Latest / Big Talk About Small Business / Ep. 124 - Cash Flow Runs Franchises with Nolen Hughes

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Ep. 124 - Cash Flow Runs Franchises with Nolen Hughes · Big Talk About Small Business

• 0:00
  SPEAKER_01: Most people cannot float$40,000,$50,000 until they get their first paycheck.
• 0:08
  SPEAKER_01: It just doesn't work.
• 0:09
  SPEAKER_01: And so we kind of operate as the bank.
• 0:13
  SPEAKER_01: So we're typically paying the providers, we're paying, we're paying every Jam Pro franchisee net 30, regardless of the client's payment terms.
• 0:27
  SPEAKER_03: This is another episode of Big Talk About Small Business.
• 0:36
  SPEAKER_01: You want me to do that with you?
• 0:39
  SPEAKER_03: Yeah, let's do it.
• 0:40
  SPEAKER_03: Come, let's do it together, Nolan.
• 0:42
  SPEAKER_03: Come on.
• 0:42
  SPEAKER_03: Okay.
• 0:43
  SPEAKER_03: This is another episode of Big Talk about small business.
• 0:51
  SPEAKER_03: Business.
• 0:54
  SPEAKER_03: All right.
• 0:55
  SPEAKER_03: We got that out of the way.
• 0:57
  SPEAKER_03: Um without Eric here, it's just never quite the same, but I appreciate your help.
• 1:02
  SPEAKER_03: Oh, yeah.
• 1:03
  SPEAKER_03: So tell us about yourself.
• 1:06
  SPEAKER_01: Yeah.
• 1:06
  SPEAKER_01: So, you know, my name's Nolan.
• 1:09
  SPEAKER_01: Uh Hughes.
• 1:11
  SPEAKER_01: I am the president of Jam Pro of Arkansas and the Ozarks.
• 1:18
  SPEAKER_01: Uh, so we're kind of um a regional developer headquartered here in Little Rock, but then we have support offices in Rogers, Arkansas, Jonesboro, Arkansas, and Springfield, Missouri.
• 1:32
  SPEAKER_01: So we kind of oversee the territory.
• 1:36
  SPEAKER_01: Uh and I've been doing this since the end of 2018.
• 1:40
  SPEAKER_01: So a little over seven years now.
• 1:42
  SPEAKER_01: Um previously was the owner of Jam, uh, not Jam Pro, of uh College Hunks, hauling junk and moving.
• 1:50
  SPEAKER_01: Uh so that was a fun little business back when I actually was a college hunk.
• 1:55
  SPEAKER_01: Uh so started that business at 22.
• 2:00
  SPEAKER_03: I've never been a hunk.
• 2:02
  SPEAKER_01: Well, they did a they did a good rebrand.
• 2:05
  SPEAKER_01: So everyone kept asking them, you know, so are all the guys really hunks?
• 2:11
  SPEAKER_01: And so the founders built out an acronym where HUNC stood for Honest, Uniformed, Nice, Knowledgeable Service.
• 2:21
  SPEAKER_01: So you could always get away with yes, we are all hunks.
• 2:26
  SPEAKER_01: This is what this is the value that we provide to the marketplace.
• 2:29
  SPEAKER_01: So was that a franchise that you had?
• 2:33
  SPEAKER_01: It was.
• 2:33
  SPEAKER_01: Yeah.
• 2:34
  SPEAKER_01: So it was headquartered or it still is headquartered out of Tampa, Florida.
• 2:38
  SPEAKER_01: And we were franchise number 16 uh in the country.
• 2:44
  SPEAKER_01: They now have over 200, uh, if that tells you anything.
• 2:48
  SPEAKER_01: They're one of the fastest growing franchisers, like 10 years in a row.
• 2:52
  SPEAKER_01: Yeah.
• 2:53
  SPEAKER_01: So how did you get into that?
• 2:56
  SPEAKER_01: Well, uh, so I was actually still in college at the time.
• 3:01
  SPEAKER_01: So I was University of Central Arkansas, uh, business grad.
• 3:05
  SPEAKER_01: And at the time, HP, Hewlett Packard was probably one of the biggest employers at the time.
• 3:13
  SPEAKER_01: So this is like 2009.
• 3:15
  SPEAKER_01: Um a lot of my friends and fraternity brothers were basically looking at going into the corporate world, right?
• 3:24
  SPEAKER_01: So HP was kind of a good launch pad for most of those guys.
• 3:27
  SPEAKER_01: And um my, you know, me and my dad have, you know, my dad has owned several businesses, and he stumbled across this article and about junk removal franchising.
• 3:40
  SPEAKER_01: And believe it or not, it's kind of mainstream now.
• 3:43
  SPEAKER_01: People throw stuff away all the time.
• 3:46
  SPEAKER_01: Storage units are like the biggest business in America right now.
• 3:51
  SPEAKER_01: And so, but back in 2009, junk removal wasn't even the category, right?
• 3:59
  SPEAKER_01: So, like if the concept of paying somebody to throw your stuff away, especially in Arkansas, right?
• 4:06
  SPEAKER_01: Where everyone has a truck, a trailer, uh, you know, that kind of stuff, it was it was very new.
• 4:13
  SPEAKER_01: And so we were actually the first junk removal business uh in central Arkansas.
• 4:21
  SPEAKER_01: Uh, and it was kind of a tough learning curve for people to kind of grasp, you know, the concept of paying a company to throw your stuff away, right?
• 4:29
  SPEAKER_01: So, but yeah, so we just got into it.
• 4:32
  SPEAKER_01: Um, kind of an early uh adopter kind of wanted to be the first mover in the market, uh, did that for nine years, scaled it to basically nine trucks.
• 4:43
  SPEAKER_01: We basically added a truck every year for nine years.
• 4:48
  SPEAKER_01: Uh, and then we sold that in 2018.
• 4:52
  SPEAKER_01: Yeah.
• 4:53
  SPEAKER_03: That's funny, you know, you say about Arkansas, especially here.
• 4:57
  SPEAKER_03: When I first bought a house here in 04, I was redoing it and I was building a I built a guest house with a two-car garage in it.
• 5:07
  SPEAKER_03: And I built an art studio with a two-car garage.
• 5:10
  SPEAKER_03: It's part of our renovation.
• 5:12
  SPEAKER_03: And the the guest house was I pushed it over as far as I could on the property line.
• 5:18
  SPEAKER_03: And this friend of mine, who was an architect, was designing this for me.
• 5:23
  SPEAKER_03: And he goes, you know, he goes, uh, I was like five feet off the line.
• 5:27
  SPEAKER_03: He goes, I think you should move that 10 feet off the line.
• 5:30
  SPEAKER_03: And I'm like, what do I want to do that for, Garth?
• 5:32
  SPEAKER_03: He says, he goes, Well, you got to have a place to put your junk.
• 5:36
  SPEAKER_03: I go, what do you mean?
• 5:38
  SPEAKER_03: He goes, I I he goes, you're moving to Arkansas, you're gonna have junk, and you need to put it alongside your garage.
• 5:45
  SPEAKER_03: That's it.
• 5:46
  SPEAKER_03: That's it.
• 5:47
  SPEAKER_03: I'll never forget that.
• 5:50
  SPEAKER_03: So anyway, so you did that, you did that out of school and you sold that that business.
• 5:56
  SPEAKER_03: And then now your current business there at Jan Pro, that is a franchise as well.
• 6:01
  SPEAKER_01: Yes.
• 6:02
  SPEAKER_01: So it's uh it's a it's a regional developer uh franchise.
• 6:07
  SPEAKER_01: So it's kind of a unique model.
• 6:10
  SPEAKER_01: Um there's there's some businesses that do it, like uh, I think Tropical Smoothie, maybe some Slims chickens, but basically we have uh the territory rights for the state of Arkansas and southern Missouri.
• 6:25
  SPEAKER_01: So what that means is like we can actually sell franchise packages to small business owners throughout the state.
• 6:34
  SPEAKER_01: So think about a tropical smoothie.
• 6:36
  SPEAKER_01: Someone buys the rights to develop our Slims chickens, the rights to develop all of Northwest Arkansas.
• 6:42
  SPEAKER_01: So you have one ownership group, but say they have like 15, 20 locations all under one brand.
• 6:50
  SPEAKER_01: And so that's kind of how we operate.
• 6:53
  SPEAKER_01: So one of the benefits of that is uh, because again, we're we're headquartered in Little Rock, and then, but we service brands all throughout the state in southern Missouri.
• 7:04
  SPEAKER_01: So if you're Arvest Bank or McClarty Auto Group, uh it allows that model allows us to scale, just like any other franchise, right?
• 7:14
  SPEAKER_01: Uh it allows us to scale and partner with companies that have facilities throughout the state.
• 7:20
  SPEAKER_01: And then we assign those contracts to franchisees that buy into the Jampro model, whether they're in Rogers, Jonesboro, Russellville, Fort Smith, uh, whatever it is, we have the Jampro kind of provider network uh that can service really any facility uh throughout Arkansas and Missouri.
• 7:43
  SPEAKER_03: So that makes you sort of like a super franchise, I guess, in a way, super franchisee.
• 7:48
  SPEAKER_03: I guess in a way.
• 7:49
  SPEAKER_01: So um it's easier for the client.
• 7:54
  SPEAKER_01: Um so you know, podcast videos actually is a client, but if you guys were ever to open up more studios, uh, you have an accounts payable department, right?
• 8:06
  SPEAKER_01: So every every company has an accounts payable department.
• 8:10
  SPEAKER_01: And when you partner with someone like Jampro, we can service all of your facilities.
• 8:18
  SPEAKER_01: It makes it a lot easier for those clients to write one check instead of paying 50 janitorial companies throughout the region.
• 8:28
  SPEAKER_01: They can just partner with one.
• 8:30
  SPEAKER_01: So that's kind of the value that we provide to clients is really a consolidated model for customer service, uh, supply.
• 8:39
  SPEAKER_01: So we have a uniform chemical process, microfiber towels, uh, uniforms, billing and collections, W9, COIs, all that kind of stuff.
• 8:49
  SPEAKER_01: So we really just make it easier to do business with us, is really what it boils down to.
• 8:53
  SPEAKER_01: So, how many employees do you have now?
• 8:56
  SPEAKER_01: So we have 15 employees on our payroll.
• 9:00
  SPEAKER_01: Uh, everyone else is uh franchisees.
• 9:04
  SPEAKER_01: They're subs.
• 9:05
  SPEAKER_01: Yes.
• 9:06
  SPEAKER_01: So they're all subcontractors operating under the brand.
• 9:09
  SPEAKER_01: We have about 180 uh franchise partners throughout Arkansas and Missouri.
• 9:17
  SPEAKER_03: So let me ask you this.
• 9:19
  SPEAKER_03: So somebody, let's say they have their own little janitorial company, it's Mark's Janitorial Services here in Fayetteville or whatever.
• 9:26
  SPEAKER_03: Yeah.
• 9:27
  SPEAKER_03: Um, could I be providing services through Janpro, even though I still have my other janitorial service non-Janpro clients?
• 9:38
  SPEAKER_03: Yes.
• 9:38
  SPEAKER_03: Is that the how the model could work?
• 9:41
  SPEAKER_03: I see.
• 9:42
  SPEAKER_03: So when when we do a Jan Pro job, though, we've got to meet your standards for how we dress, the process we use, the products that we use.
• 9:52
  SPEAKER_03: Is that right?
• 9:55
  SPEAKER_03: How do you follow how do you make sure that they're doing that?
• 9:59
  SPEAKER_03: What's your quality process?
• 10:01
  SPEAKER_01: Sure.
• 10:01
  SPEAKER_01: So the quality process, that's part of our staff, right?
• 10:05
  SPEAKER_01: So out of our our staff of 15, we have, you know, two to three in the finance department.
• 10:11
  SPEAKER_01: We have, you know, roughly four in sales, and then the rest are all operations.
• 10:17
  SPEAKER_01: So those are the people that are going into facilities, making sure that the services are being performed properly, that the client's happy with what you know is being done inside their facility.
• 10:28
  SPEAKER_01: Um so, and we typically do that.
• 10:32
  SPEAKER_01: We're in every account typically at least once a month.
• 10:35
  SPEAKER_01: Uh, that's kind of our our process with the checks and balances, making sure that everything is running smoothly.
• 10:42
  SPEAKER_03: I see.
• 10:43
  SPEAKER_03: So what is um the what's the biggest challenge in your business?
• 10:48
  SPEAKER_03: I mean, I would think it's finding qualified providers that do a good job.
• 10:53
  SPEAKER_03: Is is that the biggest challenge today?
• 10:56
  SPEAKER_01: Finding qualified providers uh in certain areas is definitely a challenge.
• 11:04
  SPEAKER_01: Uh and what I what I love, well, and this is kind of part of my job as the owner, and really overseeing the the growth and the strategy behind the growth.
• 11:16
  SPEAKER_01: So it's been very interesting to see each market, even within the state and just above the state, and to you know, Joplin, Branson, Springfield, the Ozark Territory, every little area is super unique, uh, even down to the wages, right?
• 11:35
  SPEAKER_01: So what people are willing to work for in Bentonville uh is completely different than you know, 70 miles south in Fort Smith, right?
• 11:48
  SPEAKER_01: So Fort Smith Vamp Buren, you know, it's very interesting.
• 11:52
  SPEAKER_01: So, you know, we we, you know, my dad founded Jampro Central Arkansas in 2005.
• 11:59
  SPEAKER_01: Uh, I was like 18 years old coming out of high school when he opened up this.
• 12:05
  SPEAKER_01: And then in 2018, when I came back into the business as the general manager, one of the first things I did after kind of getting our systems, you know, up to speed was to open up an office in northwest Arkansas.
• 12:19
  SPEAKER_01: So we did that in 2019.
• 12:22
  SPEAKER_03: Um, the hottest market, I'm sure.
• 12:27
  SPEAKER_01: Oh, yes.
• 12:27
  SPEAKER_01: Is uh and in hindsight, it was one of the best decisions I've ever made was to, you know, spend a lot of time, money, and resources to develop that uh area.
• 12:38
  SPEAKER_01: And then we opened up the Jonesboro market, uh, and that's the whole northeast side over to Memphis.
• 12:46
  SPEAKER_01: And then in 2022, we opened up the Springfield, Missouri office.
• 12:49
  SPEAKER_01: So covering Branson and uh Joplin, Missouri's.
• 12:53
  SPEAKER_01: And so uh, yeah, it's so in seven years, we've opened up three additional kind of territories, and it's all due to customer demand, right?
• 13:03
  SPEAKER_01: So we have customers in one market.
• 13:06
  SPEAKER_01: Uh so think of like a lot of logistics, you know, logistics is big in Arkansas.
• 13:10
  SPEAKER_01: So when uh, you know, Ryder or Pinski, you know, they open up a hub, you know, they're all hub and spokes, right?
• 13:20
  SPEAKER_01: So whenever they open up a hub in Jotlin, you know, we're able to kind of move with that customer.
• 13:27
  SPEAKER_01: And that's what kind of has created this organic growth um since the seven years that I've been here.
• 13:34
  SPEAKER_03: So do you all just do office or do you also do industrial facilities?
• 13:40
  SPEAKER_03: We will do any commercial facility.
• 13:43
  SPEAKER_03: So that could include a manufacturing plant or a food plant.
• 13:47
  SPEAKER_03: Do you do any chicken processing plants and things like that?
• 13:52
  SPEAKER_03: Because that's a real specialty.
• 13:54
  SPEAKER_01: Yeah, I think our most interesting client is Remington Ammunition in Lone Oak, Arkansas.
• 14:02
  SPEAKER_01: Uh it's like, you know, their own municipality.
• 14:07
  SPEAKER_01: They have their own water treatment plant out there.
• 14:11
  SPEAKER_01: Um, and it's and it's terrible.
• 14:13
  SPEAKER_01: So it's like they got a lot of uh calcium uh iron in the water, so it's really hard water.
• 14:21
  SPEAKER_01: And so it leaves those water marks and stains on the urinals.
• 14:26
  SPEAKER_01: You know what I'm talking about?
• 14:27
  SPEAKER_01: Those like streaks, uh, the the heavy water, and um, you just can't keep it clean uh at all.
• 14:36
  SPEAKER_01: Uh so we spent a lot of time just maintaining that, you know, old, I think that was built in like the 50s or something.
• 14:46
  SPEAKER_01: Uh it's a really old facility.
• 14:48
  SPEAKER_01: So that's probably our one of our larger, more challenging uh properties that that that we maintain.
• 14:55
  SPEAKER_03: That's interesting.
• 14:56
  SPEAKER_03: So what is the business um form of ownership at this point?
• 15:02
  SPEAKER_03: Are you um the owner?
• 15:03
  SPEAKER_03: Is your dad still the owner?
• 15:05
  SPEAKER_03: Are you partners in this deal?
• 15:07
  SPEAKER_03: What what's the structure?
• 15:08
  SPEAKER_01: Yeah, great question.
• 15:10
  SPEAKER_01: Uh so I was not an owner until 2024, I believe.
• 15:19
  SPEAKER_01: Uh so I was just kind of operating as as the GM.
• 15:23
  SPEAKER_01: My dad uh and his wife owned the business.
• 15:28
  SPEAKER_01: Um and through our transition, you know, planning, estate planning, uh, we we were getting two of the weeds.
• 15:39
  SPEAKER_01: We were a C corporation for a while because my dad's wife rolled over her 401k to buy out my dad's previous partner.
• 15:48
  SPEAKER_01: And so we were kind of in this interesting uh business structure.
• 15:52
  SPEAKER_01: Uh and my dad was like, hey, if you undo this C Corp deal, and then we will gift 25% of Rebecca's stock to you post-transition because it was gonna save that much money in taxes over a period of time.
• 16:10
  SPEAKER_01: So, you know, in a C corporation, you can't really take distribution.
• 16:13
  SPEAKER_01: So there's a lot of um, you know, we had to do annual reporting, you know, with the IRS and all kinds of fun stuff with that 401k plan.
• 16:21
  SPEAKER_01: So we undid that, I think, in 23.
• 16:25
  SPEAKER_01: Um, yeah, something like that.
• 16:27
  SPEAKER_01: 2023, 2024, transitioned back to an S corporation, uh, and then the the stocks were kind of, you know, the stock percentages were redistributed where my dad, Dave, owned 75% of the business.
• 16:41
  SPEAKER_01: Uh, we paid uh Rebecca out her remaining shares, and then I had 25% of the business.
• 16:50
  SPEAKER_01: I see.
• 16:51
  SPEAKER_03: Well, you know how a lot of small business owners deal with C Corps, though, is they just bonus the money out.
• 16:59
  SPEAKER_03: And so they don't show any corporate tax obligations.
• 17:03
  SPEAKER_03: I mean, I'm just saying that's typical of how it's done, my experience.
• 17:07
  SPEAKER_03: Uh, you can get in trouble doing that with the IRS if those distributions happen to match your proportional share of ownership, then it is considered a guy's dividend.
• 17:19
  SPEAKER_03: But it is a typical way businesses deal with that problem.
• 17:24
  SPEAKER_01: Yeah, yeah.
• 17:25
  SPEAKER_01: Well, it's just one additional layer of complexity that um we really just didn't want to mess with.
• 17:33
  SPEAKER_03: So sure.
• 17:34
  SPEAKER_03: Makes sense.
• 17:36
  SPEAKER_03: So where are you going with this business next?
• 17:39
  SPEAKER_03: What's the the plan?
• 17:41
  SPEAKER_01: Well, that's a great question.
• 17:43
  SPEAKER_01: The plan is to continue um making incremental improvements.
• 17:50
  SPEAKER_01: Uh we've done a lot of big swings uh through the seven years, opening up, you know, kind of some new markets that were yet to be developed.
• 17:59
  SPEAKER_01: The way the Jampro model works is most of the metropolitan areas are already owned by, you know, a developer, right?
• 18:10
  SPEAKER_01: So I think the the future would either be the only the only open territories that have not been developed anywhere close to us would be like Des Moines, Iowa.
• 18:23
  SPEAKER_01: I think is uh one market that's never had a Jan Pro in it.
• 18:27
  SPEAKER_01: Um and there and there's not a lot.
• 18:32
  SPEAKER_01: So I've looked at Des Moines, uh, Iowa.
• 18:34
  SPEAKER_01: I actually got my pilot's license this last year, uh, just so I can kind of hop, skip, and a jump to kind of these different areas that uh that we service.
• 18:46
  SPEAKER_01: And so I was like, well, it was a deal I made with myself.
• 18:49
  SPEAKER_01: I said, I am not gonna buy Des Moines, Iowa unless I can fly there myself.
• 18:55
  SPEAKER_01: Uh, because there's not a there's not an easy flight to Des Moines, Iowa.
• 19:00
  SPEAKER_01: There's not a direct flight to Des Moines from Lurok.
• 19:03
  SPEAKER_01: Yeah, yeah, yeah.
• 19:04
  SPEAKER_01: So I was like, I can't do business there if it's gonna take me a day to get there.
• 19:11
  SPEAKER_01: So yeah, we're just making incremental improvements.
• 19:15
  SPEAKER_01: This year is a lot of uh we've elevated quite a few of the staff uh as far as their roles and responsibilities.
• 19:25
  SPEAKER_01: Uh so it's a we're still doing quite a bit of development.
• 19:31
  SPEAKER_01: Our average age of our 15 employees is like 34.
• 19:38
  SPEAKER_01: So uh there's you know, there's a lot of uh there's a lot of runway there.
• 19:46
  SPEAKER_01: So we're we're doing a lot of kind of development.
• 19:50
  SPEAKER_01: We we got people on different leadership tracks.
• 19:53
  SPEAKER_01: Um and so yeah, it's really just sharpening the tools that we have.
• 19:58
  SPEAKER_01: And then if and when we're ready to kind of expand into a new space, uh, we will be equipped uh to do so.
• 20:07
  SPEAKER_03: So you know, I see a lot of guys like you, let's say they have a really good, successful franchise that's out there is making it happen and they're growing.
• 20:19
  SPEAKER_03: A lot of times the franchiser goes out to those people because they've got other franchisees who are not doing so well and says, Hey, here's an opportunity for you guys.
• 20:30
  SPEAKER_03: You can take over ABC territory.
• 20:33
  SPEAKER_03: Um, has that happened with you yet?
• 20:35
  SPEAKER_03: I mean, that seems like that's another gross strategy, aside from a territory that's never been taken.
• 20:41
  SPEAKER_01: Right, as far as underperforming markets.
• 20:45
  SPEAKER_03: Yeah, yeah.
• 20:46
  SPEAKER_03: And the and the and the corporate wanting to hand them over to an operator who knows what they're doing.
• 20:53
  SPEAKER_01: Yeah, so um that that's happened, but it's very infrequent.
• 20:59
  SPEAKER_01: Um in the seven years I've been here, I've seen like three offices transition.
• 21:09
  SPEAKER_01: So, I mean, there's a hundred, there's a hundred and twenty like total markets, but out of those 120, I think there's like 80 owners.
• 21:20
  SPEAKER_01: Um, so a lot of are like me, they may own, you know, three to four markets.
• 21:26
  SPEAKER_01: Um and then like because there's a few state developers, like Mississippi, Louisiana, Alabama, a lot of the smaller, kind of more rural states, they just they develop the whole state similar to us.
• 21:39
  SPEAKER_01: But um uh yeah, so one that's actually on the table potentially would be the Shreveport Bozier City Market in northern Louisiana.
• 21:48
  SPEAKER_01: Uh so we do work down in Tex Arcana, El Dorado.
• 21:53
  SPEAKER_01: Uh so we're getting close.
• 21:57
  SPEAKER_01: Yeah, yeah, we're getting close.
• 21:58
  SPEAKER_01: And so again, for a synergy perspective if we if we could have one really good salesperson out of you know shrefort and then just run appointments as needed through like Tex Arcana El Dorado you get a lot of synergy uh with with that so you really only need one person that's really good at sales to develop a territory from a sales perspective and then you have to have the operations team that supports that growth right so you sign a client someone's got to hold that person's hand through the process right so that's where our operation team come in they make sure that they're putting the right provider into that facility who's not uh who's really going to take ownership of that of that project so where we where we have tend to fail going back to finding good operators you know you could really push the limits of of an individual who's looking to grow a cleaning business and then you give them something like a Remington or something like you know a Top Golf one of these big high traffic areas it's just like they're they're most likely going to fail unless unless they have a ton and ton of hand holding and education throughout that process.
• 23:21
  SPEAKER_01: Because again going back a lot of times these small business owners they don't know how to hire people they just don't they've never done it.
• 23:31
  SPEAKER_01: And so I think that's probably the biggest uh challenge to what I'll call mom and pop businesses is that they don't have the tools and resources or the education and experience to actually grow a business and hire and understand the paperwork that's involved.
• 23:53
  SPEAKER_01: And so that's why the partnership with Jampro is so vitally important because we do have those tools resources and education to take people from here to here to here should they choose to do so.
• 24:09
  SPEAKER_03: Yeah you basically teach them how to run a real business instead of just make a living with a their family members or friends or whoever they have working with them, right?
• 24:20
  SPEAKER_03: Yeah, that's exactly it.
• 24:22
  SPEAKER_03: So back on the the whole franchise thing, I think it's very interesting that you know a lot of people don't r really understand that buying a franchise is one of the doorways to entrepreneurship.
• 24:37
  SPEAKER_03: I mean if you look at entrepreneurship education which I'm part of here at the Walton College, it tends to be all geared around a cold start, you know, inventing something new, starting a business from scratch, raising outside equity capital, all those things.
• 24:56
  SPEAKER_03: But in reality you can go buy a business that's an entry point to entrepreneurship or you can buy a franchise like you guys did here.
• 25:07
  SPEAKER_03: What um you know in your business let's just take the cleaning business what what are some of the advantages of owning the franchise and now that you know all that you know I mean is it is it still worth being part of a company like Jan Pro?
• 25:29
  SPEAKER_03: That may be difficult for you to uh answer but I mean at some point you've sort of learned all the tactics techniques you've got the tools down you've developed your own sales course yada yada yada does the franchiser still provide you with value I guess that's the question.
• 25:47
  SPEAKER_01: Yeah that's a great question and I think just like with anything uh time dilutes value um it's super valuable when you're first getting started right you're it's because you don't know what you don't know getting into any business and going back to the franchise question I think it's also very industry specific right so if you're a Slims chicken and you can get access to the brand uh access to the playbook you can buy chicken at a a super discounted price than what you could as an independent you know chicken restaurant so you get all the synergies that franchise or is developing out um and so I I think it's worth it um depending on on the entrepreneur right and depending on what they're willing to give up.
• 26:43
  SPEAKER_01: So when I was at college hunks uh the best thing about that franchise model for me was understanding culture um and like core values they really did and I'm a marketer at heart like I love marketing uh I love branding uh and college hunks was probably and probably still is one of the best companies in the country uh at at branding they do a phenomenal job uh and they just have fun doing it and you know the different the the different teams within the network are awesome now some of the constraints were uh you had to use their call center right and so and like what I was saying earlier just within Arkansas you have different subcultures we'll call it and so uh the call center in Tampa if they were talking you know off of a script a lot of people don't like dealing with customer service reps they don't want to talk to a call center they want to talk to the local person they want to they want someone someone local that that has a southern draw that knows where their street is on a map and like you know that they know like what they want to get accomplished they don't want to go through the robotic process of like A, B, C, D, and E.
• 28:10
  SPEAKER_01: And so but we didn't have a choice right and we had to pay a lot of money for that call center whether we liked it or not.
• 28:17
  SPEAKER_01: So I think those are some of the constraints so I would just say um and in the Jan Pro model specifically one of the one of the biggest values that we get not just for our office but all of our franchise owners which is 180 of them right throughout the region we have a supply program that is national so it's something that Jampro National kind of puts in place what that means is uh if you're in gentry arkansas and you need to go buy a mop or whatever it is a trash can dolly you would typically have to go to a retailer and buy that at whatever the cost is because we're spending tens of millions of dollars through these certain vendors we get very discounted wholesale pricing and so our network gets better pricing and what's even better is they can put it on their Janpro account meaning they get the value of the float of the money right so if if we're servicing the month of January and you're not going to get paid until February for the services that you provide by the client well you buy a you buy a mop bucket in January well you're technically not paying until you know your check hits in the next month.
• 29:56
  SPEAKER_01: So there's a lot of streamlined benefits to to cash flow management and that's just another tool that we kind of provide that's a really really big value to the franchisees.
• 30:09
  SPEAKER_01: I can see that I mean so but it's still you if you're working for some of these commercial clients there are bound to be some slow payers that are like 60 or 90 days I would guess right these bigger companies and oh yeah how do you mitigate that that's that's a um that's another reason why a typical nonprop can't do business with companies like PG or uh you know Walmarts of the world Tysons yeah because they're all paying 90 some are dude we're getting paid by some customers on 120 days uh and that's the term you either you yeah you can't do most people can't do it especially when you're talking about say a uh a$10,000 a month client and you get put 40 50 grand in arrears and you got you got payroll the whole time you know you got to pay your people every two weeks or you know twice a month whatever it is most people cannot float$4050 until they get their first paycheck it just doesn't work.
• 31:21
  SPEAKER_01: And so we kind of operate as the bank uh so we're typically paying the providers we're paying we're paying every Jampro franchisee net 30 regardless of the client's payment terms.
• 31:34
  SPEAKER_03: So it's not a PWP paid one paid you're paying them so that's a huge advantage for them but for you guys you have to carry that cash flow.
• 31:43
  SPEAKER_03: So do you use a bank line of credit for your to finance your AR or how are you doing that?
• 31:49
  SPEAKER_01: We do have a bank line of credit uh uh fortunately when I came on it was kind of a bleak situation from a cash in the bank uh perspective and so I just went to work and then it it was kind of my job uh at the time uh to get us financially healthy we were not in 2018 so uh fortunately we have not had to draw our line of credit very often but um yeah we do have one so just financing it with your own working capital that you've got invested in this business that's just part of the cost of the business of that amount of capital that it takes well it's the cheapest way to do it if you have it um yeah I see well that's interesting you know back on franchising and you know you use the slim chicken model or slim chickens I can't even remember what the name of it really is but we all call it slims.
• 32:58
  SPEAKER_03: It seems like one of the advantages of a franchise like that is if you open the doors people are going to line up because they know the product already they like it and it's you know I always said it's like a McDonald's versus Joe's burgers.
• 33:13
  SPEAKER_03: If I open McDonald's there's going to be cars lined up at my drive up window.
• 33:17
  SPEAKER_03: If I open Joe's there may or may not be but with a deal like Janpro I mean I'm not sure that brand uh has necessarily the same value you know it's not like everybody knows Janpro.
• 33:33
  SPEAKER_03: I mean I'm not saying that there's not awareness of it but it's kind of a different game it seems to me it's a competition as far as a franchise goes.
• 33:41
  SPEAKER_01: Well you gotta think how many franchises can you rattle off that are B2B?
• 33:47
  SPEAKER_01: Yeah that's true.
• 33:49
  SPEAKER_01: Right so we're everyone knows these these other brands because they are marketing everybody the whole world is a customer uh in our world out of the population of Arkansas which is like I don't know three and a half million I would say one percent of that population is a decision maker for the janitorial facilities of their building I mean it's like nobody it's nobody it's it's it's nobody that's why no one knows a jampro because no one needs to know about jam pros.
• 34:29
  SPEAKER_01: We're like a utility bill we're like a light you know you just turn it on you come into work you got a clean building no one even thinks about it.
• 34:38
  SPEAKER_01: No one thinks that someone actually showed up after hours with a vacuum cleaner and scrub the toilets the night before nobody thinks about it.
• 34:49
  SPEAKER_01: And so but going back to the value I'll tell you what the value is it's real simple national accounts accounts payable so again if we're trying to find yay people in the marketplace go back to go back to Slims go back to really any company that has multi-site facilities JMPro again so there's regional accounts like we support say First Security Bank and we clean all of their banks in central Arkansas uh but on a on a on a much larger scale there's Bank of America right there's JP Morgan Chase and so just like we're working with the local facilities director on a regional contract there's people working on national contracts right so like every bank coast to coast and so one of the big values with Jampro as a franchisee is we get opted in to this network similar to our franchisees they get opted in so if we pick up a first security bank and you happen to be the franchisee in Van Buren Arkansas you just got an account and it you didn't even have to do anything for it.
• 36:17
  SPEAKER_01: You just had to be a part of the Jampro network similar to us so anytime there's a national account sold uh and we just picked one up called First Franklin never even heard of it.
• 36:30
  SPEAKER_01: First Franklin some kind of regional financial institution primarily in Tennessee Mississippi uh and Louisiana they happen to have one account in Texarkana Arkansas and so we get to service that we didn't work for it we just happen to be there right so I think that's one of the I would say one of the biggest values is as our world gets smaller and smaller and you kind of continue to see these consolidations of businesses it's terrible it's terrible for everybody involved uh these acquisitions mergers and all these smaller companies getting gobbled up it is a terrible economic forecast for for the nation but it's beneficial to the larger players right so they get savings they get cost they get synergy and then they have the same problems well crap we got to clean all these offices that we just bought they're they're dealing with 15 vendors or 20 vendors they want to consolidate right so it's like ultimately jampro is in the best position to continue to grow in as our as our world evolves we're dealing with less and less decision makers period I mean it's just it's just a fact and so if you're dealing with less and less decision makers who do you want to be do you want to be a mom and pop cleaning business no you don't uh you're gonna be squeezed out ready to level up your show at podcastvideos.com we offer industry leading recording and expert marketing to help your show reach more listeners from creation to distribution we've got you covered visit podcastvideos.com and elevate your podcast today yeah it makes total sense so now back on your father yeah um he obviously is a fan of franchises he's had two of them that we know of college hunks and then janpro that he bought does he have any other franchise uh operations that he's bought in uh no and he actually wasn't ironically he wasn't a part of college hunks uh going back to lines of credit uh actually just put funded the startup of callachunks through a secured line of credit or um uh cd so yeah so jampro put 50 grand into a cd that bank loaned me 50 grand to buy a brand that was the collateral yeah and so um and believe it or not i mean yeah we started the whole college hunks business with 50 grand like that's it that's all the money that was invested in that entire business was$50,000 so you could not do that today in 2026 um but yeah so my dad and I was I was going through kind of some some of the questions that were potentially going to be asked on on this morning's call and and one of them was you know one of the biggest mistakes you made early on uh that ended up you know being I guess valuable or or a lesson that you were able to take away and ironically this is kind of a funny little story but so when I came on 2018 my dad he was more of a sales guy he was more really acting as the sales manager uh over like one employee and so when we started growing uh and we opened up the Rogers office and we were developing Northwest Arkansas and we were hiring you know inside sales uh you know we had to bring on an extra you know finance per so we were we were growing like you know uh and forecasting for the growth that we were going to you know start experiencing and so we ended up hiring this other guy and and we were in this small office and my dad at that time really wasn't working like he hasn't really worked since 29 early 2019 and so but he was the owner right he had his office and one day I went to his house because he you know he wasn't at the office but uh I said hey man uh I really hate to ask you this but you think I can have your office for a new hire that we're bringing on we we don't we don't really have we don't really have the space uh and you're not using it so I kind of figured we could just take it if you were cool with that and uh you know I think it was kind of met with mixed response you know rightfully so uh you know getting getting edged out of his own business uh and so I was like you I said you don't have to do this I was like you don't have to do this like we will we can get some cubicles and put them out on the floor or whatever um it's your call and he was like you know what yeah that's fine I don't really you know I don't need to be taking up space that I'm not using and I said okay great and so in like you know even then and at the especially now as a as as I kind of matured uh that was a really dumb thing for me very disrespectful thing to do to the owner of the business and I'm such a pragmatic guy uh that it really it was like kind of worth the risk if that makes sense like it was like uh uh because I was running the business and so this is what I learned from that and I think the lesson that I took away from that was you really can't serve two masters like you really can't and while it was a uh a bad thing it ended up being a good thing because there for about a year year and a half there was a house divided uh yeah it's hard for you to be the boss with him there right and even if he wasn't there he had employees that he had hired right to do a job and then I come in and then I hire my own my own employees over here and it created this this tension and I had a sales guy tell me that he wasn't gonna listen to me that he was hired by Dave and that he didn't have to listen to me.
• 43:57
  SPEAKER_01: I I was like what I said I'm like, are you serious?
• 44:02
  SPEAKER_01: And so you know, a couple months after, you know, my dad had exited the building, we had we had a come to Jesus meeting.
• 44:14
  SPEAKER_01: And I said, I said, here's the deal, buddy.
• 44:19
  SPEAKER_01: And this guy's like 50 years old.
• 44:21
  SPEAKER_01: I'm like 34.
• 44:23
  SPEAKER_01: And uh I go, here's the deal, buddy.
• 44:27
  SPEAKER_01: I'm in charge.
• 44:30
  SPEAKER_01: All right.
• 44:31
  SPEAKER_01: And I'm running this company.
• 44:34
  SPEAKER_01: And you're either gonna get on board with where we're going, or you're gonna see yourself out the same door.
• 44:47
  SPEAKER_01: You know, that they went out of.
• 44:48
  SPEAKER_01: And I said, the choice is yours.
• 44:50
  SPEAKER_01: And he was, and he's still with us to this day.
• 44:53
  SPEAKER_01: He's still one of our top-performing salespeople.
• 44:57
  SPEAKER_01: Oh, yeah.
• 44:59
  SPEAKER_01: But I mean, it it changed the culture.
• 45:02
  SPEAKER_01: It changed, it changed when there's no longer a power struggle or a someone to serve, you get a unified vision and a unified culture.
• 45:14
  SPEAKER_01: And then you got the bus or the plane, it's all moving in, everyone's moving in the same direction.
• 45:19
  SPEAKER_01: And so that was a big kind of takeaway that I learned.
• 45:22
  SPEAKER_01: And it's super difficult with family.
• 45:25
  SPEAKER_01: I mean, family businesses, it's even worse, right?
• 45:28
  SPEAKER_01: Everyone thinks it's nepotism or you know, he's he's not qualified, or whatever it is.
• 45:33
  SPEAKER_01: Fortunately, I was.
• 45:35
  SPEAKER_03: Um, but that's uh that is a very interesting and and not uncommon situation in family businesses.
• 45:44
  SPEAKER_03: You know, that's called unity of command.
• 45:46
  SPEAKER_03: That's the management term, if you remember from your UCA education.
• 45:52
  SPEAKER_03: Each person should have one and only one boss.
• 45:55
  SPEAKER_03: And um, you you you characterize that really well.
• 45:59
  SPEAKER_03: And it's very typical, you know, when you've got like husbands and wives in the business, who do they listen to?
• 46:06
  SPEAKER_03: And, you know, father, son, whatever.
• 46:08
  SPEAKER_03: Um it's it's a it, you know, commonly the oldest one is the one that everybody assumes is the is the um you know, the the leader they have to listen to.
• 46:20
  SPEAKER_03: And obviously, in your case, you took over this business and you're running this business.
• 46:25
  SPEAKER_03: But yeah, it stuff gets easier to deal with the older you get.
• 46:29
  SPEAKER_03: There's no doubt about that.
• 46:32
  SPEAKER_01: Yeah.
• 46:32
  SPEAKER_01: And what's crazy about those family, you know, business statistics, it's pretty insane, right?
• 46:38
  SPEAKER_01: So you have a hundred businesses that start in a year, for example.
• 46:43
  SPEAKER_01: 50 of them will be gone within within five years, right?
• 46:47
  SPEAKER_01: So you're left with 50.
• 46:49
  SPEAKER_01: Out of those 50, say they're all family businesses, 30 percent will successfully transition to a second generation owner.
• 46:59
  SPEAKER_01: So out of out of the hundred, you're down to 15, right?
• 47:04
  SPEAKER_01: 15's left.
• 47:06
  SPEAKER_01: And going from a second to a third generation, you're left with 1.8 businesses left going into the third generation.
• 47:19
  SPEAKER_01: So my goal, my goal is hopefully to get it to the third generation, just for shits and gigs, we'll call it.
• 47:29
  SPEAKER_03: So when you were a little kid, were you like one of those guys who was a hustler always trying to do stuff to make money?
• 47:36
  SPEAKER_01: Oh, yeah.
• 47:36
  SPEAKER_01: Yeah, I think I think my first stage at entrepreneurship was going to Sam's and getting like the bulk, like double bubble, you know, like the big tubs.
• 47:47
  SPEAKER_01: They used to sell them.
• 47:48
  SPEAKER_01: I don't, I don't know if they still do, but it used to sell the big tubs.
• 47:53
  SPEAKER_01: And uh, yeah, I'd be flipping them, selling them by the piece, uh, you know, bundle, you know, five discount if you get five or ten at a time, you know.
• 48:05
  SPEAKER_01: So yeah, you know, I would say that that entrepreneurship was was there pretty early on.
• 48:13
  SPEAKER_03: Sounds like it.
• 48:14
  SPEAKER_03: I'm not surprised just based on what you told me about yourself.
• 48:17
  SPEAKER_03: So, one last question for you.
• 48:20
  SPEAKER_03: What advice do you have for young people getting out of school today?
• 48:25
  SPEAKER_03: Let's say they've gone through a business program, they're 21, 22 years old, they're gonna be getting out here in May.
• 48:33
  SPEAKER_03: What advice do you have for them based on what you've learned over the last 18 years or however long it's been for you?
• 48:42
  SPEAKER_01: Yeah.
• 48:43
  SPEAKER_01: What what I would say is uh hitch hitch your wagon to somebody or some company that you really admire or look up to or that fits your values.
• 49:00
  SPEAKER_01: Um looking back, I was an idiot coming out of college.
• 49:07
  SPEAKER_01: Like you're talking about a 21, 22, maybe 23 years old, and you think you think you can just go into the world and and conquer it.
• 49:20
  SPEAKER_01: And you know, to some degree you can, right?
• 49:24
  SPEAKER_01: I mean, I feel like I did, yeah, I feel like I did really well coming out, stepping into a franchise, but um there's nothing wrong with being number two or number three on a journey, uh, especially if you can learn the whole goal in life, the way I see it, is to fail early, right?
• 49:47
  SPEAKER_01: To fail early and fail enough to where I think as Matthew McConaughey says, kiss the fire and still come out whistling.
• 49:57
  SPEAKER_01: Uh you know, you gotta kiss the fire, but you still have to come out whistling, right?
• 50:04
  SPEAKER_01: Which means you can't get totally burned.
• 50:06
  SPEAKER_01: Um, and so going back to statistics, I mean, half of these people starting anything are going to fail.
• 50:14
  SPEAKER_01: And so I think my advice going into it is going into the understanding that if you number one, if you can even attempt to start a business, you're better off than like 99% of the world.
• 50:33
  SPEAKER_01: Uh, most people can't.
• 50:35
  SPEAKER_01: Most people don't have the resources, they don't have the financial resources, they don't have the educational resources.
• 50:40
  SPEAKER_01: So if you're in those percentages of people coming out of college, the mindset you should be having is how like grateful you should be, number one.
• 50:49
  SPEAKER_01: Uh either to yourself or to your parents or whoever was able to kind of help you out in that journey.
• 50:54
  SPEAKER_01: Um, and then be lucky enough to start something.
• 50:58
  SPEAKER_01: I for I forget the, I forget the statistics around it, but I think it's 14%.
• 51:04
  SPEAKER_01: 14% of Americans will ever start a business.
• 51:08
  SPEAKER_01: I think that's right.
• 51:10
  SPEAKER_01: Um and so just knowing that you're the odds, like you're already beating the odds.
• 51:18
  SPEAKER_01: Like, and so like pat yourself on the back, always have gratitude in your in your heart that you're doing a very challenging thing.
• 51:28
  SPEAKER_01: Very few people ever attempt to do it.
• 51:30
  SPEAKER_01: And so when you do it, always seek counsel uh because you don't know what you don't know.
• 51:36
  SPEAKER_01: And that's that's probably my biggest thing that I would impart to any young person is have a solid counsel around you as you go into the flames of entrepreneurship.
• 51:52
  SPEAKER_01: And hopefully you'll come out, you'll come out whistling.
• 51:57
  SPEAKER_03: There are people out there who will help you.
• 51:59
  SPEAKER_03: You just have to ask.
• 52:01
  SPEAKER_03: Yeah, for sure.
• 52:04
  SPEAKER_03: That's that's good advice.
• 52:06
  SPEAKER_03: Well, Nolan, this has been great.
• 52:08
  SPEAKER_03: Um, really appreciate your getting on with me today here.
• 52:12
  SPEAKER_03: Um, so if anybody wants to reach out to you, what is your contact information?
• 52:18
  SPEAKER_01: Yeah, so you can reach me email, which is Nolan N-O-L-E-N, not A-N, N-O-L-E-N dot Hughes at janpro.com.
• 52:31
  SPEAKER_01: Um, and all my social medias are just nolin.hues.
• 52:35
  SPEAKER_01: It's all pretty standard.
• 52:36
  SPEAKER_01: There's not a lot of Nolans with the E-N, so I got lucky that none of my names are taken on any real platforms.
• 52:43
  SPEAKER_01: Uh yeah, no Nolan with an E, uh, you'll pretty much be able to find me.
• 52:48
  SPEAKER_03: That's awesome.
• 52:49
  SPEAKER_03: Well, I guess this is one case where having your name spelled differently than every other Nolan worked out.
• 52:54
  SPEAKER_03: It worked out.
• 52:55
  SPEAKER_01: Yeah.
• 52:55
  SPEAKER_01: I can never find a keychain at a gas station with my name on it, but um, I still hold out hope.
• 53:03
  SPEAKER_03: Touch is life, my friend.
• 53:05
  SPEAKER_01: Yeah.
• 53:06
  SPEAKER_01: That's it.
• 53:07
  SPEAKER_03: All right.
• 53:08
  SPEAKER_03: Well, hey, this is great.
• 53:09
  SPEAKER_03: We appreciate your being on with us today.
• 53:11
  SPEAKER_03: And I need you to join me now, Nolan.
• 53:15
  SPEAKER_03: This has been another episode of Big Talk about Small Small Dot Com.com.
• 53:28
  SPEAKER_03: Thanks a lot.
• 53:35
  SPEAKER_02: Thanks for tuning into this episode of Big Talk About Small Business.
• 53:39
  SPEAKER_02: If you have any questions or ideas for upcoming shows, be sure to head over to our website, www.bigtalkaboutsmallbusiness.com, and click on the Ask the Host button for the chance to have your questions answered on the show.
• 53:53
  SPEAKER_02: Stay connected with us on LinkedIn at Big Talk About Small Business.
• 53:57
  SPEAKER_02: And be sure to head over to our website to read articles, route episodes, and ask questions about upcoming shows.