Latest / Reframe First / Pam Bartlett, Founder of FranStrategies | AI-Resistant Is the New Recession-Resistant

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Pam Bartlett, Founder of FranStrategies | AI-Resistant Is the New Recession-Resistant · Reframe First

• Oleksij Rak: Hey guys, welcome to another episode of Free Frame First. I'm Alexey and let me welcome our today's guest, Penn Barlett, founder and CFC, certified franchise consultant at Friend Strategies. So, hi Penn, it's great having you here. Pam Bartlett: Hi, it's nice to be here. Thank you. Oleksij Rak: Thanks a lot for coming. So from what I learned, you run a franchise, you're a franchisee, but also you are your own business and you are certified franchise consultant. So how at all did you get into this field? Because you're quite a lot in this field for quite some time. How did you get here and how does it work for you? Could you tell us your story a bit? Pam Bartlett: So it back up, this is actually my third career, which I find with a lot of us Oleksij Rak: yes. Pam Bartlett: in the franchise world. So I started out, I had a very long career, corporate career, working in consumer products, completely unrelated to anything I'm doing now. Really thought that was gonna be what I did for my entire work life. but the c the industry I was I was in kept consolidating and shrinking, and I reached a point where I had to make a decision and a pivot, and I wasn't sure what to do. And I was always in an entrepreneurial role in the companies I worked for. So I started thinking I should do something on my own. I had no idea what that looked like. I didn't have an idea for a business. I didn't know where to start. I was really lost. And so I thought, I'll just check out franchising. I knew nothing about it. I, like many people, thought, well, you know, McDonald's, I don't want to own a McDonald's. but I filled out a form and I met a franchise consultant, somebody who does what I do now, and it just opened up this world to me that I didn't realize existed. So I did my due diligence and made an investment in a franchise. I invested in senior care, which had a lot of moving parts. it was 247, it was life and death, it was very stressful, it was a lot for me. It wasn't I didn't love the business. But I learned I love franchising as a way to be in business. It gave me that feel of still being connected on a corporate level, like working in corporate, but I didn't have that stress and pressure of working for someone else. So it really combined the best of both worlds for me. And I realized in doing that that while I didn't love the franchise I had purchased, I loved the franchise or everything was great there. I realized I need to do something else. What does that look like? And long story, I'll just condense it, but I kind of fell into franchise consulting and realize I can help people find franchises that they will actually love versus the one that I didn't, if I can help them really understand what their goals are, you know, what they're trying to do and what they're trying to accomplish, how they like to work, what type of business they like to be involved in. And it's such a rewarding experience to be able to to help people find something that fits them. and that gives them that w that that that satisfaction. Oleksij Rak: Yeah, all the people I chat with from French chatting industries share this kind of passion to the industry. What does it take to be a good French easy? Like what's what's psychotide? is need to be you mentioned being an entrepreneur, but besides, you need to still follow some rules. need to follow the system. So it's not Pam Bartlett: So Oleksij Rak: probably it's not for everyone, you know. Pam Bartlett: It is definitely not for everybody. Business ownership isn't for everybody. But Oleksij Rak: Yeah. Pam Bartlett: franchising, if if you don't here's an example. I met a woman who had an interesting business and I asked her if it was a franchise. And she said, hell no, I don't want anybody telling me what to do. And I thought, well, okay. I mean, franchising, they give you a playbook. It's not that somebody is telling you what to do. And I think she kind of overthought that. But it gives you a system and it gives you something to follow. So if you're somebody who says, I want to figure it all out on my own, I really don't want to, don't want to look like anybody else, and I don't want anybody else telling me how to do my job, then you don't want to be in franchising. But if you're somebody who says, you know what, I want that guidance, I I appreciate and respect their experience, the fact that they've done this, whoever the franchise is, they've they've done their trial and error. They've done they they've done this. So they know what works and what doesn't. If you can respect that and want to learn along with them, then it it could be a great fit. veterans make great franchisees because they are used to following a system. So many franchise will have a veteran's discount to get into their systems. Oleksij Rak: Okay. I've heard a lot about IT people getting into franchise industry nowadays because of AI Pam Bartlett: I'm hearing more more Oleksij Rak: displacement and stuff like that. Are they a good fit or not? Pam Bartlett: It depend you know, it's so individual. It really depends on your mindset and Oleksij Rak: Mm-hmm. Pam Bartlett: your and your experience and your skills, but really it's a mindset. Are you willing to do what it takes to run a successful business that might be outside of your comfort zone if you've been focused on in one area? it's really interesting though that you mention it in talking to just anecdotal, talking to a few people recently I've heard over and over about IT people coming into these companies. Some of them are sports related, completely out of that IT realm. Which leads me to something that I I always tell my clients too, is where can you start something new in a new field without experience and not have to come in at entry level where you can come in at the top. And that's one of the beautiful things about franchising is that you don't need the experience. You're gonna get training from the franchiseur. For example, I had consumer products for thirty years and ended up in healthcare. Oleksij Rak: You mentioned that you came into the business and you didn't really like the choice probably. Yeah, but you did like the franchise industry as is, but you didn't like the choice of senior care of the segment. Why didn't you like it? And what would you choose now if you were to get into the business? Pam Bartlett: So if if if I were to do it over so what I didn't like it are things that other people thrive in. It was very employee intensive with having up to a hundred employees and the bigger businesses have way more than that. right now I'm you know I'm hearing of people that are doing huge volume that would require well over a hundred employees. So you're managing that. It's twenty four seven. It's life and death. It was senior care. So my phone would ring at two in the morning. I had 24-7 on-call coverage, but if there was a real emergency as the owner, my shoulders. so that was just very, very stressful. I realized that I didn't want to manage a lot of employees. I, you know, I realized, I kind of liked being an employee, even though I was middle management. in my roles as an employee, I manage businesses more than people. And I realized I like that better. So if I were to do it over, I would probably do something. I s it's funny because I I'd see all these franchises now and think, I would have liked that or I could have done that. I'm not sure what I would have done. I think because I had a really strong retail background, I would have gotten into vending, which isn't even real a franchise, but we do we do Oleksij Rak: Okay. Pam Bartlett: we do broker vent vending deals with my company. But it's little retail stores. That's what I did for years, managing assortments and retail stores. That would be me. But then I see other businesses, I think, that would have been great. I could have done that. I can work with three, four employees. It was the the hundreds of employees in 24-7 and life and death and so much stress. Oleksij Rak: Yeah, I see. Yeah, it makes sense because you don't really have employees. need to deliver the vending machine and check up on it Pam Bartlett: Yeah. Oleksij Rak: regularly. Awesome. Pam Bartlett: Yeah. Oleksij Rak: So what is the right choice of franchise? How do you choose it? It's based on your skills, psychology, ability to work with people, ability to sell. Pam Bartlett: So it it it really is dependent on the franchise. So what I do, my I have a process where when I meet someone and we sit down and we'll have a conversation, I try to ask a lot of questions because everybody is unique and everybody has different goals. Somebody might say, you know, I want to work a million hours a week and do as much as I can in a short time. I don't care, I'm very driven. And somebody else said, you know, I'd like to do this if I can part time. That's not particularly realistic. But I don't want to, I don't want to give up my life. I want work-life balance. So and all points in between. So I I do in a couple different intake forms where I get a lot of information and try to understand what are your skills now? I are do you are you do you like sales? Do you hate sales? Do you like managing people? Do you hate managing people? you know, what's important to you? And it's about it, I have about 25 questions that dig into that after we've had our initial conversation. I also have to look at your financials. when we look at franchising, we look at what do you have liquid, what's your net worth, and what's your credit score. All that factors in because you're investing in a business and there's a franchise fee, and then the upfront costs of starting your business can range anywhere from I want to say there's a low at like 11,000 you can get into a travel agency, but it really goes up into the millions and realistically. Hundred thousand plus really to you need to be able to access to get into any franchise. So financials matter. and and interest. Oleksij Rak: interest. Pam Bartlett: I look at interest, you know. What are you interested in? if you hate fitness, I'm not going to show you a fitness studio. you know, I try to really try to take. Do you have hobbies? Do you have family? What is what is the family lifestyle? Are you do you have young children or You know, or empty nests, those things really matter in your day-to-day running a business. What type of capacity do you have for different elements of the business? So we really dig into that. Then I have to do a lot of research. Once I have all that, I kind of digest it and I organize it and I think through it, and I do a lot of research. I do use AI quite a bit, but I will say in franchise research. just a typical consumer trying to use AI for franchise research, you're not gonna get a good result because there are so many nuances and so many things that I dig into and it makes mistakes. that it's just a very detailed process to try and come up with maybe four or five brands that might fit somebody's profile. Oleksij Rak: What else? What else do you do? What exactly do you do with AI? Pam Bartlett: so I use I use AI in a lot of different ways. So I have set up a GPT to analyze franchise disclosure documents. and that's taken a lot, a lot of refining to do, but I've got it where with some with some massaging I can get it to give me the information I want. I am in the process of creating my own personality assessment. Think like Myers Briggs or Disk Assessment. I'm in the process of creating that with AI. I'm also creating my own CRM with AI because I really don't like what's out there. But I do use it like I use it as kind of a research assistant. So I'll plug in FDDs client profile and some thoughts I have. And we kind of work back and forth on usually it's talking me out of things. It's really interesting. There's a, you know, it's usually trying to say, no, you don't want to do that. Oleksij Rak: Is GPT capable to read FDD? Because FDD is quite a huge document. It's a couple of hundreds of pages. So it's quite complicated for GPT to fit it into context window and to read it properly. Pam Bartlett: Well, it's also I also find that like you really have to know what you're looking at. So I can tell you could you could tell it to read an F D D or any document. It's gonna Oleksij Rak: Yeah. Pam Bartlett: pull things that may or may not make sense based on what I already know because it doesn't have that logic yet or it doesn't think in those terms. So it's I always get a little nervous when people who don't understand the franchise industries try to use AI to do their analysis. Oleksij Rak: Yeah, and what parts of FDD do you mostly pay attention to? Like everything is important there, but what do you read specifically? Pam Bartlett: So it's interesting. So I just changed it. So I actually have a 23 section recap and it'll pull the highlights out of all 23 sections. I look at I obviously I look at the item 19, which gives their financial data. It's always different. You never know what you're really seeing. It's I mean some of it's very, very good data, some of it doesn't really tell you anything. We look at I look at litigation. I want to know what litigation looks like. I look at the obviously the item seven, I wanna know startup costs. the range. I also want to know the fee, the fee stack and what that looks like. I look at the item twenty, which is will show you any attrition, it'll show you it, you know, how what their brand looks like in terms of number of units and how those units look. I want to know if there are transfers, closings, things that reflect on the system. If there are a lot of I can't think of the word, but if there are a lot of take backs on territories that tells you there's there might be a problem with the system. So I really dig into that. We look at I look at the financials for the franchise or I want to know that there's they have stability and in in their business. those are the main things that I really dig like to dig into. But like I said, I do have it doing a 23 item recap. So it will go through each one and it will pick up points. One thing it catches quite a bit that I that I is concerning is it will see the statement in the brand financials that the brand may not have the financial ability to support their franchisees. So when I see that statement, that is a huge red flag to me. Not always, but Oleksij Rak: What other red flags are you paying attention to? What are these red flags for you? Pam Bartlett: lit litigation is a big one. You want to Oleksij Rak: Yeah. Pam Bartlett: know if it's and a lot of times the litigation is against a franchisee from a consumer. So you really have to understand where the litigation is coming from and who's being lit, you know, what what it looks like. But I like to see no litigation. That makes me feel the best. you know, certain brands, like I go back to senior care. You might see litigation in senior care that a franchisee is being sued by a consumer because of Breach of contract, lack of care, something that happened. Doesn't reflect on the franchise or but I that is something that is concerned, you know. I always like to look at that. And I try to dig through the item nineteens. It's hard. It's really important to see those numbers, but you don't always get a good picture of what's really going on. But those are and and like I said, item twenty to me that's important. If there's a lot of churn in the in the franchisee count, that's a problem. Oleksij Rak: Yeah, Coming back to the initial questions, what else do you pay attention to with regards to franchisee? Especially since you mentioned that you are trying to build your own Meijer bricks, MBTI scores or something like that, about the potential franchisees. So what else do you pay attention to? Like, do they have family? are they a profile for entrepreneur, financials? Like, what else? Pam Bartlett: Financial's a big thing. One of the things I look at is how are we interacting? because if you're not gonna show up for my and for my meetings, and if you're not, you know, I I if you're not responding to my communication, that's concerning to me because it's follow through. How are you gonna run a business? How are you gonna, you know, my partners, my franchise partners, my I my reputation's on the line. I don't want to be sending people over. The reason that franchise ours work with people like me is that we vet. their candidates. We spend time with them. We're not sending them everybody that just happens to think I want to look at a franchise. We're really spending time getting to know them before we send them over. So I look at, you know, I like right now I have a client who I can't seem to get a hold of the franchise ours can't seem to get a hold of. And I'm about to write a letter saying, thank you, but I think this we need to this isn't going anywhere. it that's real I that's important to me that you follow through and that you're communicative because that reflects everything going forward. But you know, there are people that I just think if you that just may not be right for a franchise that say, you know, that just really aren't comfortable with the risk. There is definitely risk involved. You're making a big financial commitment and it's very scary. Oleksij Rak: You're running a kibbutz. Pam Bartlett: And And if you're not comfortable with a certain level of risk and comfortable in your own ability to make the business happen, then don't do it. it it it isn't it isn't meant for you. I had somebody call me about a year after I sold my franchise who had signed an agreement with the brand I was with and was panicking. and because my name was still in the FDD and information and is a former owner and he's He's like panicking about this mistake he made. Like, you've already signed the agreement, you've paid your fees, you're a little late to be panicking. I don't know how we ended up, but it's like if you're if that's you, then you probably don't want to sign that agreement to begin with. it is a commitment. It's a definitely, you know, a big it's it's a money financial commitment, it's a time commitment, and it's it's your life. It it's a big change from being an employee. Oleksij Rak: Yeah, for sure. It is, is because running a business is quite a different story than being an employee. But that's for sure. With regard to this franchise segment, which you mentioned like senior care at some point you understood it's not yours. Like, and you're trying to build that profile of franchisees, potential franchisees of your clients and to try to match it to some franchising segments. How do you choose which segment is right? Who would you send to send to senior care? Pam Bartlett: So far I haven't sent anybody to senior care, but that's just because I haven't had a a proper candidate. But so what one of the forms that they fill out when I when I send them my intake form, I have a list of about 40 categories and I have them rank them in their level of interest. So I take their highest level of interest as a starting point. and that's really where I'll focus. Because w the one of the things I'll talk about before I hand before I send them that questionnaire. Is kind of a these are the categories that we're looking at, kind of a little bit of overview of what types of businesses fall into each one. Because I may I might have 40 categories and then there's like another 40 subcategories under that. You know, there's like home services Oleksij Rak: Yeah. Pam Bartlett: and then there's like 20 different businesses that fall under that. You know, so I try to give them a little bit, but I that's my starting point is what interests you in terms of these categories, and then I dig in from there. Usually I'll come up pretty close to what the interests are and I'm I'm I'll have people say, yeah, that's spot on. I do have a client now I'm on round three with, which is unusual. Highly unusual. Oleksij Rak: So 40 categories is not enough. What kind of categories are these? Do you care about other people? Pam Bartlett: Well, and it's like he yeah, it was just I don't know, we weren't quite meshing on what it was, but it but Oleksij Rak: Yeah. Pam Bartlett: yeah, I mean there's a lot people think when when you say, What do you think of franchising? people say, you mean Chick fil A and McDonald's and like, yeah, those are two of thousand there's four thousand franchises. There's so many things people don't realize are franchises. And there's new ones every day. Oleksij Rak: How many franchises do you actually work with? when you're trying to suggest something to your clients, you choose from some list. How big is the list? Pam Bartlett: I have a database of about five to six hundred brands and then I have another platform I'm also working with that has additional brands. A lot of them overlap, but there are some other ones there too. and if there's something that may not be part of my network but is really interesting to a client and I think it'd be a good fit, I will reach out to those brands to see if they'll work with me. Oleksij Rak: Yeah, yes, I did your work with those. are some platforms for consultants. Yeah, yeah, makes sense. If I'm a franchisee and I'm just starting, what am I like most usual troubles, problems that I need to take care of? What's the way of franchisee? Pam Bartlett: I think the hardest thing with, and I think it's with any business, is you don't know what you don't know. And and that's a really s unsettling feeling, especially when you're new at something. Now in healthcare it was worse because it was life and death than it was. But you know, the thing is, are you in a r are you in a regulated business? Do you need to be licensed? Do you you know, getting your LLC set up or whatever your business whatever your business structure looks like? How are you gonna first thing is how are gonna finance your business? one of the things I first things I'll work with on my with my clients is how are we going to finance the business? Because if you're going to get a loan, and and at least this is, you know, in the US, if you're gonna get an SBA loan, it takes time. It takes, it's not quick. so Oleksij Rak: Mm-hmm. Pam Bartlett: I like to explore funding right away, and that is one of the first things that a franchisee needs to look at. And it can be confusing, which is why working with a consultant makes it a little easier because we have r great resources. Getting so it's getting your business entity set up is the first thing. And and then just releasing your anxiety and go going through training with an open mind because that is going to be what's going to make or break your experience in the first six months to a year, is the onboarding and training that the franchise offers. That's what you're paying for with your franchise fee, among other things. And so that's so important to get that foundation. and you should leave your training feeling pumped, confident, and ready to go. but then you get started and you realize, you know, it's it's a learning curve for any new business. And it's, you know, understanding that you you bought into a franchise, so you've got resources that to help you. If you'd started your own business from scratch and you're sitting there day one, not sure what to do next, you don't really have anywhere to go. But if you're sitting there day one with a franchise and you're confused, you make a phone call and you've got somebody helping you. you know, so that's that's a big thing. You know, and it's just understanding and your and I think managing expectations in that first year is also huge. How long is it going to take you to cash flow? How long do you see an ROI? What are your expectations? And can are are they realistic? The brand should help you with that because they have data and history, but I think that's a big thing as a new franchisee is r understanding am I capitalized well enough? Do I have enough operating capital to get through the first six months if I'm not cash flowing right away? the Oleksij Rak: So. Pam Bartlett: financials are huge in the beginning because you you've got to have it under control. You've got to be capitalized enough for for opening, grand opening marketing to make sure people Come in the door, whether it's a virtual, whether you're work from home or whether you have a brick and mortar, you want to make sure you've got customers coming. So it's understanding, you know, it's it's being well capitalized and the financials a huge piece of it. Also, thinking about how you're going to get those first clients, customers. That's your priority day one, is how what happens? Now the the the agreements are signed, you've been through training, now you're open. and I think that's a really scary time and a really exciting time for a lot of people. But a good franchise or will have you hitting the ground running. And, you know, you're really spending those that your first six months is really just getting yourself established and learning and trying to become the face in your community of your business. Oleksij Rak: Yeah, yeah, makes sense. How many people do run a few different franchises? Not scale one franchise, but try to step into a few different. Is it common or is it not? Pam Bartlett: There are a lot of investment groups out there. There's private equity that's buying up large franchisee ownership. there is, I mean, it clearly exists in franchise multi-unit ownership. There are people that own, you know, hundreds of units of one brand. in my world, I don't see a lot of that, but I tend to want a smaller practice. I don't really want to work internationally because I'm not really comfortable with the visa situation. I do have great partners for that that I refer people to that are really comfortable in that space. but yeah. Oleksij Rak: If you're speaking about franchisee path, what are the most common things that take a lot of time and that could be automated or simplified with some proper software? What would be the great software for franchisee if it existed? Pam Bartlett: What say say the thing? I'm sorry. Oleksij Rak: What would be a great software for a franchisee if it ever existed? Like I'm running a software company, I'm always curious, you know, what software can Pam Bartlett: so I Oleksij Rak: be built. Pam Bartlett: so I think it it it's so business dependent. For example, I think every every c every franchise needs a CRM and they need a CRM system, obviously. But it the more specific now I know do know brands that have developed their own software systems for their companies, but they need to be adaptable to the brand's needs. For example, I was in healthcare. So I had a healthcare-based platform that was our CRM. So we could do care plans and do things within that platform, manage manage care, you know, manage caregivers, manage manage clients, manage all that within the platform. So I think it's really specific to the brand and how it operates, what the software needs are. Certain industries are going to have similar, you know, have similar needs, but then they're also very brand specific. Oleksij Rak: Okay, okay, I see. And you actually need quite a lot of different software. You some CRM, need some financial software, some marketing software. Pam Bartlett: there's there's all different all different different types of software that are I mean and and AI is really finding its way into franchising and creating a lot of I think it's making consolidations of various software platforms within what AI can do with one system. Oleksij Rak: Yeah, so we basically use AI as an entrance point into your software. Pam Bartlett: But it as a software provider, you could really refine that and really make that, you know, really targeted. Oleksij Rak: Yeah, I'm trying to explore options. Pam Bartlett: Mm-hmm. Oleksij Rak: With regards to consultants, what's the most time consuming part of your work when working with clients? Is it client acquisition or is it talking with them or is it preparing proposals? I don't know. Pam Bartlett: It's client acquisition is number one for me because I do a lot of networking, so that's time consuming. I spend personally the most most of my time consuming task is the research of researching franchises for a client. It'll I can spend days on a one client, like entire days just going down the rabbit hole. analyzing F D Ds, pulling things back, trying to refine what I want to show, what I don't want to show. I that is of my process really and really honing it so that I hope I am meeting exactly what I heard from that client. Oleksij Rak: Yeah, spending days with them. You're one of the best consultants. Pam Bartlett: But it's it's just I I I I love it. I I that's the part I really like. I just I get I don't even realize what time it is. I kinda go down the rabbit hole and get caught up in it and then I'll look up and like, I probably should eat lunch. Yeah, so Oleksij Rak: That's great. That's great. Because some consultants like our company is selling like 200 or 300 franchises. what's that retail here are five options. Pam Bartlett: Yeah, no, I don't do that. Oleksij Rak: Awesome. And how do you compare different franchises between them? So like, how do you compare different FDDs? How do you make the right call? For instance, senior carers, there are probably like plenty, dozens of different senior carer franchises out there. but you choose three or five and present to your clients. Pam Bartlett: So I have resources. So I like I said, I go through the FTDs. That is step one. I will look at how long have they been open? How many franchisees do they have? I also have I'm part of a consultants network. We ta I'm in two mastermind groups that we talk, one once a month and one every other week. So we we we talk a lot about what's going on, plus we have a a Facebook group, but We share a lot of information in that group. The big thing we share are the negatives, stay away from this brand because of this kind Oleksij Rak: Okay. Pam Bartlett: of thing, which I think is the most valuable piece of it. yes, Oleksij Rak: Yes. Pam Bartlett: we also share this is a great brand. This is what how I have a client who's really killing it. we love hearing that, but I also really want the red flags. I am more concerned with showing somebody and and and getting somebody involved in a mistake than I am with what's great at this point. Oleksij Rak: Yeah, that's a one. Knowing who is not the right choice is really important because that's your reputation in the end. Pam Bartlett: Well it's it's yeah, and it's just it's I don't want to be responsible for somebody else's misery. I want them to be happy. Oleksij Rak: By the way, about misery, what's one advice that you would like to hear 10 years ago when you stepped into this industry? What's the number one advice you would like to hear back then? Pam Bartlett: Really so I think the biggest thing, and I have my clients do this, is when you're doing your validation and talking to other to franchisees, really ask the the the difficult. I always ask, not you know, yeah, would you do it again, yes or no, but what keeps you up at night? What do you dislike the most about what you're doing? What do you like about doing what you're doing? And then how do you spend your day? really understand how the day is spent. because it might be doing a lot of tasks that you hate. so understand what's expected of you as the franchise or franchisee rather and the owner of the business. Really know those things. And I really want my my clients to dig into that because what I didn't understand, what I just didn't I don't know why it didn't dawn on me. I s I bought a resale, so I had care I had employees and I had clients, but it just didn't dawn on me that I was going to be managing that many people. Oleksij Rak: So you would love to have that advice, but that's only years ago. Pam Bartlett: Yeah. So yeah, the advice should be really dig in and really understand your day to day, really understand the negatives. Because just because they're negatives to you doesn't mean they're not that they're negatives to me. Things I couldn't stand, other people thrived in. But Oleksij Rak: Yeah. Pam Bartlett: know that going into it. Oleksij Rak: Yeah, yeah, great one. Then consultants and franchisors. Franchisors, they also do their own due diligence of franchisees because these are people who will be representing their name, actually in certain territory. And they want to work, they get basically married, engaged with these people for a long period of time. So they want to have great community of entrepreneurs working with them. So they also do their due deal. So where does like consultants job work and where does franchise source like sales cycle begin? How does it work? When do you pass the client the potential franchisee to the franchisee? Pam Bartlett: So I spent my first 30 years as a in consultative sales. So it's hard for me to take that step back when it's time. So I've learned what's not my job anymore. So my because I wanna just I wanna tell you everything about it and I wanna help, you know, that's what I did for years. My job is to give you basic is to understand you as my client, what everything we talked about, what are your goals, personal goals, professional goals, family, all that. understand all that and make this and make this recommendation. And I just lost my train of thought. Where was I going? What were we just talking about? Oleksij Rak: French is ours versus consultants. Pam Bartlett: versus consultant, where my job is. I'm sorry about that. So my job is to give a highlight overview of the brands I'm recommending and pass them off. And then from the back, I my job is first to educate. Oleksij Rak: Yeah. Pam Bartlett: The first thing I need to do is educate them on franchising. And so I wrote a book which I share with my clients as soon as I meet with them, which explains everything. It's forty pages, it's you know, quick read, but it really explains plus I do a little. That's that's my job. I give an overview on the brands that I want them to look at. And I like I said, pass them off. From there, the FDD, all the detail that goes to the franchise or my role at that point just becomes support. I follow through with them, I give them questions to ask the franchisor, I'll give them questions to ask franchisees. I will kind of guide them through it. We'll meet each time they've met with a franchisor. But as far as selling the franchise, talking the detail, digging into the FDD and the numbers, all that, that's the franchise. That's their job. And I have to step back from that. Oleksij Rak: You cannot basically talk numbers with them because it's not legal. Pam Bartlett: Not my place. I never I cannot talk numbers. I know the numbers. I've looked at what it is to see how it fits into my client's budget, but I'm not gonna share. I will share with them when I present the brand what the what the startup costs are and the fees, but everything after that goes to the brand. That's their Oleksij Rak: Yeah, Pam Bartlett: responsibility. Oleksij Rak: that's part of their sales process because they basically Pam Bartlett: There's that's yeah. Oleksij Rak: trying to sell their system to potential client. And the numbers, the FDD reading, all that kind of stuff. Like franchisee needs to do that before they sign the franchise agreement. They need to like be aware of what they're signing. How do they do it? Do they read this couple of hundred pages by themselves? Do they go to a tournament? they sit with the franchise or to try to understand all of that? Pam Bartlett: I always it's not my job to review the FDD with them so I don't touch it, but I always recommend that they re have it reviewed by a franchise attorney, not a general business attorney. And Oleksij Rak: they take the time. Pam Bartlett: I will give them three or four names of people to contact and I'll explain why a franchise attorney versus a general business attorney, because franchising is unique and there are franchise attorneys will pick up red flags that business attorneys may not. And they may see business attorneys may see things as red flags that franchise attorneys know are standard. They also understand the lack of ability to negotiate a franchise agreement more than a business attorney does. So I always want my and if they choose not to, that's on them. But I think that it's a huge mistake. You're making that investment, should always have that F D D review by a franchise attorney. Oleksij Rak: Yeah, yeah, because you're signing. Pam Bartlett: It you're making this huge investment, a few hundred thousand dollars, spend a couple thousand dollars more and make sure that you're covered. Oleksij Rak: Yeah, yeah, I see. Awesome. With regards to the sales, like looking from the side of franchise or with regards to the sales process, consultants do a great job, like some consultants like you do a great job of pre-qualifying candidates for them and bringing them candidates who are kind of ready to step into this kind of business and ready to step into business at all, have money and are already interested. But it also costs them a lot, you know, for franchisers. Pam Bartlett: Mm-hmm. Oleksij Rak: Why don't they do their own marketing and why don't they like build their own sales campaigns? Or do they do it? Pam Bartlett: They they do. they all do. they all they all have their own franchise development s people. That's who we work with as consultants. Many of them will also, in addition to being part of our the broker networks, they'll also work with franchise sales organizations, which are large organizations Oleksij Rak: as well. Pam Bartlett: that will manage their sales process for them. And they also work with brokers. Oleksij Rak: And they quite likely work with these online platforms which collect a lot of franchises through a funnel. Why isn't there a proper marketplace for franchise industry online? When potential franchisees can come over, browse through everything, compare different franchises. Why is it like that? Pam Bartlett: There are. that there are platform yeah, there's websites out there that list everything. There's quite a few of them out there that you can go and explore franchises. I haven't looked at any in a while. I don't know if you can like compare and do different things with them. No. But there are like yeah, there's a whole Oleksij Rak: You cannot even get the FDD because when you try to drill deeper, they just ask you for contact information. Pam Bartlett: Yeah, they they want they want it they want to talk to you. So they'll yeah they want you to fill out a form, which is what my website, if you if you click on a brand on my website, you'll get a form to fill out for me. Oleksij Rak: Yeah, Awesome. How do you think the franchise industry will look in a couple of years, especially with this advancement in the AI and AI agents and GPTs, whatever? It's a big advancement nowadays, a big technology advancement. How do you think it will look like in a couple of years? Pam Bartlett: It's so hard to say. Technology moves so fast and I it just sometimes it's mind-boggling what comes out of it. I Oleksij Rak: Yeah. Pam Bartlett: think one of the things we're seeing a lot is a lot of private equity in franchising. I think you'll see more of that. I think there's gotta be shifts because there's got gotta be sh just like there are in corporate America where there's jobs being taken by AI, there's gotta be shifts in franchising for AI resistant businesses. we look at COVID resistant, we look at recession resistant. Now we're looking at AI resistant Oleksij Rak: Yeah. Pam Bartlett: or AI enhanced. I think you're gonna see a lot of I think I think it's gonna be a mess before it's it really refines because I think so many people think they know what they're doing and there's just and and there's a lot of mistakes out there and a lot of mess out there, and I think it will eventually refine. but I think you're gonna have to see businesses adapt and I think that also with all the layoffs coming because of AI, that you're gonna see more of those middle manager and senior managers that are displaced that may want their own business. That may be the only option. so franchise and and franchising still is very viable in in industries that make money. So needs versus wants may become more important. I don't know about that. but it I I think that's where we're headed. Oleksij Rak: Yeah, it looks like that. I'm hearing that franchise industry had like probably best year or last year because of all of these age of displacements. Because when people feel insecure, they try to move towards something that is more stable, you know. Pam Bartlett: Yep, and or they're wanna hedge their bets. It's like, all right, I'm gonna try and stay here as long as I can hold out, but I want something ready and waiting and if I can do it to s I have a client right now, if I can do it part time to start, I eventually will move into it 'cause I know this job isn't gonna last. Oleksij Rak: Yeah, Yes, even if you're not displaced yet, so you start looking around because AI will come for you. Pam Bartlett: Yeah. Well that I mean, d back to twenty thirteen, that's why I bought a franchise is I did not want to be displaced again. I was in an Oleksij Rak: Okay. Pam Bartlett: industry that kept consolidating. it I worked with department stores, they kept consolidating re all the retailers I worked with and I thought I just can't keep doing this. I c I can't I I need I need to know I'm gonna have an income and that I'm gonna like what I'm doing. but you know, I want it I wanted something of my own. And I think there are people I'm I'm starting to hear that more and more when I talk to people where I had a lot of resistance. I'm starting to feel, yeah, let me think about this. Oleksij Rak: Golden Age for franchise Pam Bartlett: Mm. Oleksij Rak: industries. Awesome. Maybe the last one would be the biggest misconception, the biggest lie in franchise industry. What do you think it is? Pam Bartlett: okay. There's a lot. a that it's not all fast food, it's not all Chick-fil-A and McDonald's, that it goes well beyond Oleksij Rak: Yeah. Pam Bartlett: that, and the myth, the myths around those two are another whole conversation. I think that's a big one. People are shocked at at Oleksij Rak: passive income. Pam Bartlett: the size of the industry. And I think the other misconception is that you're gonna spend a ton of money and you're gonna lose a ton of money. I hear a lot of negativity about. people's fear of losing their life savings and their investments and things like that. And I think that risk fear is the biggest myth. And and it's in some cases it's accurate. People do lose money. It happens. There's bad investments, but I think that's one of the things that I think the biggest negative activity that I hear. Oleksij Rak: Okay. What about passive income? it true? Pam Bartlett: That's another myth. that you know now you mentioned so that we we do now that you say the myth we talk about the myth of semi-absentee. because Oleksij Rak: Yeah. Pam Bartlett: realistically, if you're gonna invest this kind of money into a a business, you need to know it well, you need to be available to it. And yes, you can do a manager run business, you're gonna give up a quite a bit to the bottom line. but you really do need I I I I we all we as consultants I think are pretty much have a consensus that that it i i it absentee is not a great way to do this and not really realistic. Oleksij Rak: Yeah, you can invest a lot of money to step in and then. Pam Bartlett: I mean, there are a couple business opportunities where that are purely investment that are a sit in the franchise world. I'm actually meeting with one later today. I don't know a lot about it. but they're not the norm. And yes, there are some franchises that are actually designed to be part time or semi ex semi passive, but for the most part you need to be involved. Oleksij Rak: I heard the saying, you want a passive income, go to stock market. That's the franchisee Pam Bartlett: Pretty much. Oleksij Rak: does. Awesome. Thanks a lot for this great discussion, Pam. It was quite insightful and thanks a lot for that. Before we wrap it up, is there anything else you would like to add on top of that? Pam Bartlett: No, but thank you for having me. I appreciate it. And I just I li I like I said, I love franchising as a way to be in business for yourself. Oleksij Rak: Yeah, awesome. Thanks a lot and good luck for you. Pam Bartlett: Thank you.