and help them.”

We had seven recruiters that we brought on that helped franchisees find actual pre-service labor in all the markets at no cost to the franchisees. In one year we doubled the average and the volume of that system. It was like, “This makes a hell of a lot of sense.” The big reason that franchise brands don’t do this, those that are reading is that there is a lot of joint employer liability where the more you provide support for the franchisee, the more they are technically your employee.

What we do is we flirt with that gray line to say, “We are going to help train them on how to hire. We are going to help provide them with compensation structures, not the amounts. We are going to help them identify qualified individuals.” They set the qualification parameters and we help find them. Those qualification parameters are coached by us.

It’s an intensive amount of time it took to build this process to where we were compliant but it makes a huge difference for a franchisee. When we say, “Here’s a general manager handed over on a silver platter. We believe that they are qualified. You will need to interview them and go through these steps to ensure yourself,” but, “Thanks Mr. Franchisor, we appreciate it.” It makes the process a hell of a lot easier.

I remember you bringing me back many years. Not a lot of people know about this. I have a Master’s degree in Industrial Organizational Psychology which is basically human resources. I took a job with AdvantaClean two months after Jeff started to franchise the business and I stuck around. I was trying to figure out franchise sales. It took us about two years and thousands of phone calls I want to forget but I learned a lot.

When we started getting traction, it was the exact same thing. It was a restoration business. Water damage, cleanup, mold removal and air duct cleaning. We did not want any of the owners doing the work. They love the concept, culture and business but they’re like, “How do I find these people?” This is back in 2007, 2008 or 2009. I was like, “I will help you hire them.” I would sell the franchise and the first thing we would do is I would teach them how to get the right candidates to come through the pipeline. I probably stepped over this line many times.

 

There are a lot of qualified people out there, but most people don't take the first step which is to post the ad. Click To Tweet

 

I would basically do the interviewing forum and say, “I think this guy is worth hiring. This is recorded,” and all that type of stuff. That was way back when but in case any of the National Labor Review Boards reading to this thing. It’s like, “At the end of the day, you guys have figured out a way. There are the policies and all that stuff,” but you know it’s a bottleneck for franchise owners. If you can figure out a way to remove that bottleneck, it opens up the opportunity for everybody. Bigger revenues, royalties and more money for the franchisees.

It’s not as hard as everybody thinks it is to find people. We hired over 100 people in the pandemic, etc. This is a great example. We had a franchisee that said, “I’m semi-absentee. I don’t know if I can make this decision until I have a general manager in place.” I go, “How are you going to have a general manager in place for a business that you don’t even have yet?” Here would be my suggestion. Here are the compensation ranges that are in the FDD for the general manager. Create an Indeed account, go on and post an ad for a general manager in-home services. Don’t even say the industry, post it, boost it for $50 and I will tell, we will give you $50 back at discovery.

Thirty people applied to it and he still had not responded to one. I looked through the resumes. There are going to be a lot of qualified people and I go, “There are a lot of qualified people out there but most people don’t take the first step. Just to post the damn ad, number one.” That’s a big thing. You are never going to have that general manager before you make a decision on the business but once you have made the decision, you sign the document, you have wired the money. Now you are motivated. You are not alone in that. We can help.

It’s the people piece especially in service businesses. That’s a lot of times. When you have some strong systems with the digital advertising agency and the call center, which is massive in any home service business that you guys make sure that the phone is getting answered consistently and the customers get a professional experience. Then you convert those into appointments for the franchise owners. The people piece is the thing that sets it apart.

You guys do something that’s super unique with traction and the entrepreneur operating system, which this thing changed my life. Let the idea of Level 10 meetings, that’s the one piece that I have used in different businesses I have been a part of that is such a simple thing but it’s had such a big impact on organizing people. Getting people-focused, knowing how to say no to the things that creep up during the week and focus on the things that are moving the needle. Could you talk to me a little bit about what the EOS system is. How you are using it in your business?

I give books to members of the team every Wednesday but there’s a book called Traction by Gino Wickman. It is a preface of EOS, which is the entrepreneurial operating system. Like a computer has an operating system to run, businesses need an operation system to run. I will never forget. We have supporters and we built up a retail nutrition empire as we called it. We had 68 locations. We are doing $40 million in revenue. We got that business to a place where it was running us.

We were all accountable for everything. Nobody was accountable for anything. It was not going well. We brought in an implementer to come in and basically bring traction to our business and it was probably $20,000. I don’t have the folder anymore but you go through a VTO, education and people analyzer.

It helps you. That situation helped us organize the business, put the right people on the bus and create a structure of how to hold people accountable and run meetings. The biggest one is Level 10 which you were talking about. It creates a scorecard that you manage KPIs that run your business. Every week, you are managing those KPIs.

It helps track to-dos to make sure that people got what they were supposed to do done on time. There’s a portion called IDS, which stands for Identify, Discuss and Solve. That is important because if you don’t give your members of the team, a place to bring issues to you to discuss, they won’t bring them to you to discuss.

When we were starting to place all these franchisees, it was an awakening where I was talking to Josh. When Josh and I bought redbox+, I brought Traction into that. I said, “I’m not going to attend one more of these meetings if someone does not talk numbers and talk about what’s being held accountable. We implemented Traction and it took us about six days to have good meetings and we moved the needle dramatically.

That is what started our journey to kicking out the largest digital marketing company in the country as our marketing vendor because they could not get results because we started measuring them. EOS for a franchisee when they come through our process, we talked about it. We do it for all our businesses. When they are here at Discovery Day, we spend a whole day on the VTO on Level 10s, educating them on that practice. When they go out and they launched their business, they have built their VTO with their team, which is their Vision Traction Organizer.

 

FM 2 | Horse Power Brands
Horse Power Brands: If you want to be profitable, you can’t pause all your marketing and not go to sales. Keep doing the marketing and do the sales yourself. You have the bandwidth because you’ll have more coming in.

 

They built their 1 and 3-year vision. They built their core values. They have built their roles of responsibilities for everyone. Everyone has a clear line of sight of what they are supposed to do and how performance is measured. It sounds so simple as like we have those things all sound like you should do them but nobody ever does. There is a lot of stuff to worry about in a business.

When it’s a new business that’s growing and a lot of times you have never been down that path before, you are figuring things out a lot as you build the business. It’s almost like therapy in a way because you have this safe place with these Level 10 meetings where you know what the process with the flow of the meeting is going to be. You know that there’s time set aside to bring up any issues and then to prioritize those issues and then figure them out.

You don’t leave that meeting until there’s at least a clear future on one of those issues. If you don’t get to the other four issues on the list, that’s okay. You carry them over to the next week. It’s such a simple thing but until you have been in the chaos of a growing brand or organization, this is a way to bring an organization that still harnesses the entrepreneurial spirit, power and growth that the company is on. It’s the coolest thing.

Every month, I pick up Monday and I go through and I sit in every Level 10 of every brand or department. There were some brands that are brand new with leaders that have not been through EOS that are talented individuals but listening to them trying to run a meeting was painful. We score the meeting at the end. I’m like, “This was a terrible meeting. It was a one,” but by God, next month or next week, it will be a 2 and the week after that, it will be a 3.

We are going to get this but it’s going to take time for you to learn EOS and Level 10. To get things where everybody’s in harmony. When I look at our Mighty Dog brand who’s led by Mark Stanek, our brand president, it was like on time. This one goes here. That drops the IDS. You finished 25 minutes early and I was like, “That was refreshing.” If you have not read that book by Gino Wickman, it’s a fantastic book for anybody looking to start a business or thinking about it or even leaders in organizations.

You might have said this as I was reading but what do you guys do to help the franchise owners get them on the EOS path from the beginning?

I will get a book which is not enough but they get a book. The next thing is at Discovery Day or after the academy, which is five days. We spend a day going through their VTO. We train on Level 10 and we do some role-playing on bad and good Level 10 meetings. Our success coaches then for the first 90 days, each month have a Level 10 meeting with the franchisee and their team where they are going through their scorecard. They are going through IDS.

After that, if they are on the right path, we can move to it to a quarterly, unless they request to say monthly. If they are in the bottom performance, they move to a weekly Level 10 where our success coaches one Level 10 for them and their team. They say, “Here are the stats. This is what needs to be done to fix these stats.”

Regardless of what the franchise agreement says and the performances, if the effort is not there, that’s where we get to have what’s called the confrontational conversation. It starts with something like this, “We care enough about your family, you as a person, your happiness and your overall investment to have a conversation but we are going to create some conflict. Is that okay?” Everybody always says okay and then we go, “What in the hell is going on?”

That’s where we dumped the bucket of water on them and we break them down and then pick them back up. We try to get things moving in the right direction. By doing that, we found one gentleman that had found cancer behind his eyes but had not told anybody yet, not even his wife. We found something that happened on this issue and this issue. You learn that everybody has things that happen in life but sometimes people need that help to pick things up and keep moving.

It’s not leads or more customers. A lot of times if somebody is struggling with their business, it’s something else. It’s the behind-the-scenes stuff that’s going on. Do you have any cool stories you mind sharing about how you have been able to take somebody that was at the bottom and through the intervention, you have been able to help them get on the right track and get up to a certain level?

 

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There’s a franchisee. He was a younger gentleman whose dad was funding the project. He is a smart individual and motivated. He didn’t quite have the experience. We’re a little bit leery but we liked him and he launched a business and lost a sales guy. I think it was partly because the sales guy might not have liked to work for him and was struggling for about 30 to 40 days.

Our success coach flew into the market, spent about a week with him and said, “You don’t have a salesperson. Who’s doing the sales?” I paused leads. I’m following up on old leads. I go, “We are going to go do sales and you are going with.” We made him do sales for a week and I’m not joking. For about 2 or 3 weeks, he was turning around huge weeks of revenue.

He was not a salesperson but he followed the process of our digital sales process. He was having a lot of success. He has two salespeople who are now working for him. He’s in probably the top 25% of performance. He’s doing a fantastic job. He’s a young guy. That was an example of what you think might be the right decision, probably might not always be the right and we are there to help say, “We can’t pause all your marketing and not go do sales. Let’s keep doing the marketing and let’s do sales yourself. You have the bandwidth because you will have more coming in.” That was some coaching from us but we have followed Level 10. It was him and Level 10. I would say, “How many estimates that we do following in the scorecard?” That’s where we learned that we needed to come down there and help.

That’s awesome that you guys were willing to get on a plane and get belly to belly, eyeball to eyeball and hone in on what’s holding this guy back. What is it? You were then able to identify, pretty quickly diagnose it and then put a plan around it. It worked. There are a lot of franchise companies that don’t get on planes either. They try to do everything from behind the computer to behind the phone. Sometimes with franchise owners, the life factor of it. It’s a big decision and part of their life. You guys are getting out there side by side in the field with them and then helping them figure it out, which is awesome.

As long as there’s effort, it will work. There’s not a single franchise that I’m aware of in my entire life that put forth 100% effort that failed and that’s God’s honest truth. It’s always, “It’s not profitable,” so they turn their focus somewhere else. The effort on the process or what they are supposed to do was not there.

As we are talking, you make this stuff sound simple, fun and exciting but there is the X factor of there’s a boatload of work that goes into building any one of your brands and any business, like you guys are putting in a ton of work behind the scenes, making the moves that you guys are making. If you are willing to put the work in and I hate to use the word, follow the system because that’s so generic but you guys truly have figured out the recipe for a home service franchise and put the pieces in place that can help franchise owners scale if they want to scale.

There’s a process every franchisor has. You want to make sure that you can motivate the franchisee to take your process and make it their own to where they can let their personality and their strengths drive better performance versus trying to put everybody in the same bucket. That’s where we have had a lot of success.

Owning a business is not for everybody. It takes grit. I tell everyone that I grew up in a blue-collar household. My dad and grandpa owned a business that I grew up in every day. In the summer, I remember going to work every day. Josh was the same way. His dad owned a hardwood flooring business that he helped on every day.

There is something that you feel inside that I can’t explain from either being pride. I can’t explain but there’s something that you get when you build a business and grow up in a business like what my family built. It was not a big business. They still run it. My grandpa bought a business in 1969 and he’s about to be 90 or 89. He still goes in every day.

He does the books by hand and he won’t change, which was never a conversation. He’s proud of what he’s built and I’m proud of him and my dad. Going up in that environment taught me a lot of values that I could not have gotten in other places but building a business for yourself gives you this feeling inside that you will never get from anything else besides maybe having children. If you have never taken the risk of doing that, even if you failed and lost everything, I still personally think it’s worth it.

It’s one of those things that’s so hard to explain or put into words like what it feels like to build your own business, create your own paycheck, all that stuff. Have the control, the lifestyle and be able to make decisions that are your decisions. There are consequences good and bad to all those decisions but it’s a weird thing. It’s almost like it’s liberating in a way. It’s like you have this control over your life. It’s empowering in a lot of different ways.

FM 2 | Horse Power Brands
Traction: Get a Grip on Your Business

This has been amazing stuff. I feel like we could talk about this forever. There’s another business that deserves some shout-out here for all the folks reading around the country who might be meat lovers. You have another business that you are a part of that you own. Let’s give that business a plug. What’s the other business that you have going on?

It’s Beutler Beef and Cattle Company. We raise cattle. I came from agriculture and I always fed cattle as an investment but it got tougher and tougher to make money. If you ever meet anybody that’s in the cattle business, they will do it forever. No matter if they make money or not. I love that industry and the people that are in it.

We started selling directly online. We went and created an eCommerce business BeutlerBeef. My wife runs all of the eCommerce social media, all the operations and she absolutely dominates and crushes it. I spend my time more on the cow-calf and the genetic side but we do that in our spare time. We have people that help us with that business. If you like steaks and beef in Nebraska, there’s a special taste if you have never had it. We raised it all in Nebraska. We ship it all over the country.

Big Daddy Earl is a big part of that operation.

That’s my wife’s pet. I hate that damn thing.

He’s a boar?

My wife has two pet cows, Big Earl and Harriet. It started out as this little thing you could pet and now you can’t even get in the pen with them because they have 0:37:31. He is grumpy all the time. He needs to go away but my wife doesn’t want to sell him.

I will personally vouch. I’m a Big Green Egg snob, been one for several years. I have thrown some rib-eyes on the Egg and they are delicious. If you are hungry, if you like beef, check out Beutler Beef and Cattle. It’s amazing. Well worth it.

I do want to point out one thing about you. We have always had a lot of side conversations at these conferences that we have met each other at and your background is valuable coming from franchise development because you have seen what does not go right and you have seen what happens. I’m sure that people that are working with you probably read to this but you do have a different approach from experience. From a franchise consultant standpoint, having that experience in franchise development, lets you be honest, smell out some of the BS that’s out there. That’s what makes you special and good at your job.

I appreciate that. I have enjoyed it and thank you for taking the time to talk to us about Horsepower and all the exciting things you have going on.

We can do some more too. If you ever want us to have us back on, let us know.

I will. Thanks.

 

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About Zach Beutler

FM 2 | Horse Power BrandsZach began his career in franchising as a young, ambitious franchisee with Nebraska-based Complete Nutrition, later becoming a multi-unit franchisee of Color World Housepainting, Inc.

He went on to take up a variety of roles in franchise development with 5 different brands and as Chief Development Officer of Redbox+. As one of the highest performers in franchise development with franchise sales outsourcing firm to Chief Development Officer of Redbox+, Zach has gained a wealth of knowledge on building brands and businesses.

He is also co-owner of Beutler Beef, a company that provides high-quality beef, and most recently co-founded Horse Power Brands.