Latest / Reframe First / Storm Miller, Sr. Director of Franchise Dev at REP’M Group | Don’t Buy Yourself a Full-Time Job

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Storm Miller, Sr. Director of Franchise Dev at REP’M Group | Don’t Buy Yourself a Full-Time Job · Reframe First

• Oleksij Rak: Hey guys, welcome to another episode of Reframe First. I'm Alexi and let me welcome all to the today's guest, Storm Miller, Senior Director of Franchise Development at Rapim Group. So h hi s hey Storm, it's great having you here. Storm Miller: Alexa, thank you for having me on, man. I appreciate it. Oleksij Rak: Yeah, thanks a lot for joining. so for what I learned, Repams group is a full service franchise development firm and you're offering services from growth, building, branding, scaling, like emerging and existing franchises. And you work with a few different verticals. Your perfor portfolio includes fitness, home care, lifestyle industries, wellness and stuff. Stuff like that. So could you tell us more about what you do at wrapping groups? Storm Miller: Yeah, of course. so there are these organizations within the franchise industry that have kind of branded themselves franchise sales organizations, right? FSOs. Oleksij Rak: Yeah, I think it's also. Storm Miller: and I think one of the biggest misconceptions about the Repome group is that we're another FSO. We're not, but we have an FSO engine within the organization. We were the the first full service franchise development company to kind of enter the franchise industry. And there's four verticals that support our business and in turn support the franchise oars that we partner with. And those are brand them, grow them, which is actually the franchise sales engine, buildem, which is the real estate project management arm, and then scale them, which is an operationally focused division of the company. And when we Oleksij Rak: Yeah. Storm Miller: partner with brands, brands have access to all four of those verticals within our company. and many of the brands choose to utilize them. There are a Oleksij Rak: Yeah. Storm Miller: handful of concepts in the portfolio that have their own internal real estate teams. And in that case, they don't necessarily need the real estate project management arm of the business. but if you've caught on, that's actually what Repum began as. We were an outsourced construction arm for emerging franchise oars. That's what REPM stands for. And then we kind of evolved from there. what happened was some of the brands that we were managing outsourced construction for knew that one of our founders, Rob, had a background in franchise development. And they came to him and and one day said, Hey, y'all are doing a great job. working with the franchisees that we're bringing on to help them find their spaces, get their businesses built out so that we can actually launch them in markets. Could you help us with the franchise development side of the business? And Rob said, I could, but I can't do it myself, right? I would need to pilot this with a brand and I would need to bring somebody on board to help us with that. And and he did. And it went pretty well. And from there we kind of evolved into what you see today, which is more of a full service franchise consulting organization. We're currently partnered with 17 different brands within the Grom Division. we work with close to a dozen more of those outside of Grom on construction and and project management. So We went from a company of maybe a couple dozen employees to now nearly 70, working with 17 Oleksij Rak: Okay. Storm Miller: different franchisors. Oleksij Rak: That's a great story actually. So yeah, yeah, so it's not FS FSO. FSO is just part of the portfolio. scale services. And awesome. Do you own some of these franchises or is do you do it partner with existing franchises? How does it work for you? Storm Miller: We do not. We we do not own the franchise oars. That makes us a little bit different. there Oleksij Rak: Yeah. Storm Miller: are some kind of umbrella companies and portfolio companies that Oleksij Rak: Yeah. Storm Miller: actually own the brands that they represent. ours is a true partnership. and if the partnership is working well, and I can say this having launched four different brands over the last, you know, six going on seven years with the Repum group, these partnerships usually do go pretty well. The best compliment that we can get, especially when it comes from a candidate, is as they interface with different people for different things in their franchise exploration and discovery process, if they cannot tell who works for repum and who actually works for the brand, it's the best compliment that we can get. outside of myself, right, because I am wearing a polo that says the repum group, I do have people who support me and what I do and and in in turn support. our franchise partners as they work through their due diligence. But if you can't tell who's working for whom, that means it's working. But Oleksij Rak: Yeah. I see. you're working with French Aiz or not with French Az. French Az is like it's it's part of just part of the story, like build them. Well then you need to build them. Yeah, awesome. Storm Miller: Yeah. Yeah. So we we do. We work directly with the franchiseors and on our side of the business, we are that outsource franchise development arm. So we help the franchisors really identify who their buyer archetype is. There's Oleksij Rak: Yeah. Storm Miller: a lot of work that goes into taking a brand to market, but I think one of the most important things for franchisors to understand early on is what kind of skill sets and what kind of personalities. translate to franchisees success in the system. And then we help those franchisors go and find those individuals. People like myself, we take the candidates through the entire process from start to finish, right? From that very first introductory call into an FDD review. We talk about the marketing prowess of the brands, the operational support they can expect as a franchisee. Candidates then have an opportunity to validate that both with founding and leadership groups for the brand as well as franchisees who are already open and operating. And if it all makes sense, we get them together with the team in the same room and then we'll invite them to join the franchise family. Oleksij Rak: Yep. Awesome. we will get into that in to in more detail for sure. but how do you choose who who to work with? How do you to do you choose the right franchise to Yes. And which French Storm Miller: So Oleksij Rak: card is the right one? Storm Miller: that's a great question. and to be honest with you, we're pretty picky and choosy about who we dedicate time and resources to. and it's because Oleksij Rak: Yeah. Storm Miller: a lot of of brands, when we first start working with them, it is a heavy lift, right, to get them Oleksij Rak: Yeah. Storm Miller: to market. So we evaluate brands on a number of different criteria. first things first, it has to be in an industry that we like and an industry that we understand is consumers. Oleksij Rak: Okay. Storm Miller: Every single brand in the rep own portfolio, somebody at the company understands the value of the brand as a consumer. And if you can understand it as a consumer, it makes it a little bit easier for us to pitch it to somebody who wants to own a business in that vertical. So that's first and foremost. Two, there needs to be something truly differentiated about the brand. it whether it's a proprietary technology, a proprietary product. Whether it's a a different approach to how things have been done for the last couple of decades within some of these age-old industries, there needs to be a clear differentiation. And for us, typically it cannot be an individual, right? Because that individual is not going to run these businesses. It has to be something that the business is actually doing different from their competition. three, the unit economics have to make sense, right? We need to be able to look. at how corporate locations are performing. There needs to be proof of concept. There needs to be multiple businesses that are showing profitability and preferably a trend towards growth, both in revenue and profitability. So those are things that we backcheck as we do our own due diligence on franchise ours. And then finally, we're looking for really strong and dynamic leaders, right? For Oleksij Rak: Yeah. Storm Miller: anybody that's considering franchising their business. There is a paradigm shift that you have to go through because once you franchise the business, you're not just a small business owner anymore. Right? Corporate locations, sure, they're great. They're going to turn profit, they're going to help you support the franchise or business, but you have to start thinking like a franchise or you're inviting Oleksij Rak: Yeah. Yeah. Storm Miller: people to use your name, your image, your logo, and run a business in their market, and you have to support them in that growth. You have to be comfortable answering questions around things that you struggled with in your corporate locations, solutions that you came up with, how to implement them in your business. We're looking for franchise ours who are signing up to support people in their journeys to become business owners, and they're doing it with that particular franchise. That is something we really Oleksij Rak: Yeah. Yeah. Storm Miller: need to see. Oleksij Rak: I do you start working with emerging franchises who are not franchises yet, who are not Storm Miller: Yes. Oleksij Rak: like franchisors? How how how do you what what what's the profile of a leader to be able to to to to run a franchise business? Because like st starting a franchise like b to become a franchiser, you you start running two different businesses in parallel. So you have your existing Storm Miller: You do. Oleksij Rak: business and you start Like selling the system, you know, and supporting people who bought your system. How Storm Miller: Yeah. Oleksij Rak: what what's the profile of like ideal franchise or Storm Miller: So I think there's two different profiles that can work. And whichever Oleksij Rak: Yeah. Storm Miller: one the franchisor fits, there needs to be somebody on the staff who fits the other. Most franchisors are visionaries, right? Their dream or their business started as a vision. It started as a dream. And then they went out Oleksij Rak: Yeah. Storm Miller: there and figured out how to execute on it. But usually they had help executing, right? So you either need to be the visionary and have somebody who knows how to help you execute on the business, or you need to be Uber operations focused and then come to us to help you realize the vision of growing a franchise or business. I think either of those works, but there tends to be a yin and yang between two people behind a brand. You see that pretty consistently with almost every single franchise or that we have inside of the portfolio. I can speak to that with two brands in the portfolio that I work with very, very closely. You have that with Renew Meta Cabinet Restoration with Mike Pierce and Chris Gammel. You also have it with Liquoroof, which is a brand that we just launched earlier this summer. You have that with Carmelo and you have that with Patrick on the team. Oleksij Rak: Yeah. What did what does it take to launch a brand? So you start from those the initial phase with launching the brands. What does it take to launch what what what like most typical operational problems on the that are there? It it it's Storm Miller: so Oleksij Rak: even right, it's even before you find your first franchisees. You need to learn to launch Storm Miller: Yeah. Yeah. I I think it's figuring out who the fit is as a franchise partner and then figuring out target markets where you think the demographics would support a business like this. that's why a lot of brands come to us, right? We tend to know how to go about actually finding individuals who would have an interest in this brand. Typically we do that through the consulting networks. We have longstanding relationships with a number of different firms who do a really good job. Of taking the time to better understand our new concepts and then finding people that either they've already interacted with or people that they will interact with the future in in the future that would be a good fit for that brand. but we do that and a lot of brands come to us for that. So we help them define who they think will be a good fit as a franchise operator and then we go about helping them identify the channels to actually find these individuals once we get them into process we employ the the replum sales process which is consistent across all 17 brands in the growing portfolio and if all makes sense at the end of the day we'll begin the onboarding process right even from there it's one thing to actually sell a franchise it's another thing for the pieces to be in place to support that person if it is a brick and mortar brand in finding a site negotiating a lease getting their build out done within the confines of an item seven. That's exactly what the build them division specializes in. And then helping them launch, go to market, supporting them in their path towards profit. Oleksij Rak: Yeah, so so you go to to consultant networks to to kick start the business and then you do and then you do the sales process yourself later. Storm Miller: We do. We do. And then we'll also execute on organic searches ourselves, right? So that's part of what the branding and marketing division over at the Repum group does. we help to you know, kind of push the brand opportunity in front of specific profiles across some of the different digital and social media. networks and and we help find the individuals ourselves. We try not to put all of our eggs in one basket, right? So it's it's the reason that we don't work with just one particular franchise consulting network. We work with probably close to half a dozen. and then we conduct an organic search ourselves. And depending Oleksij Rak: Dodajesz. Storm Miller: on the business, sometimes the best organics are our consumers. of the business, right? So we've seen that a lot with Oleksij Rak: Yeah. Storm Miller: fitness. People who are coming in and and experiencing, you know, fitness and lifestyle changes and they tend to have a a long term impact from it. They say, hey, not only am I the consumer here, I would love to open one of these myself. And then it's just a matter of finding the right territory for that individual. We see things like that that happen all the time. Oleksij Rak: Do you also utilize some some marketing channels? for instance, in inbound outreach channels. And if s and well how how do you usually get franchisees for for the franchise? Storm Miller: Yeah. Yeah. So it's it's through the consulting networks and it's through that that organic search across the social media channels. We do have a team in-house that just focuses on organics. We have another team that just focuses on referrals from the consulting networks. and each brand director and VP, they tend to have a set person that they work with in the long run. So for me it's it's the same sales support individuals. that support me on both of my brands and it's people I've been working with now for the better part of, you know, five, six years. I've been with the company Oleksij Rak: Yeah. Storm Miller: going on seven. So they they've been here almost as long as I have. Oleksij Rak: Yeah, I s I thought maybe if you're running some ads, so like like you I would reach email campaigns. Okay. Storm Miller: Yeah. Yeah, there's there's outreach there, right? And and we have kind of a consistent process that we file our or follow to get an a certain number of touch points before we know we're gonna get that individual on the phone. They also get entered into campaigns that that just gradually share information about the brand, the leadership. the actual opportunity, things that are going to entice them to get on the phone, but then we have to go through a certain pre-qualification process, right? Like we Oleksij Rak: Yeah. Storm Miller: need to we need to make sure that, hey, this individual who clearly is interested in in potentially owning and running this business, they also meet the financial prerequisites to get funding, you know, on the the opportunity to actually launch. Oleksij Rak: What else is there in qualification of a franchisee? In qualification. Storm Miller: territory, right? First and foremost, people are are buying into franchise oars for some level of of territory protection. So we need to make sure that hey, we can put this in your region and frankly the demographics of your region we feel would comfortably support. a business offering service X, Y, or Z. I would say that's a big thing. the other thing that we check on is like, hey, what is your professional background? And if you're going to own this business, do you have a plan on how you're going to run it? I think oftentimes, you know, people have these almost pie in the sky dreams of of being able to maintain full-time corporate America employment. Right. And we're talking jobs that sometimes command 50, 60 hours of your week and then still Oleksij Rak: Yeah. Storm Miller: being able to run a business on the side without having any experience of having done it before. Right? You're signing up for a very difficult job. So we want to make sure as we begin the discovery process, and we don't need every single detail completely Oleksij Rak: Mm-hmm. Storm Miller: ironed out up front to have that initial conversation. But we want to plant the seed of, hey, if this is a business that you're going to purchase, you've got to have a plan in place for either how you're going to run it or how somebody else is going to run it. and we make that clear from the jump. Oleksij Rak: Yeah, yeah. What else is there in some demographics but psychographics, whatever in in qualification process. Does it matter if you Storm Miller: Yeah, demographic Oleksij Rak: s if you are twenty five or fifty five? Storm Miller: Yeah, I I think it matters, right? Like we we need to make sure that like for example, one of the things that we check on before we launch a brand is do our competitors operate in the region? Right. We don't view competition as a bad thing. If somebody else from the vertical is already open and operating in a region, it means that there's demand. For the service of the product that is being provided by the competitor. Means there's going to be a demand for our product or our service or our business. so it's just one of those things where we'll utilize some, you know, pretty sophisticated territory mapping software. we'll check the demographics, we'll check the psychographics, we'll check median age, you know, we'll we'll check for competitors. You know, there are brands that we consider to be amplifiers to certain businesses. Oleksij Rak: Yeah. Storm Miller: We check to make sure that amplifiers are there, you know, especially if it's more of a luxury concept. Oleksij Rak: Mm-hmm. Storm Miller: We want to make sure that, hey, other luxury concepts are being supported and and that gives us it's not a definitive answer, but it gives us a pretty good idea that hey, the market can support this. Oleksij Rak: Awesome. when it comes down to an ICP profile of of a franchisee, especially since you run in a couple a couple of different verticals, what what what's the best ICP or ICPs for for a French AZ and does it do the revolution really different differ between different segments. Storm Miller: Yeah. I I think depending on the brand, yeah, you're Oleksij Rak: Yeah. Storm Miller: gonna have very different buyer archetypes. Right. And Oleksij Rak: Yeah. Storm Miller: I'll speak to a couple of brands that are within the pod of concepts that I work most closely with. I have a couple of service brands that I run with right now. and the buyer archetype is somewhat similar for both of the brands. It's really a a white-collar professional that operates in a blue-collar industry or Has lived around and/or managed blue-collar labor. That's what we're looking for with Renew Medic. It's the same type of buyer archetype that we're looking for for Liquor Roof. That's what we think will translate to success. Part of the reason we feel that way is because we've seen people with those backgrounds, people with that experience set. It's it has translated to success for them as franchisees within the system, right? and when we went to market specifically with Renew Medic, I didn't know how wide that buyer profile was. I said, hey, I think this is what fits. And then I'm gonna lean on the consultants that we work with to help me find people who kind of match this archetype. And what we found was there was a pretty wide range of individuals who could fit that. Right. And then it really came down to, you know, skill sets. Do you do you have some level of experience in woodworking? Do you is it a hobby for you? I have people within the rune renew medic system who had no background in disaster restoration or cabinet restoration, but they were woodworking hobbyists and they had built their Oleksij Rak: Yeah. Storm Miller: own woodworking shops on their property. Perfect. If this is if this is fun for you. If this is something you actually enjoy doing, if it's something that you would enjoy overseeing, yeah, this isn't gonna feel like a job. It's gonna feel like a business that you're gonna be pretty fortunate to run. Oleksij Rak: Is there a risk that is there a risk that you go? Is there risk that you can ru ruin somebody's hobby? Because Storm Miller: Yeah, right. Oleksij Rak: all of the some s all of a sudden it's not a hobby, it's a full time job and you need to manage other Storm Miller: Exactly. Oleksij Rak: people. Storm Miller: That's the last thing that we want to do. We don't want to sell somebody a full-time job, right? We want to sell Oleksij Rak: Yeah, yeah. Storm Miller: them something that they're going to be passionate about. But that's the buyer archetype for the businesses that I represent. We also have a concept in our pod that's in the senior care space. Most Oleksij Rak: Mm-hmm. Storm Miller: franchisees who are entering into senior care, it's because they've had a personal experience with you know, a a family member who needed care. And they either were very frustrated trying to find sufficient care for an ailing relative. Usually it's somebody who's pretty close to the nuclear family, if not a part of the nuclear family, or they had a great experience. Oleksij Rak: Yeah. Storm Miller: They want to bring that to market. They want to offer that to others. it's usually one or the other. but that is also a business where, hey, You need to be a full-time owner operator. That is not something you can ramp up on the side while working, you know, a nine to five that's going to command 50 hours of your work week every single week. You need to be out there developing relationships in the community that are going to lead to referrals. that's not something you can do as a side hustle. But two very different buyer archetypes for two very different brands. Oleksij Rak: Yeah. But still it sounds more about having a hobby and being passionate about it rather than being like white-collar man colour collar managing blue colours, you know. Because in fitness it's also can come can come down to the bioarchety being white collar who in the past had experience of managing people. But you know, it comes down to fitness and to your hobby. If fitness is a hobby probably can you can easily run it. If it's not, you know, you just don't don't understand it. Storm Miller: Yeah. And it's gotta be a cultural fit, right? It's part of the reason that that we have, you know, pretty you know, long-term and and and pretty regulated but process-driven discovery of the brands. This is a mutual evaluation from start to finish, right? And and when we first set calls with candidates looking at one of the brands, we walk them through. Our process of getting their questions answered in a in a pretty chronological fashion. But we also know that if you're going to struggle as a candidate to complete three separate calls that typically run about an hour or more, and then enter into a process of speaking with brand founders, speaking with other franchisees, and hearing what they have to say about actually running the day-to-day of this business. If you can't follow that simple process, you're going to struggle to follow a two to three hundred-page operating manual that you're going to be handed once you sign a franchise agreement. Right. So the process by design is really there to filter who we think has the time and who has the resources that they can dedicate towards getting one of these businesses off the ground and growing it successfully. it's something we learned as an organization. over the last six, seven years. Early on in my tenure at the Repoom group, I used to take calls, introductory calls, super late in the evening. I was willing to talk to any and everybody, right? And what I realized was people who could only talk to me at seven, eight o'clock at night were never going to complete our discovery process. All of our validation calls, they're done during normal business hours. All calls with the leadership team, they're done during normal business hours. And those same candidates who were requesting me late at night started requesting calls of leadership and calls of franchisees when they're trying to spend time with their families super late at night or over the weekend. And we realized this person doesn't have the autonomy over their own day, the autonomy over their own time to also run a business. Right. So So now it's it's a it's a pretty stiff process. It's a simple process, but it's a stiff one. Oleksij Rak: How does this process look like? How how many of the candidates you get, how many of them become franchisees in the end? Like how how does what Storm Miller: different different conversions for different brands, right? Some brands cast a super wide net, other brands not so much, right? I see a little bit of of that with the two brands that I represent. And it's because the investment levels are very, very different, right? Oleksij Rak: Yeah. Storm Miller: If you're gonna be purchasing a liquor roof, the all-in investment for that in our item seven shows it's it's likely to be about a quarter of a million dollars, maybe a little bit less. My other brand, a little bit more expensive because you need to build a 10,000 square foot woodworking shop with CNC machines and edge banders. You're gonna need some working capital. you know, it's it's equipment intensive and and the initial investment on that is, you know, closer to seven figures than it is to the mid six figures. Right. So with with buyer archetypes that are a little bit slimmer on the other brand, our conversion's a little bit higher. Whereas with lower cost investment, you can cast a little bit of a wider net. And then again, it's our job to bring the most qualified and frankly the best cultural fits through the discovery process to brand founders where ultimately they'll make the decision as to whether or not they want to bring them to a discovery day. It's their approval that we're seeking. But sometimes we have to cut that down a little bit just to make sure we're bringing out people that are the right fit for the brand. Oleksij Rak: Yeah, but still like when you get through the initial net, like through through the top of the funnel, how how it usually converts with with similar rates. How many of them get through the first call? How many of them get to the second one? how many of them get to the Storm Miller: So what what we've noticed is there is a consistency across all the brands with where candidates drop out, right? And usually Oleksij Rak: Yeah, yeah. Storm Miller: it's it's after it's after one of two different places in the funnel. So candidates are most likely to drop out after either one, the introductory call, right? Because we share Oleksij Rak: Yeah. Storm Miller: a ton of information in that very first call about the the inception of the brand, the differentiators. The leadership team behind it, the initial investment. Typically there are financial performance representations if there's an item 19 in the FDD. So we talk about performance. And usually after that first call, it either heightens somebody excitement or it eliminates the brand altogether. And I'm comfortable either way. Like my job at the end of the day is to help candidates be able to get to a decision. And that decision is either, yes, this is right for me, or no, this is wrong for me. I'd rather know on the first call. Then the third, the fourth, the fifth, the sixth. Right. So it either happens after the introductory call, or as a franchise developer, I will take them through an introductory call. I'll take them through a franchise disclosure document review. And there's a little bit more of an emphasis on the financially focused sections when I do that review. Then I take them through a marketing and operations webinar. Right. So, hey, this is what you're gonna get in support of marketing in the business. This is how we're gonna set you up for operational success. Beyond those three calls, all of that information is going to be effectively spoon-fed to a candidate. And then they're going have to validate that with leadership teams, and then they're going to speak with franchisees. I can't do those things for the candidate. Right. So usually they're going to fall out either after the intro because what I've presented doesn't make any sense for the candidate whatsoever. Or After they've absorbed a a bunch of information in discovery, if you ask them to go get some of this information for their sell and we make this easy, right? We have weekly leadership calls with brand founders, we have weekly validation calls with franchisees. If it's one of my brands, we record the validation calls. All the validation calls get uploaded to a database. the candidates can review it if they cannot make the call on on that particular day or at that particular time. But I can't do those things for the candidate. They have to do it themselves. Sometimes they drop out there. Pretty rarely do we fly a candidate to meet with brand founders at a discovery day. And then they get the feeling that, hey, this isn't the right fit for them. And it's because up until that point, you should have received pretty much all the information that we can legally share about the opportunity. And then the discovery days are designed to just drive that information. Right, maybe take the level of understanding on that information to a slightly deeper level. But there's no new surprises once somebody gets to a discovery. Oleksij Rak: But you got to mean the leadership team. You might it might maybe not a fit, you know, for you. No, not the business, but but the team itself. Yeah. with regards to brokers versus FSource versus like franchise sales team or lead generation, whatever, versus buying leads from online platforms like franchise gate or whatever. What works for and which phases? What what's your point? Because probably you've you you used all of that, e even though your company is providing these FS FSO services. Probably you used all of them. Yeah. Storm Miller: Yeah. Yeah. We we do, right? We we kind of spread spread the eggs around in in different baskets. I think for us, and this may depend on the developer. for us, we've had a ton of success in the consulting networks. It is it is also funny to me where, you know, having launched four different brands. in very different spaces, right? I've I've represented brands that were full service, anti-aging medical spas. I've done food service in the dessert category, right? So ice cream and chocolate. now I'm in the cabinet restoration space and the roofing industry. Very different businesses, very different industries. But even Oleksij Rak: Yeah. Storm Miller: within the consulting networks, there are certain consultants who, based on their own experience, tend to prefer working with candidates that are looking at home service versus brick and mortar brands. Right? There are some that that prefer to stick to health, wellness, and fitness. Oleksij Rak: Mm-hmm. Storm Miller: And we work with those. consultants and and we kind of help narrow down our search on like, hey, this is who we think is going to be a right fit for this. If there's somebody in the database, if there's somebody you've had a conversation with already looking for a new opportunity, we would love to have a conversation with them. Or in the future, if you come across somebody with this resume, with this background, we think they would be a good fit for this brand. Oleksij Rak: In the future, if you're powering somebody with this resume, with this background, we think they can be a good thing. Storm Miller: Working with the consulting networks really helps to do that, right? Outside of that, if you're going through social media channels, if you're going through the the franchise gators, the biz buy-sell leads of the world, you're kind of casting a wide net. And then you kind of shrink it down from there. But a lot of those individuals we tend to eliminate on the first call, either because of financial prequalifications or they're they're just not ready to take that step as a business owner. Oleksij Rak: I th it it feels for me that of all of these sources in the end they cost a bit kind of similar for a franchise or Storm Miller: Little bit. Oleksij Rak: yeah per franchisee. because it should be balance somehow. So if something is too expensive, you know. Yeah. Storm Miller: Yeah, if if you're looking for a franchise, yeah, you've probably filled out information, requested you know, more info on an opportunity on a biz buy sell or a franchise gator. and if Oleksij Rak: Yeah. Storm Miller: that happens, you may have then received information from a consultant, right, who represents 200, 300, 400 franchisors in their inventory. They're willing to help you kind of narrow down the search and help you find the right fit. No cost to the buyer. That is absolutely the case. and then sometimes you fill out information and it tends to come directly from the brand. So you might end up on the phone with a qualifier from the Repum group who's gonna ask you a couple of quick questions, put you on the phone with the director, and then you can enter the process from there. but yeah, there's there's a little bit of crossover between all the different avenues of of lead generation. Oleksij Rak: How much how much do you think it costs a franchisor to like the end cost of franchisia of a new franchisia? If you could share such information? Because you quite likely Storm Miller: So to be honest with you, I haven't run the numbers on it in quite some time, right? Like what is the actual cost to generate a qualified lead that you bring through the process all the way through to the signing of a franchise agreement? Again, it it probably depends on conversion rate. Oleksij Rak: It's it's rather cost per acquisition. So for Franchis French Azor, he is selling the system and like cost per sale. Storm Miller: Yeah, I I I don't I don't have the exact figure in front of me, but I mean it's it's probably substantial, especially early on, right? When you are casting a wider net. and then as you start to to really narrow down on on your profile, you get more efficient. Oleksij Rak: It yeah it Yeah, it depends which way you go. Do you either work with with consultant net networks and they get twenty three thirty K or but still you need to have your own sales team to to qualify for the the the franchisees so there there is certain cost per deal. But okay. So Storm Miller: Yeah. It's a it's a good qu it's a good question. for us it Oleksij Rak: I think it's like the the the numbers should balance based on on that on that end number because Franchizor is looking into okay, I'm selling my my system and like the system costs X and I'm I'm ready to spend a certain fraction of it for per sale. And Storm Miller: Well, and and that's the other side of of the business, right? And I had this conversation with a candidate just last week, right? They talked about franchising a business and how profitable that can be for a franchisor. And I said, Well, depends on what you mean. And I said, Are you talking about in a year? Are we talking about in two years? Are we talking about in three years? And he goes, Well, what do you mean? And I said, I know every franchise or collects franchise fees up front, and that defines a territory that is going to be protected for a franchisee entering the system. But the money collected in franchise fees, more often than not, is turned right around and invested right back into getting that franchisee open, operating, and bonded, right? Oleksij Rak: Yeah. Storm Miller: Franchise ORs really don't make a ton of money or a ton of profit until they have enough franchisees who have opened, launched, launched successfully, and are growing businesses and then paying a royalty to the franchise or. Oleksij Rak: Yeah. Storm Miller: But it's not something that happens in 365 days. It takes years, usually for a franchise or to reach royalty sufficiency. And some brands see the trajectory of of when it's going to happen and either choose to take on a capital partner to help accelerate how quickly they can get there. Some brands will slug it out, right? And they'll bootstrap it until they get to royalty sufficiency. And then they say, okay, now we're running a profitable franchise or let's go out and do some pretty special things. And I've seen brands take on Capital Partners after the fact. Oleksij Rak: Yeah, but that's a lot of push to to to to have a substantial number of franchisees who who become successful. But that's the only point when as a franchise or you can you can start making really money. Yeah. Awesome. with regards to modern trends, AI, like how how does it work? I I've seen there are like a couple of resources online that that can help you and just read FDDs, answer questions about FDDs, compare them and so on and so forth. But does your company do something and what what what c what kind of trends do you see in terms of AI? Because AI is everywhere nowadays, Storm Miller: Yeah, so we we've said Oleksij Rak: you know. Storm Miller: it is, it's everywhere. so I've I've had franchisees who have run analyses on our brands, whether it be the positioning of the brand within its own particular vertical, right? So looking at competition, looking at amplifier businesses, I've seen brands or or candidates that have taken our franchise agreements and our FDDs and run it through an analysis in Grok or Chad or or or Claude. When I've seen that done, I've seen a lot of mistakes that are made in those analyses, which is kind of funny, right? I think we'll see less and less of them as more and more people enter franchise information into those those databases and into those frames. but it's funny how all of a sudden I'll see something in an analysis and I'll say, Hey, I'm gonna have to take you back to the language in the FDD to show you what the FDD says and then what This says because they're two different things. I think where AI can be helpful is definitely taking a business model and then actually modeling it from a financial perspective. We see a lot more people utilizing some AI technologies to better understand cash flows in a business, right? Especially if you can tweak some variables here and there. I've seen people do that successfully. at the end of the day, you want to be confident that what you're what you're seeing translates. So that's why validation and speaking with franchise partners within the system is still going to play a a key role in due diligence. And also I think it forces developers like myself to continue to to hone and sharpen our skills. Right. We have to be ready to work with candidates in an ever-changing technological environment. and it changes rapidly. But that's what we sign up for. Oleksij Rak: Yeah, Storm Miller: Right. And and we utilize it on our end as well. but yeah, I've I've I've seen some I've seen some insertions of of AI in franchising. I think it's only gonna become more and more common. Oleksij Rak: It will, it will. It's it's everywhere nowadays. It's penetrating every industry with with different velocity, but it does. What what kind of mistakes have you have you seen that A systems produce? Of course. Storm Miller: Mostly in numbers, right? Like I've I've had I I had a an AI analysis that said, and this was for a franchise or that actually referred business directly into the franchise branches, that every lead we sent in resulted in a ten thousand dollar lead fee payable to the franchise or that lead fee would have Would have been larger than the average ticket, right? The average job size. And they said, How can you run a profitable business if you're paying $10,000 for every lead that comes to us? And I had to go back, and what I realized was it had pulled a lead fee out of the item six for whether or not the franchise or was connecting that franchisee with a potential buyer. of the business. They were referring a lead, but it's for somebody to buy the business, not a lead that the business would then go out, provide an estimate, execute, and actually generate revenue from. So it was two different things, right? It just came down to a fundamental misunderstanding of, hey, this is how we approach driving leads into franchise businesses. But if you're going to sell your territory, that's an entirely different process and we're talking about the word lead in an entirely different way. So I had to correct that, right? Like it was just an example off the top of my head. I've seen a little bit of that, but that again, I I think that's why the human component is still gonna be important, right? You still need some context around what it is you're actually reading in the document. Oleksij Rak: Yeah, yeah, for sure. And actually I've I've spoken with a couple of different industries, not franchise one, but travel and e-commerce. And yeah, it it always comes down that humans should be in the loop at certain certain point because like people tend to to to want to chat with people. Yeah. Storm Miller: A hundred percent. One hundred percent. And and I think the acceleration of AI is going to be much like the acceleration of other technologies we've seen and and how they've impacted the workspace. It's the people who understand how to harness the tool that will ultimately succeed Oleksij Rak: Yeah. Storm Miller: in the wrong run in the long run. I Oleksij Rak: Yeah. Storm Miller: AI's not going anywhere, right? I I think it's here to stay. Oleksij Rak: Yeah. Storm Miller: But it is a tool and it's designed to make our lives easier. So if we can find those instances where AI can do something for us very quickly, very efficiently, and very accurately, yeah, why would Oleksij Rak: Yeah. Storm Miller: we not employ that? But it's the people who will harness that tool. That will end up having the long-term success in this game. They said the same thing about email when email was introduced: that physical mail was going to go away altogether. It hasn't. As a matter of fact, I think we kind of go through cycles on that now. I get bombarded with marketing emails from retailers and clubs. all day long. If you put something in my mailbox, I think there's a certain level of importance to it. I'm actually gonna read what's in my mailbox. Right? So you Oleksij Rak: Exactly. Storm Miller: kind of see these cycles. I think you're gonna see the same thing with AI. Oleksij Rak: Just like with short mathematics, yes, people still read SMS and one of the marketing channels because people do read SMS. What what would it what what would it be? Storm Miller: For the franchise industry. Oof. Oleksij Rak: Yeah. I'm I'm running a software company, I'm I'm just curious. Storm Miller: It's it's a good qu I I could go so many different directions with it, right? Oleksij Rak: Yeah. That would help now also. Yeah. Storm Miller: only because every brand is a little bit different and there's going to be different uses for AI depending on what your brand is doing, who you're looking for, what you do well versus what you don't do well. I think for me, as a sales guy, if I could utilize AI to consistently follow up with candidates that I've had initial conversations with, to get them back on the calendar, that is something that would make my day a heck of a lot easier. that would be a there'd be a huge use for that in the franchise sales organization space and and for any franchise developer. that's one thought that that absolutely comes to mind for me. Right. And I know there's Oleksij Rak: Kind of Storm Miller: AI bots that probably can do it. Oleksij Rak: Yeah. Storm Miller: but employing something like that would probably would change our business for the better. Right. It would allow us to run cleaner pipelines. It would allow us to project out revenue and closings much, much more efficiently. There's probably a very clear use for that already in our business. Oleksij Rak: Yeah, yeah, it's like some kind of nurturing and and following for following up on like FDDs or whatever. Yeah, yeah, it makes sense. It makes sense. Awesome. how how do you think the franchise industry will look like in in a couple of years? Especially with AI, with private equity getting into the industry, with corporate refugees and displaced workers nowadays with AI. Storm Miller: Yeah. Oleksij Rak: Also lean into the industry. How do you think the industry will look like? Storm Miller: So I I think we're we're already seeing the impact of the acceleration of AI just in broadening the candidate pool that we work with. for example, one of the brands that that I represent, Renew Medic, I wish I had come up with this description of the brand. And it wasn't me, it was a candidate who kind of coined it. They said, hey, I'm I'm looking into AI insulated brands. Right, which are brands Oleksij Rak: Mm-hmm. Storm Miller: that require a human being to provide a service. And we do that. The most ironic thing about that statement is one of the technologies in our shops actually utilizes AI when we're custom cutting pieces of cabinetry that our cabinet carpenter puts back together. Right. And it's mosaic. That's the software platform that runs our CNC machine. So again, it's about how do we harness AI to run a business more efficiently. I do think you will see more and more people lean in. To service-driven concepts over time because of the acceleration of AI. But I think AI acceleration is also going to be good for brands that are entering the franchise space. It's going to allow them to more clearly differentiate themselves, whether or not they're utilizing that technology the right way. It's going to be clear for a lot of consumers early on. Hey, is this thing truly differentiated? Or hey, are they utilizing all of the tools at their disposal in the right way to make life easier for the franchisees. And if they are, they're gonna see a ton of interest. Oleksij Rak: Yeah. Awesome. Awesome. Storm. That was a great discussion. And yeah. Thanks a lot for this conversation. Before we wrap it up, is there anything anything else you would like to add? Storm Miller: no, Alexei, I I do truly appreciate appreciate you having us on. I know you had a an episode on the podcast last season that kind of sparked the interest in franchising in the first place. I have worked with a number of different individuals who are now franchisees in brands that I represent, brands that Repum represents, who came out of tech, who came out of software. I think there's an application for people who are coming out of that space. I have a guy, for example, who used to run a robotics division for Amazon, Oleksij Rak: Yeah. Storm Miller: whose job he knew was going to eventually be replaced by AI. he walked away from it because he didn't want to see the end of the runway. He wanted to make the leap before he reached the end of the runway. Oleksij Rak: Yeah. Yeah. Storm Miller: and what I would tell you is for anybody who does listen to this and and thinks that, hey, I might have a skill set that translates into franchise ownership. franchise operation. We're always happy to have the initial conversation with you. Part of our development as a company is building, to the point that you made earlier, a pretty diversified portfolio of brands so that no matter what candidate we speak to, There might be a fit both from a cost perspective, a skill set perspective, a lifestyle perspective within the Replum group portfolio. And if this inspires you to have an initial conversation with us, we're happy to have that at any time. Oleksij Rak: Awesome. Awesome. Thanks a lot, Storm, and best of luck for you, Antiel and Trap and Group. Storm Miller: Likewise, Alexei, thank you.