Owned and Operated #83 - Power Washing: Franchising a Path to Wealth Generation with Aaron Harper

The Path, Revealed.
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Ready to explore more about franchises? If you didn't catch the last episode, Aaron Harper of Rolling Suds gave a peek into his world of franchises, and now he gets into the details. He generously shares all his knowledge about the challenges and victories of starting a power washing business, the importance of selecting the right franchisees, and the potential for growth within the industry. This episode is basically like your manual for acing the franchising game! Find out how, within just six months, half of Rolling Suds' franchisees have ordered their next truck, setting an ambitious pace for business expansion.

Episode Hosts: 🎤
John Wilson: @WilsonCompanies on Twitter
Jack Carr: @TheHVACJack on Twitter

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John Wilson, CEO of Wilson Companies

Jack Carr, CEO of Rapid HVAC

Owned and Operated Episode #83 Transcript

John Wilson: I'm John Wilson. Welcome to Owned and Operated. Twice a week, we talk about home service businesses, and if you're a home service entrepreneur, then this is going to be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting.

Let's get into it.

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Welcome to part two of our conversation with Aaron Harper. The conversation is awesome. We're talking franchising. We're talking Rolling suds. We're talking power washing. It's a great conversation. I know I enjoyed it. Thanks for tuning back in

feels like the purest form of what you can do with Twitter.

It really does.. Like, I remember I first started like, tweeting, three years ago now? Two years ago? And, there's no goal, really. You just sort of do your thing. Like six months in, it was like, all right, what are we going to do with this, really? What does this become? How do we make this a business? So that way I feel less bad about investing my time on it. Yeah, that's right. It's work, babe. And I think like what a lot of people that I've seen, they've raised money. They turn it into a fund that makes total sense. That's one of the bigger things you can do.

So like Brent Bishore is a perfect example of what you can do with an audience. But launching a franchise is like the next one. Right. Because I think courses are interesting. The podcast obviously, we're doing our thing here. We have events, there's all this stuff, but like, you can build a freaking business, like, and you are.

Yeah, funds and franchises. Like I get it. I'm into it. I think like, Jack, maybe let's launch an HVAC franchise, I don't know bro. Or drains, let's compete against Zoom.

Aaron Harper: Yeah

John Wilson: But I think it's an intellectually curious crowd. You get to connect in a unique way. As like the CEO of a up and coming franchise that like not other people are gonna be able to do you have a unique distribution I remember talking to zoom drain like a year or two ago and like working through their distribution channel because we were thinking about becoming a franchisee and I was like You could do this on Twitter so much better and cheaper than what they're doing right now.

Like, it was this very elaborate, lead funnel to be roughly in the same spot that you are. I don't know. Yeah I'm pumped to see it. . So you started posting on Twitter, I guess, the content about the business. You started driving franchisees through that.

Making your way through some pods. Like how else have you gotten distribution for the business,

Aaron Harper: So all of the Franchisees that I found for the previous brand so we did 223 deals at patch in two years of those deals were done through one franchise consultant

John Wilson: Which one was it like fast franchise or whatever?

Aaron Harper: no, oh, you're thinking of fast franchise fast lane.

John Wilson: Okay.

Aaron Harper: sales organization. . But no, so there's broker networks. And then there's franchise sales organizations. So franchise sales organizations can exist without broker networks. Broker networks are the lead source.

Franchise sales organizations are the deal. So I do all the franchise development in house. I do it. Like I'm the one talking to franchisees right now, start to finish. And

John Wilson: Yeah.

Aaron Harper: for years. So when you're with a franchise sales organization, you pay the majority of your franchise fee as a franchise or to the franchise sales organization

John Wilson: Right. for them to close it. There's no lead gen dollars, isn't that the idea, like, hey, it's 80 grand or whatever to sign up, but, that's your total lead gen expense. Like you don't have to really drive, become a franchisee marketing dollars, they run that.

Is that how that works?

Aaron Harper: That is correct. They handle all of the

John Wilson: OKay.

Aaron Harper: work can go just do the franchising part.

John Wilson: Yeah.

Aaron Harper: background where my. experiences in franchising. So

John Wilson: Yeah.

Aaron Harper: I've been told that I'm one of the only people in the franchise industry, other than a franchise sales organization that can sell a hundred units a year. difference is that I sell them to people who are going to be actively involved in growing the business. And all the other people who are selling a hundred units a year are saying, you can run your business to send my absentee or from your couch,

John Wilson: Yeah.

Aaron Harper: a manager. You don't need to know anything about it. It's just. It's terrible. And so, I'm super transparent, super like, I'm all about accountability. Like, this is what we do. This is what you do. Here are the challenges you're going to have, right. one of my consultants is part of Fransurf. He's also become a good friend and he's part of Twitter Space.

That's how I got connected to it. So, Brian Beers came and saw the operation. And saw us do a 3, 000 square foot house in 25 minutes, start to finish and charge customers 500 and technicians got paid a 20 tip each and they were off on their way. the next day, not telling me what he was going to do and just wrote a tweet thread.

And I didn't even know that was like the plan, but like, we got a ton of traction. within the Twitter space, it really just resonated the small business Twitter space because you see it, but there's a lot of people who are like. at taking out a personally guaranteed 2 million loan.

And like, they're going to buy an HVAC business. They don't know anything about like,

John Wilson: Yeah, franchising is like having a moment for sure on Twitter and I think it's exactly that reason like two years ago When debt was 3 percent 4 percent on an acquisition loan Nobody was thinking about startups because why bother if it's a 4 percent note, but now Economic uncertainty Franchising is on a bunch of people's brains.

So definitely yeah, right moment

Aaron Harper: I think if you can find the right brand and there's a, few of us out there who are doing it the right way, like you've seen them, it's the brands you hear about on Twitter that are selling units, and I think if you can find the right brand, like cares about your success and actually has systems to support franchisee and franchisees and the capital, because that's the thing a lot of franchisors don't have is like capital.

Cause we're not making any significant royalties for a period of time until we get franchisees open. So like you're burning cash and that's why a lot of franchisors don't succeed is because they don't have that amount of cash, to burn and to build the team, to support the franchisees.

And, but if you can find one that does and is, I sincerely do not think that there is a quicker way to wealth generation than finding the right brand at the right time. They talk about this a lot. The power washing industry is very similar to the way that the junk business was in the nineties, which was just a dude that had a truck and like put junk in it.

John Wilson: Yeah.

Aaron Harper: And 1800 junk came in and like had a wrapped vehicle and like answered the phone showed up on time. And like, Built a billion dollar company, now there are franchisees in 1 800 GOT JUNK that are doing 80, 90 million a year. Because private equity saw that they could operate six markets, like here I'll just give you all the money you want, and you can go buy more markets.

And they did. so my hope to do, to the power of Washington to show you what 1 800 GOT JUNK did to the junk business in the 90s.

Jack Carr: That's awesome.. On the same question with the drywall, I know that like I said, we do it every episode when we're going into models from a standpoint of doing this on your own versus a standpoint of doing it with a franchise. What is the difficulty level?

Aaron Harper: So starting a power washing business, just like knocking doors and buying a machine, like super easy. One, two out of 10, if like you just go knock on doors and you do that, that's a residential power washing business. Starting a commercial power washing business at seven, eight out of 10.

Like you got to have some serious levels of sophistication and capital in order to do it the right way. Now, I always think that a good franchise makes that easier. I think we're probably somewhere in like the three, three to five range depending on how big the person wants to go, right?

Like the guy who wants to get to a million and a half versus the guy that wants to get to 10 to 15 million. Like Those are different difficulty levels, but I'm confident that we're bringing in the right people can execute on the model that we've created. And we've been really selective. I mean, I've turned away 39 people at this point wanted to be franchisees, had the capital, wanted to buy the business, weren't right. know what I mean? So like, I do think that it's about bringing in the right people and setting up the right systems from the start.

Jack Carr: Who is the right person?

Aaron Harper: Someone who wants to build a really big business, someone who has a higher risk tolerance, right? If you're buying into an emerging brand, I don't have five years of like, here's what a hundred franchisees did. A hundred units did over in like, so high risk tolerance almost like an unrealistic expectation that like they're going to build, they have to have the belief in themselves that they can execute and do the thing. Like a lot of the people I turned away, like I just felt like they were going to be able to buy a job. That's it. And like, I want to help people build assets, not jobs. And, but there's a certain type of person that can do that and there's a certain type of person that, that can't also like, we're obsessed with the franchisee experience. We want our franchisees to be obsessed with the customer experience. And like offloading the customer experience to a GM that you don't pay properly and you keep your job full time.

Like, that's not a good way to start a business. I don't think, especially from scratch. So we've just been very selective. I've also done this, like I've put over 500 units into three brands in six years. So like, I've got a lot of just like gut reactions of knowing who's going to work and who's not.

Jack Carr: Yeah, that makes sense.

As John says, you can see the light in their eyes when you talk about the position.

John Wilson: Yeah. Are you ready to go power wash something?

Aaron Harper: The other thing that I'll say is like, we have them hire two technicians to start.

John Wilson: Yeah.

Aaron Harper: them powerwashing, so we help them find two technicians prior to going to training. We turn leads on a month back from training. So they've got to be able to delegate immediately. So like if someone comes to me and they're like, Hey Aaron, I like really want to do this with my son and like run the truck for a year and a half, like this isn't the business for them.

we're getting them to truck number two within six months. Like that's how the development schedule works. That's where the capital is going. so like it's a growth business. Like everyone who's coming in has to be growth minded.

John Wilson: Yeah. , do you have anybody over a million yet?

Aaron Harper: No, so we started franchising. I guess I didn't really the explanation at the beginning, but I finalized the transaction in January of this year. acquired the franchise rights in January. We started franchising in February. Our 1st franchisee signed up at the end of March and then our 1st training was in June. So like our longest standing franchisee is finishing their month right now.

So we're very new. And that's another reason why I've turned a lot of people away is like. Buy in emerging brands, not in everyone's risk tolerance,

John Wilson: And, I mean, on your end, like, the OGs set the tone.

Aaron Harper: Correct.

John Wilson: That's a two way street. Where you need the biggest movers, same as anything else. Like if I was starting a new vertical, I would need the biggest, baddest movers I could put inside there to drive the bus. So that makes total sense.

You need high performers out of the gate. So I'm into that. Has performance been strong so far?

Aaron Harper: Yeah, so multiple franchisees have ordered their next truck already.

John Wilson: like the third truck.

Aaron Harper: No, so their second truck.

John Wilson: Okay.

Aaron Harper: We had two franchisees that launched in June operating five territories. August, we launched three franchisees operating 10 territories. And then November, we launched two franchisees operating seven territories.

John Wilson: Gotcha.

Aaron Harper: Out of those franchisees half of them have ordered their next truck and the other ones are gearing up for a March open for their second truck. All within the 6 month timeline of scale, which is

John Wilson: Yeah.

Aaron Harper: What we're building but the goal is if you buy three territories, three trucks within 18 months at the latest, right?

Which three trucks is over a million dollar business, especially in the south. So talking 1. 2 plus with three trucks and that's if the trucks not operating at night Jack, I'll be launching a corporate location in Nashville. In March. So we'll be running the

Jack Carr: Yeah, there you go.

Aaron Harper: at the same exact time as all the other franchisees.

So launching two trucks in March. I hired a lot of corporate operations. I signed a lease for 6, 000 square foot space in Mount Juliet. like we're running the play, we're eating our own lunch.

John Wilson: Yeah,

Jack Carr: awesome. It'd be fun to watch uh, more it is, more trucks get on the road and you see him cruising around.

John Wilson: How many like corporate owned stores is reasonable?

Aaron Harper: So fact, I've never done corporate owned stores on any of the other brands I've been involved in.

John Wilson: Yeah.

Aaron Harper: It's just not been part of the model. So it's a good question. We're going to run it in Nashville. We're going to do three territories. We're going to run the play just as franchisees do. We're going to expand to another three territories, Hopkinsville, Clarksville, kind of those areas around there, then probably take it down to Huntsville. That's our five year. Trajectory,

John Wilson: Yeah.

Aaron Harper: and fill the area and get as. many trucks go as deep as possible within the territories as far as you can. which help make us better franchisors, right? Cause we can test things

John Wilson: Yeah for sure.

Aaron Harper: Hire salespeople. We can try sales things out. Like we don't need to take any money out of the business at all. We're going to put all back in and grow, grow, grow, grow.

John Wilson: Yeah, that would be fun And maybe like if you didn't, take capital, I would have to imagine that is how people would have funded it. Is like you just launch more corporate owned stores and you roll those profits up to the franchise.

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Aaron Harper: So I am asked to advise people franchisors pretty regularly. And the, one of the first questions I ask is how much capital do you have to go towards franchising? You would be shocked at how many of them say less than a hundred thousand dollars. It's like frightening.

John Wilson: Oh, that does not surprise me at all. The amount of people that have contacted me or like people that I know that have like begun the franchising route And the biggest thing that they're worried about is the legal docs expense to start a franchise. They're like, dude, it's gonna be 50 grand.

And I'm like, It's gonna be 50 grand. Like, like, I don't understand how that's the thing we're worried about right now. It's crazy. Yeah, I think people just they see the 80, 000 or I have no idea what yours is But they see the buy in and they're like, oh, yeah, that's gonna be sick You know that's like instant cash flow not realizing that's probably 100 percent going to the salesperson that sold it And then like unless you're getting a conversion But then conversions, you know, there's probably a ramp up period because somebody built that business.

They don't want to pay you royalties off the rip. So yeah, it's a five years before you get money play.

Aaron Harper: It's a hard business.

John Wilson: Yeah.

Aaron Harper: I always tell people, cause franchisors come to me all the time. They've got good epoxy coatings business or a good youth enrichment business, and they're like, I want to franchise and. I'm like, first of all, like why, right? Like, cause it's going to be really hard.

It's not your epoxy coatings business. It's actually a completely different business. You're going to burn a tremendous amount of capital. Like you have to know why you're going to do it like first and foremost. then I always say, how much money do you have to go towards franchising? And typically my answer is like, respectfully don't franchise now.

And my response is go open another corporate unit, that unit cash flowing. Do it again. Use the cash flow from those other units to now fund the franchise. Sell one of those corporate units your first franchisee and now you have instant validation and you have a cash flowing franchisee and you also have royalties from that. So now you're learning how to support a fran but people aren't. Getting that advice. They're like, yeah, I'll sell your franchise brand. Give me 50, 000 and I'll write you an FDD and I'll sell it and blah, blah. And

It's a big deal. People give me a lot of money and a lot of trust to help them grow a business.

Jack Carr: Yeah.

Aaron Harper: I take that very seriously. And I think anyone who wants to franchise their business should,

John Wilson: Yeah, the only reason that I was like franchising could be fun is Because the way you get to talk to people I think would be fun I think that sounds exciting and that's why I think it's like a that's probably the highest and best use of Twitter is like doing a fund or franchising because it would be interesting to go from Like, Hey, this podcast is about like teaching people to like a much more direct teaching mentorship and like, dude, you're going to make a lot of money off of this and I'm going to be able to work with you directly.

And I think that'd be fun. So like distribution and it sounds fun. So when I launched a franchise in a year, we can all mark the date. What's the 27th? But yeah,

Aaron Harper: And

John Wilson: different game. So yeah, I get that for sure. Yeah, I was talking to a guy, he was going to launch a drain cleaning franchise, so he was selling his main business, which was a plumbing and HVAC company.

For like a couple hundred grand and he was gonna launch rub a dub drain cleaning or something like that I don't even, New Hampshire or New Jersey or one of the news. I don't know And this guy, the plumbing and HVAC company alone was like very small It was just weird like the whole thing was weird It's like you don't know what it's like to build a large business in the first place You don't have the cash to support the franchise let alone your own business I don't understand how you're going to be a resource to other people.

Like this is a cash grab. This is like a shitty cash grab. It's what it looks like to me. Yeah.

Aaron Harper: Unfortunately, part of the reason I'm doing this is I've seen franchising done the wrong way more than I've seen it done the right way. And. Like, that's hard to watch, especially from inside the industry.

John Wilson: Yeah.

Aaron Harper: I knew that the only way I was going to be 100 percent in control of what happens to franchisees after they sign from a support standpoint is if I owned the company.

Like, majority ownership, could make decisions as much as I need to, put whoever I need to go into place, move at the speed that I want. And like, based on what I've seen, like, , that's a non negotiable for me. Like, at this point. And like, will be forever as I continue to grow this business and other businesses.

John Wilson: be a septic based franchise.

I'm just, I'm workshopping here. I'm workshopping. I don't know.

Jack Carr: I'm in. Let's do it. I'm your first sale

John Wilson: First one's going to be in Nashville. Yeah, we'll have it. Cool.

Jack Carr: Rolling Turds. Just give me a different name and we'll be good.

Aaron Harper: It's got different name. I don't think anyone's going to buy that franchise.

John Wilson: I think they would buy it just because of the name. the stool bus. There we go.

Jack Carr: Hey man, you could paint all the, those pump trucks like a school bus.

already, that's much better. I'm in. Now I'm

John Wilson: Yeah, now you're in. This was awesome, man. This was a lot of fun. I got to learn about franchising. I got to learn about power washing. Frankly, I had no idea. I got to learn about drywall patching. Also had no idea. This was interesting. This was a good conversation. If people want to connect with you where can they find you?

Aaron Harper: Twitter works Aaron Harper CEO.

John Wilson: Sweet.

Aaron Harper: I'm on Twitter.

John Wilson: Cool.

Aaron Harper: You can connect with me there. If you want to just learn more about the franchise and you can go to rolling suds, franchise. com. There's information there and then you just Google Aaron Harper rolling suds. There's a ton of podcasts I've been on.

People just want to learn more information. So those are some resources.

Jack Carr: Thanks for coming today. We really appreciate it. Yeah.

Aaron Harper: Thanks for having me guys. This has been awesome.

John Wilson: Yeah. Thanks everybody for tuning in to Own and Operated. Make sure you check out own and operated.com and sign up for the newsletter. Give us a five star review. I think we're back in Apple's top a hundred. So here we freaking go. Living the dream over here. Living the dream. All right, thanks for coming on.

Thanks for tuning in.

Thanks for tuning in to Owned and Operated, the podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out. You can find me on Twitter at at Wilson companies.

I'll see you next time.

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