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John Wilson and Jack Carr discuss their recent business transitions and exciting changes, including moving to a new location, adopting Service Titan, hiring a comfort consultant, and surviving the slow season. They also explore a unique niche business called Gum Busters, a specialized pressure-washing company that removes gum and graffiti from public spaces. They delve into the company's operations, contracts with municipalities, and the potential for expansion. The episode provides insightful and practical business ideas for service-oriented entrepreneurs.
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John Wilson: @WilsonCompanies on Twitter
Jack Carr: @TheHVACJack on Twitter
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John Wilson, CEO of Wilson Companies
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Jack Carr, CEO of Rapid HVAC
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Owned and Operated Episode 53 Transcript
Brandon Niro: Welcome back to owned and operated where we dive deep into the businesses we own, the businesses we are acquiring, and we also bring on guests to talk about their operating struggles. If you like what you hear today, follow John and Brandon on Twitter. That's John at Wilson companies in Brandon at Brandon Nairo.
Brandon Niro: Also check out our weekly newsletter. Where we teach you how to be an effective operator. You can sign up by clicking the link in the description of this podcast. Or by visiting owned and operated. com that's owned and operated. com. Check it out.
John Wilson: Welcome back to owned and operated. What's up, Jack? How's it going, John? Good. Good. I'm ready to dive into our new, uh, our new format this week. I'm pretty excited about it before we dive in. How'd your week go? What'd you get into?
Jack Carr: Oh gosh. We are in the middle of a huge transition. I know that we talked a little bit about it offline, but Oh man, we signed a new lease.
Jack Carr: So we're finally moving out of those storage units and into some square footage, which will be really nice for some team building activity, kind of centralizing everything we're switching over to service Titan. So yes, we're, we're becoming a real, real company. We're a real boy now. Um, and we hired a comfort consultant, which we're switching models there too.
Jack Carr: I know we talk about it a lot on Twitter, but realistically we're getting to a point. I'm getting to a point with the business that we were the old owner's business. We're coming up on that year mark and now we're becoming my business, which is great. Honestly, I'm really excited about these changes and I'm excited about this comfort advisor and, uh, this summer's getting, starting to warm up here.
Jack Carr: So it's, it's nice. How about yourself?
John Wilson: Yeah, I want to say my stuff, but like your stuff's kind of wild just because we sat down in like a Like a getting to know you interview. What? Like you basically just turned everything over that you told me about
Jack Carr: Yeah Fair enough.
John Wilson: Yeah.
Jack Carr: I mean, why'd you
John Wilson: end up, why'd you end up swapping locations?
John Wilson: I mean, that's, that seemed like a big, uh, structural change.
Jack Carr: Yeah. I mean, so it's actually right next door to where we're located, which has been really nice. I saw the for lease sign and I noticed kind of all the changes are coming. Congruently together, right? It's we're hiring this comfort advisor. We're staffing up and it's this realization as I'm holding meetings inside storage units like we're a real business.
Jack Carr: Let's get our health care. Let's, you know, do all the things that we're supposed to do. And that's just part of it.
John Wilson: Yeah. Yeah, that's great. I'm pumped for you. Um, yeah, our new stuff this week, it's sort of similar. Funny that we're on the same vibe here, but we signed our lease for our new headquarters. So that's going to be crazy.
John Wilson: We have to undergo construction, so that's going to take a couple months. We hired a new salesperson in our remediation business and that is like really like gone up like he's doing a great job. So we're pumped. And we survived February, which is always like the worst, especially when it's like 80 degrees in February.
John Wilson: So we're mainly just excited that it's March. That's the vibe up in Akron right now.
Jack Carr: Yeah. Is, uh, does your plumbing business see any kind of, um, decline in these, these colder months or is it just straight across the line, hopefully in the up, up to the right position?
John Wilson: Yeah, it sees a decline. Like all of the businesses see a decline.
John Wilson: So. Our HVAC sees the biggest decline because it's especially warm winter and then people get, you know, there's just less volume inside March and April and all that stuff. It's a shoulder season plumbing season decline, but you know, HVAC could be like a 50 to a 60 percent decline plumbing could be like 10.
John Wilson: But then plumbing will slow down remediation because that's where it gets all its leads. And then electric just gets slow. Cause most of our electricians are working on larger models, which construction slows in the winter up here.
Jack Carr: Yeah, it
John Wilson: makes sense. So this is just a slow time for everybody. Yeah, our first quarter is like half of the revenue of any other quarter throughout the year.
Jack Carr: Yeah, that's about right. I, I said, I was talking to one of the staff and I said, I did the numbers and summer, I think the five months of end of spring, early fall, and then all of summer, we make 70, 75 percent of all the money we make in HVAC in like five months. And it's a rush. So we're really trying to push up against that.
Jack Carr: I would assume it's the same, get in the building. Get ready, have all your, your systems in place and then summer's here.
John Wilson: Yeah, no, pretty much. I mean that that's us too. All our profits earned from May to September.
Jack Carr: Oh yeah. Um, so I know we talked about it in the last episode, uh, but the, the formatting of this is we're going to, you know, we love service businesses.
Jack Carr: We love. You know, even B2B service, just this trade oriented physical service sector. And so I think today we brought some, some fire businesses to look over. I'm real excited. All right. So, okay. The business I brought to the table today is called Gum Busters. So, um, it's, it's silly. It's, it's, has a great name, but the business is essentially
John Wilson: it's when I first saw this name.
John Wilson: Sorry. Yeah. When, when I first saw this name, I was like, you brought a dentist. You brought like a dentist company. Yeah. Right. I bought something. Like, what are they doing?
Jack Carr: Yeah. What, what really surprised me is how big they are. So. I found them and I was kind of blown away. They're just, they're a niche pressure washing company.
Jack Carr: You have pressure washing for residential, for houses. These guys came along and said, Hey, there's a need for pressure washing and especially specialty pressure washing in municipalities, playgrounds, Stadiums, um, courthouses, you know, you name it, kind of these, these big commercial, um, public spaces. And so they're out in New York and they have the gambit on this entire niche and it's, it's absolutely incredible.
Jack Carr: Um, I mean, they're doing everything from, from pressure washing. They have huge contracts on the East coast. They're working with the New York giants. I mean, this, this talk about like. All these guys do is, is gum, gum, stickers, and, you know, I think there was one more gum stickers and graffiti.
John Wilson: Yeah. Do you know how many trucks they have?
John Wilson: Or do you have like an idea of size of this company?
Jack Carr: I don't have an idea of size, but I was going through their stuff and they're pretty open with all of their, they're pretty open with all their, their contracts and everything they're getting. And so, I mean, they're signing contracts with, you know, some city parks and city squares.
Jack Carr: And I think that they had something. Yeah, they had, it's 7, 500 for the initial service and then 4, 800 a month for subsequent visits after. So you can imagine. They, they probably have, you know, 15, 20 trucks on the road at any time, um, to, to match this kind of volume. And then the, the interesting part is on the back end of this as well.
Jack Carr: They, they also kind of run an e commerce store, which I found really interesting because of they have, you know, um, specialty equipment.
John Wilson: Yeah. I'm looking through their website and they're rolling around these little, like. I don't even know what that is. I guess that's the power washer. Yeah. That
Jack Carr: thing is tiny.
Jack Carr: It is. And ironically enough, um, so when I was working at Wineries, we saw these things all the time. It's the same exact equipment. That we used to use to pressure wash, uh, steam wash. So it's technically not pressure washing and steam washing, but to steam, clean, uh, tanks, wine tanks to go in there and make sure that all the stainless steel is clean and everything.
Jack Carr: And so it's the same exact equipment. They just branded it and then they do maintenance and sales. And they have a team that goes around and just steam cleaned sidewalks. This is wild. Are they only in New York? Uh, I think I saw New York, New Jersey. But that's really the area I haven't, I tried to look to see if they franchised out because I think it would be a great model for franchise.
Jack Carr: Is to, to go to the big cities, start one of these companies and, um, grab some contracts, but I haven't seen them.
John Wilson: Are they doing, are they, I think when I first read through this, my, my quick take was, Oh, they're doing like underneath furniture, the cafeteria stuff, but it looks like it's almost all sidewalks and like graffiti.
John Wilson: It's like brick. I wonder if they could expand into like, you know, school cleanup, desk cleanup. Cause you could probably power wash that too, every summer or something like that. Yeah. I mean,
Jack Carr: I was going through there, like I said, they, they, they post a lot of stuff on, on the contracts that they've won with cities and municipalities and.
Jack Carr: They have the New York Giants, right? They work with them. They work with some high end hotels to do the sidewalks out front. But I think they also do work with some courtrooms, um, and government buildings, schools, things like that.
John Wilson: I honestly can't believe how good they got graffiti off. Okay. So, so this is like, um, it's a, I'm, I'm really impressed.
John Wilson: These pictures are amazing. Okay. So this is most of their contracts are with municipalities. Or maybe individual businesses, but they're, they're dealing with big contracts like, you know, the New York sports teams, the city. So this is really big. I wonder if you need like an in with one of those cities to get those contracts or how do you even bid on that stuff?
Jack Carr: I mean, I assume you, you would have an in, um, but it's one of those things where it just compounds over time. You know, it's a need. I could imagine that those stadiums at the end of the year, absolutely filthy. I mean, popcorn, beer, gum, oh my gosh. And think about the lifetime value, the LTV on those customers, they're going back every single year.
Jack Carr: There's no one else I've ever heard of doing, you know, gum steam cleaning.
John Wilson: Yeah. Yeah. So did you, did you walk through the pricing and like, what, what's the economics on this?
Jack Carr: Yeah, the economics on this, or they have two options for, it was like a small to medium size job. They that's like I said, 7, 500 initial and then 48, I think it was every month after that 4, 800 a month.
Jack Carr: So I mean, if you're looking at that, that's gosh, um, almost a hundred thousand per year for a little under that per customer. And I mean, two guys, a truck. And maybe a couple of days. So labor on this. That's really all you're buying is labor or all you're expending. Your expenditures are, you know, your truck, your labor, and then this machine and maintenance on this machine.
Jack Carr: That's the other side to it is. So, like I was saying, they have an e com sign to, which is really cool. Um, so if you didn't want To pay for that service, you know, you could buy your own, you, they, they sell them on their website. And so they're like, they have a, yeah, I'm looking
John Wilson: at it. So 6, 000 bucks. Yeah,
Jack Carr: this is sweet.
Jack Carr: So if you had some maintenance guys, right. If you're, if you're, you run the maintenance program for some kind of a city or something, you know, you, you could realistically. I think it said all in, it was 1700, or excuse me, 17, 000. Um, it's only 000 bucks for the unit, but you have bristles. And then there's about 10, 000 in consumables every six months or so.
Jack Carr: And I mean, it's, that's a huge win for them. They, so is
John Wilson: there something on their website where they like talk you through how to start up one of these?
Jack Carr: Uh, I think it comes with training. So they'll, they'll give you some training on it. I mean, realistically, it's a, it's a pretty easy process for, for running it.
Jack Carr: It's a. Hook up to water. Go press the green button. Um, but it, where it comes down to the difficulties in the maintenance side, right? Because you hook up to city water or whatever, which you kind of have to, you can't really use distilled and you're running into hard water that's, you know, getting evaporated and leaving behind mineral deposits.
Jack Carr: So someone has to go through there and clean that every, every couple of months. So they sell one of these things and then you're stuck with them outside of Napa Valley or any kind of winery district. There's really not too many places that service these things.
John Wilson: This is wild. I'm trying to think of who would be a good, like, use case for this.
John Wilson: You know, maybe somebody already running, someone already running a power washing business. Seems like that'd make sense. Cleaning, landscaping. Who else could add this on as like a vertical for what they're doing?
Jack Carr: That's a good question. I mean, if it was me and I had the team that was already at power washing graffiti and already power washing, um, kind of had a large power washing division for any kind of commercial application, that's where I would start.
Jack Carr: That's who should grab one of these and add it, you know, 17, 000 a year. Um, that's a few big contracts, right? Apparently that's two. One or two big contracts and that ROR is, so if you already had, you know, if you're already power washing parking lots for, you know, gas stations and in LA or something that I would definitely pick up one of these and give it a go.
John Wilson: Yeah. I'm into this. Yeah. I think this is pretty cool. Awesome. Would you buy it? I'm trying to figure out where they. Yeah. Cool. I think I would if I had a power washing business or like a landscaping business. Like, yeah, I think I would. I think it's interesting. I think if you like power washing, the hardest part with power washing is the just the intense seasonality.
John Wilson: And if you can handle inside stuff or like, like that, you know, they're doing. Basketball and football into the winter. And if you can run contracts throughout the winter, that's a big deal. Like you can keep your guys working. You don't have to do layoffs. I'm seeing this as like our labor retention tool, a way to get revenue in the winter.
John Wilson: If for any. Hyper seasonal business, like up here in Ohio landscaping, you know, someone that deals with a ton of commercial landscaping, this would be a sweet add on. You already have the customers. You already have that funnel built and all of your guys get laid off in the winter, except for the two or three guys that are doing snow plowing.
John Wilson: And if we have a winter, like what we just had, where it was 70 degrees in February. There's no snow to plow. So then they end up getting laid off anyways. So this would be, uh, this would be cool.
Jack Carr: Yeah. I mean, I think that's where the hardest part of this is, is it comes down to finding those contracts, right?
Jack Carr: Having those ends with the, you know, the head of maintenance at, at the New York giant stadium or the head of maintenance for the Ritz Carlton hotel in whatever city you're in and that that's where it's at, it's really a networking play and then if you have the labor already, it's a, it's a no brainer.
John Wilson: It is a cool, some of these businesses that I think, um, Rand runs a cool business where he only needs like eight to 11, uh, customers, which on one hand, like if you're building something to scale, that's. That's like, not great. You know, that's kind of hard, but like, if it's just you and you're running a tight team, that's sweet.
John Wilson: Uh, you know, it's just, I don't know. It's easy. Whereas I feel like these contracts are so big, you only need like five and you're good to go.
Jack Carr: Yeah, the, the customer concentration, like, like I said, if you have it already, I mean, that's where it's at. Just it's, you know, I was thinking about it there. I know we, we almost bought an HVAC company that, that only did service at schools and hospitals and churches.
Jack Carr: And I'm thinking, man, if, if I, if I had that one, this would be. A great add on, you know, you walk through with the maintenance manager all the time and you just say, Hey, you know, I see that you guys got quite a bit of buildup of gum. We'll come once a year and do this for you for 10 K. And then if you had 20 customers, 30 customers, you're, you're already there.
John Wilson: Yeah, sweet. No, I'm into it. I think for the right, I think it'd be hard on its own until you got to like scale. That's probably the same with any business, but I see this as a sweet little add on for somebody. Yeah. All right. Well, what did, uh, what'd you bring? Cool. All right. Yeah. So what I brought today, um, I brought, uh, uh, drain franchise.
John Wilson: Uh, I don't think it's any secret. I love drain businesses. Like my first three on this show are going to be some variation of a drain business. Like, uh, I I've got one that's a municipality, like a municipality drain business where you go around and you. You inspect sewer manholes for 2, 500 bucks a pop.
John Wilson: And you just do that every day. So yeah, I'm, I'm pumped about, I'm pumped about some of these, uh, some of these services, uh, but today we're just going to like start at the top of the funnel. With entry into drains. All right. So the, the franchise I brought today is the zoom drain franchise business. I think they started back in 2017 and they're somewhere around a hundred to 125 units right now.
John Wilson: I don't, I'm not normally into like most franchises in home services. I think they're kind of like, they don't hit, but. This one is pretty cool to me. I should be charging them like a commission or something, but this one's sweet.
Jack Carr: When you say 125 units, you mean 125 like individual locations that are already sold out to people?
John Wilson: Yeah, they, so they started in like, I think it was 2017. They took three or four years, and they got up to 15 or 20 units. And then they signed up with a PE firm and then they just, they ramped, they ramped right up. Um, but it's a really interesting concept because they, one, it's exclusively drains, which is a big deal.
John Wilson: If you're looking at the other home service, like plumbing HVAC franchises, you know, it's like a Roto Rooter or a Mr. Rooter or a Benjamin Franklin, the punctual plumber or something like that. Where it's plumbing and drains. So this, this is one of the only ones that I know of that is just drains. And that makes it.
John Wilson: In my mind, way more attractive because they are open to you tucking this into your business. So a buddy of mine, uh, Rick Vazza is doing this. Um, I think he announced it on Twitter a couple months ago. I don't remember when his location opens up, but he, he has a plumbing company in, uh, San Diego and they are, they bought a zoom franchise and they're going to have that running outside of that plumbing business.
John Wilson: Division. So I, I dunno, I think that's sweet in general. You get easier lead flow, you get all that stuff. If you talk to any of the other franchises, they're going to force you to convert your entire business over. Whereas zoom is meant to be an add on, like they're meant to accent the other parts of your business, which I think is really cool.
Jack Carr: What
John Wilson: does start on one
Jack Carr: of those look like in terms of like, right. So when I think about, um,
John Wilson: yeah,
Jack Carr: what, what's the benefit of going with zoom versus going with buying a van. It's not an overly asset heavy business, right?
John Wilson: Drains are so. You know, when you think of plumbing and HVAC, those are fairly asset light, but you need a vehicle and a guy and maybe 10 grand of tools.
John Wilson: That's not the case with drains. Drains is a, it's an asset heavy business. So our drain business, like I think we have 2. 1 in assets. That's drain machines, drain trucks, jetters, septic pumpers. Excavation equipment, dump trucks. There's a lot going on, uh, with drains, but, uh, EBITDA is usually 20 to 30%. So a lot of assets, lot of ebitda,
John Wilson: Mm-Hmm. . That was the best kind, big note. So I'm usually pretty. Yeah. Yeah. Yeah. And that was always, um, drains really is like who has the asset? Like I'll dive further into this exact model, but this is just why I find drains so interesting. It's a, who has the asset. There's no licensure problem with drains.
John Wilson: Anybody can go drill a drain and that's like, I don't know a state. Maybe there is one. So somebody correct me if I'm wrong, but that's one of the cool things about this service is you don't need licensing. If you're doing septic pumping, you might need to go get a septic pumping license, but that's an online test that you can take in 45 minutes and it's open book.
John Wilson: So I did it and I, you know, passed it first time. It was great. I'd never opened the book prior to that. But drains. We, we got into, we started getting more and more into drains a few years ago because we were, we had these contractor or these customers that we kept having to serve and we didn't have the equipment to do it because it's a super asset heavy thing.
John Wilson: Like we would need a, a jetter, which is 60 grand or once a month we would need to pump something out and those pumpers are 200, 000 this one's off the beaten path, but it's a. Topic I'm going to bring up a well drilling. It's sort of the same concept. It's whoever's got the asset has a big moat Yeah, cuz you know if you paid five hundred thousand dollars for the well drilling equipment There's only gonna be one or two of you in your city that have that equipment So like you're just gonna always be busy because who else is gonna pay for it Don't get me started on well drilling.
Jack Carr: I love well drilling. I had some really good buddies back in California who actually did well drilling. And oh my gosh, it is a beautiful business. Assets, like you said, are crazy, but the actual numbers behind it are wonderful. Um, so, but with pumping, so no license needed. What does Zoom bring just as a, as a, I mean, We're talking about the, the financials and the model in general is a great model, but zoom in particular, uh, have you seen what they bring to the table or, or in terms of why would you go zoom if, if you were going to go and wanting to starting a drain business versus just tucking in, you know, buying the 50, 000 truck, buying the 50, 000 jetter.
Jack Carr: And start doing drains.
John Wilson: Yeah. I think the model is pretty straightforward. If we've gone back and forth about whether or not we would launch our own drain business or just go zoom. And I think it's a split for us, but I also think that we're unique because we already do four or 5 million of drains.
John Wilson: Whereas if I was the average bear, I am probably not doing that. So if I was looking for sort of easy access into a no license business that has high margins, then I would probably do Zoom. I have a friend that Rick just bought one out in San Diego. I have another friend that just bought three down in the Carolinas.
John Wilson: This is his first attack at drains. He's an experienced franchise or he has. 30 or 35 other franchise units in services, but none of them are home services. Uh, so this is his first take at that. I think it's a great fit for that type of thing. All right. So drain business in general, I think that's the, I don't know that.
John Wilson: So that's why I think zoom is good as far as drain business in general. And it's like any other home service. You can probably compare it to HVAC where it's, you go out, it's 75 to a hundred bucks or, you know, cost to send somebody on a job to like clean a drain. And then one in 10 turns into a replacement or two intention turns into a replacement, and then maybe another one or two in 10 turn into larger.
John Wilson: Repairs, maybe you're doing a camera or you're doing a spot repair or you're doing nearly anything else inside that drain system. So there's a, I I've always loved the sales cycle of drains because you can just go out, you do something dirty that people don't want to do. And then once you get in that home to clean that drain or that business, to clean that drain.
John Wilson: There's, there's like 10 different ways you can upsell that product. And it's still like a very high margin service. You're hardly ever selling equipment. Even if you're selling a new drain, you're still selling a very high margin service.
Jack Carr: At that point, do you cross over into that territory though, where you do need a license, it becomes plumbing when you're replacing drains.
Jack Carr: Correct.
John Wilson: It depends on the municipality.
Jack Carr: Yeah.
John Wilson: Sometimes you just need what's called a sewer builders license. Which you can just go apply for. So there's plenty of excavation companies that replace sewers every day, and they're not plumbers.
Jack Carr: I'll have to look into that. Yeah. I mean, that, that's super interesting to me.
Jack Carr: I think that's a great business. I've always loved drains, um, in general as well. And if, if it's really just right, cause you walk into a home, like you're saying there's 10 different ways to go, but I'm, I'm the perfect example of, of a, on the buy side of the customer is if you walked into my home, cleared out my drain and said, Hey, I cammed your drain and man, you're going to, it's going to stop it.
Jack Carr: It's going to stop up again. Yeah. I can see all this crud in there and your main line is all backed up like, Hey, you need to get a full jetting. You would upsell me in a second. I mean, realistically, back when we were doing winery work, man, you could, we used to have a camera. We used to have a jetter. We used to do all this stuff ourselves and you could get into those lines and I mean, there's such a great visual there for the sale.
John Wilson: Yeah, and I, I think what I, what I like about it versus like a an HVAC, like with an H, with HVAC, you go in plumbing to, I guess, but you go in and the big upsell is the unit. And that's the same in drains, but there's still a lot of profitable things in between the drain cleaning. And the sewer, like, like what you just said, a jetter, a camera, a spot repair.
John Wilson: And then you, when you're doing replacements, you can do liners, you can do pumps, you can do with anything. There there's all these different variations that you can take it. And it's sort of just like, honestly, it's mainly a capital constraint because it is such an asset heavy business. Like you can do any of these things.
John Wilson: If you're willing to invest in the equipment to do it. And then once you're willing to invest in the equipment to do it, you sort of start building your own lead flow. This is more specialized in Deceptic, but I think Mark, his name's Mark Gilesi. Yeah. But you know, he bought two pumpers he's on Twitter and he started getting more lead flow just because he has those pumpers.
John Wilson: It's sort of the same thing in, in drains. If you have the excavation equipment or if you have like the sewer lining equipment, that's 300, 000. What, what starts happening is contractors start subbing. I was just going to ask, did you sub out? Yeah, we do. And when we didn't have that stuff, we used to sub out to it as well.
John Wilson: So we would say, hey, we don't have the jetter. Can you jet this for us? And, you know, we'll pay you your rate. We'll upcharge a hundred bucks or something. Or we don't have a pumper. Or we don't have a lining equipment. So you end up building this book of business with other people's customers. It's kind of funny.
Jack Carr: Right. So for, for someone listening to this, who's maybe, you know, they're, they're searching for their first business, um, trying to figure this whole sector out, maybe, you know, they said, Jack, we, we don't want to do gum, gum, you know, we don't have those contracts. We don't have the, uh, the connections. Is drains right for them?
John Wilson: I think so. I mean, you asked me if I would buy gum blasters, would you buy, would you buy a drain franchise?
Jack Carr: Yes. A hundred percent. So, I mean, the, the connection between HVAC and plumbing is, isn't, you know, it's a no brainer. It's, it's the way we move it. It's in the back of my mind, pretty much 24 seven starting plumbing, but kind of in to that, a soft start is this drain side is saying, Hey, We're not going to go HVAC plumbing.
Jack Carr: We're going to go HVAC trains plumbing. So yeah, it's, it's definitely, it's there. And I'm curious as to what. What zoom has as a benefit to, you know, other small businesses versus just going out and doing it myself, other than, you know, they, they probably have, what, where's the upsells, how to do it. Here's the trucks you need.
Jack Carr: Here's the marketing material, which is all great. Um, but I, I just wonder the balance of just going out there to like, like you said, buying, buying a pumper or buying a jetter or buying a truck and getting some guys out there to do it
John Wilson: again. I think I'm a bad example. We bought our dream business when it was about 2 million in revenue and we grew it.
John Wilson: I think for most drain businesses, it is very uncommon to see a drain business that size, even 2 million in revenue. It just doesn't happen a lot. And I'll see a lot of them at like one, one and a half. But when I see something over two or 3 million, I usually want to buy it on the spot because it's on, it's uncommon and it takes a ton of lead flow.
John Wilson: To get to that size and they usually don't have a good sales process to convert to sewer replacements. So if it's 2 or 3 million, it's probably a 4 or 6 million dollar company like waiting to be enhanced. All of that to say, I think that's the value add here is it's tough to just start a drain business and know where to go with it.
John Wilson: It's so asset heavy. Assets are the constraint in this business. And if you make a mistake of buying the wrong asset or not knowing how to get lead flow or not maximizing that asset, then you just burnt a quarter of a million dollars really quick. And I think that for somebody just starting off, like I get that franchise buy in fees are a pain and royalties are a pain.
John Wilson: Um, but it's a network of 120 other operators that have already done it. And to me, that seems like a no brainer. Yeah. Like we've, I have spent a quarter of a million dollars in the wrong way in our drain business. And like, I've been doing this for a minute, like we we've made, we've made like mistakes to the tune of a couple hundred grand on assets and we buy it.
John Wilson: And we're like, Hey, that, that might not have been the right asset to buy. Like maybe it, you know, it didn't have this specific specification or, or this piece of excavation equipment was a hair too big. Or whatever it was. And, and you have to like to get a drain business to five. Seven, 10 million. Like all you're doing is buying millions of dollars of assets because that's what it takes to do it.
John Wilson: So there's a lot of chances to mess that up.
Jack Carr: Yeah. Yeah. That, that, that's a, that's definitely risky and just putting it out there. I'm not against franchises whatsoever at all. I'm just curious as to what zoom is in particular, but, um, I mean, I'm in, yeah, and we probably will.
John Wilson: I think the big, I think the big value add.
John Wilson: Yeah, you should like after, after HVAC, I think the big value add. Yeah, will it ever be set? The time is now.
John Wilson: I, I, I do think one of the, uh, one of the most interesting parts of the, of this thing is it's meant to be an add on business. Uh, and there, I, I talked to him on the phone cause we, we started going through the process a little bit and there. A few of their most successful franchisees have, uh, a plumbing or HVAC business or an electric business that this is tucked onto.
John Wilson: And they were able to cycle customers and leads off of that. And that's how they got so big, so fast. And it, it becomes a, you know, our drain business is our most profitable business unit by a long shot. So I can see that being a pretty big value add for, for someone that has another. Another business in the space.
Jack Carr: Awesome. Well, I'm in sweet. So, so, uh, I mean, from here, we'd love to hear from you guys. I know John and you and I talked about this before, uh, businesses. You want us to dig on, dig through, figure out, take a look. This is kind of a new segment. So we're just trying to find our way through. What's interesting?
Jack Carr: What's not? Are you guys liking this? Blow us up on Twitter, especially John, send them lots of DMS on what, what you like and what you don't like about this episode and, uh, we'll go from there. Great. Yeah. Thanks everyone. Thank you.
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