Everything You Need to Know About Franchising and Commercial Real Estate

Aviva (00:00)
This week's listener of the week is CRE Steve. Steve, if that is your real name, thank you so much for leaving us a five star review. And for those of you listening, if you leave us a five star review below, you might be next week's listener of the week. Week, week. This week on Commercial Real Estate Secrets, we have Mr. Greg Mohr.

Greg is the founder of franchise Maven and he is a Wall Street Journal bestselling author of the book, Real Freedom, Why Franchises Are Worth Considering and How They Can Be Used for Building Wealth. If that doesn't pique your interest, I don't know what does. Greg, thank you for being on the show today.

Greg Mohr Franchise Maven (00:47)
Aviva, it's an honor. I appreciate you having me.

Aviva (00:50)
Greg, tell me, well, you don't tell me, tell the audience who you are, what you do, and how we got here today.

Greg Mohr Franchise Maven (01:00)
Well, Aviva, what I do is I help ambitious entrepreneurs and investors find a thriving franchise fit or flip their business into one. on that, So people come to me, they want to go into business for themselves. Don't know exactly how to do it, specifically really through franchising, because that's what I do. I help them avoid and cut through all the confusion of all the various franchises that are out there. How I got here today.

Aviva (01:09)
Hmm.

Greg Mohr Franchise Maven (01:28)
We'll keep it condensed because we like to these things short. So a long time ago in a land not so far away, I had to get a job as a 16 year old. I ended up getting a job at Taco Bell. I think I knew the managers, they were hiring at the time, something like that. Turned out as I moved my way up that I was actually working for a master franchise. Her name was Cathy and she owned about 50 Taco Bells throughout the Sacramento, California area. And I lived in Woodland, a little town close by there. She owned that one as well.

So I started helping her build up her teams and her restaurants throughout the Sacramento, California area. And that's when I learned all about franchising. It's like, this is a really cool concept. So fast forward 30 years later, 15 years as a restaurant manager, 15 years as a microelectronic circuit engineer, finally got out of the corporate world after owning a couple of businesses myself on the side and decided I'm going to get back into that franchising thing. That was a lot of fun. So I went out and started searching, found myself a great franchise consultant, never knew they existed at the time.

Aviva (02:24)
Hmm.

Greg Mohr Franchise Maven (02:24)
Really

made it very easy then for me to find a great franchise got into that but really enjoyed what that franchise consultant was doing more than I enjoyed my franchise because my franchise actually had drive around a little bit and the franchise consultant worked from home and I said I like that working from home sounds like a whole heck of a lot of fun Teach me what you do. You get to work with all sorts of interesting people all across the United States. That's what I want to do. So sold off my franchise after a couple years got into franchise consulting 10 12 years ago and have a look back since

Aviva (02:53)
Wow. So as if, can you explain to me what a franchise is as if I'm a fifth grader?

Greg Mohr Franchise Maven (03:02)
So what a franchise is, is you're renting out or leasing out their business model. They've got a business model that they have already developed. They've gone through all the trials and tribulations. They've made all the mistakes along the way. And now they've got a step-by-step process of exactly what you need to do to make that business successful. That in a nutshell is what a franchise is. And they come in many different shapes and forms.

Aviva (03:29)
Is there deviation from the plan? Like say I want to franchise X, Y or Z and we'll talk about some companies. If you can talk about any well-known franchises, is there any deviation from the plan or you stick to the plan or it's against franchise protocol? I do not know much about franchising, so I'm excited to learn.

Greg Mohr Franchise Maven (03:53)
Excellent question Aviva because quite a few people think that you know it's just rigid, totally rigid. This is exactly what you do, no deviation at all. But no, there's actually some creativity involved with different franchises. It is your business, they give you the guidelines to follow. This is what we did to become successful. If you do this then your chances of becoming successful are that much greater. Now, when a franchise has been around and they've got 100, 500,000 franchisees,

There's probably not going to be a lot of leeway from the main office to have you kind of do the things that you think are good on that. You can bring them up and that's how franchises develop. If you really want to be more creative, then what you'd probably be looking for is something that's maybe an emerging franchise, maybe has 20 franchises. So that's not quite at its peak yet on that little more of a risk since it hasn't gotten up to the hundred or more franchisees yet. But you can put more creativity into it. And even with the ones that have been around for a while, I had one person.

Aviva (04:28)
Sure.

Greg Mohr Franchise Maven (04:52)
They got into a franchise, a child's education franchise, and she had come from the hotel motel industry. And she said, you folks are not, you know, hitting up any of the hotels or motels for this. And I think that would be a great area to bring in new clients. And they said, well, we never tried that before. Feel free. Go for it. So she went for it. Didn't quite work out as well as she'd hoped. But, you know, there's obviously a reason why they didn't do it, but they had never tried it. So they didn't want to say no. So they let her do it. Didn't work out. So she went back to their model.

Aviva (05:09)
Wow.

Greg Mohr Franchise Maven (05:22)
and then it started, know, everything clicked in place on that. But you can and some franchises will allow you some creativity in there. So it's not always strict and rigid.

Aviva (05:30)
Okay. What are some well-known companies that are franchises that maybe the general public would not have expected?

Greg Mohr Franchise Maven (05:41)
Great question, Aviva, because when you and I drive around, all we see are the brick and mortar franchise. McDonald's, Taco Bell, know, Myniki, Mako, Supercut, Scrape Clips, brick and mortar. What we don't see is a service industry. So for instance, the Belfort Group. Belfort Group has 1-800 Water Damage, which is restoration company. Also have hoods, have ducks that do hoods cleaning, ducks cleaning inside of restaurants. Unless you were paying attention, like at Katrina, for instance, when the Katrina came through and they had all that devastation.

Aviva (05:51)
Hmph.

Greg Mohr Franchise Maven (06:08)
Unless you were paying attention and you know watching watching the news real close You would not know that belfor is actually the largest restoration company in the whole wide world And they'd have to clean up for katrina And if you've never needed any restoration done, you would never know about them. That's a huge one Take the neighborly group. They have 20 different franchises in there the ground guys. They have molly maids They have long pride Mr appliance mr. Router

They have 20 different ones and they're the largest home services company in the US today. But if you don't need those services, if you've never looked into them, you would not necessarily know, or maybe you did, but you would not necessarily know that they were franchise. Authority brands, Benjamin Franklin Plumbing, Mr. Sparky, One Hour Heating and Air Conditioning, Powerhouse brand, know, a few hundred franchises in each one of those. We don't necessarily know that unless we look into them.

Aviva (07:05)
So interesting. What does a regular person need to start a franchise and how do you get accepted from the franchisor ?

Greg Mohr Franchise Maven (07:19)
So first thing that you need Aviva is risk tolerance. It is a business, there's going to be a little bit of a risk to it. You got to realize that. Now you alleviate some of that risk by getting into a franchise, you alleviate more of a risk by getting into a franchise that has been around 10, 20 years. Still is going to be some risk to it. So risk tolerance. Second thing, you need to be able to be mentored. You're going to be mentored, somebody is going to help you grow that business. You need to be able to follow processes and procedures.

There's going to be a step-by-step process. That's why you're getting into a franchise in the first place is to have that step-by-step process that'll take you to where you want to be on that. And then you have to be a self-starter. You still have to get up in the morning. Franchise is going to call you and say, Hey, you up yet? Let's get going. You still got to be a self-starter. Still got to do that. So those are the traits that we look for. and I have a little bit of a process that I take people through and I find if they're not quite going through the process, they're probably not a great.

ideal candidate for a franchise because if you can't follow my simple process, you're not going to be able to follow that franchise's process. And to get accepted into that enthusiasm, enthusiasm about that business, they're looking for enthusiastic people. You don't necessarily have to know anything about the industry or about the business or having the experience in it at all. That's going to vary a little bit by franchise because when I look at people's backgrounds, where have they been, what kind of skill sets should they bring to the table? What skill set is that franchise are looking for in a great

and a successful franchisee. So if you do it yourself, then that's something you're going to need to look at. When you're working with me, I do that for you. But the main thing that they're looking for is that when you get on those calls with those franchise development folks on there, that you're asking questions, that you're involved, that you have a really great interest in learning more about that business and really doing what it takes to be successful, they'll teach you just about everything you need to know, a few exceptions. So a Sandler sales training franchise, biggest sales training franchise.

throughout the US. If you don't have any sales background, that's probably not gonna be the franchise for you. And they're gonna let you know pretty quick that if you don't have any sales training, you're not gonna be able to train people for sales. So that's what they're mainly looking for is that enthusiasm about their business.

Aviva (09:32)
Fascinating. So, you know, on the other side of that, say I'm a small business owner or a medium business owner. How do I go about franchising my business?

Greg Mohr Franchise Maven (09:45)
So there are three things we look at. These are not set in stone. These will just help you attract more people to it. So number one, are you making netting $100,000 or more? That's a good start because people are looking to get a good and decent income off the franchise itself. And they're going to be paying out a royalty fee, which is generally five to 10%. So you really need a hundred thousand or more. Have you reproduced your concept? Again, these are not set in stone. You don't have to.

But if you've reproduced it more than once in your area is good, another city or state better so that you've shown that it can be reproduced. And another thing to consider is how many people can use it in different cities and states, your product or service. The more people that can use it, like house cleaning can be used everywhere, obviously, the more attractive it's gonna be. There are some boat rental franchises out there that are doing just fine. Obviously in the middle of desert, you're not gonna work out too well.

on that one. But those are the three things that we look at is that hundred thousand income, have you reproduced it, and how many different people can use it in many different cities and states. Again, we've started with just one franchise and we've grown it from there. If people believe in you and they believe in your concept and they like what they're seeing and they see the potential in it, they'll go for it.

Aviva (11:07)
So, you know, this show is called Commercial Real Estate Secrets, so we have to talk about the intersection of franchising and commercial real estate, which obviously are heavily intertwined.

How does a franchisee pursue a commercial real estate lease or the purchase of a property?

Greg Mohr Franchise Maven (11:33)
Very good question, Aviva. One of the things you look for in a great franchise system is that they've got the real estate people that are going to one, find you the real estate for you because they don't expect you to be that great real estate person. They expect you to be that great business person to run that business, but not the real estate person. And they don't expect you to be a leasing expert either. So you want to look for both of those things. If you're going to go with something that requires a building, commercial real estate is good. And if you invest in commercial real estate, that's another great way to

to open up different avenues is that if you look into franchising, you can bring franchises into your commercial real estate space. And also there's commercial cleaning franchises out there that will open you up to other commercial buildings. Once you start taking care of those, not only your own with it, a lot of my real estate people like to do things like that. Not only the commercial, but the private homes as well, because they work with people on a regular basis that take care of their properties. So you get into one of those franchises that

takes care of cleaning and maintenance of commercial real estate, and you start taking care of other buildings, then you find out when those other buildings come up for sale, for instance. So it really gives you a good step into kind of an insider information on new commercial buildings coming up for sale.

Aviva (12:53)
So say I'm opening a franchise location and I sign a lease, five year, 10 year. Say I'm doing a Chick-fil-A franchise.

The lease, does the liability of the lease go 100 % on to my shoulders or does Chick-fil-A take any of the liability of that lease?

Greg Mohr Franchise Maven (13:17)
Okay, I can see where you use Chick-fil-A. That's a very loose interpretation of a franchise. They own everything, so they've got that all. I don't know how they work exactly, pretty much, but I know they own everything. You got nothing to sell, but similar. You got a restaurant. The lease is your responsibility. Everything is your responsibility on that when you're getting into the franchise system. So the lease is your responsibility. The thing that you're doing from the franchisor is investing in their business model. That's what you do. You lease in their business model.

Aviva (13:38)
Hmph.

Greg Mohr Franchise Maven (13:47)
everything except for Chick-fil-A everything else in all the franchises you own and you are responsible for Which means that at the end of the day you have something to sell except for Chick-fil-A you own that business So sorry Chick-fil-A totally be wrong anybody out there does Chick-fil-A great people. I met him before Outstanding great job pays a lot beautiful people. You got to love them Every other franchise it's a little bit different. So you own it

Aviva (13:49)
Okay.

Hmm.

No,

Greg Mohr Franchise Maven (14:16)
At the end of the day, you are taking responsibility for the lease, you're taking responsibility for the equipment, the employees, those are all yours. You get lots of help from the franchise, but all that is yours. And at the end of the day, if you decide you don't have to stay five to 10 years, which is generally the franchise agreement, you can sell that at any time. So once you build up the equity in that business and you've got it coming in, if you decide to get away and get out, you sell it, very easy to sell a franchise.

Aviva (14:32)
Hmm.

Interesting. So, you know, we are dancing in the very end of 2024. What are future trends you anticipate in 2025 in the franchise world?

Greg Mohr Franchise Maven (14:56)
So for the most part, I try to not get too involved in anything that's a fab or that's trending. For the most part, I like to work with the businesses that are essential services. So we're looking at the healthcare, the commercial buildings on that, eating, air conditioning, plumbing, those sort of things, senior care, those are all good. However, in direct answer to your question for what's emerging, I would take a look at...

Aviva (15:08)
Hmph.

Greg Mohr Franchise Maven (15:26)
the electronic, the EV stations, the electronic vehicle charging stations, I would start taking a look at those. Because if something's gonna be trending in the near future or sometime in the future, it's gonna be electric vehicles. Now, I don't know where it's gonna go. I don't know which ones are gonna be the good ones out there. On that, I don't know how they're gonna go about draining the electrical grid or anything like that. Not privy to that, how that's gonna work out. But.

Aviva (15:30)
Tiff. Tiff.

Sure.

Greg Mohr Franchise Maven (15:53)
it seems to be that we're getting a lot more people interested in electrical vehicles. So we don't have a whole lot of places to charge them just yet. So that might be one, if you want to look at something emerging to start just following and see where it goes.

Aviva (16:07)
very interesting. I, yeah, they say the biggest compliment is, essentially reproducing exactly what somebody has already done before. And, and that is Frank. Imitation is the best form of, there we go. This is the sincerest form of flattery.

Greg Mohr Franchise Maven (16:17)
Yes. Imitation. that what? Imitation. There we go.

Perfect.

Aviva (16:28)
And it looks like franchising is just a really smart way to navigate that.

Greg Mohr Franchise Maven (16:35)
True, very true. is because you're just somebody. What you want to do really is take that system that they have and get you to where you want to be two to three years quicker than if you do it yourself. Compare it. I don't say that franchising is for everybody. I would say that there's a franchise for everybody, but I'm going to tell you right out, franchising is not for everybody out there. Dual compare and contrast is investing in commercial estate versus getting a franchise. Which one is better? Put it in a spreadsheet, look it out, pros and cons.

Getting your own business. How does that compare to a franchise? Look at them both. Starting your own. How long is it going to take? What do got to do? Buy into an existing one. How long is that going to take? What you got to do? Compare it to a franchise and see which one fits you personally better.

Aviva (17:14)
Hmm.

It's cool that we have these options.

Greg Mohr Franchise Maven (17:19)
Yes, options are good.

Aviva (17:22)
And, you know, could bore our listeners to tears about why branding is important and fundamentally, leveraging brand is the, in my opinion, probably the heart of franchising because it's like you said, you're starting two, three, four years ahead because you're able to leverage that company. Somebody has already associated with the service. So.

one point for branding. Greg, what makes you happy with what you do in franchising at Franchise Maven?

Greg Mohr Franchise Maven (17:53)
There you go. Love it.

When I hear my people, so we were just, I was just talking with a couple the other day that, and the franchise development person, I put a couple people that were real estate investors and they wanted to get into it. They got into a, or they were looking at a Mr. Sparky from Authority Brands and the husband wanted to do this thing part-time. So we started going through the process on that. A wife was there too and she was kind of in the background. handled all the real estate properties, real estate investments and she was, had good questions but was kind of in the background.

After they learned about the business, she stepped up and she said, we're not going to run that semi absentee. I got that all figured out. I'll do it myself. A year later, she's rookie of the year. That makes me feel good when they do that. I had another gentleman that got into a franchise and keep in mind, all franchises you have to do full time. You can do a lot of them semi passive, but some of them require you to be full time upfront. So I had a guy went into senior care, required him to be full time upfront. He did it. Three years later, he came to me. said, Greg, I'm bored.

things are running a lot of clockwork, I don't ever have to be there, just find me another franchise. Right on. He again, I think he made Rookie of the Year as well. Those kind of stories is what I like hearing when people have realized their goals and realize their dreams and what they tried to do and then want to do something different and expand out or become Rookies of the Year. I just love hearing stories like that.

Aviva (19:21)
You know, I think the opportunity that we have in this country is truly for a lot of people, a lot of people can't even conceptualize it. But if you educate yourself and really open your eyes to the opportunity,

The possibilities are endless. And I wake up every single day, grateful that we live in a place that we can manifest and choose our own destiny and decide what we want to do with it. And, you know, I was at a commercial real estate broker conference a couple of weeks ago and my big takeaway was go big. You know, people are doing

a hundred million dollar deals, I can do them too. And I think that applies, and it's true, right? What's the difference between X person and me mindset. And I think that applies so much to franchising because the possibilities are infinite. And if you want to work hard, you get lucky, know, the harder you work, the luckier you get. So I think it's brilliant. I love it.

Greg Mohr Franchise Maven (20:27)
Make your own luck that way.

Aviva (20:28)
Absolutely. They say if somebody says, we got lucky on that, it just means they worked really hard for it.

Greg Mohr Franchise Maven (20:37)
Yep, yep, just keep going out, doing things, talking with people. Luck will happen. It will find you.

Aviva (20:42)
Yep,

absolutely. Greg, our audience is lucky to have had you and to listen to you today on the podcast. Where can they follow you, find you or contact you if they have any questions about franchising?

Greg Mohr Franchise Maven (20:58)
Aviva, the easiest way would be to go to my website at franchisemaven.com. That's FRANCHISE M-A-V-E-N.COM. Email me at greg at franchisemaven.com or just pick up the phone and give me a call. 361-772-6401 and I answer my own phone.

Aviva (21:19)
Greg, thank you so much for being on the show and for everybody listening. We'll see you next week.