The “Boring” Business Model Making Regular People Millionaires
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Franchising is one of the most
overlooked paths to [music] wealth in
America.
>> That's a very bold statement.
>> They said the most
>> the most overlooked.
>> There are more millionaires generated
from franchising than all combined
players ever in the NFL. And there's a
number of private [music] equity family
offices starting to get further and
further into franchising. And they're
buying both large franchises or they're
doing roll-ups.
>> You made this bold claim and I wanted to
fight you about it. Now I'm totally on
your team. Traditionally, franchising is
looked at as like, "All right, it's
either McDonald's and Subway, and you
got to have $3 million to do it. So,
only the wealthy can actually [music] do
it." But there's 4,000 franchise brands,
and if you're willing to do the
research, willing to do the work, there
are a lot of hidden gems of brands and
industries that are really taking off.
>> So, explain the path. What's the game
plan?
>> This is such a good hidden gem. I don't
want to talk about how I did this.
>> All right. What's up? Welcome, Alex.
Alex is the franchise guy that we have
invited on the pod. So, I don't know if
that's what you normally get called, but
that's what we're calling you. So, this
podcast called My First Million, one of
the re reasons we originally called it
that was because there was all these
different ways people made a million
dollars. And in my first 10 episodes, I
think I had a guy who did it in real
estate, a guy who did it with Amazon
FBA, a guy who did it playing poker, and
I was very fascinated just to hear all
the different ways you can win in
business for two reasons. One, I wanted
a menu of options I could go choose
from. How can you know which one sounds
most appealing to me? Which one sounds
like it fits me? And the second is I
like just hearing that you could be do
it in all these different ways because
it makes the impossible feel extremely
possible. I remember when I was sort of
pre- success, it felt like winning was
like just this needle in a hay stack. I
couldn't find it. And then as I've been
doing this podcast, I realized it's a
hay stack full of needles. You there's
so many to choose from. There's so many
different ways to win. You're going to
talk about kind of retail and
franchising. Did I do did I do you
justice there setting that up? Yeah,
absolutely. I honestly up until four or
five years ago was a bit of a I think
franchise hater and thought, "Oh, you
that's is that really entrepreneurship
or is that you are there viable paths
there?" And the more I've gotten into
it, the more I've realized it's probably
the most overlooked path to wealth
creation in in America and I've become a
big statement. That's a very bold
statement. Most
>> overlooked overlooked. [laughter]
>> All right.
>> Yes. Well, let's let's start with who
who you are. So you're you're a guy who
made your initial wealth in laundry in
the laundry business. So can you give us
the fast forwarded quick version of your
story?
>> Yeah, I'll try to be try to be short. So
I'm originally from smalltown Minnesota,
town of 15,000 people. Uh ended up in
North Carolina for college. Went to uh
to Wake Forest, studied finance, was
about to have a pretty kind of boring,
plain life, and then bought a laundry
business my freshman year of college. um
did seller financing. Had to learn what
that was at at 18. Uh learned what a
discounted cash flow analysis was at 18
just talking to, you know, business
school professors before I got into the
BIS school. And I ended up buying that
business and learned more doing that
than any class I took at Wake. You know,
we ran it, we grew it, we sold it for a
little over 10 times what we bought it
for and had an exit uh our senior year
for about 10 times what we bought it
for. And that set the path to complete
addiction. Why? Why did you buy a
laundry business as a college freshman?
Who does that?
>> So, I was I was working for them. I was
working for them as a way to make a
little extra beer money and and was
hooked. I was like, "This could work at
Duke and Chapel Hill and Vanderbilt and
you guys are graduating. I want to buy
it." And they asked for 30 grand and my
jaw hit the floor. I was like, "That's
the most money I've ever heard of." Uh,
and I had maybe two grand saved up. So,
had to get creative and figure out how
are we going to buy this and structure
it. Well, that's sort of like one of the
one of the three businesses college kids
starts. It's usually like some type of
like app or something where like college
kids could sell stuff to other kids. Uh
or a roommate matching app, which I did.
Or like a like a laundry map. Uh a
laundry business. I know Blake Mioski, I
think that's his name, the guy who
started Tom Shoes. That was his first
business was the laundry business.
[laughter]
>> What were you doing? You just go pick up
the laundry from students dorm rooms.
You said like, "Hey, you you know, I
remember when I went to college, I
didn't know how to do laundry. I'd like,
you know, grown up and my parents did my
laundry and so by the time I got to
school, I was a little confused. My
roommate had to teach me like what is a
dryer sheet and like why do you use
this? What are all these different
components? How long do you leave this
in?
>> Yeah. So, Tuesday was pickup day. You'd
leave your stuff outside your dorm room
door. We'd have runners, you know,
mostly football players that could hold
like 200 lb of laundry at a time. They
would just, you know, run up and down
the hallways, grab your bag. We'd
partner with vendors off campus. They
would clean it. We'd return it Thursday.
But the big unlock for us was kids
aren't paying for this. You know, it's a
bunch of broke college kids. It's their,
you know, affluent parents or, you know,
parents that are worried about them, you
know, being at college not knowing how
to do laundry. And so the big thing that
changed it for us that allowed us to go
from, you know, call it 30-ish,000 in
revenue when we first bought it to just
under 300 grand a school year in revenue
was get a booth at orientation week. And
for whatever reason, Wake gave us a
booth next to where you got your meal
plan, where you got your parking pass,
where you got your keys to your dorm,
like all the like marquee things you
need to do. And we went full Shamwow
guy. Like I was like, "Step right up.
We're the premier laundry service at
Wake. You got your kids got to have it.
You don't want them to go, you know,
clothesless. You got to sign up for
this."
>> Yeah. And they loved it. They thought it
was like the cutest thing. And they're
like, "Yeah, that's true. My kids, you
know, screwed going here and not knowing
how to do laundry. and I want them
studying or you know having fun or
whatever it was. And so we went from
yeah 30k a year in school year to like
280,000 our first year. Is this still a
business that any college kid could do
today? Like has this been a solved
problem or does every campus just have
kind of like a version of you who's who
hustles and makes the the campus the
freshman laundry service?
>> Yeah, I think Sam's right. Like the
number of people I've met that have gone
on to be serial entrepreneurs that were
like, "Oh, I did that in college, too.
like I thought I was so cool and special
and unique that I meet like 30 other
college kids that had a laundry business
at their school. So I don't think it's